Agenda packet — Livermore City Council, September 12, 2022 (part 2 of 3)

2022-356 JKS/JRA

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CITY COUNCIL STAFF REPORT
ITEM NO. 4.15

DATE:

September 12, 2022
TO:

Honorable Mayor and City Council
FROM:

Christine Martin, Assistant City Manager
SUBJECT:

Resolution reauthorizing remote or hybrid teleconference meetings for City of Livermore's legislative bodies in accordance with Assembly Bill 361

RECOMMENDED ACTION

Staff recommends City Council adopt a resolution reauthorizing remote or hybrid teleconference meetings for City of Livermore's legislative bodies in accordance with Assembly Bill 361.

SUMMARY
On September 16, 2021, the Governor signed Assembly Bill 361 (“AB 361”) into law, allowing the City’s legislative bodies to continue to meet via teleconference during proclaimed states of emergency under modified Brown Act requirements when a state of emergency is declared by the Governor pursuant to Government Code section 8625, proclaiming the existence of conditions of disaster or of extreme peril to the safety of persons and property within the state caused by conditions as described in Government Code section 8558. AB 361 further requires that state or local officials have imposed or recommended measures to promote social distancing, or, the legislative body meeting in person would present imminent risks to the health and safety of attendees. AB 361 requires reauthorization every 30 days.

DISCUSSION
An outbreak of coronavirus disease 2019 (COVID-19) caused by the 2019 novel coronavirus (SARS- CoV-2) began in Wuhan, Hubei Province, China in December 2019, and has now spread throughout the world.

On March 1, 2020, the Health Officer of Alameda County declared a public health emergency throughout the County of Alameda.

On March 4, 2020, the Governor of California proclaimed a state of emergency exists in California after making determinations that:

1 .

The conditions caused by COVID-19 are likely to require the combined forces of a mutual aid 336
region or regions to appropriately respond; and,
2 .

Local authority is inadequate to cope with the threat posed by COVID-19.

On March 12, 2020, the Alameda County Department of Public Health confirmed evidence of community-acquired transmission.

On March 13, 2020, the President of the United States of America declared a National state of emergency in response to the spread of COVID-19 within the United States of America.

On March 13, 2020, the City Manager declared a Local Emergency. The local emergency was ratified by City Council and continued every 30 days into 2022, where the emergency was terminated by Council in April 2022, then reinstated in May 2022 (Reso. No. 2022-077) and continued in June 2022 (Reso. No. 2022-099). The local emergency terminated thirty days thereafter, as it was not renewed.

However, the state continues its COVID-19 emergency response and the Governor has signed Executive Order N-11-22, which retains a limited set of provisions that remain necessary to continue responding to the threat posed by, and mitigating the effects of, the COVID-19 pandemic; and precautions toward reducing the spread of COVID-19, including strongly encouraging masking indoors and social distancing.

Based on the above, staff recommends the City Council adopt a resolution reauthorizing teleconference or hybrid meetings of the City's legislative bodies in accordance with AB 361.

FISCAL AND ADMINISTRATIVE IMPACTS

There are no fiscal or administrative impacts associated with the resolution.

ATTACHMENTS

1. Resolution

Prepared by: Christine Martin
Assistant City Manager

Approved by:
____________________________________
Marianna Marysheva
City Manager
Fiscal Review by:
____________________________________
Tina Olson
Administrative Services Director
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RESOLUTION NO. ________

IN THE CITY COUNCIL OF THE CITY OF LIVERMORE, CALIFORNIA

A RESOLUTION REAUTHORIZING REMOTE TELECONFERENCE MEETINGS FOR THE CITY OF LIVERMORE’S LEGISLATIVE BODIES IN ACCORDANCE WITH ASSEMBLY BILL 361, INCLUDING HYBRID
An outbreak of coronavirus disease in 2019 (COVID-19) caused by the novel coronavirus (SARS-CoV-2) began in Wuhan, Hubei Province, China, in December 2019, and spread throughout China and to numerous other countries and territories, including the United States.

COVID-19 is an infectious disease that causes respiratory illness. Experts anticipate that while a high percentage of individuals affected by COVID-19 will experience mild flu-like symptoms, some will have more serious symptoms and require hospitalization, particularly individuals who are elderly or have underlying chronic health conditions.

It is imperative to prepare for and respond to suspected or confirmed COVID-19 cases, to implement measures to mitigate the spread of COVID-19, and to prepare to respond to an increasing number of individuals requiring medical care and hospitalization.

The United States Centers for Disease Control and Prevention (CDC), the United States Health and Humans Services Agency, the California Department of Public Health, and the Alameda County Department of Public Health are each working to monitor and plan for the potential spread of COVID-19 to support and guide local actions to preserve public health.

On January 23, 2020, the CDC activated its emergency response system to provide ongoing support for the response to COVID-19 in the United States.

On January 31, 2020, the Secretary of the United States Department of Health and Human Services declared a public health emergency for the entire United States to aid the nation's healthcare community in responding to COVID-19.

On February 25, 2020, the Centers for Disease Control and Prevention announced that community spread of COVID-19 is likely to occur in the United States.

On March 1, 2020, Health Officer of Alameda County declared a public health emergency throughout the County of Alameda.

On March 4, 2020, the Governor of California proclaimed a state of emergency exists in California after making determinations that:
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RESOLUTION NO. ________

1. The conditions caused by COVID-19 are likely to require the combined forces of a mutual aid region or regions to appropriately respond; and,

2. Local authority is inadequate to cope with the threat posed by COVID-19.

On March 12, 2020, the Alameda County Department of Public Health confirmed evidence of community-acquired transmission.

On March 13, 2020, the President of the United States of America declared a national state of emergency in response to the spread of COVID-19 within the United States of America.

On March 16, 2020, the City Council adopted a resolution ratifying the declaration of local emergency (Resolution No. 2020-033).

On June 8, July 27, September 14, November 9, December 14, 2020, February 8, March 22, May 10, June 28, July 26, September 13, October 25, November 22, December 13, 2021, January 10, February 14, and February 28, 2022, the City Council adopted resolutions of continued local emergency (Resolution Nos. 2020-78, 2020-133, 2020-166, 2020-207, 2020-235, 2021-018, 2021-037, 2021-063, 2021-112, 2021-140, 2021-155, 2021-179, 2021-195, 2021-217, 2022-006, 2022-016, and 2022-022, respectively).

On April 11, 2022, the City Council adopted a resolution terminating the proclamation of local emergency and the temporary suspension and revision of the City Council Meeting Rules of Procedure, and all unexpired emergency orders declared in response to the spread of COVID-19.

On May 13, 2022, the Alameda County Department of Health, along with twelve Bay Area health officers urged the public to take precautions as COVID-19 levels rise, including but not limited to continued masking indoors as the region experiences a new swell of COVID-19 cases and hospitalizations.

On May 20, 2022, the Director of Emergency Services declared a local emergency. The declaration was based on the Alameda County Department of Health guidance issued on May 13, 2022, and the increase of positive cases among Livermore residents and City of Livermore staff.

On May 23, June 13, and July 11, 2022, the City Council adopted resolutions ratifying the declaration of local emergency and to reauthorize remote teleconference meetings in accordance with Assembly Bill 361 (Reso. Nos. 2022-077, 2022-099, and 2022-121).

The State continues its COVID-19 emergency response and the Governor has signed Executive Order N-11-22, which retains a limited set of provisions that remain necessary to continue responding to the threat posed by, and mitigating the effects of, 339
RESOLUTION NO. ________
the COVID-19 pandemic; and precautions toward reducing the spread of COVID-19, including strongly encouraging masking indoors and social distancing.

Alameda County continues to align its response to the State and strongly encourages COVID-19 safety precautions, including masking indoors.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Livermore that it hereby finds that conditions warrant reauthorization of remote or hybrid teleconference meetings for City of Livermore's legislative bodies in accordance with Assembly Bill 361 due to the COVID-19 pandemic.

BE IT FURTHER RESOLVED by the City Council of the City of Livermore that:

1. The Recitals set forth above are true and correct and are incorporated into this Resolution by reference.

2. The City Council has determined that COVID-19 continues to impact the ability of the City of Livermore’s legislative bodies to meet safely in person with no teleconference option. In-person meetings of the City of Livermore’s legislative bodies with no teleconference option might present imminent risks to the health or safety of some or all attendees.

3. The staff and legislative bodies of the City of Livermore are hereby reauthorized and directed to take all actions necessary to carry out the intent and purpose of this Resolution, including conducting open and public meetings in accordance with Government Code section 54953(e) and other applicable provisions of the Brown Act for fully teleconferenced meetings, or hybrid meetings that accommodate both in person and teleconference participation by the legislative body members, staff, and the public.

4. This Resolution shall take effect immediately upon its adoption and shall be effective until the earlier of October 12, 2022, or such time the City Council makes subsequent findings in accordance with Government Code section 54953(e)(3) to extend the time during which the legislative bodies of the City of Livermore may continue to teleconference without compliance with Government Code section 54953(b)(3).

5. If any section, subsection, clause, or phrase in this Resolution is for any reason held invalid, the validity of the remainder of this Resolution shall not be affected thereby. The City Council would have passed this Resolution and each section, subsection, sentence, clause, or phrase thereof, irrespective of the fact that one or more sections, subsections, sentences, clauses, or phrases thereof be held invalid. 340
RESOLUTION NO. ________
On motion of Council Member ______________________, seconded by Council Member ______________________, the foregoing resolution was passed and adopted on September 12, 2022, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ATTEST: APPROVED AS TO FORM:
_____________________________ /s/ Jason Alcala
Marie Weber Jason R. Alcala
City Clerk City Attorney
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CITY COUNCIL STAFF REPORT
ITEM NO. 6.1

DATE:

September 12, 2022
TO:

Honorable Mayor and City Council
FROM:

Paul Spence, Community Development Director
SUBJECT:

Discussion and direction regarding Comprehensive General Plan Update – Draft Land Use Alternatives

RECOMMENDED ACTION

Staff recommends the City Council review the Draft Land Use Alternatives for each of the specific focus areas, receive a presentation from staff, affirm that the draft land use alternatives represent an adequate range and mix of land use types, and direct staff to evaluate the alternatives for the General Plan Update.

SUMMARY
On March 1, 2021, the City Council selected updating the General Plan as a priority and directed staff to seek consultant assistance and develop a 3-year work program. The work program includes a variety of components including visioning, existing conditions assessment, land use planning, policy development, and environmental impact review. In January 2022, the project team began the General Plan land use alternatives process, which will inform the 2045 General Plan Land Use Map. This land use alternatives process includes receiving input from the community and General Plan Advisory Committee in identifying geographical areas that are likely to experience change (focus areas) and preparing a mix of land use alternatives for each focus area.

Following City Council direction, the project team will conduct further in-depth analysis and evaluation of the draft land use alternatives. The evaluation process will take approximately six months after which the project team will conduct extensive community engagement to share the results and discuss tradeoffs.

The project team and General Plan Advisory Committee will continue to refine land use alternatives and ultimately develop a preferred scenario, which will return to the City Council for further direction and be integrated into the overall General Plan Land Use Map.

DISCUSSION

BACKGROUND

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The General Plan is the City’s long-range policy document for growth, land use, sustainability, and resource and open space conservation. The planning period for the City’s current General Plan is 2003- 2025. Adopted in 2004, the City’s General Plan is almost 18 years old. The traditional planning period for updating the General Plan is 10-20 years. A comprehensive General Plan update is required due to the age of the current document and data that supports it (e.g. traffic and environmental impact studies).

Since the last comprehensive General Plan update, many state and regional policies have changed, which can have an influence on local policy. In addition, the comprehensive General Plan update process offers the community and City an opportunity to re-evaluate existing General Plan policies and develop new ones that address shifts in community priorities, technologies, and current land use and real estate market trends.

On March 1, 2021, the City Council set goals and priorities for Fiscal Years 2021-2023 and identified the Comprehensive General Plan Update as a priority. On June 28, 2021, City Council authorized a contract with PlaceWorks as the consultant team for the General Plan Update Project. On October 7, 2021, following a three-month recruitment, selection, and interview process, the City Council appointed a 19- member General Plan Advisory Committee (Committee).

On March 14, 2022, the City Council approved the General Plan Vision Statement which will be the basis for the General Plan update and describes the future of Livermore as the community would like it to be in 2045. On April 1, 2022, the project team completed the Existing Conditions Reports. The Reports analyze and summarize various conditions in Livermore, assist the community and project team in understanding the issues and opportunities facing the City as we collectively plan for the horizon year 2045, and inform future policy and land use discussions and decisions.

On May 23, 2022, the project team presented the draft General Plan 2023-2031 Housing Element (the General Plan is currently comprised of 10 separate elements) to the City Council. City Council directed staff to revise the draft document to incorporate the input received. On July 19, 2022, the project team submitted the Draft Housing Element to the California Department of Housing and Community Development for their 90-day review period.

The Vision Statement, Existing Conditions Reports, and Draft Housing Element are published on the project website (Imaginelivermore2045.org). In addition, the project website provides background information, project updates as major milestones are achieved, links to relevant documents, and information about how to become involved in the General Plan Update process. The website includes information about community events and General Plan Advisory Committee meetings and also provides access to online surveys and interactive exercises.

The comprehensive General Plan Update (including Housing Element Update and Environmental Impact Report) is anticipated to be an approximately three-year project, consisting of preparation of an assortment of technical studies, collection of local and regional data, and analysis of a broad range of policy issues and land use alternatives. Further, the update involves a variety of community engagement events and activities to ensure broad participation and community input. The project team anticipates formal adoption and project completion in early 2024. (However, the Housing Element requires a shorter approval schedule to comply with the state’s January 2023 deadline, and separate environmental review).

PROJECT DESCRIPTION
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A major component of the General Plan Update process is modifying the General Plan Land Use Map to align with the vision and plan for future growth. The new General Plan Land Use Map will be developed iteratively through creation and evaluation of draft land use alternatives to ultimately select a preferred land use scenario. The process will be shaped by community, Committee, and Planning Commission input. The City Council will ultimately provide direction on the preferred scenario in Spring of 2023.

To arrive at a preferred scenario, the project team is following five steps, described below. Currently, the project team is in step two and is seeking feedback and authorization to evaluate the draft land use alternatives.

1. Focus Area Identification

For many parts of Livermore, the General Plan land use designations remain valid and appropriate and are not expected to change. This task identifies areas where transformation is expected or desired, known as Focus Areas. Focus Areas are typically a combination of many parcels and are many acres in size. The draft Focus Areas are shown in Attachment 1.

2. Create Land Use Alternatives

Using Committee, property owner, and community feedback, the project team prepared three draft land use alternatives for each draft Focus Area that considers a range of different intensities and types of development that could occur over the next 25 years. The current version reflects feedback from the Committee and Planning Commission.

3. Evaluate and Compare Alternatives
Following Committee and Planning Commission review and City Council direction, the project team will begin to compare the differing outcomes of these alternatives against a set of metrics. The evaluation will take approximately six months and consider topics such as those noted below:

Climate change and resilience
Public safety
Equity
Parks
Housing supply
Student generation and school capacity
Capacity of water, sewer, and storm drainage infrastructure Open space preservation and biological resources
Historic resources
Aesthetics and urban design
Fiscal impacts
Traffic and transportation impacts
Commercial land use supply (adequate sites and geographic distribution) Commercial diversity (product, service, recreation)
Jobs/housing balance and jobs/housing match

4. Create the Preferred Scenario

Beginning in spring 2023, the project team will present the results of the alternatives evaluation to the community, Committee, Planning Commission, and City Council to choose a preferred scenario for each 344
Focus Area after considering the relative benefits, trade-offs, and potential impacts of each alternative.

The preferred scenario will likely be the result of mixing different combinations of land use types identified in the draft alternatives for each Focus Area.

5. Analyze the Preferred Scenario as part of the Draft General Plan

Once a preferred scenario is finalized, the project team will integrate the preferred scenarios with the citywide General Plan land use map. The Draft General Plan will cover the entire city and analyze proposed growth to understand required infrastructure improvements, the fiscal impacts, and the financing tools and policies available to finance any public costs associated with the preferred scenario.

The Draft General Plan, including policies and actions in all elements, will undergo additional analysis in the Draft Environmental Impact Report.

COMMUNITY OUTREACH AND ENGAGEMENT

The project team launched an online activity and hosted eight pop-up events at the Downtown Farmers Market, a local coffee shop, winery, and Civic Center Library to hear the community’s ideas about land use changes through 2045 in Livermore. From February to March 2022, Livermore community members were asked to provide input at the pop-ups, meetings with property owners, and an online activity to help identify areas of the city to study for potential change over the next 20 years. In general, the community identified focus areas that included vacant infill parcels, aging shopping centers, and industrial areas in transition.

In addition, the project team sent letters to property owners within the potential focus areas informing them of the General Plan Update process and specifically that land use changes may be considered for their property and within their area. On March 8, 2022, the project team hosted a virtual open house to provide additional information about the General Plan Update and the land use alternatives process and received input from attendees. The project team received approximately a dozen calls and emails from property owners. Most property owners asked questions about the process, others stated their openness to exploring land use changes and wanted to stay involved in the process, and others desired no land use change on their property. In addition, the project team has had dozens of one-on-one discussions with various property owners regarding land use. Staff has also had a number of conversations with local property brokers and developers to gather their feedback about viable development alternatives.

Following City Council direction and the project team’s evaluation of the draft land use alternatives, the project team will employ a community engagement strategy including a series of workshops and engagement activities to gain input on the draft land use alternatives. The engagement process is anticipated to occur in the early part of 2023. Input received will help inform the Council's decision making regarding the selection of the preferred scenario.

PLANNING FOR FUTURE GROWTH

Based on regional and state forecasts, the project team anticipates that both population and job growth will continue over the next twenty-plus years and within the time horizon of the 2045 General Plan.

The project team reviewed projections from Association of Bay Area Governments (ABAG) and the Metropolitan Transportation Commission (MTC), the California’s Department of Finance, and the US Census Bureau. The project team adjusted projection totals to capture updated existing conditions data (i.e., recent population and employment counts). Currently, Livermore has a population of approximately 345
91,000 residents and approximately 53,340 jobs. Applying ABAG/MTC forecasted growth rates to updated population and employment counts suggests Livermore could potentially expand to 120,000 residents and 57,000 jobs by 2040.

State law requires jurisdictions to plan for their “fair share” of the regional housing need for households of all income levels. Livermore’s ABAG Regional Housing Needs Allocation (RHNA) for the 2023-2031 planning period, known as the “6th cycle”, is 4,570 housing units, distributed among four income categories that range from Very Low Income to Above Moderate Income. The City must ensure it can accommodate the new RHNA housing unit allocation for the period from 2023 to 2031. Although the RHNA allocation is not a requirement to build housing, the General Plan and Housing Element policies and programs must ensure the City is accommodating housing development and removing common barriers to housing construction.

The City does not need to re-designate or rezone sites to comply with the 6th Cycle RHNA (2023-2031).

However, the General Plan extends beyond the end of the 6th Cycle. Assuming continued 8-year RHNA cycles, and that the General Plan’s expected life cycle is until 2045, the updated General Plan should designate sufficient residential land to accommodate the future 7th and 8th cycles. The scale of future RHNA housing allocations is unknown and difficult to predict. However, it is reasonable to assume if the 7th and 8th RHNA is in the same proportion to the existing number of homes as the 6th Cycle RHNA; ABAG could allocate Livermore a combined total of approximately 11,000 new units over the 7th and 8th cycles, covering the years 2031 to 2047.

The draft land use alternatives also provide an opportunity to plan for population and job growth and respond to emerging market conditions. Beyond meeting state obligations and projected growth, planning for a mix of land uses is important to realize a well-rounded community and contribute to overall quality of life.

A healthy mix of land uses helps accomplish a range of broad civic goals such as job creation, cultural experiences, access to amenities and services, and the city's financial stability. In addition to the type and mix of land uses, an important consideration is understanding their relationships and connections to each other, to public services, and to transportation systems (among other market factors). Some land uses benefit from clustering and proximity to each other, whereas other land uses may benefit from wider distribution across the community.

DRAFT LAND USE ALTERNATIVES

The draft land use alternatives explore a range of commercial, industrial, and residential growth within four focus areas. The intent of the draft land use alternatives is to sustain and improve quality of life, accommodate future community and market needs, support local job growth, and to respond to future State mandated RHNA cycles through 2045. This section describes the land use alternatives for each focus area:

East Avenue - Vasco Focus Area
Las Positas Court Focus Area
Laughlin Road Focus Area
Southfront - Vasco Focus Area

Three different alternatives have been developed for each focus area. Attachment 2 includes maps of 346
the Draft Land Use alternatives for each of the focus areas and development projections. The draft land use alternatives are based on land use categories described and illustrated in the Place Types Menu in Attachment 3. The Place Types are representative examples. The land use categories within the Focus Areas are not existing General Plan land use designations. At a future phase when a preferred scenario is selected, the land use categories will be refined to either use existing designations, modified designations, or new designations in the General Plan.

The draft land use alternatives provide broad ideas on the types and intensity of development that could occur in the future. Once the City Council selects the preferred land use scenario, the Draft General Plan will include additional policy guidance for these areas to improve circulation, community character, safety, and protect natural resources among other topics.

In addition to the focus areas, current regulations allow for future growth in the Isabel Neighborhood Specific Plan area, Downtown, and other infill sites distributed throughout the City. Further, the project team may also propose to the City Council other small scale land use designation changes to the General Plan Land Use Map. These may be initiated by community input, property owners and/or needed to improve compatibility with existing land uses or neighborhoods. These recommendations will be developed and presented to Council next year, around the time the preferred alternatives are being selected for each focus area.

Development Projections

Each of the draft alternatives prepared for the focus areas is accompanied by a table that summarizes the range of potential net new jobs, housing units, and population each alternative could create. The project team generated the development estimates calculating the minimum and maximum density range allowed by each Place Type. These calculations assume that every parcel would redevelop through the 2045 horizon, a scenario that is unlikely given historic development trends and potential parcel-level site constraints that cannot be projected at this large-scale analysis. In addition, the project team applied an industry standard factor that assumed a portion of each parcel would not be developed to account for roads, landscape setbacks, parking areas, and utilities.

These estimates are meant to provide an array of possibilities that could occur under these draft land use alternatives to help determine whether there is a sufficient range of land use alternatives. The impacts of future growth in jobs and housing will be evaluated once the City Council provides final direction on the range of draft alternatives. The results of this evaluation will be presented to the community, Committee, Planning Commission, and City Council to illustrate tradeoffs and inform the selection of the preferred land use scenario. The project team anticipates presenting the results in Spring 2023.

Below is a summary of each proposed Focus Area identified above and shown in Attachments 1 and 2.

East Avenue - Vasco Focus Area

The East Avenue and South Vasco Road focus area is approximately 40 acres and currently includes a mix of existing predominately light industrial uses and a few rural residential uses. The emergence of commercial uses from winery and brewery businesses have created a new vibrancy to this area that was not originally anticipated by the existing General Plan. The proposed vision for this focus area is a visitor 347
destination that supports production maker spaces and wine country commercial uses and serves as a gateway to South Livermore Wine region. All three draft alternatives explore variations of a commercial and production maker village that accommodates the sale and cultivation of local products such as coffee, cheese, wine, and beer, along with related dining and entertainment uses. The maker village is activated by differing mixes of new residential uses and parks and open spaces.

Las Positas Court Focus Area

The Las Positas Court focus area is approximately 75 acres and currently includes low-lying industrial/office buildings and undeveloped land that fronts I-580 along with highway-oriented retail commercial uses. Considerations for the northern portion of this focus area include Arroyo Las Positas, flood plain limitations, limited access across the creek and biological resources. All of the alternatives propose adding residential south of Las Positas Court along with a new open space corridor, while preserving or expanding the existing commercial and industrial/office space north of Las Positas Court.

Laughlin Road Focus Area
The Laughlin Road focus area is approximately 270 acres and currently consists of primarily vacant, undeveloped land with minimal light industrial and open space/recreational uses. Much of this focus area is outside of the city limits, but within the Urban Growth Boundary. On the current General Plan map, this focus area is identified as a transit-oriented development in anticipation of a future BART station and maintenance facilities. BART formally decided not to extend service to Livermore. However, the new Valley Link rail system has identified transit stations in Livermore at Isabel Ave and Southfront Road.

Therefore, the current urban land use designations may not be appropriate at this location. Considering biological resources and earthquake fault lines in the undeveloped part of this focus area outside the city limits, all three draft alternatives anticipate preserving the majority of the focus area’s open space and explore different variations of residential, industrial, and commercial uses along I-580 at the southern and western edges of the focus area.

Southfront-Vasco Focus Area

The Southfront-Vasco focus area is approximately 630 acres and currently includes a mix of existing commercial, office, industrial, and residential land uses. The predominant existing land use is low intensity, light industrial. The existing Altamont Corridor Express (ACE) Vasco train station is located in the southeastern portion of the focus area near the existing Brisa residential neighborhood. In addition, a planned Valley Link train station is proposed within this focus area located within the I-580 median approximately midway between the First Street Interchange and Vasco Road Interchange. The vision for this focus area is a transit oriented, complete neighborhood, with a mix of housing, jobs, and services.

Each alternative includes a mix of residential and job supporting land uses in varying proportions.

Alternative A is focused on job growth, Alternative B is focused on housing growth, and Alternative C includes a balanced mix of both jobs and housing.

GENERAL PLAN ADVISORY COMMITTEE and PLANNING COMMISSION FEEDBACK

On June 8th and 9th, 2022, the General Plan Advisory Committee met to review and provide feedback on the draft land use alternatives. The Committee is comprised of 19 members that represent the Livermore community in the development of the Livermore 2045 General Plan. The Committee’s role is to ensure continuous and balanced public representation and provide feedback that conveys the 348
community’s perspectives and local knowledge. The Committee provides feedback on work products, serves as liaison to the broader community, and advises the project team on effective outreach and engagement.

On June 21, 2022, the Planning Commission met to review and provide feedback on the draft land use alternatives. The role of the Planning Commission is to advise the City Council on the adoption and on- going review of the General Plan and serve as an advisory body to the Council on matters related to city growth and development. In addition, the Commission promotes public interest in planning and encourages citizen participation in the formation of the General Plan.

The Committee and Planning Commission both found the draft land use alternatives to be an appropriate range to pursue further study. In addition, the Committee and Planning Commission provided feedback on the draft land use alternatives that is summarized in Attachment 4. The Committee and Commission recommended modest changes and additions to the mix of land use alternatives within each of the focus areas. The draft land use alternatives have been updated to reflect both Committee and Commission feedback.

FISCAL AND ADMINISTRATIVE IMPACTS

On June 28, 2021, Council authorized a professional services agreement in an amount not to exceed $2,800,000 for a contract term beginning July 1, 2021 and ending July 1, 2024. The City’s 2021-2023 Operating Budget includes the General Fund appropriations necessary to cover consultant contract costs through the end of Fiscal Year 2022-23. The development and evaluation of a range of land use alternatives is a task identified in the contract. City staff time and resources has been programmed to participate in the document review, research and analysis, and community outreach related to the evaluation and review of the different possible outcomes resulting for the range of land use alternatives.

ATTACHMENTS

1. Citywide Focus Area Map

2. General Plan Draft Land Use Alternative

3. Land Use Place Types Menu

4. Planning Commission and GPAC Feedback Summary

Prepared by: Andy Ross
Senior Planner

LAUGHLIN ROAD AREA DRAFT ALTERNATIVES 2045 BUILDOUT

Existing
(2020)*

Open Space Alternative
(Net New)
Mixed Use Alternative
(Net New)
Industrial Alternative
(Net New)
Min Mi d Max Min Mid Max Mi n Mid Max
Homes 0 1,137 1 ,608 2,079 141 291 441 820 1 ,116 1,413 Population 0 3,024 4 ,277 5,530 375 774 1,174 2,181 2 ,970 3,759 Jobs 0 136 2 57 378 711 1,540 2,370 464 7 81 1,009
*Source: Existing housing units are based on the 2020 Alameda County Assessor’s Office data. The estimated number of 2020 jobs are based Traffic Analysis Zone (TAZ) data used for the City’s Traffic Model.

ATTACHMENT 2
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ATTACHMENT 2
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SOUTHFRONT-VASCO PDA DRAFT ALTERNATIVES 2045 BUILDOUT

Existing
(2020)*

Business Center Alternative
(Net New)
Residential Neighborhood
Alternative
(Net New)
Blended Alternative
(Net New)
Min Mi d Max Min Mid Max Mi n Mid Max
Homes 773 3,521 4 ,734 5,948 7,741 10,564 13,387 4,763 6 ,542 8,322 Population 2,053 9,365 1 2,593 15,821 20,592 28,101 35,610 12,669 1 7,403 22,136 Jobs 2,956 2,726 5 ,807 8,889 1,469 4,871 8,274 1,489 4 ,248 7,007 *Source: Existing housing units are based on the 2020 Alameda County Assessor’s Office data. The estimated number of 2020 jobs are based Traffic Analysis Zone (TAZ) data used for the City’s Traffic Model.

ATTACHMENT 2
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ATTACHMENT 2
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LAS POSITAS COURT DRAFT ALTERNATIVES 2045 BUILDOUT

Existing
(2020)*

Residential Alternative
(Net New)
Neighborhood Center Alternative
(Net New)
Highway Oriented Alternative
(Net New)
Min Mi d Max Min Mid Max Mi n Mid Max
Homes 0 18 7 4 129 392 580 768 189 2 81 373
Population 0 49 1 96 343 1,043 1,543 2,043 503 7 47 992 Jobs 253 247 9 96 1,745 296 1,102 1,909 992 2 ,665 4,338 *Source: Existing housing units are based on the 2020 Alameda County Assessor’s Office data. The estimated number of 2020 jobs are based Traffic Analysis Zone (TAZ) data used for the City’s Traffic Model.

ATTACHMENT 2
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ATTACHMENT 2
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EAST AVENUE AND SOUTH OF VASCO ROAD DRAFT ALTERNATIVES 2045 BUILDOUT

Existing
(2020)*

Maker Village Alternative
(Net New)
Production Alternative
(Net New)
Wine Country Center Alternative
(Net New)
Min Mi d Max Min Mid Max Mi n Mid Max
Homes 5 373 5 56 738 -5 -5 -5 118 1 75 233
Population 13 992 1 ,478 1,963 -13 -13 -13 314 4 66 619 Jobs 442 -205 72 3 49 0 412 825 -141 2 10 561
*Source: Existing housing units are based on the 2020 Alameda County Assessor’s Office data. The estimated number of 2020 jobs are based Traffic Analysis Zone (TAZ) data used for the City’s Traffic Model.

ATTACHMENT 2
359
Place Types Menu
June 2022 | Page 1

RESIDENTIAL
Low Density Residential
» Single-family homes, duplexes
» 1 to 2 stories
» 2 to 14 DU/A
Medium Density Residential
» Townhomes, low-rise garden
apartments, and condominiums
» 2 to 3 stories
» 15 to 29 DU/A
Medium High Density
Residential
» Multi-story condominiums and
apartment buildings with
structured or below-ground
parking
» 3 stories or higher
» 30 to 59 DU/A
High Density Residential
» Multi-story condominiums and
apartment buildings with
structured or below-ground
parking
» 4 stories or higher
» 60 to 100 DU/A
Image credit: Niles
Bolton Associates
Image credit: Zillow Image credit: Google
Image credit: Zillow
Image credit: Apartmetns.com
ATTACHMENT 3
360
Place Types Menu

June 2022 | Page 2

MIXED USE
Medium High Density Mixed
Use
» Residential: Multi-story
condominiums and apartment
buildings
» Non-residential: Neighborhood
commercial or office
» 3 stories or higher
» 30 to 59 DU/A
» 1.5 FAR (non-residential)

High Density Mixed Use
» Residential: Multi-story
condominiums and apartment
buildings
» Non-residential: Neighborhood
commercial or office
» 4 stories or higher
» 60 to 100 DU/A
» 2.0 FAR (non-residential)

ATTACHMENT 3
361
Place Types Menu

June 2022 | Page 3

COMMERCIAL
Highway Commercial
» Includes uses such as hotels and
motels, restaurants, and motor
vehicle and gasoline service
stations
» 1 to 4 stories
» 0.30 to 1.0 FAR

Neighborhood Commercial
» Includes uses such as dry cleaners,
nail salons, grocery stores, in-line
retail, and neighborhood
commercial
» 1 to 2 stories
» 0.30 to 1.0 FAR

Service Commercial
» Includes uses such as auto sales and
service, nurseries, home
maintenance centers, and kennels
» 1 to 2 stories
» 0.30 to 1.0 FAR

Wine-Country Commercial
» Includes uses such as wineries,
production facilities, tasting rooms,
small groceries, restaurants, bike
rental facilities, lodging, and other
visitor serving uses
» 1 to 2 stories
» 0.30 to 1.0 FAR

Image credit: Guzzardo Partnership Image credit: NorCal Wine Image credit: GHMG Hotel
Image credit: Google
ATTACHMENT 3
362
Place Types Menu

June 2022 | Page 4

MIXED INDUSTRIAL
Mixed Commercial
and Industrial
» Includes food or beverage
production areas that come with a
commercial component that
include sales of products made on
site, tasting rooms and event
spaces, which could occur in the
same building, such as a winery
with production uses and a tasting
room, cheese production, or coffee
roasting; or could occur next to
each other.
» 1 to 2 stories
» 0.30 to 1.0 FAR

Industrial-Office
» Includes office, Research &
Development (R&D), and high-tech
processing uses, such as life
science; but not heavy industrial
uses such as traditional
manufacturing
» 1 to 2 stories
» 0.5 to 2.0 FAR

INDUSTRIAL
Industrial-General
» Includes manufacturing,
warehousing, R&D, recycling
facilities, and heavy industry that
uses, stores, or processes raw
materials
» 1 to 2 stories
» 0.60 FAR

Image credit: Lam Research
Image credit: Tin City
ATTACHMENT 3
363
Place Types Menu

June 2022 | Page 5

OPEN SPACE AND PARKS
Community Park
» Includes active recreation areas,
playgrounds, landscaped trails, and
paths

Open Space
» Includes passive recreation areas,
trails, scenic buffers from I-580,
and open space for floodplain and
environmental conservation

Agriculture
» Includes agricultural uses such as
vineyards and orchards in areas
suitable for cultivated agriculture

PUBLIC
Public
» Includes public and quasi-public
uses, such as schools, transit
facilities, public and private
meeting facilities, park and
recreation areas, administrative
and professional offices

ATTACHMENT 3
364

MEMORANDUM
DATE June 22, 2022
TO Livermore City Council
FROM Joanna Jansen and Carey Stone, PlaceWorks
SUBJECT Planning Commission Feedback on Draft Alternatives This memorandum summarizes the Livermore Planning Commission feedback on the range of draft land use alternatives received at the June 21, 2022 Planning Commission meeting. At this meeting, the Planning Commission were asked to focus on these questions:
» Is this the right range of alternatives and do they capture the GPAC’s initial input? » Does this represent a range of alternatives that would help achieve the General Plan Vision? The June 21, 2022 Planning Commission meeting is one step in a series of mee tings to confirm the General Plan Team considering a sufficient range of alternatives before the team conducts an in-depth evaluation to compare the tradeoffs, impacts, and outcomes of each alternative on a range of topics.

This synopsis focuses on Plann ing Commission comments that responded to the above questions. It does not summarize general expressions of support for or dislike of a given alternative, since the goal of collecting feedback from this meeting was to refine the range of alternatives for e valuation rather than to choose among them. Discussion regarding preferred alternatives or elements will occur later in the process following the alternatives evaluation.

The Planning Commission had the following recommendations and feedback:

Laughlin Road Area
 The Planning Commission suggested the following changes:
o In Alternative A, add industrial uses in the same configuration as the Highway Commercial uses north of Northfront Road in Alternative C. o In Alternative B, move the strip of Neighborhood Commercial between the Residential Low Density and Residential Medium Density to front I-580 to provide a buffer for the residential uses.
 Planning Commission discussion included:
o Support for the open space designation in the northeast of the focus area due to the presence of sensitive habitats and species and earthquake fault in this area.

ATTACHMENT 4
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June 22, 2022 | Page 2
Southfront-Vasco PDA
 The Planning Commission suggested the following changes:
o In one alternative, change the Highway Commercial to Neighborhood Commercial north of I-580.
o Explore a higher residential density for the mobile home park north of I-580 under one alternative.
o Explore an alternative that includes a commercial buffer between residential uses and I-580.

 Planning Commission discussion included:
o The ACE train station is an existing asset and we should consider additional residential uses near this station and extend additional commercial uses along Vasco Road to support the Brisa neighborhood.
o Concern that it may be premature to plan for this area given uncertainty of future Valley Link service.
o Need to consider circulation connections for all modes. o Consider adding a gateway to wine country in this area by adding additional Wine Country Commercial uses.

Las Positas Court
 The Planning Commission suggested the following changes:
o Consider a residential use in the southwest corner of the focus area that is currently shown as Open Space in the alternatives, but surrounded by residential uses and currently designated for residential uses.

 Planning Commission discussion included:
o Concern about the viability of non-residential uses in the northern portion of the focus areas.

East Avenue and South Vasco Road
 The Planning Commission suggested the following changes:
o In Alternative A, move the Residential Medium-High Density place type from the east side of Research Drive to the southern end of the focus area.

 Planning Commission discussion included:
o Improving circulation, planning for sufficient parking, and design guidelines will be important for this area.
o Adding residential uses will be key to the success of this area. o Engaging with the surrounding neighborhoods to understand what uses they would like in this focus area will be important.

General Discussion on the Land Use Alternatives
ATTACHMENT 4
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June 22, 2022 | Page 3
In addition, the Planning Commission discussed a variety of broader topics related to the land use alternatives:

 Need to consider the alternatives at a citywide scale see them within the context of the entire city.
 The process will include evaluating how the alternatives will affect community design, public services, circulation, parking supply, and retail viability.  The importance of good design in higher density housing products.  High density residential outside of the Downtown could work if there is sufficient green space and nearby schools and amenities.
 Scenic views and corridors along I-580.
 Ensure adequate supply of non-residential uses to maintain the jobs/housing balance and City’s fiscal stability.
 Ensure there is sufficient density surrounding Neighborhood Commercial uses to make this land use viable. Neighborhood Commercial is what makes Livermore unique.  Create walkable communities within proximity to amenities and services.  Concern about locating residential uses adjacent to I-580 due to potential health risks and noise issues.

ATTACHMENT 4
367

MEMORANDUM
DATE June 10, 2022
TO Livermore City Council and Planning Commission
FROM Joanna Jansen and Carey Stone, PlaceWorks
SUBJECT Summary of General Plan Advisory Committee on Changes to the Draft Alternatives This memorandum summarizes the General Plan Advisory Committee (GPAC) feedback received on the range of draft land use alternatives from the Wednesday, June 8, 2022, and Thursday, June 9, 2022, GPAC meetings. At these meetings, the GPAC were asked to focus on these questions:
» Is this the right range of alternatives and do they capture the GPAC’s initial input? » Does this represent a range of alternatives that would help achieve the General Plan Vision? » Are there ideas missing that you would like to see evaluated? The June GPAC meetings are one step in a series of meetings to confirm the project team considering a sufficient range of alternatives before the General Plan team conducts an in -depth evaluation to compare the tradeoffs, impacts, and outcomes of each alternative on a range of topics.

This synopsis focuses on GPAC comments that responded to the above questions and suggested new ideas not captured in any of the draft alternatives. It does not summarize general expressions of support for or dislike of a given alternative, since the goal of collecting feedback from this meeting was to refine the range of alternatives for evaluation rather than to choose among them. Discussion regarding preferred alternatives or elements will occur later in the process following evaluation.

The GPAC had the following recommendation and feedback:

Laughlin Road Area
• GPAC suggested the following the changes:
o At least one of the alternatives should not include residential uses adjacent to I-580.

Consider light industrial or commercial instead.
o Each alternative should have park space that is more centrally located in the residential areas.
o considering an alternative that expands the commercial or light industrial uses to the east along the Northfront corridor
• Committee discussion included:
o The appropriate amount of High Density Residential in this focus area and in proximity to I-580. Consider locating some residential just east of Laughlin across from existing residential.

ATTACHMENT 4
ATTACHMENT 4
368

June 10, 2022 | Page 2

Southfront-Vasco PDA
• GPAC suggested the following changes:
o Incorporated other land uses as a buffer between residential uses and I-580 and the Vasco Corridor. (The original draft alternatives place residential closest to the future Valley Link station.)
o Include more variability in the application of the residential place types to increase the range of residential options; replace some of the High Density Residential with Medium High and Medium Density Residential, etc.
• Committee Discussion included:
o Similar land use place types should be contiguous; do not create islands or patchworks of single place type designations.
o Consider an alternative that plans for a scenario without Valley Link service in case Valley Link does not happen.
o There were questions and concerns about the displacement of existing commercial and industrial uses if converted to residential uses (e.g., If existing non-residential land transitions to housing, where will these businesses go?)

Las Positas Court
• GPAC suggested the following the changes:
o Residential uses should not be included north of Las Positas Court. o Two alternatives should consider an open space place type north of Las Positas Court including an Agriculture place type, which would allow for a vineyard, in the area between the arroyo and I-580, which should have “managed” open space. o Consider an alternative that replaces the Low Density Residential in Alternative A or B with Medium Density Residential or Medium High Density Residential. • Committee Discussion included:
o Extending the Industrial Office place type to increase space for businesses to relocate from other Focus Areas,
o Reduce fire risk for the open space area north of creek. o Including gateway features including vineyards and agricultural uses. o Considering Wine Country Commercial, however, many did not think this was an appropriate place for wine country commercial uses.
o Transitioning from one use to another and questions and concerns about displacing existing businesses. (Staff provided additional discussion about how land use designations are one among many influences on property owner decisions and usually encourage gradual rather than immediate change).

ATTACHMENT 4
ATTACHMENT 4 369

June 10, 2022 | Page 3
o All alternatives will need to address connectivity, wildfire risk, consider potential flood hazards and protected biological species, and take into consideration the adjacent Isabel Neighborhood Specific Plan.

East Avenue and South Vasco Road
• GPAC suggested the following the changes:
o Including park space in every alternative, even Alternative B that does not include housing; the maker businesses (e.g. wineries, craft brewers, etc.) would also need park space for occasional events.
o Modify the residential in one of the alternatives to vary the amount being evaluated.

Some GPAC members wanted to limit the residential uses to the northwest corner of the focus area.

• Committee Discussion included:
o Exploring a range of residential density types in the focus area, including medium high- and high-density place types.
o Ensuring Neighborhood Commercial uses would be allowed in the Wine Country Commercial place type to serve and appeal to the surrounding residential neighborhoods.

The draft land use alternatives reflect GPAC’s recommended changes. In addition, the GPAC discussed a variety of broader topics related to land use.

General Discussion on the Land Use Alternatives

• Limiting High Density Residential, immediately adjacent to I-580, to reduce exposure to air pollution, noise, and protect scenic corridors. Instead of residential, consider industrial or commercial uses along I-580. Alternatively, High Density Residential, and other housing close regardless of location, would increase housing supply, provide variety of housing, and address the housing crisis, particularly for service workers who are essential to staffing the businesses that support a high quality of life for Livermore residents, visitors, and business owners.

• Consider a “no project alternative”, an alternative that shows what would happen under the existing General Plan build out, to compare the draft land use alternatives against. • Transitioning from existing land uses and structures to other land uses and new development.

There was a question about the displacement of existing commercial and industrial uses if converted to residential uses. (If existing non-residential land transitions to housing, where will these businesses go?)
• The importance of improving circulation connections, providing sufficient parking, and resolving existing circulation issues.
• State mandates to provide for housing is in conflict with State water supply distribution or energy infrastructure.

ATTACHMENT 4
ATTACHMENT 4
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June 10, 2022 | Page 4
• Maintaining Livermore’s quality of life is paramount and recognizing that what creates a high quality of life for Livermore residents may vary based on age, income, and personal interests, but some shared aspects include access to parks and green spaces, opportunities to get around without driving, and housing that is affordable.
• The potential citywide implications of each alternative and not only the outcomes within each individual focus area.

ATTACHMENT 4
371

CITY COUNCIL STAFF REPORT
ITEM NO. 6.2

DATE:

September 12, 2022
TO:

Honorable Mayor and City Council
FROM:

Tina Olson, Administrative Services Director
SUBJECT:

Resolution approving, authorizing, and directing a lease financing of the L Street parking garage (Livermore Village parking garage) and related improvements, the sale of Certificates of Participation, the distribution of a preliminary and final official statement, and granting to the Mayor, City Manager, Administrative Services Director, City Attorney, or designee the authority to approve the related documents and actions.

RECOMMENDED ACTION

Staff recommends the City Council adopt a resolution:

1 .

Approving the forms of and authorizing the execution and delivery of a Site Lease, Lease Agreement, Trust Agreement, and a Continuing Disclosure Agreement in connection with the offering and sale of the City of Livermore 2022 Certificates of Participation for the L Street parking garage project (Livermore Village Development) and authorizing the distribution of a Preliminary Official Statement and a Notice of Sale in connection therewith, and authorizing execution of necessary documents, certificates, and certain other related actions; and 2 .

Granting to the Mayor, City Manager, Administrative Services Director, City Attorney, or designee the authority to amend and execute documents, determine appropriateness of bond terms and conditions, and to carry out, give effect to, and comply with the terms and intent of the resolution.

SUMMARY
The L Street parking garage project involves constructing a 4-level public parking garage with approximately 460 spaces east of L Street, between Veterans Way and First Street. Additional site improvements include reconfiguring the surface parking lot east of the parking garage, constructing a trash enclosure facility, installing a pedestrian walkway between the new garage and First Street, completing landscaping along Veterans Way north of the garage, and pedestrian crosswalk improvements at Veterans Way and L Street, and Veterans Way and K Street. The L Street parking garage project and the additional site improvements are referred to herein as the “Project".

The Council previously approved the Project, including the use of Certificates of Participation to finance 372
the Project.

The proposed resolution will approve the execution and delivery of the 2022 Certificates of Participation (Livermore Village Development) (the “2022 Certificates”) to finance the Project and all related documents and actions.

DISCUSSION
The Council previously approved the Project, including the use of Certificates of Participation to finance the Project. The proposed resolution will approve the execution and delivery of the 2022 Certificates and all related documents and actions. The resolution authorizes City staff to complete the transaction, based upon the parameters specified therein, notably, a not-to-exceed par amount of $47.5 million and a not-to-exceed true interest cost of 6.0%. Such not-to-exceed figures incorporate additional cushion to the Project cost estimates and financing estimates discussed below to account for the period of time between the drafting of this staff report to City Council, the City’s receipt of formal construction bids on the Project, and the anticipated sale of the 2022 Certificates in late-September 2022.

Plan of Finance
: The 2022 Certificates would finance (i) the design and construction of a parking garage to provide adequate parking for all existing and new development and other improvements in the City and (ii) certain costs of executing and delivering the 2022 Certificates.

The City will pay principal on this fixed-lease obligation annually, commencing April 1, 2023, and interest semi-annually (on April 1 and October 1, commencing April 1, 2023) for a term of 30 years. The City’s lease payments are payable from the City’s general fund, and the City will covenant to budget and appropriate for the scheduled lease payments on an annual basis, subject to abatement if the leased assets are not available for City use and occupancy.

The 2022 Certificates are expected to be sold through a competitive method of sale. The City has historically used the competitive method of sale for prior lease financings and other City debt offerings.

However, in 2020 amid the market volatility associated with the onset of the COVID-19 pandemic, the City sold refunding Certificates of Participation in 2020 (as described in “Security Structure” below) on a negotiated basis, where an underwriter was pre-selected through a competitive procurement process. In consultation with KNN Public Finance, LLC, the City’s municipal advisor (“Municipal Advisor”), staff expects to proceed with a competitive sale of the 2022 Certificates given current, less volatile market conditions.

Estimated Sources and Uses
: The table shown as Attachment 1 is an estimate of the sources and uses of the 2022 Certificates, based upon market conditions as of August 22, 2022 plus an additional interest rate cushion of 0.50%. Please note that these figures remain preliminary and subject to change with market conditions until the pricing of the 2022 Certificates, which is expected to occur during the week of September 26, 2022. Additionally, should the actual cost of the Project be materially different from the current estimated cost of the Project of $40.4 million, then the estimated par amount and financing results would change.

Security Structure
: It is common for general law cities in California to use lease/leaseback structures to finance capital projects. The City most recently utilized lease Certificates of Participation in 2020 (the “2020 Certificates”) when the City refinanced its outstanding 2011 Certificates of Participation, 2014A Certificates of Participation, and 2014B Certificates of Participation to achieve interest cost savings and 373
convert variable interest rate payment obligations to fixed interest rate payment obligations.

Consistent with the structure of the 2020 Certificates, the 2022 Certificates structure is based upon a lease arrangement between the City and the Public Property Financing Corporation of California (the “Corporation”), which is a nonprofit corporation established to provide assistance to public agencies with lease financings (see “Financing Documents” below for more information about the required documentation).

The City currently intends to utilize the City Hall, Civic Center Meeting Hall, Rincon Library, and Springtown Library as the leased assets for the 2022 Certificates. However, depending on the final par amount of the 2022 Certificates, the City may not need to pledge one or both of the Rincon and Springtown libraries.

Financing Documents.

The proposed financing requires the following documents (attached as exhibits to the resolution):

Site Lease
: Under the Site Lease, the City leases certain City assets to the Corporation, to facilitate the lease financing.

Lease Agreement
: Pursuant to the Lease Agreement, the Corporation will sub-lease the assets leased to it under the Site Lease back to the City. The City will covenant in the Lease Agreement to budget and appropriate for the scheduled lease payments on an annual basis, subject to abatement if the leased assets are not available for City use and occupancy. If the City fails to make the scheduled lease payments, the trustee for the 2022 Certificates (the “Trustee”) could sue the City to make the scheduled lease payments or the Trustee could take possession of and re-let the leased assets.

Trust Agreement; Assignment Agreement
: Under the Assignment Agreement, the Corporation will
assign to the Trustee its right to receive the lease payments that are payable by the City under the Lease Agreement. Under the Trust Agreement, the Trustee will execute and deliver the 2022 Certificates, which represent interests in the City’s lease payments.

Preliminary Official Statement
. The Official Statement is the primary disclosure document for investors in the 2022 Certificates. A Preliminary Official Statement will be circulated to potential investors prior to the pricing of the 2022 Certificates. After the 2022 Certificates have been priced, a Final Official Statement will be circulated to investors; the Final Official Statement should be identical to the Preliminary Official Statement except for the addition of pricing information (principal amount, interest rates, redemption terms).

The Preliminary Official Statement is prepared by Jones Hall, serving the City as Bond Counsel and Disclosure Counsel for this transaction, with the assistance of the remainder of the financing team, including City staff; and the Municipal Advisor.

The Preliminary Official Statement has been reviewed and approved for transmittal to the City Council by the City’s financing team. The distribution of the Preliminary Official Statement by the City is subject to federal securities laws, including the Securities Act of 1933 and the Securities Exchange Act of 1934. These laws require the Preliminary Official Statement to include all facts that would be material to an investor in the 2022 Certificates. Material information is information 374
that there is a substantial likelihood would have actual significance in the deliberations of the reasonable investor when deciding whether to buy or sell the bonds. If the City Council concludes that the Preliminary Official Statement includes all facts that would be material to an investor in the 2022 Certificates, it must adopt a resolution that authorizes staff to execute a certificate to the effect that the Preliminary Official Statement has been “deemed final.”

The Securities and Exchange Commission (the “SEC”), the agency with regulatory authority over the City’s compliance with the federal securities laws, has issued guidance as to the duties of the City Council with respect to its approval of the Preliminary Official Statement. In its “Report of Investigation in the Matter of County of Orange, California as it Relates to the Conduct of the Members of the Board of Supervisors” (Release No. 36761 / January 24, 1996) (the “Release”), the SEC stated that, if a member of the City Council has knowledge of any facts or circumstances that an investor would want to know about prior to investing in the 2022 Certificates, whether relating to their repayment, tax-exempt status, undisclosed conflicts of interest with interested parties, or otherwise, he or she should endeavor to discover whether such facts are adequately disclosed in the Preliminary Official Statement. In the Release, the SEC stated that the steps that a member of the City Council could take include becoming familiar with the Preliminary Official Statement and questioning staff and consultants about the disclosure of such facts.

The key sections of the Preliminary Official Statement are summarized below:

“THE CERTIFICATES”: This section summarizes the key terms of the 2022 Certificates, including payment dates and prepayment provisions.

“SECURITY FOR THE CERTIFICATES”: This section summarizes key security terms, including the lease payments made by the City under the Lease Agreement. Staff expects to pay the lease payments from the City’s general fund.

“APPENDIX A - CITY OF LIVERMORE GENERAL FINANCIAL AND

DEMOGRAPHIC
INFORMATION”: This section summarizes financial and operating data that is material to the City’s ability to pay the lease payments.

“RISK FACTORS”: This section highlights the primary risks associated with the 2022 Certificates, most of which relate to the financial health of the City’s general fund.

“TAX MATTERS”: This section describes the tax-exempt nature of interest with respect to the 2022 Certificates.

Continuing Disclosure Certificate.

Under SEC Rule 15c2-12, the underwriter of the 2022 Certificates may only purchase the 2022 Certificates if it has determined that the City is obligated to provide continuing disclosure, including annual updates of the financial and operating data included in the Official Statement and notices of certain specified events.

Notice of Sale.

The 2022 Certificates are expected to be sold pursuant to a competitive sale, which is similar to an auction, and the Notice of Sale establishes the terms of the sale. The Notice of Sale will be distributed to potential investors along with the Preliminary Official Statement. In addition, because of the volatile behavior of the financial markets over the past year, the resolution authorizes the Administrative Services Director, following consultation with the City Attorney, the Municipal Advisor and 375
Bond Counsel, to determine that it is in the best interests of the City to sell the 2022 Certificates to an underwriter on a negotiated basis, and authorizes the execution and delivery of a purchase agreement with such underwriter on behalf of the City.

FISCAL AND ADMINISTRATIVE IMPACTS

Funding for the Project (Livermore Village Parking Garage Construction, Project No. 586003) is included in the FY 2021-23 Capital Improvement Plan and relies on anticipated proceeds from the sale of the 2022 Certificates (2022 COP Construction Funds (Fund 320)). Project cost estimates included in the FY 2021-23 Capital Improvement Plan included $820,000 budgeted for design in Fiscal Year 2021-22 and $34,500,000 budgeted for construction in Fiscal Year 2022-23. Based on current estimates, staff’s planning estimate for the total Project costs is approximately $40.4 million, which includes a contingency of $3,000,000 for market rate adjustment, a $500,000 design contingency, and $2,000,000 for change orders. The final sizing of the 2022 Certificates will be based on the bid received from the highest- ranking proposal submitted for the construction of the Project.

Based on estimated 2022 Certificates proceeds of $40.989 million (which includes an estimated principal amount of $37.965 million plus $3.024 million of issuance premium), an interest rate of 4.38% (reflecting market interest rates as of August 22, 2022, plus a cushion of 0.50%) and a final maturity date of April 1, 2052, the Municipal Advisor estimates that the annual lease payments payable by the City from its general fund would be approximately $1,750,850 in FY 2022-23 and average $2,450,198 annually thereafter through FY 2051-52. The financial markets have been volatile over the past year, so staff cautions that the interest cost and other terms of the 2022 Certificates will not be finalized until late- September, when the sale is scheduled to occur. These estimates vary from the not-to-exceed figures in the City’s resolution, which allow for further cushion in estimated Project costs and tax-exempt interest rates, which are subject to change between Council approval and final pricing of the 2022 Certificates expected in late September. The City’s FY 2022-23 budget includes $1.325 million for debt service on the 2022 Certificates. If the actual debt service exceeds budget, staff will request a budget amendment during the FY 2022-23 mid-year budget review.

ATTACHMENTS

1. Sources and Uses Table

2. Resolution

3. Exhibit A - Government Code Section 5852 disclosure

4. Exhibit B - Property Lease

5. Exhibit C - Lease Agreement

6. Exhibit D - Trust Agreement

7. Exhibit E - Preliminary Official Statement

8. Exhibit F - Notice of Sale

Prepared by: Erik Peterson
Accounting Supervisor

376

Project Cost 40,400,000
Cost of Issuance 320,000
Underwriter’s Discount 269,046
Total Uses: $40,989,046
Estimated Results:

True Interest Cost1 4.38%
FY 2023 Lease Payment $1,750,850
Average Annual Lease Payments (FY 2024 – FY
2052)
$2,450,198
Total Lease Payments through FY 2052 $72,806,600
1 Based on market conditions as of August 22, 2022 plus a 50bps interest rate cushion ATTACHMENT 1
378
RESOLUTION NO. ________

IN THE CITY COUNCIL OF THE CITY OF LIVERMORE, CALIFORNIA

A RESOLUTION APPROVING, AUTHORIZING AND DIRECTING

A LEASE FINANCING OF THE LIVERMORE VILLAGE PARKING GARAGE, THE

EXECUTION OF CERTAIN LEASE FINANCING DOCUMENTS,

THE SALE OF CERTIFICATES, THE DISTRIBUTION OF A PRELIMINARY AND FINAL

OFFICIAL STATEMENT, AND OTHER DOCUMENTS AND ACTIONS RELATED THERETO The City of Livermore (the “City”) is a general law city organized under the Constitution and the laws of the State of California.

The City wishes to finance the capital improvements described in Section 2 below (the “Project”), together with related costs, using a lease financing structure and certificates of participation, and leasing the real property and improvements identified in Section 3 (the “Leased Property”).

The City has determined that it is in the interests of the City at this time to provide for the financing of the costs of the Project, the funding of a reserve for the lease payments to be paid by the City, if needed, and the costs of issuance incurred in connection with the proposed financing, by leasing the Leased Property to the Public Property Financing Corporation of California (the “Corporation”), pursuant to that certain Property Lease, by and between the City, as lessor, and the Corporation, as lessee (the “Property Lease”), and subleasing the Leased Property pursuant to a Lease Agreement, by and between the Corporation, as lessor, and the City, as lessee (the “Lease Agreement”).

For the purpose of obtaining the moneys required to finance the Project, the Corporation proposes to assign and transfer certain of its rights under the Lease Agreement to the Trustee, and in consideration of such assignment and the execution of a Trust Agreement, among U.S.

Bank Trust Company, National Association (the “Trustee”), the City and the Corporation (the “Trust Agreement”), the Trustee has agreed to execute and deliver City of Livermore 2022 Certificates of Participation (Livermore Village Development) (the “Certificates”), each evidencing an undivided fractional interest in the Lease Payments to be made by the City under the Lease Agreement.

In connection therewith, it is in the public interest and for the public benefit that the City authorize and direct execution of the Lease Agreement and certain other financing documents in connection therewith.

City staff has presented to the City Council the forms of the Property Lease, the Lease Agreement, the Trust Agreement, a continuing disclosure certificate under which the City will agree to provide ongoing disclosure about the Certificates (the “Continuing Disclosure Certificate”), a Notice of Sale that would be used by the City with a competitive sale of the Certificates, and a preliminary official statement containing information material to the offering and sale of the Certificates (the “Preliminary Official Statement”).

The members of the City Council, with the aid of the City’s staff, have reviewed such documents and wish to approve the proposed financing and related documents.

In accordance with Government Code Section 5852.1 and in connection with the sale of the Certificates, the City Council received from the Municipal Advisor certain required good-faith estimates, and such estimates are disclosed and set forth in Exhibit A, attached hereto. 379
RESOLUTION NO. ________
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Livermore as follows:

Section 1. The City Council hereby finds and determines that the recitals herein are true and correct.

Section 2. The Project to be financed with the proceeds of the Certificates consists of (a) the costs of design and construction of a four-level public parking garage with approximately 460 spaces east of L Street, between Veterans Way and First Street, and (b) the costs of additional site improvements, which are intended to provide adequate parking for all existing and new development in the City’s downtown.

Section 3. The Leased Property consists of City Hall, the Civic Center Meeting Hall (Council Chambers), Rincon Library and Springtown Library, all of which are located in the City.

Section 4. The City Council hereby authorizes the execution and delivery of the Certificates pursuant to the provisions of the Trust Agreement.

Section 5. The below-enumerated documents are hereby approved, and the Mayor, the City Manager, the Administrative Services Director, the City Attorney, or a designee appointed by any such officer (in each case, an "Authorized Officer"), each acting alone, are hereby separately authorized and directed to execute said documents, with such changes, insertions and omissions as may be approved by an Authorized Officer, and the City Clerk is hereby authorized and directed to attest to such Authorized Officer's signature, if applicable:
(a) the Property Lease, in the form attached hereto as Exhibit B; (b) the Lease Agreement, in the form attached hereto as Exhibit C, so long as the stated term of the Lease Agreement does not extend beyond April 1, 2052 (except in the case of default), so long as the principal amount of the Lease Agreement does not exceed $47,500,000, and so long as the principal component of the lease payments payable by the City under the Lease Agreement bears a true interest cost of not-to- exceed 6.0%;
(c) the Trust Agreement, in the form attached hereto as Exhibit D; and (d) the Continuing Disclosure Certificate, in the form attached hereto as Exhibit E (as an appendix to the Preliminary Official Statement); The City Council’s approval of such documents shall be conclusively evidenced by the execution and delivery of such documents by an Authorized Officer. The City Council hereby authorizes the performance of its obligations under such documents.

Section 6. The City Council hereby approves a competitive sale of the Certificates pursuant to a Notice of Sale in substantially the form attached hereto as Exhibit F.

The Bond Counsel approved herein is hereby authorized and directed to cause a Notice of Intention to Sell Certificates to be published once in The Bond Buyer in accordance with Section 53692 of the California Government Code, if applicable. 380
RESOLUTION NO. ________
In addition, the City Council hereby authorizes and directs the Administrative Services Director, following consultation with the City Attorney, the Municipal Advisor and Bond Counsel, to determine that it is in the best interests of the City to sell the Certificates to an underwriter on a negotiated basis, and an Authorized Officer, acting alone, is hereby authorized and directed to execute and deliver a purchase agreement with such underwriter on behalf of the City, and the City Council’s approval of such purchase agreement shall to be conclusively evidenced by the execution and delivery of such agreement. The City Council hereby authorizes the performance of its obligations under such purchase agreement.

Section 7 . The City Council hereby approves the Preliminary Official Statement describing the financing, in the form attached hereto as Exhibit E, together with any changes therein or additions thereto deemed advisable by an Authorized Officer. The City Council authorizes and directs an Authorized Officer, on behalf of the City, to deem "final", pursuant to Rule 15c2-12, under the Securities Exchange Act of 1934 (the "Rule"), the Preliminary Official Statement, prior to its distribution to prospective purchasers of the Certificates.

An Authorized Officer is hereby authorized and directed to cause the Preliminary Official Statement to be brought into the form of a final official statement (the "Final Official Statement") and an Authorized Officer, acting alone, is hereby authorized and directed to execute the Final Official Statement, dated as of the date of the sale of the Certificates, and an Authorized Officer is directed to execute a statement that the facts contained in the Final Official Statement, and any supplement or amendment thereto (which shall be deemed an original part thereof for the purpose of such statement) were, at the time of sale of the Certificates, true and correct in all material respects and that the Final Official Statement did not, on the date of sale of the Certificates, and does not, as of the date of delivery of the Certificates, contain any untrue statement of a material fact with respect to the City, or omit to state material facts with respect to the City that are required to be stated where necessary to make any statement therein not misleading, in light of the circumstances under which it was made. An Authorized Officer shall take such further actions prior to the signing of the Final Official Statement as are deemed necessary or appropriate to verify the accuracy thereof. The execution of the Final Official Statement, which shall include such changes and additions thereto deemed advisable by an Authorized Officer, and such information permitted to be excluded from the Preliminary Official Statement pursuant to the Rule, shall be conclusive evidence of the approval of the Final Official Statement by the City.

The Final Official Statement, when prepared, is approved for distribution in connection with the offering and sale of the Certificates.

Section 8. The City Council approves the selection of Jones Hall, A Professional Law Corporation (“Bond Counsel”), as Bond Counsel and disclosure counsel to the City, and KNN Public Finance as municipal advisor to the City (“Municipal Advisor”). An Authorized Officer is hereby authorized to execute a professional services agreement with such firms in connection with the proposed financing, and the execution of such agreements by an Authorized Officer shall be conclusive evidence of such approval.

Section 9. An Authorized Officer is hereby authorized and directed to take all actions necessary to authorize the purchase of one more municipal bond insurance policy, or reserve account insurance policies for the Certificates if it is determined, upon consultation with the Municipal Advisor and Bond Counsel, that such insurance policies will reduce the true interest cost of the Certificates, and to execute all related documents. 381
RESOLUTION NO. ________
Section 10. The Mayor, the City Manager, the Administrative Services Director, the City Clerk, the City Attorney, and all other appropriate officials of the City are hereby authorized and directed to do and cause to be done any and all acts and things necessary or proper for carrying out the transactions contemplated by this Resolution, and to execute such other agreements, documents, certificates, requisitions, notices, consents, instruments of conveyance, warrants and other documents as may be necessary to effect the purposes of this Resolution and the financing herein authorized. The Mayor, the City Manager, the Administrative Services Director, the City Clerk, the City Attorney and all other appropriate officials of the City are hereby authorized, after consulting with the City’s financing team, to identify additional or alternative assets to serve as Leased Property under the Property Lease and the Lease Agreement.

Whenever in this resolution any officer of the City is authorized to execute or countersign any document or take any action, such execution, countersigning, or action may be taken on behalf of such officer by any person designated by such officer to act on his or her behalf in the case such officer shall be absent or unavailable.

Section 11. This Resolution shall take effect upon its adoption by this Council.

On motion of Council Member _______________________, seconded by Council Member ______________________, the foregoing resolution was passed and adopted on September 12, 2022, by the following vote:

AYES: COUNCIL MEMBERS
NOES: COUNCIL MEMBERS
ABSENT: COUNCIL MEMBERS
ABSTAIN: COUNCIL MEMBERS
ATTEST:
________
Marie Weber
City Clerk
APPROVED AS TO FORM:
/s/ Jason Alcala
Jason Alcala
City Attorney
Attachments:

Exhibit A - Government Code Section 5852.1 Disclosure
Exhibit B - Property Lease
Exhibit C - Lease Agreement
Exhibit D - Trust Agreement
Exhibit E - Preliminary Official Statement
Exhibit F - Notice of Sale
382
6 EXHIBIT A
GOVERNMENT CODE SECTION 5852.1 DISCLOSURE
The following information consists of estimates that have been provided by the City’s Municipal Advisor, which has been represented by such party to have been provided in good faith:
(A) True Interest Cost with respect to the Certificates: 4.38%. (B) Finance Charge with respect to the Certificates (Sum of all fees paid to third parties): $589,046.15.
(C) Net Proc eeds to be Received (net of finance charges, reserves and capitalized interest, if any): $40,400,000.
(D) Total Payment A mount Through Maturity: $72,806,600.

The foregoing estimates constitute good faith estimates only. The principal amount of the Certificates, the true interest cost of the Certificates, the finance charges thereof, the amount of proceeds received therefro m and total payment amount with respect thereto may differ from such good faith estimates due t o (a) the actual date of the sale of the Certificates being different than the date assumed for purposes of such estimates, (b) the actual principal amount of Certificates sold being different from the estimated amount used for purposes of such estimates , (c) the actual a mortization o f the Certificates being different than the amortization assumed f or purposes of suc h estimates, (d) the actual market interest rate s at the time of sale of the Certificates being different than those estimated for purposes of such estimates, (e) other mar ket conditions, (f) alterations in the City’s financing plan, or a combination of su ch factors and (g) the treatment of the interest with respect to the Certificates under federal tax law. The actual date of sa le of the Certificates and the ac tual principa l amount of Certificates sold will be determined by the City based on the timing of the need for proceeds of the Certificates and ot her factors. The actual interest rates borne by the Certificates will depend on market interest rates at the ti me of sale th ereof. The actual amortization of the Certificates will also depen d, in part, on mar ket interest rates at the time of sale thereof. Market interest rates are affected by economic and ot her factors beyond the control of the City.

EXHIBIT A
383

PROPERTY LEASE
Dated as of October 1, 2022
by and between the

CITY OF LIVERMORE,
as Lessor
and the

PUBLIC PROPERTY FINANCING CORPORATION OF CALIFORNIA,
as Lessee

EXHIBIT B
384

TABLE OF CONTENTS

PROPERTY LEASE

ARTICLE I:

DEFINITIONS AND RULES OF CONSTRUCTION:

Section 1.01. Definitions. .......................................................................................................................................................... 2 Section 1.02. Article and Section Headings. ..................................................................................................................... 2 Section 1.03. References to Agreement. ............................................................................................................................ 3 Section 1.04. Number and Gender. ...................................................................................................................................... 3 ARTICLE II:

REPRESENTATIONS, COVENANTS AND WARRANTIES:

Section 2.01. Representations, Covenants and Warranties of the City. ................................................................. 4 Section 2.02. Representations, Covenants and Warranties of Corporation. ........................................................ 4 ARTICLE III:

AGREEMENT TO LEASE; TERM OFPROPERTY LEASE;

PROPERTY LEASE PAYMENTS
Section 3.01. Lease...................................................................................................................................................................... 6 Section 3.02. Term. ..................................................................................................................................................................... 6 Section 3.03. Property Lease Payments. ............................................................................................................................. 6 Section 3.04. Title. ....................................................................................................................................................................... 6 Section 3.05. No Merger. ......................................................................................................................................................... 6 ARTICLE IV:
'EMINENT DOMAIN; NET PROCEEDS':

Section 4.01. Eminent Domain. .............................................................................................................................................. 7 Section 4.02. Application of Net Proceeds. ....................................................................................................................... 7 ARTICLE V:

MISCELLANEOUS:

Section 5.01. Liens....................................................................................................................................................................... 8 Section 5.02. Assignment and Subleasing by the Corporation................................................................................. 8 Section 5.03. Amendment........................................................................................................................................................ 8 Section 5.04. Notices. ................................................................................................................................................................ 8 Section 5.05. Binding Effect. .................................................................................................................................................... 9 Section 5.06. Severability. ........................................................................................................................................................ 9 Section 5.07. Further Assurances and Corrective Instruments. ................................................................................. 9 Section 5.08. Execution in Counterparts. ........................................................................................................................... 9 Section 5.09. Applicable Law. ................................................................................................................................................. 9 Section 5.10. Corporation and City Representatives. .................................................................................................... 9 Section 5.11. Captions. .............................................................................................................................................................. 9

EXHIBIT A DESCRIPTION OF LEASED PROPERTY

EXHIBIT B
385

PROPERTY LEASE

THIS PROPERTY LEASE, dated for convenience as of October 1, 2022, by and between the CITY OF LIVERMORE, a general law city and municipal corporation duly organized and existing under the Constitution and laws of the State of California, as lessor (the “City”), an d the PUBLIC PROPERTY FINA NCING CORPOR ATION OF CALIFORNIA, a California nonprofit public ben efit corporation organized and existing under the laws of the State of California (the “Corporation”), as lessee; and

W I T N E S S E T H:

WHEREAS, the City wish es to finance the capital improvements described in the Lease Agreement described below (the “Project”), using a lease financing structure and certificates of participation, and leasing the real property more particularly described in Exhibit A and the improvements thereon (the “Leased Property”); and

WHEREAS, the City has determined that it is in the in terests of the City at this time to provide for the financing of the costs of the acquisition and construction of the Project and the costs of issuance incurred in con nection with the proposed financing, by leasing the Leased Property to the Corporation pursuant to this Property Lease, and subleasing the Leased Property pursuant to that certain Lease Agreement, dated as of October 1, 2022, by and between the City, as lessee, and the Corporation, as lessor (the “Lease Agreement”), which is recorded concurrently herewith; and

WHEREAS, the Corporation will cause to be deposited with the Tr ustee (as hereinafter defined) funds for the financing of the Project;

WHEREAS, the Corporation will assign its right to receive such the lease payments made by the City under the L ease Agreement (the “Lease Payments ”) to the Truste e under an Assignment Agreement, dated as of October 1, 2022 (the “Assignment Agreement”), recorded concurrently herewith, by and between the Corporation and the Trustee; and

WHEREAS, the Corporation and the City will establish a trust pursuant to an unrecorded Trust Agreement dated as of October 1, 20 22, among U.S. Bank Tr ust C ompany, National Association, as trustee (the “Trustee”), the City and the Corporation (the “Trust Agreement”) and direct the Trustee to execute and deliver the certificates of partici pation (the “Certifi cates”) representing undivided fractional interests in the Lease Payments to and incl uding the earlier of the maturity or redemption of the Certificates; and

NOW, THEREFORE, in consideration of the above premises and of the mutual cove nants hereinafter contained and for other good and valuable conside ration, the parties hereto agree as follows:

EXHIBIT B
386
-2-

ARTICLE I

DEFINITIONS AND RULES OF CONSTRUCTION

Section 1.01. Definitions. All terms specifically defined in the Trust Agreement hall have the same respective meanings when used herein. In addition, the following terms defined in this Section 1.01 shall have the respective meanings herein set forth when used herein.

“Lease Agreement” means the Lease Agreement, dated a s of October 1, 2022, by a nd between the Corporation as lessor and the City as lessee, together with any duly authorized and executed amendments thereto.

“Leased Property ” means the real property more particularly des cribed in Exhibit A hereto, together with all improvements located thereon as of the Closing Date.

“Permitted Encumbrances” means, as of any particular time: (i) the exceptions listed in a title insurance pol icy issued by Stewart Titl e Company on or around the date of execution and delivery of the Certificates, (ii) the liens for general ad valorem taxes and assessments, if any, not then delinquent; (ii i) the Assignment Agreement; ( iv) this Property Lease and the Lease Agreement; ( v) t he Trust Agreement; ( vi) any right or claim of any mechanic , labor er, materialman, su pplier or vendor not filed or perfected in the manner prescribed by law; (vi i) easements, rights of way, mineral rights, drill ing rights and other rights, reservations, covenants, conditions o r restrictions which exist of record a s of th e date on which the Certificates are delivered to the purchasers thereof and which the City certifies in writing will not materially impair the use of the Leased Property; and (viii) easements, rights of way, mineral rights, drilling rights and othe r rights, reservations, co venants, conditions or restrictions established following the date of recordation of this Property Lease and to which the Corporation and the Cit y consent in writing.

“Property Lease” means t his Property Lease, together with any duly au thorized and executed amendments hereto.

“Property Lease Payments” means the payments required to be paid by the Corporation on the Closing Date pursuant to Section 3.03.

Section 1.02. Article and Section He adings. Unless otherwise specified, references to Articles, Sections, and other subdivisions of this Property Lease are to be designate d Articles, Sections, and other subdivis ions of this Property Lease as originally executed. The he adings or titles of the se veral articles and sections, and the table of contents appended to copies hereof, shall be solely for convenience of reference and shall not affe ct the meaning, constructi on or effect of the provisions hereof.

EXHIBIT B
387
-3-
Section 1.03. References to Agreement. The words “hereof”, “herein”, “hereunder”, and words of similar import refer to this Property Lease as a whole.

Section 1.04. Number and Ge nder. The sing ular form of any word used herein, including terms defined as provided in Section 1.01, shall include the plural, and vice versa. The use of a word of any gender shall include all genders.

EXHIBIT B
388
-4-

ARTICLE II

REPRESENTATIONS, COVENANTS AND WARRANTIES

Section 2.01. Representations, Covenants and Warr anties of the City. The City represents, covenants and warrants to the Corporation as follows:

(a) Due Organization and Existence . The City is a general law city and municipal corporation duly organized and ex isting under the Cons titution and laws of the State.

(b) Authorization. The laws of the State authorize the City to enter into this Property Lease and to enter into the transactions contemplated by and to carry out i ts obligations under this Property Lease, and the City has duly authorized and executed this Property Lease.

(c) No Violations. Neither the execution and delivery of this Property Lease nor the fulfillment of or compliance with the terms and conditions h ereof nor th e consummation of the tran sactions contemplated hereby, conflicts with or results in a breach of the terms, con ditions or provisions of any restriction or any agreement or instrument to which the City is now a party or by which the City is boun d, or constitutes a default under any of the foregoing, or results in the creation or imposition of any lien, charge or enc umbrances whatsoever upon any of the property or assets of the City, or upon the Leased Property, except Permitted Encumbrances.

Section 2.02. Representations, Covenants and Warranties of Corporation . The Corporation represents, covenants and warrants to the City as follows:

(a) Due Organization and Existence. The Corporation is a California nonprofit public benefit corporation organized a nd exis ting under the laws of the State of California; has power to enter into the Property Lease; is possessed of full power to sublease real and personal property; and h as duly authorized the execution and delivery of this Property Lease.

(b) Authorization. T he laws of the Stat e authorize the Corporation to enter into this Property Lease and to enter into the transactions contemplated by and to carry out its obligations under this Pro perty Lease, and the Corporation has duly authorized and executed this Property Lease.

(c) No Violations. Neither the execution and delivery of this Property Lease nor the fulfillment of or compliance with the terms and conditions hereof, nor the consummation of th e transactions contem plated hereby, conflicts with or resul ts in a

EXHIBIT B
389
-5-
breach of the term s, conditions or provisions of any restriction or any agreement or instrument to which the Corporation is now a party or by which the Corporation is bound, or constitutes a default under any o f the foregoing, or results in the cre ation or imposition of any lien, charge or encumbrance whatsoever upon any of the property or assets of the Corporation, or upon the Leased Property, except Permitted Encumbrances.

EXHIBIT B
390
-6-

ARTICLE III

AGREEMENT TO LEASE; TERM OF PROPERTY LEASE; PROPERTY LEASE PAYMENTS

Section 3.01. Lease. The City hereby leases the Leased Property to the Corporation, and the Corporation hereby leases the Leased Property from the City, upon the terms and conditions set forth in this Property Lease.

Section 3.02. Term. The term of th is Property Lease sha ll commence on the Closing Date and shall end on April 1, 20__, unless such term is extended as hereinafter provided. If on April 1, 20__, the Trust Agreement shall not be discharged by its terms, then th e Term of this Property Lease shall be extended until the Trust Agreement shall be discharged by its terms (but in no event beyond April 1 , 20__). If prior to October 1, 20__, the Trust Agreement shall be discharged by its terms, the Term of this Property Lease shall thereupon end.

Section 3.03. Property Lease Payments . The Corporation hereby agrees to pay to the City, as rental for the use and occupancy of the Leased Property during the term of this Property Lease, the aggregate amount of $_______ payable on the Closing Date, and shall be deemed to have been paid when the proceeds of the Certificates are deposited with the Trustee. No further amounts shall be due and payable by the Corporation to the City under this Property Lease.

Section 3.04. Title. Title to the Leased Property shall reside in the City, and during the term of this Property Lease, the City shall hold t itle to the Leased Property and any and a ll additions which comprise fixtures, repairs, replacements or modifications to the Leased Property, including those fixtures, repairs, replacements or modifications which are added to the Leased Property by the Cit y at its own expense and which may be rem oved without damaging the Leased Property and i ncluding any items added to the Leas ed Property by the City pursuant to Section 5.8 of the Lease Agreement.

Section 3.05. No Merger . It is the express intention of the parties hereto that t his Property Lease an d the obligations of the parties her eunder shall be and remain separate and distinct from the Lease and the obligations of the parties thereunder, and that during the t erm of the Lease no merger of title or in terest occur or be deemed to occur as a result of the position of the City as lesse e under the Lease and as lessor under this Property Lease, or the position of the Corporation as lessee under this Property Lease.

EXHIBIT B
391
-7-

ARTICLE IV

EMINENT DOMAIN; NET PROCEEDS

Section 4.01. Eminent Domain. If all of the Leased Property shall be taken permanently under the power of eminent domain or sold to a government threatening to exercise the power of eminent domain, the term of this Property Lease shall cease as of the day possession shall be so taken. If less than all of the Leased Property shall be taken per manently, or if all of the Leased Prope rty or any part thereof sh all be taken temporar ily, under the power of eminent domain, this Property Lease shall continue in full force and effect and shall not be terminated by virtue of such taking and the parties waive the benefit of any law to the contrary.

Section 4.02. Application of Net Procee ds. The Net Proceeds of any insurance award resulting from any damage to or destruction of the Leased Property or any improvements thereon by fire or other casualty, and the Ne t Proceeds of any emi nent domain award resulting from any event described in Section 4.01 hereof, shall be applied as set forth in Section 6.2(a) of the Lease Agreement. All such Net Proceed s shall be paid to the City or the Trus tee as their interests may appear under the Lea se Agreement, and the Corporation hereby waives any and all right, title and interest which it may have in and to any such Net Proceeds by virtue of its estate in the Leased Property under this Property Lease.

EXHIBIT B
392
-8-

ARTICLE V

MISCELLANEOUS

Section 5.01. Liens. The Corporation shall not, directly or indirectly, create, assume or suffer to exist any mortgage, pledge, lien, charge, encumbrance or claim on or with r espect to the Leased Property, other than the respective rights of the Corporation and the City as herein provided and Permitted Encumbrances.

Section 5.02. Assignment and Su bleasing by the Corporation . For the pur pose of providing funds to enable the Corporation to pay the Property Lease Payments on the Closing Date, the Corporation has leased the Leased Prop erty to the City pursuant to the Lease Agreement. The Corporation shall not have the right to further suble ase or to assign any of its interests under this Property Lease in and to the Leased Property or any portion thereof.

Section 5.03. Amendment. Without the p rior written consent of the Trustee, the Corporation and the City will not alter, modify or cancel, or agree or consent to alter, modify or cancel this Property Lease, excepting only such alteration or modific ation as may be permi tted by Article X of the Trust Agreement.

Section 5.04. Notices. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed to have been received 48 hours after depos it in the United States mail in registered or certified form with postage fully prepaid:

If to the City: City Clerk
City of Livermore
1052 South Livermore Avenue
Livermore, CA 94550

If to the Corporation: Public Property Financing Corporation of California
2945 Townsgate Road, Suite 200
Westlake Village, California 91361
Attention: President

If to the Trustee: U.S. Bank Trust Company, National Association One California Street, Suite 1000
San Francisco, California 94111
Attention: Corporate Trust Services
Fax (415) 677-3768

EXHIBIT B
393
-9-
The Corporation , the Trustee a nd the City, by notice given hereunder, may designate different addresses to which subsequent notices, certificates or other communications will be sent.

Section 5.05. Binding Effect. This Property Lease shal l inure to the benefit of and shall be binding upon the Corporation and the City and their respective successors and assigns.

Section 5.06. Severability. In the event any provision of this Property Lease shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.

Section 5.07. Further Assurances and C orrective Instruments. The Corporation and the City agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may rea sonably be required for correcting any inadequate or incorrect description of the Leased Property hereby leased or intended so to be or for carrying out the expressed intention of this Property Lease.

Section 5.08. Execution in Counterparts. This Property Lease may be executed in several counterparts, each of which shall be an original and all of which shall co nstitute but one and the same instrument.

Section 5.09. Applicable Law. This Property Lease shall be governed by and construed in accordance with the laws of the State.

Section 5.10. Corporation and City Re presentatives. Whenever under the provisions of this Property Lease the approval of the Corporation or the City is required, or the Corporation or the City is required to take some action at the request of the othe r, such approval or s uch request shall be given fo r the Corporation by a Corporation Representative and for the City by City Representative, and any party hereto shall be authorized to rely upon any such approval or request.

Section 5.11. Captions. The captions or headin gs in t his Prop erty Lease are for convenience only and in no way define, limit or describe the scope or intent of any provisions or Section of this Property Lease.

* * * * *

EXHIBIT B
394

[Signature page to Property Lease dated as of October 1, 2022] IN WITNESS WHEREOF, the Corporation has caused this Property Lease to be executed in its name by its duly authorized officer ; and the City has caused this Property Lease to be executed in its name by its duly authorized officers and sealed with its cor porate seal, as of the date first above written.

CITY OF LIVERMORE, as Lessor

By:

City Manager
Attest:

By:

City Clerk

PUBLIC PROPERTY FINANCING CORPORATION
OF CALIFORNIA, as Lessee

By
Treasurer

EXHIBIT B
395

[Signature page to Property Lease dated as of October 1, 2022] [notary page]

EXHIBIT B
396
A-1

EXHIBIT A

DESCRIPTION OF LEASED PROPERTY

The land referred to herein is situated in the State of Cali fornia, County of Alameda, City of Livermore, and described as follows:

[____]

(End of Legal Description)

EXHIBIT B
397

LEASE AGREEMENT

Dated as of October 1, 2022

by and between the

PUBLIC PROPERTY FINANCING CORPORATION OF CALIFORNIA,
as Lessor

and the

CITY OF LIVERMORE,
as Lessee

EXHIBIT C
398

TABLE OF CONTENTS

LEASE AGREEMENT

ARTICLE I:

DEFINITIONS AND EXHIBITS:

Section 1.1. Definitions. ............................................................................................................................................................ 3 Section 1.2. Article and Section Headings. ........................................................................................................................ 4 Section 1.3. References to Agreement................................................................................................................................ 4 Section 1.4. Number and Gender. ........................................................................................................................................ 4 Section 1.5. Exhibits. ................................................................................................................................................................... 4 ARTICLE II:

REPRESENTATIONS, COVENANTS AND WARRANTIES:

Section 2.1. Representations, Covenants and Warranties of the City. ................................................................... 5 Section 2.2. Representations, Covenants and Warranties of Corporation ........................................................... 6 ARTICLE III:

DEPOSIT OF MONEYS; ACQUISITION AND CONSTRUCTION
OF THE PROJECT; SUBSTITUTION AND REMOVAL OF

LEASED PROPERTY
Section 3.1. Deposit of Moneys. ............................................................................................................................................ 7 Section 3.2. Acquisition and Construction of the Project............................................................................................ 7 Section 3.3. Payment of Project Costs ................................................................................................................................ 7 Section 3.4. Payment of Costs of Issuance ........................................................................................................................ 7 Section 3.5. Substitution of Leased Property ................................................................................................................... 7 Section 3.6. Removal of Property from Leased Property ............................................................................................ 8 ARTICLE IV:

AGREEMENT TO LEASE; TERM OF LEASE AGREEMENT;:

LEASE PAYMENTS:

Section 4.1. Agreement to Lease. ...................................................................................................................................... 10 Section 4.2. Term of Lease Agreement. ........................................................................................................................... 10 Section 4.3. Lease Payments. ............................................................................................................................................... 10 Section 4.4. Quiet Enjoyment. ............................................................................................................................................. 11 Section 4.5. Title. ....................................................................................................................................................................... 12 Section 4.6. Additional Payments. ..................................................................................................................................... 12 Section 4.7. No Merger. ......................................................................................................................................................... 12 ARTICLE V:

MAINTENANCE; TAXES; INSURANCE; AND OTHER MATTERS:

Section 5.1. Maintenance, Utilities, Taxes and Assessments. .................................................................................. 13 Section 5.2. Modification of Leased Property. .............................................................................................................. 13 Section 5.3. Public Liability and Property Damage Insurance. ............................................................................... 14 Section 5.4. Fire and Extended Coverage Insurance; Title Insurance................................................................... 14 SECTION 5.5. Rental Interruption Insurance ................................................................................................................... 15 Section 5.6. Insurance Net Proceeds; Form of Policies. ............................................................................................ 15 Section 5.7. Advances. ............................................................................................................................................................ 15 Section 5.8. Installation of City's Equipment. ................................................................................................................ 16 Section 5.9. Liens. ..................................................................................................................................................................... 16 Section 5.10. Compliance With Property Lease............................................................................................................ 16 ARTICLE VI:

EXHIBIT C
399

DAMAGE, DESTRUCTION AND EMINENT DOMAIN

USE OF NET PROCEEDS
Section 6.1. Eminent Domain. ............................................................................................................................................. 17 Section 6.2. Application of Net Proceeds. ...................................................................................................................... 17 Section 6.3. Abatement of Rental in the Event of Damage or Destruction....................................................... 17 ARTICLE VII:

DISCLAIMER OF WARRANTIES; ACCESS
Section 7.1. Disclaimer of Warranties. .............................................................................................................................. 19 Section 7.2. Access to the Leased Property. .................................................................................................................. 19 Section 7.3. Release and Indemnification Covenants. ............................................................................................... 19 ARTICLE VIII:

ASSIGNMENT, LEASING AND AMENDMENT:

Section 8.1. Assignment by the Corporation. ............................................................................................................... 20 Section 8.2. Assignment and leasing by the City. ........................................................................................................ 20 Section 8.3. Amendment of Lease Agreement. ............................................................................................................ 20 ARTICLE IX:

EVENTS OF DEFAULT AND REMEDIES:

Section 9.1. Events of Default Defined. ........................................................................................................................... 22 Section 9.2. Remedies on Default. ..................................................................................................................................... 22 Section 9.3. No Remedy Exclusive. .................................................................................................................................... 24 Section 9.4. Agreement to Pay Attorneys' Fees and Expenses. ............................................................................. 24 Section 9.5. No Additional Waiver Implied by One Waiver..................................................................................... 24 Section 9.6. Application of Proceeds. ............................................................................................................................... 25 Section 9.7. Trustee and Certificate Owners to Exercise Rights. ............................................................................ 25 ARTICLE X:

PREPAYMENT OF LEASE PAYMENTS:

Section 10.1. Security Deposit. ............................................................................................................................................ 26 Section 10.2. Prepayment; Purchase Option. ................................................................................................................ 26 Section 10.3. Mandatory Prepayment. ............................................................................................................................. 26 Section 10.4. Credit for Amounts on Deposit. .............................................................................................................. 27 ARTICLE XI:

MISCELLANEOUS:

Section 11.1. Notices. ............................................................................................................................................................. 28 Section 11.2. Binding Effect. ................................................................................................................................................. 28 Section 11.3. Severability. ..................................................................................................................................................... 28 Section 11.4. Net-net-net Lease. ........................................................................................................................................ 28 Section 11.5. Further Assurances and Corrective Instruments. .............................................................................. 28 Section 11.6. Execution in Counterparts. ........................................................................................................................ 29 Section 11.7. Applicable Law. .............................................................................................................................................. 29 Section 11.8. Corporation and City Representatives. ................................................................................................. 29 Section 11.9. Captions. ........................................................................................................................................................... 29

EXHIBIT A SCHEDULE OF LEASE PAYMENTS .................................................................................................... A-1 EXHIBIT B DESCRIPTION OF LEASED PROPERTY ............................................................................................ B-1

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LEASE AGREEMENT

THIS LEASE AGREEMENT (the “Lease Agreement”), dated for convenience as of October 1, 20 22, is by and between the PUBLIC PROPERTY FINANCING CORPO RATION OF CALIFORNIA, a California nonprofit public benefit corporation organized and existing under the laws of the State of California (the “ Corporation”), as lessor, and the CITY OF LIVERMORE, a general law city and munici pal corporation duly organ ized and existing under the Constitution and laws of the State of California, as lessee (the “City”).

RECITALS

WHEREAS, the City wishes to finance the capital improvements described herein (the “Project”), using a lease financing structure and certificates of participation, and leasing the real property more particularly described in Exhibit B and the improvements thereon (the “Leased Property”); and

WHEREAS, the City has determined that it is in the interests of the City at thi s time to provide for the financing of the costs of the acquisition and construction of the Project, and the costs of issuance incurred in connection with the proposed financ ing, by le asing the Leased Property to the Corporation pursuant to a Property Lease, dated as of Octo ber 1, 2022, by and between the City, as lessor, and the Corporation, as lessee, and recorded concurrently herewith (the “Property Lease”), and subleasing the Leased Property pursuant to this Lease Agreement; and

WHEREAS, the Corporation will assign its right to receive such the lease payments made by the City hereunder (the “Lease Payments”) to the Trustee under an Assignment Agreement, dated as of October 1, 2022 (the “Assignment Agreement”), recorded concurrently herewith, by and between the Corporation and the Trustee; and

WHEREAS, the Corporation and the City will establish a trust pursuant to an unrecorded Trust Agreement dated as of October 1, 20 22, among U.S. Bank Trust C ompany, Natio nal Association, as trustee (the “Trustee”), the City and the Cor poration (the “Trust Agreement”) and direct the Trustee to execute and deliver the certificates of partici pation (the “Certificates”) representing undivided fractional interests in the Lease Payments to and incl uding the earlier of the maturity or redemption of the Certificates; and

WHEREAS, the Corporation will cause to be deposited with the Trustee (as hereinafter defined) funds for the financing of the Project;

WHEREAS, the City is authorized under the Constitution and the laws of the State of California to enter into this Lease Agreement for the purposes and subject to the terms and conditions set forth herein.

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NOW, THEREFORE, in consideration of the above premises and of the mutual covenants hereinafter contained and for other good and valuable consi deration, the parties hereto agree as follows:

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ARTICLE I

DEFINITIONS AND EXHIBITS

Section 1.1. Definitions. All terms specifically defined in the Trust Agreement shall have the same respective meanings when used herein. In addition, the following terms defined in this Section 1.1 shall have the respective meanings herein set forth when used herein.

“Code” means the Internal Revenue Code of 1986, as amended.

“Lease Agreement” means this Lease Agreement, together with any duly authorized and executed amendments hereto.

“Lease Payment Date” means March 15 and September 15 of each year during the Term of this Lease Agreement, commencing March 15, 2023.

“Leased Property” means [______], all located in the City, and which are more particularly described in Exhibit B.

“Lease Payments” means the Lease Payments shown on Exhibit A.

“Permitted Encumbrances” means, as of any particular time: (i) the exceptions listed in a title insurance policy issued by Stewart Title Company on or around the date of execution and delivery of the Certificates, (ii) the liens for general ad valorem taxes and assessments, if any, not then delinquent; (ii i) the Assignment Agreement; ( iv) this Property Lease and the Lease Agreement; ( v) the Trust Agreement; (vi ) any right or claim of any mechanic, laborer, materialman, supplier or vendor not filed or perfected in the manner prescribed by law; (vi i) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions which exist of record as of the date on which the Certif icates are delivered to th e purchasers thereof and which the City certifies in writing will not materia lly impair the use of the Leased Property; and (vii i) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants , conditions or restrictions established following the date of recordation of this Property Lease and to which the Corporation and the City consent in writing.

“Project” means: (a) the acquisition and construction of a four -level public parking garage with approximately 460 spaces east of L Street, between Veterans Way and First Street, (b) the acquisition and construction of additional site improvements and (c) the acquisition and construction of such other public improvements identified by the City from time to time.

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“Property Lease” means the Pro perty Lease, dated as of Oc tober 1, 20 22, rec orded concurrently herewith, by and between the City, as lessor, and the Corporation, as lessee, together with any duly authorized and executed amendments thereto.

“Property Lease Payment” means the payment required to be paid by the Corporation on the Closing Date pursuant to Section 3.03 of the Property Lease.

“Regulations” means temporary and permanent regulations promulgated under the Code.

“Rental Period” means each twelve -month period during the Term of this Lease Agreement commencing on April 2 in any year and ending on the next succeeding April 1, except that the first rental period shall commence on the Closing Date.

“Trust Agreement” means the Trust Agreement dated as of Octob er 1, 20 22 b y and among Trustee, the Corporation and the City, relating to the Certificates.

“Trustee” means U.S. Bank Trust Company, Nat ional Association, and its successors and assigns.

Section 1.2. Article and Section Headin gs. Unless otherwise specified, references to Articles, Sections, and other subdivisions of this Lease Agreement are to be designated Articles, Sections, and other subdivisions of this Lease Agreement as originally executed. The headings or t itles of the s everal articles and sections, a nd the table of contents appended to copies hereof, shall be solely for convenience of reference and shall not affect the meaning, construction or effect of the provisions hereof.

Section 1.3. References to Ag reement. The words “hereof”, “herein”, “hereunder”, and words of similar import refer to this Lease Agreement as a whole.

Section 1.4. Number and Gender. The singular form of any word used herein, including terms defined as provided in Section 1.1, shall include the plural, and vice versa. The use of a word of any gender shall include all genders.

Section 1.5. Exhibits. The following Exhibits are attached to , and by reference made a part of, this Lease Agreement:

Ex
hibit A: The schedule of Lease Payments to be paid by the City hereunder with respect to the Leased Property, showing the date and amount of each such Lease Payment.

Exhibit B: The description of the Leased Property.

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ARTICLE II

REPRESENTATIONS, COVENANTS AND WARRANTIES

Section 2.1. Representations, Covenants and Warranties of the City. The City represents, covenants and warrants to the Corporation as follows:

(a) Due Organization a nd Existence. The City is a general law cit y and municipal corporation duly organized and existing under the Constitution and laws of the State.

(b) Authorization. T he laws of the State authorize the City to enter into the Property Lease, this Lease Agreement and the Trust Agreement and to enter into the transactions contemplated by and to carry out its obligations under all of the aforesaid Agreements, and the City has duly authorized and executed all of the aforesaid Agreements.

Neither the execution and delivery of the Property Lease, this Lease Agreement or the Trust Agreement, nor the fulfillment of or compliance with the terms and conditions hereof or thereof, nor the consummation of the transactions contemplated hereby or thereby, conflicts with or re sults in a breach of the terms, conditions or provisions of any restriction or any agreement or instrument to which the City is now a party or by which the City is bound, or constitutes a default under any of the foregoing, or results in the creation or imposition of any lien , charge or encumbrances whatsoever upon any of the property or assets of the City, or upon the Leased Property, except Permitted Encumbrances.

(d) Possession of Leased Property. The City is in possession of t he Leased
Property.

(e) Fair Market Rental Va lue. The Lease Payments represent the fai r market rental value of the Leased Property.

(f) Leased Property Essential . The Leased Property is essential for the operation of the City and the services it provides to the residents and businesses in Livermore.

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Section 2.2. Representations, Covenan ts and Warranties of Corporation. The Corporation represents, covenants and warrants to the City as follows:

(a) Due Organiz a tion and Existence. The Corporation is a nonprofit public benefit corporation organized and existing under the laws of the State of California ; has power to enter into the Property Lease, this Lease Agreement, the Assignment Agreement and the Trust Agree ment; is possessed of full power to lease rea l and personal property; and has duly authorized the execution and delivery of all of the aforesaid Agreements.

(b) No Encumbra
nces. The Corporation will not pledg e the Lease Payments or any other amounts deri ved from the Leased Property and from its other rights under this Lease Agreement, and will not mortgage or encumber the Leased Property, except as provided under the terms of the Property Lease, this Lease Agreement, the Assignment Agreement or the Trust Agreement.

Neither the execution and delivery of the Property Lease, this Lease Agreement, the Assignment Agreement or the Trust Agreement, nor the fulfillment of or compliance with the terms and conditions hereof or thereof, nor the consummation of the transactions contemplated hereby or thereby, conflicts with or results in a breach of the terms, conditions or provisions of any restriction or any agreement or instrument to which the Corpor ation is now a party or by which the Corporation is bound, or constitutes a default under any of the foregoing, or results in the creation or imposition of any lien, charge or encumbrance whatsoever upon any of the property or assets of the Corporation, or upon the Leased Property, except Permitted Encumbrances.

(d) No Assignments.

Except as p rovided herein, the Corporation will not
assign this Lease Agreement, its right to receive Lease Payments from the City, or its duties and obligations hereunder to any other person, firm or corporation so as to impair or violate the representations, covenants and warranties contained in this Section 2.2.

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ARTICLE III

DEPOSIT OF MONEYS; ACQUISITION AND CONSTRUCTION OF THE PROJECT;

SUBSTITUTION AND REMOVAL OF LEASED PROPERTY

Section 3.1. Deposit of Moneys. On the Closing Date, the Corporation shall cause to be deposited with the Trustee the proceeds of the sale of the Certificates, which shall be applied as set forth in Section 3.01 of the Trust Agreement.

Section 3.2. Acquisition and Cons truction of the Project. The Corporation hereby appoints the City as its agent for the purposes of acquiring and constructing the Project. The City, as agent of the Corporation, shall be diligent in acquiring a nd constructing the Project. In addition, in the event that the costs of acquiring and constructing the Project or any portion thereof are greater than the amount of money deposited in or transferred to the Project Fund, together wi th investment earnings thereon, the City agrees if, under such circum stances, it nonetheless desires to acquire the Land, to deposit into the Project Fund an amount of money necessary to pay such increased Project Costs, but only from legally available funds.

Section 3.3. Payment of Project Costs . Payment for the acquisition and construction of the Project shall be made from the moneys deposited in the Project Fund, which moneys shall be disbursed for such purpose in accordance and upon compliance wit h Section 3.04 of th e Trust Agreement.

Section 3.4. Payment of Costs of Issuance . Payment of Costs of Issuance shall be made from the moneys deposited in the Costs of Issuance Fund, which moneys shall be disbursed for such purpose in accordance and upon compliance with Section 3.03 of the Trust Agreement.

Section 3.5. Substitution of Leased Property. The City shall have, and is hereby granted, the option at any time and from time to time during the Te rm of this Lease, to substitute other land, facilities, improvements or other property (a “Substitute Property”) for the Leased Property or an y portion thereof (a “Former Property”), provided that the City shall satisfy all of the following requirements wh ich are hereby declared to be conditions precedent to such substitution:

(a) The City shall take all actions and shall execute all documents required to subject such Substitute Property to the terms and provisions of this Lease and the Property Lease, inc luding the filing with the Corporation and the Trustee an amended Exhibit B to this Lease and Exhibit A to the Property Lease which adds thereto a description of such Substitute Property and deletes therefrom the description of such Former Property, and in cluding the recordation of the amended Exhibit B to this Lease and Exhibit A to the Property Lease, or a memorandum hereof with respect to such Substitute Property in the office of the Alameda County Recorder;

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(b) The City shall certify in writing to the Corporation and the Trustee that the estimated fair market value of such Substitute Property is at least equal to estimated fair market value of such Former Property, except that the estimated fair market value of such Substitute Property, together with the portion of the Leased Property remaining after the removal of the Former Property, shall not be required to exceed the aggregate principal components of the unpaid Lease Payments;

(c) The City shall certify in writing to the Corporation and the Trustee that such Substitute Property serves essential public purposes of the City and constitutes property which the City is permitted to lease under the laws of the State of California;

(d) The City shall certify in writing to the Corporation and the Trustee that the estimated useful life of such Substitute Property at least extends to the date on which the final Lease Payment becomes due and payable hereunder;

(e) The Ci ty shall obtain a CLTA policy of title insuran ce meeting the requirements of Section 5.4 with respect to such Substitute Property;

(f) The Substitute Property shall not cause the City to violate any of its covenants, representations and warranties made herein or in the Trust Agreement; and

(g) Prior notice of such substitution shall be given by the City to any rating agency then rating the Certificates.

From and after the date on which all of the foregoing conditions precedent to such substitution are satisfied, the Term of this Lease shall cease with respect to the Former Property and shall be continued with respect to the Substitute Property, and all references herein to the Former Property shall apply with full force and effect to the Substitute Property. The City shall not be entitled to any re duction, diminution, extension or other modification of the Lease Payments whatsoever as a result of such substitution.

Section 3.6. Removal of Property from Leased Property . The City shall have, and is hereby granted, the option at any time and from time to time during th e Term of this Lease, to remove any property from the description of the Leased Property, provided that the City shall satisfy all of the following requirements which are hereby declared to be conditions preceden t to such removal:

(a) Th
e City shall file with the Corporation and the Trustee and cause to be recorded with the Alameda County Recorder an amended Exhibit B to this Lease and Exhibit A to the Property Lease, which deletes therefrom the description of the property to be removed;

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(b) The City shall certify in writing to the Corporation and the Trustee that the Leased Property, as revised by such removal, is of equal or greater value than the then unpaid principal component of Certificates;

From and after the date on which all of the foregoing conditions precedent to such removal are satisfied, the Term of this Lease shall cease with respect to the property that is so removed. The City shall not be entitled to any reduction, diminution, extension or other modification of the Lease Payments whatsoever as a result of such removal.

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ARTICLE IV

AGREEMENT TO LEASE; TERM OF LEASE AGREEMENT;LEASE PAYMENTS

Section 4.1. Agreement to Lease. The Corporation hereby subleases the Leased Property to the City, and the City hereby subleases the Leased Property from the Corporation, upon the terms and conditions set forth in this Lease Agreement.

Section 4.2. Term of L ease Agreement. The Term of this Lease Agreement shall commence on the Closing Date and shall end on April 1 , 20__ unless such term is extended as hereinafter provided. If o n April 1 , 20 __, the Tru st Agreement shall not be discharged by its terms, then the Term of this Lease Agreement shall be extended until the Trust Agreement shall be discharged by its terms (but in no event beyond April 1 , 20__). If prior to April 1 , 20__, the Trust Agreement shall be discharged by its terms, the Term of this Lease Agreement shall thereupon end.

Section 4.3. Lease Payments.

(a) Obligation to Pay . S
ubject to the provisions of Articles VI and X, the City agrees t o pay to the Corpora tion, its successors and assigns, as rental f or the use and occupancy of the Leased Property hereunder during each Rental Period, the Lease Payments (denominated into components of principal and interest) for the Leased Property in the respective amounts specified in Exhibit A, to be due and payable on the respective Lease Payment Dates specified in Exhibit A.

Any
amount held in the Lease Payment Fund on any Lease Payment Date (other than amounts resulting from the prepayment of the Lease Payments in part but not in whole pursuant to Article X and other than amounts required for payment of past due principal or interest represented by any Certificates not presented for payment) shall be credited towards the Lease Payment then due and payable; and no Lease Payment need be made on any Lease Payment Date if the amounts then held in the Lease Payment Fund and available for such purpose are at least equal to the Lease Payment then required to be paid. The Lease Payments for the Leased Property payable in any Rental Period shall be for the use of the Leased Property during such Rental Period.

(b) Effect of P
repayment. In the event that the City prepays all remaining Lease Payments, including any premium, if any, in full pursuant to Article X, the City's obligati ons under this Lease Agreement shall thereupon cease and terminate, including but not limited to the City's obligation to pay Lease Payments under this Section 4.3; subject however, to the provisions of Section 10.1 in the case of prepayment by application of a security deposit. In the event that the City purchases the Leased Property pursuant to Section 10.2, the amount paid pursuant to Section 10.2 shall be credited entirely towards the prepayment in full or in part of

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the Lease Payments. In the event t hat the City prepays the Lease Payments in pa rt but not in whole pursuant to Section 10.3 as a result of any insurance award or condemnation award with respect to the Leased Property, such prepayment shall be c redited entirely towards the prepayment of the Lease Payments a s follows: (i) the principa l components of the remaining Lease Payments shall be reduced on a pro rata basis in integral multiples of $5,000; and (ii) the interest component of the remaining Lease Payments shall be red uced by the aggregate corresponding amount of interest which would otherwise be payable with respect to the Certificates thereby prepaid pursuant to Section 4.01(B) of the Trust Agreement.

The Lease Payments for the Leased Property for each Rental Period shall constit ute the total rental for the Leased Property during each Rental Period, and shall be paid by the City in each Rental Period for and in consideration of the right of the use and occupancy of, and the continued quiet use and enjoyment of the Leased Property during each Rental Period. The parties hereto have agreed and determined that the total Lease Payments for the Leased Property do not exceed the fair rental value of the Leased Property. In making such determination, consideration has been given to the estimated value of the Leased Property, the obligations of the parties under the Property Lease and this Lease Agreement, the uses and purposes which may be served by the Leased Property and the benefits therefrom which will accrue to the City and the general public.

(d) Budget and A ppr
opriation. The City covenants to take such action as may be necessary to include all Lease Payments due hereunder in each of its budgets during the Term of this Lease Agreement and to make the necessary annual appropriations for all such Lease Payments, except to the extent such Lease Payments are payable from amounts on deposit in the Lease Payment Fund. During the Term of this Lease Agreement, the City will furnish to the Trustee a cert ificate that the Lea se Payments due i n the applicable Fiscal Year have been included in the City's budget for such Fiscal Year within thirty (30) days after the adoption of each budget. The covenants on the part of the City herein contained shall be deemed to be and shall be construed to be duties imposed by law and it shall be the duty of each and every public official of the City to take such action and do such things as are required by law in the performance of the official duty of such officials to enable the City to carry out and perform the covenants and agreements in this Lease Agreement agreed to be carried out and performed by the City.

(e) Assignment.

The City understands and agrees that all Lease Payments have been assigned by the Corporation to the Trustee in trust, pursuant to the Assignment Agreement, for the benefit of the Owners of the Certificates, and the City hereby assents to such assignment.

The Corporation hereby directs the City, and the City hereby agrees to pay to the Trustee at i ts Principal Corporate Trust Office, all payments payable by the City pursuant to this Section 4.3 and all amounts payable by the City pursuant to Article X.

Section 4.4. Quiet Enjoyment. The Corporation shall provide the City with quiet use and enjoyment of the Leased Property, and the City shall, for the remainder of the Term of this Lease Agreement, peaceably and quietly have and hold and enjoy the Leased Property, without suit,

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trouble or hindrance from th e Corporation , except as expressly se t forth in this L ease Agreement. The Corporation will, at the request of the City and at the City's cost, join in any legal action in which the City asserts its right to such possession and enjoyment to the extent the Corporation may lawfully do so. Notw ithstanding the foregoing, the Corporation shall have the right to inspect the Leased Property as provided in Section 7.2.

Section 4.5. Title. During the term of this Lease Agreement, the City shall ho ld title to the Leased Property and any and a ll additions which comprise fixtures, repairs, replacements or modifications to the Leased Property, including those fixtures, repairs, replacements or modifications which are added to the Leased Property by the City at its own expense and which may be removed without damaging the Leased Property and including any items added to the Leased Property by the City pursuant to Section 5.8 hereof. Such title shall be gover ned by the provisions of Section 3.04 of the Property Lease during the term of the Property Lease.

If
the City prepays the Lease Payments in full pursuant to Article X, or makes the security deposit permitted by Section 10.1, or pays all Lease Payments during the Term of this Leas e Agreement as the same become due and payable, all right, title and interest of the Corporation in and to the Leased Property under the Property Lease and this Lease Agreement shall be terminated. The Corporation agrees to take any and all steps and exec ute and record any a nd all documents reasonably required by the C ity to consummate any such termination of such leasehold estates.

Section 4.6. Additional Payments. In addition to the Lease Payments, the City shall pay when due, during the term of the Lease Agreement, all costs and expenses incurred by the Corporation to comply with the provisions of the Trust Agreement, including without limitation all Costs of Issuance (to the e xtent not paid from amounts on deposit in the Costs of Issuance Fund), compensation or indem nification due to the Trustee and all reasonable costs and expenses of auditors, engineers and accountants.

Section 4.7. No Merger. It is the express intention of the parties hereto tha t this Lease Agreement and t he obligations of the parties hereunder shall be and remain separate and distinct from the Property Lease and the obligations of the parties thereunder, and that dur ing the term of the Property Lease no merger o f title or interest shall occur or be deemed t o occur as a result of the position of the City as lessor under the Property Lease and as lessee hereunder, or as a result of the position of the Corporation as lessee under the Property Lease and as lessor under this Lease Agreement.

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ARTICLE V

MAINTENANCE; TAXES; INSURANCE; AND OTHER MATTERS

Section 5.1. Maintenance, Utilities, Taxes and Assessments. Throughout the Term of this Lease Agreement, as part of the consideration for the rental of the Leased Property, all improvement, repair and maintenance of the Leased Property shall be the res ponsibility of th e City, and the City shall p ay for or otherwise arrange for the payment of all utility services supplied to the Leased Property, which may include, without limitation, janitor service, security , power, gas, telephone, l ight, heating, water and all other ut ility services, and shall pa y f or or otherwise arrange for the payment of the cost of the repair and replacement of the Leased Property resulting from ordinary wear and tear or want of care on the part of the City or an y assignee or lessee thereof. In exchange for the Lease Payments herein provided, the Corporation agrees to provide only the Leased Property, as hereinbefore more specifically set forth. The City waives the benefits of subsections 1 and 2 of Section 1942 of the California Civil Code, and waives the right to make repai rs at the expense of the Corporation or in lieu thereof, vacate under Section 1942 of the California Civil Code, and all similar rights under the statues of similar effect, but such waiver shall not limit any of the rights of the City under the terms of this Lease Agreement.

The C
ity shall also pay or cause to be paid all taxes and assessments of any type or nature, if any, charged to the Corporation or the City affe cting the Leased Property or the interests or estates therein; provided that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the City shall be obligated to pay only such installments as are required to be paid during the Term of this Lease Agreement as and when the same become due.

The City may, at the City's expense and in its name, in good faith contest any such taxes, assessments, utility and other charges and, in the event of any such contest, may permit the taxes, assessments or other charges so contested to remain unpaid during the period of such contest and any appeal therefrom unless the Corporation shall notify the City that, in the opinion of Independent Counsel, by nonpayment of any such items, the interest o f the Corporation in the Leased Property will be materially endangered or any part thereof will be subject to loss or forfeiture, in which event the City shall promptly pay such taxes, assessments or charges or provide the Corporation with full security a gainst any loss w hich may result from nonpayment, in form satisfactory to the Corporation and the Trustee.

Section 5.2. Modification of Leased Property. The City shall, at its own expense, have the right to remodel the Leased Property or to make additions, modifications and improvements to the Leased Property. All additions, modifications and improvements shall thereafter comprise part of the Leased Property and be subject to the provisions of this Lease Agreement. Such additions, modifications and improvements shall not in any way damage the Leased Property or cause it to be used for purposes other than those authorized under the provisions of sta te and

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federal law; and th e Leased Property, upon completion of any additions, modification s and improvements made thereto pursuant to this Section, shall be of a value which is not substantially less than the value of the Leased Property immediately prior to the making of such additions, modifications and improvements. The City will not permit any mechanic's o r other lien to be established or remain against the Leased Property for labor or materials furnished in connection with any remodeling, additions, modifications, improvement s, repairs, renewals or replacements made by the City pursuant to this Section; provided that if any such lien is established and the City shall first notify or cause to be notified the Corporation of the City's intention to do so, the City may in good fai th contest any lien filed or establis hed against the Leased Property, and in such event may permit the items so contested to remain undischarged and unsatisfied during the period of such contest and any appeal therefrom and shall provide the Corporation with full security aga inst any loss or forfeiture which might arise from the nonpayment of any such item, in form satisfactory to the Corporation . The Corporation will cooperate fully in any such contest, upon the request and at the expense of the City.

Section 5.3. Public Liability and Property Damage Insurance.

The City shall, maintain or cause to be maintained, throughout the Term of this Lease Agreement, insurance policies, i ncluding a standard comprehensive general liability insurance policy or policies in protection of the City, the Corporation and the Trustee, including their respective members, officers, agents and employees. Said policy or policies shall provide for indemnification of said p arties against direct or contingent loss or l iability for damage s for bodily and personal injury, death or property damage occasioned by reason of the operation of the Leased Property. Said policy or policies shall provide coverage in the minimum liability limits of $1,000,000 for personal injury or death of each person and $3,000,000 for personal injury or deaths of two or more persons in each accident or event, and in a minimum amount of $100,000 (subject to a deductible clause of not to exceed $5,000) fo r damage to property resulting from each accident or event. Such public liability and property damage insurance may, however, be in the form of a single limit policy in the amount of $3,000,000 covering all such risks. Such liability insurance may be maint ained as part of or in conjunction with any o ther liability insu rance coverage carried by the City and may be maintained in the form of insurance maintained through a joint exercise of powers authority created for such purpose or in the form of self - insurance by the City. The Net Proceeds of such lia bility insurance sh all be applied toward extinguishment or satisfaction of the liability with respect to which the insurance proceeds shall have been paid.

Section 5.4. Fire and Extended Coverage Insurance; Title Insurance. (i)

(a) The City shall maintain, or cause to be maintained throughout the Term of this Lease Agreement, insurance against loss or dam age to any part of t he Leased Propert y by fire and lightning, wit h extended coverage and vandalism and malicious mischief insurance. S aid extended coverage insurance shall, as nearly as practicable, cover loss or damage by explosi on, windstorm, riot, aircraft, vehicle damage, smoke and such other hazards as are normally covered by such insurance, and shall include coverage for damage from earthquakes if such earthquake coverage is available from reputable insurance companies at a reasonable cost. Such insurance

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shall be in an amount equal to the lesser of (a) one hundred percent (100%) of the replacement cost of the Leased Property , or ( b) the aggregate principal amount of the Outstanding Certificates. Such policy may be subject to such deductibles as the City shall deem prudent, provided that such policy must expressly waive any co- insurance penalty. Such insurance may be maintained as part of or in conjunction with any other fire and extended coverage insurance carried by the City and may be maintained in whole or in part in the form of insurance maintained through a joint exercise of powers authority created for such purpose. The Net Proceeds of such insurance shall be applied as provided in Section 6.2(a).

(b) The City shall pr ovide, from moneys in the Costs of Issuance Fund or at its own expense, on the Closing Date, a CLTA title insurance policy covering, and in the amount of not less than the principal amount of the Certificates, insuring the City’s leasehold estate in the Leased Property , subject onl y to Permitted Encumbrances. The Net Proceeds of such title insurance shall be applied as provided in Section 6.2(c).

Section 5.5. Rental Interruption Insurance. The City shall procure and maintain, or cause to be procured and maintained, throughout the Term of this Lease, rental interruption or use and occupancy insurance to cover loss, total or partial, of the use of the building s, facilities and other improvements constituting any part of the Leased Property, as a result of any of the hazards covered in the insurance required by Section 5.4, in an amount at least equal to the maximum Lease Payments coming due and payable during any two consecutive Fiscal Years during the remaining Term of this Lease. Such insurance may be maintained as part of or in conjunction with any other insurance coverage carried by the City, and may be maintained in whole or in part in the form of the participation by the City in a joint powers authority or other program providing pooled insurance; provided that such insurance may not be maintained by the City in the form of self -insurance. The Net Proceeds of such insurance, if any, shall be paid to the Trustee and deposited in the Lease Payment Account, and shall be cr edited towards the payment of the Lease Payments as the same become due and payable.

Section 5.6. Insurance Net Proceeds; Form of Policies. Each policy of insurance required by Sections 5.4 and 5.5 hereof shall provide that all proceeds thereunder shall be payable to the Trustee as loss payee. The City shall pay or cause to be paid when due the premiums for all insurance policies required by this Lease Agreement. The Trustee shall not be responsible for the sufficiency of any insurance herein required and shall be fully protected in accepting payment on account of such insurance or any adjustment, compromise or settlement of any loss agreed to by the Trustee. The City shall cause to be delivered to the Trustee annually, on or before July 1 of each year, commencing July 1, 2023, a Certificate of the City that the insurance policies required by this Lease Agreement are in full force and effect. The Trustee may conclusively rely upon such Certificate.

Section 5.7. Advances. If the City shall fail to perform any of its obligations under this Article the Corporation may, but shall not be obligated to, take such action as may be necessary to cure su ch failure, including the advancement o f money, and the City shall be obligated to

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repay all such advances as soon as possible, with interest at the rate of ten percent (10%) per annum from the date of the advance to the date of repayment.

Section 5.8. Installation of City's Equipment. The City may at any time and from time to time, in its sole discretion and at its own expense, install or permit to be installed other i tems of equipment or other personal property in or upon the Leased Property. All such item s shall remain the sole property of the City, in which neither the Corporation nor the Trustee shall have any interest, and may be modified or removed by the City at any time provided that th e City shall repair and restore any a nd all damage to the Leased Property resulting from the installation, modification or removal of any such items. Nothing in this Lease Agreement shall prevent the City from purchasing or leasing items to be installed pursuant to this Section under a lease or conditional sale agreeme nt, or subject to a vendor's lien or security agreement, as security for the unpaid portion of the purchase price thereof, provided that no such lien or security interest shall attach to any part of the Leased Property.

Section 5.9. Liens. The City shall not, directly or indirectly, create, incur, assume or suffer to exist any mortgage, pledge, lien, charge, encumbrance or claim on or with respect to the Leased Property, other than the respec tive rights of the Corporati on and the City as herein provided and Permitted Encumbrances. Except as expressly provided in this Article, the City shall promptly, at its own expense, take such action as may be necessary to duly discharge o r remove any such mortgage, pledge, lien, charge, encumbrance or claim, for which it is responsible, if the same shall arise at any time. The City shall reimburse the Corporation for any expense incurred by it in order to discharge or remove any such mortgage, pledge, lien, charge, encumbrance or claim.

Section 5.10. Compliance With Property Lease. During the term of the Property Lease, the City wi ll observe and perform all agreements and obli gations on its be half required to be observed and performed thereunder. The City will not take any action or permit any action within its control to be taken which constitutes or which, if not corrected, with the passage of time or with notice, or both, w ould constitute or cause to occur any default under the Property Lease.

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ARTICLE VI

DAMAGE, DESTRUCTION AND EMINENT DOMAIN

USE OF NET PROCEEDS

Section 6.1. Eminent Domain. If the Leased Property shall be taken permanently under the power of eminent domain or sold to a government threatening to exercise the power of eminent domain, the Term of this Lease Agreement shall cease as of the day possession shall be so taken. If less than all of the Leased Property shall be taken permanently, or if the Leased Property or any part thereof shall be taken temporarily, under the power of eminent domain, (1) this Lease Agreement shall continue in full force and effect and shall not be terminated by virtue of such taking and the parties waive the benefit of any law to the contrary, and (2) there shall be a partial abatement of Lease Payments as a result of the application of the Net Proceeds of any eminent domain award to the prepayment of the Lease Payments hereunder, in an amount to be agreed upon by the City and the Corporation such that the resulting Lease P ayments represent fair consideration for the use and occupancy of the remaining usable port ion of the Leased Property. The City covenants to contest any eminent domain award which is insufficient to either: (i) prepay the Certificates in whole, if all of the Leased Property is co ndemned; or (ii) prepay a pro rata sh are of Certificates, in the event that less than all of the Leased Property is condemned.

Section 6.2. Application of Net Proceeds.

(a) F rom Insurance Award. The Net Proceeds of any insurance award resulting from any damage to or destruction of the Leased Property by fire or other casualty shall be paid to the Trustee, as assignee of the Corporation under the Assignment Agreement, and deposited in the Insurance and Co ndemnation Fund for application as set forth in Section 6 .01 of the Trust Agreement.

(b) From Eminent Domain Award. T
he Net Proceeds of any eminent domain award
resulting from any event described in Section 6.1 hereof shall be paid to the Trustee, as assignee of the Corporation under the Assignment Agreement, and deposited in the Insurance and Condemnation Fund for application as set forth in Section 6.02 of the Trust Agreement.

Section 6.3. Abatement of Rental in the Event of Damage or Destruction. The amount of Lease Payments shall be abated, during any period in which by reason of damage or destruction (other than by eminent domain which is hereinbefore provided for) there is s ubstantial interference with the use and occupancy by the City of the Leased Property (other than any portions of the Leased Property described in Section 5.2) or the Leased Property or any portion thereof. The amount of such abatement shall be agreed upon by the City and the Corporation such that the resulting Lease Payments represent fair consideration for the use and occupancy of the portions of the Leased Property not damaged or destroyed. Such abatement s hall

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continue for the peri od commencin g with s uch damage or destruction and ending with the substantial completion of the work of repair or reconstruction. In the event of any such damage or destruction, this Lease Agreement shall continue in full force and effect and the City wai ves any righ t to ter minate this Lease Agreement by virtue of any such damage and destruction.

However, notwithstanding any other provisions of this Section 6.3, there shall be no abatement of Lease Payments under this Section 6.3 to the extent that the proceeds of an eminent domain or insura nce award are available to pay Lease Payments, or to the extent that moneys are available in the Lease Payment Fund, it being hereby declared that such proceeds and amounts constitute special funds for the payment of the Lease Payments.

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ARTICLE VII

DISCLAIMER OF WARRANTIES; ACCESS

Section 7.1. Disclaimer of Warranties. The Corporation makes no warranty or representation, either express or implied, as to the value, design, condition, merchantability or fitness for any particular purpose or fitness for the use contemplated by the City of the Leased Property, or any other represent ation or warranty with respect to the Leased Property. In no event shall the Corporation be liable for incidental, indirect, special or consequential damages, in connection with or arising out of this Lease Agreement, the Property Lease or the Trust Agreement for the existence, furnishing, functioning or City's use of the Leased Property.

Section 7.2. Access to the Leased Property. The City agrees that the Corporation and any Corporation Representative, and the Corporation's successors or assigns, shall have the right at all reasonable times to enter upon and to examine and inspect the Leased Property. The City further agrees that the Corporation , any Corp oration Representative, an d the Corporation 's successors or assigns shall have such rights of access to the Leased Property as may be reasonably necessary to cause the proper maintenance of the Leased Property in the event of failure by the City to perform its obligations hereunder.

Section 7.3. Release and Indemnification Covenants. The City shall and hereby agrees to indemnify and save the Corporation and its officers, agents, successors and assigns harmless from and against all claims, loss es and damages, including legal fees and expenses, arising out of (i) the use, maintenance, condition or management of, or from any work or thing done on the Leased Property by the City, (ii) any breach or default on the part of the City in the performance of any of its obligations under this Lease Agreement, (iii) any act or negligence of the City or of any of its agents, contractors, servants, employees or licensees with respect to the Leased Property, or (iv) any act or negligence of any lessee of the City with respect to the Leased Property. No indemnification is made under this Section or elsewhere in this Lease Agreement for willful misconduct, negligence, or breach of duty under this Lease Agreement by the Corporation, its officers, agents, employees, successors or assigns.

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ARTICLE VIII

ASSIGNMENT, LEASING AND AMENDMENT

Section 8.1. Assignment by the Corporation. The Corporation 's rights under this Lease Agreement, including the right to receive and enforce payment of the Lease Payments to be made by the City under this Lease Agreement have been assigned to the Trustee pursua nt to the Assignment Agreement, to which assignment the City hereby consents.

Section 8.2. Assignment and leasing by the City. This Lease Agreement may not be assigned by the City. The City may further lease any of the Leased Property or any portion thereof, but only with the written consent of the Corporation and subject to all of the following conditions:

(i) T
his Lease Agreement and the obligation of the City to make Lease Payments hereunder shall remain obligations of the City; and

(ii) The City shall, within thirty (30) days after the delivery thereof, furnish or cause to be furnished to the Corporation and the Trustee a true and complete copy of such lease; and

(iii) No such lease by the City shall cause the Leased Property to be used for a purpose other than as may be authorized under the provisions of the Constitution and laws of the State; and

(iv) The City shall furnish the Corporation and the Trustee w ith a written opinion of Bond Counsel, stating that such lease does not cause the interest components of the Lease Payments to become subject to federal or State personal income taxes.

Section 8.3. Amendment of Lease Agreement.

(1) Except as provided in paragraph (2) below and as provided herein, without the prior written consent of the Trustee the City will not alter, modify or cancel, or agree or consent to alter, modify or cancel this Lease Ag reement, excepting only su ch alteration or mod ification as may be permitted by Article IX of the Trust Agreement.

(2) In addition, this Lease may be amended to obligate the City to pay additional amounts of rental hereunder for the use and occupancy of the Leased Property or any portion thereof, but only if (a) such additional amounts o f rental do not cause the total rental payments made by the City under the Lease Agreement to exceed the fair rental value of the Leased Property (b) the City shall have obtained and filed with the Trustee and the Corpo ration an appraisal of the Leased Property showing that the estimated fair market value thereof is not less

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than the aggregate unpaid principal components of such additional amount of rental plus the existing a ggregate unpaid principal components of the Lease Payments, (c) such additional amounts of rental shall be pledged or assigned for the payment of any bonds, notes, leases or other obligations the proceeds of which shall be applied to finance or refinance t he acquisition or improvement of real property or improvements and (d) the City sha ll send notification of the additional financing to the rating agency then rating the Certificates.

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ARTICLE IX

EVENTS OF DEFAULT AND REMEDIES

Section 9.1. Events of Default Defined. The following shall be “events of default” under this Lease Agreement and the terms “events of default” and “default” shall mean, whenever they are used in this Lease Agreement, with respect to the Leased Property, any one or more of the following events:

(i) F
ailure by the City to pay any Lease Payment when due and payable hereunder, or failure to pay any other payment when due and payable hereunder.

(ii) Failure by the City to observe and perform any covenant, condition or agreement on its part to be observed or performed, other than as referred to in clause (i) of this Section, for a period of thirty (30) d ays after written notice specifying such failure and requesting that it be remedied has been given to the City by the Corporation, the Trustee or the Owners of not less than twenty -five percent (25%) in aggregate principal amount of Certificates then outstanding; provided, however, if the failure stated in the notice can be corrected, but not wi thin the applicable period, the Corporation, the Trustee and such Owners shall not unreasonably withhold their consent to an extension of such time if corrective action is instituted by the City within the applicable period and diligently pursued until the default is corrected.

(iii) The filing by the City of a voluntary petition in bankruptcy under Title 11 of the United States Code or any substitute or successor statute.

Section 9.2. Remedies on Default. Whenever any event of default referred to in Se ction

9.1 hereof shall have happened and be continuing, it shall be lawful for the Corporation to exercise any and a ll remedies available purs uant to law or granted pursuant to this Lease Agreement; provided, however, that notwithstanding anything herein or in the Trust Agreement to the contrary, there shall be no right under any circumstances to accelerate the Lease Payments or otherwise declare any Lease Payments not then in default to be immediatel y due and payable. Each and every covenant hereof to be kept and performed by the City is expressly made a condition and upon the breach thereof the Corporatio n may exercise any and all rights of entry and re -entry upon the Leased Property, and also, at i ts option, with or without such entry, may terminate this Lease Agreement; provided, that no such termination shall be effected either by operation of law or acts of the parties hereto, except only in the manner herein expressly provided. In the event of such default and notwithstanding any re- entry by the Corporation, the City shall, as herein expressly provided, continue to remain liable for the payment of the Lease Payments and/or damages for brea ch of this Lease Agreement and the performance of all conditions herein contained and, in any event such rent and/or dam ages shall be payable to the Corporation at the time and in the manner as herein provided, to wit:

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(a) In the event the Corporation does not elect to terminate this Lease Agreement in the manner hereinafter provided for in subparagraph (b) hereof, the City agrees to and shall remain liable for the payment of all Lease Payments and the performance of all conditions herein contained and sha ll reimburse the Cor poration for any deficiency arising o ut of the re- leasing of the Leased Property, or, in the event the Corporation does not re-lease the Leased Property, then for the full amount of all Lease Payments to the end of the Term of this Lease Agreement, but sai d Lease Payments and/or deficiency sh all be p ayable only at the same time and in the same manner as hereinabove provided for the payment of Lease Payments hereunder, notwithstanding such entry or re -entry by the Corporation or any suit in unlawful detainer , or otherwise, brought by the Corpor ation for the purpose of effecting such re- entry or obtaining possession of the Leased Property or the exercise of any other remedy by the Corporation. The City hereby irrevocably appoints the Corpo ration as the agent and attorney-in-fact of the City to enter upo n and re-lease the Leased Property in the event of default by the City in the performance of any covenants herein contained to be performed by the City and to remove all personal property whatsoever situated upon the Leased Property to place such property in storage or other suitable place in the City of Livermore, for the account of and at the expense of the City, and the City hereby exempts and agrees to save harmless the Corporation from any costs, loss or dam age whatsoever arising or occasioned by any s uch entry upon and re- leasing of the Leased Property and the removal and storage of such property by the Corporation or its duly authorized agents in accordance with the provisions herein contained. The City hereby waives any and all claims for damages ca used or which may be caused by the Corporation in re -entering and taking possession of the Leased Property as herein provided and all claims for damages that may res ult from the destruction o f or injury to the Leased Property and all claims for dam ages to or loss of any property belonging to the City that may be in or upon the Lea sed Property. The City agrees that the terms of this Lease Agreement constitute full and sufficient notice of the right of the Corpora tion to re- lease the Leased Property in the event of such re-entry without effecting a surrender of this Lease Agreement, and further agrees that no acts of the Corporation in effecting such re- leasing shall co nstitute a surrender or te rmination of this Le ase Agreement irrespective of the ter m for wh ich such re- leasing is made or the terms and conditions of such re-leasing, or otherwise, but that, on the contrary, in the event of such default by the City the right to terminate this Lease Agreement shall vest in the Corporation to be effected in the sole and exclusive manner hereinafter provided for in subparagraph (b) hereof. The City further waives the right to any rental obtained by the Corporation in excess of the Lease Payments and hereby conveys and releases such excess to the Corporation as comp ensation to the Corporation for its services in re - leasing the Leased Property.

(b) In an event of default hereunder, the Corporation may terminate this Lease Agreement and re-lease all or any portion of the Leased Property. In the event of the termination of this Lease Agreement by the Corporation in the manner hereinafter

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provided on account of default by the City (and notwithstanding any re -entry upon the Leased Property by the Corporation in any manner whatsoever or the re-leasing of the Leased Property), the City nevertheless agrees to pay to the Corporation all costs, loss or damages howsoever arising or occurring payable at the same time and in the same manner as is herein provided in the case of payment of Lease Payments. Any surplus received by t he Corporation from such re -leasing shall be the absolute property of the Corporation and the City shall have no right thereto, nor shall the City be entitled to any credit in the event of a deficiency in the rentals received by the Corporation from the Leased Property. Neither notice to pay rent or to deliver up possession of the premises given pursuant to law nor any proceeding in unlawful detainer taken by the Cor poration shall of itself o perate to terminate this Lease Agreement, and no terminat ion of t his Lease Agreement on account of default by the City shall be or become effective by operation of law, or otherwise, unless and until the Corporation shall have given written notice to the City of the election on the part of the Corporation to terminate this Lease Agreement. The City covenants and agrees that no surrender of the Leased Property or of the remainder of the Term hereof or any termination of this Lease Agreement shall be valid in any manner or for any purpose whatsoever unless stated or accep ted by the Corporation by such written notice.

Section 9.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Corporation is intended to be exclusive and every such remedy shall be c umulative and shall be in addition to every other remedy given under this Lease Agreement or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Corporation to exercise any remedy reserved to it in this Article it shall not be necessary to give any notice, other than such notice as may be required in this Article or by law.

Section 9.4. Agreement to Pay Attorneys' Fees and Expenses. In the event either party to this Lease Agreement should default under any of the provisions hereof and the nondefaulting party should employ attorneys or incur other expenses for the collection of moneys or the enforcement or performance or observance of any oblig ation or agreement on the part of the defaulting party herein contained, the defaulting party agrees that it will on demand therefor pay to the nondefaulting party the reasonable fees of such attorne ys and such other expenses so incurred by the nondefaulting party; provided, however, that the Trustee shall not be required to expend its own funds for any payment described in this Section.

Section 9.5. No Additional Waiver Im plied by One Waiver. In the event any agreement contained in this Lease Agreement should be breached by either party and thereafter waived by the other party, such waiver shall be lim ited to the particular bre ach so waived and shall not be deemed to waive any other breach hereunder.

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Section 9.6. Application of Proceeds. All net pr oceeds received from the re-lease or other disposition of the Leased Property under this Article IX, and all other amounts derived by the Corporation or the Trustee as a result of an event of default hereunder, shall be transferred to the Trustee promptly upon receipt thereof, after payment of the fees and expenses of the Trustee, including those of i ts attorneys, agents and advisors and shall b e deposited by the Trustee in the Lease Payment account, to be applied to the Lease Payments in order of payment date.

Section 9.7. Trustee and Certificate Owners to Exercise Rights. Such rights and remedies as are given to the Corporation under this Article IX have been assigned by the Corporation to the Trustee under the Trust Agreement, to which assignment the City hereby consents. Such rights and remedies shall be exercised by the Trustee and the Owners of the Certificates as provided in the Trust Agreement.

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ARTICLE X

PREPAYMENT OF LEASE PAYMENTS

Section 10.1. Security Deposit. Notwithstanding any other provision of this Lease Agreement, the City may on any date secure the payment of Lease Payments by a depo sit with the Trustee of: (i) an amount of cash which, together with amounts on depo sit in t he Lease Payment Fund and the Insurance and Condemnation Fund, is sufficient to pay all unpaid Lease Payments, including the principal and interest components thereof, in accordance with the Lease Payment Schedule set forth in Exhibit A, or (ii) Fe deral Securities together with cash, if required, in such amount as will, in the opinion of an independent certified public accountant, together with interest to accrue thereon and, if required, all or a portion of moneys or Federal Securities then on deposit in the Lease Payment Fund and the Insurance and Condemnation Fund, be fully sufficient to pay all unpaid Lease Payments on their respective Lease Payment dates or on any purchase option date as set forth in Section 10.2, as the City shall instruct at t he time of said deposit. In the event of a security deposit pursuant to this Section, all o bligations of the City under this Lease Agree ment, and all secu rity provided by this Lease Agreement for said obligations, shall cease a nd terminate, excepting only the obligation of the City to make, or cause to be made, Lease Payments from such security deposit, and title to the Leased Property shall be affected thereby as described in Section 4.5. Said security deposit shall be deemed to be and shall constitute a special fund for the payment of Lease Payments in accordance with the provisions of this Lease Agreement.

Section 10.2. Prepayment; Purchase Option. The City may exer cise its option to prepay the principal component of the Lease Payments, in whole or in part, in the amount and on the dates permitted for the prepayment of the Certificates under the Trust Agreement.

Such prepayment price shall be deposited by the Trustee in the Lease Payment Account to be applied to the prepayment of Certificates pursuant to Section 4.01(a) of the Trust Agreement. The City shall give the Trustee notice of its inten tion to exercise its option not less than forty-five (45) days in advance of the date of exercise. In the event the Lease Payments have been fully paid, and the City prepays the entire unpaid principal component of the Lease Payments, the leasehold estates created by the Property Le ase and this Lease Agreement shall be automatically terminated upon such prepayment, and t he Corporation Representatives and City Representatives shall execute and record a termination agreement with respect to the Property Lease, this Lease Agreement and the Assignment Agreement.

Section 10.3. Mandatory Prepayment. The City shall be obligated to prepay the Lease Payments for the Leased Property, in whole or in part on any date, from and to the extent of any Net Proceeds of insurance award or condemnation award with respect to the Leased Property have theretofore been deposited with the Trustee in the Lease Payment Fund for such purpose pursuant to Article VI hereof. Such proceeds shall be applied to the prepayment of the principal

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component of the Lease Payments and the Prepayment of the Certificates in accordance with Article VI of the Trust Agreement.

Section 10.4. Credit for Amounts on Deposit. In the event of prepayment of the principal components of the Lease Payments in full under this Article X, such that the Trust Agreement shall be discharged by its terms as a result of such prepayment, all amounts then on deposit in the Lease P ayment Fund shall be credited towards the amounts then required to be so prepaid.

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ARTICLE XI

MISCELLANEOUS

Section 11.1. Notices. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed to have been received 48 hours after deposit in the United States mail in registered or certified form with postage fully prepaid:

If
to the City: City Clerk
City of Livermore
1052 South Livermore Avenue
Livermore, CA 94550

If to the Corporation: Public Property Financing Corporation of California
2945 Townsgate Road, Suite 200
Westlake Village, California 91361
Attention: President

If to the Trustee: U.S. Bank Trust Company, National Association One California Street, Suite 1000
San Francisco, California 94111
Attention: Corporate Trust Services

Fax (415) 677-3768

The Corporation and t he City, by notice given hereunder, may designate different addresses to which subsequent notices, certificates or other communications will be sent.

Section 11.2. Binding Effect. This Lease Agreement shall inure to the benefit of and shall be binding upon the Corporation and the City and their respective successors and assigns.

Section 11.3. Severability. In the event any provision of this Lease Agreement shall be held invalid or u nenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.

Section 11.4. Net-net-net Lease. This Lease Agreement shall be deemed and construed to be a “net -net-net lease” and the City hereby agrees that the Lease Payments shall be an absolute net return to the Corporation, free and clear of any expenses, charges or set -offs whatsoever.

Section 11.5. Further Assurances and Corr ective Instruments. The Corporation and the City agree that they will, from time to time, execute, acknowledge and deliver, or cause to be

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executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or inc orrect description of the Leased Property hereby leased or intended so to be or for carrying out the expressed intention of this Lease Agreement.

Section 11.6. Execution in Counterparts. This Leas e Ag reement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

Section 11.7. Applicable Law. This Lease Agreement shall be governed by and construed in accordance with the laws of the State.

Section 11.8. Corporation and City Represen tatives. Whenever under the provisions of this Lease Agreement the approval of the Corporation or the City is required, or the Corporation or the City is required to take some action at th e request of the other, such approval or such request shall be given for the Corporation by a Corporate Representative and for the City by a City Representative, and any party hereto shall be authorized to rely upon any such approval or request.

Section 1 1.9. Captions. The captions or headings in this Lease Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions or Section of this Lease Agreement.

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IN WITNES S WHEREOF, the Cor poration has caused this Lease Agreement to be executed in its corporate name by its duly authorized officer ; and the City has caused this Lease Agreement to be executed in its name by its duly authorized officer s and sealed with its corporate seal, as of the date first above written.

PUBLIC PROPERTY FINANCING CORPORATION
OF CALIFORNIA, as Lessor

By:

Treasurer

CITY OF LIVERMORE, as Lessee

By :

City Manager
Attest:

By:

City Clerk

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430

EXHIBIT A

SCHEDULE OF LEASE PAYMENTS

Payment
Date*
Principal
Component
Interest
Component
Total Lease
Payment
$ $

* Lease Payments are due on the fifteenth day of the month preceding each Payment Date shown.

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431

Payment
Date*
Principal
Component
Interest
Component
Total Lease
Payment
$ $
$

* Lease Payments are due on the fifteenth day of the month preceding each Payment Date shown.

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EXHIBIT B

DESCRIPTION OF LEASED PROPERTY

The land referred to herein is situated in the State of California, County of Alameda, City of Livermore, and described as follows:

[___]

(End of Legal Description)

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433

TRUST AGREEMENT

Dated as of October 1, 2022
by and among
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee,

PUBLIC PROPERTY FINANCING CORPORATION OF CALIFORNIA
and the

CITY OF LIVERMORE
Relating to
City of Livermore
$_________
2022 Certificates of Participation
(Livermore Village Development)

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434

TABLE OF CONTENTS

TRUST AGREEMENT

ARTICLE I:

DEFINITIONS:

THE CERTIFICATES OF PARTICIPATION:

Section 2.01. Authorization. .................................................................................................................................................... 9 Section 2.02. Date. ...................................................................................................................................................................... 9 Section 2.03. Maturities; Interest Rates. .......................................................................................................................... 10 Section 2.04. Form of Certificates; Interest. ................................................................................................................... 10 Section 2.05. Form. .................................................................................................................................................................. 11 Section 2.06. Execution. ......................................................................................................................................................... 11 Section 2.07. Transfer and Exchange ................................................................................................................................ 11 Section 2.08. Certificates Mutilated, Lost, Destroyed or Stolen. ............................................................................ 11 Section 2.09. Payment. ........................................................................................................................................................... 12 Section 2.10. Execution of Documents and Proof of Ownership. ......................................................................... 12 Section 2.11. Registration Books. ....................................................................................................................................... 13 Section 2.12. Use of Depository. ........................................................................................................................................ 13 ARTICLE III:

DISPOSITION OF PROCEEDS

COSTS OF ISSUANCE FUND AND PROJECT FUND
Section 3.01. Application of Proceeds ............................................................................................................................. 16 Section 3.03. Costs of Issuance Fund. .............................................................................................................................. 16 Section 3.04. Project Fund. ................................................................................................................................................... 16 ARTICLE IV:

PREPAYMENT OF CERTIFICATES:

Section 4.01. Prepayment. .................................................................................................................................................... 18 Section 4.02. Selection of Certificates for Prepayment. ............................................................................................ 18 Section 4.03. Notice of Prepayment. ................................................................................................................................ 19 Section 4.04. Partial Prepayment of Certificate. ........................................................................................................... 19 Section 4.05. Effect of Notice of Prepayment. .............................................................................................................. 19 ARTICLE V:

LEASE PAYMENTS; LEASE PAYMENT FUND:

Section 5.01. Assignment of Rights in Lease Agreement. ........................................................................................ 21 Section 5.02. Establishment of Lease Payment Fund. ................................................................................................ 21 Section 5.03. Deposits. ........................................................................................................................................................... 21 Section 5.04. Application of Moneys. ............................................................................................................................... 21 Section 5.05. Surplus. .............................................................................................................................................................. 21 ARTICLE VI:

INSURANCE AND CONDEMNATION FUND:

INSURANCE; EMINENT DOMAIN:

Section 6.01. Establishment of Insurance and Condemnation Fund; Application of Net Proceed s of Insurance Award. ...................................................................................................................................... 22 Section 6.02. Application of Net Proceeds of Eminent Domain Award. ............................................................. 23

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Se
ction 6.03. Cooperation. ................................................................................................................................................... 23 ARTICLE VII:

MONEYS IN FUNDS:

Section 7.01. Held in Trust. ................................................................................................................................................... 24 Section 7.02. Investments Authorized. ............................................................................................................................ 24 Section 7.03. Accounting. ...................................................................................................................................................... 24 Section 7.04. Allocation of Earnings. ................................................................................................................................ 24 Section 7.05. Valuation of Investments. .......................................................................................................................... 24 Section 7.06. Commingling of Investment Securities and Disposition of Investments. .............................. 24 Section 7.07. Acquisition, Disposition and Valuation of Investments ................................................................. 25 Section 7.08. Federal Tax Law Covenants ....................................................................................................................... 25 ARTICLE VIII:

THE TRUSTEE:

Section 8.01. Compensation of the Trustee. .................................................................................................................. 27 Section 8.02. Removal of Trustee....................................................................................................................................... 27 Section 8.03. Appointment of Agent. ............................................................................................................................... 27 Section 8.04. Merger or Consolidation. ........................................................................................................................... 28 Section 8.05. Protection and Rights of the Trustee. ................................................................................................... 28 ARTICLE IX:

MODIFICATION OR AMENDMENT OF AGREEMENT:

Section 9.01. Amendments Permitted. ............................................................................................................................ 32 Section 9.02. Procedure for Amendment with Written Consent of Certificate Owners. .............................. 32 Section 9.03. Disqualified Certificates. ............................................................................................................................. 33 Section 9.04. Effect of Supplemental Agreement. ....................................................................................................... 34 Section 9.05. Endorsement or Replacement of Certificates Delivered After Amendments. ....................... 34 Section 9.06. Amendatory Endorsement of Certificates. .......................................................................................... 34 ARTICLE X:

COVENANTS; NOTICES
Section 10.01. Compliance With and Enforcement of Lease Agreement. ......................................................... 35 Section 10.02. Prosecution and Defense of Suits. ....................................................................................................... 35 Section 10.03. Recordation and Filing. ............................................................................................................................ 35 Section 10.04. Continuing Disclosure............................................................................................................................... 35 Section 10.05. Further Assurances. .................................................................................................................................... 36 ARTICLE XI:

LIMITATION OF LIABILITY:

Section 11.01. Limited Liability of City. ............................................................................................................................ 37 Section 11.02. No Liability for Trustee Performance. ................................................................................................. 37 Section 11.03. Indemnification............................................................................................................................................ 37 Section 11.04. Opinion of Counsel. ................................................................................................................................... 37 Section 11.05. Limitation of Rights to Parties and Certificate Owners ............................................................... 37 ARTICLE XII:

EVENTS OF DEFAULT AND REMEDIES OF CERTIFICATE
OWNERS:

Section 12.01. Assignment of Rights. ............................................................................................................................... 39 Section 12.02. Remedies........................................................................................................................................................ 39 Section 12.03. Application of Funds. ................................................................................................................................ 39 Section 12.04. Institution of Legal Proceedings. .......................................................................................................... 40 Section 12.05. Non-waiver. ................................................................................................................................................... 40 Section 12.06. Remedies Not Exclusive. .......................................................................................................................... 40

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Se
ction 12.07. Power of Trustee to Control Proceedings......................................................................................... 40 Section 12.08. Limitation on Certificate Owners' Right to Sue. ............................................................................. 40 ARTICLE XIII:

DEFEASANCE:

Section 13.01. Discharge of Trust Agreement. ............................................................................................................. 42 Section 13.02. Discharge of Liability on Certificates. ................................................................................................. 42 Section 13.03. Deposit of Money or Securities with Trustee. ................................................................................. 43 Section 13.04. Payment of Certificates After Discharge of Trust Agreement. .................................................. 43 ARTICLE XIV:

MISCELLANEOUS:

Section 14.01. Records. .......................................................................................................................................................... 45 Section 14.02. Notices. ........................................................................................................................................................... 45 Section 14.03. Governing Law ............................................................................................................................................. 45 Section 14.04. Binding Effect; Successors ....................................................................................................................... 45 Section 14.05. Execution in Counterparts ....................................................................................................................... 46 Section 14.06. Destruction of Cancelled Certificates ................................................................................................. 46 Section 14.07. Headings ........................................................................................................................................................ 46 Section 14.08. Waiver of Notice ......................................................................................................................................... 46 Section 14.09. Separability of Invalid Provisions.......................................................................................................... 46

EXHIBIT A FORM OF CERTIFICATE OF PARTICIPATION

EXHIBIT B PROJECT FUND REQUISITION FORM

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TRUST AGREEMENT

THIS TRUST AGREEMENT is dated as of October 1, 2022, by and among U.S. Bank Trust Company, National Association, a national banking association organized and existing under the laws of the United States of America (the “Trustee”), the PUBLIC PROPERTY FINANCING CORPORATION OF CALIFORNIA, a nonprofit public benefit corporation duly formed, organized operating and acting pursuant to the laws of the State of California (the “ Corporation”), and the CITY OF LIV ERMORE, a general law city and municipal corporation duly organized and existing under the Constitution and laws of the State of California (the “City”).

RECITALS

WHEREAS, the City wishes to finance the acquisition and construction of the capital improvements defined herein as the Project, using a lease financing structure and certificates of participation, and leas ing the real property and improvements that are defined herein as the “Leased Property”; and

WHEREAS, the City has determined that it is in the interests of the City at t his time to provide for the financing of the costs of the acquisition of the Project and the costs of issuance incurred in connection with the proposed fi nancing, by leasing the Leased Property to the Corporation pursuant to that certain Property Lease, dated as of October 1, 20 22, by and between the City, as lessor, and the Corporation, as lessee (the “Property Lease”), and subleasing the Leased Property pursuant to a Lease Agreem ent, dated as of October 1, 2022, between the Corporation, as lessor, and the City, as lessee (the “Lease Agreement”); and

WHEREAS, the Corporation will cause to be deposited with the Trustee fund s for the financing of the Project; and

WHEREAS, for the purpose of obtaining the moneys required to be deposited into the funds and accounts established hereunder, the Corporati on proposes to assign and transfer certain of its rights under said Lea se Agreement to the Trustee, and in cons ideration of such assignment and the execution of this Trust Agreement, the Trustee has agreed to execute and deliver City of Livermore 20 22 Certificates of Participation (Livermore Village Development) , each evidencing an undivided fractional interest in the Lease Payments made by the City under the Lease Agreement;

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto hereby agree as follows:

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ARTICLE I

DEFINITIONS

Section 1.01. Definitions. Unless the context otherwise requires, the terms defined in this Section 1.01 shall, for all purposes of this Trust Agreement, have the meanings herein specified. In additio n, any terms defined in the Lease Agreement and not otherwise defined herein shall have the respective meanings given such terms in the Lease Agreement.

“Assignment Agreement” means the Assignment Agreement, dated as of October 1, 2022, by and between the Corporation and the Trustee, together with any duly authorized and executed amendments thereto.

“Bond Counsel” means any attorney or firm of attorneys of nationa lly recognized expertise with respect to legal matters relating to obligation s the interest on which is exempt from federal income taxation pursuant to Section 103 of the Code.

“Business Day” means a day of the week on which the Trustee is not required or authorized to remain closed and on which the New York Stock Exchange is open.

“Certificates” means the Certificates to be executed and delivered pursuant hereto.

“City” means the City of Livermore, a general law city and municipal corporation duly organized and existing under the Constitution and the laws of the State.

“City Representative” means the City Manager or the Administrative Services Director of the City, or any other person authorized by resolution of the City Council to act on behalf of the City under or with respect to this Trust Agreement and the Lease Agreement.

“Closing Date” means the date upon which there is an exchange of the Certificates for the proceeds representing the purchase of the Certificates by the Original Purchaser.

"Code" means the Internal Revenue Code of 1986 as in effect on the Closing Da te or (except as otherwise referenced in the Lease Agreement or the Trust Agreement) as it may be amended to apply to obligations issued on the Closing Date, together with applicable temporary and final regulations promulgated under the Code.

“Corporate Trust Office” means the corporate trust office of the Trustee at One California Street, Suite 2550, San Francisco, California 94111 , Attention: Corporate Trust, or at such other address designated by the Trustee in written notice filed with the City, the Co rporation and the Owners or such other place as designated by the Trustee, except that with respect to presentation of Certificates for payment or for registration of transfer and exchange, such term

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shall mean the office or agency of the Trustee at which, at any particular time, its corporate trust agency business shall be conducted.

“Corporation” means the Public Property Financing Corporation of California, a nonprofit public benefit corporation duly formed, organized, operating and existing under the l aws of the State, and its successors and assigns.

“Corporation Representative” means the President, Treasurer or Secretary of the Corporation, or the designee of any such official, or any other person authorized to act on behalf of the Corporation under or with respect to the Trust Agreement, the Lease Agreem ent and the Site Lease, and identified as such to the Trustee in writing.

“Costs of Issu ance” means all items of expense directly or indirectly payable by or reimbursable to the City or the Corporation relating to the execution, sale and delivery of the Certificates, including but not limited to printing costs, reproduction and binding costs, initial fees and charg es of the Trustee, legal fees and charges, bond insuranc e or title insurance fees and charges, financial and other professional consultant fees, costs of rating agencies for credit ratings, fees for execution, transportation and safekeeping of the Certificates and charges and fees in connection with the foregoing.

“Costs of Issuance Fund” means the fund by that name established and held by the Trustee pursuant to Section 3.03 hereof.

“Counsel” means any attorney at law or law firm (wh o or which may be counsel for the City, the Trustee or the Corporation).

“Event of Default” means an event of default under the Lease Agreement, as defined in Section 9.1 thereof.

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

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“Federal Securities” means any of the following which at the time of investment are legal investments under the laws of the State for the moneys proposed to be invested therein:

(a) direct general obligations of the United States of Amer ica (including obligations issued or held in book entry form on the boo ks of th e Department of the Treasury of the United States of America); and

(b) obligations of any department, agency or instrumentality of the United States of America the timely payme nt of principal of and interest on which are unconditionally and fully guaranteed by the United States of America.

“Fiscal Ye ar” means each twelve- month period beginning on July 1 of any year and ending on June 30 of the succeeding year, or any other twel ve-month period hereafter adopted by the City as its official fiscal year period.

“Independent Counsel” means an attorney duly admitted to the practice of law before the highest court of the state in which such attorney maintains an office and who is not an employee of the Corporation, the Trustee or the City.

“Insurance and Condemnation Fund” means the fund by that name established and held by the Trustee pursuant to Section 6.01.

“Investment Securities” means any of the following investments which are authorized under the laws of the State of California for investment of the funds proposed to be invested therein:
(a) Federal Securities;

(b) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following federal agencies and provided such obligations are backed by the full faith and credit of the United States of America (stripped securities are only permitted if they have been stripped by the agency itself): (i) certificates of beneficial ownership of the Farmers Home Administration; (ii) Federal Housing Administration debentures; ( iii) p articipation certificates of the General Services Administration; (iv) guaranteed mortgage -backed bonds or guaranteed pass -through obligations of the Government National Mortgage Association; (v) guaranteed Title XI financings of the U.S. Maritime Administration; and (vi) project notes, local authority bonds, new communities debentures and U.S. public housing notes and bonds of the U.S. Department of Housing and Urban Development;

(c) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following non- full faith a nd credit U.S. government agencies (stripped securities only as stripped by the agency itself): (i) senior debt

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obligations of the Federal Home Loan Bank System; (ii) participation certificates and senior de bt obligations of the Federal Home Loan Mortgage Corporation; (iii) mortgaged-backed securities and senior debt obligations of the Federal National Mortgage Association; (iv) senior debt obligations of the Student Loan Marketing Association; (v) obli gations of the Resolution Funding Corporation; and (vi) consolidated system-wide bonds and notes of the Farm Credit System.

(d) Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal S ecurities Act of 1933, and having a rating by S&P of at least AAAm-G, AAAm or AAm, or a rating by Moody’s of Aaa, Aa1 or Aa2 (such funds may include funds for which the Trustee, its affiliates, parent or subsidiaries provide investment advisory or other management services);

(e) Certificates of deposit (including those of the Trustee, its parent and its affiliates) secured at all times by collateral described in (a) or (b) above, which have a maturity not greater than one year from the date of investment and which are issued by commercial banks, savings and lo an associations or mutual savings banks, which collateral must be held by a third party and provided that the Trustee must have a perfected first security interest in such collateral;

(f) Certificates of deposit, savings accounts, deposit accounts or mone y market deposits (including those of the Trustee and its affiliates) which are fully insured by FDIC;

(g) Commercial paper rated , at the time of purchase, “Prime -1” by Moody's or “A-1” and better by S&P;

(h) Bonds or notes issued by any state or municipality which are rated by Moody's and S&P in one of the two highest rating categories assigned by such agencies;

(i) Federal funds or bankers acceptances with a maximum term of one year of any bank wh ich an u nsecured, uninsured and unguaranteed obligation rating of “Prime-1” or “A3” or better by Moody's and A-1+ by S&P; and

(k) Local Agency Investment Fund.

“Lease Agreement” means the Lease Agreement dated as of October 1, 20 22, by and between the Co rporation as lessor and the City as lessee, together with any further duly authorized and executed amendments thereto.

“Leased Property” means the real property described in Exhibit A of the Property Lease and Exhibit B of the Lease Agreement and the improvements thereon.

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“Lease Default Event” means any of the events specified in Section 9.1 of the Lease Agreement.

“Lease Payments” means all payments required to be paid by the City pursuant to Section 4.3 of the Lease Agreement, including any prepayment thereo f pursuant to Article X of the Lease Agreement.

“Lease Payment Fund” means the fund by that name established and held by the Trustee pursuant to Section 5.02.

“Moody's” means Moody's Investors Service, of New York, New York, or its successors.

“Net Proceeds” when used with respect to insurance or condemnation proceeds, means any insurance proceeds or condemnation award paid with respect to the Leased Property, to the extent remaining after payment therefrom of all expenses incurred in the collection thereof.

“Original Purchaser” means the first purchaser of the Certificates.

“Outstanding”, when used as of any particular time with reference to Certificates, means (subject to the provisions of Section 9.03) all Certificates theretofore, or thereupon being, executed and delivered by the Trustee under this Trust Agreement except (1) Certificates theretofore cancelled by the Trustee or surrendered to the Trustee for cancellation; (2 ) Certificates with respect to which all liability of the City shall have been discharged in accordance with Section 13.02, in cluding Certificates (or portions of Certificates) referred to in Section 13.04; and (3) Certificates for the transfer or exchange of or in lieu of or in substitution for which other Certificates shall have been executed and delivered by the Trustee pursua nt to this Trust Agreement.

“Owner” or “Certificate Owner” , when used with respect to a Certificate means the person in whose name the ownership of such Certificate shall be registered.

“Payment Date” means (i) with respect to the interest component of the Lease Payments payable to the Owners of the Certificates, April 1, 2023, and the first day of each April and October thereafter so long as any Certificates are Outstanding hereunder, and (ii) with respect to the principal of the Certificates, April 1, 2023 and each April 1 thereafter so long as the Certificates are Outstanding.

“Principal Amount” means the total unpaid principal component of the Lease Payments due under Section 4.3 of the Lease Agreement.

“Project” has the meaning given that term in the Lease Agreement.

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

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

(b) obligations incurred for labor and materials in con nection with the acquisition, construction and installation of the Project;

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

(d) all costs of engin eering and architectural services, including the actual out -of- pocket costs for test borings, surveys, estimates, plans and specif ications and preliminary investigations therefor, development fees, sal es commissions, and for supervising construction, as we ll as for the performance of all other duties required by or consequent to the proper acquisition, construction and installation of the Project;

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

(f) all Costs of I ssuance and other financing costs incurred in connect ion with the acquisition, construction and installation of the Project; and

(g) the interest components of the Lease Payments allocable to the Project or any component thereof, which come d ue during the period of acquisition, construction and installation of the improvements or such component.

“Record Date” means the close of business on the fifteenth day of the month prec eding each Payment Date, whether or not such fifteenth day is a Business Day.

“Registration Books” means the records maintained by th e Trustee pursuant to Section

2.11 for registration and transfer of ownership of the Certificates.

“S&P” means Standard & Poor's Corporation, of New York, New York, or its successors.

“State” means the State of California.

“Term of the Lease Agreement” means the time during which the Lease Agreement is in effect, as provided in Section 4.2 of the Lease Agreement.

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“Trust Agreement” or “Agreement” means this Trust Agreement, together with any amendments or supplements hereto permitted to be made hereunder.

“Trustee” means U.S. B ank Trust C ompany, Nat ional A ssociation, a national banking association organized under the laws of the United States of America or any successor thereto acting as Trustee pursuant to this Trust Agreement.

“Written Request of the Corporation” means an instrument in writing sign ed by the Corporation Representative.

“Written Request of the City” means an instrument in writing signed by the City Representative.

Section 1.02. Authorization. Each of the parties hereby represents and wa rrants that it has full legal aut hority and is duly emp owered to enter into this Agreement, and has taken all actions necessary to authorize the execution of this Agreement by the offic ers and persons signing it.

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ARTICLE II

THE CERTIFICATES OF PARTICIPATION

Section 2.01. Authorization. The Trustee is hereby authorized and directed to register, execute and deliver to the Original Purchaser: City of Livermore 2022 Certificates of Participation (Livermore Village Development), in an aggregate principal amount of ____________ Dollars ($___________). The Certificates evidence undivided fractional interests in the Lease Payments.

Section 2.02. Date. Each Certificate shall be dated as of the date of its execution, and interest with respect thereto shall be payable from the Payment Date next preceding the date of execution thereof, unless: (i) i t is executed as of a Pa yment Date, in which event interest represented thereby shall be payable from such Payment Date; or (ii) it is executed after a Record Date and before the following Payment Date, in which event interest represented thereby shall be payable from such Payment Date; or (iii) it is executed on or before March 15, 2023, in which event interest represented thereby shall be payable from the Closing Date; provided, however, that if, as of the date of any Certificate, interest represented by such Certificate is in d efault, interest represented by such Certificate shall be payable from the Payment Date to which interest represented thereby has previously been paid or made available for payment.

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Section 2.03. Maturities; Interest Rates. (i) The Certificates shall mature on April 1 in each of the years set forth below, and shall represent the right to receive interest at the rates set forth below, as follows:

Year Amount Interest Rate
$ %

Section 2.04. Form of Certificates; Interest. The Certificates shall be delivered in the form of fully registe red Certificates without coupons in the denomination of $5,000 or any integral multiple thereof, except that no Certificate may ha ve principal maturing in more than one year.

The Certificates shall be assig ned such alphabetical and numerical designation a s shall be designated by the Trustee.

I
nterest represented by the Certificates shall be payable on each Pay ment Date to and including the date of maturity or prepayment, whichever is earlier, as provided in Section 2.09.

Said interest shall represent the portion of Lease Payments designated as interest and coming due during the Rental Period preceding each Payment Date. The proportionate share of the portion of Lease Payments designated as interest represented by any Certificate s hall be computed by multiplying the portion of Lease Payments designated as principal represented by

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such Certificate by the rate of interest applicable to such Certificate (on the basis of a 360 -day year of twelve 30-day months).

Section 2.05. Form. The Certificates shall be substantially in the form set forth in Exhibit A attached hereto and by this reference incorporated herein.

Section 2.06. Execution. The Certificates shall be executed by and in the name of the Trustee by the manual signature of an authorized officer of the Trustee. If any officer whose signature appears on any Certificate ceases to be such officer before the date of delivery of such Certificate, such signature shall nevertheless be as effective as if the officer had remained in office until such date. Any Certificate may be executed on behalf of the Trustee by such person as at the actual date of the execution of such Certificate shall be the proper of ficer of the Trustee.

Section 2.07. Transfer and Exchange. (a) Transfer of Cert ificates. The registration of any Certificate may, in accordance with its terms, be transferred upon the Registration Books by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Certificate for cancellation at the Corporate Trust Office of the Trustee, accompanied by delivery of a written instrument of transfer in a form acceptable to the T rustee, duly executed. Whenever any Certificate or Certificates shall be surrendered for registration of transfer, the Trustee shall execute and deliver a new Certificate or Certi ficates of the same maturity and aggregate principal amount of the same series, in any authorized denominations.

The cost of printing Bonds and any services rendered or expenses incurred by the Trustee in connection with any transfer and exchange shall be paid by the City, except that the Trustee may require the payment by the Certificate Owner requesting such transfer of any tax or other governmental charge required to be paid with respect to such transfer.

(b) E
xchange of Certificates. Certificates may be exchanged at the Corpora te Trust Office of the Trustee, for a like aggregate principal amount of Certificates of other authorized denominations of the same maturity and the same Ser ies. The City shall p ay any costs of the Trustee incurred in connection with such exchange, except that the Trustee may req uire the payment by the Certificate Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange.

(c) L imitations on Transfer or Exchange . The Trustee may refuse to transfer or exchange either (i) any Certificate during the period established by the Trustee for the selection of Certificates for prepayment, or (ii) the portion of any Certificate wh ich the Trustee has selected for prepayment pursuant to the provisions of Section 4.02.

Section 2.08. Certificates Mutilated, Lost, Destroyed or Stolen. If any Certificate shall become mutilated, the Trustee, at the expense of the Owner of said Certificate, shall execute and deliver a new Certificate of like tenor and maturity in exchange and substitution for the Certificate so mutilated, but only upon surrender to the Trustee of the Certificate so mutilated.

Every mutilated Certificate so surrendered to the Trustee shall be cancelled by it and redelivered

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to, or upon the order of, the City. If any Certificate shall be lost, destroyed or stolen, evidence of such loss, destr uction or theft may be submitted to the Trustee, and, if such evidence is satisfactory to the Trustee and, if an indemnity satisfactory to the Trustee shall be given, the Trustee, at the expense of the Certificate Owner, shall execute and deliver a new Cer tificate of like tenor and maturity and numbered as the Trustee shall determi ne in lieu of and in substitution for the Certificate so lost, destroyed or stolen. The Trustee may require payment of an appropriate fee for each new Certificate delivered under this Section 2.08 and of the expenses which may be incurred by the Trustee in carrying out the duties under this Section

2.08. Any Certificate executed and delivered under the provisions of this Section 2.08 in lieu of any Certifica te alleged to be lost, destroyed or stolen shall be equally and proporti onately entitled to the benefits of this Agreement w ith all other Certificat es secured by this Agreement.

The Trustee shall not be required to treat both the original Certificate and any replacement Certificate as being Outstanding for the purpose of determining the principal amoun t of Certificates which may be executed and delivered hereunder or for the purpose of determining any percentage of Certificates Outstanding hereunder, but both the original and r eplacement Certificate shall be treated as one and the same. Notwithstanding any other provision of t his Section 2.08, in lie u of delivering a new Certificate in exchange for a Certificate which has been mutilated, lost, destroyed or stolen, and which has matured, the Trustee may make payment with respect to such Certificate upon receipt of indemnity satisfactory to the Trustee.

Section 2.09. Payment. Payment of interest due with respect to an y Certificate on any Payment Date shall be made to the person appearing on the Registration Books as the Owner thereof as of the Record Date immediately preceding such Payment Date, such interest to be paid by check mailed to such Owner at his address as it appears on the Regis tration Books or at such other address as he may have filed with the Trustee for that purpose. The pr incipal, interest and prepayment price represented by the Certificates at maturity or upon prior prepayment shall be payable in lawful money of the United States of America upon surrender at the Corporate Trust Office of the Trustee.

Section 2.10. Execution of Documents and Pro of of Ownership. Any request, direction, consent, revocation of consent, or other instrument in writing required or permitted by this Agreement to be signed or executed by Certificate Owners may be in any number of concurrent instruments of similar tenor, and may be signed or executed by such Owners in pers on or by their attorneys or agents appointed by an instrument in writing for that purpose. Proof of t he execution of any such instrument, or of any instrument appointing any such attorney or agent, and of the ownership of Certificates shall be sufficient for any purpose of this Agreement (except as otherwise herein provided), if made in the following manner:

(a) Th
e fact and date of the execution by any Owner or his attorney or agent of any such instrument and of any instrument appointing any such attorney or agent, may be proved by a certificate, which shall be acknowledged or verified, of an officer of any bank or trust company located within the United States of America, or of any notary public, or other officer authorized to take acknowledgments of deeds to be recorded in such jurisdictions, that the persons signing such instruments acknowledged before him

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the execution thereof. Where any such instrument is executed by an officer of a corporation or association or a member of a partnership on behalf of such corporation, association or partnership, such certificate shall also constitute sufficient proof of his authority.

(b) The fact of the ownership of Certificates by any person and the amount, the maturity and the numbers of such Certificates and the date of his holding the same shall be proved by the Registration Books.

Nothing contained in this Art icle II shall be constru ed as limiting the Trustee to such proof, it being intended that the Trustee may accept any other evidence of the matters herein stated which the Trustee may deem sufficient. Any request or consent of the O wner of any Certificate shall bind every future Owner of the same Certificate in respect of anything done or suffered to be done by the Trustee in pursuance of such request or consent.

Section 2.11. Registration Books. The Trustee shall keep or cause to be kept, at its Corporate Trust Office, sufficient records for the registration and registration of transf er of the Certificates, which shall at all times be open to inspection by the City and the Corporat ion during regular business hours and upon reason able prior notice; and, upon presentation for such purpose, the Trustee shall, under such reasonable regulatio ns as it may prescri be, register or transfer or cause to be registered or transferred, on the Reg istration Books, Certific ates as hereinbefore provided.

Section 2.12. Use of Depository. Notwithstanding any provision of this Trust Agreement to the contrary:

(
a) At the request of the Original Purchaser, each maturity of the Certificates shall be initially executed and delivered registered in the name of “Cede & Co.,” as nominee of The Depository Trust Company, the depository designated by the Original Purchaser, and shall be evidenced by one Certificate maturing on each of the maturity dates set for th in Section 2.03 hereof to be in a denomination corresponding to the total principal therein designated to mature on such date. Registered ownership of such Certificates, or any portions thereof, may not thereafter be transferred except:

(i) to any suc cessor of The Depository Trust Company or its nominee, or of any substitute depository designated pursuant to paragraph (ii) of th is subsection (a) (“substitute depository”); provided that any successor of The Depository Trust Compa ny or substitute depository shall be qualified under any applicable laws to provide the service proposed to be provided by it;

(ii) to any substitute de pository designated in a written request of the City, upon (i) the resignatio n of The Depository Trust Company or its successor (or any substitute depository or its successor) from its functions as depository or (ii) a determination by the City that The De pository Trust Company or its successor is no

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longer able to carry out its functions as depository; provided that any such substitute depository shall be qualified under any applicable laws to provide the services proposed to be provided by it; or

(iii) to any person as provided below, upon (A) the resignation of The Depository Trust Company or its successor (or any substitute depository or its successor) from its functions as depository or (B) a determination by the City that The Depo sitory Trust Company or its successor is no longer able to carry out i ts functions as depository; provided that no substitute depository which is not objected to by the City and the Trustee can be obtained.

(b) In the case of any transfer pursuant to paragraph (i) or paragr aph (ii) of subsection (a) of this Section 2.14, upon receipt of all Outstanding Certificates by the T rustee, together with a written request of a City Representative to the Trustee, a single new Certificate shall be executed and delivered for each maturity of such Certificate then outstanding, registered in the name of such successor or such substitute depository or their nominees, as the case may be, all as specified in such written request of a City Representative. In the case of any transfer pursuant to paragraph (iii) of subsection (a) of this Section 2.14, upon receipt of all Outstanding Certificates by the Trustee together with a written request of a City Representative, new Certificates shall be executed and delivered in such deno minations and regist ered in the names of such persons as are requested in a written request of the City provided the Trustee shall not be required to deliver such new Certificates within a period less than sixty (60) days from the date of receipt of such a written request of a City Representative.

(c) In the case of partial redemption or an advance refunding of any Certific ates evidencing all of the principal maturing in a particular year, The Depository Trust Company shall, at the City’s expense, deliver the Certificates to the Trustee for cancellation and re-registration to reflect the amounts of such reduction in principal.

(d) The City and the Trustee shall be entitled to treat the person in whose name any Certificate is registered as the absolute Owner thereof for all purposes of this Trust Agreement and any applicable laws, notwithstanding any notice to the contrary received by the Trustee o r the City; and the City and the Trustee shall have no responsibility for transmitting payments to, communication with, notifying or otherwise dealing with any beneficial owners of the Certificates. Neither the City nor the Trustee will have any responsibi lity or obligations, legal or otherwise, to the beneficial owners or to any other party including The Deposito ry Trust Company or its successor (or substitute depository or its suc cessor), except for the reg istered owner of any Certificate.

(e) So long as all outstanding Certificates are registered in the name of Cede & Co. or its registered assign, the City and the Trustee shall reasonably cooperate with Cede & Co., as sole regis tered Owner, or its registe red assign in effecting payment of the principal and redemption premium, if any, and interest due with respect to the Certificates by arranging for

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payment in such manner that funds for such payments are properly identified and a re made immediately available on the date they are due.

(f) So long as all Outstanding Certificates are registered in the name of Cede & Co. or its registered assigns (hereinafter, for purposes of this paragraph (f), the “Owner”):

(i) All notices and p ayments addressed to the Ow ners shall contain the Certificates’ CUSIP number.

(ii) Notices to the Owner shall be forwarded in the manner set forth in the form of Blanket Issuer Letter of Representations executed by the City and received and accepted by The Depository Trust Company.

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ARTICLE III

DISPOSITION OF PROCEEDS

COSTS OF ISSUANCE FUND AND PROJECT FUND

Section 3.01. Application of Proceeds . The proceeds received by the Trustee from the sale of the Certificates shall forthwith be set aside by the Trustee in the following respective funds and in the following order of priority:

(a) th
e Trustee shall deposit an amount equal to $ _________ in the Costs of Issuance Fund; and

Section 3.03. Costs of Issuan ce Fund. The Trustee shall establish a special fund designated as the “Costs of Issuance Fund”; shall keep such fund separate and apart fr om all other funds and moneys held by it; and shall administer such fund as provided herein. There shall be deposited in the Costs of Issuance Fund the proceeds of the Certificates deposited therein pursuant to Sections 3.01(b), and any other funds from time to time deposited by the Trustee for such purpose. The moneys in the Costs of Issuance Fund shall be disbursed to pay the Costs of Issuance from time to time upon the receipt of Written Requests of the City setting forth the amounts to be disbursed for payment or reimbursement of Costs of Issuance and the name and address of the person or persons to w hom said amounts are to be disbursed, stating that the amounts to be disbursed are for Costs of Issuance properly chargeable to the Costs of Issuance Fund. Each such Written Request requisition of the City shall be sufficient evidence to the Trustee of the facts stated therein, a nd the Trustee shall have no duty to confirm the accuracy of such facts. Any amou nts remaining in the Costs of Issuance Fund on the date sixty (60) days after the Closing Date shall be withdrawn therefrom by the Trustee and transfer red to the Lease Payment Fund.

Section 3.04. Project Fund. The Trustee shall establish and maintain a separ ate fund to be known as the “Project Fund”. There shall be deposited in the Project Fund the proceeds of the Certificates deposited therein pursuant to Section 3.01(c).

T
he Trustee shall disburse moneys in the Project Fund for the purpose of paying the Project Costs, upon receipt of a Requisition in substantially the form attached hereto as Exhibit B. Upon completion of acquisition and construction of the Project, which shall be determined by receipt by the Trustee of a Certificate of Completion signed by the City, and following payment of all Project Costs, the Project Fund shall be closed, and any balance remaining therein sha ll be transferred to the Lease Payment Fund.

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In making such payments, the Trustee may conclusively rely upon the representations made in the Requisition . If for any reason the City should decide prior to the payment of any item in said Requisition not to pay such item, then it shall give written notice of such decision to the Trustee and thereupon the Trustee shall not make such pa yment, and the Trustee shall have no liability to the City or the designated payee as a result of such nonpayment. In no event shall the Trustee be responsible for the adequacy or due performance of any contracts relating to the Project or for the use or a pplication of money properly disbursed pursuant to requests ma de under this Section 3.04.

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ARTICLE IV

PREPAYMENT OF CERTIFICATES

Section 4.01. Prepayment.

( A) Optional Prepayment. The Certificates maturing on or before _________ 1, 20__ are not subject to optional prepayment prior to their respective stated maturities. The Certificates maturing on or after ________ 1, 20__, are subject to optional prepayment on any date on or after _________ 1, 20__, in whole or in part, from prepa yments of the Lease Payments made at the option of the City pursuant to Section 10.2 of the Lease Agreement, at a prepayment price equal to the principal amount thereof to be prepaid, together with accrued interest to the prepayment date, without premium.

(B) Mandatory Sinking Fund Prepayments. The Certificates maturing on April 1, 20__ are subject to mandatory sinking fund prepayment prior to their stated maturity, in the amounts and years set forth below, at the prepayment price equal to the principa l amount thereof to be prepaid, together with accrued interest to the date fixed for prepayment, without premium.

Sinking Fund
Prepayment Date
(April 1)

Sinking Payments
20__ $
20__
20__
20__
20__

(C) P
repayment From Net Proceeds of Insurance and Condemnatio n. The Certificates are also subject to prepayment on any Payment Date, in whole or in part, from the Net Proceeds of insurance or condemnation with respect to the Leased Property, which Net Proceeds are deposited in the Lease Payment Fund and credited towards the prepayment of the Lease Payments made by the City pursuant to Section 10.3 of the Lease Agreement, at a prepayment price equal to the principal amount of the Certificates to be prepai d, together with accrued interest to the date fixed for prepayment, without premium.

Section 4.02. Selection of Certificates for Prepayment. Whenever provision is made in this Agreement for the prepayment o f Certificates pursuant to Section 4.01(A) and less than all Outstanding Certificates are called for prepayment, the Trustee shall select Certificates for prepayment from the Outstanding Certificates not previously called for prepa yment, among maturities selected by the City, in integral multiples of $5,000, and by lot within a maturity, in any manner deemed appropriate by the Trustee. Whenever provision is made in this Agreement

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for the prepayment of Certificates pursuant to Section 4.01(C), and less than all Outstandin g Certificates are called for prepayment, the Trustee shall select Certificates for prepayment from the Outstanding Certificates not previously called for prepayment, proportionately among maturities, in integral multiples of $5,000, and by l ot within a ma turity, in any manner deemed appropriate by the Trustee. For the purposes of such selection, Certificates shall be deemed to be composed of $5,000 portions, and any such portion may be separately prepaid. The Trustee shall promptly notify th e City and the Corporation in writing of the Certificates so selected for prepayment.

Section 4.03. Notice of Prepayment. When prepayment is authorized or required pursuant to Section 4.01, the Trustee shall give notice of the prepayment of the Certificates.

Such notice shall specify: (a) that the Certificates or a designated portion thereof are to be prepaid, (b) the date of prepayment, and (c) the place or places where the prepayment will be made. Su ch notice sha ll further state that on the specified date there shall become due and payable upon each Certificate, the principal and premium, if any, together with interest accrued to said date, and that from and after such date i nterest represented thereby shall cease to accrue and be payable.

N
otice of such prepayment shall be mailed by first class mail to the respective Owners of Certificates designated for prepayment at their addresses appearing on the Registration Books, at least twenty (20) days but not more than forty- five (45) days prior to the prepayment date, which notice shall, in addition to setting forth the above information, set forth, in the case of each Certificate called only in part, the portion of the principal thereof which is to be prepaid; provided that neither failure to receive such notice so mailed nor any defect in any notice so mailed shall affect the sufficiency of the proceedings for the prepayment of such Certificates.

The notice of an optional prepayment may provide that the prepayment is conditioned upon receipt by the City of sufficient funds to pay the prepayment price on the proposed prepayment date, and the City may rescind any such o ptional prepayment notice by providing notice of rescission on or before the prepayment date in the same manner that the notic e of prepayment was provided.

Section 4.04. Partial Prepayment of Certificate. Upon surrender of any Certificate prepaid in part only, the Trustee shall execute and deliver to the Owner thereof, at th e expense of the City, a new Certificate or Certificates of authorized denominations equal in aggregate principal amoun t to the unprepaid portion of the Certificate surrendered and of the same interest rate and the same maturity.

Section 4.05. Effect of Notice of Prepayment. Notice having been given as afores aid, and moneys for the prepayment (including the interest to the applicable date of prepayment and including any applicable premium), having been set aside in the Lease Payment Fund, the Certificates shall become due and payable on said date of prepayment, and, upon presentation and surrender thereof at the Corporate Trust Office of the Trustee, said Cert ificates shall be paid

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at the unpaid principal amount (or applicable portion thereof) with respect thereto, plus interest accrued and unpaid to said date of prepayment.

If, on said date of prepayment, moneys for the prepayment of all the Cer tificates to b e prepaid, together with interest to said date of prepayment, shall be held by the Trustee so as to be available therefor on such date of prepayment, and, if notice of prepayment thereof shall have been given as aforesaid, then, from and after said date of prepayment, interest represented by said Certificates shall cease to accrue and become payable. All moneys held by or on behalf of the Trustee for the prepayment of Certificates shall be held in trust for the account of the Owners of the Certificates so to be prepaid.

All Certificates paid at maturity or prepaid prior to maturity pursuant to the provisions of this Article IV shall be cancelled upon surrender thereof and destroyed.

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ARTICLE V

LEASE PAYMENTS; LEASE PAYMENT FUND

Section 5.01. Assignment of Rights in Lease Agreement. The Corporation has in the Assignment Agreement transferred, assigned an d set over to the Trust ee certain of its rights in the Lease Agreement, including but not limited to all of the Corporation's rights to receive and collect all of the Lease Payments and all other amounts required to be deposited in the Lease Payment Fund pursuant to the Lease Agreement or pursuant hereto. All Lease Payments and such other amounts to which the Corporation may at any time be entitled shall be paid directly to the Trustee, and all of the Lease Payments collected or received by t he Corporation shall be deemed to be held and to have been collected or received by the Corporation as the agent of the Trustee, and if received by the Corporation at a ny time shall be deposited by the Corporation with the Trustee within one Business Day after the receipt thereof, and all suc h Lease Payments and such other amounts shall be forthwith deposited by the Trustee upon the receipt thereof in the Lease Payment Fund (except as provided in Section 3.02).

Section 5.02. Establishment of Lease Payment Fund. The Trustee shall establish a special fund designated as the “Lease Payment Fund”. All moneys at any time deposited by the Trustee in the Lease Payment Fund shall be held by the Trustee in trust for the benefit of the Owners of the Certificates. So long as any Certificates are Outstanding, neither the City nor the Corporation shall have any beneficial right or interest in the Lease Payment Fund or the moneys deposited therein, except only as provided in this Agreement, and such moneys shall be used and applied by the Trustee as hereinafter set forth.

Section 5.03. Deposits. There shall be deposited in the Lease Pay ment Fund all Lease Payments received by the Trustee (except as provided in Section 3.02), including any moneys required to be deposited therein pursuant to the Lease Agreement or pursuant to this Agreement, and including any other moneys required to be cr edited towards payment of the Lease Payments.

Section 5.04. Application of Moneys. All amounts in the Lease Payment Fund shall be used and withdrawn by the Trustee solely for the purpose of paying the principal, interest and prepayment premiums (if any) with respect to the Certificates as the same shall become due and payable, in accordance with the provisions of Article II and Article IV.

Section 5.05. Surplus. Any surplus remaining in the Lease Pay ment Fund, after prepayment and payment of all Certificates, including premiums and accrued interest (if any) and payment of any applicable fees to the Trustee or provision for such prepayment or payment having been made to the satisfaction o f the Trustee, shall be withdrawn by the Trustee and remitted to the City.

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ARTICLE VI

INSURANCE AND CONDEMNATION FUND
INSURANCE; EMINENT DOMAIN

Section 6.01. Establishment of Insurance and Con demnation Fund; Application of Net Proceeds of Insurance Award. The provisions of this Section are subject to Section 4.02 of t he Property Lease. Any Net Proceeds of insurance (other than rental interruption insurance) against accident to or destruction of any structure constituting any part of the Leased Property collected by the City in the event of any such accident or destruction shall be paid to the Trustee by the City pursuant to Section 6.2(a) of the Lease Agreement and deposited by the Trustee promptly upon receipt thereof in a special fund to be established and held by the Trustee, designated a s the “Insurance and Condemnation Fund”. If the City determines and notifies the Trustee in writing of its determination, within n inety (90) days following the date of such deposit, that the replacement, repair, restor ation, modific ation or improvement of the Leased Property is not economically feasible or in the best interest of the City, then such Net Proceeds shall be promptly transferred by the Trustee to the Lease Payment Fund, and applied to the prepayment of Lease Payments pursuant to Section 4.01(C); provided, that such transfer shall only be made if the amount transferred is sufficient to prepay the principal amount of Certificates attributable to the portion of the Leased Property dama ged or destroyed, determined on the basis of the ratio resulting from dividing the fair mar ket value of the portion of the Leased Property so damaged or destroyed by the fair market value of the Leased Property, and only if the remaining unpaid Lease Payments represent fair consideration for the remaining portion of the Leased Property.

All Net Proceeds deposited in the Insurance and Condemnation Fund and not so transferred to the Lease Payment Fund shall be applied to the prompt replacement, repair, resto ration, modification or improvement of the damaged or destroyed portions of the Leased Property by the City, upon receipt of Written Requests of the City stating with respect to each payment to be made (i) the name and address of the person, firm or corporation to whom payment is d ue, (ii) the amount to be paid and (i ii) that each obligation men tioned therein has been properly incurred, is a proper charge against the Insurance and Condemnation Fund, has not been the basis of any previous withdrawal, and specifying in reasonable detail the nature of the obligation, accompanied by a bill or a state ment of account for such obligation. Each such Written Request requisition of the City shall be sufficient evidence to the Trustee of the facts stated therein, and the Trustee shall have no d uty to confirm the accuracy of such f acts. Any balance of the Net Proceeds remaining after such work has been completed (as evidenced by a Certificate of the City to th e Trustee) shall be paid to the City. The preceding sentence notwithstanding, before the remaining Net Proceeds are paid to the City by the Trustee, the City shall deliver to the Trustee a certificate stating that the Leased Property has been replaced, repaired, restored, modified or improved with the Net Proceeds to a fair market value not less than the aggregate principal components of the unpaid lease Payments, and that the City has full use, occupancy and enjoyment of the Leased Property.

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Section 6.02. Application of Net Proceeds of Eminent Domain Award . The provisions of this Section are subject to Section 4.02 of the Property Lease. If all or any part of the Leased Property shall be taken by eminent domain proceedings (or sold to a government threatening to exercise the power of eminent domain) the Net Proceeds ther efrom shall be deposited with the Trustee in the Insurance and Condemnation Fund pursuant to Section 6.2(b) of the Lease Agreement and shall be applied and disbursed by the Trustee as follows:

(a) I
f all of the Leased Property (or portions thereof such that the remainder is not useable for essential public purposes of the City) shall have been taken in suc h eminent domain proceedings or sold to a government threatening the use of eminent domain powers, or if the City has given written notice to the Trustee of its determination that such proceeds are not needed for repair or rehabilitation of the Leased Property, the Trustee shall transfer such proceeds to the accounts within the Lease Payment Fund to be credited towards the prepa yments of the Lease Payments required to be paid pursuant to Section 6.2(b) of the Lease Agreement and applied to the prepayment of Certificates in the manner provided in Section 4.01(C).

(b) If less than all of the Leased Property shall have been taken i n such eminent domain proceedings or sold to a government threatening the use of eminent domain powers and the remainder is useable for essential public purposes of the City, and if the City has given written notice to the Trustee of its determination that such proceeds are needed for repair, rehabilitation or replacement of the Leased Property, the Trustee shall pay to the City, or to its order, from said proceeds such amounts as the City may expend for such repair or rehabilitation, upon the filing of Written Requests of the City in the form and containing the provisions set forth in Section 6.01.

Section 6.03. Cooperation. The Corporation and the Trustee shall cooperate ful ly with the City at the expense of the City in filing any proof of loss with respect to any insurance policy maintained pursuant to Article V of the Lease Agreement and, to the extent indemnified to its satisfaction from any liability or expense related thereto, in the prosecution or defense of any prospective or pending condemnation proceeding with respect to the Leased Property or any portion thereof.

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ARTICLE VII

MONEYS IN FUNDS

Section 7.01. Held in Trust. The moneys and investments held by the Trustee under this Trust Agreement are irrevocably held in trust for the Certificates, and for the purposes herein specified, and such moneys shall be expended only as provided in this Trust Agreement, and shall not be subject to levy or attachment or lien by or for the benefit of any creditor of (i) the City, (ii) the Trustee, (iii) the Corporation or (iv) the Owner of Certificates.

Section 7.02. Investments Auth orized. All moneys in any of the funds established pursuant to this Trust Agreement shall be invested by the Trustee, upon Written Request of the City, solely in Investment Securities which mature or will be otherwise available for the purposes of the fund from which such moneys are being invested. In the absence of any Written Request of the City directing investments, the Trustee shall invest in Investment Securities described in (f) of the definition thereof; provided, further, that as long as the Trus tee is U.S. Bank Trust Company, National Association , the Trustee shall invest such money in the money market fund set forth in the letter of authorization and direction executed by the City and delive red to the Trustee. If no specific money market fund has been specified by the City, the Trustee shall make a request to the City for investment directions. Such moneys shall be held in cash, uninvested, until specific investment directions are provided by the City to the Trustee.

I
nvestment Securities shall be purchased at Fair Market Value, provided the Trustee shall not be responsible to determine Fair Market Value. Moneys in all funds shall be invested in Investment Securities maturing not later than five (5) years from the date said investment is made.

Section 7.03. Accounting. The Trustee shall furnish to the City, not less than monthly, an accounting (which may be in the fo rm of the Trus tee's regular statement) of all investments made by the Trustee. The Trustee shall not be responsible or liable for any loss suffered in connection with any investment of funds made by it in accordance with Section 7.02.

Section 7.04. Allocation of Earn ings. Any inco me, profit or loss on such investments in any of the funds shall be deposited in or charged to the respective funds from which such investments were made.

Section 7.05. Valuation of In vestments. In computing the amount in any fund or account, Investment Securities shall be valued at the market price thereof. Valuation shall occur annually, prior to the adoption of the City's budget.

Section 7.06. Commingling of Investment Securities and Disposition of Inv estments.

Investments in all funds may be commingled for purposes of maki ng, holding or disposing of

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investments, notwithstanding provisions herein for transfer to or holding in particular funds amounts received or held by the Trustee hereunder, provided that the Trustee shall at all t imes account for such investments strictly in accordance with the funds to which they are credited and otherwise as provided in this Trust Agreement. The Trustee or an affiliate may ac t as principal or agent in the making or disposing of any investment.

The Trustee may sell, or present for prepa yment, any Investment Securities so purchased whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund to which such Investment Securities i s credited, and the Trustee shall not be liable or responsible for any loss resulting from any investment made pursuant to this Section 7.06.

The City acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the City the right to receive brokerage confirmations of security transactions as they occur, the City will not receive such confirmations to the extent permitted by law. The Trustee will furnish the City periodic cash transaction statements which include detail for all invest ment transactions made by the Trustee hereunder. The Trustee may make any investments hereunder through its own bond or investment department or trust investment department, or those of its parent or any affiliate. The Trustee or any of its affiliates may act as s ponsor, advisor or manager in connection with any investments made by the Trustee hereunder.

Section 7.07. Acquisition, Disposition and Valuation of Investments. Except as otherwise provided in the following sentence, the City covenants that all investments of amounts deposited in any fund or account created by or pursuant to this Trust Agreement, or otherwise containing gross proceeds of the Certificates (within the meaning of section 148 of the Code) shall be acquired, disposed of, and valued (as of the date that valuation is required by this Trust Agreement or the Code) at Fair Mark et Value. Investments in funds or acc ounts (or portions thereof) that are subjec t to a yie ld restriction under applicable provisions of the Code shall be valued at their present value (within the meaning of section 148 of the Code).

Section 7.08. Federal Tax Law Covenants.
(a) Generally. The City shall not take any action or permit to be taken any action within its con trol which would cause or which, with the passage of time if not cured would cause, interest represented by the Certificates to become includable in gross income for federal income tax purposes.

(b) Federal Guarantee Prohibition. The City shall not take any action or permit or suffer any action to be taken if the result of the same would be to cause any of the Certificates or the Lease Agreement to be “federal ly guaranteed” within the meaning of Section 149(b) of the Code.

(c) Maintenance of Tax-Exemption. The City shall take all actions necessary to assure the exclusion of interest with respect to the Certificates from the gross income of the Owners of the

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Certificates to the same extent as such interest is permitted to be excluded from gross income under the Code as in effect on the Closing Date.

(d) Rebate Requirement. The City shall take any and all actions necessary to assure compliance with section 148(f) of the Code, relating to the rebate of excess investment earnings to the federal government.

(e) No Arbitrage. The City will not take, or permit or suffer to be taken by the Trustee or otherwise, any action with respect to the proceeds of the Certi ficates which, if suc h action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the Closing Date would have caused the Certificates to be "arbitrage bonds" within the meaning of section 148 of the Code.

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

(g) Compliance with T ax Certificates. The City and the Corporation will comply with the provisions of the Certificate as to Arbitrage and the Certificate Regarding Use of Pro ceeds with respect to the Certificates, which are incorporated herein as if fully set forth herein.

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ARTICLE VIII

THE TRUSTEE

Section 8.01. Compensation of the Trustee. The City shall from time to time, as agreed upon between the City and the Trustee, pay to t he Trustee reasonable compensation for its services, and shall reimburse the Trustee for all its advances and expenditures, including but not limited to advances to, and fees and expenses of, independent appraisers, accountants, consultants, counsel, agents and attorneys-at-law or other experts employed by it in the exercise and performance of its powers and duties hereunder.

Section 8.02. Removal of Tru stee. The City and the C orporation may by writt en agreement between themselves, or the Owners of a majority in aggregate principal amount of all Certificates Outstanding may by written request, at any time a nd for any reason, remove the Trustee and any successor thereto, and shall thereupon appoint a succes sor or successors thereto. Any such successor shall be a bank, national banking association, corporation or trust company in good standing, duly authorized to exercise trust powers and subject to examination by federal or State authority having a combined capital (exclusive of borrowed capital) and surplus of at least Fifty Million Dollars ($50,000,000). If such bank, national banking association, corporation or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section the combined capital and surplus of such bank, national banking association, corporation or trust company shall be deemed to be its combined c apital and surplus as set forth in its most recent report of conditions so published.

T
he Trustee may at any time resign by giving written notice to the City a nd the Corporation and b y giving to the Certificate Owners notice by mailing such notice to the registered owners of the Certificates. Upon receiving such notice of resignation, the City shall promptly appoint a successor Trustee by an instrument in writing; provided, however, that in the event that the City does not appoint a successor Trustee within thirty (30) days following receipt of such notice of resignation, the resigning Trustee may petition the appropriate court havin g jurisdiction to appoint a suc cessor Trustee. Any resignation or removal of the Trustee and appointment of a successor Trustee shall become effective upon acceptance of appointment by the successor Trustee. Upon such acceptance, the City shall mail notice thereof to the Certificate Owners at their respective addresses set forth on the Certificate registration books maintained pursuant to Section 2.11.

Section 8.03. Appointment of Agent. The Trustee may appoint an agent to exercise any of the powers, rights or remedies granted to the Trustee under thi s Trust Agreement, and to hold title to property or to take any other action which may be desirable or necessary.

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Section 8.04. Merger or Consolidation. Any company into which the Trustee 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 Trustee may sell or transfer all or substantially all of its corporate trust business (provided that such company shall be eligible under Section 8.02) shall be the successor to the Trustee without the execution or filing of any paper or further act, anything herein to the contra ry notwithstanding.

Section 8.05. Protection and Rights of the Trustee . The Trustee shall be protected and shall incur no liability i n acting or proceeding in good faith upon any resolution, notice, telegram, facsimile, request, consent, waiver, certificate, statement, affidavit, voucher, bond, requisition or other paper or document which it shall in good faith believe to be genuine and to have been passed or signed by the proper board or person or to have been prepared and furnished pursuant to any of the pr ovisions of this Trust Agreement, and the Trustee shall be under no duty to make any investigation or inquiry as to any statements contained or matters referred t o in any such instrume nt, but may accept and rely upon the same as conc lusive evidence of the truth and accuracy of such statements. The Trustee may consult with counsel, who may be counsel to the Corporation, 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 in accordance therewith.

W
henever in the administration of its duties under this Trust Agreement, the Trustee 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), shall be deemed to be conclusively pro ved and established by the certificate of the City Representative or the Corporation Representative and such certificate shall be full warranty to the Trustee for any action taken or suffered under the provisions of this Tr ust Agreement upon the faith thereof, but in its disc retion the Trustee may, in lieu thereof, accept other evidence of such m atter or may require such additional evidence as to it may seem reasonable.

The Trustee may become the Owner of the Certificates w ith the same rights it would have if it were not the Trustee; may acquire and dispose of other bonds o r evidences of indebtedness of the City with the same rights it would have if it were not the Trustee; and may act as a depositary for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Owners of Certificates, whether or not such committee shall represent the Owners of the majority in principal amount of the Certificates then Outstanding.

The recitals, sta tements and representations by the City and the C orporation contained in this Trust Agreement or in the Certificates shall be taken and construed as made by and on the part of the City and the Corporatio n, as the case may be, and not by the T rustee, and the Trustee does not assume, and shall not have, any responsibility or obl igation for the correctness of any thereof.

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The Trustee may execute any of the trusts or powers hereof and perform the duties required of it hereunder by or through attorneys, agents, or receivers, and shall be entitled to advice of counsel concerning all matters of trust and its duty hereunder, and the Trustee shall not be answerable for the default or misconduct of any such attorney, agent, or receiver selected by it with reasonable care. The Trustee shall not be answerable for the exercise of any discretion or power under this Trust Agreement or for anything whatever in connection with the funds and accounts established hereunder, except only for its own negligence or willful misconduct.

The Trustee shall be responsible to perform only those duties specifically set forth herein and no implied duties or obligations shall be read into this Trust Agreement against the Trustee.

The Trustee shall have no responsibility with respect to any information, statement, or recital in any official statement, offering memorandum or any other disclosure material prepared or distributed with respect to the Certificates.

The Trustee is authorized and directed to execute in its capacity as Trustee th e Assignment Agreement.

The Trustee shall not be deemed to have knowled ge of an Event of Default hereunder unless it shall have actual knowledge at its Corporate Trust Office.

No provision of this Trust Agreement or any other document related hereto shal l require the Trustee to risk or advance its own funds or otherwise incur any financial liability in the performance of its duties or the exercise of its rights hereunder.

Before taking any action under Article XII or this Article hereof the Trustee may require indemnity satisfactory to the Trustee be furnished from any expenses a nd to protect it against any liability it may incur hereunder.

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

The Trustee shall not be liable for any action taken or not taken by it in accordance with the direction of a majority (or other percentage provided for herein) in aggregate principal amount of Certificates outstandi ng relating to the exercise of any right, power or re medy available to the Trustee.

The permissive ri ght of the Trustee to do thi ngs enumerated in this Trust Agreement shall not be construed as a duty.

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Every provision of this Trust Agreement, the Lease Agreement, the Property Lease and the Assignment Agreement relating to the conduct or liability of the Trustee shall be subjec t to the provisions of this Trust Agreement, including without limitation, this Article.

In acting as Trustee hereunder, the Trustee acts solely in its capacity as Trust ee hereunder a nd not in its individual or personal capacity, and all persons, includin g wit hout limitation the Owners, the City and the Corporation, having any claim against the Trustee shall look only to the funds and accounts held by the Trustee hereunder for payment, except as otherwise provided herein. Under no circumstances shall the Trustee be liable in its individual or personal capacity for the obligations evidenced by the Certificates.

The Trustee makes no r epresentation or warranty, either express or implied, as to the value, design, condition, merchantabil ity or fitness for any parti cular purpose or fitness for the use contemplated by the City or the Corporation of the project or any portion thereof, or any other representation or warranty with respect to the Property or any portion thereof. In no event shall the Trustee be liable fo r incidental, indirect, special or consequential damages in connection with this Trust Agreement, the Lease Agreement or the Property Lease or the existence, furnishing or functioning of the Property or the City’s use of the Leased Property.

The Trustee shall not be considered in breach of or in default in its obligations hereunder or progress in respect thereto in the event of enforced delay (“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, floo ds, epidem ics, quarantine restrictions, strikes, freight em bargoes, earthquakes, explos ion, mob violence, riot, inability to procure or general sabotage or rationing of labor, equipment, facilities, sources of energy, material or supplies in the open market, litigat ion or arbitration involving a party or others relating to zoning or other go vernmental action or inaction pertaining to the project, malicious mischief, condemnation, and unusually severe weather or del ays of suppliers or subcontractors due to such causes or any similar event and/or occurrences beyond the control of the Trustee.

The Trustee’s rights to immunities and protection from liability hereunder and its rights to payment of its fees and expenses shall survive its resignation or removal and final payment or defeasance of the Certificates.

The Trustee agrees to accept a nd ac t upon instructions or directions pursuant to this Trust Agreement sent by unsecured e- mail, facsimile transmission or other similar unsecured electronic methods, provided, however, that, the Trustee shall have received an incum bency certificate listing persons designated to give such instructions or directions and containing specimen signatures of such designated persons, which such incumbency certificate shall be amended and replaced whenever a person is to be added or deleted from the listing. If the City elects to give the Trustee e-mail or facsimile instructions (or instructions by a similar electronic method) and the Truste e in its discretion elects to act upon such instructions, the Trustee’s understanding of such instructions shall be deemed co ntrolling. The Trustee shall not be liable

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for any losses, costs or expenses arising directly or indirectly from the Trustee’s rel iance upon and compliance with such instruc tions notw ithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The City agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk of interception and misuse by third parties.

The Trustee 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 Trustee, prior to the occurrence of an Event of Default and after the curing of all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Trust Agreement. In case an Event o f Default has occurred (which has not been cured) the Trustee shall exercise such of the rights and powers vested in it by the Trust Agreement, and use the same degree o f care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.

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ARTICLE IX

MODIFICATION OR AMENDMENT OF AGREEMENT

Section 9.01. Amendments Permitted. This Agreement and the rights and obligations of the parties hereto and the Lease Agreement and the rights and obligations of the parties thereto, may be mo dified or amended at any time by a supplemental agreement which shall become effective when the written consents of the Owners of at least sixty percent (60%) in aggregate principal amount of the Certificates then Outstanding, exclusive of Certif icates disqualified as provided in Section 9.03, shall have been filed with the Trustee. No such modification or amendment shall (1) extend or have the effect of extending the fixed maturity of any Certificate or reducing the interest rate with respect thereto or e xtending the time of payment of interest, or reducing the amount of prin cipal thereof or reducing any premium payable upon the prepayment thereof, without the express consent of the Owner of such Certificate, or (2) reduce or have the effect of r educing the percentage of Certificates required for the affirmative vote or written con sent to an amendment or modification of the Lease Agreement, or (3) modify any of the rights or obligations of the Trustee wit hout its written assent thereto. Any such supplemental agreement shall become effective as provided in Section

9.02. T
his A greement and the rights and obligations of the parties hereto and the Lease Agreement and the rights and obligations of the respective parties thereto, may be modified or amended at an y time by a supplemental agreement, without the consent of any such Owners, but only to the extent permitted by law and only (1) to add to the covenants and agreements of any party, other covenants to be observed, or to surrender any right or power herein or therein reserved to the City, (2) to cure, correct or supplement any ambiguous or defective provision contained herein or therein so long as such modification or amendment is not inconsistent with any other provision contained herein, (3) in regard to questions arising hereunder or thereunder, as the parties hereto or thereto ma y deem necessary or desirable and which shall not adversely affect the interests of the Owners of the Certificates, (4) to cor rect any incorrect property description or (5) to mak e such additions, deletions or modifications as m ay be necessary to assure co mpliance with section 148(f) of the Code relating to required rebate of excess investment earnings to the United States or otherwise as may be necessary to assure ex emption from federal income taxation of the interest component of the Lease Payments. The Trustee may in its discretion, but shall not be obligated to, enter into any such supplemental agreement authorized by this Section which affects the Trustee’s own rights, duties or immunities under this Trust Agreement. Any such supplemental agreement shall become effective upon execution and delivery by the parties hereto or thereto as the case may be.

Section 9.02. Procedure for Amendment with Written Consent of C ertificate Own ers.

This Agreement and the Lease Agreement may be amended by supplemental agreement as provided in this Section 9.02 in the event the consent of the Owners of the Certificates is

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required pursuant to Section 9.01. A copy of such supplemental agreement, together with a request to the Certificate Owners for their consent thereto, shall be mailed by the Trust ee to each Owner of a Certificate at hi s address as set forth on the Registration Books, but failure t o receive copies of suc h supplemental agreement and request shall not affect the validity of the supplemental agreement when assented to as in this Section provided.

Such supplemental agreement shall not become effective unless there shall be filed with the Trustee the written consents of the Owners of at least sixty percent (60%) in aggregate principal amount of the Certificates then Outstanding (exclusive of Certificates disqualified as provided in Section 9.03) and a notice shall have been mailed as hereinafter in this Sectio n provided. Each such consent shall be effective only if accompanied by proof of ownership of the Certificates for which such consent is given, which proof shall be such as is permitted by Section

2.10. Any such consent shall be binding upon the Owner of the Certificate 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 Trustee prior to the date when the notice hereinafter in this Section provided for has been mailed.

After the Owners of the required percentage of Certificates shall have filed their consents to such supplemental agreement, the Trust ee shall mail a notice to th e Owners of the Certificates in the manner hereinbefore provided in this Section for the mailing of such supplemental agreement of the notice of adoption thereof, stating in substance that such supplemental agreement has been consented to by the Owners of the required percentage of Certificates and will be effective as provided in this Section (but failure to receive copies of sa id notice shall not affect the validity of such supplemental agreement or consents thereto). A record, consisting of the papers required by this Section to be filed with the Trustee, shall be conclusive proof of the matters therein stated. Such supplemental agreement shall become effective upon the mailing of such last -mentioned notice, and such supplemental agreement shall be deemed conclusively binding upon the parties hereto and the Owners of all Certificates at the expiration of sixty (60) days after such mailing, except in the event of a final decree o f a court of competent jurisdiction setting aside such consent in a lega l act ion or equitable proceeding for such purpose commenced within such sixty (60) day period.

Section 9.03. Disqualified Certificates. Certificates owned or held by or for the account of the City or by any person directly or indirectly controlling or controlled by, or under direct or indirect common control with the City (except any Certificates held in any pension or retirement fund) shall not be deemed Outstanding for the purpose of any vote, co nsent, waiver or other action or any calculation of Outstanding Certificates provided for in this Agreement, and shall not be entitled to vote upon, consent to, or take a ny other actio n provided for in this Agreement. Upon request of the Trustee, the City shall specify in a certificate to the Trustee those Certificates disqualified pursuant to this Section, and the Trustee may conclus ively rely on such certificate.

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Section 9.04. Effect of Supplemental Agreement. From and after the time any supplemental agreement becomes effective pursuant to this Article IX, this Agreement or the Lease Agreement, as the case may be, shall be deemed to be modified and amended in accordance therewith, the respective rights, duties and obligations of the parties hereto or thereto and all Owners of Certificates Outstanding, as the case may be, shall thereafter be determined, exercised and enforced hereunder subject in all respects to such mo dification and amendment, and all the terms and conditions of any supplemental agreement shall be deemed to be part of the terms and conditions of this Agreement or the Lease Agreement, as the case may be, for any and all purposes.

T
he Trustee may require each Certificate Owner, before his consent provided for in this Article IX shall be deemed effective, to reveal whether the Certificates as to which such consent is given are disqualified as provided in Section 9.03.

Section 9.05. Endorsement or Replacement of Certificates Delivered After Amendments.

The Trustee or the City may determine that Certificates delivered after the effective date of any action taken as provided in this Article IX 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 Certificate Outstanding at such effective date and presentation of his Certificate for the pur pose at the Corporate Trust Office of the Trustee, a suitable notation shall be made on such Certificate. The Trustee or the City may determine that the delivery of subs titute Certificates, so modified as in the opinion of the Trustee is necessary to conf orm to such Certificate Owners” action, which substitute Certificates shall thereupon be prepared, executed and delivered. In that case, upon demand of the Owner of any Certificate th en Outstanding, such substitute Certificate shall be exchanged at the Co rporate Trust Office of the Trustee, without cost to such Owner, for a Certificate of the same character then Outstanding, upon sur render of such Outstanding Certificate.

Section 9.06. Amendatory Endorsement of Certificates. The provisions of this Article IX shall not prevent any Certificate Owner from accepting any amendment as to the particular Certificates held by him, provided that proper notation thereof is made on such Certificates.

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ARTICLE X

COVENANTS; NOTICES

Section 10.01. Compliance With and Enforcement of Lease Agreement . The C ity covenants and agrees with the Owners of the Certificates to perform all obligations and duties imposed on it under the Lease Agreement. The Corporation covenants and agrees w ith the Owners of the Certificates to perform all obligations and duties imposed on it under the Lease Agreement.

T
he City will not do or permit anything to be done, or omit or refrain from doing anything, in any case where any such act done or permitted to be done, or any such omission of or refraining from action, would or might be an event of default under or a ground for cancellation or termination of the Lease Agreement. The Corporation and the City, immediately upon receiving or giving any notice, communication or other document in any way relating to or affecting their respective estates, or either of them, in the Leased Property, which may or can in any manner affect such estate of the City, will deliver the same, or a copy thereof, to the Trustee.

Section 10.02. Prosecution and Defense of Suit s. The Corporation and the City shall promptly, upon request of the Trustee or any Certificate Owner, from time to time take such action as may be necessary or proper to remedy or cure any defect in or cloud upon the t itle to the Leased Property, whether now existing or hereafter developing and shall prosecute all such suits, actions and othe r proceedings as may be appropriate for such purpose and shall indemnify and save the Trustee and every Certificate Owner harmless from all loss, cost, damage and expense, including attorneys” fees, which they or any of them may incur by reason of any such defect, cloud, suit, action or proceeding.

Section 10.03. Recordation and Filing. The City shall record and file the Lease Agreement, the Assignment Agreement and all such documents as may be required by law (and shall take all further actions which may be necessary or be reasonably required by the Trustee), all in such manner, at such times and in such places as may be required by law in order fully to preserve, protect and perfect the security of the Trustee and the Certificate Owners.

Section 10.04. Continuing Disclosure. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of that certain Continuing Disclosure Certificate executed by the City as of the Closing Date, as originally executed and as it may be amended from time to time in accordance with its terms. Notwithstanding any other provi sion of this Trust Agreement, failure of the City to comply with such Continuing Disclosure Certificate shall not constitute an Event of Default; provided, ho wever, that any Partici pating Underwriter (as such term is defined in such Continuing Disclosure Certificate) or any Owner or beneficial owner of the Cert ificates may take such actions as may be necessary an d appropriate to compel

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performance by the City of its obligations under this Section, including seeking mandate or specific performance by court order.

Section 10.05. Further Assurances. The Corporation and the City will make, execute and deliver any and all such further r esolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Agreement and the Lease Agreement, and for the better assuring and confirming unto the Owners of the Certificates the rights and benefits provided herein.

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ARTICLE XI

LIMITATION OF LIABILITY

Section 11.01. Limited Liability of City. Except for the payment of Lease Payments when due in accordance with the Lease Agreement and the performance of the other covenants and agreements of the City contained in the Lease Agreement and herein, the City shall have no pecuniary obligation or liability to any of the other parties or to the Owners of the Certificates with respect to this Trust Agreement or the terms, execution, delivery or transfer of the Certificates, or the distribution of Lease Payments to the Owners by the Trustee.

Section 11.02. No Liability for Trustee Performance. Neither the Ci ty nor the Corporation shall have any obligation or liability to any of the other parties or to the Ow ners of the Certificates wit h respect to the performance by the Trustee of any duty imposed upon it under this Trust Agreement, except where the City or t he Corporation, as the case may be, has given specific direction to the Trustee to take certain actions.

Section 11.03. Indemnification. The Corporation and the City agree, to the extent permitted by law, to indemnify and save the Trustee harmless from and a gainst all claims, suits, losses, expenses, liabilities, and actions, including legal fees and expenses brought against it, or to which it is made a party, and from all losses and damages suffered by it as a result thereof, including where and to the extent such claim, suit or action arises out of the actions of any other party to this Agreement, including but not limited to (a) the ownership, operation or use of the Leased Property by the City or (b) the Trustee’s acceptance or administration of the trust under the Trust Agreement, or the exercise or per formance of any of its powers or duties hereunder, but excluding liabilities which are due to the negligence or willful misconduct of the Trustee.

Such indemnity shall survive the satisfaction and discharge of this Trust Agreement or resignation or removal of the Trustee. In the event the Corporation or the City is required to indemnify the Trustee as herein provided, the Corporation or the City shall be subrogated to the rights of the Trustee to recover such losses or damages from any other person or entity.

Section 11.04. Opinion of Counsel. Before being required to take any action, the Trustee may require an opinion of Independent Counsel acceptable to the Trustee, which opinion shall be made availabl e to the other parties hereto upon request, which counsel may be counsel to any of the parties hereto, or a verified certificate of any party hereto, or both, concerning the proposed action. If it does so in good faith, Trustee shall be protected in relying thereon.

Section 11 .05. Limitation of Rights to Parties and Certificate Owners . Nothing in this Agreement or in the Certificates expressed or implied is intended or shall be construed to g ive any person other than the City, the Corporation, the Trustee and the Owners of the Certificates, any legal or equitable right, remedy or claim under or in respect of this Agreement or any covenant, condition or provision hereof; and all such covenants, conditions and provisions are

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and shall be for the sole and exclusive benefit of the City, the Corporation, the Trustee and said Owners.

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ARTICLE XII

EVENTS OF DEFAULT AND REMEDIES OF CERTIFICATE OWNERS

Section 12.01. Assignment of Rights. Pursuant to the Assignment Agreement the Corporation has transferred, assigned and set over to the Trustee all of the Corporation's rights in and to the Lease Agreement (excepting only the Corporation's rights under Sections 5.7, 7.3 and 9.4 thereof), including without limitation all of the Corporation 's rights to exercise such rights and remedies conferred on the Corporation pursuant to the Lease Agreement as may be necessary or convenient (i) to enforce payment of the Lease Payments and any other amounts required to be deposited in the Lease P ayment Fund or the Insurance and Condemnation Fund, and (ii) otherwise to exercise the Corporation's rights and take any action to protect the interests of the Trustee or the Certificate Owners in an Event of Default.

Section 12.02. Remedies. If an Event of Default shall happen, then and in each and every such case during the continuance of such Event of Default, the Trustee may, and upon request of the Owners as provided in Article IX of the Lease Agreement shall, upon being indemnified to its satisfaction exer cise any and all remedi es available pursuant to law or granted pursuant to the Lease Agreement; provided, however, that notwithstanding anything herein or in the Lease Agreement to the contrary, there shall be no right under any circumstances to accelerate the maturities of the Certi ficates or otherwise to declare any Lease Payment not then in default to be immediately due and payable.

Section 12.03. Application of Funds. All moneys received by the Trustee pursuant to any right given or action taken under the provisions of this Article XII or Article IX of the Lease Agreement shall be applied by the Trustee in the order following upon presentation of the several Certificates, and the stamping thereon of the payment if only pa rtially paid, or upon the surrender thereof if fully paid -

First, to the payment of the costs and exp enses of the Trustee incurred in and about the performance of its powers and duties under this Trust Agreement, then, the Certificate Owners in declaring such Event of Default, including reasonable compensation to its or their agents, attorneys and counsel;

Second,
to the payment of the whole amount then owing and unpaid with respect to the Certificates for principal and interest, with interest on the overdue principal and installments of interest, (provided that such interest on overdue installments shall be paid only to the extent funds are available therefor following payment of interest on overdue principal, as aforesaid,and in case such moneys shall be insufficient to pay in full the whole amount so owing and unpaid with respect to the Certificates, th en to the payment of such principal and interest without preference or priority of principal over interest, or of interest over pr incipal, or of any inst allment of

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interest over any other installment of interest, ratably to the aggregate of such principal and interest.

Section 12.04. Institution of Legal Proceedings. If one or more Events of Def ault shall happen and be continuing, the Trustee in its discretion may, and upon the written request of the Owners of a majori ty in principal amount of the Certificates then Outstanding, and upon being indemnified to its satisfa ction therefor, shall, proceed to protect or enforce its rights or the rights of the Owners of Certificates by a suit in equity or action at law, either f or the specific performance of any covenant or agreem ent contained herein, or in aid of the execution of any power herein granted, or by mandamus or other appropriate proceeding for the enforcement of any other legal or equitable remedy as the Trustee shall deem most effectual in support of any of its rights or duties hereunder.

Section 12.05. Non-waiver. Nothing in this Article XII or in any other provision of this Agreement or in the Certificates, shall affect or impair the obligation of the City to pay or prepay the Lease Payments in accordance with and subject to the terms and pro visions of the Lease Agreement, or affect or impair the right of action, which is also absolute and unc onditional, of the Certificate Owners to institute suit to enforce and collect such payment. No delay or omission of the Trustee or of any Owner of any of th e Certificates to exercise any right or power arising upon the happening of any Event of Default s hall impair any such right or power or shall be construed to be a waiver of any such Event of Default or an acquiescence therein, and every power and remedy given by this Article XII to the Trustee or to the Owners of Certificates may be exercised from time to time and as often as shall be deemed expedient by the Trustee or the Certificate Owners.

Section 12.06. Remedies Not Exclu sive. No remedy herein conferred upon or reserved to the Trustee or to the Certificate Owners is intended to be exclusive of any other remedy, and every such remedy shall be cumulative and shall be in addition to every othe r remedy given hereunder or now or hereafter existing, at law or in equity or by statute or otherwise.

Section 12.07. Power of Tr ustee to Control Proceedings. In the event that the Trust ee, upon the happening of an Event of Default, shall have taken any action, by judicial proceeding s or otherwise, pursuant to its duties hereunder, whether upon its own discretion or upon the written direction of the Owners of a majority in principal amount of the Certificates then Outstanding, it shall have full power, in the exercise of its discretion for the best interests of the Owners of the Certificates, with respect to the c ontinuance, discontinuance, withdrawal, compromise, settlement or other dispo sal of such action; provided, however, that the Trustee shall not discontinue, withdraw, compromis e or settle, or otherwise di spose of any litigation pending at law or in equity.

Section 12.08. Limitation on Certificate Owners ' Right to Sue. No Owner of any Certificate executed and delivered hereunder shall have the right to institute any suit, action or proceeding at law or in equity, for any remedy under or upon this Ag reement, unless (a) such Owner shall have previously given to the Trustee written notice of the occurrence of an Event of

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Default hereunder; (b) the Owners of at least twenty -five percent (25%) in aggregate principal amount of all th e Certificates then Out standing shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such action, suit or proceeding in its own name; (c) said Owners shall have tendered to the Trustee reasonable indemnity against the costs, exp enses and liabilities to be incurred in compliance with such request; and (d) the Trustee shall ha ve refused or omitted to comply with such request for a period of sixty (60) days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee.

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

The right of any Owner of any Certificate to receive payment of sa id Owner's proportionate interest in the Lease Payments as the same become due, or to institute suit for the enforcement of such payment, shall not be impaired or affected without the consent of such Owner, notwithstanding the foregoing provisions of this Section or any other provision of this Agreement.

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ARTICLE XIII

DEFEASANCE

Section 13.01. Discharge of Trust Agreement. The Certificates may be paid by the City in any of the following ways, provided that the City also pays or causes to be paid any other sums payable hereunder by the City:

(a) by
paying or causing to be paid the Principal Amount relating to the Certificates, t ogether with interest thereon, as and when the same become due and payable;

(b) by depositing with the Trustee, in trust, at or before maturity, money or securities in the necessary amount (as provided in Section 13.03) to pay or prepay all Certificates then Outstanding ; or

If the C ity shall also pay or cause to be paid all other sums payable by the City hereunder, then and in that case, at the election o f the City (evidenced by a Written Request of the City, filed with the Trustee, signifying the intentio n of the City to discharge a ll such indebtedness and this Trust Agreement), and n otwithstanding that any Certificates shall not have been surrendered for payment, this Trust Agreement and the pledge of Lease Payments and other assets made under this Trust Agreement and all covenants, agreements and other obligations of the City under this Trust Agreement shall cease, terminate, become void and be completely discharged and satisfied. In such event, upon the Written Request of the City, the Trustee shall cause an accounting for such period or periods as may be requested by the City to be prepared and filed with the City and shall execute and deliver to the City all such instruments as may be necessary or desirable to evidence such discharge and satisfaction, and the Trustee shall pay ov er, transfer, assign or deliver all moneys or securit ies or other property held by it pursuant to this Trust Agreement which are n ot required for the payment or prepayment of Certificates not theretofore surrendered for such payment or prepayment to the City.

Section 13.02. Discharge of Liability on Certif icates. Upon the deposit with the Trustee, in trust, at or before maturity, of money or securities in the necessary amount (as provided in Section 13.03) to pay or prepay any Outstanding Certificates (whether upon or prior to their respective maturities or the prepayment date of such Certificates), provided that, if such Certificates are to be prepaid prior to maturity, notice of such prepayment shall have been given as provided in Article IV or provision satisfactory to the Trustee shall have been made for the giving of such notice, then all liability of the City in respect of such Certificates shall cease, terminate and be completely discharged, and the Owner thereof shall thereafter be entitled only

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to payment out of such money or securities deposited with the Trustee as aforesaid for their payment, subject, however, to the provisions of Section 13.04.

The City may at any time surre nder to the Trustee for cancellation by it any Certif icates previously executed and delivered, which the City may have acquired in any manner whatsoever, and such Certificates, upon such surrender and cancellation, shall be deemed to be paid and retired.

Section 13.03. Deposit of Money or Securities with T rustee. Whenever in this Trust Agreement it is provided or permitted that there be deposited with or held in trust by the Trustee money or securities in the necessary amount to pay or redeem any Certificates, the money or securities so to be deposited or h eld may include money or securities held by the Trustee in the funds established pursuant to this Trust Agreement and shall be--

(a) l
awful money of the United States of America in an amount equal to the principal amount of suc h Certificates and all unpai d interest thereon to maturity, except that, in the case of Certificates which are to be prepaid prior to maturity and in respect of which notice of such prepayment shall have been given as provided in Article IV or provision satisfactory to the Trustee shall have been made for the giving of such notice, the amount to be deposited or held shall be the principal amount of such Cer tificates and all unpaid interest thereon to the prepayment date; or

(b) Defeasance Obligations (as defined below), the pri ncipal of and interest on which when due will provide money sufficient in the opinion of a certified public accountant to pay the principal of and all unpaid interest to maturity, or to the prepayment date, as the case may be, on the Certificates to be pai d or prepaid, as such principal and interest become due, provided that, in the case of Certificates whi ch are to be prepaid prior to the maturity thereof, notice of such prepayment shall have been given as provided in Article IV or provision satisfactory t o the Trustee shall have been made for the giving of such notice;

provided, in each case, that the Trustee shall have been irrevocably instructed (by the terms of this Trust Agreemen t or by Written Request of the City) to apply such money to the payment of such principal and interest with respect to such Certificates.

For purposes of this Section, “Defea sance Obligations” shall mea n Federal Securities, as herein defined.

Section 13. 04. Payment of Certificates After Discharge of T rust Agreement.

Notwithstanding any provisions of this Trust Agreement, any moneys held by the Trustee in trust for the payment of the Principal Amount relating to any Certificates, together with interest thereon and remaining unclaimed for two years after the Principal Amount relating to all of the Certificates has become due and payable (whether at maturity or upon call for prepayment as provided in this Trust Agreement), if such moneys were so held at such date, or two years after

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the date of deposit of such moneys if deposited after said date when all of the Cert ificates became due and payable, shall be repaid to the City free from the trusts created by this Trus t Agreement and all lia bility of the Trustee with respect to such moneys shall thereupon cease; provided, however, that before the repayment of such money s to the City as aforesaid, the Trustee may (at the c ost of the City) first mail to the Owners of Cert ificates which have not yet been paid, at the addresses shown on the Registration Books a notice, in such form as may be deemed appropriate by the Trustee with respect to the Certificates so payable and not presented and with respect to the provisions relating to the repayment t o the City of the moneys held for the payment thereof.

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ARTICLE XIV

MISCELLANEOUS

Section 14.01. Records. The Trustee shall keep complete and accur ate records of all moneys received and disbursed under this Agreement, which shall be available for inspection by the City, the Corporation , and any Owner, or the agent of any of them, at any time during regular business hours, upon reasonable prior notice.

Section 14.02. Notices. All written notices to be given under this Agreement shall be given by mail or personal delivery to the party entitled thereto at its address set forth below, or at such address as the party may provide to the other party in writing from time to time. Notice shall be effective upon receipt after deposit in the Unite d States mail, postage prepaid or, in the case of personal delivery, upon delivery to the address set forth below:

I
f to the City: City Clerk
City of Livermore
1052 South Livermore Avenue
Livermore, CA 94550

If to the Corporation:

Public Property Financing Corporation of
California
2945 Townsgate Road, Suite 200
Westlake Village, California 91361
Attention: President

If to the Trustee:

U.S. Bank Trust Company, National Association
One California Street, Suite 1000
San Francisco, California 94111
Attention: Corporate Trust Services

Fax (415) 677-3768

Section 14.03. Governing Law . This Agreement shall be construed and governed in accordance with the laws of the State.

Section 14.04. Binding Effect; Successors . This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. Whenever in this Agreement either t he Corporatio n, the City or the Trustee is named or referred to , s uch reference shall be deemed to include the succ essors or assigns there of, and all the covenants

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and agreements in this Agreement contained by or on behalf of the Corporation , the City or the Trustee shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not.

Section 14.05. Execution in Counterparts . This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same agreement.

Section 14 .06. Destruction of Cancelled Certificates . Whenever in this Agreement provision is made for the surrender to or cancellation by the Trustee and the delivery to the City of any Certificates, the Trustee, in lieu of such cancellation and delivery, shall destroy such Certificates and deliver a certificate of such destruction to the City.

Section 14.07. Headings. The headings or titles of the several Articles and Sections hereof, and any table of contents appended to copies hereof, shall be solely for convenience of reference and shall not affect the meaning, construction or effec t of this Agreement. All references herein to “A rticles”, “Sections”, a nd other subdivisions are to the corresponding Articles, Sections or subdivisions of this Agreement; and the words “herein”, “hereo f”, “hereunder” and other words of similar import ref er to this Agreement as a whole and not to any particular Article, Section or subdivision hereof.

Section 14.08. Waiver of Notice . Whenever in this Agreement the giving of notice by mail or otherwise is re quired, the giving of such notice may be waived in writing by the person entitled to receive such notice and in any case the giving or receipt of such notice shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

Section 14.09. Separability of Invalid Provis ions. In case any one or more of the provisions contained in this Agreement or in the Certificates shall for any reason be held to be invalid, illegal or unenforceable in any respect, then s uch invalidity, illegality o r unenforceability shall not affect any other provision of this Agreement, and this Agreement shall be construed as if such in valid or illegal or unenforceable provision had never been contained herein. The parties hereto hereby declare that they wou ld have entered into this Agreement and each and every other section, paragraph, sentence, clause or phrase hereof and authorized t he delivery of the Certificates pursuant thereto irr espective of the fact that any one or more sections, paragraphs, sentences, cl auses or phrases of this Agreement may be held illegal, invalid or unenforceable.

EXHIBIT D
483
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first above written.

U.S. BANK TRUST COMPA NY, NA TIONAL
ASSOCIATION, as Trustee

By:

Authorized Officer

PUBLIC PROPERTY FINANCING CORPORATION

OF CALIFORNIA

By:

Treasurer

CITY OF LIVERMORE

By:

City Manager
Attest:

By:

City Clerk

EXHIBIT D
484

EXHIBIT A

(FORM OF 2022 CERTIFICATE OF PARTICIPATION)

CITY OF LIVERMORE
2022 CERTIFICATE OF PARTICIPATION
(Livermore Village Development)

Evidencing the Undivided Fractional Interest of the Owner Hereof in Lease Payments to be Made by the

CITY OF LIVERMORE, CALIFORNIA

As Rental For Certain Property Pursuant
to a Lease Agreement With the

Public Property Financing Corporation of California

DATED DATE: RATE OF INTEREST: MATURITY DATE: CUSIP
______, 2022

REGISTERED OWNER:

PRINCIPAL AMOUNT:

THIS IS TO CERTIFY THAT the Registered Owner identi fied above, or registered assigns, as t he registered owner (the “Registered Owner”) o f this Certificate of Participation (the “Certificate”) is the owner of an undivided fractional interest in Lease Payments under the Lease Agreement dated as of April 1, 2022, by and between the Public Property Financing Corporation of California, a nonprofit public benefit corporation duly formed a nd acting under the laws of the State of California ( the “ Corporation”), and the City of Livermore, a general law city and municipal corporation and politica l subdivision duly organized and existing under the Constitution and the laws of the State of California the (“City”) (the “Lease Agreement”) which Lease Payments and certain other rights and interests under the Lease Agreement have been assigned to U.S. B ank Trust Company, National Association, as trustee (the “Trustee”), having a corporate trust office in San Francisco, California, or such other place designated by the Trustee (the “Corporate Trust Office”) .

EXHIBIT D
485
The Registered Owner of this Certificate is entitled to receive, subject to the terms of the Lease Agreement, on the Maturity Date identified above, the Principal Amount identified above, representing a portion of the Lease Payments designated as principal, and to receive on A pril 1, 2023 and semiannually thereafter on April 1 and October 1 of each year (the “Payment Dates”) until payment in full of said principal, the Registered Owner's proportionate share of the Lease Payments designated as interest coming due during the interest period immediately preceding each of the Payment Dates; provided that interest with respect hereto shall be payable fr om the Payment Date next preceding the date of execution of this Certificate unless (i) this Certificate is executed on a Payment Date, in which event interest shall be payable from such Payment Date, or (ii) this Certificate is executed after the close of business on the fifteenth (15th) day of the month immediately preceding a Payment Date and prior to such Payment Date, in which even t interest shall be payable from such Payment Date, or (iii) unless this Certificate is executed on or before March 15, 2023, in which event interest shall be payable from the Dated Date. Said proportionate share of the portion of the Lease Payments designated as interest is the result of the multiplication of the aforesaid portion of the Lease Payments designated as principa l by the Rate of Interest per annum identified above. Said amounts are payable in lawful money of the United States of Ameri ca in th e case of principal and interest at maturity upon presentation hereof at the Corporate Trust Office of the Trustee, and in the case of interest prior to maturity by check or draft mailed on the applicable Payment Dates by the Trustee to the Registered Owner hereof at the address as it appears on the registration books of the Trustee.

This Certificate has been executed and delivered by the Trustee pursuant to the terms of a Trust Agreement by and among the Trustee, the Corporation and the City, dated as of October 1, 2022 (the “Trust Agreement”). The City has certified that it is authorized to enter into the Lease Agreement and the Trust Agreement under the constitution and laws of the State of California, for the purpose of leasing certain public i mprovements from the Corporation .

Reference is hereby made to the Lease Agreement and the Trust Agreement (copies of which are on file at the Corporate Trust Office of the Trustee) for a description of the terms on which the Certificates are delivered, the rights thereunder of the owners of the Certificates, the rights, duties and immunities of the Trustee and the rights and obligations of the City under the Lease Agreement, to all of the provisions of the Lease Agreement and the Trust Agreement the Registered Owner of this Certificate, by acceptance hereof, assents and agrees.

The City is obligated under the Lease Agreement to pay Lease Payments from any source of available funds. The obligation of the City to pay the Lease Payments does not constitute a n obligation of the City for which the City is obligated to levy or pledge any form of taxation or for which the City has levied or pledged any form of taxation. The obligation of the City to pay Lease Payments does not constitute a debt of the City, the State of California or any of it s political subdivisions, an d does not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction.

To the extent and in the manner permitted by the terms of the Trust Agr eement, the provisions of the Tr ust Agreement may be amended by the parties thereto with the written consent of the owners of at least sixty percent (60%) in aggregate principal amount of the

EXHIBIT D
486
Certificates then outstanding, and may be amended without such consent under certain circumstances; provided that no such amendment shall adversely affect the interests of the owners of the Certificates or shall impair the right of any owner to receive in any case such owner's proportionate share of any Lease Payment in accordance with such owner's Certificate.

This Certificat e is transferable by the Registered Owner hereof, in person or by his attorney duly authorized in writing, at the Corporate Trust Office of the Trustee, but only in the manner, subject to the limi tations and upon payment of the charges, if any, provided in the Trust Agreement and upon surrender and cancellation of this Certificate. Upon such transfer a new Certificate or Certificates, of authorized denomination or denominations and of the same maturity, f or the same aggregate pr incipal amount will be execu ted and delivered to the transferee in exchange herefor. The City, the Corporation and the Trustee may treat the registered owner hereof as the absolute owner hereof for all purposes, whether or not this Certificate shall be overdue, and the City, the Corporation and the Trustee shall not be affected by any notice to the contrary.

The Certificates maturing on or before April 1 , 20__, are not subject to optional prepayment prior to their stated maturity. The Certificates maturing on or after April 1, 20__, are subject to optional prepayment on any date on or after April 1 , 20__, in whole or in part, from prepayments of the Lease Payments made at the option of the City pursuant to the Lease Agreement, at a prepayment price equal to the principal amount thereof to be prepaid together with accrued interest to the prepayment date, without premium.

The Certificates maturing o n April 1 , 20__ are subject to mandatory sinking fund prepayment prior to their respective stated maturities, in the amounts and years set forth below, at the prepayment price equal to the principal amount thereof to be prepaid, together with accrued interest to the date fixed for prepayment.

Sinking Fund
Prepayment Date
(April 1)

Sinking Payments
$

The Certificates are subject to prepayment on any Payment Date in whole, or in part, proportionately among maturities and by lot wit hin a maturity, from the Net Proceeds (as defined in the Trust Agreem ent) of ins urance or condemnation with respect to the Leased Property (as defined in the Lease Agreement), which Net Proceeds are deposited in the Lease Payment Fund and credited towards the prepayment of the Lease Payments made by the City pursuant to the Lease Agreement, at a prepayment price equal to the principal amount thereof to be prepaid together with accrued interest to the date fixed for prepayment, without premium.

EXHIBIT D
487

As provided in the Trust Agreement, notice of prepayment shall be mailed, not les s than twenty (20) nor more than forty -five (45) days before the prepayment date, to the registered owner of the Certificate to be prepaid, but neither failure to receive such notice nor any defect in the notice so mailed shall affect the sufficiency of th e proceedings for prepayment. Any such notice may be conditional upon receipt of sufficient funds for the prepayment and may be rescinded.

If this Certificate is called for prepayment and payment is duly provided therefor as specified in the Trust Agreement, interest represented hereby shall cease to accrue from and after the date fixed for prepayment.

The Trustee has no obligation or liability to the registered owners for the payment of the interest or principal or the prepayment premiums, if any, represen ted by the Certificates; but rather the Trustee’s sole obligations are to administer, for the benefit of the City and the Certificate registered owners, the various funds established under the Trust Agreement.

Unless this Certificate is presented by an authorized representative of The Depository Trust Company, a New Y ork corporation (“DTC”), to the Trustee for registration of transfe r, exchange, or payment, and any Certificate executed and delivered is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co., or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR T O ANY PERSO N IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.

IN WITNESS WHEREOF, this Certificate has been executed and delivered by U.S. Bank Trust Company, National Association, as trustee, acting pursuant to the Trust Agreement.

Execution Date:

U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Trustee

By:

Authorized Officer

* * * * * * * * * * * *

(FORM OF ASSIGNMENT)

EXHIBIT D
488

For value received, the undersigned do(es) hereby sell, assign and transfer unto

(Name, Address and Tax Identification or Social Security Number of Assignee)

the within Certificate and do(es) hereby irrevocably c onstitute and appoint , attorney, to transfer the same on the registration books of the Trustee, with full power of substitution in the premises.

D
ated:

Signature Guaranteed:

NOTICE: Signature guarantee shall be made by a
guarantor institution participating in the
Securities Transfer Age nts Medallion
Program or in such other guarantee
program acceptable to the Trustee.

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

EXHIBIT D
489

EXHIBIT B

FORM OF PROJECT FUND REQUISITION

DISBURSEMENT REQUEST NO.: _______

U.S. Bank Trust Company, National Association

Re: City of Livermore 2022 Certificate s of Participation (Livermore Village Development)

Ladies and Gentlemen:

In accordance w ith the terms of a Trust Agreement , by and among, the Public P roperty Financing Corporation of California, U.S. Bank Trust Company, National Association and the City of Livermore, dated as of October 1, 2022 (the “Trust Agreement”), I am a City Representative of the City of Livermore, a nd you are hereby authorized and requested to make immediate disbursement of funds held by you in the Project Fund for Project Costs relating to the Proj ect (as such terms are d efined in the Trust Agreement) pursuant to Section 3. 04 of the Trust Agreement.

You are hereby requested to pay from the Project Fund, to the person(s), corporation(s) or other entity(ies) designated on Schedule A attached hereto, in payment of all or a portion of the Project Costs described on said S chedule. Supporting documentation for t he listed Project Costs are attached hereto.

The undersigned hereby certifies that (i) the amounts listed on Schedule A constitute Project Costs (as defined in the Trust Agreement), (ii) no part of the amount requested herein has been included in any other request previously filed with you; (iii) to the knowledge of the undersigned, there has not been filed with or served upon the City any notice of any lien or attachment upon or claim (except for any preliminary not ice of lien as may be filed in accordance with law) affecting the right of the person, corporation or other entity stated below to receive payment of the amount stated below, which lien has not been released or will not be released simultaneously with the payment requested hereunder; and (iv) the labor, services and/or materials covered hereby have been performed upon or furnished to the Project and the payment requested herein is due a nd payable under a purchase order, contract or other authorization;

Dated: __________, 20___.

CITY OF LIVERMORE

EXHIBIT D
490

By:

City Representative

EXHIBIT D
491

SCHEDULE A

Payee Description Project Costs
(include address) of Costs Amount Amount

EXHIBIT D
492
AGENDA DRAFT Jones Hall, A Professional Law Corporation PRELI
MINARY OFFICIAL STATEMENT DATED _______, 2022
NEW ISSUE - BOOK-ENTRY ONLY RATING: S&P: “__”
See “RATING”
In the opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Special Counsel, subject, however to certain qualifications described herein, under existing law, the portion of Lease Payments designated as and comprising interest and received by the owners of the Certificates is excluded from gross income for federal income tax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax. In the further opinion of Spe cial Counsel, such interest is exempt from California personal income taxes. Special Counsel expresses no opinion regarding any other tax consequences caused by the ownership or disposition of, or the accrual or receipt of interest on, the Certificates. See "TAX MATTERS."
$______*

CITY OF LIVERMORE
2022 Certificates of Participation
(Livermore Village Development)
Dated: Date of Delivery Due: April 1, as shown on inside cover Authority for Execution and Delivery. The 2022 Certificates of Participation (the “Certificates”) are being executed and delivered under a Trust Agreement dated as of October 1, 2022 (the “Trust Agreement”), among the City of Livermore (the “City”), the Public Property Financing Corporation of California (the “Corporation”) and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). See “THE CERTIFICATES – Authority for Execution and Delivery.” Purpose. The Certificates are being executed and delivered to (i) finance the design and construction of a parking garage to provide adequate parking for all existing and new development and other improvements in the City (and (ii) pay certain costs of executing and delivering the Certificates. See “PLAN OF FINANCING.” Security for the Certificates. The Certificates evidence and represent direct, undivided fractional interests in certain payments (the “Lease Payments”) to be made by the City pursuant to a Lease Agreement dated as of October 1, 2022 (the “Lease Agreement”), between the City and the Corporation, under which the Corporation will lease certain real property to the City i n consideration of the payment by the City of the Lease Payments. The Corporation, for the benefit of the Owners of the Certificates, has assigned, among other things, its right to receive Lease Payments to the Trustee. See “SECURITY FOR THE CERTIFICATES.”
Terms of the Certificates. The Certificates will be executed and delivered in denominations of $5,000 principal amount or integral multiples thereof. Interest with respect to the Certificates accrues from their date of delivery and is payable semiannually on April 1 and October 1, commencing April 1, 2023. See “THE CERTIFICATES – General Certificate Terms.” Book-Entry Only. The Certificates will be executed and delivered as fully registered certificates in book -entry form only, initially registered in the name of Cede & Co., New York, New York, as nominee of The Depository Trust Company (“DTC”), New York, New York. Purchasers will not receive physical certificates representing their interest in the Certificates. The principal and premium (if any) on and interest with respect to the Certificates will be payable by the Trustee to DTC for subsequent disbursement to DTC participants, so long as DTC or its nominee remains the registered owner of the Certificates. See “THE CERTIFICATES – Book-Entry System.”
Prepayment. The Certificates are subject to optional prepayment , extraordinary mandatory prepayment from the net proceeds of insurance or condemnation proceedings , and mandatory sinking fund prepayment prior to their scheduled payment dates. See “THE CERTIFICATES – Prepayment of the Certificates.” This cover page contains information for general reference only, and is not a summary of the security or terms of this issue. Investors must read the entire Official Statement, including the section entitled “RISK FACTORS,” for a discussion of special factors that should be considered, in addition to the other matters set forth in this Official Statement, in considering the investment quality of the Certificates.

MATURITY SCHEDULE
See inside front cover

NEITHER THE CERTIFICATES NOR THE OBLIGATION OF THE CITY TO MAKE LEASE PAYMENTS CONSTITUTES

A DEBT OF THE CITY OR OF THE STATE OF CALIFORNIA OR OF ANY POLITICAL SUBDIVISION THEREOF WITHIN THE

MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMIT OR RESTRIC TION, OR AN OBLIGATION FOR WHICH

THE CITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE CITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION.

The Certificates will be sold and awarded pursuant to a competitive bidding process held on _______, 2022, as set forth in the Notice of Intention to Sell. The Bonds will be offered, when, as and if issued and accepted by the Purchasers, subje ct to the approval of Jones Hall, A Professional Law Corporation, San Francisco, California, Special Counsel to the City, and subject to certain other conditions. Jones Hall, A Professional Law Corporation is also serving as Disclosure Counsel to the City. In addition, certain legal matter s will be passed upon for the City by the City Attorney. It is anticipated that the Certificates, in book-entry form, will be available for delivery through the facilities of DTC, on or about October __, 2022.

The date of this Official Statement is ______, 2022.
* Preliminary; subject to change.

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

EXHIBIT E
493
MA
TURITY SCHEDULES*
(Base CUSIP†: _______)
$________
CI

TY OF LIVERMORE
2022 Certificates of Participation
(Livermore Village Development)
$_____________ Serial Certificates
Maturity Date
(April 1)
Principal
Amount
Interest
Rate Yi
eld Pr
ice CUSI
P†
$_______ ____% Term Certificates Due April 1, 20___; Price: ____; Yield: ____%; CUSIP† : ____ * Pr eliminary; subject to change.
† Copyright, American Bankers Association. CUSIP data are provided by Standard & Poor's CUSIP Service Bureau, a division of T he Mc
Graw-Hill Companies, Inc., and are provided for convenience of reference only. Neither the City nor the Purchaser assumes any responsibility for the accuracy of these CUSIP data.

EXHIBIT E
494

CITY OF LIVERMORE, CALIFORNIA

City Council

Robert Woerner, Mayor
Gina Bonnano, Vice Mayor
Robert W. Carling, Council Member
Brittni Kick, Council Member
Trish Munro, Council Member

City Officials

Marianna Marysheva, City Manager
Jason Alcala, City Attorney
Marie Weber, City Clerk
Tina Olson, Administrative Services Director
Erik Peterson, Accounting Supervisor
David Doyle, Accounting Supervisor

Special Counsel and Disclosure Counsel
Jones Hall, A Professional Law Corporation
San Francisco, California

Municipal Advisor
KNN Public Finance, LLC
Oakland, California

Trustee
U.S. Bank Trust Company, National Association
Los Angeles, California

EXHIBIT E
495

GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT

Use of Official Statement. This Official Statement is submitted in connection with the sale of the Certificates referred to herein and may not be reproduced or used, in whole or in part, for any other purpose.

This Official Statement is not to be construed as a contract with the purchasers of the Certificates.

Estimates and Forecasts. When used in this Official Statement and in any continuing disclosure by the City, in any press release and in any oral statement made with the approval of an authorized officer of the City, the words or phrases “will likely result,” “are expected to ,” “will continue, ” “is anticipated ,” “estimate,” “project,” “forecast ,” “expect, ” “intend” and similar expressions identify “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. Any forecast is subject to such uncertainties. Inevitably, some assumptions used to develop the forecasts will not be realized and unanticipated events and circumstances may occur. Therefore, there are likely to be differences between forecasts and actual results, and those differences may be material.

Limit of Offering. No dealer, broker, salesperson or other person has been authorized by the City or the Purchaser to give any information or to make any representations other than those contained herein and, if given or made, such other information or representation must not be relied upon as having bee n authorized by any of the foregoing. 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 Certificates by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale.

Limited Scope of Information. The City has obtained certain information set forth herein from sources that are believed to be reliable, but this information is not guaranteed as to accuracy or completeness. 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 any other parties described in this Official Statement since the date hereof.

All summaries of or references to the documents referred to in this Official Statement are made subject to the provisions of such documents and do not purport to be complete statements of any or all of such provisions. All capitalized terms used herein, unless noted otherwise, have the meanings given them in APPENDIX B.

Stabilization of Prices. In connection with this offering, the Purchaser may over-allot or effect transactions that stabilize or maintain the market price of the Certificates at a level above that which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time.

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

The Purchaser has provided t he following sentence for inclusion in this Official Statement: The Purchaser has reviewed the information in this Official Statement in accordance with, and as a part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Purchaser does not guarantee the accuracy or completeness of such information.

NO REGISTRATION. THE CERTIFICATES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE UPON AN EXCEPTION FROM THE REGISTRATION REQUIREMENTS CONTAINED IN SUCH ACT. THE CERTIFICATES HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE.

City Internet Site. The City maintains a website, but the information presented on the website is not a part of this Official Statement and should not be relied upon in making an investment decision with respect to the Certificates.

EXHIBIT E
496

TABLE OF CONTENTS
Page Page

INTRODUCTION ........................................ 1 THE CERTIFICATES .................................. 4
Authority for Execution and Delivery ....... 4
General Certificate Terms ....................... 4
Prepayment of the Certificates* ............... 5
Book-Entry System .................................. 7
Transfer and Exchange ........................... 8
THE LEASED PROPERTY ......................... 9
General .................................................... 9 Modification of Leased Property .............. 9
Substitution of Property ......................... 10
Removal of Property .............................. 10
PLAN OF FINANCING .............................. 12
The Project ............................................ 12 Estimated Sources and Uses of Funds . 12
SCHEDULE OF LEASE PAYMENTS ....... 13
THE CORPORATION ............................... 14
The Corporation .................................... 14 SECURITY FOR THE CERTIFICATES .... 15
General .................................................. 15 Lease Payments .................................... 15
Source of Payments; Budget and
Appropriation ..................................... 16
Limited Obligation .................................. 16 Abatement ............................................. 17 Insurance and Condemnation Fund;
Application of Net Proceeds of
Insurance and Condemnation ........... 17
Covenants to Maintain Insurance .......... 17

CONSTITUTIONAL AND STATUTORY

LIMITATIONS ON TAXES AND
APPROPRIATIONS .............................. 19
Article XIIIA of the California
Constitution ........................................ 19 Appropriation Limitation - Article XIIIB .. 19
Proposition 218 - Article XIIIC and
Article XIIID ....................................... 20 Unitary Property .................................... 21 Proposition 62 ....................................... 22 Proposition 22 ....................................... 22 Future Initiatives ................................... 22 RISK FACTORS ....................................... 23 Security for the Certificates ................... 23
Abatement ............................................ 24 Remedies Against the City ................... 25
State Law Limitations on
Appropriations ................................... 26
City Bankruptcy ..................................... 26 Earthquakes and Other Natural
Disasters ........................................... 27 Climate Change .................................... 29
Cybersecurity ........................................ 30 No Liability by the Corporation to the
Owners .............................................. 30 Impact of State Budget on City
Revenues .......................................... 30
Change in Law ...................................... 31 Tax Exemption of the Certificates ......... 31
Secondary Market ................................. 31
TAX MATTERS ........................................ 32 CERTAIN LEGAL MATTERS ................... 33
CONTINUING DISCLOSURE .................. 34
COMPETITIVE SALE OF BONDS ........... 34
LITIGATION ............................................. 34 PROFESSIONAL FEES ........................... 35
RATING .................................................... 35 EXECUTION ............................................ 36

APPENDIX A CITY OF LIVERMORE GENERAL FINANCIAL AND DEMOGRAPHIC INFORMATION

APPENDIX B SUMMARY OF PRINCIPAL LEGAL DOCUMENTS

APPENDIX C AUDITED FINANCIAL STATEMENTS OF THE CITY FOR THE YEAR ENDED JUNE 30, 2021

APPENDIX D PROPOSED FORMS OF FINAL OPINIONS

APPENDIX E FORM OF CONTINUING DISCLOSURE CERTIFICATE

APPENDIX F BOOK-ENTRY PROVISIONS

EXHIBIT E
497

__________________________________

OFFICIAL STATEMENT
__________________________________

$______*

CITY OF LIVERMORE
2022 Certificates of Participation
(Livermore Village Development)

The purpose of this Official Statement (which includes the cover page and the attached appendices) is to provide information concerning the execution and delivery of the City of Livermore 2022 Certificates of Participation (Livermore Village Development) (the “Certificates”), evidencing and representing direct, undivided fractional interests of the registered owners thereof in certain semiannual lease payments (the “ Lease Payments ”) to be made by the City of Livermore (the “City ”) to the Public Property Financing Corporation of California (the “Corporation”) under the Lease Agreement described below.

Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized.

Capitalized terms used but not defined in this Official Statement have the meanings set forth in APPENDIX B.

INTRODUCTION

The City. The City is a general law city with a council/manager form of government, which was incorporated on April 1, 1876. It comprises approximately 24.72 square miles and is located in southeastern Alameda County (the “County”) , approximately 43 miles southeast of San Francisco and 30 miles southeast of Oakland.

For selected financial, economic and demographic information about the City, see “APPENDIX A – City of Livermore General Financial and Demographic Information.”

The City’s audited financial statements for the fiscal year ended June 30, 20 21, are attached as APPENDIX C.

Authority for Execution and Delivery . The Certificates are being executed and delivered under a Trust Agreement dated as of October 1, 2022 (the “Trust Agreement”), among the City, the Corporation and U.S. Bank Trust Company, National Association , as trustee (the “Trustee”).

EXHIBIT E
498

2 Purpose of the Certificates.

The Certificates are being executed and delivered to:

(i) finance the acquisition and construction of public improvements benefitting the City, including (a) the costs of design and construction of a four -level public parking garage with approximately 460 spaces east of L Street, between Veterans Way and First Street in the City to provide adequate parking for all existing and new development in the downtown, (b) additional site improvements and (c) the acquisition and construction of such other improvements identified by the City from time to time (collectively, the “Project”); and

(ii) pay certain costs of executing and delivering the Certificates.

See “PLAN OF FINANCING.”

Security for the Certificates. In order to provide funds to finance the Project, the Corporation and the City have entered into a Property Lease dated as of October 1, 2022 (the “Property Lease ”), pursuant to which the City will lease certain real property and the improvements thereon (the “Leased Property”) to the Corporation, and the Corporation and the City have entered into a Lease Agreement dated as of October 1, 2022 (the “Lease Agreement”), under which the Corporation will lease the Leased Property back to the City in consideration of the payment by the City of semiannual lease payments (the “ Lease Payments ”). See “THE LEASED PROPERTY” for a description of the Leased Property.

The Corporation will assign its right to receive the Lease Payments to the Trustee under an Assignment Agreement dated as of October 1, 2022 (the “Assignment Agreement”), between the Corporation and the Trustee, in consideration for which the Trustee has agreed to execute and deliver the Certificates. The Certificates evidence and represent direct, undivided fractional interests of the Certificate Owners in the Lease Payments. See “SECURITY FOR THE CERTIFICATES.”

Funds for the Lease Payments. The Lease Payments are payable from any source of available moneys of the City . Subject to provisions of the Lease Agreement providing for abatement of the Lease Payments in certain circumstances (see “- Abatement” below), the City covenants in the Lease Agreement to take such action as may be necessary to include all Lease Payments in each of its budgets during the term of the Lease Agreement and to make the necessary annual appropriations for the Lease Payments.

Prepayment. The Certificates are subject to optional prepayment , extraordinary mandatory prepayment from the net proceeds of insurance or condemnation proceedings , and mandatory sinking fund prepayment prior to their scheduled payment dates . See “THE CERTIFICATES – Prepayment of the Certificates.”

Abatement. The Lease Payments are subject to complete or partial abatement in the event and to the extent that there is substantial interference with the City’s use and possession of the Leased Property or any portion thereof. If the Lease Payments are abated under the Lease Agreement, the Certificate Owners would receive less than the full amount of principal of and interest represented by the Certificates. To the extent proceeds of rental interruption insurance are available, Lease Payments (or a portion thereof) may be made from those proceeds during

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3 periods of abatement. See “SECURITY FOR THE CERTIFICATES – Abatement” and “RISK FACTORS – Abatement.”

Legal Opinions . Upon delivery of the Certificates, Jones Hall, A Professional Law Corporation, San Francisco, California, Special Counsel (“Special Counsel”) will release its final approving legal opinion s with respect to the Certificates, regarding the validity and tax -exempt status of the Certificates, in the forms attached hereto as APPENDIX D.

Risk Factors. The Certificates are payable only from Lease Payments made by the City to the Corporation and assigned to the Trustee under the Trust Agreement. For a discussion of some of the risks associated with the purchase of the Certificates, see “RISK FACTORS.”

Limited Obligations. NEITHER THE CERTIFICATES NOR THE OBLIGATION OF THE

CITY TO MAKE LEASE PAYMENTS CONSTITUTES A DEBT OF THE CITY OR OF THE STATE

OF CALIFORNIA OR OF ANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING

OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMIT OR RESTRICTION, OR AN

OBLIGATION FOR WHICH THE CITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF

TAXATION OR FOR WHICH THE CITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION.

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4 THE CERTIFICATES

This section provides summaries of the Certificates and certain provisions of the Trust Agreement. See “APPENDIX B – Summary of Principal Legal Documents” for a more complete summary of the Trust Agreement. Capitalized terms used but not defined in this section have the meanings given in APPENDIX B.

Authority for Execution and Delivery

The Certificates are being executed and delivered under the Trust Agreement, a resolution of the City Council adopted on _______, 2022, and a resolution of the Board of Directors of the Corporation adopted on _______, 2022. Under these resolutions, the Certificates may be executed and delivered in a maximum principal amount of $_______.

General Certificate Terms

Certificate Terms. The Certificates will be dated as of the date of original delivery, will bear interest at the rates per annum and will mature on the dates and in the amounts set forth on the inside front cover of this Official Statement . The Certificates will be executed and delivered in fully registered form without coupons in denominations of $5,000 principal amount or any integral multiple of $5,000, except that no Certificate will represent principal payable in more than one year.

Interest with respect to the Certificates accrues from their date of delivery and is payable semiannually on April 1 and October 1, commencing April 1, 2023 (each, a “Payment Date”).

Book-Entry Only System. The Certificates, when executed and delivered, will be registered in the name of Cede & Co., as registered owner and nominee of The Depository Trust Company, New York, New York (“DTC”). So long as DTC, or Cede & Co. as its nominee, is the registered owner of all Certificates, all payments with respec t to the Certificates will be made directly to DTC, and disbursement of such payments to the participants in DTC’s book -entry system (”DTC Participants” ) will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners (defined below) will be the responsibility of the DTC Participants, as more fully described hereinafter. See “– Book-Entry System” below.

Calculation of Interest. Interest represented by each Certificate will be payable from the Payment Date next preceding the date of execution thereof, unless:

(a) it is executed as of a Payment Date, in which event interest with respect thereto shall be payable from such Payment Date,

(b) it is executed after a Record Date and before the following Payment Date, in which event interest with respect thereto shall be payable from such Payment Date, or

(c) it is executed on or before March 15, 2023 , in which event interest with respect thereto shall be payable from the Closing Date;

provided, however, that if, as of the date of any Certificate, interest represented by such Certificate is in default, interest represented by such Certificate shall be payable from the Payment Date to which interest represented ther eby has previously been paid or made available for

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5 payment. Interest represented by the Certificates is payable on each Payment Date to and including the date of maturity or prepayment, whichever is earlier.

Such interest represents the portion of Leas e Payments designated as interest and coming due on each of the respective Payment Date s. The share of the portion of Lease Payments designated as interest with respect to any Certificate will be computed by multiplying the portion of Lease Payments designated as principal represented by such Certificate by the rate of interest represented by such Certificate (on the basis of a 360 -day year consisting of twelve 30-day months).

Record Date . The Trust Agreement defines the “Record Date” with respect to the Certificates as the close of business on the 15th calendar day of the month preceding each Payment Date, whether or not such 15th calendar day is a Business Day.

Payments of Interest and Principal. Payment of interest represented by any Certificate on any Payment Date will be made to the person appearing on the Registration Books as the Owner thereof as of the close of business on the Record Date immediately preceding such Payment Date, such interest to be paid by check mailed on the applicable Payment Date to such Owner, by first class mail postage prepaid, at such Owner’s address as it appears on the Registration Books.

The principal, interest and prepayment premium, if any, represented by any Certificate at maturity or upon prepayment are payable in lawful money of the United States of America upon surrender of such Certificate at the Corporate Trust Office.

Notwithstanding the foregoing, while the Certificates are held in the bo ok-entry only system of DTC, all such payments of principal, premium (if any) of, and interest with respect to, the Certificates will be made to Cede & Co. as the registered owner of the Certificates, for subsequent disbursement to Participant and benefici al owners. See “APPENDIX F – BOOK- ENTRY PROVISIONS.”

Prepayment of the Certificates*

Optional Prepayment. The Certificates maturing on or before April 1, 20__, are not subject to optional prepayment before their respective stated maturities.

The Certificates maturing on or after April 1, 20__, are subject to optional prepayment in
whole at any time or in part on any date, on or after April 1, 20__, at a prepayment price equal to the principal amount thereof and accrued interest to the date fixed for prepayment, without premium, from the proceeds of the optional prepayment of Lease Payments made by the City pursuant to the Lease Agreement, at a prepayment price equal to the principal amount thereof to be prepaid, together with accrued interest to the prepayment date, without premium.

Extraordinary Mandatory Prepayment From Net Proceeds of Insurance or Condemnation. The Certificates are subject to mandatory prepayment, in whole on any date or in part on any Payment Date , from the Net Proceeds of an insurance, title insurance, condemnation, or eminent domain award to the extent credited towards the prepayment of the Lease Payments by the City pursuant to the Lease Agreement, at a prepayment price equal to

* Preliminary; subject to change.

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6 the principal amount thereof to be prepaid, together with accrued interest to the date fixed for prepayment, without premium.

Mandatory Sinking Fund Prepayment. The Certificates maturing on April 1, 20__ (the “Term Certificates”), are subject to mandatory prepayment in part by lot on April 1 in each year on and after April 1, 20__, from the principal components of scheduled Lease Payments required to be paid by the Ci ty pursuant to the Lease Agreement with respect to each such prepayment date, at a prepayment price equal to the principal amount thereof to be prepaid, together with accrued interest to the date fixed for prepayment, without premium, as follows:

Sinking Fund
Prepayment Date
(April 1)

Principal Amount
To Be Prepaid

(Maturity)

Selection of Certificates for Prepayment . Whenever less than all Outstanding Certificates are called for prepayment, the Trustee will select Certificates for prepayment from the Outstanding Certificates not previously called for prepayment, among maturities selected by the City, in integral multiples of $5,000, and by lot within a maturity, in any manner deemed appropriate by the Trustee. Whenever provision is made pursuant to “- Extraordinary Mandatory Prepayment From Net Proceeds of Insurance or Condemnation ” above, and less than all Outstanding Certificates are called for prepayment, the Trustee shall select Certificates for prepayment from the Outstanding Certificates not previously called for prepayment, proportionately among maturities, in integral multiples of $5,000, and by lot within a maturity, in any manner deemed appropriate by the Trustee. For the purposes of such selection, Certificates shall be deemed to be composed of $5,000 portions, and any such portion may be separately prepaid. The Trustee shall promptly notify the City and the C orporation in writing of the Certificates so selected for prepayment.

Notice of Prepayment. While the Certificates are subject to DTC’s book-entry system, the Trustee will be required to give notice of prepayment only to DTC as provided in the letter of representations executed by the City and received and accepted by DTC. DTC and DTC Participants will have sole responsibility for providing any such notice of prepayment to the beneficial owners of the Certificates to be prepaid. Any failure of DTC to notify any Participant, or any failure of DTC Participants to notify the Beneficial Owner of any Certificates to be prepaid, of a notice of prepayment or its content or effect prepayment redemption described below under “–Effect of Notice of Prepayment.”

During any period in which the Certificates are not subject to the book -entry system, notice of prepayment of any Certificates to be prepaid will be given to the respective Owners of Certificates designated for prepayment by first-class mail, postage prepaid, at their addresses appearing on the registration books of the Trustee at least 20 but not more than 45 days prior to the prepayment date. Such notice must also be given to each of certain specified securities depositories and to certain other speci fied services. Neither failure to receive a prepayment notice nor any defect in the notice shall affect the sufficiency of the proceedings for the prepayment of the Certificates.

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7 However, while the Certificates are subject to DTC’s book-entry system, the Trustee will be required to give notice of prepayment only to DTC as provided in the letter of representations executed by the City and received and accepted by DTC. DTC and DTC Participants will have sole responsibility for providing any such prepayment notice to the beneficial owners of the Certificates to be prepaid. Any failure of DTC to notify any Participant, or any failure of DTC Participants to notify the Beneficial Owner of any Certificates to be prepaid, of a notice of prepayment or its content or effect, will not affect the validity of the notice of prepayment, or alter the effect of prepayment set forth in the Trust Agreement.

Rescission of Prepayment. The City has the right to rescind any notice of the optional prepayment of Certificates by written notice to the Trustee on or prior to the dated fixed for prepayment. Any notice of optional prepayment will be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for prepayment for the payment in full of the Certificates then called for prepayment, and such cancellation will not constitute an Event of Default. The City and the Trustee have no liability to the Owners or any other party related to or arising from such rescission of prepayment.

The Trustee will mail notice of such rescission of prepayment to the respective Owners of the Certificates designated for prepayment at their respective addresses appearin g on the Registration Books, and to the Securities Depositories and the Municipal Securities Rulemaking Board.

Effect of Notice of Prepayment. If moneys for the prepayment (including the interest to the applicable date of pr epayment) of Certificates hav e been set aside in the Lease Payment Fund, the Certificates will become due and payable on the date of such prepayment, and, upon presentation and surrender thereof at the Office of the Trustee, those Certificates will be paid at the unpaid principal amou nt (or applicable portion thereof) represented thereby plus interest accrued and unpaid to the date of prepayment.

If, on the date of prepayment, moneys for the prepayment of all the Certificates to be prepaid, together with interest represented thereby to the date of prepayment, are held by the Trustee so as to be available therefor on such date of prepayment, then, from and after the date of prepayment, interest represented by the Certificates will cease to accrue and become payable.

All moneys held by the Trustee for the prepayment of Certificates will be held in trust for the account of the Owners of the Certificates so to be prepaid, and will be held by the Trustee in cash uninvested.

Book-Entry System

DTC will act as securities depository for the Certificates. The Certificates will be executed and delivered as fully -registered Certificates registered in the name of Cede & Co. (DTC’s partnership nominee). One fully -registered Certificate will be execut ed and delivered for each maturity of the Certificates, each in the aggregate principal amount of such maturity, and will be deposited with DTC. See “APPENDIX F – BOOK-ENTRY PROVISIONS”.

The City and the Trustee cannot and do not give any assurances that DTC, DTC Participants or others will distribute payments of principal, interest or premium with respect to the Certificates paid to DTC or its nominee as the registered owner, or will distribute any prepayment notices or other notices, to the Beneficial Owners, or that they will do so on a timely basis or will serve and act in the manner described in this Official Statement. The City and the Trustee are

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8 not responsible or liable for the failure of DTC or any DTC Participant to make any payment or give any notice to a Beneficial Owner with respect to the Certificates or an error or delay relating thereto.

Transfer and Exchange

The provisions of the Trust Agreement regarding the registration, exchange and transfer of the Certificates apply only during any period in which the Certificates are not subject to DTC’s book-entry system. While the Certificates are subject to DTC’s book -entry system, their registration, exchange and transfer will be effected through DTC and DTC Participants and will be subject to the procedures, rules and requirements established by DTC. See APPENDIX F.

Transfer of Certificates. The registration of any Certificate may, in accordance with its terms, be transferred upon the Registration Books by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Certificate for cancellation at the Corporate Trust Office of the Trustee, accompanied by delivery of a written instrument of transfer in a form acceptable to the Trustee, duly executed. Whenever any Certificate or Certificates will be surrendered for registration of transfer, the Trustee will execute and deliver a new Certificate or Certificates of the same maturity and aggregate principal amount of the sam e series, in any authorized denominations. The cost of printing Bonds and any services rendered or expenses incurred by the Trustee in connection with any transfer and exchange will be paid by the City, except that the Trustee may require the payment by th e Certificate Owner requesting such transfer of any tax or other governmental charge required to be paid with respect to such transfer.

Exchange of Certificates. Certificates may be exchanged at the Corporate Trust Office of the Trustee, for a like aggregate principal amount of Certificates of other authorized denominations of the same maturity and the same Series. The City will pay any costs of the Trustee incurred in connection with such exchange, except that the Trustee may require the payment by the Certificate Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange.

Limitations on Transfer or Exchange. The Trustee may refuse to transfer or exchange either (i) any Certificate during th e period established by the Trustee for the selection of Certificates for prepayment, or (ii) the portion of any Certificate which the Trustee has selected for prepayment under the Trust Agreement.

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9 THE LEASED PROPERTY

General

Lease Payments will be m ade by the City under the Lease Agreement for the use and occupancy of the Leased Property, which is comprised of land and the improvements thereon, consisting of City Hall, the Civic Center Meeting Hall (Council chambers), Rincon Library and Springtown Library.

City Hall. The City’s 51,261 square foot, two-story City Hall was originally built in 2002 and houses the City’s municipal government offices. The estimated land value of City Hall is $_____ and the estimated insured value of City Hall is $37,766,500.

Civic Center. The City’s 6,750 square foot, one-story Civic Center was originally built in 2019 and includes chambers for the City Council. The estimated land value of Council chambers is $____ and the estimated insured value of the Council chambers is $8,666,000.

Rincon Library. The City’s 4,355 square foot, one-story Rincon Library was originally built in 1992. The estimated land value of the Rincon Library is $___ and the estimated insured value of the Rincon Library is $3,667,790.

Springtown Library. The City’s 2,480 square foot, one-story Springtown Library was originally built in 1980. The estimated land value of the Springtown Library is $____ and t he estimated insured value of the Springtown Library is $1,856,987.

Modification of Leased Property

Under the Lease Agreement, the City has the right, at its own expense, to make additions, modifications and improvements to the Leased Property or any p ortion thereof. All additions, modifications and improvements to the Leased Property will thereafter comprise part of the Leased Property and become subject to the provisions of the Lease Agreement.

Such additions, modifications and improvements may not in any way damage the Leased Property, or cause the Leased Property to be used for purposes other than those authorized under the provisions of state and federal law; and the Leased Property, upon completion of any additions, modifications and improvements made thereto under the Lease Agreement, must be of a value which is not substantially less than the value thereof immediately prior to the making of such additions, modifications and improvements.

The City will not permit any lien to be established or remain against the Leased Property for labor or materials furnished in connection with any remodeling, additions, modifications, improvements, repairs, renewals or replacements made by the City under the Lease Agreement; provided that if any such lien is established and the City first notifies the Corporation of the City’s intention to do so, the City may in good faith contest any lien filed or established against the Leased Property, and in such event may permit the items so contested to remain undischarged and unsatisfied during the period of such contest and any appeal therefrom and will provide the Corporation with full security against any loss or forfeiture that might arise from the nonpayment of any such item, in form satisfactory to the Corporation. The Corporation will cooperate fully in any such contest, upon the request and at the expense of the City.

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10 Substitution of Property

Under the Lease Agreement, the City has, and is granted, the option at any time and from time to time to substitute other (the “Substitute Property”) for the Leased Property or any portion thereof (the “Former Property”), provided that the City must satisfy all of the requirements set forth in the Lease Agreement that are conditions precedent to such substitution, and which include (among others) the following:

(a) The City shall certify in writing to the Corporation and the Trustee, that the estimated fair market value of such Substitute Property is at least equal to estimated fair market value of such Former Property, except that the estimated fair market value of such Substitute Property, together with the portion of the Leased Property remaining after the removal of the Former Property, shall not be required to exceed the aggregate principal components of the unpaid Lease Payments.

(b) The City must certify in writing to the Corporation and the Trustee that such Substitute Property serves essential public purposes of the City and constitutes property which the City is permitted to lease under the laws of the State of California.

(c) The City must file with the Corporation and the Trustee a certificate to the effect that the value of the Substitute Property and any other property that will be subject to the Lease Agreement and the Property Lease are at least equal to the value of the Former Property , and that the useful life of the Substitute Property at least equals the useful life of the Former Property.

Upon the satisfaction of all conditions precedent to substitution under the Lease Agreement, the Term of the Lease Agreement will thereupon end as to the Former Property and commence as to the Substitute Property), and all references to the Former Property will apply with full force and effect to the Substitute Facility.

The City is not entitled to any reduction, diminution, extension or other modification of the Lease Payments whatsoever as a result of such substitution.

The Corporation and the City will execute, deliver and cause to be recorded all documents required to discharge the Lease Agreement, the Property Lease and the Assignment Agreement against the Former Property, and to cause the Substitute Site or Substitute Property to become subject to all of the terms and conditions of th e Lease Agreement, Property Lease and the Assignment Agreement.

See APPENDIX B for additional conditions to the substitution of property under the Lease Agreement.

Removal of Property

Under the Lease Agreement, City has the option at any time and from time to time to remove any portion of the Leased Property from the Lease Agreement and the Property Lease (the “Released Property”) provided that the City has satisfied all of the requirements of the Lease Agreement that are conditions precedent to such release, and which include (among others) that the City certifies in writing to the Corporation and the Trustee that the Leased Property as revised

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11 by such removal is of equal or greater value than the the unpaid prin cipal component of the Certificates.

Upon the satisfaction of all conditions precedent to release under the Lease Agreement, the Term of the Lease Agreement will thereupon end as to the Released Property.

The City is not entitled to any reduction, diminution, extension or other modification of the Lease Payments whatsoever as a result of such release.

See APPENDIX B for additional conditions to the release of property from the Lease Agreement and the Property Lease.

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12 PLAN OF FINANCING

The proceeds of the Certificates will be used to (i) finance the Project; and (ii) pay certain costs of executing and delivering the Certificates.

The Project

On January 30, 2018, City Council approved locations for open space, housing, parking and circulation systems, cultural facilities, commercial uses, and a hotel for the Downtown catalyst sites. The approved plan includes additional parking to meet the increased demand expected to accompany downtown development in the City.

The Project consists of the design and cons truction of a four-level public parking garage with approximately 460 spaces east of L Street, between Veterans Way and First Street in the City, additional site improvements and the acquisition and improvement of such other public facilities identified by the City from time to time.

The Project is not serving as a lased asset for the Certificates. See “THE LEASED PROPERTY.”

Estimated Sources and Uses of Funds

The proceeds to be received from the sale of the Certificates , and related amounts, are anticipated to be applied as follows:

SOURCES

Total
Principal Amount of Certificates
Plus/Less: Net Original Issue Premium/(Discount)
Total Sources

USES
Deposit into Project Fund
Deposit into Costs of Issuance Fund [1]
Purchaser’s Discount
Total Uses

[1] Includes fees of Special Counsel, Disclosure Counsel, municipal advisor, rating agency, Trustee; title insurance premium; printing costs; and other costs of executing and delivering the Certificates.

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13 SCHEDULE OF LEASE PAYMENTS

The table below shows the annual Lease Payments, which corresponds to the payments of principal and interest with respect to the Certificates and assumes no optional or extraordinary mandatory prepayments.

Rental
Period
Ending
(April 1)*

Principal
Component

Interest
Component

Total

TOTAL

(1) “Rental Period” is defined in the Lease to mean each twelve- month period during the Term of this Lease Agreement commencing on April 2 in any year and ending on the next succeeding April 1, except that the first rental period shall commence on the Closing Date. Lease Payments are due on the fifteenth day prior to the corresponding Payment Date.

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14 THE CORPORATION

The Corporation

The Corporation was organized on April 15, 1991, as a California nonprofit public benefit corporation. The Corporation was form ed for the specific and primary purpose of benefiting California governmental agencies by participating with such governmental agencies in projects to maintain, improve and assist the activities of such governmental agencies by acquiring, purchasing, selling, leasing or otherwise transferring real and personal property in connection with such projects, and assisting the governmental agencies in financing, acquiring and constructing of such projects, as well as other purposes as specified in the Corporation’ s articles of incorporation.

The Corporation has no financial liability to the owners of the Certificates with respect to the payment of Lease Payments by the City, or with respect to the performance by the City of the other agreements and covenants it is required to perform.

The Corporation functions as an independent entity and its policies are determined by a board of directors. Under the bylaws of the Corporation, the board of directors of the Corporation consists of at least two, but no more than five, directors holding office for terms of six years. The Corporation has no employees and the directors of the Corporation receive no compensation for work or service performed as Corporation directors.

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15 SECURITY FOR THE CERTIFICATES

This section p rovides summaries of the security and sources of payment for the Certificates and certain provisions of the Trust Agreement and Lease Agreement. See APPENDIX B for a more complete summary of the Trust Agreement and Lease Agreement.

Capitalized terms used but not defined in this section have the meanings given in APPENDIX B.

General

Lease Payments. Each Certificate evidences and represents a proportionate undivided interest of the Owner thereof in the Lease Payments to be made by the City under the Lease Agreement.

Assignment to Trustee. Under the Assignment Agreement, the Corporation will transfer, assign and set over to the Trustee, for the benefit of the Owners of all Outstanding Certificates, substantially all of the Corporation’s rights under the Lease Agreement and the Property Lease, including without limitation:

(a) the right to receive and collect all of the Lease Payments from the City under the Lease Agreement;

(b) the right to exercise such rights and remedies conferred on the Corporation pursuant to the Lease Agreement as may be necessary or convenient (i) to enforce payment of the Lease Payments, prepayments thereof and any other amounts required to be deposited in the Lease P ayment Fund established under the Trust Agreement, or (ii) otherwise to protect the interests of the Certificate Owners in the event of a default by the City under the Lease Agreement.

This assignment will be absolute and irrevocable, and will be withou t recourse to the Corporation.

Under the Lease Agreement, the City acknowledges that all Lease Payments have been assigned by the Corporation to the Trustee in trust under the Assignment Agreement, for the benefit of the Owners of the Certificates, and th e City consents to such assignment. The Corporation directs the City, and the City agrees to pay to the Trustee at its Corporate Trust Office, all Lease Payments (including prepayments thereof).

Lease Payments

Obligation to Make Lease Payments. Under t he Lease Agreement (subject to the provisions of the Lease Agreement regarding abatement and prepayment), the City will pay to the Corporation, its successors and assigns, the Lease Payments (denominated into components of principal and interest) in the respective amounts specified in the Lease Agreement, to be due and payable in immediately available funds on the Payment Dates immediately following each of the respective Lease Payment Dates, and to be deposited by the City with the Trustee on each of the Lease Payment Dates.

The Lease Payments payable in any Rental Period are for the use of the Leased Property during such Rental Period.

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16 Effect of Prepayment. If notice of prepayment has been duly given and moneys for the payment of the prepayment price of the Certificates to be prepaid are held by the Trustee, then the Certificates will become due and payable on the date of prepayment, and, upon presentation and surrender thereof at the Corporate Trust Office of the Trustee, those Certificates will be paid at the unpaid principal amount (or applicable portion thereof) with respect thereto, plus interest accrued and unpaid to the date of prepayment. From and after the date of prepayment, interest represented by the prepaid Certificates will cease to accrue and become payable. All moneys held by or on behalf of the Trustee for the prepayment of Certificates will be held in trust for the account of the owners of the Certificates so to be prepaid.

Fair Rental Value. The Lease Payments coming due and payable during each Rental Period constitute the total rental for the Leased Property for such Rental Period, and the City will pay the Lease Payments in each Rental Period for and in consideration of the right of the use and occupancy of, and the continued quiet use and enjoyment of the Leased Property during each Rental Period.

The Corporation and the City have agreed and determined that the total Lease Payments represent the fair rental value of the Leased Property. In making that determination, consideration has been given to the estimated value of the Leased Property as of th e Closing Date, other obligations of the City and the Corporation under this Lease, the uses and purposes that may be served by the Leased Property , and the benefits therefrom that will accrue to the City and the general public.

Source of Payments; Budget and Appropriation

General. The Lease Payments are payable from any source of legally available funds of the City, subject to the provisions of the Lease Agreement regarding abatement and prepayment.

The City covenants in the Lease Agreement to take such action as may be necessary to include all estimated Lease Payments due under the Lease Agreement in each of its final approved budgets. The City further covenants to make all necessary appropriations (including any supplemental appropriations) from any source of legally available funds of the City for all the actual amount of Lease Payments that come due and payable during the period covered by each such budget.

These covenants on the part of the City are duties imposed by law and it is the duty of each and every public official of the City to take such action and do such things as are required by law in the performance of the official duty of such officials to enable the City to carry out and perform the covenants and agreements in the Lease Agreement agreed to be carried out and performed by the City.

Limited Obligation

THE OBLIGATION OF THE CITY TO MAKE LEASE PAYMENTS DOES NOT

CONSTITUTE A DEBT OF THE CITY OR OF THE STATE OF CALIFORNIA OR OF ANY

POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR

STATUTORY DEBT LIMIT OR RESTRICTION, OR AN OBLIGATION FOR WHICH THE CITY IS

OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE CITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION.

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17 Abatement

Use and Possession of the Leased Property. Lease Payments will be made by the City for and in consideration of the right of beneficial use and occupancy of the Leased Property. If due to damage or destruction to the Leased Property, eminent domain or for any reason, there is substantial interference with the use and possession of all or part of the Leased Property, the City’s obligation to make Lease Payments from its funds will be subject to abatement. Abatement of Lease Payments is not an event of default under the Trust Agreement, the Lease Agreement or the Certificates and will not permit the Trustee to take any action or avail itself of any remedy against the City. The City will not have an obligation to make Lease Payments with respect to the Leased Property other than from amounts in the Lease Payment Fund or eminent domain award or the proceeds of any rental interruption insurance until such substantial interference with the use and possession of the Leased Property, or a portion thereof, has been remedied.

Absence of Earthquake and Flood Insurance. The obligation to make Lease Payments may be adversely affected if the Leased Property or any improvements thereon are damaged or destroy by natural hazard such as earthquake or flood. The City, however, is not obligated under the Lease Agreement to procure and maintain, or cause to be maintained, earthquake or flood insurance on the Leased Property. The City, however, is obligated under the Lease Agreement to maintain other types of insurance . In the event of damage or destruction to the Leased Property caused by perils for which the City is
not required to provide insurance under the Lease Agreement, the City will not be obligated to repair, replace or reconstruct the Leased Property, though the City may choose to do so.

Insurance and Condemnat ion Fund ; Application of Net Proceeds of Insurance and Condemnation

Any net proceeds of insurance or condemnation awards with respect to the Leased Property will be deposited in the Insurance and Condemnation Fund. In the event of an insurance award, the net proceeds on deposit in the Insurance and Condemnation Fund shall be used, as directed by the City, either (a) to replace, repair, restore, modify or improve such Leased Property if the City determines that such is economically feasible or in the best interests of the City, or (b) to the extent not so used, to prepay the Lease Payments allocable to such Leased Property and thereby prepay Certificates. In the event of an eminent domain award with respect to the Leased Property, the net proceeds on deposit in any Insurance and Condemnation Fund shall be used as directed by the City, as follows: (i) if the City determines that such eminent domain proceedings have not materially affected the interest of the City in such Leased Property or its ability to make payments under the Lease Agreement, such proceeds shall be used either for repair, replacement or rehabilitation of such Leased Property, or credited towards the allocable Lease Payments next coming due and payable; or (ii) if the City determines otherwise, and in any event if all of the Leased Property is taken in eminent domain proceedings, such proceeds shall be used to prepay the Lease Payments and Certificates.

Covenants to Maintain Insurance

Public Liability and Property Damage Insurance. The City shall maintain or cause to be maintained, throughout the Term of the Lease Agreement, insurance policies, including a standard comprehensive general liability insurance policy or policies in protection of the Corporation, the Trustee and the City, and their respective members, officers, agents and employees. Said policy or policies shall provide for indemnification of said parties against direct

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18 or contingent loss or liability for damages for bodily and personal injury, death or property damage occasioned by reason of the operation of the Leased Property.

Said policy or policies shall provide coverage in the minimum liability limits of $1,000,000 for personal injury or death of each person and $3,000,000 for personal injury or deaths of two or more persons in each accident or event, and in a minimum amount of $10 0,000 (subject to a deductible clause of not to exceed $5,000 for damage to property resulting from each accident or event. Such public liability and property damage insurance may, howeve r, be in the form of a single limit policy in the amount of $3,000,000 covering all such risks. Such liability insurance may be maintained as part of or in conjunction with any other liability insurance coverage carried by the City and may be maintained in the form of insurance maintained through a joint exercise of powers authority created for such purpose or in the form of self-insurance by the City.

The Net Proceeds of such liability insurance shall be applied toward extinguishment or satisfaction of the liability with respect to which the insurance proceeds shall have been paid.

Fire and Extended Coverage Insurance . The City will maintain, or cause to be maintained, throughout the remainder of the Term of the Lease Agreement, insurance against loss or damage to any part of the Leased Property by fire and lightning, with extended coverage and vandalism and malicious mischief insurance. Said extended coverage insurance shall, as nearly as practicable, cover loss or damage by explosion, windstorm, riot, aircraft, vehicle damage, smoke and such other hazards as are normally covered by such insurance , and will include coverage for damage from earthquakes if such e arthquake coverage is available from reputable insurance companies at a reasonable cost. Such insurance shall be in an amount equal to one hundred percent (100%) of the replacement cost of the Leased Property. Such insurance may be subject to such deductibles as the City deems prudent, provided such policy expressly waives any co-insurance policy. Such policy may be maintained as part of or in conjunction with any other fire and extended coverage carried by the City and may be maintained in whole or in part in the form of insurance maintained through a joint exercise of powers authority created for such purpose. The Net Proceeds of such insurance shall be applied as provided in the Lease.

Rental Interruption Insurance. Under the Lease Agreement, the City will procure and maintain, or cause to be procured and maintained, at all times throughout the Term of the Lease Agreement, rental interruption or use and occupancy insurance to cover loss, total or partial, of the use of the buildings, facilities and other improvements constituting any part of the Leased Property, as a result of any of the hazards covered in the casualty insurance required by the Lease Agreement and described above , in an amount at least equal to the maximum Lease Payments coming due and payable during any two consecutive fiscal years during the remaining Term of the Lease Agreement.

Such insurance may be maintained as part of or in conjunction with any other insurance coverage carried by the City, and may be maintained in whole or in par t in the form of the participation by the City in a joint powers authority or other program providing pooled insurance; provided that such insurance may not be maintained by the City in the form of self-insurance.

The Net Proceeds of such insurance, if any, will be paid to the Trustee and deposited in the Lease Payment Fund, and will be credited towards the payment of the Lease Payments allocable to the insured improvements as the same become due and payable.

See “APPENDIX B – Summary of Principal Legal Documents” for a summary of certain other insurance requirements under the Lease Agreement.

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19 CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS

The constitutional and statutory provisions discussed in this section have the potential to affect the ability of the City to levy taxes and spend tax proceeds for operating and other purposes.

Article XIIIA of the California Constitution

On June 6, 1978, California voters approved Proposition 13 (“ Proposition 13”), which added Article XIIIA to the State Constitution (“Article XIIIA ”). Article XIIIA limits the amount of any ad valorem tax on real property to 1% of the full cash value thereof, except that additional ad valorem taxes may be levied to pay debt service on (i) indebtedness approved by the voters prior to July 1, 1978, (ii) (as a result of an amendment to Article XIIIA approved by State voters on June 3, 1986) on bonded indebtedness for the acquisition or improvement of real property which has been approved on or after July 1, 1978, by two-thirds of the voters on such indebtedness, and (iii) bonded indebtedness incurred by a school district or community college district for the construction, reconstruction, rehabilitation or replacement of school facilities or the acquisition or lease of real property for school facilities, approved by 55% of the voters of the district, but only if certain accountability measures are included in the proposition . Article XIIIA defines full cash value to mean “the county assessor’s valuation of real property as shown on the 1975-76 tax bill under full cash value, or thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership have occurred after the 1975 assessment.” This full cash value may be increased at a rate not to exceed 2% per year to account for inflation.

Article XIIIA has subsequently been amended to permit reduction of the “full cash value” base in the event of declining property values caused by damage, destruction or other factors, to provide that there would be no increase in the “full cash value” base in the event of reconstruction of property damaged or destroyed in a disaster and in other minor or technical ways.

Legislation Implementing Article XIIIA. Legislation has been enacted and amended a number of times since 1978 to implement Article XIIIA. Under current law, local agencies are no longer permitted to levy directly any property tax (except to pay voter-approved indebtedness).

The one percent property tax is automatically levied by the county and distributed according to a formula among taxing agencies. The formula apportions the tax roughly in proportion to the relative shares of taxes le vied prior to 1989. Increases of assessed valuation resulting from reappraisals of property due to new construction, change in ownership or from the 2% annual adjustment are allocated among the various jurisdictions in the “taxing area” based upon their respective “situs.” Any such allocation made to a local agency continues as part of its allocation in future years.

In accordance with Article XIIIA, all taxable property is now shown at “full cash value” on the County’s property tax rolls.

Appropriation Limitation - Article XIIIB

On November 6, 1979, the voters of the State approved Proposition 4, known as the Gann Initiative, which added Article XIIIB to the State Constitution. On June 5, 1990, the voters approved Proposition 111, which amended Article XIIIB in certain respects.

Under Article XIIIB, as amended, state and local government entities each have an annual “appropriations limit” which limits the ability to spend certain monies that are called “appropriations

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20 subject to limitation” (consisting of most tax revenues and certain state subventions, together called “proceeds of taxes,” and certain other funds) in an amount higher than the “appropriations limit.” Article XIIIB does not affect the appropriation of monies that are excluded from the definition of “appropriations limit,” including debt service on indebtedness existing or authorized as of January 1, 1979, or bonded indebtedness subsequently approved by two-thirds of the voters.

The “appropriations limit” is adjusted annually for changes in the cost of living an d in population, for transfers in the financial responsibility for providing services, and in the case of certain declared emergencies.

If an entity receives any proceeds of taxes in excess of its appropriations limit, it may, by resolution of the entit y’s governing board, increase its appropriations limit to equal that amount (provided that the State has excess appropriations limit of its own in that fiscal year). The City’s appropriations limit for fiscal year 2022-23 is $440,433,435, and the City does not anticipate exceeding this limit.

Proposition 218 - Article XIIIC and Article XIIID

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

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

Taxes. Article XIIIC requires that all new local taxes be submitted to the electorate before they become effective. Taxes for general governmental purposes of the City (“general taxes”) require a majority vote; taxes for specific purposes (“special taxes”), even if deposited in the City’s General Fund, require a two-thirds vote. The voter approval requirements of Article XIIIC reduce the flexibility of the City to raise revenues for the General Fund, and no assurance can be given that the City will be able to impose, extend or increase such taxes in the future to meet increased expenditure needs.

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

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21 charges that are used for general governmental services, including police, fire or library services, where the service is available to the public at large in substantially the same manner as it is to property owners.

Reduction or Repeal of Taxes, Fees and Charges . Article XIIIC also removed limitations on the initiative power in matters of reducing or repealing local taxes, assessments, fees or charges. No assurance can be given that the voters of the City will not, in the future, approve an initiative or initiatives that reduce or repeal local taxes, assessments, fees or charges currently comprising a substantial part of the City’s General Fund, including Measure P (a quarter- cent general sales tax increase passed by the voters of the City in 2010) and Measure O (a quarter percent sales tax increase passed by voters in 2004) . See “APPENDIX A – City of Livermore General Financial and Demographic Information – Major Revenues.” If such repeal or reduction occurs, the City’s ability to pay debt service with respect to the Certificates could be adversely affected.

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

Impact on City’s General Fund . The approval requirements of Articles XIIIC and XIIID reduce the flexibility of the City to raise revenues for the General Fund, and no assurance can be given that the City will be able to impose, extend or increase the taxes, fees or charges in the future that it may need to meet increased expenditure needs. The City believes all of its existing local taxes, fees and assessments are compliant with Proposition 218 and Proposition 26.

Judicial Interpretation. Although some court cases have been decided, further interpretation and application of Articles XIIIC and XIIID will be determined by the courts, and it is not possible at this time to predict with certainty the outcome of such determination.

Unitary Property

AB 454 (Chapter 921, Statutes of 1986) provides that revenues derived from most utility property assessed by the State Board of Equalization ("Unitary Property"), commencing with the 1988-89 fiscal year, will be allocated as follows: (1) each jurisdiction will receive up to 102% of its prior year State- assessed revenue; and (2) if county -wide revenues generated from Unitary Property are less than the previous year’s revenues or greater than 102% of the previous year’s revenues, each jurisdiction will share the burden of the shortfall or excess revenues by a specified formula. This provision applies to all Unitary Property except railroads, whos e valuation will continue to be allocated to individual tax rate areas.

The provisions of AB 454 constitute neither an elimination of the assessment of any State- assessed properties nor a revision of the methods of assessing utilities by the State Board o f Equalization. Generally, AB 454 allows valuation growth or decline of Unitary Property to be shared by all jurisdictions in a county.

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22 Proposition 62

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

Most of the provisions of Proposition 62 were affirme d by the 1995 California Supreme Court decision in Santa Clara County Local Transportation Authority v. Guardino , which invalidated a special sales tax for transportation purposes because less than two-thirds of the voters voting on the measure had approved the tax.

The City does not believe any of the taxes constituting City revenues are levied in violation of Proposition 62.

Proposition 22

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

Proposition 22 has resulted in more stable revenues for the City, and the City expects this to continue to be the case.

Future Initiatives

Article XIIIA, Article XIIIB, Proposition 218, Proposition 62, Proposition 1A and Proposition 22 were each adopted as measures that qualified for the ballot pursuant to California’s initiative process. From time to time, other initiative measures could be adopted, further affecting the City or its revenues or the ability of the City to expend revenues.

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23 RISK FACTORS

This section provides a general overview of certain risk factors which should be considered, in addition to the other matters set forth in this Official Statement, in evaluating an investment in the Certificates. This section is not meant to be a comprehensive or definitive discussion of the risks associated with an investment in the Certificates, and the order in which this information is presented does not necessarily reflect the relative importance of various risks.

Potential investors in the Certificates are advised to consider the following factors, among others, and to review this entire Official Statement to obtai n information essential to the making of an informed investment decision. Any one or more of the risk factors discussed below, among others, could lead to a decrease in the market value and/or in the marketability of the Certificates.

There can be no assurance that other risk factors not discussed herein will not become material in the future.

Security for the Certificates

General. The obligation of the City to make Lease Payments does not constitute an obligation of the City to levy or pledge any for m of taxation or for which the City has levied or pledged any form of taxation. The obligation of the City to make Lease Payments does not constitute a debt or indebtedness of the City, the Corporation, the State or any of its political subdivisions, within the meaning of any constitutional or statutory debt limitation or restriction.

The obligation of the City to make Lease Payments is in consideration of the right of the City to the continued use and possession of the Leased Property. In the event of failure of such use and possession, the obligations of the City may be abated in whole or in part as described herein.

Although the Lease Agreement does not create a pledge, lien or encumbrance upon the funds of the City, the City is obligated under the Lease Agreement to pay the Lease Payments from any source of legally available funds and the City has covenanted in its Lease Agreement that, for so long as the Leased Property is available for its use, it will make the necessary annual appropriations within its budget for its Lease Payments.

See “SECURITY FOR THE CERTIFICATES.”

Available General Revenue. The City is liable and may become additionally liable on other obligations payable from general revenues, some of which may have a priority over the Lease Payments. To the extent that additional obligations are incurred by the City, the funds available to make Lease Payments may be decreased. Certain taxes, assessments, fees and charges presently imposed by the City could be subject to the voter approval requirements of Article XIIIC and Article XIIID of the California Constitution. Based upon the outcome of an election by the voters, or future changes in Article XIIIC and Article XIIID or their interpretation by the courts, such fees, charges, assessmen ts and taxes might no longer be permitted to be imposed, or may be reduced or eliminated and new taxes, assessments fees and charges may not be approved. Property tax revenue can be adversely affected by reduction of assessed values by appeal or economic downturn and sales and other taxes also can be reduced by economic downturn or loss of significant taxpayers. To the extent that City tax revenue from any source is reduced or eliminated, the funds available to make Lease Payments may be decreased. See also “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS.”

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24 Abatement

Use and Possession of the Leased Property. Lease Payments are paid by the City for and in consideration of the right of beneficial use and occupancy of the Leased Property. If, for any reason, there is substantial interference with the use and possession of all or part of the Leased Property, the City’s obligation to make Lease Payments from its funds will be subject to abatement. See “SECURITY FOR THE CERTIFICATES — Abatement” and APPENDIX B for additional information regarding abatement. Abatement of Lease Payments is not an event of default under the Trust Agreement, the Lease Agreement or the Certificates and will not permit the Trustee to take any action or avail itself of any remedy against the City. The City will not have an obligation to make Lease Payments with respect to the Leased Property other than from the proceeds of the Certificates or the proceeds of any rental interruption insurance , until such substantial interference with the use and possession of the Leased Property, or a portion thereof, has been remedied.

Damage or Destruct ion. If damage or destruction to the Leased Property results in abatement or adjustment of Lease Payments and the resulting Lease Payments, together with moneys in the Lease Payment Fund (and in the event of damage or destruction, together with rental interruption insurance proceeds, if any, are insufficient to make all payments of principal and interest due with respect to the Certificates during the period that the Leased Property is being replaced, repaired or reconstructed, then such payments of principal and interest may not be made in full and no remedy is available to the Trustee or the Owners under the Lease Agreement or Trust Agreement for nonpayment under such circumstances.

In the event of damage or destruction to the Leased Property caused by perils for which the City is not required to provide insurance under the Lease Agreement, the City will not be obligated to repair, replace or reconstruct the Leased Property, though the City may choose to do so.

The State, by statute, requires each city and county to adopt a comprehensive, long-term general plan for the physical development of the city or county. The general plan is required to contain, among other things, a safety el ement for the protection of the community from any unreasonable risks associated with the effects of various natural hazards. The safety element must include mapping of known seismic and other geologic hazards. However, knowing of the existence and location of a seismic fault does not mean that there are not others not known nor prevent earthquakes destructive to property from occurring . While the buildings on the Leased Property are generally built or have been retrofitted to exceed State building codes at the time with respect to seismic risk, a destructive earthquake could occur in the City and to the Leased Property in particular. So far this has not happened, and the City has not suffered serious earthquake damage to the Leased Property or any of its other property.

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25 Remedies Against the City

Failure by the City to pay Lease Payments or other payments required to be made under the Lease Agreement or failure to observe and perform its other covenants and agreements under the Lease Agreement for a period of 30 days (or greater period, pursuant to the Lease Agreement) after written notice of such failure and reque st that it be remedied has been given to the City by the Corporation, or the Trustee, as the assignee of the Corporation, constitute events of default under the Lease Agreement and permit the Trustee to pursue remedies at law or in equity to enforce such covenants and agreements.

The enforcement of any remedies provided in the Lease Agreement and Trust Agreement could prove both expensive and time consuming. Although the Lease Agreement and the Trust Agreement provide that the Trustee may take possession of the Leased Property and lease it if there is a default by the City, and the Lease Agreement provides that the Trustee may have such rights of access to the Leased Property as may be necessary to exercise any remedies, portions of the Leased Property may not be easily recoverable and even if recovered, could be of little value to others. Furthermore, it is not certain whether a court would permit the exercise of the remedies of repossession and leasing of the Leased Property.

No Acceleration Upon Default

If the City defaults on its obligations to make Lease Payments, the Trustee may have limited ability to re-let the Leased Property so as to preserve the tax exempt nature of the interest component of the Lease Payments and the Certificates. In the eve nt of a default, there is no available remedy of acceleration of the total Lease Payments due over the term of the Lease Agreement. The City will only be liable for Lease Payments on an annual basis, and the Trustee would be required to seek a separate ju dgment in each fiscal year for that fiscal year ’s Lease Payments.

COVID-19 Pandemic

General. The spread of the novel strains of coronavirus that causes the disease known as COVID-19 (“COVID-19”) and local, state, and federal actions in response to COVID -19, is having a significant impact on the economy and on the City’s operations and finances. On February 11, 2020, the World Health Organization announced the official name for the outbreak of COVID-19, an upper respiratory tract illness. COVID -19 has since spread across the globe.

The COVID-19 pandemic has had an adverse effect on, among other things, the world economy, global supply chain, international travel, and a number of travel-related industries. The temporary and permanent business closures caused by the COVID-19 pandemic have led to a stark increase in unemployment across the County and the nation. Depending on the length and the breadth of the impacts of the COVID-19 pandemic, the economic costs may be very significant for the City and the region’s economy. On June 8, 2020, the National Bureau of Economic Research announced that the United States of America officially entered into a recession in February 2020.

In addition, capital markets in the United States and globally have been volatile.

In mid-March 2020, based on guidance and directives from the State and public health agencies, all counties in the Bay Area and the City implemented and revised Shelter -in-Place (“Shelter-in-Place”) emergency orders or directives, which directed individuals to stay home, except for limited travel for the conduct of essential services. Most retail establishments (including restaurants, bars and nightclubs, entertainment venues and gyms) were close d in response to

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26 the Shelter-in-Place orders or directives. The Governor of the State announced similar Shelter - in-Place emergency orders effective for the entire State, which were lifted in June 2021.

In December 2020, two vaccines were approved for use in the United States and vaccinations began in California. A third vaccine was approved for emergency use in February 2021. In August 2021, booster shots became available to all Americans.

Impacts of COVID-19 Emergency Uncertain. The COVID-19 pandemic is still ongoing; however, indications are strong that the pandemic is transitioning to its endemic stage though its dynamic nature leads to uncertainties. There are many variables that will continue to contribute to the economic impact of the COVID-19 pandemic and the recovery, including the length of time social distancing measures are in place, the effectiveness of State and Federal governments’ relief programs and the timing for the containment and treatment of COVID -19. The ultimate impact of COVID-19 on the City’s operations and finances is not fully known, and it may be some time before the full impact of the COVID-19 pandemic is known .

The City is unable to predict the ultimate long-term impacts of the COVID -19 pandemic on the City’s finances, and there can be no assurance that the COVID -19 pandemic will not have a material effect on the City’s ability to make the Lease Payments.

State Law Limitations on Appropriations

Article XIIIB of the California Constitution limits the amount that local governments can appropriate annually. The City’ s ability to make Lease Payments may be affected if the City should reach its appropriations limit. The City does not anticipate reaching said limit in the foreseeable future. See “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS.” The COVID-19 pandemic is expected to have a material impact on State revenues and appropriations.

City Bankruptcy

In addition to the limitation on remedies contained in the Trust Agreement, the rights and remedies provided in the Trust Agreement and the Lease Agreement may be limited by and are subject to the provisions of federal bankruptcy laws, as now or hereafter enacted, and to other laws or equitable principles that may affect the enforcement of creditors’ rights.

Under Chapter 9 of the United States Bankruptcy Code, which governs the bankruptcy proceedings for public agencies, there are no involuntary petitions in bankruptcy. If the City were to file a petition under Chapter 9 of the Bankruptcy Code, the Owners, the Trustee and the Corporation could be prohibited from taking any steps to enforce their rights under the Lease Agreement, and from taking any steps to collect amounts due from the City under the Lease Agreement.

If a Bankruptcy Court were to determine that the Lease Agreement is a lease for the purposes of the Bankruptcy Code, the City would have the right to reject (i.e., terminate) the Lease Agreement. If the City elects to reject the Lease Agreement, the Leased Property could be re-let for the benefit of the Owners, but there can be no assurance that the Leased Property can be re- let for an amount sufficient to pay the Certificates or that such re -letting will not adversely affect the exclusion of any interest component of rental payments from federal or state income taxation.

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27 In addition the Bankruptcy Code severely limits any claim for damages suffered as a result of rejection of a lease.

Earthquakes and Other Natural Disasters

Earthquakes or other natural disasters, including fires, landslides or floods, could interrupt operation of the City and thereby interrupt the ability of the City to pay the Lease Payments. The City is located in a very active seismic area with major faults in and around the City. In 2004, the City adopted its current general plan (the “General Plan”), the long-range policy document for growth, land use, transportation, sustainability and resource and open space conservation. The current General Plan looks out to the horizon year 2025, and was last updated in 2013.

Seismic Risk. Earthquakes can give rise to various seismic hazards including ground shaking, liquefaction, ground rupture and the generation of large waves in bodies of water. These seismic hazards can cause damage to structures and risk the health and safety of cit izens, particularly in unreinforced masonry buildings. Major earthquakes have occurred in the vicinity of the City in the past, and can be expected to occur again in the near future.

According to the Public Safety Element of the City’s General Plan:

• The City is located in the San Andreas Fault Zone, one of the most seismically active regions in the United States. The San Andreas Fault Zone has generated numerous moderate to strong historic earthquakes in northern California and in the San Francisco Bay Area.

• The Greenville Fault, an active fault that is the easternmost strand of the San Andreas fault system in the San Francisco Bay region, is located approximately four miles to the east of the City’s downtown, and crosses the eastern part of the City. Each of the three segments of the Greenville fault is considered capable of generating earthquakes in the range of Richter magnitude 6.6 to 6.9. If all segments were to rupture in a single seismic event, a 7.2 magnitude earthquake would be expected. The United States Geologic Survey (“USGS”) estimates a six percent probability of a 6.7 magnitude or greater earthquake on the Greenville fault during the period 2000 to 2030.

• The Las Positas Fault, which is considered to be active, trends northeast to southwest approximately 2.5 miles to the southeast of the City’s downtown, and is located almost completely within the City. The Las Positas fault could potentially generate an earthquake of Richter magnitude 6.3. The probability of an earthquake on the fault has not been determined. In addition, several other major active faults are located in the vicinity of Livermore, including the Calaveras and Hayward faults. Because of the high level of seismic activity in and around Livermore, the area has been classified as seismic risk Zone 4 (the highest risk category) by the California Building Code.

• In addition to these faults, the Livermore fault is also located within the urbanized portion of the City. The Livermore fault is considered to be potentially active. It is approximately five miles in length and is considered capable of generating an earthquake with a moment magnitude of 6.2.

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28 • In addition to the known active faults in the Planning Area, recent research regarding the structural geology and tectonics of the Mount Diablo-Livermore region indicate that there is another potential source of large magnitude earthquakes in the region. A structural trend of folds and thrust faults has been mapped in the hills north of the Livermore Valley. The largest of these features i s the Mount Diablo anticline. Recent research has interpreted this feature to be a large fold developed above a buried, or “blind,” thrust fault. The accumulation of strain on the blind Mount Diablo Thrust presents the potential for an earthquake along thi s structure. The USGS considers the fault capable of generating a magnitude 6.7 earthquake with a 4 percent probability of occurring during the period 2000 to 2030. An earthquake on the fault would not be expected to cause fault rupture at the surface. How ever, strong ground shaking would be expected within the Livermore area during such an earthquake.

Flooding. According to the Public Safety Element of the City’s General Plan:

• Most flooding within the City is caused by heavy rainfall and subsequent run -off volumes that cannot be adequately conveyed by the existing storm drainage system combined with surface water bodies.

• Portions of the City are located within the dam failure inundation hazard areas for Lake Del Valle and Patterson Reservoir. Patterso n Dam is located east of Greenville Road and north of Patterson Pass Road, and impounds the 100 -acre foot Patterson Reservoir. The Del Valle Dam is located at the northern end of Lake Del Valle, and impounds an average of 44,000 acre-feet in the reservoir. The depth of inundation would vary from near zero at topographic highs or uplands to many feet in low-lying areas and in creek channels. Both of these dams are under the jurisdiction of the California Department of Water Resources (DWR), Division of Safety of Dams. Existing dams under DWR jurisdiction are periodically inspected to ensure adequate maintenance and to direct the owner to correct any deficiencies found. Regular inspections and required maintenance of the dams substantially reduce the potential for catastrophic failure.

• The City is not susceptible to inundation by coastal hazards, such as tsunamis, extreme high tides, or sea level rise, due to the elevation of the area and the distance from the margin of the San Francisco Bay and Pacific Ocean.

• According to the Federal Emergency Management Agency’s Flood Insurance Rate Maps, or FIRMS, the majority of the City is designated as subject to minimal flooding. However, some portions of the City are located in 100-year flood zones.

• In 2002, the Alameda County Flood Control and Water Conservation District, Zone 7 embarked on a watershed-wide Stream Management Master Plan. Zone 7 owns and maintains approximately 40 miles of flood control channels, including creeks and concrete-lined channels, in the watershed area. Most of these channels are in the Pleasanton area. However, Zone 7 owns portions of flood control channels in the City. Zone 7 maintains an ongoing program of channel acquisition funded by developer fees. Under this program, the agency enters into an agreement with a developer or another agency to take ownership, including maintenance responsibilities, of facilities that are constructed to Zone 7 standards. The

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29 developer or agency is reimbursed a predetermined amount for channel improvements and right-of-way. When the flood control sys - tem is completed, Zone 7 will own and maintain approximately 120 miles of creeks and channels, including the primary drainage features, in the City.

Wildfires. In recent years, wildfires have caused extensive damage throughout the State.

Certain of these fires have burned thousands of acres and destroyed hundreds and in some cases thousands of homes. In some instances, entire neighborhoods have been destroyed. Some commentators believe that climate change will lead to even more frequent and damaging wildfires in the future. To quantify this potential hazard, the California Department of Forestry and Fire Protection (“CAL FIRE”) has developed a fire modeling and mapping process that utilizes three main criteria in order to evaluate and recommend potential fire hazards in wildland areas. The criteria are type of vegetation, fire weather, and topography. The maps developed by CAL FIRE identify areas as Fire Hazard Severity Zones and include three severity classifications: moderate, high, and very high. Wildland fire is a hazard that exists throughout the City. The entire City has been identified as a “Community At Risk” by CAL FIRE.

In the event taxable property within the City were destroyed by wildfires, the assessed valuation of such property would be reduced. Such reduction of assessed valuations could result in a reduction of tax revenues to the City.

PG&E Public Safety Power Shutoffs. Pacific Gas and Electric Company (“PG&E”) has adopted a Community Wildfire Safety Program in an effort to prevent wildfires in the State. As part of its Community Wildfire Safety Program, PG&E has notified customers, including the City, that PG&E has implemented additional precautionary measures to help reduce the risk of wildfires. In particular, PG&E has notified the City that, if extreme fire danger conditions threaten a portion of the electric system serving a community, PG&E may turn off electricity in the interest of public safety (referred to as a “Public Safety Power Shutoff”). According to PG&E, a Public Safety Power Shutoff could impact customers in an area that is not experiencing high winds or other extreme weather conditions because PG&E’s system relies on power lines working together to provide electricity across cities, counties and regions, including the City and the County.

Climate Change

The adoption by the State of the California Global Warming Solutions Act of 2006 (AB 32) and subsequent companion bills demonstrate the commitment by the State to take action and reduce greenhouse gases (“GHG”) to 1990 levels by 2020 and 80% below 1990 levels by 2050.

The State Attorney General’s Office, in accordance with SB 375, now requires that local governments examine local policies and large-scale planning efforts to determine how to reduce greenhouse gas emissions. Additionally, the State adopted Senate Bill No. 32, which established a revised statewide GHG emission reduction target of 40% below 1990 levels by 2030.

Consistent with the State’s objective outlined above, in November 2012, the City adopted a Climate Action Plan. The primary purpose of t he plan is to design a feasible strategy to reuce community-generated GHG emissions. The Climate Action Plan is currently being updated by the City.

Climate change will have new, direct impacts and will also exacerbate existing local natural hazards. Incr eased temperatures, when coupled with prolonged drought events, can increase the intensity of wildfires that may occur, and pose significant health and safety risks for vulnerable communities. Shorter, more intense wet seasons could make flooding more frequent,

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30 and may increase the landslide risk. California may experience greater water and food insecurity, and drought may become a more persistent issue as the effects of climate change deepen.

Cybersecurity

The City and its departments face multiple cyber threats including, but not limited to, hacking, viruses, malware and other attacks on computers and other sensitive digital networks and systems. No assurances can be given that the security and operational control measures of the City will be successful in guarding against any and each cyber threat and attack. The results of any attack on the computer and information technology systems could have a material adverse impact on the operations of the City and damage the digital networks and systems. The resulting costs and/or impacts on operations and General Fund revenues could be material.

In September of 2019, the City was the target of a ransomware attack. The City did not pay a ransom to the threat actors in accordance with advice from law enforcement agencies.

Ultimately, the threat did not result in any reportable data theft and City networks were repaired and restored systematically after a six-week period.

No Liability by the Corporation to the Owners

The Corporation shall not have any obligation or liability to the Owners with respect to the payment when due of the Lease Payments by the City, or with respect to the performance by the City of other agreements and covenants required to be performed by it contained in the Lease Agreement or the Trust Agreement, or with respect to the performance by the Trustee of any right or obligation required to be performed by it contained in the Trust Agreement.

Impact of State Budget on City Revenues

At various times, including currently, the State has experienced significant financial and budgetary stress. State budgets are affected by national and local economic conditions and other factors over which the City has no control. The State’s financial condition and budget policies affect communities and local public agencies throughout the State. To the extent that the State budget process results in reduced revenues to the City, the City will be required to make adjustments to its budget.

For example, declining revenues and fiscal difficulties that arose in the State commencing in fiscal year 2008 -09 led the State to undertake a number of budgeting strategies, which had subsequent impacts on local agencies within the State. These techniques included the issuance of IOUs in lieu of warrants (checks), the enactment of statutes deferring amounts owed to public schools, until a later date in the fiscal year, or even into the following fiscal year (known as statutory deferrals), trigger reductions, which w ere budget cutting measures that were implemented or could have been implemented if certain State budgeting goals were not met, among others, and the dissolution of local redevelopment agencies in part to make available additional funding for schools.

The City cannot predict what actions will be taken in future years by the State Legislature and the Governor to address a State budget deficit. Future State budgets will be affected by national and state economic conditions and other factors over which the City has no control. To the extent that the State budget process results in reduced

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31 revenues to the City, the City will be required to make adjustments to its budget. Decrease in such revenues may have an adverse impact on the City’s ability to pay the Certificates.

Change in Law

No assurance can be given that the State, the County or the City electorate will not at some future time adopt initiatives or that the State Legislature or the City Council will not enact legislation that could result in a reductio n of the City’s General Fund revenues and therefore a reduction of the funds legally available to the City to make Lease Payments. See, for example, “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS –
Proposition 218 Article XIIIC and Article XIIID.”

Tax Exemption of the Certificates

The City has covenanted in the Lease Agreement that it will not use or permit the use of any proceeds of the Certificates or any funds of the Corporation or the City, directly or indirectly, in any manner, and will not take or omit to take any action that would cause the interest component of the Lease Payments to be included in the gross income of the Owners for federal income tax purposes. In the event the City fails to comply with th e foregoing tax covenant, the interest component of the Certificates may be includable in the gross income of the Owners thereof for federal tax purposes. See “TAX MATTERS.”

Secondary Market

No assurance can be given that the marketability of the Certificates will not be affected by the introduction or enactment of any future legislation (including without limitation amendments to the Internal Revenue Code), or changes in interpretation of the Internal Revenue Code, or any action of the Internal Revenue Service (the ‘IRS”), including but not limited to the publication of proposed or final regulations, the issuance of rulings, the selection of the Certificates for audit examination, or the course or result of any IRS audit or examination of the Certificat es or obligations that present similar tax issues as the Certificates.

No assurance can be given that the rating initially assigned to the Certificates by a rating agency will not be downgraded, or that the rating criteria or views of a rating agency will not change, some time in the future, with a resulting decline in the se condary market price of the Certificates. See “RATING.”

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32 TAX MATTERS

Federal Tax Status. In the opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Special Counsel, subject, however to the qualifications set forth below, under existing law, the portion of Lease Payments designated as and comprising interest and received by the owners of the Certificates is excluded from gross income for federal income tax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax.

The opinions set forth in the preceding paragraph are subject to the condition that the City comply with all requirements of the Internal Revenue Code of 1986, as amended (the "Tax Code") that must be satisfied subsequent to the delivery of the Certificates in order that the interest thereon be, and continue to be, excludable from gross income for federal income tax purposes .

The City has made certain representations and covenants in order to comply wi th each such requirement. Inaccuracy of those representations, or failure to comply with certain of those covenants, may cause the inclusion of such interest in gross income for federal income tax purposes, which may be retroactive to the date of delivery of the Certificates.

Tax Treatment of Original Issue Discount and Premium. If the initial offering price to the public at which a Certificate is sold is less than the amount payable at maturity thereof, then such difference constitutes "original issue discount" for purposes of federal income taxes and State of California personal income taxes. If the initial offering price to the public at which a Certificate is sold is greater than the amount payable at maturity thereof, then such difference constitutes "bond premium" for purposes of federal income taxes and State of California personal income taxes.

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

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

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33 with respect to State of California personal income tax and federal income tax consequences of owning such Certificates.

California Tax Status. In the further opinion of Special Counsel, interest on the Certificates is exempt from California personal income taxes.

Other Tax Considerations. Current and future legislative proposals, if enacted into law, clarification of the Tax Code or court decisions may cause interest with respect to the Certificates to be subject, directly or indirectly, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent beneficial owners from realizing the full current benefit of the tax status of such interest. The introduction or enactment of any such legislative proposals, clarification of the Tax Code or court decisions may also affect the market price for, or marketability of, the Certificates. It cannot be predicted whether or in what form any such proposal might be enacted or whether, if enacted, such legislation would apply to Certificates issued prior to enactment.

The opinions expressed by Special Counsel are based upon existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of such opinion, and Special Counsel has expressed no opinion with respect to any proposed legislation or as to the tax treatment of interest on the Certificates, or as to the consequences of owning or receiving interest on the Certificates, as of any future date. Prospective purchasers of the Certificates should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation, as to which Special Counsel expresses no opinion.

Owners of the Certificates should also be aware that the ownership or disposition of, or the accrual or receipt of interest on, the Certificates may have federal or state tax consequences other tha n as described above. Other than as expressly described above, Special Counsel expresses no opinion regarding other federal or state tax consequences arising with respect to the Certificates, the ownership, sale or disposition of the Certificates, or the a mount, accrual or receipt of interest on the Certificates.

CERTAIN LEGAL MATTERS

The legal opinion s of Special Counsel, approving the validity of the Certificates and addressing certain tax matters, in substantially the form s attached hereto as APPENDIX D, will be made available to purchasers at the time of original delivery of the Certificates. Special Counsel will, as Disclosure Counsel, also deliver a disclosure letter to the City and the Purchaser
regarding the contents of this Official Statement. Certain matters will be passed upon for the City by the City Attorney.

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34 CONTINUING DISCLOSURE

The City has covenanted for the benefit of owners of the Certificates to provide certain financial information and operating data relating to the City and its general fund by not later than nine months after the end of the City’s fiscal year , or April 1 of each year based on the City’s current fiscal year-end of June 30, commencing April 1, 2023, with the report for fiscal year 2021- 22 (the “Annual Report”) and to provide notices of the occurrence of certain listed events (“Event Notices”). All Annual Reports and Event Notices are required to be filed electronically with the Municipal Securities Rulemaking Board (the “MSRB”).

These covenants have been made in order to assist the Purchaser in complying with Rule 15c2-12(b)(5) promulgated under the Securities Exchange Act of 1934, as amended (the “Rule”).

The specific nature of the information to be contained in the Annual Report and the Event Notices is set forth in APPENDIX E.

The City and its related entities, most notably the Successor Agency to the L ivermore Redevelopment Agency, have not complied in the p ast five years with all of their obligations established by previous continuing disclosure undertakings. Specifically, (i) certain of the City’s operating data was not timely filed for fiscal 2016-17, as required by certain undertakings, and (ii) a notice of rating change was not timely filed for the Livermore-Amador Valley Water Management Agency, a joint powers agency to which the City belongs. [KNN to order DAC report]

COMPETITIVE SALE OF BONDS

The Bonds were sold pursuant to a competitive bidding process held on ______, 2022, pursuant to the terms set forth in the Notice of Intention to Sell the Bonds (the “Notice of Intent”), and were awarded to __________(the “Purchaser”), whose proposal represented the lowest true interest cost for the Bonds as determined in accordance with the Notice of Intent. The Purchaser has agreed to purchase the Bonds at a price of $______ (being the principal amount of the Bonds plus original issue premium of $ ______ and less a Purchasers’ discount of $ ______). The Purchaser will purchase all of the Bonds if any are purchased.

LITIGATION

The City is not aware of any pending or threatened litigation concerning the validity of the Certificates or challenging any action taken by the City with respect to the Certificates.

Furthermore, the City is not aware of any pending or threatened litigation to restrain, enjoin, question or otherwise affect the Trust Agreement or in any way contesting or affecting the validity or enforceability of any of the foregoing or any proceedings of the City taken with respect to any of the foregoing.

There are a number of lawsuits and claims pending and threatened against the City unrelated to the Certificates or actions taken with respect to the Certificates. It is the opinion of the City as of this date that such litigation, claims and threatened litigation will not materially affect the City’s finances or impair its ability to make debt service payments on the Certificates.

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35 PROFESSIONAL FEES

In connection with the execution and delivery of the Certificates, fees payable to the following professionals involved in the offering are contingent upon the issuance and delivery of the Certificates:

• KNN Public Finance, LLC, as Municipal Advisor;

• Jones Hall, A Professional Law Corporation, as Special Counsel and Disclosure Counsel; and

• U.S. Bank Trust Company, National Association as Trustee.

RATING

S&P Global Ratings, a Standard & Poor’s Financial Services LLC business (“S&P”) has assigned its rating of “AA” to the Certificates. This rating reflects only the views of S&P, and an explanation of the significance of this rating, and any outlook assigned to or associated with this rating, should be obtained from S&P.

Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. The City has provided certain additional information and materials to the rating agency (some of which does not appear in this Official Statement).

Future events, including the impacts of the COVID -19 pandemic that is described under the caption “RISK FACTORS — Infectious Disease Outbreak and COVID-19 Global Pandemic,” could have an adverse impact on the rating of the Certificates, and there is no assurance that the criteria required by S&P to achieve the rating on the Certificates will not change during the period that the Certificates remain outstanding.

There is no assurance that this rating will continue for any given period of time or that this rating will not be revised downward or withdrawn entirely by the rating agency, if in the judgment of the rating agency, circumstances so warrant. Any such downward revision or withdrawal of any rating on the Certificates may have an adverse effect on the market price or marketability of the Certificates.

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36 EXECUTION

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

CITY OF LIVEMORE

By:

City Manager

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APPENDIX A

CITY OF LIVEMORE

GENERAL FINANCIAL AND DEMOGRAPHIC INFORMATION

General

The City is a general law city with a council manager form of government, which was incorporated on April 1, 1876. It comprises approximately 24.72 square miles and is located in southeastern Alameda County, approximately 43 miles southeast of San Francisco and 30 miles southeast of Oakland.

The estimated January 1 , 2022 population of the City is 86,149. The City is part of the rapidly developing Tri-Valley area which contains the cities of Pleasanton, Livermore, Dublin and San Ramon and has a total estimated January 1, 2022 population of 320,510.

The primary industry in the City is research and development. There are approximately 4,500 acres zoned for research and development and light/heavy industry, including 49 industrial parks with over 19 million square feet of industrial space. The City is also home to tw o national laboratories: Lawrence Livermore National Laboratory and Sandia National Laboratories, and the Livermore Municipal Airport.

The City was originally a rural community and still has many agricultural activities occurring in its sphere of influence, including ranching uses and a significant wine industry. The Livermore Valley Wine Country in and around the City covers over 5,000 acres, and is one of California’s oldest wine regions and home to over three dozen wineries, many with more than 50 tasting rooms and visitor centers. The region is also a developing golf destination with the PGA and LPGA choosing the Tri-Valley as one of their Nationwide Tournament hosts.

The County

The County is located on the east side of the San Francisco Bay, extending to the City of Albany on the north, the City of Fremont on the south, and to the City of Livermore on the east, and is approximately ten miles west of San Francisco. Automobile access to San Francisco is provided by the San Francisco-Oakland Bay Bridge.

The northern part of the County has direct access to San Francisco Bay and the City of San Francisco. It is highly diversified with residential areas, active commercial areas, traditional heavy industry, the University of California at Berkeley, the Port o f Oakland, and sophisticated manufacturing, computer services and biotechnology firms. The middle of the County is also highly developed including older established residential and industrial areas. The southeastern corner of the County, including the cities of Pleasanton and Livermore, has seen strong growth in residential development and manufacturing. Many high-tech firms have moved from neighboring Silicon Valley in Santa Clara County to the County.

City Services and Government

The City provides a fu ll range of services, including public safety (police and fire), highways and streets, sewer, water, public improvements, planning and zoning, general administration services and housing services.

The Livermore Capital Projects Financing Authority (the “ Authority”) provides financing assistance to the City and has been included in the City’s financial plan document as the

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Livermore Capital Projects Financing Authority Debt Service Funds and as part of the Airport Enterprise Fund and the Water Enterprise Fund. The Authority is controlled by the City and has the same governing body as the City, which also performs all accounting and administrative functions for the Authority.

The City is organized as a council-manager form of local municipal government. The City Council consists of five members elected at -large for four- year, overlapping terms. The City Council selects the Mayor from among its members for a one-year term. On November 26, 2018 the City adopted an ordinance to transition from an a t-large to district-based election system to comply with the California Voting Rights Act (California Government Code Section 34886 and 34871(c)). The City Council selected a district map dividing the City into four single member districts. City Council members will be elected in City Council districts 3 and 4 beginning at the general municipal election in November 2020, and every four years thereafter. Council members will be elected in City Council districts 1 and 2 beginning at the general municipal ele ction in November 2022, and every four years thereafter. The Mayor will continue to be elected on an at- large basis.

The Mayor and City Council provide community leadership, develop policies to guide the City in delivering services and achieving community goals, and encourage citizen understanding and involvement.

The City Manager is appointed by the City Council and responsible for administration of municipal affairs. All municipal departments operate under the supervision of the City Manager.

Through the City Manager, City staff, using the resources appropriated by the Council in the budget to achieve desired service results in the community, carries out the policies of the Council.

Possible Impacts of COVID-19

As described in this Official Statement, the short-term and long-term impact of COVID-19 on the City’s finances cannot be predicted. The Certificates described in this Official Statement are secured by the City’s general fund. See “RISK FACTORS – Infections Disease Outbreak and COVID-19 Global Pandemic.”

Budget Process

The fiscal year of the City begins on the first day of July and ends on the 30th day of June of the following calendar year. Development of an annual or biennal budget typically begins six months prior to the fiscal year o r initial fiscal year of the two -year budget under consideration.

Budgeting is a continuing process involving the presentation of budget estimates by all departments, review of requests by the City Manager and referral of a preliminary budget to the City Council for consideration. After the City Council review and public hearings on the proposed budget, adoption of the budget for the forthcoming year or two year period is normally enacted by resolution prior to July 1. For a biennial budget, the City Council reviews the budget at the end of the initial fiscal year to determine if changes or adjustments need to be made for either fiscal year.

Operating Budget Policy. The operating budget takes the form of a two -year financial plan, which is adopted in its entirety by the City Council. The operating budget is subject to supplemental appropriations throughout its term in order to provide flexibility to meet changing needs and conditions. A mid -period review is conducted in the off year and ap propriations are adjusted accordingly. The operating budget is presented on a program basis, with an emphasis on matching costs of services with appropriated revenues available to provide those services while maintaining stable reserves; however, the lega l level of budgetary control is at the fund level.

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Capital Improvement Budget Policy. A capital improvement plan (the “CIP”) is prepared and updated every two years on the same cycle as the operating budget and is adopted to be consistent with the Genera l Plan. The CIP budget is subject to supplemental appropriations throughout its term in order to provide flexibility to meet changing needs and conditions.

From the effective date of the budget, the amounts stated as recommended expenditures become appropriated to the various departments and programs. The City Manager may transfer appropriations between departments or programs within any fund. Any revisions or transfers that alter the total appropriations of any fund must be approved by the City Council. In addition, supplemental appropriations and budget transfers related to capital improvement projects between funds and projects need approval from the City Council. All appropriations and encumbrances lapse at the end of the fiscal year to the extent that they have not been expended or lawfully encumbered. Valid outstanding encumbrances (those for which performance under executory contract is expected in the next fiscal year) are re-appropriated and become part of the subsequent year’s budget. At a public meeting after the adopting of the budget, the Council may amend or supplement the budget by motion adopted by the affirmative vote of at least three members of the five-member City Council.

The CIP for Fiscal Years 2021-2023 allocates approximately $15.5 million of General Fund resources for capital improvements, representing a significant investment in the City’s downtown area.

The most recent

Long-Term Financial Plan . The City also maintains a long -term financial plan (the “Forecast”), which is intended to help evaluate the City’s financial condition and help assess the financial implications of current and proposed budgets, programs and assumptions. The Forecast is also used to help shape budget decisions by providing early warning of adverse tren ds and develop strategies to achieve City goals. The most recent Forecast is projected through Fiscal Year 2027-28.

Appropriations Limit

The following table shows the City of Livermore’s appropriation limit and appropriations subject to limitation for the fiscal years 2018-19 through 2022-23. See also “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS –Appropriations Limitation — Article XIIIB.”

CITY OF LIVERMORE
Appropriations Limit and
Appropriations Subject to Limitation

2018-19 2019-20 2020-21 2021-22 2022-23

Appropriations Limit $344,087,147 $368,161,204 $385,462,616 $408,160,948 $440,433,435 Appropriations Subject to Limitation 67,435,856 74,420 994 78,774,574 76,546,934 105,628,659

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General Fund Budgets

General. The City’s currently budgeted General Fund revenues and expenditures for fiscal years 2021-22, and 2022-23, and actual General Fund revenues and expenditures for fiscal years 2020-21, are set forth in the following table. Budgeted amounts are based on the most current and reliable currently information. The City’s audited financial statements for the fiscal year ended June 30, 2021, are included as APPENDIX C to this Official Statement.

CITY OF LIVERMORE
General Fund Adopted Budgets
For Fiscal Years 2020-21 (Actual) and 2021-22 and 2022-23 (Adopted Budget)

Actual
2020-21
Existing
Budget
2021-22 (1)
Adopted
Budget
2021-22 (2)
Existing
Budget
2022-23
Adopted
Budget
2022-23 (2)

Revenues:

Property Tax $38,874,958 $41,401,520 $40,464,176 $42,953,530 $43,011,015 Sales Tax 35,441,550 34,094,000 37,550,000 36,500,000 39,047,000 Franchise Tax 5,686,312 5,185,281 5,827,371 5,222,356 6,043,000 Business License Tax 6,804,846 5,906,285 7,370,000 6,101,374 7,672,000 Other Taxes 3,651,054 4,250,000 5,862,930 5,550,000 6,850,800 License and Permits 2,587,449 2,596,220 3,315,100 2,566,487 3,220,242 Fines and Forfeitures 395,011 370,000 345,000 380,000 355,000 Use of Money and Property 7,952,228 3,830,381 4,075,607 3,921, 943 3,939,280 Intergovernmental Revenues 15,307,657 16,267,460 17,030,373 11,602,258 12,364,166 Other In-Lieu Taxes 7,990 7,980 7,980 7,980 7,980
Charges for Current Services 7,954,985 8,063,192 8,694,048 8,299,003 8,608,340 Other Revenues 3,438,904 469,750 2,106,261 474,750 486,250 Total Revenues 128,102,944 122,442,069 132,648,846 123,579,681 131,605,073 Transfers In 537,023 4,278,135 705,275 2,132,599 852,919 Total Sources 128,639,967 126,720,204 133,354,121 125,712,280 132,457,992

Expenditures:

Personnel 33,724,109 37,319,745 36,424,489 37,828,248 40,360,639 Supplemental Personnel 26,407,327 29,286,282 27,985,199 30,158,021 29,622,797 Services and Supplies 49,130,697 54,657,407 56,649,200 50,448,932 56,620,959 Capital Outlay 97,734 -- -- 49,100 396,000
Total Operating Expenditures 109, 359,867 121,263,434 121,058,888 118,484,301 127,000,395 Transfers Out 4,189,577 6,759,479 6,294,486 9,182,168 8,218,044 Capital Improvement 4,367,190 14,207,000 13,577,000 1,090,000 1,897,000 Reserves 5,697,188 1,599,556 4,643,528 1,043,263 2,180,358 Total Expenditures 123,613,822 143,829,469 145,573,902 129,799,732 139,295,797

(1) Includes supplemental budget requests.
(2) Fiscal year 2022-23 financial plan update, adopted by City Council on June 13, 2022.

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2022-23 Adopted Budget. The City’s 2022-23 adopted budget (the “Adopted Budget”) projects a cumulative general fund surplus of approximately $4.3 million and an estima ted $7.2 million unassigned general fund balance at the end of fiscal year 2022 -23. General Fund revenues are expected to increase by $10.2 million in fiscal year 2021-22 and $8 million in fiscal year 2022 -23 beyond original estimates. This is primarily r elated to growth in sales tax and business license tax revenues though all of the City’s revenue sources are expected to increase beyond original estimates.

CITY OF LIVERMORE
Proposed Financial Plan Update:

General Fund Budget Projections

Actual
2020-21

Adopted
2021-22
Projected
Actuals
2021-22 (1)

Adopted
2022-23
Operating Revenue $128,102,944 $132,648,846 $134,563,212 $131,605,073 Transfers In
Use of Unassigned Reserves
Use of ERP Reserves
537,023
0 0
705,275
12,219,781
0 705,275
3,911,526
0 852,919
4,837,805
2,000,000
Total Sources $128,639,967 $145,573,902 $139,180,013 $139,295,797

Total Operating Expenditures $109,359,867 $121,058,888 $114,454,879 $127,000,395 Transfers Out 4,189,577 6,294,486 6,294,486 8,218,044
Capital Improvement Plan 4,367,190 13,577,000 13,787,120 1,897,000 Contributions to Reserves 5,697,188 4,643,528 4,643,528 2,180,358 Total Uses $123,613,822 $145,573,902 $139,180,013 $139,295,797

Excess/(Shortfall) $5,026,145 $0 $0 $0

(1) Projected Actuals made using a number of assumptions and estimates .

Source: City of Livermore

City General Fund Reserves

Operating Reserves. The City is committed to the establishment of minimum fund balance/net position which will help maintain the City’s credit worthiness, and to provide funds for catastrophic events, economic uncertainties, contingencies and cash flow requirements. It is the goal of the City to achieve and maintain a combined minimum unrestricted (committed, assigned and unassigned) fund balance in its General Fund equal to 30% of the current year’s budgeted operating expenditures and outgoing transfers for debt service as listed below:

o The City’s General Fund balance committed for Operating Reserve Stabilization is established at a minimum of 15% of the General Fund’s budgeted operating expenditures plus debt service transfers, to be used in a catastrophic event or in a major emergency or in periods of severe fiscal crisis as described in the Comprehensive Fund Balance Policy.

o The City’s General Fund Assigned for Economic Uncertainty Reserve is established at a minimum of 13.5% of the General Fund’s budgeted operating expenditures plus debt service transfers, to be used during times of severe economic distress such as protracted recessionary periods, State raids on local resources, or other impactful unforeseen events which greatly diminish the financial ability of the City to deliver core services.

o The City will strive to maintain a minimum unassigned fund balance in its General Fund of

1.5% of the budgeted operating expenditures and outgoing debt service transfers. This

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minimum fund balance is to protect aga inst cash flow shortfalls related to timing of projected revenue receipts and to maintain budgeted level of services.

As of June 30, 2021, all of these reserves were fully funded with the unassigned fund balance exceeding the City Council goal by 75.4%. The General Fund reserve as of June 30, 2021, exceeds the 30% unrestricted fund balance in its General Fund by $26.3 million, or 23.8% of General Fund operating expenditures plus debt service transfers.

CITY OF LIVERMORE
Available General Fund Balances

2020-21 2021-22 (1) 2022-23 (1)

15% Committed Reserve $17,419,222 $18,740,986 $19,831,165

13.5% Assigned Reserve 15,677,300 16,866,888 17,848,049 Assigned Infrastructure Replacement 12,000,000 14,000,000 16,000,000 Assigned ERP 2,000,000 2,000,000 -- (2)

1.5% Unassigned Reserve 1,741,922 1,874,099 1,983,116
Available Unassigned (3) 26,273,570 14,053,789 7,215,984 TOTAL FUND BALANCE $75,112,014 $67,535,762 $62,878,314

(1) Projected.
(2) Included in Fiscal Year 2022-23 Budget.
(3) Calculated by adding the unrealized loss on investments ($3,544,354 for Fiscal Year 2020-21), and subtracting

1.5% from the Unassigned Fund Balance, See – “Financial Statements” below. Investments are typically held to maturity, so unrealized gains or losses are excluded from Available Fund Balances and are not budgeted for .

Source: City of Livermore

Infrastructure Repair and Replacement Reserves . In June of 2016, the City Council directed staff to establish an Infras tructure Repair and Replacement Reserve to begin accumulating the resources necessary to address the City’s aging infrastructure as part of the Council Goal and Priority of Asset Management. One of the City’s strategies to contain costs and leverage its buying power is to save during times of economic prosperity so that resources are available during the next economic downturn. Council has directed staff to reserve $2 million per year.

State Budget and Its Impact on the City

Fiscal Year 2022-2023 State Budget. On June 30, 2022, the Governor signed the fiscal year 2022-23 State Budget (the “2022-23 State Budget”), a $308 billion spending plan, including $234.4 billion in general fund spending, and a historic $100 billion budget surplus . The 2022-23 State Budget includes significant general fund investments, provides for tax rebates to millions of taxpayers, and provides for a $37.2 billion reserve.

Impact of State Budget on City. The City receives a portion of its funding from the State.

The City's projects that approximately 7.8% of the City's General Fund revenues will come from State sources.

Voters approved Proposition 1A in November 2004 to amend the State Constitution to place constraints on the State’s ability to divert certain specified revenues from local agencies to the State. Subsequently, in November 2010, voters approved Proposition 22 to amend the State Constitution to further constrain or eliminate the State’s ability to redirect revenues from local agencies. “CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING CITY REVENUES AND APPROPRIATIONS – Proposition 1A” and “– Proposition 22.”

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Additional Information. Information about the 2022 -23 State Budget and other State budgets is available at www.ebudget.ca.gov. An impartial analysis of the budget is posted by the Legislative Analyst Office at www.lao.ca.gov. In addition, various State official statements, many of which contain a summary of the current and past State budgets, may be found at the website of the State Treasurer, www.treasurer.ca.gov. The information referred to in this paragraph is prepared by the respective State agency maintaining each website and not by the City. The City takes no responsibility for the continued accuracy of the Internet addresses or for the accuracy or timeliness of information posted there, and such information is not incorporated in this Official Statement by these references.

Financial Statements

The accounting policies of the City conform to generally accepted accounting principles.

The Governmental Accounting Standards Board (“GASB”) published its Statement No. 34 “Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments” on June 30, 1999. Statement No. 34 provides guidelines to auditors, state and local governments and special purpose governments such as school districts and public utilities for financial reporting for all governmental agencies in the United States. Generally, the basic financial statements and required suppl ementary information should include (i) Management’s Discussion and Analysis; (ii) financial statements prepared using the economic measurement focus and the accrual basis of accounting; (iii) fund financial statements prepared using the current financial resources measurement focus and the modified accrual method of accounting; and (iv) required supplementary information.

Accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. There are three groups of funds: governmental funds (which include the General Fund), proprietary funds (which include enterprise funds and internal service funds) and fiduciary funds (which are used to account for resources held for the benefit of parties outside the City).

All governmental funds and fiduciary funds use the modified accrual basis of accounting.

The proprietary funds use the accrual basis of accounting. The General Fund is the general operating fund of the City and is used to account for all financial resources except those required to be accounted for in a separate fund.

In fiscal year 2014 -15, the City implemented GASB Statements No. 68 and 71. These statements establish standards for measuring and recognizing liabilities, deferred outflows of resources, deferred inflows of resources and pension plan expenses. GASB Statements No. 68 and No. 71 do not change the pension funding obligations of the City and have had no effect on the General Fund. See also “– Employee Retirement System.”

In fiscal year 2016-17, the City implemented GASB Statement No. 74, which relates to plan level financial reporting for fiduciary fund financial statements. In fiscal year 2017 -18, the City implemented GASB Statement No. 75, which relates to improved accounting and fina ncial reporting by state and local governments for other post-employment benefits (“OPEB”).

The City’s most recent audited financial statements are included in the Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2021, which is attached as APPENDIX C to this Official Statement. The financial statements were prepared by the City and audited by Eide Bailly LLP (the “Auditor”).

The financial statements should be read in their entirety. The City has neither requested nor obtained p ermission from the Auditor to include the audited financial statements as an

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appendix to this Official Statement. Accordingly, the Auditor has not performed any post -audit review of the financial condition or operations of the City or General Fund. In addition, the Auditor has not reviewed this Official Statement.

Set forth on the following pages are (i) a general fund balance sheet for fiscal years 2016- 17 through 2020-21 and (ii) a statement of revenues, expenditures and changes in fund balance for the City’s General Fund for the same period.

CITY OF LIVERMORE
General Fund Balance Sheet

Audited
2016-17
Audited
2017-18
Audited
2018-19
Audited
2019-20
Audited
2020-21
ASSETS:

Cash and investments in City Treasury $41,778,029 $49,948,78 $55,223,247 $62,232,532 $69,899,712 Accounts receivable 9,014,068 8,042,464 8,917,551 6,501,251 11,000,416 Interest receivable 1,027,729 1,377,384 2,030,505 1,540,378 1,278,834 Due from other funds 679,279 1,191,119 14,651 102,953 -- Advances to other funds 5,094,048 4,983,136 3,880,245 3,880,245 3,874,396 Prepaids and deposits 97,720 200,584 104,759 20,000 8,000 Notes receivable -- -- -- -- --
Land held for redevelopment -- 1,727,437 1,727,437 1,727,437 1,727,437 Total assets 57,690,873 67,470,602 71,898,395 76,004,796 86,788,795

LIABILITIES:

Accounts payable or other accrued liabilities 1,732,637 3,217,410 5,674,185 3,514,024 3,992,870 Accrued payroll and benefits 977,522 946,345 990,348 1,394,778 1,556,050 Deposit payable 20,939 26,783 135,210 1,085,290 2,805,547 Advance from other funds 476,958 359,493 -- -- --
Unearned rents and revenue 14,507 -- 53,000 -- 1,256,835 3,222,563 4,550,031 6,852,743 5,994,092 9,611,302
Total liabilities

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue -- 1,531 4,017 12,191 --
Total deferred inflows of resources -- 1,531 4,017 12,191 --

Fund Balances:

Nonspendable 5,191,768 6,911,157 5,712,441 5,627,682 5,609,833 Restricted -- -- -- -- --
Committed 14,534,792 15,689,514 15,954,446 16,561,703 17,419,222 Assigned 17,891,417 20,120,563 22,359,001 24,905,533 29,677,300 Unassigned 16,850,333 20,197,806 21,015,747 22,903,595 24,471,138 Total fund balances 54,468,310 62,919,040 65,041,635 69,998,513 77,177,493

Total liabilities and fund balances $57,690,873 $67,470,602 $71,898,395 $76,004,796 $86,788,795

Source: City of Livermore Annual Comprehensive Financial Reports.

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CITY OF LIVERMORE
Statement of General Fund Revenues, Expenditures and Changes in Fund Balance

Audited
2016-17
Audited
2017-18
Audited
2018-19
Audited
2019-20
Audited
2020-21
Revenues:

Property Taxes and special
assessments $30,187,436 $32,637,569 $35,234,143 $37,421,396 $38,874,958 Sales taxes 30,684,026 32,346,374 35,556,493 32,869,001 35,441,550 Other taxes 15,503,409 17,306,457 16,895,027 16,253,107 16,150,202 Licenses and permits 2,587,073 3,329,443 2,647,472 2,408,482 2,587,449 Intergovernmental 8,852,215 9,353,334 9,713,419 10,260,780 15,307,657 Contributions from outside
sources -- 75,515 125,000 36,737 3,024,939
Fines and forfeitures 382,735 472,063 522,198 480,714 395,011 Charges for current services 10,499,907 9,424,003 7,752,120 8,632,078 7,954,985 Use of money and property 3,115,686 3,556,356 8,531,498 9,654,094 4,407,874 Miscellaneous 1,194,782 1,140,518 443,392 419,446 413,965 Total revenues 103,007,269 109,641,632 117,420,762 118,435,835 124,558,590

Expenditures:

Current:

General government
City Council 163,769 158,834 153,040 146,052 292,587
City Manager 1,567,504 1,878,162 1,992,078 1,845,388 2,115,420 City Attorney 1,613,198 1,339,275 1,635,294 1,750,605 1,874,129 City Clerk -- -- -- -- --
Administrative Services 4,963,911 5,022,105 5,584,001 5,752,797 6,459,231 General Services 4,951,296 5,011,989 5,367,660 7,069,468 3,040,213 Fire 18,153,885 19,730,024 21,467,182 21,956,743 22,758,011 Police 31,332,961 34,028,461 36,597,420 36,151,077 38,135,545 Public Works 6,018,508 6,701,971 7,048,763 7,298,306 7,886,134 Community & Econ.

Development 16,881,991 16,497,855 17,896,133 17,999,658 22,185,775 Library 5,218,799 5,570,535 5,587,920 5,834,282 5,517,721 Capital outlay
Capital projects 1,308,516 1,938,989 6,906,865 3,319,627 3,462,289 Total expenditures 92,174,338 97,878,200 110,236,356 109,124,003 113,727,055

Excess of revenues over (under)
expenditures 10,832,931 11,763,432 7,184,406 9,311,832 10,831,535

Other financing sources (uses):

Transfers in 2,287,970 3,845,182 900,260 691,026 537,023 Transfers out (5,792,127) (7,348,147) (5,962,071) (5,045,980) (4,189,578) Total other financing sources
(uses) (3,504,157) (3,502,965) (5,061,811) (4,354,954) (3,652,555)

Net change in fund balance 7,328,774 8,260,467 2,122,595 4,956,878 7,178,980

Fund balance - July 1 47,139,536 54,468,310 62,919,040 65,041,635 69,998,513 Beginning fund, as restated -- 54,658,573 -- -- --
Fund balance - June 30 $54,468,310 $62,919,040 $65,041,635 $69,998,513 $77,177,493

Source: City of Livermore Annual Comprehensive Financial Reports.

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Major Revenues

The following table summarizes the City’s most significant tax revenue, which is deposited in the general fund.

CITY OF LIVERMORE
General Fund Tax Revenues

Type of Revenue

2018-19(a)

2019-20(a)

2020-21(a)
Projected
2021-22(b)
Projected
2022-23(b)

Property Tax $35,234,143 $37,421,396 $38,874,958 $40,464,176 $43,011,015 Sales and Use Tax 35,556,493 32,869,001 35,441,550 37,550,000 39,047,000 Business License Tax 6,013,252 5,968,119 6,804,846 7,370,000 7,672,000 Franchise Taxes 5,206,202 5,410,593 5,686,312 5,827,371 6,043,000

Other Taxes(c) 5,675,573 4,874,395 3,659,044 5,870,910 6,858,780 Total $87,685,663 $86,543,504 $90,466,710 $97,082,457 $102,631,795

(a) Restated from the City of Livermore Audited Financial Reports. (b) Provided by City Finance Department.
(c) Other Taxes include Transient Occupancy Tax, Real Property Tax, Business Construction Tax and other Taxes in Lieu.

Source: City of Livermore.

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Property Taxes

Property tax has historically been one of the top two largest revenue sources for the City and has been the number one revenue source since fiscal year 2019-20. In the Adopted Budget, the property tax revenue is projected to increase by $2.5 million, from $40.5 million in fiscal year 2021-22 to an estimated $43 million in fiscal year 2022 -23 primarily on the strength of the current housing market and continued residential and commercial development activity.

Assessed Valuation. All non -exempt property is assessed using full cash value as defined by Article XIIIA of the California Constitution. State law exempts from taxation $7,000 of the full cash value of an owner-occupied dwelling, provided that the owner files and qualifies for such exemption. This exemption does not result in any loss of tax revenue to local agencies, since the State reimburses local agencies for the value of taxes on exempted property. State law also provides exemptions from ad valorem property taxation for certain classes of property based on ownership or use, such as household and personal effects, intangible personal property (such as bank accounts, stocks and bonds), business inventories and real property used for religious, non-profit hospital, scientific and charitable purposes; the State does not reimburse local agencies for any tax not levied due to these exemptions. State and federal government property also is not taxed, nor is local government property located within the jurisdiction of that local government.

For assess ment and collection purposes, property is classified as either “secured” or “unsecured” and is listed accordingly on separate parts of the assessment roll. The “secured roll” is that part of the assessment roll containing State-assessed real property and other real property having a tax lien which is sufficient, in the opinion of the assessor, to secure payment of the taxes.

Unsecured property comprises all other taxable property, including personal property and leasehold interests. Unsecured property is assessed on the “unsecured roll.” Every tax levied by a county that becomes a lien on secured property has priority over all present and future private liens arising pursuant to State law on the secured property, regardless of the time of the creation of the other liens. A tax levied on unsecured property does not become a lien against the taxed unsecured property, but may become a lien on other property owned by the taxpayer. Valuation of secured property and a statutory tax lien is established as of J anuary 1 prior to the tax year (the tax year is the July 1 - June 30 fiscal year of the State) of the related tax levy, and the secured and unsecured tax rolls are certified as of July 1 of the tax year by the County Assessor. New property and improvement s are assessed and added to “supplemental” rolls during the year acquired or improvements are completed, and taxed at the secured or unsecured rate then in effect, as the case may be, for the remaining portion of that year. The next year and thereafter such assets are assessed on the regular tax rolls.

Future growth in assessed valuation allowed under Article XIIIA is allocated on the basis of “situs” among the jurisdictions that serve the tax rate area within which the growth occurs.

Local agencies and school districts will share the growth of “base” r evenues from the tax rate area. Each year’s growth allocation becomes part of each agency’s allocation in the following year.

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The following table represents the most recent ten-year history of taxable assessed valuation in the City:

CITY OF LIVERMORE
Historical Assessed Valuations

Fiscal
Year Common Property Public Utility Unsecured
Total Taxable
Assessed Valuation

2011-12 $12,677,885,472 $16,667,214 $621,343,226 $13,315,895,912 2012-13 12,785,579,465 16,652,307 712,651,650 13,514,883,422 2013-14 13,495,749,069 16,534,025 677,891,857 14,190,174,951 2014-15 14,441,874,348 15,920,292 618,857,248 15,076,651,888 2015-16 15,425,274,831 16,125,723 644,740,332 16,086,140,886 2016-17 16,462,710,778 16,036,533 669,293,841 17,148,041,152 2017-18 17,584,794,540 13,149,678 665,835,413 18,263,779,631 2018-19 18,716,232,125 13,261,314 742,728,963 19,472,222,402 2019-20 19,706,452,617 12,659,804 887,677,095 20,606,789,516 2020-21 20,739,018,910 12,463,593 890,242,048 21,641,724,551 2021-22 _____ _____ _____ _____

Source: California Municipal Statistics

Factors Relating to Increases/Decreases in Assessed Value. As indicated in the previous table, assessed valuations are subject to change in each year. Increases or decreases in assessed valuation result from a variety of factors including but not limited to general economic conditions, supply and demand for rea l property in the area, government regulations such as zoning, and natural disasters such as earthquakes, fires, floods and droughts.

Wildfires. Wildfires have occurred in recent years in different regions of the State, the most destructive of which hav e burned thousands of acres and destroyed thousands of homes and structures. Many of these fires have originated in wildlands adjacent to urban areas.

Although the recent wildfires have not included territory within the City’s boundaries, the City is vulnerable to a wind-driven fire starting along the City’s eastern border.

The City cannot predict or make any representations regarding the effects that natural disasters including but not limited to earthquakes, fires, floods, droughts and related conditions may have on the value of taxable property within the City, or to what extent the effects said disasters might have had on economic activity in the City or throughout the State. See also “SECURITY FOR THE CERTIFICATES – COVID-19 Global Pandemic.”

Property Tax Base Transfer Ballot Measure. On November 3, 2020, State voters approved a constitutional amendment entitled Property Tax Transfers, Exemptions and Revenue for Wildfire Agencies and Counties Amendment (“Proposition 19”), which will: (i) expand special rules that give property tax savings to homeowners that are over the age of 55, severely disabled, or whose property has been impacted by a natural disaster or contamination, when they buy a different home; (ii) narrow existing special rules for inherited properties; and (iii) broaden th e scope of legal entity ownership changes that trigger reassessment of properties. The City cannot make any assurance as to what effect the implementation of Proposition 19 will have on assessed valuation of real property in the City.

Tax Levies, Collections and Delinquencies. Secured property tax rates are set annually by the first business day of September for the levy of property taxes in that tax year. The levy is

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payable in two equal installments due November 1 and February 1, and payments become delinquent if not postmarked or paid by end of the business day on December 10 and April 10, respectively. Taxes on unsecured property (personal property and leasehold interests) are levied at the preceding fiscal year’s secured tax rate and have a due date set by each county effectively no earlier than July 1 and no later than July 31 of each year. Taxes on unsecured property become delinquent if not postmarked or paid by end of business day on August 31, or if added to the unsecured roll after July 31, become delinquent at the end of the month succeeding the month of enrollment.

A 10% penalty attaches to any delinquent payment for secured roll taxes, plus a charge of $10 if unpaid after April 10. In addition, property on the secured roll for which taxes are delinquent becomes tax-defaulted if not paid by June 30 of the same fiscal year. Such property may thereafter be redeemed by payment of (a) the delinquent taxes, (b) the 10% penalty, (c) the $10 charge, (d) an additional penalty of 1.5% per month (18% annualized rate) from July 1 to the time of redemption and (e) a redemption fee of $15 per parcel, $5 of which goes to the State (collectively, the “Redemption Amount”). Properties may be redeemed under an installment plan of paying the Redemption Amount in five equal installments over a period of four years. A delinquent taxpayer may enter into the installment plan at any time up to the June 30 occurring five years after the property becomes tax defaulted. If taxes are unpaid five years after the property becomes tax defaulted or, if an installment plan is in place, then at the end of the installment plan, the County can initiate a “power to sell” procedure for the County Tax Collector to sell the property at auction. Alternatively, in certain instance s the County may institute a superior court action to foreclose the lien on the property; if the lawsuit is successful, the property may be sold at a judicial foreclosure sale.

A 10% penalty attaches to delinquent taxes on property on the unsecured roll, and after the last day of the second month after the 10% penalty attaches, an additional penalty of 1.5% per month begins to accrue and a lien is recorded against the assessee. The taxing authority may collect delinquent unsecured personal property taxes by: (a) a civil action against the taxpayer; (b) filing a certificate of delinquency in the office of the County Clerk specifying certain facts in order to obtain a judgment lien on specific property of the taxpayer; and (c) seizure and sale of personal property, improvements or possessory interests belonging or assessed to the assessee.

Supplemental roll taxes are due on the date the bill is mailed. If the tax bill is mailed within the months of July through October, the first installment shall become delinquent at 5 p.m., or the end of the business day, whichever is later, on December 10 of the same year and the second installment shall become delinquent at 5 p.m., or the end of the business day, whichever is later, on April 10 of the next year; if the bill is mailed within the months of November through June, the first installment shall become delinquent at 5 p.m., or the end of the business day, whichever is later, on the last day of the month following the month in which the bill is mailed and the seco nd installment shall become delinquent at 5 p.m., or the end of the business day, whichever is later, on the last day of the fourth calendar month following the date the first installment is delinquent.

A 10% penalty attaches to any delinquent payment for supplemental roll taxes.

All tax due dates and delinquency dates become the next business day if they fall on a day that is not a business day.

Disclaimer Regarding Property Tax Collection Procedures . The property tax collection procedures described above are subject to amendment based on legislation or executive order which may be enacted by the State legislature or declared by the Governor from time to time.

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The following is a summary of ad valorem tax rates for a representative tax rate area, TRA 16-071, within the City. TRA 16-071 has a total fiscal year 2021-22 secured assessed valuation of $7,614,575,601, approximately 34.34% of the City’s total local secured assessed valuation.

CITY OF LIVERMORE
Tax Rates - TRA 16-071

2017-18 2018-19 2019-20 2020-21 2021-22

General 1.0000% 1.0000% 1.0000% 1.0000% 1.0000%
Alameda County .0000 .0112 .0108 .0036 .0041
Livermore Valley Joint Unified School District .0803 .0771 .0743 .0691 .0706 Chabot Las Positas CCD .0445 .0443 .0422 .0214 .0458 Flood Zone 7, State Water .0359 .0332 .0309 .0309 .0307 Bay Area Rapid Transit District .0084 .0070 .0120 .0139 .0060

TOTAL 1.1691% 1.1728% 1.1702% 1.1389% 1.1572%

Source: California Municipal Statistics, Inc.

The secured tax charges and year -end delinquencies for the most recent five years are reflected on the following table:

CITY OF LIVERMORE
Secured Tax Charge and Delinquencies

Fiscal Year

Secured Tax Charge(1)
Amount Delinquent
as of June 30
Percent Delinquent
June 30
2014-15 $23,879,546.57 $256,837.43 1.08%
2015-16 25,581,676.66 325,351.24 1.27
2016-17 27,223,319.92 301,816.94 1.11
2017-18 29,227,082.95 260,838.11 0.89
2018-19 31,300,680.02 275,282.83 0.88
2019-20 33,217,746.56 354,318.98 1.07
2020-21 34,692,169.16 335,389.31 0.97

(1) 1% General Fund apportionment.

Source: California Municipal Statistics, Inc.

No Teeter Plan. The Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds (the “ Teeter Plan”) has been adopted by 53 of the 58 counties, including Alameda County, as provided for in Section 4701 et seq. of the State Revenue and Taxation Code. Under the Teeter Plan, each participating local agency, including cities, levying property taxes in a county receives the amount of uncollected taxes credited to its fund, in the same manner as if the amount credited had been collected. In return, the county receives and retains delinquent payments, penalties and interest as collected, that would have been due the local agency. However, although a local agency receives the total levy for its property taxes without regard to actual collections, to the extent of a reserve established and held by its county for this

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purpose, the basic legal liability for property tax deficiencies at all times remains with the local agency. The Teeter Plan is to remain in effect unless the county board of supervisors orders its discontinuance or unless, prior to the commencement of any fiscal year of the county, the board of supervisors receives a petition for its discontinuance from two -thirds of the participating revenue districts in the county. The board of supervi sors may, after holding a public hearing on the matter, discontinue the procedures under the Teeter Plan with respect to any tax levying agency in its county.

The City has elected not to participate in the Teeter Plan. That means that the City is subject to any delinquencies in the collection of property taxes but gains all penalty and interest amounts when such delinquencies are collected.

Largest Property Taxpayers. The following table represents the 20 largest secured property taxpayers in the City for fiscal year 2021-22.

CITY OF LIVERMORE
Largest Taxpayers

Property Owner Primary Land Use
2021-22
Assessed Valuation Percent of Total (a)

1. Livermore Premium Outlets LLC Outlet Stores $ 224,809,590 1.06%

2. Livermore Oaks Joint Venture LLC Industrial 148,318,172 0.70

3. Longfellow Logistics Center LLC Industrial 137,408,960 0.65

4. Kaiser Foundation Hospitals Industrial 105,875,506 0.50

5. Arkay Properties LLC Industrial 101,412,454 0.48

6. Jack London Blvd. & Isabel Ave. LLC Industrial 83,746,604 0.39

7. BCORE Shield 6933 Preston Owner LLC Industrial 69,570,700 0.33

8. Marathon Drive Buildings LLC Industrial 67,581,119 0.32

9. 3055 Livermore Owner LLC Office Building 64,524,170 0.30

10. Raintree Ironwood LLC Apartments 61,732,367 0.29

11. Sequoia Equities Mill Springs Apartments 53,000,863 0.25

12. FM Industries Inc. Industrial 50,435,950 0.24

13. BCDPF Bay Area Commerce Center LP Industrial 48,730,000 0.23

14. BTMU Capital Leasing & Finance Inc. Industrial 48,569,006 0.23

15. Sutter Health Commercial Land 47,032,612 0.22

16. Eleanor Sade Trust Industrial 45,344,315 0.21

17. 174 Lawrence Drive Investors LLC Industrial 44,621,034 0.21

18. Valley Care Senior Housing Inc. Apartments 42,920,971 0.20

19. Golden Bears LLC & Ellis Street Properties Auto Dealership 41,525,210 0.20

20. Livermore Investments LLC Shopping Center 39,932,035 0.19 $1,527,091,638 7.19%

(a) 2021-22 Local Secured Assessed Valuation: $21,248,057,637.

Source: California Municipal Securities, Inc.

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Sales and Use Tax.

For fiscal year, 2020-21, sales tax was the City’s second largest revenue source, with over

16.2% of all sales tax revenue derived from its outlet mall. In addition to a consumer trend of moving away from brick and mortar stores, COVID -19 impacted consumer behavior and retails sales. Sales tax revenue in the Adopted Budget are expected to increase by $1.5 million from

37.6 million in fiscal year 2021 -22 to $39.1 million in fiscal year 2022 -23 due to anticipated continued recovery from the pandemic and inflation.

The sales tax is imposed on retail sales of tangible personal property. A similar use tax is imposed on purchases out-of-state and delivered for use in California. Since the passage of the Bradley-Burns Act in 1955, the State has collected, along with its own sales taxes, a uniform 1% sales and use tax for allocation to cities and counties based on a point -of-sale formula. The passage of Proposition 172 in 1993 permanently extended an additional 0.5% sales tax dedicated to local public safety. Sales and use tax receipts to the City are deposited in the City’s general fund.

The following table summarizes historical taxable transactions in the City. Total taxable sales during calendar year 2021 in the City were reported to be $2,907,568,783, a 22.62% increase over the total taxable sales of $2,371,274,613 reported during calendar year 2020.

CITY OF LIVERMORE
Taxable Transactions - 2017 through 2021
Number of Permits and Valuation of Taxable Transactions

Retail Stores Total All Outlets

Number
of Permits

Taxable
Transactions
(in thousands)

Number
of Permits

Taxable
Transactions
(in thousands)
2017 1,513 $1,888,222 2,722 $2,787,558
2018 1,501 1,980,658 2,806 2,917,004
2019 1,530 2,005,968 2,901 2,959,726
2020 1,545 1,489,580 2,947 2,371,275
2021 1,479 1,915,735 2,815 2,907,569

Source: State Department of Tax and Fee Administration.

The following table summarize s historical taxable transactions in the County. Total taxable sales during calendar year 2021 in the County were reported to be $37,893,681,750, a

17.77% decrease over the total taxable sales of $32,176,001,960 reported during calendar year 2020.

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ALAMEDA COUNTY
Taxable Transactions - 2017 through 2021
Number of Permits and Valuation of Taxable Transactions

Retail Stores Total All Outlets

Number
of Permits

Taxable
Transactions
(in thousands)

Number
of Permits

Taxable
Transactions
(in thousands)
2017 27,431 $20,561,252 45,232 $32,476,174
2018 27,816 22,857,349 47,402 35,073,302
2019 28,375 21,882,886 49,197 35,040,749
2020 28,831 19,931,259 50,461 32,176,002
2021 26,964 22,613,147 47,565 37,893,682

Source: State Department of Tax and Fee Administration.

Business License Tax

The Business License Tax is a type of excise tax imposed on businesses for the privilege of conducting business within the City. Every person or business that sells tangible items, provides service or has an office (including Internet businesses) within the City must have a business license. Business license taxes are based on the gross receipts earned from sales or services performed within the City. Major businesses exempted from the tax are banks and insurance companies. In the majority of cases the Ci ty’s tax is based on gross receipts. The Adopted Budget projects that the business license tax will increase $1.5 million in fiscal year 2021- 22 and $1.6 million in 2022-23. These increases can be attributed to Sandia National Laboratory annual revenues of $1.0 million and the remainder due to recovery from the pandemic and inflation.

The City’s Business License consultant, HdL, discovered that Sandia National Laboratories (“SNL”) and Lawrence Livermore National Laboratory (“ LLNL”) (collectively the “Labs”) should have been paying the City’s Business License tax but have not done so to date.

The City can collect up to three years for past due amounts. City staff has been working with the Labs to determine the correct amount owed to the City for the previ ous three years and the amount due in fiscal year 2022- 23. City staff has reached agreement with SNL but has not yet done so for LLNL. As such the increased Business License revenue associated with SNL is included in the FY 2022-23 Plan Update, as mentioned above, but staff has not included anything for LLNL. In addition, the fiscal year 2022 -23 budget does not include the three years back payment for either lab. City staff recommends allocating the back payments received from the Labs to prepay OPEB liabilities, from which the future annual OPEB contribution savings will be allocated to the Infrastructure Repair and Replacement Reserve.

Franchise Taxes

Several State statutes provide cities with the authority to impose fees on privately -owned utility companies and other businesses for the privilege of using city right -of-way. The City collects franchise fees from gas and electric utilities, cable television and garbage franchises, which fees were $.03 million higher in fiscal year 2021-22 than franchise fees collected in the previous fiscal year.

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Other Taxes

Cities in California are authorized to levy and collect other taxes for deposit in the general fund in addition to property taxes. Other taxes collected by the City include Transient Occupancy Tax, Real Property Tax, and Business Construction Tax.

Transient Occupancy Tax. Sometimes referred to as a hotel tax, this tax is imposed on occupants for the privilege of occupying rooms in hotels, motels, inns and other taxed properties.

The City’s current transient occupancy tax is 8%. Transient occupancy tax projections decreased by roughly $0.9 million in Fiscal Year 2020-21, but is expected to grow over the next several years due to the addition of hotels expected to be built in the City.

Real Property Tax. Real estate transfer taxes are imposed by the City upon the transfer of real property, based on the price of the property transferred to the new owner. Real property transfer taxes increased $0.5 million in Fiscal Year 2020-21 from the previous Fiscal Year.

Long-Term General Fund Obligations

Set forth below is a summary of long -term obligations payable from the City’s General Fund.

2020 Certificates of Participation. On June 25, 2020, $7,465,000 Refunding Certificates of Participation, Series 2020A (the “ Series 2020A Certificates ”) and $42,035,000 Refunding Certificates of Participation, Series 202B (the “ Series 2020B Certificates”) were executed and delivered to refund the certain outstanding obligations of the City.

The 2020A Certificates were executed and delivered to cause the current refunding of the outstanding $9,380,000 initial principal amount Variable Rate Demand Certificates of Participation, Series 2014A ( Livermore Valley Performing Arts Center Refunding) (Qualified 501(c)(3) Certificates),” which were executed and delivered on November 7, 2014 and refinance the related outstanding lease payment obligation under a Lease Agreement dated as of November 1, 2014, by and between the City and the Public Agency Finance Corporation.

The 2020B certificates were executed and deliver ed to refinance all outstanding lease payment obligations under a Lease Agreement dated as of June 1, 2011, by and between the City and the Livermore Capital Projects Financing Authority, and cause the current refunding of the outstanding $17,470,000 initi al principal amount “2011 Certificates of Participation (Capital Projects)”, which were executed and delivered on June 30, 2011.

The 2020B certificates were also executed and delivered to cause the current refunding of the outstanding $49,720,000 initial principal amount City of Livermore Variable Rate Demand Certificates of Participation, Series 2014B (Livermore 2008 Certificates) (Governmental Certificates), which were executed and delivered on November 7, 2014 , and to refinance the related outstanding payment obligation under the 2014 Lease Agreement.

The 2020A Certificates mature on October 1, 2041, and the average annual debt service on the 2020A Certificates is $514,000. The 2020B Certificates mature on October 1, 2040, and the average annual debt service on the 2020B Certificates is $2,623,000.

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Overlapping Debt Obligations

Set forth below is a direct and overlapping debt report (the “ Debt Report”) prepared by California Municipal Statistics, Inc. and dated June 30, 2022 . The Debt Report is includ ed for general information purposes only. The City has not reviewed the Debt Report for completeness or accuracy and makes no representation in connection therewith.

The Debt Report generally includes long-term obligations sold in the public credit markets by public agencies whose boundaries overlap the boundaries of the City in whole or in part. Such long-term obligations generally are not payable from revenues of the City (except as indicated) nor are they necessarily obligations secured by land within the City. In many cases, long -term obligations issued by a public agency are payable only from the general fund or other revenues of such public agency. See also “Long-Term General Fund Obligations ” below for further discussion of the City’s general fund debt obligations.

CITY OF LIVERMORE
Statement of Direct and Overlapping Bonded Debt
(Debt Issued as of June 30, 2022)

2021-22 Assessed Valuation: $22,172,608,303

Total Debt City’s Share
OVERLAPPING TAX AND ASSESSMENT DEBT : 6/30/22 % Applicable (1) of Debt Alameda County $ 183,745,000 6.397% $ 11,754,168
Bay Area Rapid Transit District 2,521,570,000 2.492 62,837,524 Chabot-Las Positas Community College District 805,595,000 15.242 122,788,790 Livermore Valley Joint Unified School District 246,710,000 93.462 230,580,100 East Bay Regional Park District 184,590,000 0.086 158,747 City of Livermore Community Facilities District No. 99 -1 10,295,000 100.000 10,295,000 City of Livermore Community Facilities District No. 2009 -1 I.A. No. 1 16,843,452 100.000 16,843,452 City of Livermore Community Facilities District No. 2009 -1 I.A. No. 2 4,318,815 100.000 4,318,815 City of Livermore Community Facilities District No. 2009 -1 I.A. No. 3 2,568,315 100.000 2,568,315 City of Livermore Community Facilities District No. 2016 -2 8,500,000 100.000 8,500,000 City of Livermore 1915 Act Bonds 1,812,000 100.000 1,812,000 California Statewide Communities Development Authority Assessment District B onds 9,376,390 100.000 9,376,390 TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $481,833,301

DIRECT AND OVERLAPPING GENERAL FUND DEBT :

Alameda County General Fund Obligations and Coliseum Authority $742,688,000 6.397% $ 47,509,751 Livermore Area Recreation and Park District Pension Obligation Bonds 12,215,000 92.116 11,251,969 City of Livermore Certificates of Participation 46,415,000 100.000 46,415,000 TOTAL GROSS DIRECT AND OVERLAPPING GENERAL FUND DEBT $105,176,720 Less: City of Livermore obligations supported from impact fees, airport, & water enterprise revenues 13,397,106 TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND DEBT $ 91,779,614

OVERLAPPING TAX INCREMENT DEBT (Successor Agency) : $17,190,000 100.000% $17,190,000

TOTAL GROSS DIRECT DEBT $46,415,000
TOTAL NET DIRECT DEBT $33,017,894
TOTAL OVERLAPPING DEBT $557,785,021

GROSS COMBINED TOTAL DEBT $604,200,021
(2)
NET COMBINED TOTAL DEBT $590,802,915

Ratios to 2021-22 Assessed Valuation:

Total Overlapping Tax and Assessment Debt ........................................... 2.17% Total Gross Direct Debt ($46,415,000) ................................................... 0.21% Total Net Direct Debt ($33,017,894) ........................................................ 0.15% Gross Combined Total Debt ...................................................................... 2.72% Net Combined Total Debt .......................................................................... 2.66%

Ratios to Redevelopment Successor Agency Incremental Valuation ($844,092,024) :

Total Overlapping Tax Increment Debt ...................................................... 2.04%

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(1) The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value.
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations.

Source: California Municipal Statistics, Inc.

Labor Relations

There are currently 371.875 full equivalent (FTE) City employees, the majority of which are assigned to representation units, with formal or informal labor organizations as follows:

CITY OF LIVERMORE
Labor Relations

Employee Organization
Number of FTE
Positions Contract Expiration Date

Association of Livermore Employees 199.125 9/30/2025
Livermore Management Group 58.000 6/30/2025
Livermore Police Officers Association 83.000 4/30/2025
Police Management 8.000 6/30/2025
Unrepresented 23.750 N/A
Total 371.875

Source: City of Livermore Human Resources Division.

Risk Management

The City is self-insured for general liability claims up to a self-insured retention (“SIR”) of $750,000 per occurrence. It is a member of California Joint Powers Risk Management Authority (“CJPRMA”), an excess insurance pool that provides coverage for each occurrence that exceeds the SIR. CJPRMA provides coverage up to $40,000,000 per occurrence. The first $5,000,000 layer is retained by CJPRMA and the second and third layers totaling $35,000,000 are covered by reinsurance, purchased through their broker of record, Aon. The City contributed $513,314 to CJPRMA for liability coverage for the fiscal year ending June 30, 2021. The City purchases a variety of insurance products from Aon, both through the CJPRMA pooled program and directly.

The City paid $249,497 directly to Aon, $396,479 to A lliant through CJPRMA for property insurance, and $56,876 for auto physical damage insurance to Aon through CJPRMA.

The Local Agency Workers Compensation Excess Joint Powers Authority (“ LAWCX”) covers workers compensation up to statutory limits. The City has a deductible or uninsured liability of up to $500,000 per claim. During the fiscal year ended June 30, 2021, the City contributed $401,931 for program year coverage.

See Note 14 in the City’s fiscal year 2020 -21 audited financial statements, which a re attached to this Official Statement as Appendix C, for additional information about the City’s risk management practices.

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Employee Retirement System

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

The annual comprehensive financial reports of CalPERS are available on its Internet website at www.calpers.ca.gov. The CalPERS website also contains CalPERS’ most recent actuarial valuation reports and other information concerning benefits and other matters. Such information is not incorporated by reference in this Official Statement Neither the City nor Purchaser can guarantee the accuracy of such information. Actuarial assessments are “forward- looking” statements that reflect the judgment of the fiduciaries of the pension plans, and are based upon a variety of assumptions, one or more of which may not materialize or may be changed in the future. Actuarial assessments will change with the future experience of the pension plans.

GASB Statement No. 68. In June 2012, the GASB adopted new standards (GASB Statement No. 68, or “GASB 68”) with respect to accounting and financial reporting by state and local government employers for defined benefit pension plans. The new standards revise the accounting treatment of defined benefit pension plans, changing the way expenses and liabilities are calculated and how state and local government employers report those expenses and liabilities in their financial statements. Major changes include: (i) the inclusion of unfunded pension liabilities on the government’s balance sheet (previously, such unfunded liabilities were typically included as notes to the government’s financial statements ); (ii) pension expense incorporates more rapid recognition of actuarial experience and investment returns and is no longer based on the employer’s actual contribution amounts; (iii) lower actuarial discount rates that are required to be used for underfunded plans in certain cases for purposes of the financial statements; (iv) closed amortization periods for unfunded liabilities that are required to be used for certain purposes of the financial statements; and (v) the difference between expected and actual investment returns to will be recognized over a closed five -year smoothing period. The reporting requirements took effect in fiscal year 2014 -15. Based on the adoption of the new accounting standards, beginning with the fiscal year 2014 -15 actuarial valuation, the annual required contribution and the annual pension expense will be different. GASB 68 is a change in accounting reporting and disclosure requirements, but it does not change the City’s pension plan funding obligations.

Information shown in th is section that has been sourced from a CalPERS Actuarial Valuation Report has not been prepared in accordance with GASB 68. For a presentation of additional information that is required by GASB 68, see Note 10 to the City’s Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2021, which is attached as APPENDIX C.

Plan Description. All qualified permanent and probationary employees are eligible to participate in the City’s separate Safety (police) cost-sharing and Miscellaneous (all other) agent multiple-employer defined benefit plans (“ Plans”), administered by the CalPERS. The Miscellaneous Plans are agent multiple-employer defined benefit pension plans administered by CalPERS, which acts as a common investment an d administrative agent for its participating member employers. Benefit provisions under the Plans are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

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The City’s Safety Plans became part of a cost -sharing multiple employer defined benefit pension plan administered by CalPERS, commonly referred to as a risk pool, as of the actuarial valuation date of June 30, 2003. Risk pools exist for employers with less than 100 active plan members.

The City has three retirement benefit tiers in the Plans. Membership in the first tier of the retirement system is closed to new employees hired on or after December 26, 2012. The second tier was adopted by the City in November 2012 for all employees hired on and after December 31, 2012. The third tier was adopted by the City effective January 1, 2013 pursuant to Stat e Assembly Bill 340. Membership of the Miscellaneous Plan consists of 460 retirees and beneficiaries currently receiving benefits, 293 retirees and beneficiaries entitled to, but not yet, receiving benefits, and 320 active plan members. All tiers of the Miscellaneous plans were reported together in the census data reported by CalPERS. The Safety Police Plan data was not prepared by CalPERS.

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

Funding contributions for both Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The City must contribute these amounts. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. For the year ended June 30, 2021, the City’s contributions to the plans were $10,729,567 and $5,457,222 to the Miscellaneous and Safety police plan, respectively. All tiers were of the Miscellaneous and Safety plans were combined together by CalPERS . All City employees pay the full CalPERS member contribution as provided for in the most recent labor contracts.

Benefits Provided. CalPERS provides service and disability retirement benefits, cost of living adjustments, and death benefits to plan members and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total credited service are eligible to retire at age 50 with statutorily reduced benefits. Members may apply for a non-duty disability retirement benefit after 5 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1959 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.

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The provisions and benefits of each plan that were in effect at June 30, 2021, are summarized as follows:

Miscellaneous Safety
Benefit vesting schedule 5 years service 5 years service Benefit payments Monthly for life Monthly for life
Minimum retirement age 50/52 50

Employees hired prior to December 30, 2012 Tier 1 Tier 1 Monthly benefits, as a % of salary 2.7% at 55 3% at 50
Required member contribution rates 8% 9%
% paid by employee 8% 9%(1)
% paid by employer 0% 0%(1)
Required employer contribution rates (normal cost) 11.854% 23.674% Employer payment of unfunded liability $7,272,015(4) $2,916,644

Employees hired December 31, 2012 Tier 2 Tier 2
Monthly benefits, as a % of annual salary 2% at 60(2) 3% at 55(3) Required member (employee) contribution rates 7% 9%
Required employer contribution rates (normal cost) 11.854% 20.585% Employer payment of unfunded liability -- $8,081

Employees hired after December 31, 2012 Tier 3 Tier 3
Monthly benefits, as a % of annual salary 2% at 62(2) 2.7% at 57(3) Required member (employee) contribution rates 6.25% 12.0% Required employer contribution rates (normal cost) 11.854% 13.044% Employer payment of unfunded liability -- $3,696

(1) Rates presented in the table above were effective 7/1/2016. (2) Newly hired Misc. Employees will be enrolled in the 2% at 60 or 2% at 62 formula, dependent on the individual’s eligibil ity, as per AB340.
(3) Newly hired Safety Employees will be enrolled in the 3% at 55 or 2.7% at 57 formula, dependent on the indiv idual’s eligibility, as per AB340.
(4) Balance mentioned above is a combined amount for all Miscellaneous plans. As a percentage of projected payroll, the UAL contribution for fiscal year 2020 -21 is 23.858% for an estimated total employer contribution ra te of 35.712%.

Source: City of Livermore Annual Comprehensive Financial Report.

Actuarial Assumptions and Other Inputs. The City’s total pension liabilities in the June 30, 2021 actuarial valuations were determined using the following actuarial assumptions and were measured as of June 30, 2020 and determined by an actuarial valuation as of June 30, 2019 using the following actuarial assumptions: discount rate 7.15%, inflation 2.500%, payroll growth

2.875%, projected salary increase 2.75% -4.5%, depending on age, service, and type of employment, investment rate of return 7.25%, net of pension plan investment expenses, including inflation, and mortality 36.1 to 17.0, which represents life expectancy over the age ranging from 50 to 70 years and assumptions in clude 20 years of mortality improvement. The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2020 valuation were based on the results of the 2017 CalPERS Experience Study for the period 1997 to 2015.

Further details of the Experience Study can be found on the CalPERS website.

Discount Rate. The discount rate used to measure the total pension liability was 7.15%.

The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long -term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

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The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

Pension Liability. The following tables show the development of accrued and unfunded liabilities and the normal cost rate and the unfunded accrued liability for the City’s plans, as projected at June 30, 2020.

DEVELOPMENT OF ACCRUED AND UNFUNDED LIABILITIES

CITY OF LIVERMORE

Miscellaneous
Plans
Safety Plan -
PEPRA
Safety Plan -
Tier 1
Safety Plan -
Tier 2

1. Entry Age Normal Accrued Liability
a) Active Members $120,012,558 $1,436,502 $54,621,665 $3,429,209 b) Transferred Members 17,435,093 26,295 1,409,690 16,568 c) Terminated Members 5,054,035 51,496 1,361,116 216,740 d) Members and Beneficiaries Receiving Payments 182,220,465 -- 114,440,534 0 e) Total 324,722,151 1,514,293 171,833,005 3,662,517

2. Market Value of Assets (MVA) 226,623,352 1,372,556 121,735,361 3,301,261

3. Unfunded Accrued Liability (UAL) [(1e) - (2)] 98,098,799 141,737 50,097,644 361,256

4. Funded Ratio [(2) / (1e)] 69.8% 90.6% 70.8% 90.1%

NORMAL COST RATE AND UAL PAYMENTS FOR CALPERS PLANS

CITY OF LIVERMORE

Plan Contribution 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 Miscellaneous Normal Cost Rate 11.47% 11.35% 11.0% 10.6% 10.3% 10.0% 9.7% UAL Payment $8,506,527 $9,104,749 $8,401,000 $9,053,000 $8,987,000 $9,401,000 $9,636,000

Safety Plan Normal Cost Rate 13.13% 12.78% 12.8% 12.8% 12.8% 12.8% 12.8% PEPRA UAL Payment 6,324 $8,628 $11,000 $14,000 $15,000 $16,000 $16,000

Safety Plan Normal Cost Rate 23.71% 23.75% 23.8% 23.8% 23.8% 23.8% 23.8% Tier 1 UAL Payment $3,442,084 $3,947,504 $4,262,000 $4,577,000 $4,779,000 $4,969,000 $5,090,000

Safety Plan Normal Cost Rate 20.64% 20.64% 20.6% 20.6% 20.6% 20.6% 20.6% Tier 2 UAL Payment $14,593 $23,220 $30,000 $35,000 $38,000 $41,000 $42,000

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Safety Police Cost-Sharing Multiple-Employer Defined Benefit Plan. As of June 30, 2021, the City reported net pension liabilities for its proportionate share of the net pension liability of the Safety Police Plan to be $46,528,122. The City’s net pension liability for the Plans is measured as the proportionate share of the net pension liability. The net pension liability of the Plans are measured as of June 30, 2020, and the total pension liability for the Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2017 rolled forward to June 30, 2018 using standard update procedures. The City’s proportion of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. The City’s proportionate share of the net pension liability for the Plan as of the measurement dates of June 30, 2019 and 2020 was as follows:

Safety Police(1)
Proportion- June 30, 2019 0.67581%
Proportion- June 30, 2020 0.69837
Change-Increase (decrease) 0.02256

(1) All tiers of the Safety plan were combined together on the GASB 68 report by CalPERS.

Source: City of Livermore Annual Comprehensive Financial Report.

Pension Plans Fiduciary Net Position. Detailed information about the Plans’ fiduciary net positions are available in the separately issued CalPERS financial reports.

Recent Actions Taken by CalPERS. At its April 17, 2013, meeting, CalPERS’ Board of Administration (the “ Board of Administration”) approved a recommendation to change the CalPERS amortization and smoothing policies. Prior to this change, CalPERS employed an amortization and smoothing policy that spread investment returns over a 15 -year period with experience gains and losses paid for over a rolling 30- year period. After this change, CalPERS will employ an amortization and smoothing policy that will pay for all gains and losses over a 20- year period with a five -year ramp-up, and five- year ramp-down, period. The new amortization and smoothing policy was used for the first time in the June 30, 2013, actuarial valuations in setting employer contribution rates for fiscal year 2015-16.

On February 18, 2014, the Board of Administration approved new demographic actuarial assumptions based on a 2013 study of recent experience. The largest impact, app lying to all benefit groups, is a new 20 -year mortality projection reflecting longer life expectancies and that longevity will continue to increase. Because retirement benefits will be paid out for more years, the cost of those benefits will increase as a result. The Board of Administration also assumed earlier retirements for Police 3%@50, Fire 3%@55, and Miscellaneous 2.7%@55 and 3%@60, which will increase costs for those groups. As a result of these changes, rates will increase beginning in fiscal year 2016-17 (based on the June 30, 2014 valuation) with full impact in fiscal year 2020-21.

On November 18, 2015, the Board of Administration adopted a funding risk mitigation policy intended to incrementally lower its discount rate – its assumed rate of investment return – in years of good investment returns, help pay down the pension fund's unfunded liability, and provide greater predictability and less volatility in contribution rates for employers. The policy establishes a mechanism to reduce the discount rate by a minimum of 0.05 percentage points to a maximum of 0.25 percentage points in years when investment returns outperform the existing discount rate, currently 7.5%, by at least four percentage points. CalPERS staff modeling anticipates the policy wi ll result in a lowering of the discount rate to 6.5% in about 21 years, improve funding levels gradually over time and cut risk in the pension system by lowering the volatility of investment returns. More information about the funding risk mitigation polic y can be

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accessed through CalPERS’ web site at the following website address:
https://www.calpers.ca.gov/page/newsroom/calpers-news/2015/adopts-funding-risk-mitigation- policy. The reference to this Internet website is provided for reference and convenience only. The information contained within the website may not be current, has not been reviewed by the City and is not incorporated in this Official Statement by reference.

On December 21, 2016, the CalPERS Board voted to lower its discount rate from the then current 7.5% to 7.0% over the next three years according to the following schedule.

Fiscal Year Discount Rate
2017-18 7.375%
2018-19 7.250
2019-20 7.000

For public agencies like the City, the new discount rate took effect July 1, 2018. Lowering the discount rate means employers that contract with CalPERS to administer their pension plans will see increases in their normal costs and unfunded actuarial liab ilities. Active members hired after January 1, 2013, under the Public Employees' Pension Reform Act will also see their contribution rates rise. The three-year reduction of the discount rate resulted in average employer rate increases of about 1 percent t o 3 percent of normal cost as a percent of payroll for most miscellaneous retirement plans, and a 2 percent to 5 percent increase for most safety plans.

Additionally, many CalPERS employers saw a 30 to 40 percent increase in their current unfunded accrued liability payments. These payments were made to amortize unfunded liabilities over 20 years to bring the pension fund to a fully funded status over the long-term.

On November 15, 2021, the CalPERS Board selected a new asset allocation mix that will guide the fund’s investment portfolio for the next four years, while at the same time retaining the reduction of discount rate from 7.0% to 6.8%. Notable changes for employers include a decrease in median total employer contribution rates, from less than 1% in miscellaneous plans to a decrease of more than 2% in some safety plans. Contribution changes will take effect in fiscal year 2023-24 for public agencies.

For more information regarding the City’s Plans and assumptions used in its most recent actuarial study, see Note 10 of Appendix C to the Official Statement.

Livermore City CouncilSeptember 12, 2022

Livermore City Council
September 12, 2022