Agenda packet, regular meeting — Laguna Beach City Council, April 14, 2026 (part 3 of 6)

entitlement communities. The City is a non-entitlement jurisdiction and does not receive a direct annual allocation from HUD.

Instead, Laguna Beach participates in the Orange County Urban County CDBG program. Under this structure, HUD allocates funding to the County of Orange, which then administers the program and distributes funds to participating cities, including Laguna Beach. The City must enter into agreements with the County to access and use these funds.

How Funding Is Determined
For participating cities, CDBG funding is generally distributed by the County using a formula based on factors such as population, housing characteristics, and measures of community need, consistent with federal guidelines. As a result, the City’s annual funding amount is not purely competitive, but it is also not a guaranteed fixed allocation. The amount may vary year to year based on the County’s total allocation from HUD and any programmatic adjustments made by the County.

Local Control and Eligible Uses
While the County administers the program, participating cities retain discretion to propose how their allocated funds will be used, provided that the proposed activities meet federal eligibility requirements and are approved by the County.

Eligible uses include public services, public facility improvements, housing related activities, and programs that address homelessness or other community needs. All funded activities must meet at least one federal national objective, most commonly providing a benefit to low and moderate income persons.

The City has consistently directed these funds toward emergency shelter operations at the Alternative Sleeping Location, as this program meets federal eligibility criteria and addresses a defined community need.

Administrative Allowance
Federal regulations allow up to 20 percent of a CDBG allocation to be used for planning and administrative costs at the grantee level. Within the Orange County Urban County program, the County retains a portion of the overall allocation for program administration and oversight. Participating cities may receive a limited administrative allowance for eligible grant related activities.

Since FY 2015-16, the City has prioritized applying its CDBG funding toward direct service delivery, specifically the operation of the ASL emergency shelter, rather than allocating a portion of funds toward administrative costs.

Local Application of CDBG Funding
On May 23, 2023, the City and County executed a Memorandum of Understanding governing the use of these funds. The agreement has been modified through subsequent amendments as follows:
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AUTHORIZATION TO EXECUTE THE THIRD AMENDMENT TO THE MEMORANDUM OF

UNDERSTANDING WITH THE COUNTY OF ORANGE FOR THE COMMUNITY

DEVELOPMENT BLOCK GRANT (CDBG) PROGRAM
April 14, 2026

Page 3 of 3 ends

• Initial Memorandum of Understanding: $545,437, inclusive of CDBG and CDBG CV3 CARES Act funding (Attachment 4)
• Amendment No. 1: Removed CARES Act related responsibilities and extended the term to June 30, 2025 (Attachment 2)
• Amendment No. 2: Extended the term to June 30, 2026 (Attachment 3) The proposed Third Amendment would extend the term of the agreement through June 30, 2027 and provide an additional $140,326 in CDBG funding for continued ASL emergency shelter operations.

FINANCIAL ANALYSIS
The proposed General Fund budget for the ASL in Fiscal Year 2027 is $500,000, pending City Council approval. A third amendment to the agreement with the County will provide $140,326 in grant funding, which will directly offset a portion of the ASL’s operating costs.

ENVIRONMENTAL ANALYSIS
The execution of this amendment is not a “project” under the California Environmental Quality Act (CEQA) pursuant to State CEQA Guidelines Section 15378(b)(4) and (5), as it involves government fiscal and administrative activities that do not commit to a physical change in the environment.

ATTACHMENTS

1. Proposed Third Amendment to the MOU (Pgs. 3-5)

2. Amendment No. 1 to the MOU (Pgs. 6-9)

3. Amendment No. 2 to the MOU (Pgs. 10-12)

4. Original Memorandum of Understanding (Pgs. 13-38)
Submitted By: . Approved: .David A Kiff
Jeremy Frimond, Assistant City
Manager
Dave Kiff, City Manager
Report Prepared By: Coordinated With:

Louie Lacasella, Senior Management Analyst
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Docusign Envelope ID: B6B306AC-00F3-421F-8556-0976CF1EA2D5 County of Orange
City of Laguna Beach
Docusign Envelope ID: 53F22C9A-2E59-4F15-A3B5-1EB851AD8CFD Community Development Block Grant (CDBG) Program
Third Amendment Memorandum of Understanding

THIRD AMENDMENT TO

MEMORANDUM OF UNDERSTANDING

BETWEEN

THE COUNTY OF ORANGE
AND

THE CITY OF LAGUNA BEACH
FOR

COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM
This Amendment to Community Development Block Grant Program, Memorandum of Understanding, hereinafter referred to as “Second Amendment”, is made and entered into upon execution of all necessary signatures between the County of Orange, acting through its County Executive Office (CEO), hereinafter referred to as “County”, and the City of Laguna Beach, herein after referred to as “City”. County and City may be referred to individually as “Party” and collectively as “the Parties”.

RECITALS
WHEREAS, County and City entered Memorandum of Understanding (MOU), hereinafter referred to as “MOU” for the implementation and administration of the Community Development Block Grant (CDBG) Program and Community Development Block Grant Cares Act (CDBGCV3) Program, approved by the Board of Supervisors on May 23, 2023, effective July 1, 2023, through June 30, 2024, in the amount of $545,437; and
WHEREAS, both Parties desire to continue the MOU responsibilities for CDBG Program while agreeing to remove the responsibilities for CBDG-CV3 Program, extend the MOU term for CBDG Program for one additional year, effective July 1, 2024, through June 30, 2025, revise the revise the Budget to remove table for CDBG-CV3 Program budget and increase CDBG Program by $140,326, for a revised MOU cumulative total not to exceed $685,763; and WHEREAS, County and City desire to continue the MOU responsibilities for CDBG Program to extend the MOU term for one additional year effective July 1, 2025, through June 30, 2026, in the amount of $140,326, for a revised MOU cumulative total not to exceed $826,089; WHEREAS, County and City desire to continue the MOU responsibilities for CDBG Program to extend the MOU term for one additional year effective July 1, 2026, through June 30, 2027, in the amount of $140,326, for a revised MOU cumulative total not to exceed $966,415; NOW, THEREFORE, in consideration of the mutual obligations set forth herein, both Parties mutually agree to amend the MOU as follows:

1. Paragraph 1. Term of the MOU is hereby amended and replaced in its entirety to read as follows:

1. TERM
The term of this MOU shall commence on July 1, 2026, and end on June 30, 2027, Attachment 1
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Docusign Envelope ID: B6B306AC-00F3-421F-8556-0976CF1EA2D5 County of Orange
City of Laguna Beach
Docusign Envelope ID: 53F22C9A-2E59-4F15-A3B5-1EB851AD8CFD Community Development Block Grant (CDBG) Program
Third Amendment Memorandum of Understanding
unless earlier terminated pursuant to the provisions of Paragraph 26 of this MOU; however, the Parties shall perform such duties as would normally extend beyond this term, including, but not limited to, obligations with respect to indemnification, reporting and confidentiality. County and City may mutually agree in writing to extend the term of this MOU for up to twelve (12) additional months upon the same terms and conditions for additional funding that may become available under the CDBG Program.

1.1. The following term is applicable to CDBG funding, in accordance with funding guidelines.

Funding Source Term
CDBG Program 7/1/2026 to 6/30/2027

2. Paragraph 10. Budget of the MOU is hereby amended in its entirety to read as follows:

10. BUDGET

10.1. The amount of CDBG Funds allocated to City under this MOU for the annual allocation as outlined below and shall be used for eligible homeless services activities up to the not to exceed amount for such activities, as further explained in the tables below.

Funding
Source
Amount Eligible Activity
CDBG $140,326 Emergency Shelter Operations - ASL

3. The recitals above are incorporated into this MOU.

4. Except as otherwise expressly set forth herein, all terms and conditions contained in the MOU, including any amendments/modifications, are hereby incorporated herein by this reference as if fully set forth herein and shall remain in full force and effect.

SIGNATURE PAGE TO FOLLOW
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Docusign Envelope ID: B6B306AC-00F3-421F-8556-0976CF1EA2D5 County of Orange
City of Laguna Beach
Docusign Envelope ID: 53F22C9A-2E59-4F15-A3B5-1EB851AD8CFD Community Development Block Grant (CDBG) Program
Third Amendment Memorandum of Understanding
IN WITNESS WHEREOF, the Parties hereto have executed this Second Amendment on the dates with their respective signatures:

City of Laguna, a municipal corporation in the State of California By: Dated:

Dave Kiff, City Manager
City of Laguna Beach
By: Dated:

Jeremy Frimond,
Assistant City Manager
City of Laguna Beach

APPROVED AS TO FORM
By: Dated:

Megan Garibaldi, City Attorney
County of Orange, a political subdivision of the state of California By: Dated:

Douglas Becht, Director, Office of Care
Coordination County Executive Office

APPROVED AS TO FORM
Office of the County Counsel
By: Dated:

Deputy County Counsel
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County of Orange , Page 1 of 4 Community Development Block Grant (CDBG) Program City of Laguna Beach First Amendment Memorandum of Understanding

FIRST AMENDMENT

BETWEEN

THE COUNTY OF ORANGE
AND

THE CITY OF LAGUNA BEACH
FOR

MEMORANDUM OF UNDERSTANDING
FOR

COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM
This Amendment to Community Development Block Grant Program, Memorandum of Understanding, he First Amendment , is made and entered into upon execution of all necessary signatures between the County of Orange, acting through its County Executive

RECITALS
WHEREAS, County and City entered Memorandum of Understanding (MOU), hereinafter for the implementation and administration of the Community Development Block Grant (CDBG) Program and Community Development Block Grant Cares Act (CDBGCV3) Program, approved by the Board of Supervisors on May 23, 2023, effective July 1, 2023, through June 30, 2024, in the amount of $545,437; and
WHEREAS, both Parties desire to continue the MOU responsibilities for CDBG Program while agreeing to remove the responsibilities for CBDG-CV3 Program, extend the MOU term for CBDG Program for one additional year, effective July 1, 2024, through June 30, 2025, revise the Budget to remove table for CDBG-CV3 Program budget and increase CDBG Program by $140,326, for a revised MOU cumulative total not to exceed $685,763; and NOW, THEREFORE, in consideration of the mutual obligations set forth herein, both Parties mutually agree to amend the MOU as follows:

1. All references to CDBG-CV3 Program in the MOU are hereby deleted.

2. Paragraph 1. Term of the MOU is hereby amended in its entirety to read as follows:

1. TERM
The term of this MOU shall commence on July 1, 2023, and end on June 30, 2025, unless earlier terminated pursuant to the provisions of Paragraph 26 of this MOU; Attachment 2
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County of Orange , Page 2 of 4 Community Development Block Grant (CDBG) Program City of Laguna Beach First Amendment Memorandum of Understanding however, the Parties shall perform such duties as would normally extend beyond this term, including, but not limited to, obligations with respect to indemnification, reporting and confidentiality. County and City may mutually agree in writing to extend the term of this MOU for up to twelve (12) additional months upon the same terms and conditions for additional funding that may become available under the CDBG Program.

1.1. The following term is applicable to CDBG funding, in accordance with funding guidelines.

Funding Source Term
CDBG Program 7/1/2023 to 6/30/2025:

Fiscal Year 23-24: 7/1/2023 to 6/30/2024
Fiscal Year 24-25: 7/1/2024 to 6/30/2025

3. Paragraph 10. Budget of the MOU is hereby amended in its entirety to read as follows:

10. BUDGET

Funding
Source
Amount Eligible Activity
CDBG $27,156 Transportation for Participants
$113,170 Essential Services for Participants
$140,326 TOTAL FOR FY 23-24
CDBG $27,156 Transportation for Participants
$113,170 Essential Services for Participants
$140,326 TOTAL FOR FY 24-25

4. The recitals above are incorporated into this MOU.
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County of Orange , Page 3 of 4 Community Development Block Grant (CDBG) Program City of Laguna Beach First Amendment Memorandum of Understanding Except as otherwise expressly set forth herein, all terms and conditions contained in the MOU, including any amendments/modifications, are hereby incorporated herein by this reference as if fully set forth herein and shall remain in full force and effect.

SIGNATURE PAGE TO FOLLOW
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County of Orange , Page 4 of 4 Community Development Block Grant (CDBG) Program City of Laguna Beach First Amendment Memorandum of Understanding IN WITNESS WHEREOF, the Parties hereto have executed this First Amendment on the dates with their respective signatures:

By: Dated:

Dave Kiff, City Manager
City of Laguna Beach
By: Dated:

Douglas Becht, Director, Office of Care Coordination
County Executive Office
By: Dated:

Chris Anderson, Deputy County Counsel
County of Orange, California
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County of Orange Community Development Block Grant (CDBG) Program City of Laguna Beach Second Amendment Memorandum of Understanding

SECOND AMENDMENT TO

MEMORANDUM OF UNDERSTANDING

BETWEEN

THE COUNTY OF ORANGE
AND

THE CITY OF LAGUNA BEACH
FOR

COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM
This Amendment to Community Development Block Grant Program, Memorandum of Understanding, he Second Amendment , is made and entered into upon execution of all necessary signatures between the County of Orange, acting through its County Executive Office

RECITALS
WHEREAS, County and City entered Memorandum of Understanding (MOU), hereinafter for the implementation and administration of the Community Development Block Grant (CDBG) Program and Community Development Block Grant Cares Act (CDBGCV3) Program, approved by the Board of Supervisors on May 23, 2023, effective July 1, 2023, through June 30, 2024, in the amount of $545,437; and
WHEREAS, both Parties desire to continue the MOU responsibilities for CDBG Program while agreeing to remove the responsibilities for CBDG-CV3 Program, extend the MOU term for CBDG Program for one additional year, effective July 1, 2024, through June 30, 2025, revise the revise the Budget to remove table for CDBG-CV3 Program budget and increase CDBG Program by $140,326, for a revised MOU cumulative total not to exceed $685,763; and WHEREAS, County and City desire to continue the MOU responsibilities for CDBG Program to extend the MOU term for one additional year effective July 1, 2025, through June 30, 2026, in the amount of $140,326, for a revised MOU cumulative total not to exceed $826,089; NOW, THEREFORE, in consideration of the mutual obligations set forth herein, both Parties mutually agree to amend the MOU as follows:

1. Paragraph 1. Term of the MOU is hereby amended and replaced in its entirety to read as follows:

1. TERM
The term of this MOU shall commence on July 1, 2025, and end on June 30, 2026, unless earlier terminated pursuant to the provisions of Paragraph 26 of this MOU; Attachment 3
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County of Orange Community Development Block Grant (CDBG) Program City of Laguna Beach Second Amendment Memorandum of Understanding however, the Parties shall perform such duties as would normally extend beyond this term, including, but not limited to, obligations with respect to indemnification, reporting and confidentiality. County and City may mutually agree in writing to extend the term of this MOU for up to twelve (12) additional months upon the same terms and conditions for additional funding that may become available under the CDBG Program.

1.1. The following term is applicable to CDBG funding, in accordance with funding guidelines.

Funding Source Term
CDBG Program 7/1/2025 to 6/30/2026

2. Paragraph 10. Budget of the MOU is hereby amended in its entirety to read as follows:

10. BUDGET

Funding
Source
Amount Eligible Activity
CDBG $140,326 Emergency Shelter Operations - ASL

3. The recitals above are incorporated into this MOU.

SIGNATURE PAGE TO FOLLOW
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County of Orange Community Development Block Grant (CDBG) Program City of Laguna Beach Second Amendment Memorandum of Understanding IN WITNESS WHEREOF, the Parties hereto have executed this Second Amendment on the dates with their respective signatures:

City of Laguna, a municipal corporation in the State of California By: Dated:

Dave Kiff, City Manager
City of Laguna Beach
By: Dated:

Assistant City Manager
City of Laguna Beach

APPROVED AS TO FORM
City of Laguna Beach
Megan Garibaldi, City Attorney
Date
County of Orange, a political subdivision of the state of California By: Dated:

Douglas Becht, Director, Office of Care Coordination
County Executive Office

APPROVED AS TO FORM
Office of the County Counsel
County of Orange, California
Deputy County Counsel
Date
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STAFF REPORT
Meeting Date:

April 14, 2026

CONSENT
14 SUBJECT: INTERVIEWS AND APPOINTMENT TO THE ORANGE COUNTY MOSQUITO &

VECTOR CONTROL DISTRICT (OCMVCD)
RECOMMENDATION: It is recommended that the City Council:

1. Appoint Joanne McMahon to serve on the Orange County Mosquito & Vector Control District Board, with a term beginning immediately, through January 3, 2028.

SUMMARY OF THE MATTER
During the January 30, 2026, Strategic Planning Session, the City Council reviewed the listing of various organizations, committees, and subcommittees where the City Council is represented, and during the process, the City Council suggested appointing a resident to the Orange County Mosquito and Vector Control District Board of Trustees. To qualify, the representative must be over 18 years old and a resident of Laguna Beach. The position has most recently been held by a Councilmember; however, it has previously been held by a Laguna Beach resident.

DISCUSSION
The Orange County Mosquito and Vector Control District (OCMVCD) is responsible for the surveillance and control of vectors — including mosquitoes, ticks, and other organisms — that can transmit diseases to humans and animals. Board trustees play a key role in setting policy and overseeing programs that safeguard public health throughout the region. The OC Vector Control Board of Trustees meets at 3:00 p.m. on the third Thursday of every month at the Orange County Mosquito and Vector Control District headquarters at 13001 Garden Grove Blvd., Garden Grove, CA 92843.

For the opening, the City Clerk’s Office received one application, from Joanne McMahon.

FINANCIAL ANALYSIS
The recommended action has no financial impact to the budget.

ENVIRONMENTAL ANALYSIS
The recommended action has no environmental impact.

ATTACHMENT

1. Application (Pg. 2)
Submitted By: Ann Marie McKay Approved: .David A Kiff
Ann Marie McKay, City Clerk Dave Kiff, City Manager
Report Prepared By:

Ann Marie McKay, City Clerk
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JOANNE MCMAHON
(949)306-3116 | [email protected] | 31024 Aliso Circle, Laguna Beach, CA

PROFESSIONAL EXPERIENCE
A senior executive responsible for leading and overseeing an organization’s sales strategy and team performance. With extensive experience in sales management, business development, and market expansion, drive revenue growth by setting clear sales targets, developing effective processes, and fostering strong customer relationships. Skilled in team leadership, negotiation, and data-driven decision-making, adapts to market changes, and consistently achieves or exceeds revenue objectives.

EMPLOYERS
The Vomela Companies, Business Development Director, Circle Graphics, Vice President of Sales, Los Angeles Times, Sales Executive, Orange County Register, Sales Executive

EDUCATION
University of California, Santa Barbara, CA, Bachelor of Arts in Political Science with International Relations Emphasis

LOCAL REPRESENTATION
Board Member of Aliso Circle Improvement Association, (HOA), Laguna Beach, Treasurer Laguna Beach Unified School District PTA

CIVIC LEADERSHIP
Community advocate for fire safety, local wildfire defense projects and vector issues. Collaboration with:

The City of Laguna Beach, Laguna Beach City Council, The County of Orange, Orange County Mosquito and Vector Control District, OC Parks, Orange County Public Works, Orange County Board of Supervisors, Army Corp of Engineers, California Coastal Commission, California Department of Fish and Wildlife Attachment 1
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STAFF REPORT
Meeting Date:

April 14, 2026

CONSENT

CALENDAR
15 SUBJECT: WORKPLAN TO EVALUATE JOINING THE ORANGE COUNTY POWER

AUTHORITY (ENVIRONMENTAL SUSTAINABILITY COMMITTEE)
RECOMMENDATION: It is recommended that the City Council:

1. Direct staff and the Environmental Sustainability Committee (ESC) to implement the proposed work plan and return to the City Council with findings, community input, and a recommendation regarding potential Orange County Power Authority (OCPA) membership at the October enrollment decision timeline.

SUMMARY OF THE MATTER
At the direction of the City Council during its January 27, 2026 study session, and subsequently affirmed by City Council action at its January 10, 2026 meeting, a preliminary work plan has been developed by the Environmental Sustainability Committee (ESC) to evaluate whether membership in the Orange County Power Authority (OCPA) would be in the best interest of the City (Attachment 1) and area ratepayers. The purpose of the work plan is to provide a structured and transparent process through which ESC, with support from City staff, can review relevant financial, operational, governance, legal, and community considerations before returning to City Council with a recommendation.

The proposed work is intended to support a future City Council policy decision and does not commit the City to joining OCPA. Rather, it establishes a framework for due diligence, community education and outreach, and comparative analysis so that City Council may later consider the issue with a more complete record.

DISCUSSION
Background
Community Choice Energy (CCE) is a model where local governments choose the source of electricity for their community instead of leaving that decision entirely to a traditional utility company. The existing utility, such as Southern California Edison (SCE), still delivers the electricity, maintains the poles and wires, sends the bill, and responds to outages. The main difference is who buys the electricity and how much renewable energy is included in the power mix.

OCPA is Orange County’s local CCE provider. It purchases electricity on behalf of participating cities and offers different energy plan options, including choices with higher renewable energy content. OCPA’s role is to give cities and customers more local control over energy procurement, cleaner energy options, and potentially more stable long term energy planning. It does not replace the utility’s role in transmission, infrastructure, or outage response.

Timeline
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Workplan to Evaluate Joining the Orange County Power Authority (Environmental Sustainability Committee)
April 14, 2026

Page 2 of 3 ends

The enrollment process begins with the City Council adopting a resolution declaring its intent to join OCPA.

That action is taken in October of each year. The ESC has developed a workplan to conduct due diligence and community outreach working back from that October meeting date. A five phase workplan is included as Attachment 1. Additionally a streamlined task oriented workplan is included as Attachment 2. These plans are subject to change as the process unfolds, but what is proposed will be the general process followed.

The table below summarizes the timing and objectives of each phase.

Phase Name Objective
Phase 1
(March-April) Authorization and Framework Secure City Council direction and establish the evaluation framework.

Phase 2
(April – June)
Data Collection, Baseline
Analysis, and Community
Outreach
Build the factual record, begin comparative analysis,
and engage the community early in the process.

Phase 3
(Jul – Aug) Due Diligence and Validation Validate assumptions, fill information gaps, and assess legal, operational, and governance issues.

Phase 4
(Sep)
Synthesis and Draft
Recommendation
Bring together the technical analysis, risk
assessment, and community input into a clear
recommendation.

Phase 5
(Oct) Council Review and Direction Present the completed assessment and recommendation for City Council consideration.

Fiscal and Staffing Considerations
There is no direct cost to the City to authorize OCPA to conduct a preliminary evaluation of the City’s energy profile and potential service options. However, staff anticipates that a meaningful review of potential participation in OCPA would require a substantial legal and administrative analysis beyond the City’s current internal capacity.

Specifically, staff expects that the City Attorney’s Office would need to conduct extensive legal research and review to evaluate the governance structure, financial obligations, risk exposure, withdrawal provisions, regulatory considerations, and other potential liabilities associated with enrollment in a CCE program. At this time, we do not believe that the City has sufficient internal capacity to complete that level of evaluation with existing staff resources.

As a result, the City Attorney would likely need to retain outside legal counsel with subject matter expertise in CCE and Joint Powers Authority participation to perform this analysis. Staff estimates that this work would carry a cost of approximately $40-50,000, depending on the scope of review and the level of due diligence directed by the City Council (assumes 100-150 hours at $275-$400/hour).

Given current budget and staffing constraints, the City Council would need to consider the broader organizational impact of undertaking this evaluation. The City is currently operating with limited staff and operational resources, and moving forward with a formal assessment is likely to require the reprioritization or reprogramming of existing funds and staff time. If directed to proceed, the City Council would need to 2 of 466
Workplan to Evaluate Joining the Orange County Power Authority (Environmental Sustainability Committee)
April 14, 2026

Page 3 of 3 ends

determine whether sufficient resources should be reassigned from other operational priorities to support this effort.

FINANCIAL ANALYSIS
Outside legal review is estimated to cost approximately $40,000 to $50,000, exclusive of any additional staff time or internal oversight required to manage that work.

This cost is not currently included in the adopted budget and would need to be considered as part of the City’s Fiscal Year 2026-27 budget process, alongside other competing priorities.

ENVIRONMENTAL ANALYSIS
The recommended action is not a project under the California Environmental Quality Act (CEQA) pursuant to State CEQA Guidelines Section 15378 because it consists only of the City Council’s review and consideration of a proposed workplan and does not authorize any physical activity, development, or other action that could result in a direct or reasonably foreseeable indirect change to the environment. In the alternative, the action is also exempt from CEQA pursuant to State CEQA Guidelines Section 15061(b)(3), the common sense exemption, because it can be seen with certainty that there is no possibility the recommended action would have a significant effect on the environment.

ATTACHMENTS

1. ESC Proposed Work Plan for OCPA

2. Task List Version
Submitted By:
. Approved: .

Jeremy Frimond, Assistant City
Manager
Dave Kiff, City Manager
Report Prepared By: Coordinated With:

Jeremy Frimond, Assistant City Manager, City
Manager's Office
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Page 1 of 4 ends

Proposed Work Plan for Environmental Sustainability Committee Review of Orange County Power Authority Membership

RECOMMENDATION
Receive the proposed work plan from the Environmental Sustainability Committee for evaluation of potential membership in the Orange County Power Authority and provide direction on whether the Committee and City staff should proceed with the assessment and return to City Council with findings and a recommendation.

SUMMARY OF THE MATTER
At the direction of the City Council, a preliminary work plan has been developed by the Environmental Sustainability Committee to evaluate whether membership in the Orange County Power Authority (OCPA) would be in the best interest of the City. The purpose of the work plan is to provide a structured and transparent process through which ESC, with support from City staff, can review relevant financial, operational, governance, legal, and community considerations before returning to City Council with a recommendation.

The proposed work plan is organized into five phases, as summarized below.

PROPOSED WORK PLAN
Phase 1: Authorization and Evaluation Framework
March 2026
The first phase would consist of City Council review of the proposed work plan and direction on whether ESC and City staff should proceed.

If authorized to proceed, ESC and staff would establish the framework that will guide the assessment, including the primary evaluation criteria to be used in developing a future recommendation. Those criteria are anticipated to include:
• Potential customer rate impacts
• Rate stability and long term cost considerations
• Renewable energy and sustainability benefits
• Governance structure and local control
Attachment 1
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Page 2 of 4 ends

• Financial, legal, and operational risks
• Community interest and alignment with City priorities Phase 1 Deliverable:

City Council direction on whether to proceed and confirmation of the evaluation framework.

Phase 2: Preliminary Analysis, Data Collection, and Community Outreach April through June 2026
If authorized to proceed, ESC and staff would begin collecting and organizing information necessary to evaluate OCPA membership.

This phase would include requesting relevant customer load data through OCPA coordination with the applicable investor owned utilities, including Southern California Edison and, if applicable, San Diego Gas & Electric. ESC and staff would also work to develop a preliminary bill impact analysis to better understand potential customer cost implications.

In addition, ESC and staff would revisit the City’s prior 2023 questionnaire used to evaluate Joint Powers Authority participation and refine that framework as appropriate for this review. Questions that can be answered through publicly available information, online materials, adopted documents, financial records, and agency publications would be completed during this phase.

Community outreach would also occur during this phase so that public education and feedback may inform the review while it is still underway. Outreach efforts may include informational materials, public discussion at ESC meetings, stakeholder engagement, and opportunities for residents and businesses to provide feedback.

Phase 2 Deliverables:
• Preliminary bill impact and customer analysis
• Updated evaluation questionnaire
• Community outreach summary and public input log
Phase 3: Due Diligence and Agency / Internal Review
July through August 2026
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The third phase would focus on validating information, filling gaps in the record, and addressing legal, operational, and governance questions that require direct agency or internal review.

ESC and staff would seek to schedule discussions with OCPA leadership, including Joe Mosca and/or Tiffany Law, in order to obtain responses to questions requiring clarification, direct confirmation, or technical explanation.

During this same phase, ESC and staff would also confer with the City Attorney and City Manager to evaluate legal, contractual, governance, and implementation considerations associated with potential membership.

The work completed during this phase would inform the City’s understanding of issues such as governance structure, financial oversight, membership obligations, operational implications, and risk exposure.

Phase 3 Deliverable:

Governance, legal, and risk assessment memorandum.

Phase 4: Draft Findings and Recommendation
September 2026
Following completion of the analysis and outreach process, ESC and staff would consolidate the information developed in the prior phases and evaluate OCPA against the approved criteria.

This phase would result in preparation of draft findings and a recommendation to City Council regarding whether the City should further consider membership in OCPA. If warranted, the recommendation may also identify conditions, safeguards, or additional follow up actions that should be considered in connection with any future Council direction.

Phase 4 Deliverable:

Draft ESC recommendation and supporting analysis.

Phase 5: City Council Workshop / Presentation of Findings October 2026
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The final phase would consist of ESC presentation of its findings and recommendation to City Council at a future public meeting or workshop.

The presentation would summarize the results of the review, including financial and customer considerations, governance and legal issues, identified risks and opportunities, and the nature of community feedback received during the process.

At that time, City Council would have the opportunity to consider whether to provide further direction regarding potential OCPA membership.

Phase 5 Deliverable:

Presentation of ESC findings and recommendation to City Council. 7 7 of 466

Page 1 of 3 ends

ESC Workplan for OCPA Assessment (Task Item Version)
Phase 1: Authorization and Framework (March)
Objective: Secure City Council direction and establish the evaluation framework.

Tasks
• Present the proposed scope, timeline, and workplan to City Council • Request authorization to proceed with the assessment of Orange County Power Authority • Establish evaluation criteria to guide ESC and staff analysis, including:
o Cost competitiveness
o Rate stability
o Renewable energy and sustainability value
o Governance and local control
o Financial and legal risk
o Community benefit and alignment with City values
• Confirm the roles of the Environmental Sustainability Committee and City staff in carrying out the work
Deliverable
• City Council approved workplan and evaluation criteria Phase 2: Data Collection, Baseline Analysis, and Community Outreach (April – June) Objective: Build the factual record, begin comparative analysis, and engage the community early in the process.

Tasks
• Ask OCPA to coordinate with Southern California Edison and San Diego Gas & Electric, as applicable, to obtain load data
• Work with OCPA and City staff to develop a preliminary bill impact analysis for residential and commercial customers
• Revisit and refine the City’s 2023 questionnaire used to evaluate potential Joint Powers Authorities
• Complete those portions of the questionnaire that can be answered through publicly available information and online research
• Develop and implement a community outreach plan to:
o Educate the public on what OCPA is and what membership would mean o Provide neutral background information on options and tradeoffs o Solicit public input from residents, businesses, and stakeholders • Gather and organize public feedback for later incorporation into the analysis Deliverables
• Preliminary financial and customer impact analysis
• Updated evaluation questionnaire
Attachment 2
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• Community outreach summary and input log
Phase 3: Due Diligence and Validation (July – August)
Objective: Validate assumptions, fill information gaps, and assess legal, operational, and governance issues.

Tasks
• Schedule and conduct interviews with:
o Joe Mosca
o Tiffany Law
• Obtain answers to questions requiring direct agency response or verification • Schedule and conduct internal discussions with:
o City Attorney
o City Manager
• Evaluate:
o Governance structure
o JPA membership terms
o Financial oversight and transparency
o Potential legal and operational risks
• Assess reliability of assumptions used in the preliminary bill and risk analyses Deliverable
• Governance, legal, and risk assessment memorandum
Phase 4: Synthesis and Draft Recommendation (September) Objective: Bring together the technical analysis, risk assessment, and community input into a clear recommendation.

Tasks
• Consolidate findings from:
o Financial analysis
o Questionnaire responses
o Governance and legal review
o Community outreach
• Evaluate OCPA against the Council approved criteria
• Develop a draft recommendation on whether the City should join OCPA • If appropriate, identify conditions, safeguards, or follow up steps that should accompany any recommendation
Deliverable
• Draft ESC recommendation report to City Council
Phase 5: Council Review and Direction (October)
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Objective: Present the completed assessment and recommendation for City Council consideration.

Tasks
• Present ESC findings and recommendation to City Council • Summarize:
o Financial impacts
o Risks and opportunities
o Governance considerations
o Community feedback
o Overall recommendation
• Request Council direction on whether to proceed with or decline OCPA membership consideration
Deliverable
• City Council presentation and requested direction
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15 of 466
1 McKay, Ann Marie CC
Subject: Support for Agenda 15
From: Tristan Miller
Sent: Monday, April 13, 2026 2:02 PM
To: McKay, Ann Marie CC <[email protected]>
Subject: Support for Agenda 15
Good afternoon,
We support agenda item 15 and the implementation of a work plan. As OCPA, a not-for-profit CCA, will bring more energy choices and renewable energy to Laguna Beach. For example, in Marin County, their local CCA is providing 14% generation rate reduction for their residents and businesses: https://mcecleanenergy.org/mce-board-approves-14-percent-generation-rate-reduction-andbill-relief-beginning-april-1/ Renewable energy is a key part of greening communities and keeping rates competitive. Thank you! Tristan

WORKPLAN TO EVALUATE JOINING THE ORANGE COUNTY POWER AUTHORITY (ENVIRONMENTAL

SUSTAINABILITY COMMITTEE
Recommendations: Direct staff and the Environmental Sustainability Committee (ESC) to implement the proposed work plan and return to the City Council with findings, community input, and a recommendation regarding potential Orange County Power Authority (OCPA) membership at the October enrollment decision timeline.
https://lagunabeachcity.primegov.com/Portal/Meeting?meetingTemplateId=719 16 of 466

STAFF REPORT
Meeting Date:

April 14, 2026

BUSINESS
16 SUBJECT: FIRST READING OF AN ORDINANCE AMENDING TITLE 18 AND SECTIONS

6.16.020 AND 8.04.010 OF THE LAGUNA BEACH MUNICIPAL CODE AND

ADOPTION OF A RESOLUTION FOR SPECIAL EVENTS
RECOMMENDATION: It is recommended that the City Council:

1. Adopt the Resolution titled, “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

LAGUNA BEACH, CALIFORNIA, ESTABLISHING LOCATIONS WHERE SPECIAL

EVENTS ARE ALLOWED AND RULES AND REGULATIONS GOVERNING SPECIAL EVENTS; AND FINDING THE ACTION CATEGORICALLY EXEMPT FROM THE

CALIFORNIA ENVIRONMENTAL QUALITY ACT PURSUANT TO STATE CEQA GUIDELINES SECTION 15304”; and

2. Waive the full reading and introduce by title only, “AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAGUNA BEACH, AMENDING TITLE 18 AND SECTIONS 6.16.020 AND

8.04.010 OF THE LAGUNA BEACH MUNICIPAL CODE; AND FINDING SUCH ACTION

EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT UNDER CEQA GUIDELINES SECTION 15304”.

SUMMARY OF THE MATTER
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This report presents an ordinance amending Title 18 (Beaches and Parks) and Sections 6.16.020 and

8.04.010 of the Laguna Beach Municipal Code, along with a resolution establishing locations where special events are allowed and rules and regulations governing such events through a Special Event Permit Policy.

Following the Council’s last direction, we have presented both in a manner that would allow the Council to adopt the resolution and introduce the ordinance to streamline the review and approval process for events held at City parks, beaches, and facilities, while addressing operational and public safety considerations.

The proposed Special Event Permit Policy establishes designated event locations, defines event classifications based on size, outlines application requirements, and implements a tiered fee structure to ensure cost recovery.

Additionally, the ordinance includes updates to regulations related to shade coverings on beaches and parks, and clarifies swimming and surfing designations, including operational provisions at Aliso Beach.

As we note the above, we also note that in this staff report, we’ve proposed for your consideration an alternative solely regarding allowing some canopies (of a defined size) at two beaches, and behind the lifeguard tower line of sight. You may or may not wish to consider this alternative.

There is no direct fiscal impact associated with the adoption of the ordinance and resolution; however, the proposed policy is intended to improve administrative efficiency and ensure appropriate cost recovery for City services. This action supports the City Council’s goals of enhancing public safety, improving operational efficiency, and maintaining high-quality recreational experiences.

The proposed actions have been reviewed in accordance with the California Environmental Quality Act (CEQA) and are categorically exempt pursuant to CEQA Guidelines Section 15304 (Minor Alterations to Land), as they involve minor regulatory and operational changes with no potential for significant environmental impact.

DISCUSSION
Background
At the January 26, 2026 City Council meeting, City staff presented a proposed ordinance amending Title 18 (Beach and Parks) and a corresponding proposed resolution establishing locations where special events are allowed and the rules and regulations governing special events through a Special Event Permit Policy to streamline the review and approval of events held at City parks, beaches, and facilities.

Additionally, City staff presented proposed modifications to the municipal code through the same ordinance amending Title 18 to further address shade coverings and to designate surfing and skimboarding locations at Aliso Beach in response to Marine Safety Department challenges when monitoring the ocean from the lifeguard towers due to shade coverings and facilitating mixed uses at Aliso Beach. (See Attachment 1 [January 26, 2026 Staff Report, Resolution, Ordinance, and Matrix of Changes to Title 18].) 2 of 150
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Following public comments, the City Council directed that staff return to the Council with following proposed changes to the ordinance:

1. Better address that swimming and surfing are allowed in the swimming and surfing area year-round, except during certain periods of time and locations where only surfing is allowed to the exclusion of swimming;

2. Prohibit the use of certain shade coverings (commonly known as tents, canopies, or EZ-ups) on all City beaches; and

3. Allow shade coverings in city parks as long as they meet a certain size requirement.

Following the January 27, 2026 City Council meeting, City staff identified that some provisions from the urgency ordinance adopted by the City Council to ensure continuity in operations of South Laguna Beaches needed to be included in a regular ordinance. Accordingly, City staff updated this ordinance before the City Council to implement the same exact urgency provisions for Section 6.16.020 (Dogs on beaches, in parks and school grounds—when and where prohibited) and for Section 8.04.010 (Drinking or possession in public places) to be adopted by regular ordinance.

We believe that the changes mentioned in the above paragraph can be considered “clean-up” changes.

A redline version of the ordinance implementing the City Council’s direction is included as Attachment 2.

The final, clean versions of the Ordinance Amending Title 18 and Sections 6.16.020 and 8.04.010 of the Laguna Beach Municipal Code and the Resolution Establishing Locations for Special Events and Rules and Regulations are attached to this staff Report as Attachments 3 and 4, respectively. 3 of 150
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1. Special Events
The City of Laguna Beach hosts a wide variety of special events each year, including parades, community events, art shows, athletic competitions, and other community activities. Currently, the City relies on a combination of municipal code provisions, departmental procedures, and informal practices to manage these events. The lack of a consistent policy has led to challenges in enforcement, inconsistent requirements for event organizers, and a more complex approval process. The increase in event requests in recent years highlights the need for a standardized, transparent permitting framework. .At the January 26, 2026 City Council meeting, the City Council did not direct any changes to the Resolution Establishing Locations for Special Events and Rules and Regulations. This resolution will guide applicants and members of the public on the process to obtain a special event permit. In short, it defines certain City parks and beaches that are available for special events and further identifies that an event, which will exceed 50 people, will require a Tier I special event permit, and an event, which will exceed 500 people, will require a Tier II special event permit. The Tier I special event permit requires lesser application fees and application requirements than the Tier II special event permit. The proposed event locations include:
• Aliso Beach and Aliso Beach Park
• Alta Laguna Park
• Bluebird Park
• Cobblestones at Main Beach
• Community and Recreation Center
• Heisler Park Picnic Area
• Irvine Bowl (subject to existing lease obligations)
• Lang Park
• Main Beach Park
• Moulton Meadows Park
• Parking Lot 10
• Picnic Beach
• Promenade on Forest Avenue
Key areas of the proposed policy include:
• Event Definition and Classification: Establishes two event categories based on size. • Application Requirements: Creates a checklist of the required documentation for each type of application.
• Permit Fees and Cost Recovery: Establishes a tiered fee structure and requires reimbursement for City services.
• Event Limitation: Establishes rules and regulations for special events. Prohibits special events during peak summer months from Memorial Day to Labor Day unless considered and approved by the City Manager.
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A Resolution Establishing Locations for Special Events and Rules and Regulations is included as Attachment 4. It is proposed to become effective once the Ordinance Amending Title 18 and Sections

6.16.020 and 8.04.010 of the Laguna Beach Municipal Code becomes effective.

2. Title 18 – Beaches and Parks
At the January 26, 2026 City Council meeting, the City Council directed the following changes to the Ordinance Amending Title 18:

1. Better address that swimming and surfing is allowed in the swimming and surfing area year-round except during certain periods of time and locations where only surfing is allowed to the exclusion of swimming;

2. Prohibit the use of certain shade coverings (commonly known as tents, canopies, or ez-ups) on all City beaches; amd

3. Allow shade coverings in city parks as long as they meet a certain size requirement.

As more clearly reflected in the redline, City staff made changes to the swimming and surfing provisions to read as follows:
§ 18.20.025. Swimming and Surfing Areas.
a) All waters within two hundred (200) yards from the shoreline are designated as swimming and surfing areas, except that from June 15th and September 15th, both dates inclusive, of each calendar year, there are designated surfing areas to the exclusion of swimming.

1. The following described areas of the Pacific Ocean are hereby designated as surfing areas, and surfing within said areas only during the daylight hours enumerated below shall be permitted:
i. Area No. 1: That area lying between a point one hundred fifty feet south of the southerly extension of Brooks Street and a point one hundred fifty feet north of the northerly extension of Brooks Street only during the hours from sun-up to sundown; ii. Area No. 2: That area lying between a point ninety feet south of the southerly extension of St. Ann's Drive and a point two hundred feet south of the southern extension of Thalia Street only during the hours from sun-up to sundown; iii. Area No. 3: That area lying between Victor Hugo's Point and the stairway entrance below Jasmine Street only during the hours from sun-up to sundown; iv. Area No. 4: That area lying between a point one hundred twenty-five feet south of the southerly extension of Agate Street and a point one hundred feet north of the northerly extension. The hours of surfing to be from sun-up until twelve noon and then five p.m. until sunset;
v. Area No. 5: Surfing is allowed in Area No. 5. Exception: In Aliso Beach, specifically, a zone for surfing shall be set up from 12 pm to 6 pm daily through the posting of signs and flags by Marine Safety Department staff or for increased durations as conditions warrant at the determination by Marine Safety Department staff. If a zone for surfing is not set through the posting of signs and flags by Marine Safety 5 of 150
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Department staff, the surfing area is hereby established at the South end of Aliso Beach from 12pm to 6pm between June 15th and September 15th (inclusive of those specific days).

2. No person shall wade, bathe, or swim between in any surfing area at any times when surfing is permitted in such area unless such person has in his or her possession and is actually using a surfboard, paddleboard, or other similar device.

3. No person shall engage in the activity of surfing from June 15th to September 15th outside of the designated surfing area unless the city manager, marine safety chief, police chief, or other employee of the city designated by the city manager to enforce surging regulations and control surfing activities, upon careful evaluation, permits surfing in certain swimming areas as follows through the posting of signs and flags.
i. Whenever surfing or weather conditions make swimming or bathing hazardous in the beach area from a point one hundred fifty feet south of the southerly extension of Brooks Street to a point ninety feet south of the southerly extension of St. Ann's Drive, or
ii. When relatively few swimmers or bathers are present. b) No persons shall operate any vessel within swimming and surfing areas except that vessels, other than motorboats, which have been launched from the beach may proceed directly to and from the beach through said designated areas.
c) The launching of any vessels may be prohibited by any police officer or lifeguard at any time it appears to such police officer or lifeguard that such activity would constitute a hazard to persons swimming and surfing in said designated area or to the operators or passengers of said vessels.

Further, as more clearly reflected in the redline, City staff made changes to the shade covering and structures provisions to implement the City Council’s direction, and better address the structures that the City is trying to regulate (i.e., shade coverings, tables, and volleyball courts and nets), to read as follows:
§ 18.04.020. Shade Coverings, Tables, and Volleyball Nets and Courts. (a) Shade coverings

1. Shade coverings, other than umbrellas in a form substantially similar to Figure 1, below, are prohibited on all beaches within the City.

2. Shade coverings are allowed at all parks within the City but cannot exceed six feet in width by six feet in depth by six feet in height.

3. Any authorized shade covering shall be relocated at the request of the Marine Safety Department staff, Police Department staff, or other authorized City personnel. (b) Tables

1. No person shall install, erect, or maintain any table over six feet in length by three feet in width on any beach within the City.

2. No person shall install, erect, or maintain any table over six feet in length by three feet in width on any public park within the City.

3. Any authorized table shall be relocated at the request of the Marine Safety Department staff, Police Department staff, or other authorized City personnel. (c) Volleyball Nets and Courts
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1. No person shall install, erect, or maintain any volleyball net or court on any beach within the City unless it has been approved by the city manager or designee and has all of the required approvals from the City.

2. No person shall install, erect, or maintain any volleyball net or court on any public park within the City unless it has been approved by the city manager or designee and has all of the required approvals from the City.

3. Any authorized volleyball net and court shall be relocated at the request of the Marine Safety Department staff, Police Department staff, or other authorized City personnel.

Figure 1
(Umbrella)
Later Discussions – Another Option? Following the City Council meeting, City staff, including the Marine Safety Department and Police Department, met regarding the difficulties of enforcing a ban on certain shade coverings (commonly known as tents, canopies, or ez-ups). Specifically, there is concern that members of the public, who travel far distances with such shade coverings will have nowhere to go to beach with sufficient shade covering and Marine Safety and Police Department staff will spend a great deal of time working with such members of the public to explain the rules and explain that there is no beach in Laguna Beach where such shade coverings are allowed.

There is concern that these additional enforcement burdens might interfere with the lifeguards’ main duties, including education, accident prevention, and rescue, and police officers’ main duties, including preventing crime and protecting the public. Beach and ocean conditions often require staff to shift priorities due to accident prevention and life-safety concerns.

In response to these concerns, City staff prepared language reflecting an alternative to an outright ban on certain shade structures at the beach. This alternative is not in the proposed ordinance, but it addresses City staff’s concerns regarding enforcement and line of sight issues while also trying to implement the City Council’s direction and stated goals. It also distinguishes between beach adjacent parks and non-beach adjacent parks, such as sport fields, and authorizes different size shade structures at beach adjacent parks and non-beach adjacent parks. What follows is proposed alternative language for Section 18.04.020:
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§ 18.04.020. Shade Coverings, Tables, and Volleyball Nets and Courts. (a) Shade coverings

1. Beaches
i. Shade coverings, other than umbrellas in a form substantially similar to Figure 1, below, are prohibited on all beaches within the City except for Main Beach and Aliso Beach.
ii. In the case of shade coverings and structures at Main Beach and Aliso Beach, shade coverings are limited in size to eight feet in width by eight feet in depth by six feet in height and are only allowed in the zones, which are located in line with or behind the lifeguard towers and approved by resolution of the City Council. iii. Any authorized shade covering shall not interfere with a lifeguard's ability to see the water or adjacent lifeguard towers and shall not be located within twenty feet of public and emergency access pathway and not be located within five feet from another shade covering.
iv. Any authorized shade covering shall be relocated at the request of the Marine Safety Department staff, Police Department staff, or other authorized City personnel.

2. Parks
i. Shade coverings and structures are allowed at beach adjacent parks within the City but cannot exceed eight feet in width by eight feet in depth by six feet in height. ii. Shade coverings and structures are allowed at non-beach adjacent parks within the City but cannot exceed ten feet in width by ten feet in depth by ten feet in height. iii. Any authorized shade covering shall be relocated at the request of the Marine Safety Department staff, Police Department staff, or other authorized City personnel. (b) Tables

1. No person shall install, erect, or maintain any table over six feet in length by three feet in width on any beach within the City.

2. No person shall install, erect, or maintain any table over six feet in length by three feet in width on any public park within the City.

3. Any authorized table shall be relocated at the request of the Marine Safety Department staff, Police Department staff, or other authorized City personnel. (c) Volleyball Nets and Courts

3. Any authorized volleyball net and court shall be relocated at the request of the Marine Safety Department staff, Police Department staff, or other authorized City personnel. 8 of 150
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Figure 1
(Umbrella)
See below for proposed additional definitions to add to Chapter 18.01 (Definitions):
“Beach Adjacent Park” means Aliso Beach Park, Crescent Bay Park Point, Heisler Park, Montage Park, and Main Beach Park.
“Non-Beach Adjacent Park” means Alta Laguna Park, Bluebird Park, Community and Recreation, South Laguna Village Green Center, High School and Community Pool, Indoor Chapel Park, Laguna Beach Dog Park, Lang Park, Moulton Meadows Park, Riddle Field Park, Temporary Skate Ramps, Wilcoxen Park Below are the zones that City staff proposes for certain allowed shade structures at Aliso Beach and Main Beach:
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Aliso Beach:

Main Beach:
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The final, clean versions of the Ordinance Amending Title 18 and Sections 6.16.020 and 8.04.010 of the Laguna Beach Municipal Code and the Resolution Establishing Locations for Special Events and Rules and Regulations are attached to this staff Report as Attachment 3 and 4, respectively. City staff is open to any additional feedback regarding the proposed ordinance and resolution and the proposed modifications set forth in this staff report, which as noted are not included in the proposed ordinance.

FINANCIAL ANALYSIS
Fees collected for Special Events Permits should offset some or all of the costs associated with the events themselves. There may be modest increases in the amount of time that Park Rangers and others spend addressing canopy violations, but some of that work is being done now.

ENVIRONMENTAL ANALYSIS
The action on the ordinance amending Title 18 and resolution establishing locations where special events are allowed and rules and regulations governing special event through the Special Event Permit Policy is exempt from the requirements of the California Environment Quality Act pursuant to State CEQA Guidelines Section 15304 (Minor Alterations to Land, Class 4) which exempts minor public or private alterations in the condition of land, water, and/or vegetation which do not involve removal of healthy, mature, scenic trees except for forestry and agricultural purposes. Examples include but are not limited to minor temporary use of land having negligible or no permanent effects on the environment, including carnivals, sales of Christmas trees, etc. (14 CCR Section 15304(e).) Here, this action will allow people to use portions of the City’s parks and beaches for special events for a temporary period of time subject to rules and regulations of the City. This action does not authorize permanent infrastructure and merely creates an administrative system to allow persons to coordinate use of the beach, parks, and other City facilities.

Therefore, this action falls within the minor alterations to land exemption.

Finally, the Project does not include any hazardous waste sites. Thus, Class 4 exemption applies, and no further environmental review is required.

ATTACHMENTS

1. January 26, 2026 Staff Report, Resolution, Ordinance, and Matrix of Changes to Title 18 (Pgs. 12-70)

2. Redline of Changes to Ordinance Since January 26, 2026 City Council meeting (Pgs. 71-101)

3. Ordinance Amending Title 18 and Sections 6.16.020 and 8.04.010 of LBMC (Pgs. 102-132)

4. Resolution Establishing Locations for Special Events and Rules and Regulations (Pgs. 133-147) 11 of 150
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Submitted By: Alexis Bruan Approved: .David A Kiff
Alexis Braun, Acting Director of
Transit and Community Services
Dave Kiff, City Manager
Report Prepared By: Coordinated With:

Alexis Braun, Acting Director of Transit and
Community Services
Kai Bond, Marine Safety Chief
Jane Abzug, Assistant City Attorney
Andrea Tirnauer, Senior Recreation Coordinator
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STAFF REPORT
Meeting Date:

January 27, 2026

BUSINESS

15.5 SUBJECT: DISCUSSION OF AN ORDINANCE AMENDING TITLE 18 (BEACH AND PARKS)

TO ESTABLISH A SPECIAL EVENT PERMIT PROCESS AND MODIFYING

REGULATIONS ON SURFING AT ALISO BEACH AND USE OF SHADE

COVERINGS AT BEACHES AND PARKS AND A CORRESPONDING

RESOLUTION ESTABLISHING LOCATIONS WHERE SPECIAL EVENTS MAY

OCCUR AND RULES AND REGULATIONS FOR SPECIAL EVENTS
RECOMMENDATION: It is recommended that the City Council receive a staff report, take public comments, discuss and provide further direction to staff regarding:

1. A Draft Ordinance titled, “AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAGUNA BEACH, AMENDING TITLE 18 OF THE LAGUNA BEACH MUNICIPAL CODE;

AND FINDING SUCH ACTION EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT UNDER CEQA GUIDELINES SECTION 15304”; and

2. A Draft Resolution titled, “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

LAGUNA BEACH, CALIFORNIA, ESTABLISHING LOCATIONS WHERE SPECIAL

EVENTS ARE ALLOWED AND RULES AND REGULATIONS GOVERNING SPECIAL EVENTS; AND FINDING THE ACTION CATEGORICALLY EXEMPT FROM THE

CALIFORNIA ENVIRONMENTAL QUALITY ACT PURSUANT TO STATE CEQA GUIDELINES SECTION 15304”.

SUMMARY OF THE MATTER
The City of Laguna Beach hosts a wide variety of special events each year, including parades, community events, art shows, athletic competitions, and other community activities. Currently, the City relies on a combination of municipal code provisions, departmental procedures, and informal practices to manage these events. The lack of a consistent policy has led to challenges in enforcement, inconsistent requirements for event organizers, and a more complex approval process. The increase in event requests in recent years highlights the need for a standardized, transparent permitting framework. In response, staff developed an ordinance amending Title 18 (Beach and Parks) and a corresponding proposed resolution establishing locations where special events are allowed and the rules and regulations governing special events through a Special Event Permit Policy to streamline the review and approval of events held at City parks, beaches, and facilities. Developed by the Transit and Community Services Department in collaboration with multiple departments, the Special Event Permit Policy establishes consistent criteria, timelines, and responsibilities.

Additionally, in light of beach attendance increasing annually, Marine Safety staff have faced challenges when monitoring the ocean from the lifeguard tower due to shade coverings and facilitating mixed uses at Aliso Beach. In response, staff addressed modifications to the municipal code through the same ordinance amending Title 18 to further address shade coverings and to designate surfing and skimboarding locations at Aliso Beach.
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The purpose of this agenda item is not to consider adoption tonight but to gain feedback from the public and City Council for further development of the ordinance and resolution.

Actions on the ordinance amending Title 18 and resolution establishing locations where special events are allowed and rules and regulations governing special events through the Special Event Permit Policy will be exempt from the requirements of the California Environment Quality Act pursuant to State CEQA Guidelines Section 15304 (Minor Alterations to Land, Class 4).

DISCUSSION
On May 16, 2023, the City Council directed staff to develop a special event permit process to authorize private events at Aliso Beach and other South Laguna Beaches as needed. Since that time, City staff has identified community interest in using additional City parks, beaches, and facilities for special events.

Accordingly, City staff has prepared a draft ordinance that amends Title 18 (Beach and Parks) to better organize the rules (Attachment 1), an index of the changes to Title 18 (Beach and Parks) (Attachment 2), and a draft resolution establishing locations where special events are allowed and rules and regulations governing special event through the Special Event Permit Policy (Attachment 3). The draft ordinance changes and Special Event Permit Policy are discussed in more detail below.

A. Title 18 (Beaches and Parks)
As a summary, the ordinance repealing and replacing Title 18 (Parks and Beaches) makes the following changes: (1) reorganizes Title 18 to remove duplications and out-of-date provisions and regroup related provisions; (2) creates a comprehensive special event permit process; (3) modifies the regulations on tents on beaches and parks and surfing in South Laguna.
(1) Reorganizes Title 18 to remove duplications and out-of-date provisions City staff reorganized and reformatted the provisions in Title 18, as reflected in the index of proposed changes to Title 18. (Attachment 2.) As reflected in the index, most changes reorganized provisions and left the content of the provisions the same. The new, revised, or repealed provisions are notated in the index. (2) Creates a comprehensive special event permit process While the current version of Title 18 references a beach and park use reservation permit system and various activities that require a reservation, such as certain activities at Main Beach Park cobblestone area and outdoor gatherings, concerts, festivals, art shows, and exhibits, and outdoor athletic contests, it also references other activities that require a permit from the City, such as commercial dog training, organized play, and informal weddings. In practice, City staff has been issuing permits for such activities but without a formal adopted policy.

To better guide City staff and the public, City staff is proposing to amend Title 18 to specifically define a “special event” and to more clearly regulate when a special event permit is required, the process for obtaining a special event permit, and the operable rules for activities authorized by special event permits.

More specifically, the ordinance proposes to define “special event” as follows:
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a) Organized public or private gatherings or activities, whether for profit or not for profit, that exceed the capacity of designated areas specified by resolution of the city council. Private or public gatherings within the capacity of the designated areas set by resolution are not considered special events for purposes of this chapter.
b) The following organized public or private gatherings or activities, whether for profit or not for profit:

1. Informal weddings;

2. Outdoor gatherings, concerts, festivals, art shows, and exhibits;

3. Commercial stand-up paddling activity;

4. Commercial dog training;

5. Outdoor athletic contests;

6. Organized play;

7. Special organized recreational boating events; and

8. Other similar activities at the determination of the City Manager or designee.

The draft resolution (Attachment 3) establishes where special events are allowed and the capacity of persons at an event which trigger the need for a special event permit.

The draft ordinance largely maintains the existing provisions relating to the beach and park use reservation permit system and renames it throughout Title 18 as the special event permit process. It maintains that the City Council will set the application fees for special event permit applications. This is established in the resolution. (Attachment 3.) It further maintains that the City Manager or designee shall be responsible for the administration of the special event permit process and shall develop application forms and any further internal city rules, regulations, and requirements deemed necessary to administer the process.

The draft ordinance requires that a special event permit application be submitted in writing at least 30 calendar days before the date of the proposed activity and requires a decision on the application within 15 calendar days after it is received. The draft ordinance sets forth specific grounds upon which a special event permit can be denied and provides an appeal procedure to the City Council.

Certain conduct subject to a special event permit have special time, place, and manner rules. Below is an overview of those special rules, most of which already exist in the City’s municipal code, and how this draft ordinance modifies those special rules, if at all:

Conduct Special Rules in Draft
Ordinance
How It Would Change
Constitutionally protected
expressive activities with
use of structure at Main
Beach Park.

Hard surface cobblestone
area is available not more
than 5 days per month.

Change to identify the special event permit
process rather than unnamed permit
process.

Other Special Events
Involving the Use of
Hard surface cobblestone is
available not more than two
Change to authorize individuals and
organizations (including for-profit
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Structures at Main Beach
Park
days per month and may
involve sales related to the
event provided the vendor
has a Laguna Beach business
license.
organizations) and authorize activities other
than art and craft shows and sales.

Change to identify the special event permit
process rather than unnamed permit
process.

Informal Weddings No additional tables or
chairs or other facilities may
be erected for such
ceremonies.

No alcoholic beverages shall
be served and no amplified
sound shall be permitted.

The maximum number of the
wedding party and guests
shall not exceed fifty people
in the Gazebo at Heisler Park
or at Crescent Bay Park.

Up to ninety-five people are
allowed per wedding in other
locations in Heisler Park.

No more than two weddings
per day shall be permitted at
Crescent Bay Park.

Change to identify the special event permit
process rather than unnamed permit
process.

Outdoor gatherings,
concerts, festivals, art
shows, and exhibitions;
Any outdoor gathering,
concert, festival, art show, or
exhibitions involving the use
of structures and not
otherwise provided for in
this chapter or elsewhere in
this code shall be held at
Irvine Bowl Park. The use of
the amphitheater and festival
grounds at Irvine Bowl shall
be on a first-come, firstserved basis by reservation
through the special event
permit process and is subject
to the requirements of any
existing or subsequently
approved lease of those
facilities. Nothing in this
section shall be construed to
supersede the provisions of
Change to identify the special event permit
process rather than unnamed permit
process.

New provision that allows for outdoor
gatherings, concerts, festivals, art shows,
and exhibits outside of the Irvine Bowl if
the Irvine Bowl is unavailable. City staff
added this provision in case a member of
the public wants to have a block party, for
example, so that the City has a mechanism
to recoup its fees and costs. Such event
must be approved or denied by the City
Manager.
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any such lease. Outdoor
gatherings to be attended by
more than two thousand five
hundred persons require a
license pursuant to
Chapter 5.68 of this code.

If the Irvine Bowl Park is
unavailable for an outdoor
gathering, concert, festival,
art show, or exhibition
involving the use of
structures, the sponsor of a
special event can propose the
event at an alternative
location. The City Manager
shall either approve or deny
such special event permit
application.

Commercial stand-up
paddling activity;
All commercial stand-up
paddling activity business
must obtain a special event
permit and must meet basic
safety and operating rules,
including that instructors
must be trained in First Aid
and CPR and attend a yearly
safety orientation; each
instructor may supervise no
more than four students; no
more than ten people from
one business may be in the
water at one time; instructors
must be clearly identifiable,
such as by wearing matching
hats; business must maintain
certain liability insurance;
business must comply with
law. Marine Safety Chief
may add additional permit
requirements in the interest
of public health, safety, and
general welfare.

Change to identify the special event permit
process rather than unnamed permit
process.
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Commercial dog training Commercial dog training is
prohibited in city dog parks,
unless specifically permitted
by the city through the
special event permit process.

Change to identify the special event permit
process rather than unnamed permit
process.

Outdoor athletic contests Parks and beaches may be
reserved through the special
event permit process for
athletic contests, events, or
activities, including practice
or training sessions, in areas
designated for such use.

Special structures to be used
in conjunction with these
activities shall be subject to
the discretionary review and
approval by the city through
the special event permit
process and may require
other entitlements based on
the proposed structures.

Change to allow outdoor athletic contests
and parks and beaches and to identify the
special event permit process rather than
unnamed permit process.

Organized play Need a special event permit
to hold organized games or
practices on city parks,
fields, courts, pools, or other
recreational facilities. City
will consider whether the
location is a good fit for the
activity, impacts to
surrounding neighborhoods,
interference with other
public use, and whether
group is made of up city
residents (for preference).

City can set reasonable rules
to protect public welfare.

City may suspend or revoke
special event permit if
conditions of permit are
violated.

Change to identify the special event permit
process rather than unnamed permit
process.

Special organized
recreational boating events
While overnight storage on
public beaches of vessels is
usually prohibited, it can be
Change to identify the special event permit
process rather than unnamed permit
process.
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accommodated through a
special event permit in
connection with a special
organized recreational
boating event.
(3) modifies the regulations on shade coverings on beaches and parks and surfing in South Laguna.
i. Shade Coverings and Structures:

Recently, beach attendance has increased, creating challenges for Marine Safety staff when monitoring the ocean from the lifeguard tower. The lifeguard's view of the ocean and nearshore environment is paramount to public safety and Marine Safety operations. The most common obstruction is large shade coverings with multiple posts. In response, staff is requesting that the City Council consider modifying the current ordinance to prohibit multi-post shade coverings seaward (in front) of lifeguard towers. Shade coverings with multiple points of contact with the sand would be allowed behind lifeguard towers with a size restriction of six feet in height and width. The modification in the draft ordinance is written below:
§ 18.04.020. Shade Coverings1 and Structures2. (a) No person shall install, erect, or maintain any shade covering or structure over six feet in height or wider than six feet on or in any public beach, park, street, alley, or passageway.
(b) Any shade covering or structure installed, erected, or maintained on or in any public beach, park, street, alley, or passageway shall:

1. Not have more than one side closed to public view; and

2. Not interfere with a lifeguard’s ability to see the water or adjacent lifeguard towers; and

3. Not have more than one contact point with the sand, when located seaward of lifeguard towers; and

4. Not be located within twenty feet of any emergency or public access; and

5. Not obstruct any emergency or public access; and

6. Not be located within five feet from another shade covering or structure. (c) Any shade covering or structure shall be relocated at the request of the Marine Safety Department staff, Police Department staff, or other authorized City personnel.
ii. Surfing and Skimboarding
1 Chapter 18.01 includes the following new definition: “Shade covering” means a canopy, awning, umbrella, tent, cabana, easyup, or cover. 2 Chapter 18.01 includes the following new definition: “Structure” means tables, signs, coolers, sports equipment, a volleyball court, or other temporary items.
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In March 2023, the City began providing lifeguard services in South Laguna. Aliso Beach has been identified as a high-impact area due to amenities such as a parking lot, a playground, bathrooms, firepits, and beachside dining. In addition, Aliso Beach is a very popular spot for skimboarding, surfing, and swimming. Due to Aliso Beach's popularity and frequent overlap of these activities, the staff is proposing a modification to the municipal code to reduce the possibility of accidents and injuries. The modification in the ordinance is written below:
§ 18.20.025. Surfing5—Time and place permitted.
a) Between June fifteenth and September fifteenth, both dates inclusive, of each calendar year, the following described areas of the Pacific Ocean are hereby designated as surfing areas, and surfing within said areas only during the daylight hours enumerated below shall be permitted:
. . . 5. Area No. 5: Surfing is allowed in Area No. 5. Exception: In Aliso Beach, specifically, a zone for surfing shall be set up from 12 pm to 6 pm daily through the posting of signs and flags by Marine Safety Department staff or for increased durations as conditions warrant at the determination by Marine Safety Department staff. If a zone for surfing is not set through the posting of signs and flags by Marine Safety Department staff, the surfing area is hereby established at the South end of Aliso Beach between June fifteenth and September fifteenth.

B. Special Event Permit Policy
City staff has prepared a Special Event Permit Policy (Attachment 3, Exhibit B) to guide applicants and members of the public on the process to obtain a special event permit. In short, it defines certain City parks and beaches that are available for special events and further identifies that an event, which will exceed 50 people, will require a Tier I special event permit, and an event, which will exceed 500 people, will require a Tier II special event permit. The Tier I special event permit requires lesser application fees and application requirements than the Tier II special event permit. The proposed event locations include:

Aliso Beach and Aliso Beach Park
Alta Laguna Park
Bluebird Park
Cobblestones at Main Beach
Community and Recreation Center
Heisler Park Picnic Area
Irvine Bowl (subject to existing lease obligations)
Lang Park
Main Beach Park
5 Chapter 18.01 includes the following new definition: “Surfing” means the use in the Pacific Ocean adjacent to the shoreline within the boundaries of the city of any surfboard, paddleboard, skimboarding, or other similar object made entirely or partially of wood, metal, glass, hard plastic, or any other hard substance. 19 20 of 150
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Moulton Meadows Park
Parking Lot 10
Picnic Beach
Promenade on Forest Ave.

Key areas of the proposed policy include:

Event Definition and Classification: Establishes two event categories based on size.

Application Requirements: Creates a checklist of the required documentation for each type of application.

Permit Fees and Cost Recovery: Establishes a tiered fee structure and requires reimbursement for City services.

Event Limitation: Establishes rules and regulations for special events. Prohibits special events during peak summer months from Memorial Day to Labor Day unless considered and approved by the City Manager.

FINANCIAL ANALYSIS
The fiscal impact would be recouping revenue that is currently absorbed by the general fund.

Finally, the Project does not include any hazardous waste sites. Thus, Class 4 exemption applies, and no further environmental review is required.
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ATTACHMENTS

1. Draft Ordinance Amending Title 18 (Pgs. 11-38)

2. Index of proposed changes to Title 18 (Pgs. 39-45)

3. Draft City Council Resolution Establishing Locations for Special Events and Rules and Regulations (Pgs. 46-59)
Submitted By: Alexis Braun Approved: .David A Kiff
Alexis Braun, Acting Director of
Transit and Community Services
Dave Kiff, City Manager
Report Prepared By: Coordinated With:

Alexis Braun, Acting Director of Transit and
Community Services
Kai Bond, Marine Safety Chief
Andrea Tirnauer, Senior Services Coordinator
Jane Abzug, Assistant City Attorney
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ORDINANCE NO. XXXX

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
LAGUNA BEACH, CALIFORNIA, AMENDING TITLE 18 OF THE
LAGUNA BEACH MUNICIPAL CODE; AND FINDING SUCH

ACTION EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL
QUALITY ACT UNDER CEQA GUIDELINES SECTION 15304
WHEREAS, the City of Laguna Beach, California (“City”) is a municipal corporation, duly organized under the California Constitution and laws of the State of California; and WHEREAS, pursuant to the police powers delegated to it by the California Constitution, the City has the authority to enact laws which promote the public health, safety, and general welfare of its citizens; and
WHEREAS, on May 16, 2023, the City Council directed staff to develop a special event permit process to authorize private events at Aliso Beach and other South Laguna Beaches as needed; and
WHEREAS, since then, City staff has identified other areas of City property that members of the public and private organizations would like to use for special events and other areas of Title 18 that require modification for internal consistency within Title 18; and WHEREAS, the City Council desires to amend Title 18 (Beaches and Parks) to create a special event permit process to authorize private events at Aliso Beach and other South Laguna Beaches, as needed, as well as at other City property and to make changes to streamline and add consistency to the application of Title 18 as a whole; and WHEREAS, all other legal prerequisites to the adoption of this Ordinance have occurred.

NOW, THEREFORE THE CITY COUNCIL OF THE CITY OF LAGUNA BEACH DOES ORDAIN, AS FOLLOWS:
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SECTION 1. Recitals. The recitals set forth above are true and correct and are hereby adopted as findings in support of this Ordinance as if fully set forth herein.

SECTION 2. Code Amendment. Laguna Beach Municipal Code Title 18 is hereby repealed and replaced with Title 18, which is attached hereto as Exhibit A and incorporated herein by reference.

SECTION 3. CEQA. This Ordinance is exempt from the requirements of the California Environmental Quality Act (“CEQA”) pursuant to State CEQA Guidelines Section 15304 (Minor Alterations to Land, Class 4) which exempts minor public or private alterations in the condition of land, water, and/or vegetation which do not involve removal of healthy, mature, scenic trees except for forestry and agricultural purposes. Examples include but are not limited to minor temporary use of land having negligible or no permanent effects on the environment, including carnivals, sales of Christmas trees, etc. (14 CCR Section 15304(e).) Here, this action will allow people to use portions of the City’s parks and beaches and other City property for special events for a temporary period of time subject to rules and regulations of the City and makes other changes to streamline and add consistency to the application of Title 18. This action does not authorize permanent infrastructure and merely creates an administrative system to allow persons to coordinate use of the beach and other City property. Therefore, this action falls within the minor alterations to land exemption.

None of the exceptions to the use of the categorical exemptions identified in State CEQA Guidelines section 15300.2 apply. The Project will not result in a cumulative impact from successive projects of the same type in the same place, over time. Moreover, there are no unusual circumstances surrounding the Project that would result in a reasonably possibility of a significant effect on the environment. Additionally, the Project will not damage scenic resources, including 1223
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trees, historic buildings, rock outcroppings, or similar resources. The Project will not cause a substantial adverse change in the significance of a historical resource. Finally, the Project does not include any hazardous waste sites. Thus, Class 4 exemption applies, and no further environmental review is required. The City Council directs staff to cause a Notice of Exemption to be filed with the County of Orange County and State Clearing house within five (5) days of adoption of this Ordinance.

SECTION 4. Effective Date. This Ordinance shall become effective thirty (30) days following its adoption by the City Council.

SECTION 5. Publication. The City Clerk shall certify to the adoption of this Ordinance.

Not later than fifteen (15) days following the passage of this Ordinance, the Ordinance, or a summary thereof, along with the names of the City Council members voting for and against the Ordinance, shall be published in a newspaper of general circulation in the City.

ADOPTED this _____ day of ____________, 2026.

Mark Orgill, Mayor
Ann Marie McKay, City Clerk
APPROVED AS TO FORM:
____________ Megan Garibaldi, City Attorney
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I, Ann Marie McKay, City Clerk of the City of Laguna Beach, do hereby certify that the foregoing Ordinance No. XXXX was introduced at a regular meeting of the City Council on _______________, 2026, and was finally adopted at a regular meeting of the City Council of said City held on _______________, 2026, by the following vote:

AYES: COUNCILMEMBER(S):

NOES: COUNCILMEMBER(S):

ABSTAIN: COUNCILMEMBER(S):

ABSENT: COUNCILMEMBER(S):

City Clerk, City of Laguna Beach, CA
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EXHIBIT A
Title 18. Beach and Parks
Chapter 18.01 DEFINITIONS
For purposes of Title 18, the following terms shall have the following meanings:
"Business" means and includes "business," "profession," "trade," "calling," "occupation," "show," "exhibition" or "game," and all and every kind of calling carried on for profit or livelihood whether or not a profit or livelihood is actually earned thereby and whether or not said business has a fixed place of business in the city.
"Charcoal" means a carbon substance obtained as a residue when wood or other organic matter is heated in the absence of air.
“Commercial dog training” means any training activity where a person is receiving compensation, donations, or anything of value for training a dog.
"Commercial stand-up paddling" means the use, in the Pacific Ocean adjacent to the shoreline within the city boundaries, of any stand-up paddleboard and paddle. Commercial stand-up paddling activity refers to any business, activity or act for financial compensation in connection with conducting classes, tours, instruction, lessons or group activities in stand-up paddling. "Constitutionally protected expressive activities involving the use of structures" means and refers to conduct and activities that encompasses, entails or includes the erection and use of stages, tables, barricades, utility poles, booths, tents or other temporary structures in addition to the tables, benches, permanent structures, equipment and facilities provided by the city, and the sole or principal purpose of which is the expression, dissemination, or communication by verbal, visual, literary or auditory means of opinion, views or ideas.
"Fire log" means any manufactured log constructed of sawdust; sawdust and paraffin; or waste fiber from the oil palm.
"Garbage" is all animal and vegetable refuse, all vegetable and fruit trimmings, all other refuse that shall have been prepared for, or intended to be used as food, or shall have resulted from the preparation of food, and shall also include coffee grounds, eggshells, and all other food refuse. “Motorboat" includes any vessel propelled by machinery, whether or not such machinery is the principal source of propulsion.
"Natural wood" means the hard fibrous substance consisting basically of xylem that makes up the greater part of the stems, branches, and roots of trees and shall not include any material that has 1526
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been processed or treated including, but not limited to, wooden pallets, books, newspapers, furniture, or construction materials.
"Organized play" means six persons or more engaging as a member of a league, sports association, or commercial enterprise in a team sport athletic contest, such as, but not limited to, soccer, lacrosse, baseball, softball, football, basketball, tennis, pickleball, sand volleyball, running, swimming, or training.
"Scuba diving" means the use, in the Pacific Ocean adjacent to the shoreline within the city boundaries, of any face mask, diving fins, snorkel, knife, abalone iron, spear or spear gun, in any combination or combinations, together with any self-contained underwater breathing apparatus. “Shade covering” means a canopy, awning, umbrella, tent, cabana, easy-up, or cover. "Skin diving" means the use, in the Pacific Ocean adjacent to the shoreline within the city boundaries, of any or all of the articles of equipment described in the definition of “scuba diving” except the use of self-contained underwater breathing apparatus. “Special event” means both:
a) Organized public or private gatherings or activities, whether for profit or not for profit, that exceed the capacity of designated areas specified by resolution of the city council. Private or public gatherings within the capacity of the designated areas set by resolution are not considered special events for purposes of this chapter. b) The following organized public or private gatherings or activities, whether for profit or not for profit:

1. Informal weddings;

2. Outdoor gatherings, concerts, festivals, art shows, and exhibits;

3. Commercial stand-up paddling activity;

4. Commercial dog training;

5. Outdoor athletic contests;

6. Organized play;

7. Special organized recreational boating events; and

8. Other similar activities at the determination of the City Manager or designee. "Store" means to put aside or accumulate for use when needed, to put for safekeeping, to place or to leave in a location.
“Structure” means tables, signs, coolers, sports equipment, a volleyball court, or other temporary items.
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“Surfing" means the use in the Pacific Ocean adjacent to the shoreline within the boundaries of the city of any surfboard, paddleboard, skimboarding, or other similar object made entirely or partially of wood, metal, glass, hard plastic, or any other hard substance. "Trash" means and includes rubbish, newspapers, magazines, all discarded paper and wrappings, tin cans, glass containers, broken glass, boxes, discarded clothing, dead animals or fish, ashes, waste wood, or any other waste material.
"Vegetation" means any and all types of trees, plants, bushes, hedges and shrubs, but not including grass.
"Vessel" means every description of watercraft used or capable of being used as a means of transportation on water.
"Wet sand" means that portion of the beach that is wet as a result of the wash of the waves or tidal action.

Chapter 18.02 USE OF CITY BEACHES AND PARKS
§ 18.02.005. Intent and purpose.
a) The police power to promote the public peace, morals, health, safety and general welfare authorizes the city of Laguna Beach to regulate the use of public property, including beaches and parks, and to impose reasonable restrictions on the time, place, and manner of the use of public property, including beach and park use. b) In accordance with this authority, the city intends to impose reasonable requirements on the use of public property, including beaches and parks to maintain and maximize: (1) the natural beauty and aesthetic attractiveness of public property, including beach and park areas; (2) the guarantees of freedom of speech and association contained in the Constitutions of the United States and the state of California; (3) the availability of limited beach and park areas for diverse uses; and (4) public safety, including, without limitation, the free flow of pedestrian and vehicle traffic in and around public property, including beach and park areas.
§ 18.02.010. General use. a) Unless otherwise reserved pursuant to this chapter, city parks and beaches are available to the public for general active and passive recreational use and constitutionally protected expressive activities in accordance with the design and character of the area being used.

No reservations shall be taken for general use of parks or beaches. b) Except as expressly authorized otherwise in this chapter, parks and beaches are to be used only with the structures, equipment, and other facilities provided by the city. c) Except as expressly authorized otherwise in this chapter, no additional tables, booths, tents or structures may be erected or installed for general use activities. 1728
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§ 18.02.015. Closing times.
a) Except as otherwise provided in this Title, all city beaches and coastal-adjacent parks shall be closed to public use during the times set by city council resolution. b) Except as otherwise provided in this Title, all noncoastal-adjacent parks shall be closed to public use at ten p.m. and shall remain closed until five a.m. § 18.02.020. Entering, remaining or staying during closing times.

Except as otherwise provided in this Title, no person shall enter, remain, or stay on any city beach or in any city park at any time when such beach or park is closed to public use. § 18.02.025. Park curfew hours.

It is unlawful for any person to be within the area known as Crescent Bay Point Park between the hours of twelve midnight and five a.m. of the following day. § 18.02.030. Posting of Hours.

The city manager, or designee, shall post or cause to be posted appropriate signs in conspicuous locations giving notice of closing times and, as applicable, the exceptions provided in this Title

18. § 18.02.035. Exceptions.
a) The provisions of Sections 18.02.015, 18.02.020, and 18.02.025 of this code shall not apply to the following activities, including the most direct safe route available at any given location to conduct such activities as determined by city council resolution, when conducted on wet sand or within twenty feet inland of the wet sand of all beaches:

1. Walking;

2. Jogging;

3. Fishing (by members of the public having on their possession a valid California fishing license);

4. Grunion hunting;

5. Scuba diving;

6. Surfing;

7. Swimming in the ocean.
b) The provisions of Sections 18.02.015, 18.02.020, and 18.02.025 of this code shall not apply to the following activities:

1. Activities as may be expressly permitted by preemption of state law or as may be allowed pursuant to a resolution of the city council.

2. Performance of official business by any city officer or employee or any other person authorized by the city.

3. Any city-sponsored activity, program or special event.

4. Any activity, program or special event for which a city special event permit has been issued.
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§ 18.02.040. Special Event: Permit Required
a) In accordance with its legal authority and intent to protect the public peace, morals, health, safety, and general welfare and public property, the city requires special event permits for certain activities and uses on city parks and beaches.
b) No person shall cause a “Special Event” to occur in any city park, beach, or property without first obtaining a city special event permit.
c) The city requires special event permits for the purposes of:

1. Accommodating and coordinating activities planned by different individuals and groups so that as many people as possible can use and enjoy the natural and existing beach and park environment at the same time;

2. Learning about the proposed activity to minimize or prevent inconvenience or harm to the public and public property or visual blight and degradation of beach and park areas;

3. Requiring appropriate insurance or other measures to relieve the city of liability and reduce unnecessary exposure of the city to personal injury or property damage claims or suits from harm that can occur from the use of, including the use of private structures on, public property; and

4. Ensuring that facilities most suited for the proposed activity are used without unnecessarily restricting the rights of free expression or assembly guaranteed by the Constitutions of the United States and the state of California. d) This section is not intended to in any way discriminate against, regulate, or interfere with the rights or content of constitutionally protected freedom of expression or association. § 18.02.045 Special Event Permit.
a) The city council will establish, by resolution, locations where special events are allowed and the rules and regulations governing special events. b) The city manager or designee shall be responsible for the administration of the special event permit process and shall develop application forms and any further internal city rules, regulations, and requirements deemed necessary to administer it. c) No special event permit will be issued on City beaches or parks beginning Memorial Day weekend through Labor Day unless the special event permit is ultimately approved in advance of the event by the City Manager.
d) Special event permit applications must be submitted in writing at least thirty calendar days before the date of the proposed activity on a form approved by the city manager or his/her designee.
e) Special event permit applications will be processed in the order in which they are received and a permit will be issued or denied within fifteen calendar days after it is received. f) Special event permits issued under this chapter may also require a Coastal Development Permit, or may be exempt or excluded from a Coastal Development Permit requirement, as provided in sections 25.07.007 and 25.07.008(A)(6).
g) Special event permit applications will be denied only if:

1. The special event permit application is not fully completed and executed or contains a material falsehood or misrepresentation, or the applicant has on prior occasions 1930
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made material misrepresentations regarding the nature or scope of activity previously permitted or has violated the terms of a previous permit;

2. The applicant has not tendered any required application fee, indemnification agreement, or insurance certificate;

3. A fully executed prior application for a special event permit for the same time and place has been received and has been or will be granted to a prior applicant or the use or activity intended by the applicant would conflict with previously planned activities organized and conducted by the city and previously scheduled for the same time and place;

4. The proposed use or activity intended by the applicant would present an unreasonable imminent danger to the health or safety of the applicant, other users of the park, city employees, or the public, or cause damage to any public or private property, or will create an unreasonable demand upon the city's emergency services personnel and equipment so as to cause potential imminent deficiencies in such services and endanger the public health and welfare;

5. The proposed use or activity is prohibited by law; or

6. Other grounds set forth in this Title or as established by the city manager. h) If a special event permit application is denied, the city manager or designee will notify the applicant in a writing that clearly sets forth the grounds for such denial, and, where feasible, will suggest alternative times or places to conduct the proposed use or activity or propose any measures by which the applicant may cure any defects in the special event permit application.
i) The permittee of activities conducted pursuant to a special event permit under this section shall:

1. Be responsible to monitor the area in which the activity is being conducted, to collect and dispose of all litter generated by the permittee in connection with the activity, to remove all structures used in connection with the activity upon its conclusion, and to otherwise restore the area used to its pre-existing condition if any alteration of the area has resulted from the conduct of the permittee or any person who was or reasonably should have been within the permittee’s control.

2. Be required to:
i. To obtain a standard policy of liability insurance naming the city as an additional insured with respect to any liability, loss, damage, or injury incurred by the city, or by any other person and claimed against the city, which is proximately caused by the permittee or its officers, agents, or employees, or any person who was or reasonably should have been within the permittee’s control;
ii. To agree to reimburse the city for any costs incurred by it in restoring damage to or cleaning public property after the activity as is necessary due to damage or degradation which is proximately caused by the permittee or its officers, agents, or employees or any person who was or reasonably should have been within the permittee’s control; and
iii. To agree to defend, protect, indemnify, and hold the city free and harmless from and against any and all liability, loss, damage, or injury incurred by 2031
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the city, or by any other person and claimed against the city, which is proximately caused by the permittee or its officers, agents, or employees, or any person who was or reasonably should have been within the permittee’s control.
§ 18.02.050 Special Event Fees
a) Application and use fees established from time to time by the city council in accordance with this section for constitutionally protected expressive activities shall be reasonably related to the city's actual costs incident to the administration of this chapter or the provision of city services.
b) When establishing or requiring payment of application or use fees or the amount of liability insurance coverage, providing a waiver of fees or insurance requirements, establishing or accepting in lieu contributions as an alternative to fees, issuing or denying a special event permit, or otherwise acting in enforcement of this title as applied to constitutionally protected expressive activities, no consideration shall be given as to the identity or associational relationships of the special event permit applicant, the content, subject matter, or viewpoint of any expression or message communicated by or during a proposed activity, or to any assumptions or predictions of the amount of hostility that may be aroused in the public by the content, subject matter or viewpoint of the expression or message conveyed by the applicant or proposed activity.
c) No applicant for or recipient of a special event permit for constitutionally protected activities involving the use of structures shall be required to provide or pay the cost of public safety personnel necessary to provide for the protection of the applicant and its attendees from hostile members of the public, traffic control or general law enforcement in the vicinity of the proposed activity.
d) Except as expressly provided otherwise in this section, in establishing or imposing application and use fees, the amount of liability insurance coverage or premiums, a waiver of fees or insurance requirements, or the acceptance of in-lieu contributions consideration shall be given only to physical attributes of the proposed activity consisting of the type, size and number of any proposed temporary structure(s), the estimated attendees, excluding hostile members of the public or counter-demonstrators, at and duration of the activity, and the reasonably estimated extra city personnel hours anticipated to be used for such activity. e) No individual or organization applying for a special event permit for the purpose of conducting a constitutionally protected expressive activity for which a special event permit is required shall be required to pay an application or use fee or procure insurance, if the special event permit application includes reasonably satisfactory documentation or other evidence demonstrating the applicant's indigence and financial status, or that payment of fees or procurement of insurance is impossible or so financially burdensome that it would preclude the applicant from using beach or park property. If the city manager or his or her designee determines, after consultation with the city's risk manager, that a particular use, event or activity does not present a substantial or significant public liability or property damage exposure for the city, the city manager or designee may give a written waiver of the insurance requirements of this section.
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§ 18.02.055 Appeals
Any determination by the city manager or designee regarding a special event permit may be appealed to the city council pursuant to Chapter 2.02 of this code. § 18.02.060 Main Beach Park.
a) Constitutionally Protected Expressive Activities Involving the Use of Structures:

1. The hard surface cobblestone area located in the southerly portion of Main Beach Park shall be available not more than five days per month on a first-come, firstserved basis by reservation through the special event permit process for the conduct of constitutionally protected expressive activities involving the use of structures.

2. Such activities, which shall be sponsored by an individual or organization, may be conducted by the same individual or organization on not more than two days in any consecutive six-month period if conducting such activities more frequently would result in the exclusion of any other individual or organizations from using the cobblestone area to conduct constitutionally protected expressive activities involving the use of structures.
b) Other Special Events Involving the Use of Structures:

1. The hard surface cobblestone area located in the southerly portion of Main Beach Park shall be available not more than two days per month on a first-come, firstserved basis by reservation through the special event permit process for the conduct of other special events.

2. Such activities, which shall be sponsored by an individual or organization, may be conducted by the same individual or organization on not more than fourteen days in any calendar year.

3. Sales relating to the special event are authorized at the hard surface cobblestone area. Each vendor must have a Laguna Beach business license and shall display the license number.
c) The planning of such activities and location of such structures as are authorized in this section shall:

1. Comply with all applicable public health and safety requirements and shall be coordinated with the city so that the activity is carried on in a manner which will minimize to the greatest practical extent the prevention of or substantial interference with the ordinary and normal public usage of Main Beach Park for active and passive recreational and aesthetic enjoyment and constitutionally protected expressive activities.

2. Not utilize a single structure in excess of six hundred square feet in area or in excess of eight feet in height.
§ 18.02.065 Informal weddings. a) Certain areas designated for informal weddings may be reserved through the special event permit process on a first-come-first-served basis, upon payment of a nonrefundable fee to be established by resolution.
b) No additional tables or chairs or other facilities may be erected for such ceremonies. 2233
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c) No alcoholic beverages shall be served and no amplified sound shall be permitted. d) The maximum number of the wedding party and guests shall not exceed fifty people in the Gazebo at Heisler Park or at Crescent Bay Park.
e) Up to ninety-five people are allowed per wedding in other locations in Heisler Park. f) No more than two weddings per day shall be permitted at Crescent Bay Park. § 18.02.070 Outdoor gatherings, concerts, festivals, art shows and exhibitions. a. Any outdoor gathering, concert, festival, art show, or exhibitions involving the use of structures and not otherwise provided for in this chapter or elsewhere in this code shall be held at Irvine Bowl Park.
b. The use of the amphitheater and festival grounds at Irvine Bowl shall be on a first-come, first-served basis by reservation through the special event permit process and is subject to the requirements of any existing or subsequently approved lease of those facilities. Nothing in this section shall be construed to supersede the provisions of any such lease. Outdoor gatherings to be attended by more than two thousand five hundred persons require a license pursuant to Chapter 5.68 of this code.
c. If the Irvine Bowl Park is unavailable for an outdoor gathering, concert, festival, art show, or exhibition involving the use of structures, the sponsor of a special event can propose the event at an alternative location. The City Manager shall either approve or deny such special event permit application.
§ 18.02.075. Outdoor athletic contests.
a) The intent of this section is to provide for the integrity of various community sports leagues and sports events by facilitating the harmonious scheduling of their activities. b) Beach and Parks may be reserved through the special event permit process for athletic contests, events, or activities, including practice or training sessions, in areas designated for such use.
c) Special structures to be used in conjunction with these activities shall be subject to the discretionary review and approval by the city through the special event permit process and may require other entitlements based on the proposed structures. § 18.02.080 Independence Day celebration.

The city council finds and declares that, in consideration of the city-wide ban on the use of fireworks, it is in the interest of public health, safety and general welfare to permit and conduct a public fireworks display at Main Beach on or about July 4th of each year to celebrate Independence Day.
§ 18.02.085 Penalty.
a) A violation of this Chapter may be prosecuted as an infraction in accordance with the provisions of Section 1.04.025 of this code, or alternatively, an administrative citation may be issued pursuant to the provisions of Chapter 1.15 of this code. 2334
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b) In addition, or as a further alternative, the city may pursue any form of administrative remedy, civil action or other judicial relief against a person, business or enterprise violating the provisions of this chapter.
§ 18.02.090 Severability.

If any provision of this chapter or the application thereof to any person or circumstances is held invalid, the remainder of this chapter, or the application thereof to other persons and circumstances shall not be affected thereby; and, to this end, the provisions of this chapter are declared to be severable.

Chapter 18.04 CONDUCT
§ 18.04.010. Garbage and trash.
a) No person shall leave, scatter, throw, or discard any trash or garbage upon any beach, park, public street, alley, or passageway within the city, except as hereinafter provided. b) It shall be the duty of every person having in his possession, charge or control, any garbage or trash upon any beach, park, public street, alley, or passageway, either to place said garbage and trash in public garbage and trash containers located on or in said beaches, parks, public streets, alleys or passageways, if such containers are available, or to take said garbage and trash with him or her when he or she leaves said beach, park, public street, alley or passageway within the city.
c) The prohibitions, regulations, and restrictions in this chapter contained, relative to the disposal of garbage and trash, shall not apply to the disposal of garbage and trash as defined, regulated, and provided by Chapter 7.16 (Solid Waste Disposal and Organic Waste Diversion) of this code.
d) It is unlawful for any person, firm, or corporation to place, dump, deposit, or otherwise cause to be deposited, any foreign substance or material, including, but not limited to, dirt, wood, trees, roots, shrubs, plants, sand, brick, rock, gravel, masonry, or plaster, in or on public beaches or tidelands within the city limits, or to place, dump, deposit, or otherwise cause to be deposited, any such foreign substance or material anywhere within the city limits in such a way that it is reasonable to expect that the normal action of the elements or tides or winds will cause such materials to become deposited in or on said tidelands. § 18.04.015. Display or sale of merchandise prohibited. a) Except as expressly provided by this code, no person shall sell, offer to sell, or display for sale, or rent, offer to rent, or display for rent, goods, wares, merchandise, foodstuffs, refreshments, or other kinds of property or services in any beach or park. b) The provisions of this section shall not apply to the sale, display for sale, or offer in exchange for a donation, conducted without the use of stands or other temporary or permanent structures, of:

1. Newspapers, periodicals, pamphlets, or other written materials; or

2. Constitutionally protected expressive merchandise bearing political, religious, philosophical, social, or ideological messages and seeking support for particular causes 2435
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or support for particular views on economic, political, religious, philosophical, social or ideological issues, without regard to the viewpoint, subject matter, or content contained on or expressed by such newspapers, periodicals, pamphlets, other written materials, or expressive merchandise, or the identity or associational affiliation of any individual or organization offering such materials or merchandise. § 18.04.018. Business on city property. a) No person shall in any manner while on city property, including beaches and parks, sell any product or service or engage in any other business or commercial activity without obtaining a business license and the prior written approval of the city manager, or duly authorized representative.
b) This section does not apply to any concession operated under authority granted by the city council, nor to any other activity specifically authorized, regulated, or exempted by order or resolution of the city council.
§ 18.04.020. Shade Coverings and Structures.
(a) No person shall install, erect, or maintain any shade covering or structure over six feet in height or wider than six feet on or in any public beach, park, street, alley, or passageway. (b) Any shade covering or structure installed, erected, or maintained on or in any public beach, park, street, alley, or passageway shall:

1. Not have more than one side closed to public view; and

2. Not interfere with a lifeguard’s ability to see the water or adjacent lifeguard towers; and

3. Not have more than one contact point with the sand, when located seaward of lifeguard towers; and

4. Not be located within twenty feet of any emergency or public access; and

5. Not obstruct any emergency or public access; and

6. Not be located within five feet from another shade covering or structure. (c) Any shade covering or structure shall be relocated at the request of the Marine Safety Department staff, Police Department staff, or other authorized City personnel. § 18.04.035. Public buildings, structures and improvements. a) No person shall affix or attach any ropes, wires, cords, stakes, poles, hooks, or similar objects to any public buildings or structures in any public parks or beaches, including, but not limited to, lifeguard towers, restrooms, administrative offices, boardwalks, flag poles, public artwork, drinking fountains, barbeques, picnic stoves, fences, walls, railings, benches, tables, and trash receptacles, without the advance written consent of the city manager or designee.
b) No person shall store personal property in or on any public parks and beaches as follows:

1. on or upon any stairs, designated trails, sidewalks, or marked pathways or boardwalks;

2. within twenty feet of any restroom;

3. within fifteen feet of any lifeguard towers or administrative offices; 2536
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4. within fifteen feet of the oceanward side of the Main Beach boardwalk, beneath or under such boardwalk, or any place where such boardwalk abuts the sand; or

5. during the period from one-half hour after sunset to six a.m. of the following day. No person shall be cited under this section unless he or she has first been notified by a police officer or public officer that he or she is in violation of the prohibition in this section and thereafter continues the violation.
c) No person shall place or store any of the following items of personal property in or on any public parks and beaches:

1. hammocks,

2. cots,

3. beds,

4. sleeping bags,

5. mattresses,

6. luggage or

7. portable cooking devices.
d) For purposes of this section, no person shall be cited under this section unless he or she has first been notified by a police officer or public officer that he or she is in violation of the prohibition in this section and thereafter continues the violation. § 18.04.045. Public restrooms.
a) No person shall delay, linger, or idle about in the restroom of any city parks and beaches or in the approaches or walks adjacent to any restroom without lawful purpose for being present related to the use of such restroom, and for the purpose or having the effect of preventing, inhibiting, or impairing the intended use of the restroom. b) No person shall be cited under this section unless he or she has first been notified by a police officer or public officer that he or she is in violation of the prohibition in this section and thereafter continues the violation.
§ 18.04.055. Disturbing the peace.

Any person who willfully delays or obstructs any city employee in the performance of his or her duties in any city parks and beaches, or who by his or her conduct, or by threatening language, unreasonably annoys or unreasonably interferes with the use of any city parks and beaches by any other person, shall leave the park or beach upon request made by any police officer or other public officer authorized by the city, after a warning has not resulted in cessation of the conduct prohibited by this section.
§ 18.04.065. Use of beach fire barbeques and fire pits. a) Barbeques and Picnic Stoves. No person shall build, set, kindle, make, or maintain a fire (using solid fuel) in any public park or beach that is used or intended to be used for cooking or heating-related food purposes except in city-designated barbeques and picnic stoves provided for such purposes.
b) Fire Pits.
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1. Fire pits within the city's local coastal program jurisdiction are prohibited unless used as permitted herein.
i. No person shall burn, ignite, or otherwise set on fire any material in a fire pit unless the person is burning natural wood, fire log(s), or charcoal (collectively, "fuel") in a fire pit that has been specifically designated and operated in a manner that has been authorized by resolution of the city council. Except as expressly authorized in this section, open beach fires that burn, ignite, or otherwise set on fire any fuel outside of city-designated fire pits are prohibited at all beaches within the city's local coastal program jurisdiction.
c) Portable solid fuel burning fire pits are strictly prohibited on public property including parks and beaches. Portable propane fire pits are only allowed as specifically authorized in Paragraph 10 of Subsection 307.2 of Section 15.01.030 of this code.

1. Use of city-designated fire must comply with the following requirements:
i. A responsible person, at least eighteen years of age, must remain within twenty-five feet of the city-designated fire pit while the fire is burning. ii. Fire may not exceed a height of more than twelve inches above the upper edge of the city-designated fire pit.
iii. Only fuel may be burned in a fire pit. No fuel may be buried in the sand after burning such fuel in a fire pit.
iv. All used natural wood, fire log(s), and charcoal shall remain in the fire pit; only designated city officials shall remove any natural wood, fire log(s), or charcoal and shall deposit them in hot coal receptacles on the beach or transport them off the beach to be deposited in hot coal receptacles. v. No person shall burn trash or debris in a fire pit.
vi. City-designated fire pits are available on a first-come, first-served basis. vii. Location and use of fire pits must comply with South Coast Air Quality Management District Rules 444 and 445.
viii. Access to fire pits must comply with the Americans with Disabilities Act. ix. No fire shall be built, set, kindled, made, or maintained during the period of one hour before the closing time of the beach to six a.m. of the following day. Fires must be extinguished with water. Covering the fire with sand is prohibited.
x. Outdoor fires are not allowed on public property during hazardous conditions as set forth in Subsection 305.6 of Section 15.01.030 of this code.
§ 18.04.110. Bicycle storage prohibited.

No person shall place or store any bicycles, whether motorized or not, on any portion of Main Beach, the Main Beach Boardwalk, or Heisler Park, except in city-designated storage locations. § 18.04.120. Golf prohibited.
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No person shall play or practice the game of golf, including chipping, putting, driving, or any other type of play or practice, which includes the hitting of a golf ball or similar type ball with a golf or similar type club in any city park, beach, or city-owned open space area. § 18.04.130. Operation of ultralight vehicles or balloons.

To the maximum extent permitted by law, no person shall land, release, take off in, or launch any ultralight vehicle or balloon, as defined by 14 CFR Sections 101.1 and 103.1, including ultralight vehicles commonly known as a hang glider, paragliding device, or parasail, from any city-owned land.

Chapter 18.10 BEACHES
§ 18.10.002. Bluffs and vegetation.
a) Purpose and Intent.

1. The public bluffs and vegetation constitute aesthetically pleasing and sensitive features and resources, provide stability to land formations, and mitigate erosion, among other public benefits.

2. The public bluffs and vegetation are not intended or designed to be traversed by the public, used for the disposal of refuse, used for the storage of personal property, or used for other activities that can result in damage to or destruction of such areas, with associated adverse visual and/or functional impacts as well as substantial public expense to maintain, repair, or replace.

3. Stairs, designated trails, sidewalks, and marked pathways exist to allow the public to move through public areas.
b) Protection of Bluffs and Vegetation in Public Areas.

1. No person shall remove, destroy, damage, traverse over or through, lie on or within, or affix or attach any ropes, wires, cords, stakes, poles, hooks, or similar objects to, or store, place, or discard personal property or refuse on or within any public bluff or any vegetation planted in any public parks or beaches, including, but not limited to, open space areas and planters.

2. For purposes of this section, no person shall be cited under this section unless he or she has first been notified by a police officer or public officer that he or she is in violation of the prohibition in this section and thereafter continues the violation. § 18.10.003. Prohibition of the use or possession of glass articles on city beaches.

No person shall have, possess, or use any article made of glass as a container upon any city beach. § 18.10.005. Digging holes.

No person shall dig or cause the digging of any hole in the sand exceeding a depth of two feet.

Any person who digs, or causes to be dug, any hole upon the beach shall fill the hole before leaving the hole unattended.
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§ 18.10.010. Removal of sand.

No person shall remove or cause to be removed from any beach any sand without written permission from the marine safety chief.
§ 18.10.015. Beach activities, sports, and games.

No person shall engage in any activities or conduct or participate in any sports or games that constitute a hazard to any person, including, but not limited to, sand throwing, or the use of a hard ball, softball, bat, football, paddleball, Frisbee, boomerang, or other athletic apparatus or game equipment or object.
§ 18.10.020. Fishing from beach.
a) Each person fishing from the public beach shall at all times have due regard for the safety of persons on the beach or in the water by refraining from overhead casting or fishing too close to swimmers or beach patrons.
b) The supervising lifeguard on duty has the authority to prohibit, restrict, or otherwise regulate fishing in the interest of public health, safety, and welfare. § 18.10.025. Diving/jumping.

No person shall dive or jump into any body of water in park, beach, or any recreational area from any rock or precipice other than at those places designated and posted for diving or jumping by the city manager, marine safety chief, or police chief or their authorized designees, or any other officer or employee designated by the city council.
§ 18.10.030. Lifesaving apparatus and lifeguard tower limitations. a) No person shall handle, use, or molest in any manner or destroy any lifesaving apparatus or lifesaving equipment which is placed upon or near any beach within the city. b) No person shall climb, hang, or sit or cause someone to climb, hang, or sit on any lifeguard tower.
c) The provisions of this section shall not apply to any authorized lifeguard, or any person acting under the direction of an authorized lifeguard, or any person who shall use such equipment and apparatus for the purpose of saving life or making a rescue in emergency. § 18.10.035. Disobeying a lifeguard.

No person shall willfully resist, delay, interfere or disobey any lifeguard in the discharge or attempt to discharge any duty of his or her position.

Chapter 18.12. RIDING
§ 18.12.010. Horses, vehicles and electric personal assistive mobility devices prohibited— Exceptions.
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a) No person, except authorized law enforcement, shall ride, lead, or drive any horse or horses, or ride, drive, or operate any motor vehicle, electric personal assistive mobility device (as defined by the California Vehicle Code) including bicycles or any motorized riding equipment, upon any portion of the beach within the limits of this city. b) The provisions of this chapter shall not apply to:

1. any person, firm, or corporation using, riding or driving horses or motor vehicles, including bicycles, upon said beach when employed by this city to clean said beach;

2. any person, firm, or corporation using, riding or driving horses or motor vehicles, including bicycles, upon said beach when issued a special event permit pursuant to this Title to ride, lead, or drive horses or to ride, operate, or drive motor vehicles, including bicycles, upon said beach; or

3. any person with disabilities operating an electric personal assistive mobility device (as defined by the California Vehicle Code) upon said beach.

Chapter 18.20. SURFING AND SWIMMING
§ 18.20.015. Swimming and surfing area.
a) All waters within two hundred yards from the shoreline are designated as swimming and surfing areas.
b) No persons shall operate any vessel within said area except that vessels, other than motorboats which have been launched from the beach may proceed directly to and from the beach through said designated areas.
c) The launching of any vessels may be prohibited by any police officer or lifeguard at any time it appears to such police officer or lifeguard that such activity would constitute a hazard to persons swimming in said designated area or to the operators or passengers of said vessels.
§ 18.20.020. Swimming—Hazardous conditions.

At any time when conditions become hazardous as a result of storm, congestion of persons, or other conditions which cause a present danger to persons swimming or using the beach, the city manager, marine safety chief, or police chief or their authorized designees, or any other officer or employee designated by the city council, may prohibit swimming during the period of such hazardous conditions.
§ 18.20.025. Surfing—Time and place permitted.
a) Between June fifteenth and September fifteenth, both dates inclusive, of each calendar year, the following described areas of the Pacific Ocean are hereby designated as surfing areas, and surfing within said areas only during the daylight hours enumerated below shall be permitted:
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1. Area No. 1: That area lying between a point one hundred fifty feet south of the southerly extension of Brooks Street and a point one hundred fifty feet north of the northerly extension of Brooks Street only during the hours from sunup to sundown;

2. Area No. 2: That area lying between a point ninety feet south of the southerly extension of St. Ann's Drive and a point two hundred feet south of the southern extension of Thalia Street only during the hours from sunup to sundown;

3. Area No. 3: That area lying between Victor Hugo's Point and the stairway entrance below Jasmine Street only during the hours from sunup to sundown;

4. Area No. 4: That area lying between a point one hundred twenty-five feet south of the southerly extension of Agate Street and a point one hundred feet north of the northerly extension. The hours of surfing to be from sunup until twelve noon and then five p.m. until sunset;

5. Area No. 5: Surfing is allowed in Area No. 5. Exception: In Aliso Beach, specifically, a zone for surfing shall be set up from 12 pm to 6 pm daily through the posting of signs and flags by Marine Safety Department staff or for increased durations as conditions warrant at the determination by Marine Safety Department staff. If a zone for surfing is not set through the posting of signs and flags by Marine Safety Department staff, the surfing area is hereby established at the South end of Aliso Beach between June fifteenth and September fifteenth. b) No person shall wade, bathe, or swim between in any surfing area at any times when surfing is permitted in such area unless such person has in his or her possession and is actually using a surfboard, paddleboard, or other similar device. c) Whenever surfing conditions become hazardous as the result of storm, congestion, or participants or other conditions which cause a present danger to the persons participating in surfing or to others, the city manager, marine safety chief, police chief, or other employees of the city designated by the city manager to enforce surfing regulations and control surfing activities, may prohibit surfing with a surfboard, paddleboard, or similar device. No person shall fail, refuse, or neglect to stop surfing activities or to leave the water when ordered to do so by any such employee of the city. d) The city manager, marine safety chief, police chief, or other employees of the city designated by the city manager to enforce surfing regulations and control surfing activities, may, upon careful evaluation, permit surfing in certain swimming areas as follows through the posting of signs and flags:
a. Whenever surfing or weather conditions make swimming or bathing hazardous in the beach area from a point one hundred fifty feet south of the southerly extension of Brooks Street to a point ninety feet south of the southerly extension of St. Ann's Drive, or
b. When relatively few swimmers or bathers are present. e) No person shall engage in the activity of surfing from June fifteenth to September fifteenth except within an area where surfing is permitted by the provisions of this section. 3142
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§ 18.20.030. Signals.

At any time when surfing is prohibited within a particular area by virtue of the provisions of this chapter, a yellow flag displaying a black ball shall be raised at or near the subject area so as to be readily visible to all persons within said area.
§ 18.20.035. Hazard to others.

No person shall use any surfboard, paddleboard, skim-board, ski, canoe, or other similar object made entirely or partially of wood, metal, glass, hard plastic, or any other hard substance, at any time in the Pacific Ocean within the city limits in a manner that constitutes a hazard to any other person.
§ 18.20.040. Penalty for violations.

The violation of any of the provisions of this chapter is punishable as a misdemeanor and the revocation of the license, if any, issued to such violator.

Chapter 18.21. SKIN AND SCUBA DIVING
§ 18.21.010. Hazardous skin diving and scuba diving—Discontinuance orders authorized. a) Hazard to Others or Self. No person shall participate in any skin diving or scuba diving activity at any time in the Pacific Ocean within the city in a manner that constitutes a hazard to any other person or to themselves.
b) Authorized Order to Discontinue Skin Diving or Scuba Diving. The city manager, marine safety chief, police chief or their authorized designees, or any officer or employee designated by the city manager to enforce surfing regulations and control skin diving and scuba diving activities, may prohibit skin diving and scuba diving at any time diving conditions become hazardous as a result of storm, congestion of persons, lack of proper equipment (such equipment to include mask, fins, snorkel, buoyancy compensator, and diving partner) or other conditions which cause a present danger to the persons skin diving or scuba diving or to others.
c) No person shall fail, refuse or neglect to stop skin diving or scuba diving activities or to leave the water when ordered to do so by any such employee of the city. § 18.21.015. Equipment precautions.

No person shall enter the public beach or the ocean for the purpose of participating in scuba diving at any time in the Pacific Ocean within the city if that person is carrying a spearhead of a fixed spear which is not covered in such a way as to render it incapable of harming any individual or a spearhead of a detachable spear which is not detached and not in a firing position. 3243
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§ 18.21.020. Scuba and skin diving classes restricted to certain hours. No person shall conduct any class of instruction in scuba diving or skin diving on public beaches within the City during the following time periods: (a) from June fifteenth to September fifteenth of any year; before seven a.m. or after ten a.m. on any day. § 18.21.025. Penalty for violations.

The violation of any of the provisions of this chapter is punishable as a misdemeanor.

Chapter 18.22. COMMERCIAL STAND-UP PADDLING REGULATION
§ 18.22.010. Commercial Stand-Up Paddling Activity—Special Event Permit required. a) A special event permit is required for any business or person proposing to conduct commercial stand-up paddling activities.
b) All permits will contain, at minimum, the following requirements:

1. all instructors shall maintain basic First Aid and CPR certifications in addition to participation in a mandatory orientation with marine safety on an annual basis;

2. a student-to-instructor ratio of not more than 4:1 shall be maintained;

3. no more than ten persons from any business (including students and instructors) shall be in the water at one time;

4. each business shall utilize a system to allow for identification of permitted instructors through uniformly colored hats associated with the business;

5. a one-time application fee and an annual renewal fee shall be paid in the amounts established by resolution of the city council;

6. all businesses shall maintain liability insurance in the amount of one million dollars per incident, two million dollars in the aggregate;

7. all businesses shall comply with other applicable federal, state and local statutes and regulations.
c) The chief of marine safety may require additional permit requirements or modify permit requirements in the interest of public health, safety and general welfare. § 18.22.015. Hazardous commercial stand-up paddling activity—Discontinuance orders authorized.
a) Hazard to Others or Self. No person will conduct commercial stand-up paddling activities at any time in the Pacific Ocean within the city in a manner that constitutes a hazard to any other person or to themselves.
b) Authorized Order to Discontinue Commercial Stand-Up Paddling Activity. The city manager, marine safety chief, police chief or their authorized designees, or any officer or employee designated by the city manager to enforce ocean activity regulations and commercial stand-up paddling activities, may prohibit commercial stand-up paddling activities at any time if surf conditions become hazardous as a result of storm, congestion of persons, lack of proper equipment or other conditions that cause a present danger to the persons engaged in stand-up paddling or to others. No business or person shall fail, refuse 3344
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or neglect to stop commercial stand-up paddling activities or to leave the water when ordered to do so by any such employee of the city.
§ 18.22.020. Penalty for violations.

The violation of any of the provisions of this chapter is punishable as a misdemeanor. The violation of any of the provisions of this chapter shall constitute grounds for revocation of a special event permit issued pursuant to this chapter.

Chapter 18.25. SEAL ROCK
§ 18.25.010. Statement of intent.
a) The city council finds and determines that Seal Rock is a unique natural resource which is used as a habitat by the California sea lion and the brown pelican. b) The council further finds that the presence of people on Seal Rock is disturbing to these rare species of wildlife.
§ 18.25.015. Trespassing on Seal Rock prohibited.

No person shall trespass on that exposed reef, commonly known as Seal Rock, located in the Pacific Ocean along a prolongation of the oceanward terminus of McKnight Drive on a bearing south four degrees zero minutes west at a distance of approximately six hundred feet southerly of the radius point of the cul-de-sac of McKnight Drive.
§ 18.25.020. Signs.

The chief of marine safety shall post appropriate signs regarding Seal Rock to inform the public that trespassing is prohibited and that the wildlife should not be disturbed. § 18.25.025. Penalty.

Any person convicted of violation of this chapter is guilty of a misdemeanor and shall be subject to a penalty fine of not more than five hundred dollars or by imprisonment in the County Jail for a period not exceeding six months, or by both such fine and imprisonment.

Chapter 18.26. STORAGE AND LAUNCHING OF VESSELS
§ 18.26.010. Prohibition against overnight storage of vessels on beaches.

Except as provided in this chapter, it is unlawful for any person to leave, beach, or otherwise store a vessel on any public beach overnight.
§ 18.26.015. Exception—Nonmotorized boats of twenty feet or less.

Vessels other than motorboats which measure twenty feet or less in overall length, may be left, beached, or stored overnight on any public beach other than Main Beach Park and Heisler Park. 3445
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§ 18.26.020. Exception—Permit for special event.

The City Manager or designee is authorized to and shall establish rules and regulations for the issuance of special event permits for the overnight storage on public beaches of vessels in connection with special organized recreational boating events. § 18.26.025. Prohibition against launching of motorboats from beaches.

It is unlawful for any person to launch any motorboat from any public beach except at areas designated as launching areas by the city.
§ 18.26.030. Exception—City owned or operated vessels.

The provisions of this chapter shall not apply to vessels owned, maintained, or operated by the city.

Chapter 18.27. HAZARDOUS OR ENDANGERED AREAS
§ 18.27.010. Climbing or trespassing in hazardous or endangered areas prohibited.

It is unlawful for any person to climb or trespass within designated hazardous or endangered areas within the corporate limits of the city.
§ 18.27.015. Designation of hazardous or endangered areas. a) The hazardous or endangered areas referred to in Section 18.27.010, in which no person shall climb or trespass, are those areas designated as hazardous or endangered by the city police department, with the approval of the city manager. b) Once so designated, such hazardous or endangered areas shall be clearly posted as hazardous or endangered areas within which climbing or trespassing by any person is prohibited.

Chapter 18.28. PARKS
§ 18.28.016. Use of dog parks.

The following regulations shall apply to all city dog parks:
a) Owners and/or handlers are legally responsible for their dogs and any injuries to people or other dogs and/or damage caused by them.
b) All dogs must have current licenses and required vaccinations, and be wearing a collar or harness with a visible registration dog tag.
c) Dogs in heat, pregnant, or lactating are not permitted inside the dog park. d) Digging is not permitted anywhere in the park. Owners and/or handlers are responsible to fill any holes dug by their dog.
e) Owners and/or handlers may not bring more than three dogs at any one time to the dog park.
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f) Owners and/or handlers must keep close visual contact with their dogs and be aware of their actions at all times. Dog owners and handlers must remain in a "hands free" condition and capable at all times to use both hands to control their dog. g) Commercial dog training is prohibited in city dog parks, unless specifically permitted by the city through the special event permit process.
§ 18.28.018. Baseball at Riddle Field.
a) Riddle Field is intended for youth baseball play.
b) No hitting of baseballs by persons over the age of fourteen is permitted unless for a youth baseball activity permitted through the special event permits process in accordance with Section 18.28.025 and Title 18 of this code.
c) Riddle Baseball Field closes at dusk unless a special event permit for lights has been issued. § 18.28.025. Organized play—Special Event Permit required. a) No person shall participate in any organized play on any park, soccer field, baseball field, tennis/pickleball courts, sand volleyball court, pool or other recreational facility owned, operated, or controlled by the city without first receiving a special event permit issued by the city which authorizes the organized play at the particular site. b) In determining whether or not to issue a special event permit, the city manager, or designee, shall consider the following and any other factors he or she deems relevant:

1. The suitability of the particular facility for the proposed play.

2. The effect of the activity on the neighborhood.

3. The limitation on the availability of the facility for spontaneous recreational use by the public caused by the permitted use of the facility.

4. Priority shall be given to groups composed of residents of the city. c) The city manager, or designee, may place reasonable conditions on the issuance of a special event permit as he or she deems necessary and proper to protect the public welfare, including, but not limited to:

1. Restrictions on the number, age and other designations of persons who may participate in such permitted play.

2. Restrictions on the season, days of the week and time of day that the particular facility may be used by the permittee.

3. Provisions for the maintenance by the permittee of the sanitation, cleanliness, and appearance of the facility. At times, portable restrooms may be required for special events.

4. Provisions for security and the maintenance of law and order, including compliance with noise, parking, safety, and other appropriate regulations. It is at the city's discretion to require security on the premises to enforce the policies of field use. If security is deemed necessary, it is the responsibility of the user group or individual to obtain security personnel at the user's expense. A letter of confirmation from the security agency must be submitted prior to field approval. 3647
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5. Restrictions on the installation of apparatus or modification in any manner, either temporary or permanent, by the permittee to the sports field or adjacent structures.

6. Provisions for the posting liability insurance by the permittee. d) In the event that any of the conditions of the special event permit are violated by the permittee or for other good cause shown, the city may suspend or revoke the special event permit after notice to the permittee.
e) When a special event permit is issued for organized play at a park, soccer field, baseball field, tennis/pickleball court, sand volleyball, pool, or other recreational facility pursuant to this section for use of said facility at a particular time, and that facility is being used by one or more persons who do not hold a special event permit to use the facility at that particular time, the non-permit holders shall immediately vacate the facility upon arrival of the permit holders.

Chapter 18.29. MARINE PROTECTED AREAS
§ 18.29.010. Establishment of marine protected areas.
a) California laws provide for the protection of the marine habitat and biological diversity found in California's ocean waters, including intertidal zones. b) The state of California has established marine protected areas to protect habitat and ecosystems, conserve biological diversity, provide a sanctuary for marine life, enhance recreational and educational opportunities, and provide scientific reference points to assist resource management decisions.
c) Marine protected areas include state marine reserves, state marine parks, and state marine conservation areas.
d) The following areas in the city of Laguna Beach have been designated as marine protected areas in accordance with applicable state laws:
a. Laguna Beach State Marine Reserve,
b. Laguna Beach State Marine Conservation Area, and
c. Dana Point State Marine Conservation Area.
§ 18.29.015. Responsibility of marine protection office.

The city's marine safety department shall have and discharge the responsibilities of area manager for all of the marine protected areas located within the city limits. § 18.29.020. Unlawful acts.

No person shall take, possess or disturb specimens of live or dead intertidal marine animal or plant life, or willfully injure, destroy or alter marine intertidal zone habitats. 3748
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§ 18.29.025. Removal of certain materials permitted.
a) The city manager or designee may require a special event permit for scientific research and/or collecting of specific organisms or objects in specific quantities within marine protected areas.
b) Failure to notify the area manager or appropriate city authority of impending research may result in a citation or revocation of research and/or collection privileges. 3849
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Proposed Amendments to City of Laguna Beach Municipal Code Title 18 (Beach and Parks) Page 1 of 7 Former Section Now No Change to Terms Unless Noted Chapter 18.01 DEFINITIONS New Chapter and some new definitions (Special Event, Shade Covering, and Structures) Chapter 18.02 USE OF CITY BEACHES AND PARKS 18.02.005 18.04.005(a) Intent and Purpose Intent and Purpose 18.02.010 18.28.010 General use General Use 18.02.015 18.05.010 Closing times Closing Times 18.02.020 18.05.020 Entering, remaining or staying during closing times Entering, remaining or staying during closing times 18.02.025 18.28.090 Park curfew hours Park curfew hours 18.02.030 18.05.030 Posting of hours Posting of hours 18.02.035 18.05.040 Exceptions Exceptions 18.02.040 18.04.005(b) Intent and Purpose Special Event: Permit Required Revised name for special event permit process 18.02.045 18.28.080(a) and (c) Administration Special Event Permit Revised name for special event permit process and revised to require City Council establishment of locations for special events via resolution. 18.02.050 18.28.080(b) and (d) Administration Special Event Fees 18.02.055 18.28.080(e) Administration Appeals 18.02.060 18.28.015 Main Beach Park Main Beach Park Revised name for special event permit process. 3950 51 of 150

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RESOLUTION NO 26.XXX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF LAGUNA BEACH, CALIFORNIA, ESTABLISHING

LOCATIONS WHERE SPECIAL EVENTS ARE

ALLOWED AND RULES AND REGULATIONS
GOVERNING SPECIAL EVENTS; AND FINDING THE

ACTION CATEGORICALLY EXEMPT FROM THE

CALIFORNIA ENVIRONMENTAL QUALITY ACT

PURSUANT TO STATE CEQA GUIDELINES SECTION
15304
WHEREAS, the City of Laguna Beach, California (“City”) is a municipal corporation, duly organized under the California Constitution and laws of the State of California; and WHEREAS, pursuant to the police powers delegated to it by the California Constitution, the City has the authority to enact laws and regulations which promote the public health, safety, and general welfare of its citizens; and
WHEREAS, on May 16, 2023, the City Council directed staff to develop a special event permit process to authorize private events at Aliso Beach and other South Laguna Beaches as needed; and
WHEREAS, the City Council desires to establish where special events are allowed and the rules and regulations governing special events; and WHEREAS, all other legal prerequisites to the adoption of this Ordinance have occurred.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAGUNA BEACH DOES RESOLVE:

SECTION 1. The foregoing recitals are true and correct and incorporated herein by this reference.

SECTION 2. The City Council hereby approves special events at the locations identified in Exhibit A, which is attached hereto and incorporated herein by reference.

SECTION 3. The City Council hereby establishes rules and regulations governing special 4657
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events as set forth in Exhibit B, which is attached hereto and incorporated herein by reference.

SECTION 4. The City Council hereby makes the following findings with respect to the California Environmental Quality Act (“CEQA”). This action is exempt from the requirements of the CEQA pursuant to State CEQA Guidelines Section 15304 (Minor Alterations to Land, Class 4) which exempts minor public or private alterations in the condition of land, water, and/or vegetation which do not involve removal of healthy, mature, scenic trees except for forestry and agricultural purposes.

Examples include but are not limited to minor temporary use of land having negligible or no permanent effects on the environment, including carnivals, sales of Christmas trees, etc. (14 CCR Section 15304(e).) Here, this action will allow people to use portions of the City’s parks and beaches for special events for a temporary period of time subject to rules and regulations of the City. This action does not authorize permanent infrastructure and merely creates an administrative system to allow persons to coordinate use of the beach and parks. Therefore, this action falls within the minor alterations to land exemption.

None of the exceptions to the use of the categorical exemptions identified in State CEQA Guidelines section 15300.2 apply. The Project will not result in a cumulative impact from successive projects of the same type in the same place, over time. Moreover, there are no unusual circumstances surrounding the Project that would result in a reasonably possibility of a significant effect on the environment. Additionally, the Project will not damage scenic resources, including trees, historic buildings, rock outcroppings, or similar resources. The Project will not cause a substantial adverse change in the significance of a historical resource. Finally, the Project does not include any hazardous waste sites. Thus, Class 4 exemption applies, and no further environmental review is required. The City Council directs staff to cause a Notice of Exemption to be filed with the County of Orange County and State Clearing house within five (5) days of adoption of this Resolution. 4758
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SECTION 5. The documents and materials that constitute the record of proceedings on which this Resolution has been based are located at City Hall, 505 Forest Avenue Laguna Beach, CA 92651. The custodian of the record of proceedings is the Director of Community Development.

SECTION 6. If any provision of this Resolution is held invalid, the remainder of this Resolution shall not be affected by such invalidity, and the provisions of the Resolution are severable.

SECTION 7. This Resolution shall become effective on the 24th day of February, 2026.

ADOPTED this ______ day of __________, 2026.

Mark Orgill, Mayor
ATTEST:

Ann Marie McKay, City Clerk
I, Ann Marie McKay, City Clerk of the City of Laguna Beach, certify that the foregoing Resolution No. 26.XXX was duly adopted at a regular meeting of the City Council of said City held on ________________, 2026, by the following vote:

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

City Clerk, City of Laguna Beach, CA
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EXHIBIT “A”
Mapped Areas and Capacity Limits
Tier I: 50 people or more; Tier II: 500 people or more; *Irvine Bowl subject to existing lease
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EXHIBIT “B”
Rules and Regulations
Special Event Permit Policy
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City of Laguna Beach
Special Event Permit Policy
The purpose of the Special Event Permit Policy is to provide a process for permitting organized gatherings or activities, whether for nonprofit or for profit, specifically at designated City Parks, Beaches, or Facilities. Special Event Organizers (“Applicants”) and Vendors should review this policy in detail before submitting a special event permit application.

This policy identifies capacity limits at designated City Parks, Beaches, or Facilities that trigger the need for a Special Event permit, Special Event guidelines, and Special Event application requirements.

A Special Event may require:

Council - depending on the nature of the request.

Orange County Health Department - Food and Beverage Permits State of California ABC Licensing -
Transit & Community Services – Recreation Division
Mailing Address: 505 Forest Ave. Laguna Beach, CA 92651 Email: [email protected]
Phone: (949) 497-0716
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Irvine Bowl* - All events are booked through and also require a special event permit pursuant to Select Location for
Detailed Map
Tier
Group
Electrical
Access
Alcohol
Allowed
Alcohol
Sales
Food
Booths
Food
Trucks
Vendor
Booths
Parking
Nearby
Aliso Beach I/II • • • • Aliso Beach Park I/II • • • • • • Alta Laguna Park I • • • • Limited Bluebird Park I • • • Limited
Cobblestone Area I • • • • • Community & Rec Center I • • • • • • Heisler Park Picnic Area I • • • • Limited Irvine Bowl N/A • •
Lang Park I/II • • • • • Limited
Main Beach Park I/II • • Limited
Moulton Meadows Park I • • • • Limited
Parking Lot 10 I/II • • • • • • Picnic Beach I Carts Only On Street Limited Promenade on Forest Ave I/II • • • • Carts Only • • 5263 64 of 150
3 “Special Event” means both: (a) organized public or private gatherings or activities, whether for profit or not for profit, that exceed the capacity of designated areas specified by resolution of the City Council (as a private or public gathering within the capacity of the designated areas is not a special event); and (b) the following organized filming; (3) outdoor gatherings, concerts, festivals, art shows, and exhibits; (4) commercial stand-up paddling recreational boating events; and (9) other similar activities at the determination of the City Manager or designee.

Special Event Tiers
Tier I – Simple: A low-impact, small-scale event that requires minimal City resources and oversight.

Attendance – more than people
Duration - Same-day even
No street closures or traffic control
No major amplified sound (very limited, low-volume sound accepted) No sales by vendors or alcohol or other products (limited food sales by trucks/carts accepted) No large structures (e.g., stages, tents over No security or medical services required Site is not impacted to other general use of the same area Minimal setup and breakdown Tier II – Complex: Large-scale, high-impact events requiring extensive planning, approvals, significant City resources.

Attendance - Duration - Full-day or multi-day event
Street closures or lane closures
Significant amplified sound
Large temporary infrastructure: stages, large tents, fencing and barricades, generators and lighting towers Alcohol service or sales (beer, wine, or spirits)
Multiple vendors (food, merchandise, sponsors)
Ticketed or heavily promoted events
Guidelines Vendors (Including Alcohol, Food Trucks, Concessions & Booths) Special Events requested during the peak summer season, beginning the weekend of Memorial Day to Labor Day, are subject to ultimate review and approval by the City Manager due to summer impacts and capacity.

The proposed site must be suitable for the event, with consideration given to adequate space, traffic flow, parking, electricity, health and safety requirements, and impact on the site.

If approved, a pre-event meeting with Applicant and City staff is required.

Applicant must pay for all City services as required by this Policy.

Any vendors utilized by Applicant must have a current City of Laguna Beach Business License to operate at the event.

Applicant and vendors utilized by Applicant must abide by all City of Laguna Beach Municipal Codes. Applicant and vendors utilized by Applicant must abide by No person shall sell or distribute balloons of any kind, whether filled or unfilled.

No person shall intentionally release any balloon into the air.

No person shall use balloons on any public street, park, beach, sidewalk, recreational area, or other City property.

Applicant will ensure Neighborhood and Environmental Protection Plan ("NEPP"), mitigating visitor impact to residents and the environment.

Applicant Path the Plastic-Free Laguna Beach.

Posting and/or distribution (before and during the event) of stickers, coupons, or flyers anywhere within the City of Laguna Beach is prohibited.

Single-use, plastic, bioplastic, and polystyrene disposable food serviceware items, including utensils and utensil sleeves, straws, stirrers, and takeout bags, are strictly prohibited within the City of Laguna Beach. 5364
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4 Vendors (Including Alcohol, Food Trucks, Concessions & Booths) Applicants must submit a vendor plan with the application which details all the vendors to be utilized by the Applicant during the event, including vendors of alcohol, food trucks, concessions, and booths. Vendors must have a City of Laguna Beach Business License and any and all required permits to conduct the vending activity. Proof of business license and any all-required permits must be submitted with the application. The vendor plan is subject to approval by the Transit and Community Services Department.

Vending activity is limited to the area within the approved event site area.

Vending equipment must easily be moveable and self-supporting.

Vendors shall not affix equipment or signs to any hydrant, light pole, street fixture, or other permanent structure.

Each vendor must clean its area of operation and remove all goods and equipment at the close of the event.

The Laguna Beach Fire Department and/or Police Department may suspend or terminate vendor activity at any time for noncompliance with permit requirements or public health or safety concerns.

Alcohol: Events serving and or selling alcohol must comply with state regulations and the following are required:

Detailed security management plan on how to ensure safe distribution and consumption of alcohol at the event. Age verification, age identifier after admittance, containment area, type of alcohol to be served, serving size, etc.

Acquire ABC Daily Permit - from the Department of Alcoholic Beverage Control Obtain authorization from the Laguna Beach Police Department. Event Alcohol Approvals - LBPD Food: Allowed with final staff approval on number of, location of, and time allowed to be on site for the event.

Vendors are required to furnish a current Health Inspection Pass from the Orange County Health Department. Vendors must comply with Health, Fire, and Building & Safety Department regulations.

Food vendors must separate edible food for recovery.

Food Trucks & Carts operating in Orange County must have an Orange County Mobile Food Permit.

Janitorial, Portable Toilets, Waste Management & Recycling Applicants are required to provide a janitorial and waste management plan that details event janitorial services and waste management/recycling services. The janitorial and waste management plan is subject to approval by ment and must be to the City of Laguna Beach Public Works & if onevent size.

All events must implement
drains and local waterways.

Events will not be to use or impact City-owned solid waste and recycling dumpsters or public receptacles.

All events must provide separate containers for solid waste, recycling, and organics in accordance with SB . All events are required - or LagunaBeach- LagunaBeach- . Inadequate event cleanup may result in forfeiture of the deposit or Tier II events are subject to to determine if separate building and/or electrical permits are needed for stages,
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Insurance Requirements
Applicant shall provide a Certificate of Insurance (COI) and applicable endorsements no fewer than ten days prior to the scheduled event. Coverage must be in effect for all event-related activities, including setup and dismantling. Special event permits will be revoked, and events will be canceled if proper insurance is not obtained, and all associated fees with the special event permit shall be nonrefundable.

Certificate of Insurance (COI)
Commercial General Liability:

Insurance is primary insurance with respect to the City, its officials, employees, agents, and contractors.

Any other insurance the City may have shall be considered excess insurance only.

Coverage shall state apply separately to each insured against whom claim The Organizer shall include all subcontractors as insured under its policies or shall obtain separate Certificates of Insurance and Endorsements for each subcontractor.

Coverage must reflect your event activities (e.g., drones, alcohol service, valet, shuttle, athletics).

Automobile Liability: Combined single limit per accident for bodily injury and property damage.

Commercial Business Entities:

Transportation Entities: and general aggregate of million Individuals: Minimum accident).

Workers’ Compensation and Employers’ Liability: to cover all employees and volunteers.

Bodily Injury by Accident - Each Accident -
Bodily Injury by Disease - Each Employee -
Bodily Injury by Disease - Policy Limit -
Liquor Liability:

Required Endorsements - Endorsements are separate documents in addition to the COI Additional Insured: City of Laguna Beach must be named as additional insured.

Primary and Non-Contributory for General Liability.

Waiver of Subrogation: Must be provided when coverage is required.

Statements in the main COI description box are not sufficient.

Policy numbers must match applicable lines on COI and not contain limiting language.

Special Risks or Circumstances
City reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances.

Public Safety & Medical Plan
Events may be required by the Laguna Beach Police Department to provide a security management plan which is subject to approval by the Laguna Beach Police Department and must be to the Laguna Beach Police r to the event. All contracted security services shall be subject to prior approval by the Laguna Beach Police Department.

Events may be required by the Laguna Beach Police Department to provide onservices. Such services must meet all applicable accessibility standards. 5566
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permit which is subject to approval by the Laguna Beach Police Department.

Any requested street closures with the
and is subject to approval by the Laguna Beach Police Department. Please note that street closures require a Temporary Use Permit and may also require a Coastal Development Permit. Special Events measures to minimize impacts.
“No must be
removed immediately Special Event Parking may be required Applicants must
Transit and Community Services Department and must be
measures to minimize impacts Applicant and vendors by Applicant must comply with any required decibel limits and
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Event Fee Schedule – Fees Are Nonrefundable
Applications fees and refundable security deposit are required at the time the application is submitted.

Other fees for additional City services deemed necessary for the event are due at least days before the special event. At the pre-event meeting, City staff will determine which City services are required and will provide Applicant with an estimate for the City services. Applicant shall pay the estimate at least days before the special event. If any funds are not expended to cover the City services associated with the special event, the funds shall be refunded to Applicant before thirty calendar days following the special event.

If City staff finds it necessary to change the event plan or Applicant requests changes after the pre-event meeting, such changes may result in cost increases or decreases.

Tier I Tier II
Application Fee Nonprofit - Nonprofit -
Security Deposit
Daily Permit Fee Nonprofit - Nonprofit -
Parking Lots & Meters Special Event Parking & City Lots Meter Bag Info Electrical (Cobblestones, Promenade) N/A
Street Sweeping
Power Washing
Temporary Animal Permit - PD - Temporary Animal Permit Info - PD
Event Vendor Operator License – FN ___
Trolley Charters Trolley Charter Information
Special Event & Tent Application - FD LBFD Special Event & Tent Application Event Standards Temporary Use Permit - CD Planning Application
City Personnel
Community Development - our Building & Safety Inspector - TBD Firefighter - Fire Marshal -
MS Officer - -
- Police Officer -
Public Works Maintenance Worker - Equip. Operator -
Transit & Community Services - our CS Coordinator -
Other Fees Assigned by City of Laguna Beach
Other
Other
Other
Other
Other
Other
Other
Other
Other
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Application – Special Event Permit
Applicant Name: Date:

Mailing Address: Apt/Suite:

City: State: Zip:

Email Address: Cell Phone: Other Phone:

Business or Organization Name: Website:

Non-Profit: Yes No Laguna Beach Business License #: N/A EIN:

Event Information
Athletic or Sporting: Festival: Concert: Neighborhood: Car Show: Fundraising:

Other Type or Additional Information:

Alternate Location:

Event Name: Purpose Of Event:

On-Site Contact: Cell Phone:
# Of Personnel Staff: # Of Volunteers: Total # Of Vendors:

Day 1 Date: Day 2 Date: Day 3 Date:

Set-Up Time: Set-Up Time: Set-Up Time:

Start Time: Start Time: Start Time:

End Time: End Time: End Time:

Breakdown Time: Breakdown Time: Breakdown Time:

Estimated Attendance: Estimated Attendance: Estimated Attendance:

Open to Public: Open to Public: Open to Public:

Yes Will the event require the following? Please provide details.

Admission Fee:

Alcohol Served or Sold (Beer, Wine, Spirits) :

Amplified Sound:

Food Served or Sold or Catering:

Goods for Sale:

Outside Security:

Oversized Vehicles or Equipment:

Parking Lots or Meters:

Power Source or Generator:

Tables & Chairs, Qty:

Tents, Canopies or Stage:

Traffic Plan:

Other:

Other:
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9 Event Details
Checklist
An application will be considered complete once all the following provisions have been addressed and the required documents submitted (where applicable):

Yes N/A Application Fees
Yes N/A Vendor Plan (a list of any and all proposed vendors) Yes N/A
Parking and Traffic Control Plan (anticipated parking needs and a parking plan for the special event, including Special Event Parking Application; provision and use of traffic cones or barricades for pedestrian and vehicle traffic)
Yes N/A A proposed seating plan for the special event, if applicable.

Yes N/A Sound and Lighting Plan (detailing the use of amplified sound (for speakers, instruments, or other noise), including location, timing, and duration and detailing location of lights, if any) Yes N/A A detailed site plan of the premises including parking spaces, seating arrangements, fire exits, dimensions of each area, any other attraction offered, and the overall layout of the special event.

If required by the appropriate City Department, at least 10 calendar days before an approved event, the following items must be submitted for the event to proceed:

Yes N/A
Security Management Plan (the provision and/or operation of first aid or emergency medical aid stations; security measures or other arrangements that will be implemented to properly direct attendees/participants and to prevent unlawful conduct)
Yes N/A Janitorial and Waste Management Plan (the provision and/or operation of sanitary facilities, including ADAaccessible facilities; a trash/ -site disposal plan) Yes N/A Certificates of Insurance (COI and additional endorsements that meet all requirements of the City of Laguna Beach Special Event Policy.

Yes N/A City service fee deposit (based on coordination meeting between City staff and Applicant) ___________________________________ __________________________________ Signature of Applicant Date ___________________________________ __________________________________ XXXX Approval Date

BY DEFEND, INDEMNIFY, AND

AND AGENTS AND AGAINST ANY

EMPLOYEES, AND AGENTS
THIS
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ORDINANCE NO. XXXX

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
LAGUNA BEACH, CALIFORNIA, AMENDING TITLE 18 AND
SECTIONS 6.16.020 AND 8.04.010 OF THE LAGUNA BEACH
MUNICIPAL CODE; AND FINDING SUCH ACTION EXEMPT

FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT
UNDER CEQA GUIDELINES SECTION 15304
WHEREAS, the City of Laguna Beach, California (“City”) is a municipal corporation, duly organized under the California Constitution and laws of the State of California; and WHEREAS, pursuant to the police powers delegated to it by the California Constitution, the City has the authority to enact laws which promote the public health, safety, and general welfare of its citizens; and
WHEREAS, on May 16, 2023, the City Council directed staff to develop a special event permit process to authorize private events at Aliso Beach and other South Laguna Beaches as needed; and
WHEREAS, since then, City staff has identified other areas of City property that members of the public and private organizations would like to use for special events and other areas of Title 18 that require modification for internal consistency within Title 18; and WHEREAS, the City Council desires to amend Title 18 (Beaches and Parks) to create a special event permit process to authorize private events at Aliso Beach and other South Laguna Beaches, as needed, as well as at other City property and to make changes to streamline and add consistency to the application of Title 18 as a whole; and WHEREAS, all other legal prerequisites to the adoption of this Ordinance have occurred. 10 103 of 150
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NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAGUNA BEACH DOES ORDAIN AS FOLLOWS:

SECTION 1. Recitals. The recitals set forth above are true and correct and are hereby adopted as findings in support of this Ordinance as if fully set forth herein.

SECTION 2. Code Amendment. Laguna Beach Municipal Code Title 18 is hereby repealed and replaced with Title 18, which is attached hereto as Exhibit A and incorporated herein by reference.

SECTION 3. Code Amendment. Laguna Beach Municipal Code Section 6.16.020 (Dogs on beaches, in parks and school grounds—When and where prohibited) is hereby repealed and replaced with the provisions, which are attached hereto as Exhibit B and incorporated herein by reference.

SECTION 4. Code Amendment. Laguna Beach Municipal Code Section 8.04.010 (Drinking or possession in public places) is hereby repealed and replaced with the provisions, which are attached hereto as Exhibit C and incorporated herein by reference.

SECTION 5. CEQA. This Ordinance is exempt from the requirements of the California Environmental Quality Act (“CEQA”) pursuant to State CEQA Guidelines Section 15304 (Minor Alterations to Land, Class 4) which exempts minor public or private alterations in the condition of land, water, and/or vegetation which do not involve removal of healthy, mature, scenic trees except for forestry and agricultural purposes. Examples include but are not limited to minor temporary use of land having negligible or no permanent effects on the environment, including carnivals, sales of Christmas trees, etc. (14 CCR Section 15304(e).) Here, this action will allow people to use portions of the City’s parks and beaches and other City property for special events for a temporary period of time subject to rules and regulations of the City and makes other changes to streamline 10 104 of 150
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and add consistency to the application of Title 18. This action does not authorize permanent infrastructure and merely creates an administrative system to allow persons to coordinate use of the beach and other City property. Therefore, this action falls within the minor alterations to land exemption.

None of the exceptions to the use of the categorical exemptions identified in State CEQA Guidelines section 15300.2 apply. The Project will not result in a cumulative impact from successive projects of the same type in the same place, over time. Moreover, there are no unusual circumstances surrounding the Project that would result in a reasonably possibility of a significant effect on the environment. Additionally, the Project will not damage scenic resources, including trees, historic buildings, rock outcroppings, or similar resources. The Project will not cause a substantial adverse change in the significance of a historical resource. Finally, the Project does not include any hazardous waste sites. Thus, Class 4 exemption applies, and no further environmental review is required. The City Council directs staff to cause a Notice of Exemption to be filed with the County of Orange County and State Clearing house within five (5) days of adoption of this Ordinance.

SECTION 6. Effective Date. This Ordinance shall become effective thirty (30) days following its adoption by the City Council.

SECTION 7. Publication. The City Clerk shall certify to the adoption of this Ordinance.

Mark Orgill, Mayor
Ann Marie McKay, City Clerk
APPROVED AS TO FORM: ____________ Megan Garibaldi, City Attorney I, Ann Marie McKay, City Clerk of the City of Laguna Beach, do hereby certify that the foregoing Ordinance No. XXXX was introduced at a regular meeting of the City Council on _______________, 2026, and was finally adopted at a regular meeting of the City Council of said City held on _______________, 2026, by the following vote:

AYES: COUNCILMEMBER(S):

NOES: COUNCILMEMBER(S):

ABSTAIN: COUNCILMEMBER(S):

ABSENT: COUNCILMEMBER(S):

City Clerk, City of Laguna Beach, CA
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EXHIBIT A
Title 18. Beach and Parks
Chapter 18.01 DEFINITIONS
For purposes of Title 18, the following terms shall have the following meanings:
"Business" means and includes "business," "profession," "trade," "calling," "occupation," "show," "exhibition" or "game," and all and every kind of calling carried on for profit or livelihood whether or not a profit or livelihood is actually earned thereby and whether or not said business has a fixed place of business in the city.
"Charcoal" means a carbon substance obtained as a residue when wood or other organic matter is heated in the absence of air.
“Commercial dog training” means any training activity where a person is receiving compensation, donations, or anything of value for training a dog.
"Commercial stand-up paddling" means the use, in the Pacific Ocean adjacent to the shoreline within the city boundaries, of any stand-up paddleboard and paddle. Commercial stand-up paddling activity refers to any business, activity or act for financial compensation in connection with conducting classes, tours, instruction, lessons or group activities in stand-up paddling. "Constitutionally protected expressive activities involving the use of structures" means and refers to conduct and activities that encompasses, entails or includes the erection and use of stages, tables, barricades, utility poles, booths, tents or other temporary structures in addition to the tables, benches, permanent structures, equipment and facilities provided by the city, and the sole or principal purpose of which is the expression, dissemination, or communication by verbal, visual, literary or auditory means of opinion, views or ideas.
"Fire log" means any manufactured log constructed of sawdust; sawdust and paraffin; or waste fiber from the oil palm.
"Garbage" is all animal and vegetable refuse, all vegetable and fruit trimmings, all other refuse that shall have been prepared for, or intended to be used as food, or shall have resulted from the preparation of food, and shall also include coffee grounds, eggshells, and all other food refuse. “Motorboat" includes any vessel propelled by machinery, whether or not such machinery is the principal source of propulsion.
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"Natural wood" means the hard fibrous substance consisting basically of xylem that makes up the greater part of the stems, branches, and roots of trees and shall not include any material that has been processed or treated including, but not limited to, wooden pallets, books, newspapers, furniture, or construction materials.
"Organized play" means six persons or more engaging as a member of a league, sports association, or commercial enterprise in a team sport athletic contest, such as, but not limited to, soccer, lacrosse, baseball, softball, football, basketball, tennis, pickleball, sand volleyball, running, swimming, or training.
"Scuba diving" means the use, in the Pacific Ocean adjacent to the shoreline within the city boundaries, of any face mask, diving fins, snorkel, knife, abalone iron, spear or spear gun, in any combination or combinations, together with any self-contained underwater breathing apparatus. “Shade covering” means a canopy, awning, umbrella, tent, cabana, easy-up, or cover. "Skin diving" means the use, in the Pacific Ocean adjacent to the shoreline within the city boundaries, of any or all of the articles of equipment described in the definition of “scuba diving” except the use of self-contained underwater breathing apparatus. “Special event” means both:
a) Organized public or private gatherings or activities, whether for profit or not for profit, that exceed the capacity of designated areas specified by resolution of the city council. Private or public gatherings within the capacity of the designated areas set by resolution are not considered special events for purposes of this chapter. b) The following organized public or private gatherings or activities, whether for profit or not for profit:

1. Informal weddings;

2. Outdoor gatherings, concerts, festivals, art shows, and exhibits;

3. Commercial stand-up paddling activity;

4. Commercial dog training;

5. Outdoor athletic contests;

6. Organized play;

7. Special organized recreational boating events; and

8. Other similar activities at the determination of the City Manager or designee. "Store" means to put aside or accumulate for use when needed, to put for safekeeping, to place or to leave in a location.
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“Structure” means tables, signs, coolers, sports equipment, a volleyball court, or other temporary items.
“Surfing" means the use in the Pacific Ocean adjacent to the shoreline within the boundaries of the city of any surfboard, paddleboard, skimboarding, or other similar object made entirely or partially of wood, metal, glass, hard plastic, or any other hard substance. "Trash" means and includes rubbish, newspapers, magazines, all discarded paper and wrappings, tin cans, glass containers, broken glass, boxes, discarded clothing, dead animals or fish, ashes, waste wood, or any other waste material.
"Vegetation" means any and all types of trees, plants, bushes, hedges and shrubs, but not including grass.
"Vessel" means every description of watercraft used or capable of being used as a means of transportation on water.
"Wet sand" means that portion of the beach that is wet as a result of the wash of the waves or tidal action.

Chapter 18.02 USE OF CITY BEACHES AND PARKS
§ 18.02.005. Intent and purpose.
a) The police power to promote the public peace, morals, health, safety and general welfare authorizes the city of Laguna Beach to regulate the use of public property, including beaches and parks, and to impose reasonable restrictions on the time, place, and manner of the use of public property, including beach and park use. b) In accordance with this authority, the city intends to impose reasonable requirements on the use of public property, including beaches and parks to maintain and maximize: (1) the natural beauty and aesthetic attractiveness of public property, including beach and park areas; (2) the guarantees of freedom of speech and association contained in the Constitutions of the United States and the state of California; (3) the availability of limited beach and park areas for diverse uses; and (4) public safety, including, without limitation, the free flow of pedestrian and vehicle traffic in and around public property, including beach and park areas.
§ 18.02.010. General use.
a) Unless otherwise reserved pursuant to this chapter, city parks and beaches are available to the public for general active and passive recreational use and constitutionally protected expressive activities in accordance with the design and character of the area being used.

No reservations shall be taken for general use of parks or beaches. 10 109 of 150
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b) Except as expressly authorized otherwise in this chapter, parks and beaches are to be used only with the structures, equipment, and other facilities provided by the city. c) Except as expressly authorized otherwise in this chapter, no additional tables, booths, tents or structures may be erected or installed for general use activities. § 18.02.015. Closing times.
a) Except as otherwise provided in this Title, all city beaches and coastal-adjacent parks shall be closed to public use during the times set by city council resolution. b) Except as otherwise provided in this Title, all noncoastal-adjacent parks shall be closed to public use at ten p.m. and shall remain closed until five a.m. § 18.02.020. Entering, remaining or staying during closing times.

It is unlawful for any person to be within the area known as Crescent Bay Point Park between the hours of twelve midnight and five a.m. of the following day. § 18.02.030. Posting of Hours.

The city manager, or designee, shall post or cause to be posted appropriate signs in conspicuous locations giving notice of closing times and, as applicable, the exceptions provided in this Title

1. Walking;

2. Jogging;

3. Fishing (by members of the public having on their possession a valid California fishing license);

4. Grunion hunting;

5. Scuba diving;

6. Surfing;

7. Swimming in the ocean.
b) The provisions of Sections 18.02.015, 18.02.020, and 18.02.025 of this code shall not apply to the following activities:
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1. Activities as may be expressly permitted by preemption of state law or as may be allowed pursuant to a resolution of the city council.

2. Performance of official business by any city officer or employee or any other person authorized by the city.

3. Any city-sponsored activity, program or special event.

4. Any activity, program or special event for which a city special event permit has been issued.
§ 18.02.040. Special Event: Permit Required.
a) In accordance with its legal authority and intent to protect the public peace, morals, health, safety, and general welfare and public property, the city requires special event permits for certain activities and uses on city parks and beaches.
b) No person shall cause a “Special Event” to occur in any city park, beach, or property without first obtaining a city special event permit.
c) The city requires special event permits for the purposes of:

2. Learning about the proposed activity to minimize or prevent inconvenience or harm to the public and public property or visual blight and degradation of beach and park areas;

4. Ensuring that facilities most suited for the proposed activity are used without unnecessarily restricting the rights of free expression or assembly guaranteed by the Constitutions of the United States and the state of California. d) This section is not intended to in any way discriminate against, regulate, or interfere with the rights or content of constitutionally protected freedom of expression or association. § 18.02.045 Special Event Permit.
a) The city manager or designee shall be responsible for the administration of the special event permit process and shall develop application forms and any further internal city rules, regulations and requirements consistent with this chapter and deemed necessary to administer it.
b) No special event permit will be issued on City beaches or parks beginning Memorial Day weekend through Labor Day unless the special event permit is ultimately approved in advance of the event by the City Manager.
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c) Special event permit applications must be submitted in writing at least thirty calendar days before the date of the proposed activity on a form approved by the city manager or his/her designee.
d) Special event permit applications will be processed in the order in which they are received and a permit will be issued or denied within fifteen calendar days after it is received. e) Special event permits issued under this chapter may also require a Coastal Development Permit, or may be exempt or excluded from a Coastal Development Permit requirement, as provided in sections 25.07.007 and 25.07.008(A)(6).
f) Special event permit applications will be denied only if:

1. The special event permit application is not fully completed and executed or contains a material falsehood or misrepresentation, or the applicant has on prior occasions made material misrepresentations regarding the nature or scope of activity previously permitted or has violated the terms of a previous permit;

2. The applicant has not tendered any required application fee, indemnification agreement, or insurance certificate;

5. The proposed use or activity is prohibited by law; or

6. Other grounds set forth in this Title or as established by the city manager. g) If a special event permit application is denied, the city manager or designee will notify the applicant in a writing that clearly sets forth the grounds for such denial, and, where feasible, will suggest alternative times or places to conduct the proposed use or activity or propose any measures by which the applicant may cure any defects in the special event permit application.
h) The permittee of activities conducted pursuant to a special event permit under this section shall:

2. Be required to:
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i. To obtain a standard policy of liability insurance naming the city as an additional insured with respect to any liability, loss, damage, or injury incurred by the city, or by any other person and claimed against the city, which is proximately caused by the permittee or its officers, agents, or employees, or any person who was or reasonably should have been within the permittee’s control;
ii. To agree to reimburse the city for any costs incurred by it in restoring damage to or cleaning public property after the activity as is necessary due to damage or degradation which is proximately caused by the permittee or its officers, agents, or employees or any person who was or reasonably should have been within the permittee’s control; and
iii. To agree to defend, protect, indemnify, and hold the city free and harmless from and against any and all liability, loss, damage, or injury incurred by the city, or by any other person and claimed against the city, which is proximately caused by the permittee or its officers, agents, or employees, or any person who was or reasonably should have been within the permittee’s control.
§ 18.02.050 Special Event Fees.
a) Application and use fees established from time to time by the city council in accordance with this section for constitutionally protected expressive activities shall be reasonably related to the city's actual costs incident to the administration of this chapter or the provision of city services.
b) When establishing or requiring payment of application or use fees or the amount of liability insurance coverage, providing a waiver of fees or insurance requirements, establishing or accepting in lieu contributions as an alternative to fees, issuing or denying a special event permit, or otherwise acting in enforcement of this title as applied to constitutionally protected expressive activities, no consideration shall be given as to the identity or associational relationships of the special event permit applicant, the content, subject matter, or viewpoint of any expression or message communicated by or during a proposed activity, or to any assumptions or predictions of the amount of hostility that may be aroused in the public by the content, subject matter or viewpoint of the expression or message conveyed by the applicant or proposed activity.
c) No applicant for or recipient of a special event permit for constitutionally protected activities involving the use of structures shall be required to provide or pay the cost of public safety personnel necessary to provide for the protection of the applicant and its attendees from hostile members of the public, traffic control or general law enforcement in the vicinity of the proposed activity.
d) Except as expressly provided otherwise in this section, in establishing or imposing application and use fees, the amount of liability insurance coverage or premiums, a waiver of fees or insurance requirements, or the acceptance of in-lieu contributions consideration shall be given only to physical attributes of the proposed activity consisting of the type, size and number of any proposed temporary structure(s), the estimated attendees, excluding 11 113 of 150
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hostile members of the public or counter-demonstrators, at and duration of the activity, and the reasonably estimated extra city personnel hours anticipated to be used for such activity. e) No individual or organization applying for a special event permit for the purpose of conducting a constitutionally protected expressive activity for which a special event permit is required shall be required to pay an application or use fee or procure insurance, if the special event permit application includes reasonably satisfactory documentation or other evidence demonstrating the applicant's indigence and financial status, or that payment of fees or procurement of insurance is impossible or so financially burdensome that it would preclude the applicant from using beach or park property. If the city manager or his or her designee determines, after consultation with the city's risk manager, that a particular use, event or activity does not present a substantial or significant public liability or property damage exposure for the city, the city manager or designee may give a written waiver of the insurance requirements of this section.
§ 18.02.055 Appeals.

Any determination by the city manager or designee regarding a special event permit may be appealed to the city council pursuant to Chapter 2.02 of this code. § 18.02.060 Main Beach Park.
a) Constitutionally Protected Expressive Activities Involving the Use of Structures:

2. Such activities, which shall be sponsored by an individual or organization, may be conducted by the same individual or organization on not more than fourteen days in any calendar year.

3. Sales relating to the special event are authorized at the hard surface cobblestone area. Each vendor must have a Laguna Beach business license and shall display the license number.
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c) The planning of such activities and location of such structures as are authorized in this section shall:

2. Not utilize a single structure in excess of six hundred square feet in area or in excess of eight feet in height.
§ 18.02.065 Informal weddings.
a) Certain areas designated for informal weddings may be reserved through the special event permit process on a first-come-first-served basis, upon payment of a nonrefundable fee to be established by resolution.
b) No additional tables or chairs or other facilities may be erected for such ceremonies. c) No alcoholic beverages shall be served and no amplified sound shall be permitted. d) The maximum number of the wedding party and guests shall not exceed fifty people in the Gazebo at Heisler Park or at Crescent Bay Park.
e) Up to ninety-five people are allowed per wedding in other locations in Heisler Park. f) No more than two weddings per day shall be permitted at Crescent Bay Park. § 18.02.070 Outdoor gatherings, concerts, festivals, art shows and exhibitions. a. Any outdoor gathering, concert, festival, art show, or exhibitions involving the use of structures and not otherwise provided for in this chapter or elsewhere in this code shall be held at Irvine Bowl Park.
b. The use of the amphitheater and festival grounds at Irvine Bowl shall be on a first-come, first-served basis by reservation through the special event permit process and is subject to the requirements of any existing or subsequently approved lease of those facilities. Nothing in this section shall be construed to supersede the provisions of any such lease. Outdoor gatherings to be attended by more than two thousand five hundred persons require a license pursuant to Chapter 5.68 of this code.
c. If the Irvine Bowl Park is unavailable for an outdoor gathering, concert, festival, art show, or exhibition involving the use of structures, the sponsor of a special event can propose the event at an alternative location. The City Manager shall either approve or deny such special event permit application.
§ 18.02.075 Independence Day celebration.

The city council finds and declares that, in consideration of the city-wide ban on the use of fireworks, it is in the interest of public health, safety and general welfare to permit and conduct a 11 115 of 150
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public fireworks display at Main Beach on or about July 4th of each year to celebrate Independence Day.
§ 18.02.080 Penalty.
a) A violation of this Chapter may be prosecuted as an infraction in accordance with the provisions of Section 1.04.025 of this code, or alternatively, an administrative citation may be issued pursuant to the provisions of Chapter 1.15 of this code. b) In addition, or as a further alternative, the city may pursue any form of administrative remedy, civil action or other judicial relief against a person, business or enterprise violating the provisions of this chapter.
§ 18.02.085 Severability.

Chapter 18.04 CONDUCT
§ 18.04.010. Garbage and trash.
a) No person shall leave, scatter, throw, or discard any trash or garbage upon any beach, park, public street, alley, or passageway within the city, except as hereinafter provided. b) It shall be the duty of every person having in his possession, charge or control, any garbage or trash upon any beach, park, public street, alley, or passageway, either to place said garbage and trash in public garbage and trash containers located on or in said beaches, parks, public streets, alleys or passageways, if such containers are available, or to take said garbage and trash with him or her when he or she leaves said beach, park, public street, alley or passageway within the city.
c) The prohibitions, regulations, and restrictions in this chapter contained, relative to the disposal of garbage and trash, shall not apply to the disposal of garbage and trash as defined, regulated, and provided by Chapter 7.16 (Solid Waste Disposal and Organic Waste Diversion) of this code.
d) It is unlawful for any person, firm, or corporation to place, dump, deposit, or otherwise cause to be deposited, any foreign substance or material, including, but not limited to, dirt, wood, trees, roots, shrubs, plants, sand, brick, rock, gravel, masonry, or plaster, in or on public beaches or tidelands within the city limits, or to place, dump, deposit, or otherwise cause to be deposited, any such foreign substance or material anywhere within the city limits in such a way that it is reasonable to expect that the normal action of the elements or tides or winds will cause such materials to become deposited in or on said tidelands. 11 116 of 150
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§ 18.04.015. Display or sale of merchandise prohibited. a) Except as expressly provided by this code, no person shall sell, offer to sell, or display for sale, or rent, offer to rent, or display for rent, goods, wares, merchandise, foodstuffs, refreshments, or other kinds of property or services in any beach or park. b) The provisions of this section shall not apply to the sale, display for sale, or offer in exchange for a donation, conducted without the use of stands or other temporary or permanent structures, of:

1. Newspapers, periodicals, pamphlets, or other written materials; or

2. Constitutionally protected expressive merchandise bearing political, religious, philosophical, social, or ideological messages and seeking support for particular causes or support for particular views on economic, political, religious, philosophical, social or ideological issues, without regard to the viewpoint, subject matter, or content contained on or expressed by such newspapers, periodicals, pamphlets, other written materials, or expressive merchandise, or the identity or associational affiliation of any individual or organization offering such materials or merchandise. § 18.04.018. Business on city property.
a) No person shall in any manner while on city property, including beaches and parks, sell any product or service or engage in any other business or commercial activity without obtaining a business license and the prior written approval of the city manager, or duly authorized representative.
b) This section does not apply to any concession operated under authority granted by the city council, nor to any other activity specifically authorized, regulated, or exempted by order or resolution of the city council.
§ 18.04.020. Shade Coverings, Tables, and Volleyball Nets and Courts. (a) Shade coverings

1. Shade coverings, other than umbrellas in a form substantially similar to Figure 1, below, are prohibited on all beaches within the City.

2. Shade coverings are allowed at all parks within the City but cannot exceed six feet in width by six feet in depth by six feet in height.

3. Any authorized shade covering shall be relocated at the request of the Marine Safety Department staff, Police Department staff, or other authorized City personnel. (b) Tables

1. No person shall install, erect, or maintain any table over six feet in length by three feet in width on any beach within the City.

2. No person shall install, erect, or maintain any table over six feet in length by three feet in width on any public park within the City.

3. Any authorized volleyball net and court shall be relocated at the request of the Marine Safety Department staff, Police Department staff, or other authorized City personnel.

Figure 1
(Umbrella)
§ 18.04.035. Public buildings, structures and improvements. a) No person shall affix or attach any ropes, wires, cords, stakes, poles, hooks, or similar objects to any public buildings or structures in any public parks or beaches, including, but not limited to, lifeguard towers, restrooms, administrative offices, boardwalks, flag poles, public artwork, drinking fountains, barbeques, picnic stoves, fences, walls, railings, benches, tables, and trash receptacles, without the advance written consent of the city manager or designee.
b) No person shall store personal property in or on any public parks and beaches as follows:

1. on or upon any stairs, designated trails, sidewalks, or marked pathways or boardwalks;

2. within twenty feet of any restroom;

3. within fifteen feet of any lifeguard towers or administrative offices;

4. within fifteen feet of the oceanward side of the Main Beach boardwalk, beneath or under such boardwalk, or any place where such boardwalk abuts the sand; or

1. hammocks,

2. cots,
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3. beds,

4. sleeping bags,

5. mattresses,

6. luggage or

1. Fire pits within the city's local coastal program jurisdiction are prohibited unless used as permitted herein.
i. No person shall burn, ignite, or otherwise set on fire any material in a fire pit unless the person is burning natural wood, fire log(s), or charcoal (collectively, "fuel") in a fire pit that has been specifically designated and operated in a manner that has been authorized by resolution of the city council. Except as expressly authorized in this section, open beach fires that burn, ignite, or otherwise set on fire any fuel outside of city-designated fire 11 119 of 150
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pits are prohibited at all beaches within the city's local coastal program jurisdiction.
c) Portable solid fuel burning fire pits are strictly prohibited on public property including parks and beaches. Portable propane fire pits are only allowed as specifically authorized in Paragraph 10 of Subsection 307.2 of Section 15.01.030 of this code.

No person shall play or practice the game of golf, including chipping, putting, driving, or any other type of play or practice, which includes the hitting of a golf ball or similar type ball with a golf or similar type club in any city park, beach, or city-owned open space area. § 18.04.130. Operation of ultralight vehicles or balloons. 11 120 of 150
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To the maximum extent permitted by law, no person shall land, release, take off in, or launch any ultralight vehicle or balloon, as defined by 14 CFR Sections 101.1 and 103.1, including ultralight vehicles commonly known as a hang glider, paragliding device, or parasail, from any city-owned land.

Chapter 18.10 BEACHES
§ 18.10.002. Bluffs and vegetation.
a) Purpose and Intent.

1. The public bluffs and vegetation constitute aesthetically pleasing and sensitive features and resources, provide stability to land formations, and mitigate erosion, among other public benefits.

3. Stairs, designated trails, sidewalks, and marked pathways exist to allow the public to move through public areas.
b) Protection of Bluffs and Vegetation in Public Areas.

No person shall have, possess, or use any article made of glass as a container upon any city beach. § 18.10.005. Digging holes.

No person shall dig or cause the digging of any hole in the sand exceeding a depth of two feet.

Any person who digs, or causes to be dug, any hole upon the beach shall fill the hole before leaving the hole unattended.
§ 18.10.010. Removal of sand.

No person shall remove or cause to be removed from any beach any sand without written permission from the marine safety chief.
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§ 18.10.015. Beach activities, sports, and games.

No person shall willfully resist, delay, interfere or disobey any lifeguard in the discharge or attempt to discharge any duty of his or her position.

Chapter 18.12. RIDING
§ 18.12.010. Horses, vehicles and electric personal assistive mobility devices prohibited— Exceptions.
a) No person, except authorized law enforcement, shall ride, lead, or drive any horse or horses, or ride, drive, or operate any motor vehicle, electric personal assistive mobility device (as defined by the California Vehicle Code) including bicycles or any motorized riding equipment, upon any portion of the beach within the limits of this city. 12 122 of 150
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b) The provisions of this chapter shall not apply to:

1. any person, firm, or corporation using, riding or driving horses or motor vehicles, including bicycles, upon said beach when employed by this city to clean said beach;

3. any person with disabilities operating an electric personal assistive mobility device (as defined by the California Vehicle Code) upon said beach.

Chapter 18.20. SURFING AND SWIMMING
§ 18.20.020. Swimming and Surfing—Hazardous conditions.

At any time when conditions become hazardous as a result of storm, congestion of persons, or other conditions which cause a present danger to persons swimming, surfing, or to others using the beach, including the water, the city manager, marine safety chief, or police chief or their authorized designees, or any other officer or employee designated by the city council, may prohibit swimming and surfing with a surfboard, paddleboard, or similar device during the period of such hazardous conditions. No person shall fail, refuse, or neglect to stop swimming or surfing or fail, refuse, or neglect to leave the water when ordered to do so by any such employee of the city. § 18.20.025. Swimming and Surfing Areas.
a) All waters within two hundred yards from the shoreline are designated as swimming and surfing areas, except that from June fifteenth and September fifteenth, both dates inclusive, of each calendar year, there are designated surfing areas to the exclusion of swimming.

1. The following described areas of the Pacific Ocean are hereby designated as surfing areas, and surfing within said areas only during the daylight hours enumerated below shall be permitted:
i. Area No. 1: That area lying between a point one hundred fifty feet south of the southerly extension of Brooks Street and a point one hundred fifty feet north of the northerly extension of Brooks Street only during the hours from sunup to sundown;
ii. Area No. 2: That area lying between a point ninety feet south of the southerly extension of St. Ann's Drive and a point two hundred feet south of the southern extension of Thalia Street only during the hours from sunup to sundown;
iii. Area No. 3: That area lying between Victor Hugo's Point and the stairway entrance below Jasmine Street only during the hours from sunup to sundown;
iv. Area No. 4: That area lying between a point one hundred twenty-five feet south of the southerly extension of Agate Street and a point one hundred 12 123 of 150
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feet north of the northerly extension. The hours of surfing to be from sunup until twelve noon and then five p.m. until sunset;
v. Area No. 5: Surfing is allowed in Area No. 5. Exception: In Aliso Beach, specifically, a zone for surfing shall be set up from 12 pm to 6 pm daily through the posting of signs and flags by Marine Safety Department staff or for increased durations as conditions warrant at the determination by Marine Safety Department staff. If a zone for surfing is not set through the posting of signs and flags by Marine Safety Department staff, the surfing area is hereby established at the South end of Aliso Beach from 12pm to 6pm between June fifteenth and September fifteenth.

3. No person shall engage in the activity of surfing from June fifteenth to September fifteenth outside of the designated surfing area unless the city manager, marine safety chief, police chief, or other employee of the city designated by the city manager to enforce surging regulations and control surfing activities, upon careful evaluation, permits surfing in certain swimming areas as follows through the posting of signs and flags.
i. Whenever surfing or weather conditions make swimming or bathing hazardous in the beach area from a point one hundred fifty feet south of the southerly extension of Brooks Street to a point ninety feet south of the southerly extension of St. Ann's Drive, or
ii. When relatively few swimmers or bathers are present. b) No persons shall operate any vessel within swimming and surfing areas except that vessels, other than motorboats, which have been launched from the beach may proceed directly to and from the beach through said designated areas.
c) The launching of any vessels may be prohibited by any police officer or lifeguard at any time it appears to such police officer or lifeguard that such activity would constitute a hazard to persons swimming and surfing in said designated area or to the operators or passengers of said vessels.
§ 18.20.030. Signals.

The violation of any of the provisions of this chapter is punishable as a misdemeanor and the revocation of the license, if any, issued to such violator.

No person shall conduct any class of instruction in scuba diving or skin diving on public beaches within the City during the following time periods: (a) from June fifteenth to September fifteenth of any year; before seven a.m. or after ten a.m. on any day. § 18.21.025. Penalty for violations.

The violation of any of the provisions of this chapter is punishable as a misdemeanor.

Chapter 18.22. COMMERCIAL STAND-UP PADDLING REGULATION
§ 18.22.010. Commercial Stand-Up Paddling Activity—Special Event Permit required. a) A special event permit is required for any business or person proposing to conduct commercial stand-up paddling activities.
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b) All permits will contain, at minimum, the following requirements:

1. all instructors shall maintain basic First Aid and CPR certifications in addition to participation in a mandatory orientation with marine safety on an annual basis;

2. a student-to-instructor ratio of not more than 4:1 shall be maintained;

3. no more than ten persons from any business (including students and instructors) shall be in the water at one time;

4. each business shall utilize a system to allow for identification of permitted instructors through uniformly colored hats associated with the business;

5. a one-time application fee and an annual renewal fee shall be paid in the amounts established by resolution of the city council;

6. all businesses shall maintain liability insurance in the amount of one million dollars per incident, two million dollars in the aggregate;

7. all businesses shall comply with other applicable federal, state and local statutes and regulations.
c) The chief of marine safety may require additional permit requirements or modify permit requirements in the interest of public health, safety and general welfare. § 18.22.015. Hazardous commercial stand-up paddling activity—Discontinuance orders authorized.
a) Hazard to Others or Self. No person will conduct commercial stand-up paddling activities at any time in the Pacific Ocean within the city in a manner that constitutes a hazard to any other person or to themselves.
b) Authorized Order to Discontinue Commercial Stand-Up Paddling Activity. The city manager, marine safety chief, police chief or their authorized designees, or any officer or employee designated by the city manager to enforce ocean activity regulations and commercial stand-up paddling activities, may prohibit commercial stand-up paddling activities at any time if surf conditions become hazardous as a result of storm, congestion of persons, lack of proper equipment or other conditions that cause a present danger to the persons engaged in stand-up paddling or to others. No business or person shall fail, refuse or neglect to stop commercial stand-up paddling activities or to leave the water when ordered to do so by any such employee of the city.
§ 18.22.020. Penalty for violations.

Chapter 18.25. SEAL ROCK
§ 18.25.010. Statement of intent.
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a) The city council finds and determines that Seal Rock is a unique natural resource which is used as a habitat by the California sea lion and the brown pelican. b) The council further finds that the presence of people on Seal Rock is disturbing to these rare species of wildlife.
§ 18.25.015. Trespassing on Seal Rock prohibited.

The chief of marine safety shall post appropriate signs regarding Seal Rock to inform the public that trespassing is prohibited and that the wildlife should not be disturbed. § 18.25.025. Penalty.

Chapter 18.26. STORAGE AND LAUNCHING OF VESSELS
§ 18.26.010. Prohibition against overnight storage of vessels on beaches.

It is unlawful for any person to launch any motorboat from any public beach except at areas designated as launching areas by the city.
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§ 18.26.030. Exception—City owned or operated vessels.

The provisions of this chapter shall not apply to vessels owned, maintained, or operated by the city.

Chapter 18.27. HAZARDOUS OR ENDANGERED AREAS
§ 18.27.010. Climbing or trespassing in hazardous or endangered areas prohibited.

Chapter 18.28. PARKS
§ 18.28.016. Use of dog parks.

The following regulations shall apply to all city dog parks:
a) Owners and/or handlers are legally responsible for their dogs and any injuries to people or other dogs and/or damage caused by them.
b) All dogs must have current licenses and required vaccinations, and be wearing a collar or harness with a visible registration dog tag.
c) Dogs in heat, pregnant, or lactating are not permitted inside the dog park. d) Digging is not permitted anywhere in the park. Owners and/or handlers are responsible to fill any holes dug by their dog.
e) Owners and/or handlers may not bring more than three dogs at any one time to the dog park.
f) Owners and/or handlers must keep close visual contact with their dogs and be aware of their actions at all times. Dog owners and handlers must remain in a "hands free" condition and capable at all times to use both hands to control their dog. g) Commercial dog training is prohibited in city dog parks, unless specifically permitted by the city through the special event permit process.
§ 18.28.018. Baseball at Riddle Field.
a) Riddle Field is intended for youth baseball play.
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b) No hitting of baseballs by persons over the age of fourteen is permitted unless for a youth baseball activity permitted through the special event permits process in accordance with Section 18.28.025 and Title 18 of this code.
c) Riddle Baseball Field closes at dusk unless a special event permit for lights has been issued. § 18.28.020. Outdoor athletic contests.
a) The intent of this section is to provide for the integrity of various community sports leagues and sports events by facilitating the harmonious scheduling of their activities. b) Parks may be reserved through the special event permit process for athletic contests, events, or activities, including practice or training sessions, in areas designated for such use. c) Special structures to be used in conjunction with these activities shall be subject to the discretionary review and approval by the city through the special event permit process and may require other entitlements based on the proposed structures. § 18.28.025. Organized play—Special Event Permit required. a) No person shall participate in any organized play on any park, soccer field, baseball field, tennis/pickleball courts, sand volleyball court, pool or other recreational facility owned, operated, or controlled by the city without first receiving a special event permit issued by the city which authorizes the organized play at the particular site. b) In determining whether or not to issue a special event permit, the city manager, or designee, shall consider the following and any other factors he or she deems relevant:

1. The suitability of the particular facility for the proposed play.

2. The effect of the activity on the neighborhood.

3. The limitation on the availability of the facility for spontaneous recreational use by the public caused by the permitted use of the facility.

1. Restrictions on the number, age and other designations of persons who may participate in such permitted play.

2. Restrictions on the season, days of the week and time of day that the particular facility may be used by the permittee.

3. Provisions for the maintenance by the permittee of the sanitation, cleanliness, and appearance of the facility. At times, portable restrooms may be required for special events.

4. Provisions for security and the maintenance of law and order, including compliance with noise, parking, safety, and other appropriate regulations. It is at the city's discretion to require security on the premises to enforce the policies of field use. If security is deemed necessary, it is the responsibility of the user group or individual 12 129 of 150
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to obtain security personnel at the user's expense. A letter of confirmation from the security agency must be submitted prior to field approval.

5. Restrictions on the installation of apparatus or modification in any manner, either temporary or permanent, by the permittee to the sports field or adjacent structures.

1. Laguna Beach State Marine Reserve,

2. Laguna Beach State Marine Conservation Area, and

3. Dana Point State Marine Conservation Area.
§ 18.29.015. Responsibility of marine protection office.

The city's marine safety department shall have and discharge the responsibilities of area manager for all of the marine protected areas located within the city limits. § 18.29.020. Unlawful acts.

EXHIBIT B
(Laguna Beach Municipal Code Section 6.16.020)

6.16.020 (Dogs on beaches, in parks, and school grounds—When and where prohibited.) a) In addition to the restrictions provided in Section 6.16.120, and except as provided to the contrary in this section, it is unlawful for any dog to be within the following designated beach and park areas within the city, and it is unlawful for any person, firm or corporation owning or having charge of any dog to permit or allow such dog to be within the following beach and park areas, whether or not confined by leash, at the following times:

1. At any and all times within Bluebird Park, and within Boat Canyon Park within June 15th and September 15th of each calendar year;

2. At such times and within those areas of Heisler Park as the city council may from time to time fix and designate by resolution;

3. Notwithstanding any other provisions of this code, no person shall take any dog, whether leased or unleashed, upon any public beach in the city between the hours set by city council resolution nor shall any person owning or having charge, care custody or control of any dog cause, permit or allow such dog to be upon such beach at any time that conflicts with the hours set by city council resolution;

4. At any and all times upon any public school grounds, dogs are prohibited, whether or not confined by leash, unless prior written authorization by school district is obtained;

5. At any and all times in tot lots or play equipment areas in any city park or beach. b) The restrictions and prohibitions of this section and Section 6.16.120, shall not be applicable to dogs while they are enrolled and participating in obedience classes sponsored by the recreation department of the city, or to guide dogs for blind persons. 13 132 of 150
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EXHIBIT C
(Laguna Beach Municipal Code Section 8.04.010)

8.04.010 (Drinking or possession in public places.)
a) Except as otherwise expressly provided by this section, no person shall consume any alcoholic beverage on or upon any public place, including any public street, right-of-way, sidewalk, alley, beach, park or parking lot; provided, however, that:

1. It shall not be a violation of subsection (a) to consume alcoholic beverages with a bona fide meal in any public park, with the exception of Heisler Park, Main Beach Park, Crescent Bay Point Park, and Riddle Field and Park.

2. It shall not be a violation of subsection (a) to consume alcoholic beverages with a bona fide meal:
i. At special event gatherings in Heisler Park, Main Beach Park or Crescent Bay Point Park in accordance with a permit issued by the community services department pursuant to the requirements established by resolution of the city council; or
ii. At city-sponsored performing or cultural arts events in Heisler Park, Main Beach Park, Crescent Bay Point Park or Riddle Field and Park.

3. It shall not be a violation of subsection (a) to consume alcoholic beverages provided by the concessionaire located at Aliso Beach Park within the concession building or delineated patio area, as provided by an agreement with the city. b) Except as otherwise expressly provided by this section, no person shall possess any can, bottle or other receptacle containing any alcoholic beverage that has been opened, or a seal broken, or the contents of which have been partially removed, on or upon any public place, including any public street, right-of-way, sidewalk, alley, beach, park or parking lot. This subsection does not apply when an individual is in possession of any alcoholic beverage container for the purposes of recycling or other related activity. 13 133 of 150
RESOLUTION NO 26.XXX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

LAGUNA BEACH, CALIFORNIA, ESTABLISHING LOCATIONS

WHERE SPECIAL EVENTS ARE ALLOWED AND RULES AND
REGULATIONS GOVERNING SPECIAL EVENTS; AND

FINDING THE ACTION CATEGORICALLY EXEMPT FROM

THE CALIFORNIA ENVIRONMENTAL QUALITY ACT
PURSUANT TO STATE CEQA GUIDELINES SECTION 15304
WHEREAS, the City of Laguna Beach, California (“City”) is a municipal corporation, duly organized under the California Constitution and laws of the State of California; and WHEREAS, pursuant to the police powers delegated to it by the California Constitution, the City has the authority to enact laws and regulations which promote the public health, safety, and general welfare of its citizens; and
WHEREAS, on May 16, 2023, the City Council directed staff to develop a special event permit process to authorize private events at Aliso Beach and other South Laguna Beaches as needed; and
WHEREAS, on January 27, 2026, the City Council considered the limitations on special events within the City; and
WHEREAS, on April 14, 2026, the City Council considered the limitations on special events within the City; and
WHEREAS, the City Council desires to establish where special events are allowed and the rules and regulations governing special events; and WHEREAS, all other legal prerequisites to the adoption of this Ordinance have occurred.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAGUNA BEACH DOES RESOLVE:

SECTION 1. The foregoing recitals are true and correct and incorporated herein by this reference.
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SECTION 2. The City Council hereby approves special events at the locations identified in Exhibit A, which is attached hereto and incorporated herein by reference.

SECTION 3. The City Council hereby establishes rules and regulations governing special events as set forth in Exhibit B, which is attached hereto and incorporated herein by reference.

None of the exceptions to the use of the categorical exemptions identified in State CEQA Guidelines section 15300.2 apply. The Project will not result in a cumulative impact from successive projects of the same type in the same place, over time. Moreover, there are no unusual circumstances surrounding the Project that would result in a reasonably possibility of a significant effect on the environment. Additionally, the Project will not damage scenic resources, including trees, historic buildings, rock outcroppings, or similar resources. The Project will not cause a substantial adverse change in the significance of a historical resource. Finally, the Project does not 13 135 of 150
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include any hazardous waste sites. Thus, Class 4 exemption applies, and no further environmental review is required. The City Council directs staff to cause a Notice of Exemption to be filed with the County of Orange County and State Clearing house within five (5) days of adoption of this Resolution.

SECTION 5. The documents and materials that constitute the record of proceedings on which this Resolution has been based are located at City Hall, 505 Forest Avenue Laguna Beach, CA 92651. The custodian of the record of proceedings is the Director of Community Development.

SECTION 6. If any provision of this Resolution is held invalid, the remainder of this Resolution shall not be affected by such invalidity, and the provisions of the Resolution are severable.

SECTION 7. This Resolution shall become effective on the same date that the Ordinance entitled, “AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAGUNA BEACH, AMENDING TITLE 18 AND SECTIONS 6.16.020 AND 8.04.010 OF THE LAGUNA BEACH MUNICIPAL CODE; AND FINDING SUCH ACTION EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT UNDER CEQA GUIDELINES SECTION 15304,” becomes effective.

ADOPTED this day of , 2026.

Mark Orgill, Mayor
ATTEST:

Ann Marie McKay, City Clerk
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I, Ann Marie McKay, City Clerk of the City of Laguna Beach, certify that the foregoing Resolution No. 26.XXX was duly adopted at a regular meeting of the City Council of said City held on , 2026, by the following vote:

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

City Clerk, City of Laguna Beach, CA
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EXHIBIT “A”
Mapped Areas and Capacity Limits
Tier I: 50 people or more; Tier II: 500 people or more; *Irvine Bowl subject to existing lease
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EXHIBIT “B”
Rules and Regulations
Special Event Permit Policy
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City of Laguna Beach
Special Event Permit Policy
The purpose of the Special Event Permit Policy is to provide a process for permitting organized gatherings or activities, whether for nonprofit or for profit, specifically at designated City Parks, Beaches, or Facilities. Special Event Organizers (“Applicants”) and Vendors should review this policy in detail before submitting a special event permit application.

A Special Event may require:

Approval from other City Departments, Committees, Planning Commission, Design Review Board, or City Council - depending on the nature of the request.

Orange County Health Department - Food and Beverage Permits State of California ABC Licensing - Alcohol Sales or Consumption A Coastal Development Permit (or may be exempt in accordance with LBMC Section 25.07.008(A)(6) Transit & Community Services – Recreation Division
Mailing Address: 505 Forest Ave. Laguna Beach, CA 92651 Email: [email protected]
Phone: (949) 497-0716
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Irvine Bowl* - All events are booked through Festival of Arts and also require a special event permit pursuant to LBMC Section 18.02.085.

Select Location for
Detailed Map
Tier
Group
Electrical
Access
Alcohol
Allowed
Alcohol
Sales
Food
Booths
Food
Trucks
Vendor
Booths
Parking
Nearby
Aliso Beach I/II • • • • Aliso Beach Park I/II • • • • • • Alta Laguna Park I • • • • Limited Bluebird Park I • • • Limited
Cobblestone Area I • • • • • Community & Rec Center I • • • • • • Heisler Park Picnic Area I • • • • Limited Irvine Bowl N/A • •
Lang Park I/II • • • • • Limited
Main Beach Park I/II • • Limited
Moulton Meadows Park I • • • • Limited
Parking Lot 10 I/II • • • • • • Picnic Beach I Carts Only On Street Limited Promenade on Forest Ave I/II • • • • Carts Only • • 1
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“Special Event” means both: (a) organized public or private gatherings or activities, whether for profit or not for profit, that exceed the capacity of designated areas specified by resolution of the City Council (as a private or public gathering within the capacity of the designated areas is not a special event); and (b) the following organized public or private gatherings or activities, whether for profit or not for profit: (1) informal weddings; (2) commercial filming; (3) outdoor gatherings, concerts, festivals, art shows, and exhibits; (4) commercial stand-up paddling activity; (5) commercial dog training; (6) outdoor athletic contests; (7) organized play; (8) special organized recreational boating events; and (9) other similar activities at the determination of the City Manager or designee.

Special Event Tiers
Tier I – Simple: A low-impact, small-scale event that requires minimal City resources and oversight.

Attendance – more than 50 people
Duration - Same-day event for less than 6 hours
No street closures or traffic control
No major amplified sound (very limited, low-volume sound accepted) No sales by vendors or alcohol or other products (limited food sales by trucks/carts accepted) No large structures (e.g., stages, tents over 10’ x 10’) No security or medical services required
Site is not impacted to other general use of the same area Minimal setup and breakdown
Tier II – Complex: Large-scale, high-impact events requiring extensive planning, approvals, significant City resources.

Attendance - more than 500 people
Duration - Full-day more than 6 hours or multi-day event Street closures or lane closures
Significant amplified sound
Large temporary infrastructure: stages, large tents, fencing and barricades, generators and lighting towers Alcohol service or sales (beer, wine, or spirits)
Multiple vendors (food, merchandise, sponsors)
Ticketed or heavily promoted events
Guidelines Vendors (Including Alcohol, Food Trucks, Concessions & Booths) Special Events requested during the peak summer season, beginning the weekend of Memorial Day to Labor Day, are subject to ultimate review and approval by the City Manager due to summer impacts and capacity.

The proposed site must be suitable for the event, with consideration given to adequate space, traffic flow, parking, electricity, health and safety requirements, and impact on the site.

If approved, a pre-event meeting with Applicant and City staff is required.

Applicant must pay for all City services as required by this Policy.

Any vendors utilized by Applicant must have a current City of Laguna Beach Business License to operate at the event.

Applicant and vendors utilized by Applicant must abide by all City of Laguna Beach Municipal Codes. Applicant and vendors utilized by Applicant must abide by Balloon (Ordinance No. 1683) No person shall sell or distribute balloons of any kind, whether filled or unfilled.

No person shall intentionally release any balloon into the air.

No person shall use balloons on any public street, park, beach, sidewalk, recreational area, or other City property.

Applicant will ensure event aligns with the City’s Neighborhood and Environmental Protection Plan ("NEPP"), mitigating visitor impact to residents and the environment.

Applicant must adhere to the City’s commitment on the Path the Plastic-Free Laguna Beach.

Posting and/or distribution (before and during the event) of stickers, coupons, or flyers anywhere within the City of Laguna Beach is prohibited.

Single-use, plastic, bioplastic, and polystyrene disposable food serviceware items, including utensils and utensil sleeves, straws, stirrers, and takeout bags, are strictly prohibited within the City of Laguna Beach. 1 142 of 150
Vendors (Including Alcohol, Food Trucks, Concessions & Booths) Applicants must submit a vendor plan with the application which details all the vendors to be utilized by the Applicant during the event, including vendors of alcohol, food trucks, concessions, and booths. Vendors must have a City of Laguna Beach Business License and any and all required permits to conduct the vending activity. Proof of business license and any all-required permits must be submitted with the application. The vendor plan is subject to approval by the Transit and Community Services Department.

Vending activity is limited to the area within the approved event site area.

Vending equipment must easily be moveable and self-supporting.

Vendors shall not affix equipment or signs to any hydrant, light pole, street fixture, or other permanent structure.

Each vendor must clean its area of operation and remove all goods and equipment at the close of the event.

The Laguna Beach Fire Department and/or Police Department may suspend or terminate vendor activity at any time for noncompliance with permit requirements or public health or safety concerns.

Alcohol: Events serving and or selling alcohol must comply with state regulations and the following are required:

Detailed security management plan on how to ensure safe distribution and consumption of alcohol at the event.

Age verification, age identifier after admittance, containment area, type of alcohol to be served, serving size, etc.

Acquire ABC Daily Permit - Form 221 from the Department of Alcoholic Beverage Control Obtain authorization from the Laguna Beach Police Department. Event Alcohol Approvals - LBPD Food: Allowed with final staff approval on number of, location of, and time allowed to be on site for the event.

Vendors are required to furnish a current Health Inspection Pass from the Orange County Health Department. Vendors must comply with Health, Fire, and Building & Safety Department regulations.

Food vendors must separate edible food for recovery.

Food Trucks & Carts operating in Orange County must have an Orange County Mobile Food Permit.

Janitorial, Portable Toilets, Waste Management & Recycling Applicants are required to provide a janitorial and waste management plan that details event janitorial services and waste management/recycling services. The janitorial and waste management plan is subject to approval by the Public Works & Utilities Department and must be submitted to the City of Laguna Beach Public Works & Utilities Department at least 10 calendar days prior to the event.

Portable toilets and handwashing stations are required if on-site restrooms are for event size.

All events must implement best management practices (BMPs) to prevent pollution from reaching storm drains and local waterways.

Events will not be permitted to use or impact City-owned solid waste and recycling dumpsters or public receptacles.

All events must provide separate containers for solid waste, recycling, and organics in accordance with SB 1383. All events are required to obtain solid waste, recycling, and organics collection services exclusively through CR&R Inc., the City’s franchised solid waste hauler. Contact CR&R at (949) 662-3819 or [email protected] [email protected].

Inadequate event cleanup may result in forfeiture of the deposit or nes.

Building & Safety Inspection
Tier II events are subject to Building & Safety Inspection to determine if separate building and/or electrical permits are needed for stages, electrical use, and overall attractions.

Building & Safety Inspection must be completed at least 10 calendar days prior to the event. 14 143 of 150
Insurance Requirements
Applicant shall provide a Certificate of Insurance (COI) and applicable endorsements no fewer than ten (10) days prior to the scheduled event. Coverage must be in effect for all event-related activities, including setup and dismantling. Special event permits will be revoked, and events will be canceled if proper insurance is not obtained, and all associated fees with the special event permit shall be nonrefundable.

Certificate of Insurance (COI)
Commercial General Liability:

Minimum $1 million for each occurrence.

General aggregate of $2 million.

Insurance is primary insurance with respect to the City, its officials, employees, agents, and contractors.

Any other insurance the City may have shall be considered excess insurance only.

Coverage shall state that the Organizer’s insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer’s liability.

The Organizer shall include all subcontractors as insured under its policies or shall obtain separate Certificates of Insurance and Endorsements for each subcontractor.

Coverage must reflect your event activities (e.g., drones, alcohol service, valet, shuttle, athletics).

Automobile Liability: Combined single limit per accident for bodily injury and property damage.

Commercial Business Entities: Minimum $1 million.

Transportation Entities: Minimum $1 million and general aggregate of $5 million Individuals: Minimum $400,000 ($100,000 per person and $300,000 per accident).

Workers’ Compensation and Employers’ Liability: Required to cover all employees and volunteers.

Bodily Injury by Accident - Each Accident - Minimum $1 million Bodily Injury by Disease - Each Employee - Minimum $1 million Bodily Injury by Disease - Policy Limit - Minimum $1 million Liquor Liability: Required if alcohol is served or sold.

Minimum $1,000,000 limit per occurrence.

Required Endorsements - Endorsements are separate documents in addition to the COI Additional Insured: City of Laguna Beach must be named as additional insured.

Primary and Non-Contributory for General Liability.

Waiver of Subrogation: Must be provided when Worker’s Compensation coverage is required.

Statements in the main COI description box are not sufficient.

Policy numbers must match applicable lines on COI and not contain limiting language.

Public Safety & Medical Plan
Events may be required by the Laguna Beach Police Department to provide a security management plan which is subject to approval by the Laguna Beach Police Department and must be submitted to the Laguna Beach Police Department at least 10 calendar days prior to the event. All contracted security services shall be subject to prior approval by the Laguna Beach Police Department.

Events may be required by the Laguna Beach Police Department to provide on-site medical or rst aid services. Such services must meet all applicable accessibility standards. 14 144 of 150
Parking & Control Plan
Applicants must provide a parking and control plan with the application for the special event permit which is subject to approval by the Laguna Beach Police Department. application and is subject to approval by the Laguna Beach Police Department. Please note that street closures require a Temporary Use Permit and may also require a Coastal Development Permit. Special Events may be conditioned to provide measures to minimize impacts. “No Parking” signs must be placed at least 48 hours prior to restriction and must be removed immediately upon completion of event.

Special Event Parking may be required for some locations.

Sound, Electrical, Portable Lighting
Applicants must provide a sound and lighting plan. The sound and lighting plan is subject to approval by the Transit and Community Services Department and must be submitted with the application.

Special Events may be conditioned to provide measures to minimize impacts from sound and lighting.

Applicant and vendors utilized by Applicant must comply with any required limitations on sound, including any decibel limits and permitted hours of use, and lighting. 14 145 of 150
Event Fee Schedule – Fees Are Nonrefundable
Applications fees and refundable security deposit are required at the time the application is submitted.

Other fees for additional City services deemed necessary for the event are due at least ten (10) days before the special event. At the pre-event meeting, City staff will determine which City services are required and will provide Applicant with an estimate for the City services. Applicant shall pay the estimate at least ten (10) days before the special event. If any funds are not expended to cover the City services associated with the special event, the funds shall be refunded to Applicant before thirty calendar days following the special event.

If City staff finds it necessary to change the event plan or Applicant requests changes after the pre-event meeting, such changes may result in cost increases or decreases.

Tier I Tier II
Application Fee $150 Nonprofit - $50 $300 Nonprofit - $100 Security Deposit $500 $1000
Daily Permit Fee $250 Nonprofit - $100 $750 Nonprofit - $400 Parking Lots & Meters Special Event Parking & City Lots Meter Bag Info Electrical (Cobblestones, Promenade) $50 N/A
Street Sweeping $165 per hour
Power Washing $88 per hour
Recreation Equipment Recreation Equipment Rental
Temporary Animal Permit - PD $185 - Temporary Animal Permit Info Traffic Control Plan Review - PD $155 Per Page
Event Vendor Operator License – FN Vendors, Exhibitors, Event Service Providers X $25 = $ Trolley Charters Trolley Charter Information
Special Event & Tent Application - FD LBFD Special Event & Tent Application Event Standards Temporary Use Permit - CD $ 817 Planning Application
City Personnel
Community Development Administrative Review - $73 per hour Building & Safety Inspector - TBD Fire Department (Charity, Reg., OT) Firefighter - $69, $79, $120 Fire Marshal - $124, $143, $213 Marine Safety (Charity, Reg., OT) MS Officer - $74, $85, $128 Rescue Watercraft - $70, $75 Police Department (Charity, Reg., OT) CSO II or Park Ranger - $66, $76, $114 Police Officer - $91, $105, $157 Public Works Maintenance Worker - $45, $52, $77 Equip. Operator - $64, $74, $110 Transit & Community Services Administrative Review - $73 per hour CS Coordinator - $30 per hour Other Fees Assigned by City of Laguna Beach
Other
Other
Other
Other
Other
Other
Other
Other
Other
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Application – Special Event Permit
Applicant Name: Date:

Mailing Address: Apt/Suite:

City: State: Zip:

Email Address: Cell Phone: Other Phone:

Business or Organization Name: Website:

Non-Profit: Yes No Laguna Beach Business License #: N/A EIN:

Event Information
Athletic or Sporting: Festival: Concert: Neighborhood: Car Show: Fundraising:

Other Type or Additional Information:

Requested Location: Alternate Location:

Event Name: Purpose Of Event:

On-Site Contact: Cell Phone:
# Of Personnel Staff: # Of Volunteers: Total # Of Vendors:

Day 1 Date: Day 2 Date: Day 3 Date:

Set-Up Time: Set-Up Time: Set-Up Time:

Start Time: Start Time: Start Time:

End Time: End Time: End Time:

Breakdown Time: Breakdown Time: Breakdown Time:

Estimated Attendance: Estimated Attendance: Estimated Attendance:

Open to Public: Open to Public: Open to Public:

Yes Will the event require the following? Please provide details.

Admission Fee:

Alcohol Served or Sold (Beer, Wine, Spirits) :

Amplified Sound:

Drone (FAA License Required):

Food Served or Sold or Catering:

Goods for Sale:

Outside Security:

Oversized Vehicles or Equipment:

Parking Lots or Meters:

Power Source or Generator:

Portable Restrooms:

Tables & Chairs, Qty:

Tents, Canopies or Stage:

Traffic Plan:

Other:

Other:
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Event Details
Checklist
An application will be considered complete once all the following provisions have been addressed and the required documents submitted (where applicable):

If required by the appropriate City Department, at least 10 calendar days before an approved event, the following items must be submitted for the event to proceed:

Yes N/A
Security Management Plan (the provision and/or operation of first aid or emergency medical aid stations; security measures or other arrangements that will be implemented to properly direct attendees/participants and to prevent unlawful conduct)
Yes N/A Janitorial and Waste Management Plan (the provision and/or operation of sanitary facilities, including ADAaccessible facilities; a trash/litter collection plan coordinated with CR&R or an off-site disposal plan) Yes N/A Certificates of Insurance (COI and additional endorsements that meet all requirements of the City of Laguna Beach Special Event Policy.

Yes N/A City service fee deposit (based on coordination meeting between City staff and Applicant) Signature of Applicant Date
XXXX Approval Date
BY SIGNING, THE APPLICANT AGREES TO COMPLY WITH ALL TERMS AND CONDITIONS OF THIS PERMIT. THE APPLICANT ALSO AGREES TO DEFEND, INDEMNIFY, AND

HOLD HARMLESS THE CITY OF LAGUNA BEACH, INCLUDING ITS OFFICIALS, OFFICERS, EMPLOYEES, AND AGENTS FROM AND AGAINST ANY CLAIM, ACTION, OR

PROCEEDING, INCLUDING ANY DAMAGES AND ANY AWARD OF ATTORNEYS FEES) AGAINST THE CITY OF LAGUNA BEACH, INCLUDING ITS OFFICIAL, OFFICERS,

EMPLOYEES, AND AGENTS TO ATTACK, SET ASIDE, VOID, OR ANNUAL ANY APPROVAL OR CONDITION OF APPROVAL OF THE CITY OF LAGUNA BEACH CONCERNING THIS

SPECIAL EVENT, INCLUDING BUT NOT LIMITED TO ANY APPROVAL OR CONDITION OF APPROVAL OF THE CITY COUNCIL, PLANNING COMMISSION, DESIGN REVIEW BOARD, COMMUNITY DEVELOPMENT DIRECTOR, OR CITY EMPLOYEE. THE CITY RESERVES THE RIGHT, AT ITS OWN OPTION, TO CHOOSE ITS OWN ATTORNEY TO REPRESENT THE CITY, ITS OFFICERS, EMPLOYEES, AND AGENTS IN THE DEFENSE OF THE MATTER. 14 148 of 150
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STAFF REPORT
Meeting Date:

April 14, 2026

BUSINESS
17 SUBJECT: RESOLUTIONS AND APPROPRIATIONS RELATED TO SALE OF BONDS FOR UNDERGROUND UTILITY ASSESSMENT DISTRICT 2021-3 (FAIRVIEW/LA BREA)
RECOMMENDATION: It is recommended that the City Council:

1. Adopt the attached Resolution titled, “A RESOLUTION OF THE CITY OF LAGUNA BEACH,

CALIFORNIA, DETERMINING UNPAID ASSESSMENTS IN UNDERGROUND UTILITY ASSESSMENT DISTRICT NO. 2021-3 (FAIRVIEW/LA BREA) AND THE MANNER OF PAYMENT THEREOF AND LISTING BONDS ISSUED ON THE SECURITY THEREOF”;

2. Adopt the attached Resolution titled, “A RESOLUTION OF THE CITY OF LAGUNA BEACH,

CALIFORNIA, AUTHORIZING THE ISSUANCE OF CITY OF LAGUNA BEACH UNDERGROUND UTILITY ASSESSMENT DISTRICT NO. 2021-3 (FAIRVIEW/LA BREA)

LIMITED OBLIGATION IMPROVEMENT BONDS, AWARDING THE SALE OF SUCH

BONDS, APPROVING FISCAL AGENT AGREEMENT, OFFICIAL STATEMENT, BOND

PURCHASE AGREEMENT, AND CONTINUING DISCLOSURE CERTIFICATE AND

AUTHORIZING THE CITY MANAGER OR FINANCE DIRECTOR TO NEGOTIATE THE TERMS OF THE PURCHASE OF THE BONDS”;

3. Approve the purchase of Underground Utility Assessment District 2021-3 (Fairview/La Brea) public offering municipal serial bonds at a 25-year term with an estimated true interest cost of

5.01%;

4. Authorize the City Manager to award a task order to Accenture in the amount of $160,300 for construction management and inspection services, and authorize the City Manager to approve project-related expenses and change orders for additional construction inspection services that may be required in an amount not-to-exceed $20,000;

5. Appropriate $5,058,750 for construction and other related expenses within Underground Utility Assessment District 2021-3 (Fairview/La Brea), increase revenues by the same amount, and authorize the City Manager to expend all appropriated funds;

6. Authorize the City Manager to enter into necessary utility company agreements and make advance payments to the utility companies for their construction services for a total amount of $1,208,831; and

7. Determine that the action is exempt from California Environmental Quality Act pursuant to CEQA Guidelines sections 15301(b), 15302(c) & (d), and 15303(d).

SUMMARY OF THE MATTER
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On January 13, 2026, the City Council approved the formation of Underground Utility Assessment District 2021-3 (Fairview/La Brea). To move forward with constructing the improvements, staff recommends the sale of bonds under provisions of the Improvement Bond Act of 1915 and other applicable laws and regulations. To issue bonds, the City Council must adopt the attached two resolutions, included as Attachment 1, and appropriate funding for construction and related expenses. The resolutions have been prepared and approved by the City’s Bond Counsel, Best Best & Krieger, LLP, in coordination with the City’s municipal advisor, Fieldman Rolapp & Associates, Inc., and the bond underwriter, Oppenheimer & Co. Inc. Construction improvements are scheduled to begin in June 2026, and it is recommended that a task order be issued to Accenture for construction management and inspection services to manage the construction phase of the project. Lastly, to protect project costs from future inflation, it is recommended that advance payments to the utility companies for construction services be authorized.

DISCUSSION
Bond Financing Method
A public bond issuance will be utilized as the financing method for this assessment district. This bond financing method has been successfully used by the City for the past several assessment district projects. The public offering will be marketed to external investors including full disclosure, underwriting, and investor outreach. A 25-year bond term resembles the recently completed bond sales for the Woods Cove AD 2014-2 and West Street AD 2021-1 projects. The public offering has an estimated “all in” interest rate of 5.58%, which includes all costs associated with the issuance of bonds and the bond discount.

The Fiscal Agent Agreement is included as Attachment 2, and establishes the terms and conditions under which the bonds will be issued, and the bonds and certain other funds and accounts held in connection with the bonds will be administered.

The Preliminary Official Statement (POS), included as Attachment 3, is the document that will be used by the underwriter to market the bonds to potential investors. The POS is to be released before the bond sale and provides information on bond terms and conditions. A memorandum prepared by disclosure counsel summarizing the duties and responsibilities of the City Council with respect to the POS is included as Attachment 4. The Bond Purchase Agreement (BPA), included as Attachment 5, contains the provisions relating to the purchase, sale, and delivery agreement of the bonds between the City and Oppenheimer & Co. Inc., the underwriter of the bonds. The forms of the Fiscal Agent Agreement, POS, Continuing Disclosure Certificate (attached as an appendix to the POS), and the BPA are referenced in the proposed resolutions. The Bond Details, which include the sources and uses of funds, are listed in Attachment 6.

Pursuant to the requirements of Section 5852.1 of the California Government Code, set forth below are good faith estimates as of March 16, 2026.

True Interest Cost 5.01%
Finance Charge $233,037
Proceeds $2,884,567
Total Payment Amount $5,903,750
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The good faith estimate is included as Attachment 7.
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Project Accounting
Bonds totaling $3,330,000 are proposed to be sold to Oppenheimer & Co. Inc. on April 23, 2026, with funding of bond proceeds on May 7, 2026, to finance a portion of the costs of construction of the utility undergrounding improvements within the Assessment District. Additional revenues were received through property owner prepayments and City contributions totaling $1,688,158. Originally, there were 90 assessed parcels with assessments totaling $4,302,201 in the Assessment District. Of those, 17 parcels chose to fully pre-pay their assessments, and two parcels chose to partially pre-pay their assessments, in the total amount of $738,998. The City also contributed $474,580 as a General Benefit and $474,580 as a separate City Contribution. In total, $5,058,750 in revenue will be received as summarized in the left column of Table 1 below. The estimated appropriations needed to complete the project are listed in the right column on Table 1.

Table 1 – Estimated Project Accounting

REVENUES APPROPRIATIONS
Bond Proceeds: $ 3,300,000 Construction: $ 4,355,370 (3) Premium: $ 40,592 Incidental Expenses
Prepayments: $ 738,998 Assessment Engineering: $ 44,055 General Benefit: $ 474,580 (1) Surveying: $ 5,000
City Contribution: $ 474,580 (2) Construction Inspection: $ 160,300 Construction Bidding: $ 8,000
Bond Issuance
City Administration: $ 35,000 (4)
Fiscal Agent: $ 3,000
Fiscal Agent’s Counsel: $ 6,000
Assessment District Admin. $ 10,000
Printing/Filing Fees: $ 2,500
Incidental Contingencies: $ 20,414 (5)
Disclosure Counsel: $ 37,500
Bond Counsel: $ 35,000
Financial Advisor: $ 39,500
Underwriter’s Discount: $ 44,123
Bond Reserve $ 199,800 (6)
Capitalized Interest $ 53,188 (7)
Approximate Total revenues: $ 5,058,750 Approximate Total appropriations: $ 5,058,750 Notes for Table 1
(1) “General Benefit” cost is a contribution by the City toward the project from the Wildfire Mitigation and Fire Safety Fund previously appropriated on January 13, 2026. (2) “City Contribution” cost is an additional contribution from the Wildfire Mitigation and Fire Safety Fund previously appropriated on January 13, 2026.
(3) “Construction” includes contractor costs, construction contingencies, and utility costs (SCE, Frontier, 4 of 336

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Cox, and Crown Castle).
(4) “City Administration” is for the City’s estimated cost of administering construction. (5) “Incidental Contingencies” includes additional proceeds, CalMuni Reporting, and is adjusted to account for rounding of the Bond Proceed amount.
(6) “Bond Reserve” is 6% of the Bond Proceed amount.
(7) “Capitalized Interest” is the funded interest through September 2, 2026.

Utility Costs
Due to inflationary construction costs, staff requested utility companies to provide up-to-date costs to construct the project. The following costs were provided by the utilities and are included in the total construction appropriation listed in Table 1 above.

SCE Cost $420,239.20
Cox Cost $530,467.85
Frontier Cost $226,128.66
Crown Castle Cost $31,995.08
Total Utility Costs (Rounded): $1,208,831
Staff recommend payments be made to the utilities in advance of construction to lock in these current costs and enable the utility companies to procure materials and provide timely construction services when the City’s contractor begins work, presumably in June 2026.

Construction Inspection and Management
The Fairview/La Brea project requires full-time inspection and part-time construction management services to ensure public safety and adherence to the contract documents throughout construction. Staff solicited proposals from Psomas, Accenture, and HW Lochner, who are all on the City’s On-Call Consultant list. Accenture was determined to be the highest-rated firm due to its experience with utility undergrounding projects, and it provided a competitive cost for the scope of work.

It is recommended that a task order be awarded to Accenture (On-Call Consultant Contract No. 23-64) in the amount of $160,300 for the Fairview/La Brea project. Although Accenture is on the City’s approved On-Call Consultants list, the proposed fee exceeds the City Manager’s task order approval authority of $75,000; therefore, this task order requires City Council approval. In addition to the task order amount, it is recommended to authorize the City Manager to approve change orders for additional construction inspection/construction management services that may be required in an amount not-to-exceed $20,000 for the project.

Utility Underground Assessment Deferment Program
The Deferment Loan Program was revised and adopted by the City Council on July 8, 2025. Changes included authorizing the City Manager to provide discretionary approval for applicants of the program who do not meet the age requirements but otherwise meet all the requirements of the program such as income and asset requirements. One applicant applied for the program; however, following a review of the application and required financial documents, it was determined that the applicant did not meet the 5 of 336

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eligibility requirements of the program. As a result, the Deferment Loan Program will not be utilized for this assessment district.

FINANCIAL ANALYSIS
An appropriation of $5,058,750 is recommended from the Bond Proceeds Fund after the sale of bonds is complete and increase revenues by the same amount as outlined in Table 1. An appropriation for the Deferment Loan Program is not required as no property owners qualified for the program.

ENVIRONMENTAL ANALYSIS
At the December 4, 2024 Planning Commission meeting, the City previously conducted environmental review for the proposed undergrounding project and determined that the project was exempt under the California Environmental Quality Act pursuant to CEQA Guidelines Section 15301(b), which authorizes an exemption for “existing facilities providing electric power with no expansion of use”; Sections 15302(c) and (d) for the “replacement or reconstruction of existing utility systems involving negligible or no expansion of capacity, and conversion of overhead electric utility distribution system facilities to underground”; and Section 15303(d) involving “new construction of small utility facilities or structures.” More detailed environmental analysis can be found in that December 4, 2024, Planning Commission approval.

ATTACHMENTS

1. Resolutions (Pgs. 6-21)

2. Fiscal Agent Agreement (Pgs. 22-70)

3. Preliminary Official Statement with form of Continuing Disclosure Certificate as App. D (Pgs. 71-151)

4. Disclosure Responsibility Memo (Pgs. 152-153)

5. Bond Purchase Agreement (Pgs. 154-177)

6. Bond Details (Pgs. 178-184)

7. Good Faith Estimate (Pg. 185)
Submitted By: Mark McAvoy Approved: .David A Kiff
Mark McAvoy, Director of Public
Works & Utilities
Dave Kiff, City Manager
Report Prepared By: Coordinated With:

Pierre Sawaya, Capital Program Manager Thomas Perez, City Engineer Michelle Bannigan, Director of Administrative
Services
Laura Parisi, City Treasurer
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RESOLUTION NO. 26.XXX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

LAGUNA BEACH, CALIFORNIA, DETERMINING UNPAID

ASSESSMENTS IN UNDERGROUND UTILITY ASSESSMENT
DISTRICT NO. 2021-3 (FAIRVIEW/LA BREA) AND THE MANNER

OF PAYMENT THEREOF AND LISTING BONDS ISSUED ON THE

SECURITY THEREOF
WHEREAS, the City Council of the City of Laguna Beach (“City”) has taken proceedings under Article XIIID of the California Constitution, the Municipal Improvement Act of 1913, Division 12 of the California Streets and Highways Code (the “Code”) and California Government Code Section 53750 et seq., and has confirmed an assessment which was recorded on January 16, 2026, in the office of the Superintendent of Streets, and the Assessment Diagram and Notice of Assessment which were recorded in the office of the County Recorder of Orange County on January 21, 2026 and January 27, 2026, respectively; and WHEREAS, the proceedings provided that the bonds designated City of Laguna Beach Underground Utility Assessment District No. 2021-3 (Fairview/La Brea) Limited Obligation Improvement Bonds would be issued pursuant to the Improvement Bond Act of 1915, Division 10 of the Code (the “Bonds”); and
WHEREAS, a list of unpaid assessments has been filed with the City Clerk by the City Treasurer pursuant to Section 8620 of the Code, following the expiration of the cash collection period on March 2, 2026; and
WHEREAS, this Council has, pursuant to Section 8650.1 of the Code, established the denomination of the Bonds and the amounts to mature each year which is other and different that that provided in Section 8650 of the Code; and
WHEREAS, the Bonds are to be serial and/or term bonds numbered in consecutive numerical order. The Bonds are to be dated their date of delivery. The first payment of interest is Attachment 1
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payable on September 2, 2026, and thereafter the interest is payable semi-annually on September 2 and March 2 of each year. The bonds shall mature on September 2 in the amounts and years and bear interest from their dates at the rates to be established in the Bond Purchase Agreement for the Bonds.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAGUNA BEACH DOES RESOLVE:

SECTION 1. The unpaid assessments which provide the security for the Bonds which are to be issued are those set forth on the list of unpaid assessments filed with the City Clerk as set forth in the recitals.

SECTION 2. The unpaid assessments securing the Bonds shall be payable in the manner provided in Section 8680 et seq. of the Code and shall be payable in the same manner and at the same time and in the same installments as the general taxes of the City on real property are payable.

Pursuant to Section 8682 of the Code, a certified copy of this Resolution and a copy of the list of unpaid assessments shall be filed by the City Clerk in the office of the Auditor of Orange County, California. The County Auditor shall enter in his assessment roll on which taxes will next become due the amount coming due during the fiscal year covered by the applicable assessment roll pursuant to said Section 8682.

ADOPTED this 14th day of April, 2026.

Mark Orgill, Mayor
ATTEST:

Ann Marie McKay, City Clerk
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I, Ann Marie McKay, City Clerk of the City of Laguna Beach, certify that the foregoing Resolution No. 26.XXX was duly adopted at a regular meeting of the City Council of said City held on April 14, 2026, by the following vote:

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

City Clerk, City of Laguna Beach, CA
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RESOLUTION NO. 26.XXX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

LAGUNA BEACH, CALIFORNIA, AUTHORIZING THE ISSUANCE

OF CITY OF LAGUNA BEACH UNDERGROUND UTILITY
ASSESSMENT DISTRICT NO. 2021-3 (FAIRVIEW/LA BREA)

LIMITED OBLIGATION IMPROVEMENT BONDS, AWARDING

THE SALE OF SUCH BONDS, APPROVING FISCAL AGENT

AGREEMENT, OFFICIAL STATEMENT, BOND PURCHASE

AGREEMENT, AND CONTINUING DISCLOSURE CERTIFICATE

AND AUTHORIZING THE CITY MANAGER OR FINANCE

DIRECTOR TO NEGOTIATE THE TERMS OF THE PURCHASE OF

THE BONDS
WHEREAS, the City Council (“City Council”) of the City of Laguna Beach (the “City”), California, has previously adopted its Resolution No. 25.084 on October 28, 2025 (the “Resolution of Intention”), pursuant to the provisions of Division 12 of the Streets and Highways Code of the State of California (the “Municipal Improvement Act of 1913”) with respect to the construction of certain underground utility system improvements, appurtenances, right-of-way improvements, and all appurtenant work in connection therewith in certain streets and other public easements (collectively, the “Improvements”) within, and for the benefit of property within, an assessment district, identified as Underground Utility Assessment District No. 2021-3 (Fairview/La Brea), City of Laguna Beach, Orange County, State of California (the “Assessment District”), and the levy of assessments on the lots and parcels of property within the Assessment District to finance the costs of the construction of the Improvements; and
WHEREAS, the Resolution of Intention provides for the issuance of bonds pursuant to Division 10 of the Streets and Highways Code of the State of California (the “Improvement Bond Act of 1915”) to represent and be secured by unpaid assessments levied on lots and parcels of property within the Assessment District; and
WHEREAS, proceedings for the formation of the Assessment District and the levy of assessments on the assessable lots and parcels of property therein have been completed, the 9 10 of 336
-2- Reso. #26.XXX
Assessment District has been formed, and assessments have been authorized to be levied on the lots and parcels of property therein; and
WHEREAS, the City Treasurer has confirmed an unpaid assessment in the total amount of $3,563,203.19 (the “Unpaid Assessment Amount”), which consists of the total assessment of $4,302,200.37 less $738,997.18 in prepaid assessments; and WHEREAS, the City Council proposes to issue bonds for the Assessment District to be designated “City of Laguna Beach Underground Utility Assessment District No. 2021-3 (Fairview/La Brea) Limited Obligation Improvement Bonds” (the “Bonds”) in an aggregate principal amount which shall not exceed the amount of the unpaid assessments on lots and parcels of property within the Assessment District, the proceeds of which will be used to finance the costs of the construction of the Improvements; and
WHEREAS, there has been made available to the City Council a form of fiscal agent agreement (the “Fiscal Agent Agreement”) by and between The Bank of New York Mellon Trust Company, as Fiscal Agent (the “Fiscal Agent”) and the City providing for the issuance, administration, and payment of the Bonds; and
WHEREAS, there has been presented to the City Council a form of preliminary official statement (the “Preliminary Official Statement”) describing the Bonds, the City, and the Assessment District; and
WHEREAS, there has been presented to the City Council a form of bond purchase agreement (the “Bond Purchase Agreement”) between Oppenheimer & Co. Inc., as underwriter (the “Underwriter”), and the City whereby the Underwriter will purchase the Bonds from the City; and
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WHEREAS, there has also been presented to the City Council a form of continuing disclosure certificate (the “Continuing Disclosure Certificate”) to be executed and delivered by the City with respect to the Assessment District and the Bonds for the benefit of the owners of the Bonds in order to assist the Underwriter in complying with Rule 15c2-12(b)(5) of the Securities and Exchange Commission (the “Rule”); and
WHEREAS, Section 8830(b) of the California Streets and Highways Code authorizes a legislative body issuing bonds under the Improvement Bond Act of 1915 to covenant, by resolution, to commence and diligently prosecute to completion any foreclosure action regarding delinquent installments of any assessment which secures the bonds and to specify, by resolution, a deadline for commencement of such foreclosures and such other terms and conditions regarding it as the legislative body may determine to be reasonable; and WHEREAS, Section 5852.1 of the Government Code of the State of California (“Section 5852.1”) provides that the City obtain from an underwriter, financial advisor or private lender and disclose, in a meeting open to the public, prior to authorization of the issuance of the Bonds, good faith estimates of (a) the true interest cost of the Bonds, (b) the finance charge of the Bonds, meaning the sum of all fees and charges paid to third parties, (c) the amount of proceeds of the Bonds received less the finance charge described above and any reserves or capitalized interest paid or funded with proceeds of the Bonds and (d) the sum total of all debt service payments on the Bonds calculated to the final maturity of the Bonds plus the fees and charges paid to third parties not paid with the proceeds of the Bonds; and
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WHEREAS, in accordance with Section 5852.1, the City has obtained such good faith estimates from Fieldman, Rolapp & Associates, Inc., the City’s municipal advisor (the “Municipal Advisor”), and such estimates are disclosed in Exhibit A attached hereto; and WHEREAS, the City Council has determined that the Bonds should be issued and sold on the terms and conditions hereinafter specified.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAGUNA BEACH DOES RESOLVE AS FOLLOWS:

SECTION 1. Recitals. The foregoing recitals are true and correct and are incorporated herein by this reference.

SECTION 2. Approval of Issuance of the Bonds. The issuance of the aggregate principal amount of the Bonds shall not exceed the Unpaid Assessment Amount in order to construct the Improvements within and for the Assessment District is hereby authorized and approved. The Bonds shall be issued as fully registered bonds in 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 and shall be issued in accordance with the terms and conditions set forth in the Fiscal Agent Agreement.

SECTION 3. Fiscal Agent Agreement. The form of the Fiscal Agent Agreement with respect to the Bonds by and between the City and the Fiscal Agent, which has been made available to the City Council at the meeting at which this Resolution is adopted and to the City Treasurer, is hereby approved, and the City Treasurer or her designated deputies are each individually authorized, for and in the name of and on behalf of the City, and directed to execute and deliver the Fiscal Agent Agreement in substantially the form made available at said meeting with such 12 13 of 336
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changes thereto as the City Treasurer or their deputies may approve, such approval to be conclusively evidenced by the execution and delivery thereof.

SECTION 4. Form of Bonds. The form of the Bonds as set forth in the Fiscal Agent Agreement is hereby approved. The City Treasurer and the City Clerk, or their designees, are authorized and directed to execute, by manual or facsimile signature, in the name of and on behalf of the City, the Bonds in either temporary or definitive form and to deliver the Bonds to the Underwriter as provided in the Fiscal Agent Agreement.

SECTION 5. Approval of Preliminary Official Statement; Preparation of Final Official Statement. The form of the Preliminary Official Statement, which has been made available to the City Council at the meeting at which this Resolution is adopted, is hereby approved, together with any changes therein or additions thereto as the City Manager or Finance Director may approve in consultation with Best Best & Krieger LLP, bond counsel to the City (“Bond Counsel”), and Anzel Galvan LLP, as Disclosure Counsel (“Disclosure Counsel”). The City Manager and Finance Director are each, acting alone, authorized to determine, with the assistance of Bond Counsel and Disclosure Counsel, when the Preliminary Official Statement is to be deemed final within the meaning of the Rule and to deliver a certificate to that effect to the Underwriter. The City Manager or Finance Director may authorize the Underwriter to distribute the Preliminary Official Statement as approved hereby, or as modified with the consent of the City Manager or Finance Director, to prospective purchasers of the Bonds. The City Manager and Finance Director are each authorized to participate in the preparation of the final official statement, based on the Preliminary Official Statement, together with any changes therein or additions thereto as may be approved by either of them in consultation with Bond Counsel, Disclosure Counsel and the Underwriter, such approval 13 14 of 336
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to be conclusively evidenced by the execution and delivery thereof by the City Manager or Finance Director. The City Manager and Finance Director are each alone authorized to sign the final official statement on behalf of the City.

SECTION 6. Sale of Bonds. The City Council hereby approves and authorizes the issuance and sale of the Bonds by negotiation with the Underwriter pursuant to the Bond Purchase Agreement between the City and the Underwriter in the form presented to the City Council at the meeting at which this Resolution is adopted, together with any changes therein or additions thereto which are deemed advisable by the City Manager or Finance Director and Bond Counsel, such approval to be conclusively evidenced by the execution and delivery thereof by the City Manager or Finance Director. The City Manager and Finance Director are each, acting alone, authorized and directed to execute and deliver the final form of the Bond Purchase Agreement on behalf of the City upon the submission of an offer by the Underwriter to purchase the Bonds, which offer is acceptable to the City Manager or Finance Director and is consistent with the requirements of this Resolution; provided, however, that the true interest cost of the Bonds shall not exceed five and one-half percent (5.50%); underwriter’s discount shall not exceed 1.5% (exclusive of original issue discount) of the original aggregate principal amount of the Bonds; and the last maturity of the Bonds shall be paid and redeemed no later than September 2, 2051. The City Manager and Finance Director are each, acting alone, authorized to allow original issue discount in determining the purchase price to be paid by investors who purchase the Bonds from the Underwriter if either the City Manager or Finance Director determines that allowing such discount will result in a lower total interest cost for the Bonds. When either the City Manager or Finance Director has negotiated the Bond Purchase Agreement with the Underwriter within the parameters specified above and 14 15 of 336
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when the other terms and conditions of the Bond Purchase Agreement are satisfactory to either the City Manager or Finance Director and Bond Counsel, the City Manager and Finance Director are each, acting alone, authorized to execute and deliver the Bond Purchase Agreement on behalf of the City.

All action which has been taken by or at the direction of the City Manager or Finance Director prior to the adoption of this Resolution with respect to the sale of the Bonds, including but not limited to the negotiation of the terms of the Bond Purchase Agreement, is hereby ratified and approved.

SECTION 7. No City Obligation. Pursuant to Section 8769 of the Streets and Highways Code of the State of California, the City Council has determined in the Resolution of Intention, and does hereby determine, that the City will not obligate itself to advance funds from the City treasury to cure any deficiency in the Redemption Fund for the Bonds established pursuant to the Fiscal Agent Agreement.

SECTION 8. Approval of Continuing Disclosure Certificate. The form of the Continuing Disclosure Certificate in the form included as an appendix to the Preliminary Official Statement is hereby approved and the City Manager and Finance Director are each, acting alone, authorized to execute and deliver the final form of the Continuing Disclosure Certificate, together with any changes therein or additions thereto as either of them may approve in consultation with Bond Counsel, such approval to be conclusively evidenced by the execution and delivery thereof, for and in the name and on behalf of the City.

SECTION 9. Foreclosure. In the event of delinquency in payment of any installment of an assessment then due and payable, the City Council shall commence foreclosure proceedings, 15 16 of 336
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pursuant to Section 8830 et seq. of the California Streets and Highways Code in accordance with the terms and conditions set forth in the Fiscal Agent Agreement.

SECTION 10. Modifications. The approval of the form of the Fiscal Agent Agreement, Continuing Disclosure Certificate, Preliminary Official Statement, the Final Official Statement, and Bond Purchase Agreement given by this Resolution shall apply to any modification, amendment, or supplement of any of said documents which is agreed upon and approved by the City Attorney, Bond Counsel, the City Manager or Finance Director, and additionally for the Fiscal Agent Agreement, the City Treasurer, as being necessary to carry out the provisions thereof and the authorization and direction provided in this Resolution.

SECTION 11. Appointment of Professionals. In compliance with Section 4(a) of the City’s Debt Management Policy (the “Policy”), the Council hereby authorizes and approves the following professionals to provide services in connection with the issuance the Bonds:
(a) Fiscal Agent. The Bank of New York Mellon Trust Company, N.A. is hereby appointed as fiscal agent under the Fiscal Agent Agreement, to take any and all action provided for therein to be taken by the Fiscal Agent. (b) Municipal Advisor. Fieldman, Rolapp & Associates, Inc. is hereby appointed as municipal advisor.
(c) Bond Counsel. Best Best & Krieger LLP is hereby appointed as bond counsel.
(d) Disclosure Counsel. Anzel Galvan LLP is hereby appointed as disclosure counsel.
(e) Assessment Administrator/Dissemination Agent. DTA Public Finance, Inc. is hereby appointed as Assessment Administrator and Dissemination Agent. (f) Underwriter. Oppenheimer & Co. Inc. is hereby authorized to serve as the Underwriter for the Bonds in accordance with the conditions set forth in Section 6 hereof. 16 17 of 336
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SECTION 12. Debt Management Policy Disclosures. In compliance with Section 4 of the Policy, the estimated maximum annual debt service on the Bonds is $238,000 and estimated costs of issuance on the Bonds is $185,000. The Bonds shall be subject to optional, mandatory and sinking fund redemption as set forth in the Fiscal Agent Agreement.

SECTION 13. Further Action. The City Manager, Finance Director and City Treasurer are hereby authorized to take any and all action which is directed by the City Attorney and Bond Counsel with respect to the execution and delivery of the Fiscal Agent Agreement, the Continuing Disclosure Certificate, the Preliminary Official Statement, and the Bond Purchase Agreement, and the issuance, sale and delivery of the Bonds, and are which in the opinion of the City Attorney and Bond Counsel is necessary in order for the authorization and direction provided in this Resolution to be carried out. The City Manager and Finance Director are hereby authorized to do any and all things and to execute and deliver any and all documents which they, in consultation with the City Attorney and Bond Counsel, may deem necessary or advisable in order to effectuate the sale and issuance of the Bonds. Any references in this Resolution to the City Manager or Finance Director shall include persons appointed to such positions on an interim or acting basis.

SECTION 14. Conditions of Approval. The approvals, authorization and direction given by this Resolution are conditioned upon the satisfaction of the requirements of Section 6 hereof with respect to the issuance and sale of the Bonds. The officers of the City designated above shall not take any action with respect to the execution and delivery of the Fiscal Agent Agreement, the Continuing Disclosure Certificate and the Bond Purchase Agreement, or the issuance, sale and delivery of the Bonds unless and until such conditions are satisfied; provided, however, that upon satisfaction of such conditions, this Resolution shall be carried out by such officers without further 17 18 of 336
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approval or action of the City Council. The approvals, authorization and direction provided by this Resolution shall continue, subject to the satisfaction of such conditions, until December 1, 2026, and the Bonds may be sold, and the Bonds, the Fiscal Agent Agreement, the Continuing Disclosure Certificate, the Bond Purchase Agreement, the Preliminary Official Statement, and the final Official Statement may be dated, entered into, executed and delivered or distributed, as appropriate, on any date selected by the Mayor, the City Treasurer, the City Manager or the Finance Director, in consultation with Bond Counsel and the Underwriter, prior to said date.

SECTION 15. Effective Date. This Resolution shall take effect upon adoption and shall remain in effect until all of the Bonds are paid at or redeemed prior to maturity.

ADOPTED this 14th day of April, 2026.

Mark Orgill, Mayor
ATTEST:

Ann Marie McKay, City Clerk
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I, Ann Marie McKay, City Clerk of the City of Laguna Beach, certify that the foregoing Resolution No. 26.XXX was duly adopted at a regular meeting of the City Council of said City held on April 14, 2026, by the following vote:

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

City Clerk, City of Laguna Beach, CA
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EXHIBIT A

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

Principal Amount. The Municipal Advisor has informed the City that, based on the financing plan and current market conditions, it’s good faith estimate of the aggregate principal amount of the Bonds to be sold is $3,330,000 (the “Estimated Principal Amount”).

True Interest Cost of the Bonds. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the true interest cost of the Bonds, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Bonds, is

5.01%.

Finance Charge of the Bonds. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the finance charge for the Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the Bonds), is $233,037.

Amount of Proceeds to be Received. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the amount of proceeds expected to be received by the City, on behalf of the Assessment District, for the sale of the Bonds, less the finance charge of the Bonds, as estimated above, and any reserves or capitalized interest paid or funded with proceeds of the Bonds, is $2,884,567.

Total Payment Amount. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the total payment amount, which means the sum total of all payments the Assessment District will make to pay debt service on the Bonds, plus the finance charge for the Bonds, as described above, not paid with the proceeds of the Bonds, calculated to the final maturity of the Bonds, is $5,903,750 (excluding any offsets from reserves or capitalized interest).

The foregoing estimates constitute good faith estimates only. The actual principal amount of the Bonds issued and sold, the true interest cost thereof, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to (a) the actual date of the sale of the Bonds being different than 20 21 of 336
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the date assumed for purposes of such estimates, (b) the actual principal amount of Bonds sold being different from the Estimated Principal Amount, (c) the actual amortization of the Bonds being different than the amortization assumed for purposes of such estimates, (d) the actual market interest rates at the time of sale of the Bonds being different than those estimated for purposes of such estimates, (e) other market conditions, or (f) alterations in the financing plan or finance charges, or a combination of such factors. The actual date of sale of the Bonds and the actual principal amount of Bonds sold will be determined by the City based on the timing of the need for proceeds of the Bonds and other factors. The actual interest rates borne by the Bonds will depend on market interest rates at the time of sale thereof. The actual amortization of the Bonds will also depend, in part, on market interest rates at the time of sale thereof. Market interest rates are affected by economic and other factors beyond the control of the City. 21 22 of 336
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FISCAL AGENT AGREEMENT
by and between

THE CITY OF LAGUNA BEACH
and
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
as Fiscal Agent
Dated as of May 1, 2026
Relating to
$__________
City of Laguna Beach
Underground Utility Assessment District No. 2021-3
(Fairview/La Brea)
Limited Obligation Improvement Bonds
Attachment 2
22 23 of 336

TABLE OF CONTENTS
Page
i

ARTICLE I

AUTHORITY AND DEFINITIONS
Section 1.01 Authority for this Agreement ........................................................................... 2 Section 1.02 Agreement for Benefit of Bondowners ............................................................ 2 Section 1.03 Definitions........................................................................................................ 2

ARTICLE II

THE BONDS
Section 2.01 Principal Amount; Designation........................................................................ 7 Section 2.02 Terms of Bonds. ............................................................................................... 7 Section 2.03 Redemption. ..................................................................................................... 8 Section 2.04 Form of Bonds ............................................................................................... 12 Section 2.05 Execution of Bonds ........................................................................................ 12 Section 2.06 Transfer of Bonds .......................................................................................... 12 Section 2.07 Exchange of Bonds ........................................................................................ 13 Section 2.08 Bond Register................................................................................................. 13 Section 2.09 Temporary Bonds........................................................................................... 13 Section 2.10 Bonds Mutilated, Lost, Destroyed or Stolen .................................................. 14 Section 2.11 Special Obligation .......................................................................................... 14 Section 2.12 Refunding ....................................................................................................... 14

ARTICLE III
ISSUANCE OF BONDS; APPLICATION OF PROCEEDS; IMPROVEMENT FUND; COST OF ISSUANCE FUND; CAPITALIZED INTEREST FUND
Section 3.01 Issuance and Delivery of Bonds .................................................................... 14 Section 3.02 Application of Proceeds of Sale of Bonds ..................................................... 15 Section 3.03 Improvement Fund. ........................................................................................ 15 Section 3.04 Cost of Issuance Fund. ................................................................................... 16 Section 3.05 Capitalized Interest Fund. .............................................................................. 17 Section 3.06 Book-Entry System; Delivery of the Bonds to the Depository...................... 17

ARTICLE IV
ASSESSMENT REVENUES; REDEMPTION FUND; RESERVE FUND
Section 4.01 Pledge of Assessment Revenues; Transfers of Assessment Revenues. ......... 19 Section 4.02 Redemption Fund. .......................................................................................... 19 Section 4.03 Reserve Fund. ................................................................................................ 21

ARTICLE V

OTHER COVENANTS OF THE CITY
Section 5.01 Punctual Payment........................................................................................... 22 Section 5.02 Special Obligation .......................................................................................... 22 Section 5.03 Extension of Time for Payment ..................................................................... 22 Section 5.04 Against Encumbrances................................................................................... 23 23 24 of 336

TABLE OF CONTENTS
(continued)
Page
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Section 5.05 Protection of Security and Rights of Owners ................................................ 23 Section 5.06 Compliance with Laws, Completion of Project ............................................. 23 Section 5.07 Collection of Assessment Revenues .............................................................. 23 Section 5.08 Further Assurances......................................................................................... 23 Section 5.09 Tax Covenants ............................................................................................... 23 Section 5.10 Covenant to Foreclose.................................................................................... 24 Section 5.11 Continuing Disclosure ................................................................................... 24

ARTICLE VI
INVESTMENTS; DISPOSITION OF INVESTMENT PROCEEDS; LIABILITY OF THE CITY Section 6.01 Deposit and Investment of Moneys in Funds ................................................ 24 Section 6.02 Rebate Fund; Rebate to the United States ...................................................... 26 Section 6.03 Liability of City.............................................................................................. 26 Section 6.04 Employment of Agents by City ..................................................................... 27 Section 6.05 Books and Accounts ...................................................................................... 27

ARTICLE VII

THE FISCAL AGENT
Section 7.01 Appointment of Fiscal Agent ......................................................................... 27 Section 7.02 Liability of Fiscal Agent ................................................................................ 28 Section 7.03 Information .................................................................................................... 31 Section 7.04 Notice to Fiscal Agent ................................................................................... 31 Section 7.05 Compensation, Indemnification ..................................................................... 31 Section 7.06 Books and Accounts ...................................................................................... 32

ARTICLE VIII

MODIFICATION OR AMENDMENT OF THIS AGREEMENT
Section 8.01 Amendments Permitted. ................................................................................. 32 Section 8.02 Owners’ Meetings .......................................................................................... 33 Section 8.03 Procedure for Amendment with Written Consent of Owners ........................ 33 Section 8.04 Disqualified Bonds......................................................................................... 34 Section 8.05 Effect of Supplemental Agreement ................................................................ 34 Section 8.06 Endorsement or Replacement of Bonds Issued After Amendments .............. 34 Section 8.07 Amendatory Endorsement of Bonds .............................................................. 34 Section 8.08 Execution of Supplemental Agreements ........................................................ 35

ARTICLE IX

MISCELLANEOUS
Section 9.01 Benefits of Agreement Limited to Parties ..................................................... 35 Section 9.02 Successor is Deemed Included in All References to Predecessor ................. 35 Section 9.03 Discharge of Agreement. ............................................................................... 35 Section 9.04 Execution of Documents and Proof of Ownership by Owners ...................... 36 Section 9.05 Waiver of Personal Liability .......................................................................... 36 Section 9.06 Notices to and Demands on City and Fiscal Agent ....................................... 36 24 25 of 336

TABLE OF CONTENTS
(continued)
Page
iii
Section 9.07 Partial Invalidity............................................................................................. 37 Section 9.08 Unclaimed Moneys ........................................................................................ 37 Section 9.09 Applicable Law and Venue ............................................................................ 37 Section 9.10 Conflict with Act............................................................................................ 37 Section 9.11 Conclusive Evidence of Regularity ............................................................... 38 Section 9.12 Payment on Business Day .............................................................................. 38 Section 9.13 Counterparts ................................................................................................... 38 25 26 of 336
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FISCAL AGENT AGREEMENT
THIS FISCAL AGENT AGREEMENT (this “Agreement”) is dated and entered into as of May 1, 2026, by and between the City of Laguna Beach, California (the “City”) and The Bank of New York Mellon Trust Company, N.A., a national banking association duly organized and existing under the laws of the United States, as fiscal agent (the “Fiscal Agent”).

W I T N E S S E T H:

WHEREAS, the City Council of the City (the “City Council”) has formed Underground Utility Assessment District No. 2021-3 (Fairview/La Brea), City of Laguna Beach, County of Orange, State of California (the “Assessment District”), and has levied an assessment on the property in the Assessment District pursuant to the provisions of the Municipal Improvement Act of 1913, Division 12 (commencing with Section 10000) of the California Streets and Highways Code, and provided for the issuance of bonds for the Assessment District pursuant to the Improvement Bond Act of 1915, Division 10 (commencing with Section 8500) of the California Streets and Highways Code (the “Bond Act”), to be secured by such assessment, to finance the design and construction of public improvements for the benefit of the property within the Assessment District; and
WHEREAS, pursuant to the Bond Act, the City Council adopted its Resolution No.

26.[___] which resolution, among other matters, authorized the issuance of the City of Laguna Beach Underground Utility Assessment District No. 2021-3 (Fairview/La Brea) Limited Obligation Improvement Bonds (the “Bonds”), in an aggregate principal amount of not-to-exceed $3,563,203.19, being the unpaid amount of the assessment levied on parcels of property within the Assessment District, and provided that such issuance would be in accordance with the Bond Act and this Agreement, and authorized the execution hereof; and WHEREAS, it is in the public interest and for the benefit of the owners of the property within the Assessment District and the owners of the Bonds that the City enter into this Agreement to provide for the issuance of the Bonds, the disbursement of proceeds of the Bonds, and the administration and payment of the Bonds; and
WHEREAS, the Bonds will be secured by and paid from the assessments levied on the parcels of property within the Assessment District and the annual installments of such assessments collected with respect to such parcels; and
WHEREAS, all things necessary to cause the Bonds, when executed by the City and authenticated by the Fiscal Agent and issued as in the Bond Act, the Resolution (as hereinafter defined) and this Agreement provided, to be legal, valid and binding special obligations of the City in accordance with their terms, and all things necessary to cause the authorization, execution and delivery of this Agreement and the authorization, execution, authentication and delivery of the Bonds, subject to the terms hereof, have in all respects been duly authorized.

NOW, THEREFORE, based upon the foregoing recitals, which are incorporated herein by this reference, in consideration of the covenants and provisions herein set forth and for other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows:
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ARTICLE I

AUTHORITY AND DEFINITIONS
Section 1.01 Authority for this Agreement. This Agreement is entered into pursuant to the provisions of the Bond Act and the Resolution.

Section 1.02 Agreement for Benefit of Bondowners. The provisions, covenants and agreements herein set forth to be performed by or on behalf of the City shall be for the equal benefit, protection and security of the Owners (as defined below). All of the Bonds, without regard to the time or times of their issuance or maturity, shall be of equal rank without preference, priority or distinction of any of the Bonds over any other thereof, except as expressly provided in or permitted by this Agreement. The Fiscal Agent may become the owner of any of the Bonds with the same rights it would have if it were not Fiscal Agent.

Section 1.03 Definitions. Unless the context otherwise requires, the terms defined in this Section 1.03 shall, for all purposes of this Agreement, of any Supplemental Agreement, and of any certificate, opinion or other document herein mentioned, have the meanings herein specified. All references herein to “Articles,” “Sections” and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Agreement, and the words “herein,” “hereof,” “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or subdivision hereof.
“Agreement” means this Agreement, as it may be amended or supplemented from time to time by any Supplemental Agreement entered into pursuant to the provisions hereof. “Annual Debt Service” means, for each Bond Year, the sum of (i) the interest due on the Outstanding Bonds in such Bond Year, assuming that the Outstanding Bonds are retired as scheduled, and (ii) the principal amount of the Outstanding Bonds scheduled to be paid. “Assessment” or “Assessments” means the assessment levied on the lots and parcels of property within the Assessment District by the adoption by the City Council of Resolution No.

26.005 on January 13, 2026 and the recording of the assessment diagram and notice of assessment for the Assessment District with the County Recorder of the County of Orange pursuant to Section 3114 of the California Streets and Highways Code.
“Assessment District” means Underground Utility Assessment District No. 2021-3 (Fairview/La Brea), City of Laguna Beach, County of Orange, State of California. “Assessment Prepayment” means 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.
“Assessment Revenues” means 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 27 28 of 336
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8682, 8682.1 and 10204(f) of the California Streets and Highways Code and Assessment Prepayments.
“Authorized Officer” means any officer or employee of the City authorized by the City Council as evidenced by a certificate delivered to the Fiscal Agent or the City Treasurer, or by an Authorized Officer to undertake the action referenced in this Agreement as required to be undertaken by an Authorized Officer.
“Bond Counsel” means any attorney or firm of attorneys acceptable to the City and nationally recognized for expertise in rendering opinions as to the legality and tax-exempt status of securities issued by public entities.
“Bond Year” means the period beginning on the Closing Date and ending on September 2, 2026 and thereafter the period beginning on each September 3 and ending on the following September 2.
“Bonds” means the Bonds at any time Outstanding under this Agreement. “Business Day” means any day other than (i) a Saturday or a Sunday or (ii) a day on which banking institutions in the State of California, the State of New York, or in the state in which the Fiscal Agent has its Principal Office are authorized or obligated by law or executive order to be closed.
“Capitalized Interest Fund” means the fund by that name established in the Interest Account in the Bond Fund by Section 3.05(A) hereof.
“Cash Collections” means any assessments paid by property owners and collected by the City during the cash collection period which occurred prior to the issuance of the Bonds. “City Contribution and Cash Collections Account” means the account by that name established in the Improvement Fund by Section 3.03(A). “City Treasurer” means the City Treasurer of the City or their designee. “Closing Date” means the date upon which there is an exchange of the Bonds for the proceeds representing payment of the purchase price of the Bonds by the Original Purchaser. “Code” means the Internal Revenue Code of 1986, as amended. “Continuing Disclosure Certificate” means the Continuing Disclosure Certificate of the City entered into pursuant to Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, dated as of the Closing Date, as originally executed and as it may be amended from time to time in accordance with the terms thereof. “Costs of Issuance” means items of expense payable or reimbursable directly or indirectly by the City and related to the authorization, sale and issuance of the Bonds, which items of expense shall include, but not be limited to, printing costs, costs of reproducing and binding documents, including but not limited to the preliminary official statement and official statement regarding the 28 29 of 336
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Bonds, closing costs, filing and recording fees, initial fees, expenses and charges of the Fiscal Agent, including its first annual administration fee and the fees and expenses of its counsel, expenses incurred by the City in connection with the issuance of the Bonds and the formation of the Assessment District, bond (underwriter’s) discount, legal fees and charges, including the fees of Bond Counsel and counsel to the underwriter, fees of consultants, advisors and engineers, charges for authentication, transportation and safekeeping of the Bonds and other costs, charges and fees in connection with the foregoing.
“Cost of Issuance Fund” means the fund by that name established by Section 3.04(A) hereof.
“Debt Service” means the amount of interest and principal payable on the Bonds scheduled to be paid during the period of computation, excluding amounts payable during such period which relate to principal of the Bonds which are scheduled to be retired and paid before the beginning of such period.
“Depository” means The Depository Trust Company, New York, NY, or any successor thereof, the depository for the Bonds.
“Federal Securities” means any of the following which at the time of investment are legal investments under the laws of the State of California for the moneys proposed to be invested therein (as to which the Fiscal Agent is entitled to rely upon investment direction from the City as deemed certification that such investment constitutes a legal investment):
(i) Cash; and
(ii) Direct general obligations of the United States (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States), or obligations, the payment of principal of and interest on which is unconditionally guaranteed by the United States.
“Fiscal Agent” means The Bank of New York Mellon Trust Company, N.A., the fiscal agent appointed by the City, acting as an independent fiscal agent with the duties and powers as herein expressly provided, its successors and assigns, and any other corporation or association which may at any time be substituted in its place, as provided in Section 7.01 hereof. “Fiscal Year” means the twelve-month period extending from July 1 in a calendar year to June 30 of the succeeding year, both dates inclusive.
“Improvement Fund” means the fund by that name established by Section 3.03(A) hereof. “Independent Financial Consultant” means a firm of certified public accountants, a financial consulting firm, a consulting engineering firm or an engineer which is not an employee of, or otherwise controlled by, the City.
“Information Services” means the Electronic Municipal Market Access System of the Municipal Securities Rulemaking Board at www.emma.msrb.org; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other services providing 29 30 of 336
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information with respect to called bonds as the City may designate in an Officer’s Certificate delivered to the Fiscal Agent.
“Interest Payment Dates” means March 2 and September 2 of each year, commencing September 2, 2026.
“Investment Earnings” means all interest earned and any gains and losses on the investment of moneys in any fund or account created by this Agreement excluding interest earned and gains and losses on the investment of moneys in the Rebate Fund. “Maximum Annual Debt Service” means the greatest amount of Annual Debt Service for any Bond Year after calculation is made through the final maturity date of any Outstanding Bonds. “Moody’s” shall mean Moody’s Investors Service, Inc., a national rating service with offices in New York, New York.
“Nominee” means CEDE & Co., the nominee of the Depository. “Officer’s Certificate” means a written certificate of the City signed by an Authorized Officer of the City.
“Original Purchaser” means the first purchaser of the Bonds from the City. “Outstanding” when used as of any particular time with reference to the Bonds, means (subject to the provisions of Section 8.04 hereof) all Bonds except:
(i) Bonds theretofore canceled by the Fiscal Agent or surrendered to the Fiscal Agent for cancellation;
(ii) Bonds called for redemption which, for the reasons specified in Section 2.03 (G) hereof, are no longer entitled to any benefit under this Agreement other than the right to receive payment of the redemption price therefor; (iii) Bonds paid or deemed to have been paid within the meaning of Section 9.03 hereof; and
(iv) Bonds in lieu of or in substitution for which other Bonds shall have been authorized, executed, issued and delivered by the City and authenticated by the Fiscal Agent pursuant to this Agreement or any Supplemental Agreement. “Owner” means any person who shall be the registered owner of any Outstanding Bond. “Permitted Investments” means investments authorized pursuant to the City of Laguna Beach Investment Policy for Calendar Year 2026, adopted [March 24, 2026] by the City Council, as may be amended from time to time.
“Principal Office” means with respect to the payment, registration, surrender, exchange or transfer of any Bond or Bonds, the principal corporate trust office of the Fiscal Agent in Los 30 31 of 336
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Angeles, California; or such other office or address as may be specified in writing by the Fiscal Agent provided, however, that for purposes of administering this Agreement, the principal office shall be the principal office at which the Fiscal Agent administers its corporate trust business in California which, as of the date of this Agreement, is at the address set forth in Section 9.06 hereof (as may be updated with notice from the Fiscal Agent to the City). “Proceeds,” when used with reference to the Bonds, means the aggregate principal amount of the Bonds, plus accrued interest and premium, if any, less original issue discount, if any, less underwriter’s discount.
“Project” means the public improvements within and for the Assessment District as described in the Resolution of Intention.
“Rebate Certificate” means the certificate delivered by the City upon the delivery of the Bonds relating to Section 148 of the Code, or any functionally similar replacement certificate. “Rebate Fund” means the fund by that name established by Section 6.02 hereof. “Record Date” means the fifteenth (15th) day of the month next preceding the applicable Interest Payment Date whether or not such day is a Business Day. “Redemption Fund” means the fund by that name established by Section 4.02(A) hereof. “Regulations” means the temporary and permanent regulations of the United States Department of the Treasury promulgated under the Code.
“Reserve Fund” means the fund by that name established by Section 4.03(A) hereof. “Reserve Requirement” means the amount of $[_______].
“Resolution” means Resolution No. 26.___, adopted by the City Council on April 14, 2026. “Resolution of Intention” means Resolution No. 25.084 adopted by the City Council on October 28, 2025.
“Responsible Officer” means, when used with respect to the Fiscal Agent, any managing director, president, vice president, senior associate, associate or other officer of the Fiscal Agent within the Principal Office (or any successor corporate trust office) customarily performing functions similar to those performed by the persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred at the Principal Office because of such person’s knowledge of and familiarity with the particular subject and having direct responsibility for the administration of this Agreement. “Securities Depositories” means The Depository Trust Company, 55 Water Street, 50th Floor, New York, New York, 10041-0099, Call Notification Department, Fax (212) 855-7232; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other securities depositories as the City may designate in an Officer’s Certificate delivered to the Fiscal Agent.
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“Standard & Poor’s” shall mean Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., a national rating service with offices in New York, New York. “Supplemental Agreement” means a supplemental agreement issued pursuant to Section

8.05 hereof.

ARTICLE II

THE BONDS
Section 2.01 Principal Amount; Designation. The Bonds in the aggregate principal amount of $[__________] are hereby authorized to be issued by the City for the Assessment District under and subject to the terms of the Resolution, this Agreement, the Bond Act and other applicable laws of the State of California. The Bonds shall be designated “City of Laguna Beach Underground Utility Assessment District No. 2021-3 (Fairview/La Brea) Limited Obligation Improvement Bonds,” and shall be secured by the Assessment Revenues.

Section 2.02 Terms of Bonds.
(A) The Bonds. 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. The Bonds shall be lettered and numbered in a customary manner as determined by the Fiscal Agent.

The Bonds shall be dated as of the Closing Date.
(B) Maturities. The Bonds shall mature and become payable on September 2 of each year, as follows:

Maturity Dates
(September 2) Principal Amounts Interest Rates
____________________
(T) Term Bond
(C) Interest. The Bonds shall bear interest at the rates set forth in subsection (B) above payable on the Interest Payment Dates in each year. Interest shall be calculated on the 32 33 of 336
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basis of a 360-day year composed of twelve (12) 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 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. (D) Method of Payment. 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; provided that so long as any Bonds are in book-entry form, payments with respect to such Bonds shall be made by wire transfer or such other method acceptable to the Fiscal Agent to the Depository. All Bonds paid in full by the Fiscal Agent pursuant to this subsection shall be canceled by the Fiscal Agent upon surrender. Principal of, redemption premium, if any, and interest payable to any Owner of Bonds in aggregate principal amount of $1,000,000 or more will be paid, upon the written request of any such Owner in form and substance satisfactory to the Fiscal Agent, by wire transfer of immediately available funds to an account within the United States designated by such Owner on or before a Record Date.
(E) CUSIP Identification Numbers. “CUSIP” identification numbers shall be imprinted on the Bonds, but such numbers shall not constitute a part of the contract evidenced by the Bonds. In addition, failure on the part of the City or the Fiscal Agent to use such CUSIP numbers in any notice to the Owners shall not constitute an event of default or any violation of the City’s contract with the Owners and shall not impair the effectiveness of any such notice.

Section 2.03 Redemption.
(A) Optional Redemption. The Bonds are subject to redemption prior to their stated maturity dates on any Interest Payment Date on or 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 (B) Mandatory Redemption From Assessment Prepayments. The Bonds are subject to mandatory redemption prior to their stated maturity dates on any Interest Payment Date, 33 34 of 336
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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 In selecting Bonds for redemption pursuant to this subsection (B), the City Treasurer shall direct the Fiscal Agent to 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, as provided in Section 2.03(F) hereof. (C) 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:
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Redemption Dates
(September 2) Sinking Fund Payments
†

†Maturity.

The amounts in the foregoing schedule shall 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 redemption of the Bonds pursuant to subsection (A) or subsection (B) above. The City shall provide the Fiscal Agent with any revised schedule, if applicable.
(D) Purchase of Bonds. In lieu of payment at maturity or redemption under this Section 2.03, 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. The Fiscal Agent shall be absolutely protected and shall incur no liability in relying on such an Officer’s Certificate. In such event, the City shall, as may be appropriate, provide to the Fiscal Agent a revised maturity schedule or a revised mandatory sinking fund schedule for the Bonds, or both.
(E) Notice to Fiscal Agent. An Authorized Officer shall give the Fiscal Agent written notice of the City’s intention to redeem Bonds not less than forty-five (45) days prior to the applicable redemption date. Such written notice shall specify whether Bonds are to be redeemed pursuant to subsection (A) or subsection (B) above and shall specify the principal amounts and the maturities of the Bonds to be redeemed. The provisions of this subsection (E) shall not apply to the redemption of the Bonds pursuant to Section 2.03(C) hereof. (F) Redemption Procedure by Fiscal Agent. Subject to its receipt of timely notice from an Authorized Officer pursuant to Section 2.03 (E), the Fiscal Agent shall cause notice of any redemption to be (a) mailed by first class mail, postage prepaid, or (b) electronically delivered at least thirty (30) days but not more than sixty (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.

Such notice 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 35 36 of 336
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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. The cost of the mailing of any such redemption notice shall be paid by the City. Such notice may state that no representation is made as to the accuracy or correctness of the CUSIP numbers printed thereon or on the Bonds.

Redemption notices may be conditional. Any notice of optional redemption of the Bonds delivered in accordance herewith may be conditional and if any condition stated in the notice of redemption shall not have been satisfied on or prior to the redemption date said notice shall be of no force and effect and the City shall not be required to redeem such Bonds, and the redemption shall not be made. At the written direction of the City, the Fiscal Agent shall forward the cancellation notice in the same manner as the notice of redemption was delivered.

Additionally, 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, in which case such redemption shall be cancelled and annulled and such cancellation shall not constitute an event of default. 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 shall have no liability to the Owners of the Bonds or any other party related to or arising from such rescission or cancellation of redemption. The Fiscal Agent shall forward the rescission notice in the same manner as the notice of redemption was delivered.

Upon the payment of the redemption price of Bonds being redeemed, each check or other transfer of funds issued for such purpose shall, to the extent practicable, bear the CUSIP number identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such check or other transfer.

In the event of an optional redemption pursuant to Section 2.03 (A) hereof or a mandatory redemption pursuant to Section 2.03(B) or a purchase of Bonds pursuant to Section

2.03(D) hereof, the City shall transfer or cause to be transferred to the Fiscal Agent for deposit in the Redemption Fund moneys in an amount equal to the redemption price of the Bonds being redeemed or the purchase price of the Bonds being purchased on or before the fifteenth (15th) day of the month preceding the Interest Payment Date upon which such Bonds are to be redeemed or the date upon which the Bonds are to be purchased, as the case may be.

Whenever provision is made in this 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, subject to the procedures of the Depository.
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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.
(G) 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 this 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.

All Bonds redeemed and purchased by the Fiscal Agent pursuant to this Section

2.03 shall be canceled by the Fiscal Agent.

Section 2.04 Form of Bonds. The Bonds, including the Fiscal Agent’s certificate of authentication and the assignment to appear thereon shall be substantially in the forms, respectively, set forth in Exhibit A attached hereto and by this reference incorporated herein, with necessary or appropriate variations, omissions and insertions as permitted or required by this Agreement.

Section 2.05 Execution of Bonds. The Bonds shall be executed by the facsimile signatures of the City Treasurer and the City Clerk of the City, who are in office on the date of this Agreement or at any time thereafter. If any officer whose signature appears on any Bond ceases to be such officer before delivery of the Bond to the Owner, such signature shall nevertheless be as effective as if the officer had remained in office until the delivery of the Bond to the Owner.

Any Bond may be signed and attested by such persons as at the actual date of the execution of such Bond shall be the proper officers of the City notwithstanding that on the nominal date of such Bond any such person shall not have been such officer of the City.

Only such Bonds as shall bear thereon a certificate of authentication in substantially the form set forth in Exhibit A hereto, executed and dated by the Fiscal Agent, shall be valid or obligatory for any purpose or entitled to the benefits of this Agreement, and such certificate of authentication of the Fiscal Agent shall be conclusive evidence that such Bonds have been duly authenticated, registered and delivered hereunder, and are entitled to the benefits of this Agreement.

Section 2.06 Transfer of Bonds. Any Bond may, in accordance with its terms, be transferred, upon the books required to be kept pursuant to the provisions of Section 2.08 hereof, by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation at the Principal Office of the Fiscal Agent, accompanied by delivery of a duly executed written instrument of transfer in a form approved by the Fiscal Agent. The cost for any services rendered or any expenses incurred by the Fiscal Agent in connection with any such transfer shall be paid by the City. The Fiscal Agent shall collect from the Owner requesting transfer of a Bond any tax or other governmental charge required to be paid with respect to such transfer. Prior to any transfer of the Bonds outside the book-entry system (including, but not limited to, the initial transfer outside the book-entry system) the transferor shall 37 38 of 336
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provide or cause to be provided to the Fiscal Agent all information necessary to allow the Fiscal Agent to comply with any applicable tax reporting obligations, including without limitation any cost basis reporting obligations under Internal Revenue Code Section 6045, as amended. The Fiscal Agent shall conclusively rely on the information provided to it and shall have no responsibility to verify or ensure the accuracy of such information.

Whenever any Bond or Bonds shall be surrendered for transfer, the City shall execute and the Fiscal Agent shall authenticate and deliver a new Bond or Bonds of like aggregate principal amount.

No transfers of Bonds shall be required to be made (i) during the fifteen (15) days preceding the date established by the Fiscal Agent for selection of Bonds for redemption, or (ii) with respect to Bonds which have been selected for redemption.

Section 2.07 Exchange of Bonds. Bonds may be exchanged at the Principal Office of the Fiscal Agent only for a like aggregate principal amount of Bonds of authorized denominations and of the same maturity and interest rate. The cost for any services rendered or any expense incurred by the Fiscal Agent in connection with any such exchange shall be paid by the City. The Fiscal Agent shall collect from the Owner requesting exchange of a Bond any tax or other governmental charge required to be paid with respect to such exchange.

Whenever any Bond or Bonds shall be surrendered for exchange, the City shall execute and the Fiscal Agent shall authenticate and deliver a new Bond or Bonds of like aggregate principal amount.

No exchanges of Bonds shall be required to be made (i) during the fifteen (15) days preceding the date established by the Fiscal Agent for selection of Bonds for redemption, or (ii) with respect to Bonds which have been selected for redemption.

Section 2.08 Bond Register. The Fiscal Agent shall keep, or cause to be kept, at its Principal Office sufficient books for the registration and transfer of the Bonds which books shall show the series, number, CUSIP identification number, date of issuance, amount, rate of interest and Owner of each Bond and shall at all times be open to inspection by the City during regular business hours upon reasonable notice; and, upon presentation for such purpose, the Fiscal Agent shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said books, the ownership of the Bonds as hereinbefore provided. The ownership of the Bonds shall be proved by the Bond Register.

Section 2.09 Temporary Bonds. The Bonds may be initially issued in temporary form exchangeable for definitive Bonds when ready for delivery. The temporary Bonds may be printed, lithographed or typewritten, shall be of such denominations as may be determined by the City, and may contain such reference to any of the provisions of this Agreement as may be appropriate.

Every temporary Bond shall be executed by the City upon the same conditions and in substantially the same manner as the definitive Bonds. If the City issues temporary Bonds, it will execute and furnish definitive Bonds without delay and thereupon the temporary Bonds shall be surrendered, for cancellation, in exchange for the definitive Bonds at the Principal Office of the Fiscal Agent or at such other location as the Fiscal Agent shall designate, and the Fiscal Agent shall authenticate 38 39 of 336
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and deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized denominations. Until so exchanged, the temporary Bonds shall be entitled to the same benefits under this Agreement as definitive Bonds authenticated and delivered hereunder.

Section 2.10 Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become mutilated, the City, at the expense of the Owner of said Bond, shall execute, and the Fiscal Agent shall authenticate and deliver, a replacement Bond of like tenor and principal amount in exchange and substitution for the Bond so mutilated, but only upon surrender to the Fiscal Agent of the Bond so mutilated. Every mutilated Bond so surrendered to the Fiscal Agent shall be canceled and destroyed by the Fiscal Agent. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Fiscal Agent and, if such evidence be satisfactory to it and indemnity satisfactory to it shall be given, the City, at the expense of the Owner, shall execute, and the Fiscal Agent shall authenticate and deliver, a replacement Bond of like tenor and principal amount in lieu of and in substitution for the Bond so lost, destroyed or stolen. The City or Fiscal Agent may require payment of a sum not exceeding the actual cost of preparing each replacement Bond delivered under this Section 2.10 and of the expenses which may be incurred by the City and the Fiscal Agent for the preparation, execution, authentication and delivery thereof.

Any Bond delivered under the provisions of this Section 2.10 in replacement of any Bond alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation of the City whether or not the Bond so alleged to be lost, destroyed or stolen is at any time enforceable by anyone, and shall be equally and proportionately entitled to the benefits of this Agreement with all other Bonds issued pursuant to this Agreement.

Section 2.11 Special Obligation. All obligations of the City under this Agreement and the Bonds shall be special obligations of the City, payable solely from the Assessment Revenues.

Neither the faith and credit nor the taxing power of the City (except to the limited extent set forth herein) or the State of California or any political subdivision thereof is pledged to the payment of the Bonds.

Pursuant to Section 8769 of the California Streets and Highways Code, the City Council of the City has determined in the Resolution of Intention that the City will not obligate itself to advance funds from the City treasury to cure any deficiency in the Redemption Fund.

Section 2.12 Refunding. The Bonds are subject to refunding pursuant to the procedures of the Refunding Act of 1984 for 1915 Improvement Bond Act Bonds, Division 11.5 (commencing with Section 9500) of the California Streets and Highways Code or as otherwise permitted by law.

ARTICLE III
ISSUANCE OF BONDS; APPLICATION OF PROCEEDS;
IMPROVEMENT FUND; COST OF ISSUANCE FUND; CAPITALIZED INTEREST FUND Section 3.01 Issuance and Delivery of Bonds. At any time after the execution of this Agreement, the City may issue the Bonds in the aggregate principal amount set forth in Section

2.01 hereof and deliver the Bonds to the Original Purchaser. The Authorized Officers of the City are hereby authorized and directed to deliver any and all documents and instruments necessary to cause the issuance of the Bonds in accordance with the provisions of the Bond Act, the Resolution 39 40 of 336
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and this Agreement, to authorize the payment of Costs of Issuance and costs of the Project by the Fiscal Agent from the proceeds of Bonds, and to do and cause to be done any and all acts and things necessary or convenient for delivery of the Bonds to the Original Purchaser.

Section 3.02 Application of Proceeds of Sale of Bonds. The Proceeds of the sale of the Bonds to the Original Purchaser shall be paid to the Fiscal Agent, who shall forthwith set aside, pay over and deposit such Proceeds on the Closing Date as follows:
(1) $[____] shall be deposited in the Improvement Fund; (2) $[____] shall be deposited in the Capitalized Interest Fund; and (3) $[____] shall be deposited in the Costs of Issuance Fund. (4) $[____] shall be deposited in the Reserve Fund, which will satisfy the Reserve Requirement as of the Closing Date.

Additionally, the City shall transfer to the Fiscal Agent the amount of $[_____] from funds on hand of the City and Cash Collections, and the Fiscal Agent shall deposit said amount into the Assessment District No. 2021-3 (Fairview/La Brea) City Contribution and Cash Collections Account of the Improvement Fund.

The Fiscal Agent may create additional accounts and subaccounts in any of the funds created under this Fiscal Agent Agreement as the Fiscal Agent may deem appropriate for the purpose of fulfilling its obligations hereunder.

Section 3.03 Improvement Fund.
(A) Establishment of Improvement Fund. There is hereby established, as a separate account to be held by the Fiscal Agent, the “Underground Utility Assessment District No. 2021-3 (Fairview/La Brea) Improvement Fund,” to the credit of which a deposit shall be made as required by Section 3.02 hereof. There is hereby established as a separate account within the Improvement Fund the “Underground Utility Assessment District No. 2021-3 (Fairview/La Brea) City Contribution and Cash Collections Account” to the credit of which the City Treasurer shall transfer to the Fiscal Agent from designated City moneys the amount of $[_____] which constitutes the City’s contribution to the Project, and $[_____] which constitutes the Cash Collections. Moneys in the Improvement Fund and the City Contribution and Cash Collections Account shall be held by the Fiscal Agent for the benefit of the Owners of the Bonds, shall be disbursed, except as otherwise provided in subsection (D) of this Section 3.03, for the payment or reimbursement of the costs of the design, acquisition and construction of the Project and, pending such disbursement, shall be subject to a lien in favor of the Owners of the Bonds. (B) Procedure for Disbursement. Disbursements from the Improvement Fund shall be made by the Fiscal Agent upon receipt of an Officer’s Certificate which shall:
(1) set forth the amount required to be disbursed, the purpose for which the disbursement is to be made and the person to which the disbursement is to be paid, along with payment instructions; and
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(2) certify that no portion of the amount then being requested to be disbursed was set forth in any Officer’s Certificate previously filed with the Fiscal Agent requesting disbursement, and that the amount being requested is an appropriate disbursement from the Improvement Fund.
(C) Investment. Moneys in the Improvement Fund shall be invested and deposited in accordance with Section 6.01 hereof. Investment Earnings shall be retained by the Fiscal Agent in the Improvement Fund to be used for the purposes of such fund. (D) Closing of Fund. Upon the filing of an Officer’s Certificate stating that the Project has been completed and that all costs of the Project have been paid or are not required to be paid from the Improvement Fund, and further stating that moneys on deposit in the Improvement Fund are not needed to complete the Project or reimburse the cost thereof, amounts remaining in the Improvement Fund, if any, shall be transferred to the City and applied by the City Treasurer as provided for in Section 10427.1 of the California Streets and Highways Code. (E) Officer’s Certificate. Upon receipt of an Officer’s Certificate delivered pursuant to this Section 3.03, the Fiscal Agent is authorized to act thereon without further inquiry and shall not be responsible for the accuracy of the statements made in such Officer’s Certificate or the application of the funds disbursed pursuant thereto, and shall be absolutely protected and incur no liability in relying on such Officer’s Certificate.

Section 3.04 Cost of Issuance Fund.
(A) Establishment of Cost of Issuance Fund. There is hereby established, as a separate account to be held by the Fiscal Agent, the “Underground Utility Assessment District No. 2021-3 (Fairview/La Brea) Cost of Issuance Fund” to the credit of which a deposit shall be made as required by Section 3.02 hereof. Moneys in the Cost of Issuance Fund shall be held by the Fiscal Agent and shall be disbursed as provided in subsection (B) of this Section for the payment or reimbursement of Costs of Issuance.
(B) Disbursement. Amounts in the Cost of Issuance Fund shall be disbursed to pay Costs of Issuance, as set forth in a requisition containing respective amounts to be paid to the designated payees, signed by an Authorized Officer and delivered to the Fiscal Agent concurrently with the delivery of the Bonds. The Fiscal Agent shall, to the extent of the moneys on deposit in the Cost of Issuance Fund, pay all Costs of Issuance upon receipt of an invoice from any such payee which requests payment in an amount which is less than or equal to the amount set forth with respect to such payee in such requisition, or upon receipt of an Officer’s Certificate requesting payment of a Cost of Issuance not listed on the initial requisition delivered to the Fiscal Agent on the Closing Date. The Fiscal Agent shall maintain the Cost of Issuance Fund for a period of ninety (90) days after the Closing Date and shall then transfer and deposit any moneys remaining therein, including any Investment Earnings thereon, to the Improvement Fund for payment or reimbursement of costs of the Project, and the Fiscal Agent shall close the Cost of Issuance Fund. (C) Investment. Moneys in the Cost of Issuance Fund shall be invested and deposited in accordance with Section 6.01 hereof. Investment Earnings shall be retained by the Fiscal Agent in the Cost of Issuance Fund to be used for the purposes of such fund. 41 42 of 336
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Section 3.05 Capitalized Interest Fund.
(A) Establishment of Capitalized Interest Fund. There is hereby established, as a separate account to be held by the Fiscal Agent, the “Underground Utility Assessment District No. 2021-3 (Fairview/La Brea) Capitalized Interest Fund” to the credit of which a deposit shall be made as required by Section 3.02 hereof. Moneys in the Capitalized Interest Fund shall be held by the Fiscal Agent for the benefit of the Owners of the Bonds, shall be disbursed for the payment of the interest on the Bonds as provided in subsection (B) and, pending such disbursement, shall be subject to a lien in favor of the Owners of the Bonds. (B) Disbursement. No later than September 1, 2026, the Fiscal Agent shall transfer moneys from the Capitalized Interest Fund to the Redemption Fund the amount which is necessary to cause the amount on deposit in the Redemption Fund to be equal to the amount of interest which is due and payable on the Outstanding Bonds on September 2, 2026. (C) Closing of Funds. The amount, if any, on deposit in the Capitalized Interest Account on September 3, 2026, shall be transferred by the Fiscal Agent and deposited into the Redemption Fund and the Capitalized Interest Fund shall be closed by the Fiscal Agent. (D) Investment. Moneys in the Capitalized Interest Fund shall be invested and deposited in accordance with Section 6.01 hereof. Investment Earnings shall be retained by the Fiscal Agent in the Capitalized Interest Fund to be used for the purposes of such fund.

Section 3.06 Book-Entry System; Delivery of the Bonds to the Depository. (A) Book-Entry System; Limited Obligation of the City and the Fiscal Agent.

Notwithstanding any other provision of this Agreement, the Bonds shall be initially delivered to the Depository in the form of a separate single fully registered Bond (which may be typewritten) for each of the maturities of the Bonds. Upon such initial delivery, the ownership of each such Bond shall be registered in the registration books kept by the Fiscal Agent in the name of the Nominee, as nominee of the Depository. Except as provided in subsection (C) below, all of the Outstanding Bonds shall be registered in the registration books kept by the Fiscal Agent in the name of the Nominee.

With respect to Bonds registered in the registration books kept by the Fiscal Agent in the name of the Nominee, the City and the Fiscal Agent shall have no responsibility or obligation to any Participant of the Depository or to any person, corporation or firm on behalf of which the Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence, the City and the Fiscal Agent shall have no responsibility or obligation with respect to (1) the accuracy of the records of the Depository, the Nominee or any Participant with respect to any ownership interest in the Bonds, (2) the delivery to any Participant or any other person, other than an Owner as shown in the registration books kept by the Fiscal Agent, of any notice with respect to the Bonds, (3) the selection by the Depository and its Participants of the beneficial interest in the Bonds to be redeemed in the event the Bonds are redeemed in part, or (4) the payment to any Participant or any other persons, other than an Owner as shown in the registration books kept by the Fiscal Agent, of any amount with respect to principal of, premium, if any, or interest due with respect to the Bonds. The City and the Fiscal Agent may treat and consider the person in whose 42 43 of 336
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name each Bond is registered in the registration books kept by the Fiscal Agent as the holder and absolute owner of such Bond for the purpose of payment of principal, premium, if any, and interest with respect to such Bond, for the purpose of giving notices with respect to such Bond, for the purpose of registering transfers with respect to such Bond and for all other purposes whatsoever.

The Fiscal Agent shall pay all principal of, premium, if any, and interest due with respect to the Bonds only to or upon the order of the Owners thereof, as shown in the registration books kept by the Fiscal Agent, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to satisfy and discharge fully the City’s obligations with respect to payment of principal, premium, if any, and interest due with respect to the Bonds to the extent of the sum or sums so paid. No person other than an Owner, as shown in the registration books kept by the Fiscal Agent, shall receive a Bond evidencing the obligation of the City to make payments of principal, premium, if any, and interest pursuant to this Agreement. Upon delivery by the Depository to the Fiscal Agent and the City of written notice to the effect that the Depository has determined to substitute a new nominee in place of the Nominee, and subject to the provisions herein with respect to Record Dates, the word Nominee in this Agreement shall refer to such new nominee of the Depository.
(B) Representation Letter. In order to qualify the Bonds for the Depository’s book-entry system, an authorized representative of the Fiscal Agent is hereby authorized to execute from time to time and deliver to such Depository a representation letter in the standard form prescribed by the Depository (the “Representation Letter”). The execution and delivery of the Representation Letter shall not in any way limit the provisions of subsection (A) above or impose upon the City or the Fiscal Agent any obligation whatsoever with respect to persons having interests in the Bonds other than the Owners, as shown on the registration books kept by the Fiscal Agent. The Fiscal Agent agrees, to the extent not inconsistent with the provisions hereof, to take all action necessary to continuously comply with all representations made by it in the Representation Letter. In addition to the execution and delivery of the Representation Letter, the City Clerk, the City Treasurer, the City Manager, the Finance Director, the Authorized Officers and all other officers of the City, are hereby authorized to take any other actions, not inconsistent with this Agreement, to qualify the Bonds for the Depository’s book-entry program. (C) Transfers Outside Book-Entry System. In the event (1) the Depository determines not to continue to act as securities depository for the Bonds or (2) the City determines that the Depository shall no longer so act, then the Fiscal Agent shall discontinue the book-entry system with the Depository. If the City fails to identify another qualified securities depository to replace the Depository then the Bonds shall no longer be restricted to being registered in the registration books kept by the Fiscal Agent in the name of the Nominee, but shall be registered in whatever name or names persons transferring or exchanging Bonds shall designate, in accordance with the provisions of this Agreement.
(D) Payments to the Nominee. Notwithstanding any other provisions of this Agreement, so long as any Bond is registered in the name of the Nominee, all payments with respect to principal, premium, if any, and interest due with respect to such Bond and all notices with respect to such Bond shall be made and given, respectively, as provided in the Representation Letter or as otherwise instructed by the Depository.
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ARTICLE IV
ASSESSMENT REVENUES; REDEMPTION FUND; RESERVE FUND
Section 4.01 Pledge of Assessment Revenues; Transfers of Assessment Revenues. (A) Pledge of Assessment Revenues. The Bonds shall be secured by a pledge (which pledge shall be effected in the manner and to the extent herein provided) 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 subsections (B) and (D) of Section 3.03 hereof, all moneys deposited in the Improvement Fund. The Assessment Revenues and all moneys deposited into such funds (except as otherwise provided herein with respect to moneys disbursed from the Improvement Fund) are hereby dedicated in their entirety to the payment of the principal of the Bonds, and interest and any premium on, the Bonds, as provided herein and in the Bond 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 Section 9.03 hereof. (B) Transfers of Assessment Revenues. On or before the fifteenth (15th) Business Day preceding each Interest Payment Date, 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.

Section 4.02 Redemption Fund.
(A) Deposits. There is hereby established, as a separate account to be held by the Fiscal Agent, the “Underground Utility Assessment District No. 2021-3 (Fairview/La Brea) Redemption Fund” to the credit of which deposits shall be made as required by paragraph (A) of Section 4.01(B), Section 4.03(B) and Section 4.03(D) hereof and any other provision of this Agreement or Bond Act. Moneys in the Redemption Fund shall be held by the Fiscal Agent for the benefit of the Owners of the Bonds, shall be disbursed for the payment of the principal of, and interest and any premium on, the Bonds as provided below, and, pending such disbursement, shall be subject to a lien in favor of the Owners of the Bonds.

The Fiscal Agent shall deposit to the Redemption Fund all moneys transferred from the Reserve Fund pursuant to Section 4.03(B) and Section 4.03(D) hereof. (B) Disbursements. On each Interest Payment Date, the Fiscal Agent shall withdraw from the Redemption Fund and pay to the Owners of the Bonds the principal of and interest and any premium then due and payable on the Bonds on the Interest Payment Date.

In the event that amounts on deposit in the Redemption Fund are insufficient for the purpose set forth in the preceding paragraph, the Fiscal Agent shall transfer from the Reserve Fund, to the extent of any funds therein, to the Redemption Fund the amount of such insufficiency.

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the City Treasurer shall instruct the Fiscal Agent in writing to apply the available funds to the payment of the principal of and interest on the Bonds in the manner and in the priorities provided in Section 8775 of the California Streets and Highways Code, as it existed on the Closing Date or as it may thereafter be amended. The City Treasurer shall specify in such written instructions how and in what amounts the available funds shall be utilized to pay interest on and principal of the Bonds and the Fiscal Agent may conclusively rely upon such written instructions, and shall not have any responsibility or liability as a result of its reliance upon any such written instructions.

When funds become available for the payment of the portion of the principal of any Bond which was not paid upon its maturity date, the Fiscal Agent shall forward notice from the City to the Owner of such Bond as provided in Section 8776 of the California Streets and Highways Code.

On September 3 of each year, beginning on September 3, 2026, the amount on deposit in the Redemption Fund shall not exceed the greater of (i) one year’s earnings on such amount, or (ii) one-twelfth (1/12th) of Annual Debt Service for the then current Bond Year. If on September 3 of any year the amount on deposit in the Redemption Fund exceeds the maximum amount allowable pursuant to the preceding sentence and if on such September 3 the City shall have delivered to the Fiscal Agent an Officer’s Certificate containing the information required below in this paragraph, the excess shall be transferred by the Fiscal Agent as directed by such Officer’s Certificate to the Reserve Fund to the extent that the amount on deposit therein is less than the Reserve Requirement, and any such excess remaining thereafter shall be paid by the Fiscal Agent to the City as directed by such Officer’s Certificate. On September 3 of each year, after any such excess amount has been transferred as hereinabove provided, the amount on deposit in the Redemption Fund shall not exceed the greater of (i) one year’s earnings thereon, or (ii) one-twelfth (
1 /12th) of Annual Debt Service for the then current Bond Year. An Officer’s Certificate delivered by the City to Fiscal Agent pursuant to this paragraph shall (1) specify the dollar amount of the excess determined pursuant to the first sentence of this paragraph, (2) specify the dollar amount of such excess which the Fiscal Agent is to transfer to the Reserve Fund, and (3) specify the dollar amount of such excess which the Fiscal Agent is to pay to the City. 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.

Amounts in the Redemption Fund shall also be withdrawn and deposited in the Rebate Fund as provided in Section 6.02 hereof.
(C) Investment. Moneys in the Redemption Fund shall be invested and deposited in accordance with Section 6.01 hereof. Investment Earnings shall be retained in the Redemption Fund, except to the extent they are required to be deposited by the Fiscal Agent in the Rebate Fund in accordance with Section 6.02 hereof.
(D) Deficiency. Upon making a transfer from the Reserve Fund to the Redemption Fund, pursuant to subsection (B) of this Section 4.02 or Section 4.03(B) hereof, the Fiscal Agent shall report such fact to the City. As provided in the form of the Bonds attached hereto as Exhibit A, the City Council has determined in the Resolution of Intention that the City will not obligate itself to advance funds from the City Treasury to cure any deficiency which may occur in the Redemption Fund.
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(E) Determination of Ultimate Loss. Notwithstanding the provisions of subsection (B) of this Section 4.02, 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.

Section 4.03 Reserve Fund.
(A) Establishment of Reserve Fund. There is hereby established, as a separate account to be held by the Fiscal Agent, the “Underground Utility Assessment District No. 2021-3 (Fairview/La Brea) Reserve Fund” (the “Reserve Fund”) to the credit of which a deposit shall be made as required by Section 3.02 hereof, which deposit is equal to the Reserve Requirement as of the Closing Date, and to which deposits shall be made as provided in Section 4.02(B) hereof.

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. (B) Use of Fund. Except as otherwise provided in this Section, 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 subsection (E) of this Section

4.03, or for the purpose of redeeming Bonds.

Amounts transferred from the Reserve Fund to the Redemption Fund pursuant to this subsection shall be restored by the City from the 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. (C) 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 provide written notice thereof to the City. (D) 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.
(E) 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 46 47 of 336
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funds therein which pursuant to Section 6.02 hereof must be rebated to the United States (the “Rebate Amount”), exceeds the then applicable Reserve Requirement, as calculated on such date by the City and provided in writing to the Fiscal Agent, the Fiscal Agent shall provide written notice to the City of the amount of the excess and shall, subject to the requirements of Section

6.02 hereof and upon receiving an Officer’s Certificate from an Authorized Officer, 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 Section

4.02 hereof. 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 statements contained therein, and shall be absolutely protected and incur no liability in relying on such Officer’s Certificate.
(F) 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 an Officer’s Certificate 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 Section

2.03 and Section 4.02 hereof, 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.
(G) Investment. Moneys in the Reserve Fund shall, except as provided in subsection (D) above, be invested and deposited in accordance with Section 6.01 hereof.

ARTICLE V

OTHER COVENANTS OF THE CITY
Section 5.01 Punctual Payment. The City will punctually pay or cause to be paid the principal of and interest and any premium on the Bonds when and as due in strict conformity with the terms of this Agreement and any Supplemental Agreement to the extent that the Assessment Revenues are available therefor, and it will faithfully observe and perform all of the conditions, covenants and requirements of this Agreement and all Supplemental Agreements and of the Bonds.

Section 5.02 Special Obligation. The Bonds are special obligations of the City and are payable solely from and secured solely by the Assessment Revenues and the amounts in the Redemption Fund, the Reserve Fund and the Improvement Fund.

Section 5.03 Extension of Time for Payment. In order to prevent any accumulation of claims for interest after maturity, the City shall not, directly or indirectly, extend or consent to the extension of the time for the payment of any claim for interest on any of the Bonds and shall not, directly or indirectly, be a party to the approval of any such arrangement by purchasing or funding 47 48 of 336
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said claims for interest or in any other manner. In case any such claim for interest shall be extended or funded, whether or not with the consent of the City, such claim for interest so extended or funded shall not be entitled, in case of default hereunder, to the benefits of this Agreement, except subject to the prior payment in full of the principal of all of the Bonds then Outstanding and of all claims for interest which shall not have been so extended or funded.

Section 5.04 Against Encumbrances. The City shall not encumber, pledge or place any charge or lien upon any of the Assessment Revenues or other amounts pledged to the Bonds superior to or on a parity with the pledge and lien herein created for the benefit of the Bonds, except as permitted by this Agreement.

Section 5.05 Protection of Security and Rights of Owners. The City will preserve and protect the security of the Bonds and the rights of the Owners, and will warrant and defend their rights against all claims and demands of all persons. From and after the delivery of any of the Bonds by the City, the Bonds shall be incontestable by the City.

Section 5.06 Compliance with Laws, Completion of Project. The City will comply with all applicable provisions of the laws of the State of California in completing the construction and acquisition of the Project.

Section 5.07 Collection of Assessment Revenues. The City shall comply with all requirements of the Bond Act so as to assure the timely collection of Assessment Revenues, including without limitation, the enforcement of the payment or collection of delinquent Assessments.

Section 5.08 Further Assurances. The City will adopt, make, execute and deliver any and all such further ordinances, resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Agreement, and for better assuring and confirming unto the Owners of the Bonds of the rights and benefits provided in this Agreement.

Section 5.09 Tax Covenants. The City hereby covenants that:
(A) It will not take any action or omit to take any action, which action or omission, if reasonably expected on the date of the initial issuance and delivery of the Bonds, would have caused any of the Bonds to be “arbitrage bonds” within the meaning of Section 103(b) and Section 148 of the Code;
(B) It will not take any action or omit to take any action, which action or omission, if reasonably expected on the date of initial issuance and delivery of the Bonds, would result in loss of exclusion from gross income for purposes of federal income taxation under Section 103(a) of the Code of interest paid with respect to the Bonds; (C) It will not take any action or omit to take any action, which action or omission, if reasonably expected on the date of initial issuance and delivery of the Bonds, would have caused any of the Bonds to be “private activity bonds” within the meaning of Section 141 of the Code;
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(D) It will comply with the Rebate Certificate as a source of guidance for achieving compliance with the Code; and
(E) In order to maintain the exclusion from gross income for purposes of federal income taxation of interest paid with respect to the Bonds, it will comply with each applicable requirement of Section 103 and Sections 141 through 150 of the Code.

The covenants of the City contained in this Section 5.09 shall survive the payment, redemption or defeasance of Bonds pursuant to Section 9.03 hereof.

Section 5.10 Covenant to Foreclose. The City hereby 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, it will cause judicial foreclosure proceedings against properties with delinquent Assessment installments to be brought within one-hundred fifty (150) days of such default, as permitted by Section 8830(d) of the California Streets and Highways Code.

Notwithstanding the foregoing, the City may elect, in its sole discretion, to defer foreclosure proceedings against properties that are determined pursuant to this Section 5.10 to be delinquent in the payment of any Assessment installments within one-hundred fifty (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.

Section 5.11 Continuing Disclosure. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate.

ARTICLE VI
INVESTMENTS; DISPOSITION OF INVESTMENT PROCEEDS;

LIABILITY OF THE CITY
Section 6.01 Deposit and Investment of Moneys in Funds. Subject in all respects to the provisions of Section 6.02 hereof, moneys in any fund or account created or established by this Agreement and held by the Fiscal Agent shall be invested by the Fiscal Agent, as applicable, in Permitted Investments, as directed pursuant to an Officer’s Certificate filed with the Fiscal Agent at least two (2) Business Days in advance of the making of such investments. Unless otherwise directed in writing by the City Treasurer, all funds held by the Fiscal Agent in the Reserve Fund shall be held uninvested. If after being directed for investment and such directed investment terminates, closes, or is otherwise unavailable, the Fiscal Agent shall hold such funds uninvested until it receives a new Officer’s Certificate with written investment directive from the City Treasurer. The Fiscal Agent shall not invest any cash held hereunder in the absence of timely and specific written direction in the form of an Officer’s Certificate from the City Treasurer. The Fiscal Agent shall have no obligation to pay additional interest or maximize investment income on any funds held by it. Neither the City nor the Owners of the Bonds shall have any claim of any kind against the Fiscal Agent in connection with investments properly made pursuant to this Section 6.01. Obligations purchased as an investment of moneys in any fund or account shall be 49 50 of 336
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deemed to be part of such fund or account, subject, however, to the requirements of this Agreement for transfer of Investment Earnings in funds and accounts.

The Fiscal Agent and its affiliates may act as sponsor, advisor, depository, principal or agent in the holding, acquisition or disposition of any investment. The Fiscal Agent shall not incur any liability for losses arising from any investments made pursuant to this Section 6.01. For purposes of determining the amount on deposit in any fund or account held hereunder, all Permitted Investments or investments credited to such fund or account shall be valued at the cost thereof (excluding accrued interest and brokerage commissions, if any). Ratings of Permitted Investments referred to herein shall be determined at the time of purchase of such Permitted Investments and without regard to rating subcategories. The Fiscal Agent shall have no responsibility to monitor the ratings of Permitted Investments after the initial purchase of such Permitted Investments or the responsibility to validate the ratings of Permitted Investments prior to the initial purchase.

The Fiscal Agent shall be entitled to rely conclusively upon the written instructions of the City directing investments in Permitted Investments as to the fact that each such investment is permitted by the laws of the State, and shall not be required to make further investigation with respect thereto. The Fiscal Agent shall not have any responsibility for determining the legality or suitability of any Permitted Investments and may rely on any Officer’s Certificate or other direction as to the legality or suitability of any Permitted Investment. With respect to any restrictions contained in the definition of Permitted Investments which embody legal conclusions (e.g., the existence, validity and perfection of security interests in collateral), the Fiscal Agent shall be entitled to rely conclusively on an opinion of counsel obtained at the City’s expense.

Subject in all respects to the provisions of Section 6.02 hereof, investments in any and all funds and accounts may be commingled in a single fund for purposes of making, holding and disposing of investments, notwithstanding provisions herein for transfer to or holding in or to the credit of particular funds or accounts of amounts received or held by the Fiscal Agent hereunder, provided that the Fiscal Agent shall at all times account for such investments strictly in accordance with the funds and accounts to which they are credited and otherwise as provided in this Agreement.

The Fiscal Agent shall sell or present for redemption any investment security whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or account to which such investment security is credited, and the Fiscal Agent shall not be liable or responsible for any loss resulting from the acquisition or disposition of any such investment security in accordance herewith.

The City acknowledges that notwithstanding regulations of the Comptroller of the Currency or other applicable regulatory entity may grant the City the right to receive brokerage confirmations of securities transactions as they occur, the City agrees that the Fiscal Agent shall not send such confirmations to the City to the extent permitted by law. The Fiscal Agent shall furnish the City periodic cash transaction statements which include detail for all investment transactions made by the Fiscal Agent hereunder. The City Treasurer shall prepare the same on the behalf of the City of funds directly managed by the City Treasurer, if any. 50 51 of 336
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The Fiscal Agent may make any investments hereunder through its own bond or investment department or trust investment department, or those of its parent or any affiliate.

Section 6.02 Rebate Fund; Rebate to the United States. There is hereby created, to be held by the Fiscal Agent, as a separate fund distinct from all other funds and accounts held by the Fiscal Agent under this Agreement, the Rebate Fund. The Fiscal Agent shall, in accordance with written directions received from an Authorized Officer, deposit into the Rebate Fund moneys transferred by the City Treasurer to the Fiscal Agent pursuant to the Rebate Certificate or moneys transferred by the Fiscal Agent from the Reserve Fund. The Rebate Fund shall be held either uninvested or invested only in Federal Securities at the direction of the City. Moneys on deposit in the Rebate Fund shall be applied only to payments made to the United States, to the extent such payments are required by the Rebate Certificate. The Fiscal Agent shall, upon written request and direction of the City, make such payments to the United States.

The Fiscal Agent’s sole responsibilities under this Section 6.02 are to follow the written instructions of the City pertaining hereto. The Fiscal Agent shall have no responsibility to independently make any calculation or determination or to review the City’s calculations hereunder. The Fiscal Agent may rely conclusively upon the City’s determinations, calculations and certifications required by this Section. The City shall be responsible for any fees and expenses incurred by the Fiscal Agent pursuant to this Section 6.02.

The Fiscal Agent shall, upon written request and direction from the City Treasurer, transfer to or upon the order of the City Treasurer any moneys on deposit in the Rebate Fund in excess of the amount, if any, required to be maintained or held therein in accordance with the Rebate Certificate. Upon receipt of such a written request and direction the Fiscal Agent is authorized to act thereon without further inquiry, shall not be responsible for the accuracy thereof, and shall be absolutely protected and incur no liability in relying thereon.

Section 6.03 Liability of City. The City shall not incur any responsibility in respect of the Bonds or this Agreement other than in connection with the duties or obligations explicitly herein or in the Bonds assigned to or imposed upon it. The City shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct.

The City shall not be bound to ascertain or inquire as to the performance or observance of any of the terms, conditions, covenants or agreements of the Fiscal Agent herein or in any of the documents executed by the Fiscal Agent in connection with the Bonds. The Fiscal Agent has no liability regarding the use of the proceeds from the purchase of the Bonds deposited in funds held by the City.

In the absence of bad faith, the City may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the City and conforming to the requirements of this Agreement. The City shall not be liable for any error of judgment made in good faith unless it shall be proved that it was negligent in ascertaining the pertinent facts.

No provision of this Agreement shall require the City to expend or risk its own general funds or otherwise incur any financial liability (other than with respect to the Assessment Revenues) in the performance of any of its obligations hereunder, or in the exercise of and of its 51 52 of 336
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rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

The City may rely and shall be protected in acting or refraining from acting upon any notice, resolution, request, consent, order, certificate, report, warrant, Bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or proper parties. The City may consult with counsel, who may be counsel to the City, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith.

Section 6.04 Employment of Agents by City. In order to perform its duties and obligations hereunder, the City may employ such persons or entities as it deems necessary or advisable. The City shall not be liable for any of the acts or omissions of such persons or entities employed by it in good faith hereunder, and shall be entitled to rely, and shall be fully protected in doing so, upon the opinions, calculations, determinations and directions of such persons or entities.

Section 6.05 Books and Accounts. The City Treasurer shall keep, or cause to be kept, proper books of record and accounts, separate from all other records and accounts of the City, in which complete and correct entries shall be made of all transactions made by it to the expenditure of amounts disbursed from the City Contribution and Cash Collections Account. Such books of record and accounts shall, upon reasonable notice, at all times during business hours be subject to the inspection of the Owners of not less than ten percent (10%) of the aggregate principal amount of the Bonds then Outstanding, or their representatives duly authorized in writing.

ARTICLE VII

THE FISCAL AGENT
Section 7.01 Appointment of Fiscal Agent. The Bank of New York Mellon Trust Company, N.A. is hereby appointed Fiscal Agent, registrar and paying agent for the Bonds. The Fiscal Agent undertakes to perform such duties, and only such duties, as are specifically set forth in this Agreement, and no implied covenants or obligations shall be read into this Agreement against the Fiscal Agent.

Any company into which the Fiscal Agent may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Fiscal Agent may sell or transfer all or substantially all of its corporate trust business, provided such company shall be eligible under the following paragraph of this Section 7.01, shall be the successor to the Fiscal Agent without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding.

The City may remove the Fiscal Agent initially appointed upon thirty (30) days prior notice, and any successor thereto, and may appoint a successor or successors thereto, but any such successor shall be a bank or trust company having a combined capital (exclusive of borrowed capital) and surplus of at least $75,000,000, and subject to supervision or examination by federal or state authority. If such bank or trust company publishes a report of condition at least annually, 52 53 of 336
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pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section 7.01, the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.

The Fiscal Agent may at any time resign by giving written notice to the City and by giving to the Owners notice by mail of such resignation. Upon receiving notice of such resignation, the City shall promptly appoint a successor Fiscal Agent by an instrument in writing. Any resignation or removal of the Fiscal Agent shall become effective upon acceptance of appointment by the successor Fiscal Agent.

If no appointment of a successor Fiscal Agent shall be made pursuant to the foregoing provisions of this Section 7.01 within forty-five (45) days after the Fiscal Agent shall have given to the City written notice or after a vacancy in the office of the Fiscal Agent shall have occurred by reason of its inability to act, the Fiscal Agent, at the expense of the City, or any Owner may apply to any federal or state court to appoint a successor Fiscal Agent. Said court may thereupon, after such notice, if any, as such court may deem proper, appoint a successor Fiscal Agent.

Section 7.02 Liability of Fiscal Agent. The recitals of facts, covenants and agreements contained herein and in the Bonds shall be taken as statements, covenants and agreements of the City and the Fiscal Agent assumes no responsibility nor shall have any liability for the correctness of the same, nor makes any representations as to the validity or sufficiency of this Agreement or of the Bonds, nor shall the Fiscal Agent incur any responsibility or shall have any liability in respect thereof, other than in connection with the express duties or obligations herein or in the Bonds assigned to or imposed upon it. The Fiscal Agent shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct. The Fiscal Agent assumes no responsibility or liability for any information, statement or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of the Bonds.

In the absence of willful misconduct, the Fiscal Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates, written directions, opinions, solutions, orders, notices, requests, consents, waivers, statements, affidavits or other paper, documents or electronic communications or information furnished to the Fiscal Agent and conforming to the requirements of this Agreement. Except as provided above in this paragraph, the Fiscal Agent shall be protected and shall incur no liability in acting or proceeding, or in not acting or not proceeding in accordance with the terms of this Agreement, upon any resolution, order, notice, request, consent or waiver, opinion, certificate, statement, affidavit, electronic communication or other paper or document which it shall in good faith reasonably believe to be genuine and to have been adopted or signed by the proper person or to have been prepared and furnished pursuant to any provision of this Agreement, and the Fiscal Agent shall not be under any duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument.

The Fiscal Agent shall not be bound to ascertain or inquire as to the performance or observance of any of the terms, conditions, covenants or agreements of the City herein or in any of the documents executed by the City in connection with the Bonds. 53 54 of 336
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The Fiscal Agent shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Fiscal Agent unless it shall be proved that the Fiscal Agent was negligent in ascertaining the pertinent facts.

No provision of this Agreement shall require the Fiscal Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers unless indemnity and security satisfactory to the Fiscal Agent shall have been provided to the Fiscal Agent.

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

The Fiscal Agent shall not be responsible for accounting for, or paying to, any party to this Agreement, including, but not limited to the City and the Owners, any returns on or benefit from funds held for payment of unredeemed Bonds or outstanding checks and no calculation of the same shall affect, or result in any offset against, fees due to the Fiscal Agent under this Agreement.

The Fiscal Agent shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement at the request or direction of any of the Owners pursuant to this Agreement unless such Owners shall have offered to the Fiscal Agent reasonable security or indemnity satisfactory to the Fiscal Agent against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.

The Fiscal Agent may become the owner of the Bonds with the same rights it would have if it were not the Fiscal Agent.

The Fiscal Agent shall not be concerned with or accountable to anyone for the subsequent use or application of any moneys which shall be released or withdrawn in accordance with the provisions hereof.

The permissive right of the Fiscal Agent to do things enumerated in this Agreement shall not be construed as a duty and it shall not be liable for other than its negligence or willful misconduct.

In no event shall the Fiscal Agent be liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including but not limited to lost profits) even if the Fiscal Agent has been advised of the likelihood of such damages and regardless of the form of such action, other than for actions involving negligence or willful misconduct by the Fiscal Agent. 54 55 of 336
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For all purposes hereunder, the Fiscal Agent shall not be deemed to have notice or knowledge of any event outside of its control (including any default or event of default) unless a Responsible Officer of the Fiscal Agent has received written notice of such event that includes a reference to this Agreement, the City or the Assessment District. The delivery of reports and other documents to the Fiscal Agent without such written notice is for informational purposes only and, alone, shall not constitute constructive notice of any information contained therein or determinable therefrom. The Fiscal Agent shall have no responsibility with respect to the payment of Debt Service by the City or with respect to the observance or performance by the City of the other conditions, covenants and terms contained herein, or with respect to the investment of any moneys in any fund or account established, held or maintained by the City pursuant to this Fiscal Agent Agreement or otherwise.

All indemnification and releases from liability granted herein to the Fiscal Agent shall extend to the agents, consultants, directors, officers and employees of the Fiscal Agent (including legal counsel). The Fiscal Agent may exercise any of its trusts or powers or perform its duties through attorneys, agents or receivers.

The Fiscal Agent shall have the right to accept and act upon instructions, including funds transfer instructions (“Instructions”) given pursuant to this Agreement and delivered using Electronic Means; provided, however, that the City shall provide to the Fiscal Agent an incumbency certificate listing officers with the authority to provide such Instructions (“Authorized Officers”) and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the City whenever a person is to be added or deleted from the listing. If the City elects to give the Fiscal Agent Instructions using Electronic Means and the Fiscal Agent in its discretion elects to act upon such Instructions, the Fiscal Agent’s understanding of such Instructions shall be deemed controlling. The City understands and agrees that the Fiscal Agent cannot determine the identity of the actual sender of such Instructions and that the Fiscal Agent shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Fiscal Agent have been sent by such Authorized Officer. The City shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Fiscal Agent and that the City and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the City. The Fiscal Agent shall not be liable for any losses, costs or expenses arising directly or indirectly from the Fiscal Agent’s reliance upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent with a subsequent written instruction. The City agrees (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Fiscal Agent, including without limitation the risk of the Fiscal Agent acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Fiscal Agent and that there may be more secure methods of transmitting Instructions than the method(s) selected by the City; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Fiscal Agent immediately upon learning of any compromise or unauthorized use of the security procedures. 55 56 of 336
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The Fiscal Agent may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, custodians or nominees appointed with due care, and shall not be responsible for any willful misconduct or negligence on the part of any agent, attorney, custodian or nominee so appointed.

Section 7.03 Information. The Fiscal Agent shall provide to the City such information relating to the Bonds and the funds and accounts maintained by the Fiscal Agent hereunder as the City shall reasonably request, including, but not limited to, quarterly (or other frequency agreed to by the City and the Fiscal Agent) statements reporting funds held and transactions by the Fiscal Agent.

Section 7.04 Notice to Fiscal Agent. The Fiscal Agent may rely and shall be protected in acting or refraining from acting upon any notice, resolution, request, consent, order, certificate, statement, instrument, opinion, report, direction, bond, debenture, note, other evidence of indebtedness or other paper, electronic communications, or document believed by it to be genuine and to have been signed or presented by the proper party or proper parties. The Fiscal Agent may consult with counsel, who may be counsel to the City, with regard to legal questions, and the written opinion of such counsel shall be full and complete authorization and protection in respect of any action taken, omitted, or suffered by the Fiscal Agent hereunder in good faith and in accordance therewith.

Whenever in the administration of its duties under this Agreement the Fiscal Agent shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of willful misconduct on the part of the Fiscal Agent, be deemed to be conclusively proved and established by a certificate of the City, and such certificate shall be full warranty to the Fiscal Agent for any action taken or suffered under the provisions of this Agreement or any Supplemental Agreement upon the faith thereof, but in its discretion the Fiscal Agent may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable.

Section 7.05 Compensation, Indemnification. In addition to any written fee agreement, the City shall pay to the Fiscal Agent from time to time reasonable compensation for all services rendered as Fiscal Agent under this Agreement and all reasonable expenses, charges, fees and other disbursements, including those of its attorneys, agents and employees, incurred in and about the performance of its powers and duties under this Agreement, and the Fiscal Agent shall have a first-priority lien therefor on any funds at any time held by it under this Agreement, and the Fiscal Agent shall pay and reimburse all expenses, charges, fees and other disbursements, including those of its attorneys, agents and employees, incurred in connection therewith from the funds held by it under this Agreement. The City further agrees, to the extent permitted by applicable law, to indemnify and save the Fiscal Agent, its officers, employees, directors and agents, harmless against any and all liabilities, losses, costs, expenses (including legal fees and expenses), suits, claims, judgments or damages arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses of defending itself against any claim (whether asserted by the City, any holder, or any other person) or liability which it may incur in the exercise and performance of its powers and duties hereunder or the enforcement of this Section, which are not due to its negligence or willful misconduct. The obligation of the City under this 56 57 of 336
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Section 7.05 shall survive resignation or removal of the Fiscal Agent under this Agreement and payment of the Bonds and discharge of this Agreement.

Section 7.06 Books and Accounts. The Fiscal Agent shall keep, or cause to be kept, proper books of record and accounts, separate from all other records and accounts of the Fiscal Agent, in which complete and correct entries shall be made of all transactions made by it to the expenditure of amounts disbursed from the Redemption Fund and the Reserve Fund. Such books of record and accounts shall, upon reasonable notice, at all times during business hours be subject to the inspection of the City and the Owners of not less than ten percent (10%) of the aggregate principal amount of the Bonds then Outstanding, or their representatives duly authorized in writing.

ARTICLE VIII

MODIFICATION OR AMENDMENT OF THIS AGREEMENT
Section 8.01 Amendments Permitted.
(A) This Agreement and the rights and obligations of the City and of the Owners of the Bonds may be modified or amended at any time by a Supplemental Agreement pursuant to the affirmative vote at a meeting of the Owners, or with the written consent, without a meeting, of the Owners of at least sixty percent (60%) in aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided in Section 8.04 hereof. No such modification or amendment shall (i) extend the maturity of any Bond or the time for paying interest thereon, or otherwise alter or impair the obligation of the City to pay the principal of, and the interest and any premium on, any Bond, without the express consent of the Owner of such Bond, or (ii) permit the creation of any pledge of or lien upon the Assessment Revenues, or the moneys on deposit in the Redemption Fund, the Reserve Fund, the Capitalized Interest Fund or the Improvement Fund, superior to or on a parity with the pledge and lien created for the benefit of the Bonds (except as otherwise permitted by the Bond Act, the laws of the State of California or this Agreement), or (iii) reduce the percentage of Bonds required for the amendment hereof, or (iv) reduce the principal amount of or redemption premium on any Bond or reduce the interest rate thereon. Any such amendment may not modify any of the rights or obligations of the Fiscal Agent without its written consent. The City shall provide to the Fiscal Agent an opinion of counsel that any such Supplemental Agreement entered into by the City and the Fiscal Agent complies with the provisions of this Section 8.01 and the Fiscal Agent may conclusively rely on such opinion. (B) This Agreement and the rights and obligations of the City and the Owners may also be modified or amended at any time by a Supplemental Agreement, without the consent of any Owners, only to the extent permitted by law and only for any one or more of the following purposes:
(1) to add to the covenants and agreements of the City contained in this Agreement, other covenants and agreements thereafter to be observed, or to limit or surrender any right or power herein reserved to or conferred upon the City; (2) to make modifications not adversely affecting any Outstanding series of Bonds in any material respect;
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(3) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provisions of this Agreement, or in regard to questions arising under this Agreement, as the City and the Fiscal Agent may deem necessary or desirable and not inconsistent with this Agreement, and which shall not adversely affect the rights of the Owners;
(4) to make such additions, deletions or modifications as may be necessary or desirable to assure compliance with Section 148 of the Code relating to required rebate of moneys to the United States or otherwise as may be necessary to assure exclusion from gross income for federal income tax purposes of interest on the Bonds or to conform with the Regulations.
(5) to provide for the issuance of refunding bonds pursuant to Section

2.12 hereof for the purpose of paying and discharging the indebtedness of a portion of the Outstanding Bonds.

Section 8.02 Owners’ Meetings. The City may at any time call a meeting of the Owners.

In such event the City is authorized to fix the time and place of any such meeting and to provide for the giving of notice thereof and to fix and adopt rules and regulations for the conduct of the meeting.

Section 8.03 Procedure for Amendment with Written Consent of Owners. The City may at any time adopt a Supplemental Agreement amending the provisions of the Bonds or of this Agreement or any Supplemental Agreement, to the extent that such amendment is permitted by Section 8.01(A) hereof, to take effect when and as provided in this Section 8.03. A copy of the Supplemental Agreement, together with a request to Owners for their consent thereto, shall be mailed by first class mail, postage prepaid, or sent by electronic mail (if applicable) by the Fiscal Agent to each Owner of Bonds Outstanding, but failure to mail copies of the Supplemental Agreement and request shall not affect the validity of the Supplemental Agreement when assented to as in this Section provided.

Such a Supplemental Agreement shall not become effective unless there shall be filed with the Fiscal Agent the written consents of the Owners of at least sixty percent (60%) in aggregate principal amount of the Bonds then Outstanding (exclusive of Bonds disqualified as provided in Section 8.04) and a notice shall have been mailed as hereinafter in this Section provided. Each such consent shall be effective only if accompanied by proof of ownership of the Bonds for which such consent is given, which proof shall be such as is permitted by Section 9.04 hereof. Any such consent shall be binding upon the Owner of the Bonds giving such consent and on any subsequent Owner (whether or not such subsequent Owner has notice thereof) unless such consent is revoked in writing by the Owner giving such consent or a subsequent Owner by filing such revocation with the Fiscal Agent prior to the date when the notice hereinafter in this Section provided for has been mailed.

After the Owners of the required percentage of Bonds shall have filed their consents to the Supplemental Agreement, the City shall mail a notice to the Owners in the manner hereinbefore provided in this Section for the mailing of the Supplemental Agreement, stating in substance that the Supplemental Agreement has been consented to by the Owners of the required percentage of 58 59 of 336
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Bonds and will be effective as provided in this Section (but failure to mail copies of said notice shall not affect the validity of the Supplemental Agreement or consents thereto). Proof of the mailing of such notice shall be filed with the Fiscal Agent. A record, consisting of the papers required by this Section 8.03 to be filed with the Fiscal Agent, shall be proof of the matters therein stated until the contrary is proved. The Supplemental Agreement shall become effective upon the filing with the Fiscal Agent of the proof of mailing of such notice, and the Supplemental Agreement shall be deemed conclusively binding (except as otherwise hereinabove specifically provided in this Article VIII) upon the City and the Owners of all Bonds then Outstanding at the expiration of sixty (60) days after such filing, except in the event of a final decree of a court of competent jurisdiction setting aside such consent in a legal action or equitable proceeding for such purpose commenced within such sixty (60)-day period.

Section 8.04 Disqualified Bonds. Bonds owned or held for the account of the City, excepting any pension or retirement fund, shall not be deemed Outstanding for the purpose of any vote, consent or other action or any calculation of Outstanding Bonds provided for in this Article VIII, and shall not be entitled to vote upon, consent to, or participate in any action provided for in this Article VIII; except that in determining whether the Fiscal Agent shall be protected in relying upon any vote or consent of an Owner, only Bonds which the Fiscal Agent actually knows to be owned or held for the account of the City shall be disregarded unless all Bonds are so owned or held, in which case such Bonds shall be considered Outstanding for the purpose of such determination. Upon request of the Fiscal Agent, the City shall specify to the Fiscal Agent those Bonds disqualified pursuant to this Section and the Fiscal Agent may conclusively rely on such certificate.

Section 8.05 Effect of Supplemental Agreement. From and after the time any Supplemental Agreement becomes effective pursuant to this Article VIII, this Agreement shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Agreement of the City and all Owners of Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such Supplemental Agreement shall be deemed to be part of the terms and conditions of this Agreement for any and all purposes.

Section 8.06 Endorsement or Replacement of Bonds Issued After Amendments. The City may determine that Bonds issued and delivered after the effective date of any action taken as provided in this Article VIII shall bear a notation, by endorsement or otherwise, in form approved by the City, as to such action. In that case, upon demand of the Owner of any Bond Outstanding at such effective date and upon presentation of his or her Bond for that purpose at the Principal Office of the Fiscal Agent or at such other office as the City may select and designate for that purpose, a suitable notation shall be made on such Bond. The City may determine that new Bonds, so modified as in the opinion of the City is necessary to conform to such action, shall be prepared, executed and delivered. In that case, upon demand of the Owner of any Bonds then Outstanding, such new Bonds shall be exchanged at the Principal Office of the Fiscal Agent without cost to any Owner, for like Bonds then Outstanding, upon surrender of such Bonds.

Section 8.07 Amendatory Endorsement of Bonds. The provisions of this Article VIII shall not prevent any Owner from accepting any amendment as to the particular Bonds held by him or her, provided that due notation thereof is made on such Bonds. 59 60 of 336
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Section 8.08 Execution of Supplemental Agreements. In executing or accepting the additional trusts created by any Supplemental Agreement permitted by this Article or the modification thereby of the trusts created by this Agreement, the Fiscal Agent shall be entitled to receive, and shall be fully protected in relying upon, an opinion of counsel stating that the execution of such Supplemental Agreement is authorized or permitted by this Agreement and complies with the terms hereof. The Fiscal Agent may, but shall not be obligated to, enter into any such Supplemental Agreement which affects the Fiscal Agent's own rights, duties or immunities under this Agreement or otherwise.

ARTICLE IX

MISCELLANEOUS
Section 9.01 Benefits of Agreement Limited to Parties. Nothing in this Agreement, expressed or implied, is intended to give to any person other than the City, the Fiscal Agent and the Owners, any right, remedy or claim under or by reason of this Agreement. Any covenants, stipulations, promises or agreements in this Agreement contained by and on behalf of the City shall be for the sole and exclusive benefit of the Owners and the Fiscal Agent.

Section 9.02 Successor is Deemed Included in All References to Predecessor. Whenever in this Agreement or any Supplemental Agreement either the City or the Fiscal Agent is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Agreement contained by or on behalf of the City or the Fiscal Agent shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not.

Section 9.03 Discharge of Agreement.

If the City shall pay and discharge the entire indebtedness on all Bonds in any one or more of the following ways:
(A) by well and truly paying or causing to be paid the principal of and interest and any premium on all Bonds, as and when the same become due and payable; (B) by depositing with the Fiscal Agent, in trust, at or before maturity, an amount of money which, together with the amounts then on deposit in the Redemption Fund and the Reserve Fund, is fully sufficient to pay all Bonds, including all principal, interest and redemption premiums, if any; or
(C) by irrevocably depositing with the Fiscal Agent, in trust, cash or noncallable Federal Securities in such amount as the City shall determine, as confirmed by an Independent Financial Consultant, will, together with the interest to accrue thereon and amounts then on deposit in the Redemption Fund and Reserve Fund, be fully sufficient to pay and discharge the indebtedness on all Bonds (including all principal, interest and redemption premiums) at or before their respective maturity dates; and if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as in this Agreement provided or provision satisfactory to the Fiscal Agent shall have been made for the giving of such notice, then, at the election of the City, and notwithstanding that any Bonds shall not have been surrendered for payment, the pledge of the Assessment Revenues and other funds provided for in this Agreement 60 61 of 336
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and all other obligations of the City under this Agreement with respect to all Bonds shall cease and terminate, except the obligation of the City to pay or cause to be paid to the Owners of the Bonds not so surrendered and paid all sums due thereon, the obligation of the City to pay all amounts owing to the Fiscal Agent pursuant to Section 7.05 hereof, and the obligations of the City pursuant to the covenants contained in Section 5.09 hereof; and thereafter Assessment Revenues shall not be payable to the Fiscal Agent. Notice of such election shall be filed with the Fiscal Agent. The satisfaction and discharge of this Agreement shall be without prejudice to the rights of the Fiscal Agent to charge and be reimbursed by the City for the expenses which it shall thereafter incur in connection herewith.

Any funds held by the Fiscal Agent to pay and discharge the indebtedness on all Bonds, upon payment of all fees and expenses of the Fiscal Agent, which are not required for such purpose, shall be paid over to the City.

Section 9.04 Execution of Documents and Proof of Ownership by Owners. Any request, declaration or other instrument which this Agreement may require or permit to be executed by Owners may be in one or more instruments of similar tenor, and shall be executed by Owners in person or by their attorneys appointed in writing.

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

Except as otherwise herein expressly provided, the ownership of registered Bonds and the amount, maturity, number and date of holding the same shall be proved by the registration books maintained by the Fiscal Agent pursuant to Section 2.08 hereof.

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

Section 9.05 Waiver of Personal Liability. No member, officer, agent or employee of the City shall be individually or personally liable for the payment of the principal of, or interest or any premium on, the Bonds; but nothing herein contained shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law.

Section 9.06 Notices to and Demands on City and Fiscal Agent. Any notice or demand which by any provision of this Agreement is required or permitted to be given or served by the Fiscal Agent to or on the City may be given or served by being deposited postage prepaid (first class, registered or certified) in a post office letter box addressed (until another address is filed by the City with the Fiscal Agent) as follows:
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City of Laguna Beach
505 Forest Avenue
Laguna Beach, CA 92651
Attn: City Treasurer
Any notice or demand which by any provision of this Agreement is required or permitted to be given or served by the City to or on the Fiscal Agent may be given or served by being deposited postage prepaid (first class, registered or certified) in a post office letter box addressed (until another address is filed by the Fiscal Agent with the City) as follows:

The Bank of New York Mellon Trust Company, N.A.
333 South Hope Street, Suite 2525
Los Angeles, CA 90071
Attn: Corporate Trust
“Electronic Means” shall mean the following communications methods: e-mail, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Fiscal Agent, or another method or system specified by the Fiscal Agent as available for use in connection with its services hereunder.

Section 9.07 Partial Invalidity. If any section, paragraph, sentence, clause or phrase of this Agreement shall for any reason be held by a court of competent jurisdiction to be illegal or unenforceable, such holding shall not affect the validity of the remaining portions of this Agreement. The City hereby declares that it would have executed and delivered this Agreement and each and every other section, paragraph, sentence, clause or phrase hereof and authorized the issue of the Bonds pursuant thereto irrespective of the fact that any one or more sections, paragraphs, sentences, clauses or phrases of this Agreement may be held illegal, invalid or unenforceable.

Section 9.08 Unclaimed Moneys. Anything contained herein to the contrary notwithstanding, and subject to the escheat laws of the State, any moneys held by the Fiscal Agent in trust for the payment and discharge of the principal of, and the interest and any premium on, the Bonds which remains unclaimed for two (2) years after the date when the payment of such principal, interest and premium have become payable, if such moneys were held by the Fiscal Agent at such date, shall be paid (without liability for interest) by the Fiscal Agent to the City as its absolute property free from any trust, and the Fiscal Agent shall thereupon be released and discharged with respect thereto and the Owners of such Bonds shall look only to the City for the payment of the principal of, and interest and any premium on, their Bonds.

Section 9.09 Applicable Law and Venue. This Agreement shall be governed by and enforced in accordance with the laws of the State of California applicable to contracts made and performed in the State of California. Venue shall be exclusively in the County of Orange.

Section 9.10 Conflict with Act. In the event of a conflict between any provision of this Agreement with any provision of the Bond Act as in effect on the Closing Date, the provision of the Bond Act shall prevail over the conflicting provision of this Agreement. 62 63 of 336
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Section 9.11 Conclusive Evidence of Regularity. Bonds issued pursuant to this Agreement shall constitute conclusive evidence of the regularity of all proceedings under the Act relative to their issuance.

Section 9.12 Payment on Business Day. In any case where the date of the payment of interest or of principal (and premium, if any) of the Bonds or the date fixed for redemption is other than a Business Day, the payment of interest or principal (and premium, if any) need not be made on such date but may be made on the next succeeding day which is a Business Day with the same force and effect as if made on the date required, and no interest shall accrue for the period from and after such date.

Section 9.13 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original.
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IN WITNESS WHEREOF, the City has caused this Agreement to be executed in its name and attested, and the Fiscal Agent, in acknowledgment of its acceptance of the trusts created hereunder, has caused this Agreement to be executed in its name, all as of the date listed above.

CITY OF LAGUNA BEACH
By:

City Treasurer
ATTEST:

By:_____________________________
City Clerk

THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., as Fiscal Agent
By: _______________________________
Authorized Officer
-Signature pageFiscal Agent Agreement
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EXHIBIT “A”

FORM OF BOND

UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE

DEPOSITORY (AS DEFINED IN THE AGREEMENT) TO THE FISCAL AGENT FOR

REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY BOND AUTHENTICATED AND DELIVERED IS REGISTERED IN THE NAME OF CEDE & CO.

OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED

REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED

REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER, PLEDGE, OR OTHER USE

HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

UNITED STATES OF AMERICA

STATE OF CALIFORNIA

COUNTY OF ORANGE

CITY OF LAGUNA BEACH
ASSESSMENT DISTRICT NO. 2021-3
(FAIRVIEW/LA BREA)

LIMITED OBLIGATION IMPROVEMENT BOND
Registered
Number
Registered
Amount
Interest Rate Maturity Date
Original
Issue Date CUSIP NO.
% September 2, 20__ __________, 2026
Registered Owner: CEDE & CO.

Principal Sum:

Under and by virtue of the Improvement Bond Act of 1915, Division 10 (commencing with Section 8500) of the Streets and Highways Code of the State of California (the “Act”), the City of Laguna Beach (the “City”), will, out of the redemption fund for the payment of the Bonds issued upon the unpaid portion of assessments made for the construction and acquisition of certain public improvements in and for Assessment District No. 2021-3 (Fairview/La Brea), City of Laguna Beach, County of Orange, State of California (the “Assessment District”), which improvements and the Assessment District are more fully described in proceedings taken pursuant to Resolution No. 25.084, the Resolution of Intention for the Assessment District, adopted by the City Council of the City on October 28, 2025, pay to the registered owner identified above, or registered assigns, on the maturity date specified above the principal sum specified above in lawful money of the United States, and in like manner will pay interest from the interest payment date next preceding the date on which this Bond is authenticated, unless this Bond is authenticated after a Record Date (as hereinafter defined) and before the close of business on the next interest payment date, in which 65 66 of 336
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event it shall bear interest from such interest payment date, or unless this Bond is authenticated on or before the Record Date preceding the first interest payment date, in which event it shall bear interest from the original issue date specified above, until payment of such principal sum shall have been discharged, at the rate of interest per annum specified above, payable semiannually on March 2 and September 2 in each year commencing on September 2, 2026. Both the principal hereof and redemption premium hereon are payable at the principal corporate trust office of The Bank of New York Mellon Trust Company, N.A., the Fiscal Agent (the “Fiscal Agent”) in Los Angeles, California or such other office as shall be designated by the Fiscal Agent as its principal corporate trust office for such purpose, and the interest hereon is payable by check mailed to the owner hereof at the owner’s address as it appears on the records of the Fiscal Agent, or at such address as may have been filed with the Fiscal Agent for that purpose, as of the fifteenth (15th) day of the month preceding each interest payment date (the “Record Date”). Principal of, redemption premium, if any, and interest payable to any Owner of Bonds in aggregate principal amount of $1,000,000 or more will be paid, upon the written request of any such Owner in form and substance satisfactory to the Fiscal Agent, by wire transfer of immediately available funds to an account within the United States designated by such Owner on or before a Record Date. Interest on the Bonds will be calculated on the basis of a 360-day year composed of twelve (12) 30-day months.

This Bond will continue to bear interest after maturity at the rate above specified, provided it is presented at maturity and payment thereof is refused upon the sole ground that there are not sufficient moneys in said redemption fund with which to pay the same. If it is not presented at maturity, and there are sufficient moneys in said redemption fund with which to pay the same, interest on this Bond will run until maturity.

Pursuant to Section 8769 of the Streets and Highways Code of the State of California, the City Council of the City has determined that the City will not obligate itself to advance funds from the City treasury to cure any deficiency in the redemption fund.

This Bond is one of several annual series of bonds of like date, tenor and effect, but differing in amounts, maturities and interest rates, issued by the City pursuant to the Act and that certain Fiscal Agent Agreement, dated as of May 1, 2026, by and between the City and the Fiscal Agent (the “Fiscal Agent Agreement”) in the aggregate principal amount of $[__________] (the “Bonds”) for the purpose of providing means for paying for the construction of the improvements which are to be constructed within and for the Assessment District, as described in said proceedings, and is secured by the moneys in said redemption fund and by the unpaid portion of the assessments levied on parcels of property within the Assessment District for the payment of said improvements, and, including principal and interest, is payable exclusively out of said fund.

Reference is hereby made to the Act and the Fiscal Agent Agreement, and all amendments thereto, for a description of the rights, duties and obligations of the City and the owners of the Bonds, the terms upon which the Bonds are issued and the terms and conditions on which the Bonds will be deemed to be paid, at or prior to maturity or redemption of the Bonds, to all the provisions of which agreement the owner of this Bond, by acceptance hereof, assents and agrees.

The Bonds are issuable only as fully registered Bonds in 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.
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This Bond is transferable by the registered owner hereof, in person or by the owner’s attorney duly authorized in writing, at the office of the Fiscal Agent, subject to the terms and conditions provided in the Fiscal Agent Agreement, including the payment of certain charges, if any, upon surrender and cancellation of this Bond. Upon such transfer, a new registered Bond or Bonds, of any authorized denomination or denominations, of the same maturity, for the same aggregate principal amount, will be issued to the transferee in exchange for this Bond.

Bonds shall be registered only in the name of an individual (including joint owners), a corporation, a partnership or a trust.

The Fiscal Agent shall not be required to make any exchange or registration of transfer of Bonds during the fifteen (15) days preceding the date established by the Fiscal Agent for the selection of Bonds for redemption, or with respect to any Bonds which have been selected for redemption.

The Fiscal Agent may treat the owner hereof as the absolute owner for all purposes, and the Fiscal Agent shall not be affected by any notice to the contrary.

The Bonds are subject to redemption prior to their stated maturity dates on any Interest Payment Date on or 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 The Bonds are also 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 The Bonds maturing on September 2, 20__, 20__, and 20__ are subject to mandatory sinking fund redemption, in part, on September 2, 20__, 20__, and 20__, respectively, and on each September 2 thereafter prior to maturity, by lot, each 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 provided in the Fiscal Agent Agreement. 67 68 of 336
55852.05004\44599714.3
A-4
This Bond is subject to refunding pursuant to the procedures of Division 11.5 (commencing with Section 9500) of the Streets and Highways Code of the State of California.

This Bond shall not be entitled to any benefit under the Act or the Fiscal Agent Agreement, or become valid or obligatory for any purpose, until the certificate of authentication and registration hereon endorsed shall have been dated and signed by or on behalf of the Fiscal Agent.

IN WITNESS WHEREOF, the City of Laguna Beach, California, has caused this Bond to be signed in facsimile by its City Treasurer and City Clerk, and has caused its official seal to be reproduced in facsimile hereon all as of the ___ day of __________, 2026.

CITY OF LAGUNA BEACH, CALIFORNIA
City Treasurer
ATTEST:

CITY OF LAGUNA BEACH, CALIFORNIA
City Clerk
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55852.05004\44599714.3
A-5

CERTIFICATE OF AUTHENTICATION
This is one of the Bonds described in the within-defined Fiscal Agent Agreement.

Dated:___________, 20___ THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., Fiscal Agent
By:

Authorized Signatory
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55852.05004\44599714.3
A-6

ASSIGNMENT
For value received the undersigned hereby sells, assigns and transfers unto (Name, Address and Tax Identification or Social Security Number of Assignee) the within-registered Bond and hereby irrevocably constitute(s) and appoints(s) attorney, to transfer the same on the registration books of the Fiscal Agent with full power of substitution in the premises.

Dated:

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

Signature Guaranteed:

Note: Signature(s) must be guaranteed
by an eligible guarantor institution
70 71 of 336
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 Draft
PRELIMINARY OFFICIAL STATEMENT DATED APRIL ___, 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. $____*

CITY OF LAGUNA BEACH
UNDERGROUND UTILITY ASSESSMENT DISTRICT NO. 2021-3
(FAIRVIEW/LA BREA)

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. 2021-3 (Fairview/La Brea) 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 that certain Fiscal Agent Agreement dated as of May 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, 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. 2021-3 (Fairview/La Brea), 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 City Treasurer of the City. The Assessment District was formed to finance the design and construction of improvements to underground overhead utilities (the “Improvements”) within the Assessment District. 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 will 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 bookentry 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 will covenant 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. * Preliminary; subject to change.

Attachment 3
71 72 of 336
[Oppenheimer Logo]
Dated: _____________, 2026
72 73 of 336

MATURITY SCHEDULE
$____*

CITY OF LAGUNA BEACH
UNDERGROUND UTILITY ASSESSMENT DISTRICT NO. 2021-3
(FAIRVIEW/LA BREA)

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.
73 74 of 336

CITY OF LAGUNA BEACH

COUNTY OF ORANGE

CITY COUNCIL
Mark Orgill, Mayor
Hallie Jones, Mayor Pro-Tem
Sue Kempf, Councilmember
Alex Rounaghi, 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
DTA Public Finance, Inc.

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
74 75 of 336

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.

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.
75 76 of 336

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 .................................................. 4 Professionals Involved in the Offering .................. 4 Continuing Disclosure ........................................... 4 Bondowners’ Risks ............................................... 4 Other Information .................................................. 5

ESTIMATED SOURCES AND USES OF
FUNDS .................................................................. 5 THE BONDS ............................................................. 6 General .................................................................. 6 Redemption of Bonds ............................................ 7 Purchase in Lieu of Redemption ........................... 9 Notice of Redemption ........................................... 9 Selection of Bonds for Redemption .................... 10 Effect of Redemption .......................................... 10 Refunding Bonds ................................................. 10 Annual Debt Service Schedule ............................ 10 SECURITY FOR THE BONDS .............................. 12 Limited City Obligation ...................................... 12 Pledge and Transfers of Assessment Revenues ... 12
Reserve Fund ....................................................... 13 Covenant to Commence Superior Court
Foreclosure ..................................................... 15 Delinquency Resulting in Ultimate or
Temporary Loss on Bonds .............................. 16 Priority of Lien .................................................... 16 Existing Liens ...................................................... 17 No Teeter Plan ..................................................... 17 Deferral Program ................................................. 17 No Additional Bonds Except for Refunding
Purposes .......................................................... 17 THE ASSESSMENT DISTRICT ............................ 19 Description .......................................................... 19 Description of Improvements .............................. 19 Formation Proceedings ........................................ 20 Allocation of Assessments .................................. 21 Maximum Annual Assessment for
Administrative Costs and Expenses ................ 21
Value-to-Lien Ratios ........................................... 22 Largest Property Owners ..................................... 25 Direct and Overlapping Debt .............................. 26 Sample Tax Bill ................................................... 27 BONDOWNERS’ RISKS ....................................... 28 Potential Insufficiency of Assessment
Installments ..................................................... 28 Assessments Are Not Personal Obligations ........ 29
Risks of Real Estate Secured Investments
Generally ........................................................ 29 Limited Obligations ............................................. 29 Delinquency Resulting in Ultimate or
Temporary Loss on Bonds .............................. 30 Potential Early Redemption of Bonds from
Prepayments or Other Sources ........................ 30 Non-Cash Payments of Assessments ................... 30 Limited City Obligation Upon Delinquency ....... 31
Bankruptcy and Foreclosure ................................ 31 FDIC/Federal Government Interests in
Properties ........................................................ 32 No Acceleration Provision .................................. 34 Limitations on Remedies ..................................... 34 Foreclosure Shortfall ........................................... 34 Natural Disasters ................................................. 34 Hazardous Substances ......................................... 36 Property Values ................................................... 37 Parity of Taxes, Bonds and Special
Assessments .................................................... 38 Right to Vote on Taxes Act ................................. 38 Ballot Initiatives and Legislative Measures ......... 39 Impact of Legislative Proposals, Clarifications
of the Tax Code and Court Decisions on
Tax Exemption................................................ 40 Loss of Tax Exemption ....................................... 40 IRS Audit of Tax-Exempt Bond Issues ............... 40
Absence of Secondary Market for the Bonds ...... 40
Future Debt Issuance ........................................... 41 Disclosures to Future Purchasers......................... 41 Cybersecurity ...................................................... 42 LEGAL MATTERS ................................................ 42 ABSENCE OF LITIGATION ................................. 42 TAX MATTERS ..................................................... 42 CONTINUING DISCLOSURE ............................... 44 NO RATING ........................................................... 45 UNDERWRITING .................................................. 46 MUNICIPAL ADVISOR ........................................ 46 FINANCIAL INTERESTS ...................................... 46 MISCELLANEOUS ................................................ 46 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 CERTAIN PROVISIONS OF THE FISCAL AGENT AGREEMENT....... ................................................................................................... ........C-1 APPENDIX D - FORM OF CONTINUING DISCLOSURE CERTIFICATE ......................................... D-1 APPENDIX E - THE BOOK-ENTRY SYSTEM ....................................................................................... E-1 76 77 of 336

TABLE OF CONTENTS
(Continued)
ii
APPENDIX F - ASSESSMENT DIAGRAM .............................................................................................. F-1 APPENDIX G - ENGINEER’S REPORT ..................................................................... ............................. G-1 APPENDIX H - LIST OF UNPAID ASSESSMENTS ................................................. ............................. H-1 77 78 of 336
[INSERT REGIONAL LOCATION, AERIAL MAPS AND PHOTOS]
78 79 of 336
1 __________________________________

OFFICIAL STATEMENT
__________________________________
$____*

CITY OF LAGUNA BEACH
UNDERGROUND UTILITY ASSESSMENT DISTRICT NO. 2021-3
(FAIRVIEW/LA BREA)

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. 2021-3 (Fairview/La Brea) Limited Obligation Improvement Bonds (the “Bonds”) by the City of Laguna Beach, California (the “City”).

The Bonds will be issued pursuant to that certain Fiscal Agent Agreement dated as of May 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 CERTAIN PROVISIONS OF THE FISCAL AGENT AGREEMENT.”
The Bonds will be secured under the Fiscal Agent Agreement by a pledge of all 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. 2021-3 (Fairview/La Brea), City of Laguna Beach, Orange County, State of California (the “Assessment District”). *
Preliminary; subject to change.
79 80 of 336
2 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 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 Hillcrest Drive, Wave Street, Cliff Drive and Chiquita Street. The Assessment District consists of 90 parcels, all of which are subject to the levy of Assessments. The parcels in the Assessment District are mostly developed for residential use. During the cash prepayment period, the Assessments for 17 parcels were paid in full and the Assessments for two parcels were paid in part. As a result, there are 73 parcels in the Assessment District with unpaid Assessments securing the Bonds.

The parcels in the Assessment District with unpaid Assessments are mostly developed for residential use. Of the 73 assessable parcels within the Assessment District with unpaid Assessments, 53 parcels are zoned for residential use. The remaining 20 parcels are nonresidential parcels with land use designation as local business/professional.

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 80 81 of 336
3 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. 25.084 on October 28, 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 October 28, 2025 by Resolution No. 25.085. The Assessment Engineer subsequently filed a final written report with the City Council, which report was approved by the City Council on January 13, 2026 by Resolution No. 26.005 (the “Engineer’s Report”). See Appendix G – “ENGINEER’S REPORT.” On January 13, 2026, 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 January 13, 2026, the City Council adopted its resolution confirming the proposed assessments. The City Council confirmed a total assessment of $4,302,201 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 90 parcels in the Assessment District, all of which were assessed parcels with Assessments totaling approximately $4,302,201. During the cash prepayment period, 17 parcels fully prepaid their Assessment in the total amount of $696,586, and two parcels partially prepaid their Assessment in the total amount of $42,411. As a result, there are 73 parcels in the Assessment District with unpaid Assessments securing the Bonds. 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. See “SECURITY FOR THE BONDS.” As of the date of issuance of the Bonds, there are 73 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.” 81 82 of 336
4 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. DTA Public Finance, Inc. (“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.

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 “Rule”), 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.”
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5 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.

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 Fiscal Agent and used to finance the construction of the Improvements. (2) To be held by the Fiscal Agent 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.”
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6 (4) To be held by the Fiscal Agent 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 [April 14, 2026], 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 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.”
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7 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 In selecting Bonds for mandatory redemption, the City Treasurer shall direct the Fiscal Agent to 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, as provided in the Fiscal Agent Agreement. 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
$
* Preliminary; subject to change.
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8 (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 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 86 87 of 336
9 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.

Redemption notices may be conditional. Any notice of optional redemption of the Bonds delivered in accordance with the Fiscal Agent Agreement may be conditional and if any condition stated in the notice of redemption shall not have been satisfied on or prior to the redemption date, said notice shall be of no force and effect and the City shall not be required to redeem such Bonds. At the written direction of the City, the Fiscal Agent shall forward the cancellation notice in the same manner as the notice of redemption was delivered. Additionally, 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 87 88 of 336
10 liability to the Owners of the Bonds or any other party related to or arising from such rescission of redemption. The Fiscal Agent shall forward 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). 88 89 of 336
11 TABLE 1

CITY OF LAGUNA BEACH
UNDERGROUND UTILITY ASSESSMENT DISTRICT NO. 2021-3
(FAIRVIEW/LA BREA)

LIMITED OBLIGATION IMPROVEMENT BONDS
Debt Service
Year Ending
September 2 Principal Interest
Total Debt
Service
2026(1)
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2050
2051
TOTAL
(1) [To be paid from funds on deposit in the Capitalized Interest Fund. See “SECURITY FOR THE BONDS – Pledge and Transfers of Assessment Revenues – Transfers of Assessment Revenues.”] Source: Underwriter.
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12 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 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. 90 91 of 336
13 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 on real property. 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 on real property.

Transfers of Assessment Revenues. No later than September 1, 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 September 2, 2026. On or before the 15th Business Day preceding each Interest Payment Date, excluding 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. 2021-3 (Fairview/La Brea) 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 91 92 of 336
14 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 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 92 93 of 336
15 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 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 will covenant 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, 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 93 94 of 336
16 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.”
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
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. 94 95 of 336
17 Existing Liens
Within the Assessment District there 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 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 Program 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 (3) the property owner’s household income cannot exceed the amount corresponding to low income household in the County. No property owners in the Assessment District will participate in the Deferral Program in connection with the Bonds.

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 CERTAIN PROVISIONS OF THE FISCAL AGENT AGREEMENT” for a further summary of the Fiscal Agent Agreement.

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18 [Insert Boundary Map]
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19 THE ASSESSMENT DISTRICT
Description
The Assessment District is generally bounded by Hillcrest Drive, Wave Street, Cliff Drive and Chiquita Street 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 90 parcels in the Assessment District, all of which were assessed parcels with unpaid Assessments totaling approximately $4,302,201. During the cash prepayment period, the Assessments for 17 parcels were paid in full and the Assessments for two parcels were paid in part. As a result, there are 73 parcels in the Assessment District with unpaid Assessments securing the Bonds.

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 $137,576,011 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 and commercial service drops, construction of mainline underground power, telephone, street lighting and cable conduit, and construction of service conduits. The utilities to be undergrounded include power lines owned by Southern California Edison, street lighting owned by the City of Laguna Beach, and communication lines owned by Frontier Communications, Cox Communications and Crown Castle. The proposed undergrounding of electric and communication improvements to be constructed are within public right-of-way and/or easements owned by the serving utility.

The cost of the Improvements and incidental expenses is estimated to total approximately $4,572,724 (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 97 98 of 336
20 Construction, Inc. The City Council awarded the construction to Hot Line Construction, Inc. on January 13, 2026. 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. 2021-3
(FAIRVIEW/LA BREA)

LIMITED OBLIGATION IMPROVEMENT BONDS
Estimate of Costs and Expenses
Construction Costs $4,359,669
Project Incidental Expenses 213,055
Bond Financing Costs (1) 445,433*
Total Project Costs $5,018,157*
Less: City Contribution $474,580
Less: City Contribution for General Benefit 474,580
Less: Property Owner Prepayments 738,997
Total Unpaid Assessments (2) $3,330,000*
$1,688,157*
(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 ($486,025) less the premium on the Bonds ($40,592).
(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 January 13, 2026, 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 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.
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21 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 $100,920.60 to a low of approximately $16,734.10 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 $88 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 2026-27.

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 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 pledged as security for the Bonds. See “SECURITY FOR THE BONDS – Pledge and Transfers of Assessment Revenues.”
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22 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 $137,576,011 for fiscal year 2025-26. Based on fiscal year 2025-26 assessed values and the unpaid Assessments, the 73 parcels within the Assessment District with unpaid Assessments have an aggregate assessed value-to-assessment lien ratio of 41.01 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). All parcels listed on Table 4 appear to be fully developed.

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-tolien (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 3.99%* of the total unpaid Assessments (3.97%* inclusive of overlapping debt).
* Preliminary; subject to change.
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23 TABLE 3

CITY OF LAGUNA BEACH
UNDERGROUND UTILITY ASSESSMENT DISTRICT NO. 2021-3
(FAIRVIEW/LA BREA)

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*
Overlapping
Debt (3)*
Total
Lien (4)*
Valueto-Lien
Ratio*
Greater than 100: 1 6 $23,951,650 $4,516,490 $28,468,140 $229,191 $220,304 6.62% $5,067 $225,371 126.32 50:1 to 99.99:1 15 $45,102,998 $6,916,735 $52,019,733 $709,323 $681,822 20.48% $9,259 $691,081 75.27 25:1 to 49.99:1 19 $32,111,669 $2,941,005 $35,052,674 $933,026 $872,474 26.20% $6,239 $878,713 39.89 10:1 to 24.99:1 26 $16,447,323 $3,890,201 $20,337,524 $1,288,954 $1,238,979 37.21% $3,620 $1,242,598 16.37 3:1 to 9.99:1 4 $837,098 $503,925 $1,341,023 $202,923 $173,302 5.20% $239 $173,540 7.73 Less than 2.99:1 3 $263,809 $93,108 $356,917 $148,893 $143,120 4.30% $64 $143,184 2.49 Total 73 $118,714,547 $18,861,464 $137,576,011 $3,512,309 $3,330,000 100.00% $24,487 $3,354,487 41.01 (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.
(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. 101
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24 TABLE 4

CITY OF LAGUNA BEACH
UNDERGROUND UTILITY ASSESSMENT DISTRICT NO. 2021-3
(FAIRVIEW/LA BREA)

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)*
Overlapping
Debt (3)*
Value-toLien*
% of Total
Outstanding
Balance*
10 053-125-15 (4) $93,128 $15,442 $108,570 $41,133 $39,538 $19 2.74 1.19% 50 053-144-24 (5) $84,801 $57,951 $142,752 $50,845 $48,874 $25 2.92 1.47% 85 053-152-06 (6) $85,880 $19,715 $105,595 $56,915 $54,708 $19 1.93 1.64% Total $263,809 $93,108 $356,917 $148,893 $143,120 $64 2.49 4.30% (1) Assessed Value and ownership as of January 1, 2025, as provided by County of Orange Assessor. All parcels appear to be fully developed. (2) Based on par amount of Bonds.
(3) Sourced from California Municipal Statistics, Inc.
(4) No sales/transaction have occurred on the property since 2002. (5) No sales/transaction on file.
(6) No sales/transaction have occurred on the property since 1988. * Preliminary; subject to change.

Source: DTA; City of Laguna Beach.
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25 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. 2021-3
(FAIRVIEW/LA BREA)

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 *
Overlapping
Debt (3)*
Total
Lien*
Value-toLien*% of
Total Lien*
WAVE STREET LAGUNA LLC 2 $4,111,691 $397,474 $4,509,165 $132,754 $378 $133,132 33.87 3.97% MPLB LLC 1 $6,984,406 $1,769,836 $8,754,242 $97,008 $1,558 $98,566 88.82 2.94% JESSOE, FRANCIS A TR B TR 2 $1,021,960 $284,124 $1,306,084 $88,412 $118 $88,530 14.75 2.64% BUNN, INGE GOERICKE TR 2 $2,565,683 $794,615 $3,360,298 $69,263 $443 $69,705 48.21 2.08% RANDOLPH, JEFFREY L TR 1 $575,345 $191,500 $766,845 $54,708 $136 $54,845 13.98 1.63% KENNEDY, D ROBERT JR TR D 1 $929,372 $91,894 $1,021,266 $54,708 $182 $54,890 18.61 1.64% WOOD, ROGER KENNETH TR R (2) 1 $85,880 $19,715 $105,595 $54,708 $19 $54,727 1.93 1.63% KENNEDY, D ROBERT JR TR D 1 $512,415 $464,872 $977,287 $54,708 $174 $54,882 17.81 1.64% LEVIN, JAMES A TR 1 $416,066 $213,872 $629,938 $54,708 $112 $54,820 11.49 1.63% COLAGROSSI, PETER RICHARD 1 $797,522 $42,367 $839,889 $54,708 $149 $54,858 15.31 1.64% Subtotal Top Owners 13 $18,000,340 $4,270,269 $22,270,609 $715,685 $3,270 $718,954 30.98 21.43%

All Other Owners 60 $100,714,207 $14,591,195 $115,305,402 $2,614,315 $21,217 $2,635,533 43.75 78.57% Total 73 $118,714,547 $18,861,464 $137,576,011 $3,330,000 $24,487 $3,354,487 41.01 100.00%

(1) Assessed Value as of January 1, 2025 as provided by County of Orange Assessor. (2) No sales/transactions have occurred on the property since 1988. (3) Sourced from California Municipal Statistics, Inc.
*Preliminary; subject to change.

Source: Orange County Assessor’s office as compiled by DTA. 103
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26 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 December 1, 2025.

The Debt Report includes information for all parcels within the Assessment District, including the 17 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. 2021-3
(FAIRVIEW/LA BREA)

LIMITED OBLIGATION IMPROVEMENT BONDS
Direct and Overlapping Debt
2025-26 Assessed Valuation: $162,896,619
DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable Debt 03/01/26 Metropolitan Water District General Obligation Bonds 0.004% $ 614 Laguna Beach Unified School District General Obligation Bonds 0.537 28,380 City of Laguna Beach Assessment District No. 2021-3 Fairview/La Brea 100.000 - (1) TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT $28,994 OVERLAPPING GENERAL FUND DEBT:

Orange County General Fund Obligations 0.019% $ 81,552
Orange County Board of Education General Fund Obligations 0.019 1,744 City of Laguna Beach General Fund Obligations 0.730 78,862 TOTAL OVERLAPPING GENERAL FUND DEBT $162,158
COMBINED TOTAL DEBT $191,152 (2)
Ratios to 2025-26 Assessed Valuation:

Total Direct Debt ........................................................................... 0.00% Total Overlapping Tax and Assessment Debt ................................... 0.02% Combined Total Debt........................................................................ 0.12% (1) Excludes issue to be sold.
(2) Excludes tax and revenue anticipation notes, revenue, mortgage revenue and non-bonded capital lease obligations.

Source: California Municipal Statistics, Inc.
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27 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. 2021-3
(FAIRVIEW/LA BREA)

LIMITED OBLIGATION IMPROVEMENT BONDS
Sample Tax Bill – Fiscal Year 2025-26 (Estimate) (1)
ESTIMATED ASSESSED VALUATION (1)
Gross Assessed Valuation $1,884,603
LESS: Homeowner Exemption ($7,000)
Net Assessed Value $1,877,603
AD VALOREM TAXES (2) RATE AMOUNT
Basic Levy Rate 1.00000% $18,776
Laguna Beach USD 2010R 0.00885% $166
Metro Water D-MWDOC 0.00700% $131
TOTAL GENERAL PROPERTY TAXES 1.0159% $19,073.63
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. 2021-3 (ESTIMATE) (3)* $3,327.73 TOTAL SPECIAL ASSESSMENTS & CHARGES* $5,026.86
PROJECTED TOTAL PROPERTY TAXES* $24,100.48
PROJECTED TOTAL EFFECTIVE TAX RATE* 1.28%
(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 ($236,500) plus an administration fee of $88.
*Preliminary; subject to change.

Source: DTA.
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28 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 assessments, 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 106
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29 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.

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. 107
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30 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.

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.
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31 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 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.
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32 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 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 110
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33 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 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.
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34 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 tax-exempt 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.

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 112
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35 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 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.
113
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36 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 three 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. None of the 90 assessable parcels in the Assessment District 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 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 well-known 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 114
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37 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.

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.

The City has no knowledge of any hazardous substances being located on the assessable parcels of property in the Assessment District.

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 115
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38 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.

Laguna Beach City CouncilApril 14, 2026

Laguna Beach City Council
April 14, 2026