Agenda — Lynwood City Council, May 17, 2022 (part 2 of 3)

Website. The City maintains a website. However, 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 Bonds .

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TABLE OF CONTENTS

INTRODUCTION ................................................ 1 REFINANCING PLAN ........................................ 4 Refinancing of CalPERS Contract ................. 4
Estimated Sources and Uses of Funds .......... 4
THE LEASED PROPERTY ................................ 5
Description and Location ................................ 5 Modification of Leased Property ..................... 5 Substitution ..................................................... 6 Release of Leased Property ........................... 7 THE BONDS ...................................................... 7 Authority for Issuance .................................... 7 General Provisions ......................................... 8 Redemption .................................................... 9 Book-Entry Only System .............................. 11 Transfer, Registration and Exchange .......... 11
DEBT SERVICE SCHEDULE .......................... 13
SECURITY FOR THE BONDS ........................ 14
Revenues; Pledge of Revenues ................... 14
Allocation of Revenues by Trustee;
Application of Funds................................. 15 Lease Payments; Covenant to Appropriate . 15
Limited Obligation......................................... 16 Abatement .................................................... 17 Default; Remedies ........................................ 17 Insurance ...................................................... 18 Additional Lease Payments and Additional
Bonds ....................................................... 19 THE AUTHORITY ............................................ 20 THE CITY ......................................................... 20 General ......................................................... 20 City Government .......................................... 20 Labor Relations ............................................ 21 CITY FINANCIAL INFORMATION ................... 21
Accounting and Financial Reporting ............ 21
Pension Tax Override; Bartel Report ........... 23
General Fund Overview and Budget ............ 23
Sales and Use Taxes ................................... 28 Property Taxes ............................................. 31 Other Sources of Revenues ......................... 35
Financial Statements .................................... 36 General Fund Historical Financial Data ....... 36
Relevant Fiscal Policies ............................... 38 Risk Management ........................................ 39 Employee Retirement System; CalPERS .... 39
Other Post-Employment Benefits (OPEB) ... 44
General Fund Long-Term Indebtedness ...... 45
Direct and Overlapping Bonded Debt .......... 46

CONSTITUTIONAL AND STATUTORY

LIMITATIONS ON TAXES AND
APPROPRIATIONS ..................................... 48 Limitations on Revenues.............................. 48 Statutory Revenue Limitations -
Proposition 62 .......................................... 51 Proposition 1A .............................................. 51 Proposition 22 .............................................. 52 Unitary Property ........................................... 52 Possible Future Initiatives ............................ 53 BOND OWNERS’ RISKS ................................. 53 Abatement of Lease Payments .................... 53
Limitation on Remedies ............................... 54 No Acceleration Upon Default ..................... 54
Early Prepayment Risk ................................ 54 Limitations on Taxes and Fees .................... 56
Additional Obligations of the City ................. 57 Property Taxes ............................................. 57 Public Health Emergencies .......................... 59 Certain Risks Associated with Sales Tax
and Other Local Tax Revenues ............... 59
Natural Calamities ........................................ 60 Hazardous Substances ................................ 61 Potential Impact of Climate Change ............ 61
COVID-19 Pandemic ................................... 61 Cyber Security ............................................. 62 Litigation ....................................................... 62 Secondary Market for Bonds ....................... 62
TAX MATTERS ................................................ 63 CERTAIN LEGAL MATTERS .......................... 63
NO LITIGATION ............................................... 63 RATING[S] ....................................................... 64 CONTINUING DISCLOSURE .......................... 64
UNDERWRITING ............................................. 64 MUNICIPAL ADVISOR .................................... 65 EXECUTION .................................................... 65

APPENDIX A - GENERAL INFORMATION ABOUT THE CITY OF LYNWOOD AND THE COUNTY OF LOS

ANGELES

APPENDIX B - SUMMARY OF PRINCIPAL LEGAL DOCUMENTS
APPENDIX C - AUDITED FINANCIAL STATEMENTS OF THE CITY FOR FISCAL YEAR ENDED JUNE 30, 2021

APPENDIX D - PROPOSED FORM OF OPINION OF BOND COUNSEL

APPENDIX E - FORM OF CONTINUING DISCLOSURE CERTIFICATE

APPENDIX F - DTC AND THE BOOK-ENTRY ONLY SYSTEM
[APPENDIX G - FORM OF MUNICIPAL BOND INSURANCE POLICY] City Council Regular Meeting - Page 311 of 473

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__________________________________

OFFICIAL STATEMENT
__________________________________

$_____________*

LYNWOOD PUBLIC FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2022
(FEDERALLY TAXABLE)

The purpose of this Official Statement, which includes the cover page, inside cover page and attached appendices, is to set forth certain information concerning the sale and delivery of the bonds captioned above (the “Bonds”) by the Lynwood Public Financin g Authority (the “Authority”). All capitalized terms used in this Official Statement, unless noted otherwise, have the meanings set forth in the Indenture (as defined below).

INTRODUCTION

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

Authority for Issuance . The Authority is issuing the Bonds pursuant to (a) the Marks- Roos Local Bond Pooling Act of 1985, being Article 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Bond Law”), (b) resolutions adopted by the governing body of the Authority on [May 17], 2022 (the “Authority Resolution”), and by the City Council of the City of Lynwood (the “City”) on [May 17], 2022 (the “City Resolution”), and (c) an Indenture of Trust (the “Indenture”) dated as of July 1, 2022, by and between the Authority and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”).

The Authority. The Authority was formed pursuant to the provisions of Articles 1 through 4 of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the “Act”) and the Join Exercise of Powers Agreement, dated as of December 1, 1992, by and between the City and the Lynwood Redevelopment Agency (which has been succeeded by the Successor Agency to the former Lynwood Redevelopment Agency), to assist in financings for either member.

The City Council of the City serves as the governing body of the Authority.

The City. The City was incorporated in 1921 under the general laws of the State of California (the “State”). The City is situated approximately 13 miles south of downtown Los Angeles at the intersection of two major freeways. The local economy represents a diverse blend of industrial, commercial, agricultural and residential development. See “APPENDIX A – FINANCIAL, ECONOMIC AND DEMOGRAPHIC INFORMATION FOR THE CITY.”

* Preliminary; subject to change.

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Purpose of the Bonds. The Bonds are being issued to provide funds to refund a portion of the City ’s obligations under the CalPERS Contract (as hereinafter defined), and to pay the costs of issuing the Bonds. See “REFINANCING PLAN.”

Security for the Bonds and Pledge of Revenues. Under the Indenture, the Bonds are payable from and secured by a pledge of and lien on “Revenues,” consisting principally of lease payments (the “Lease Payments”) made by the City for the lease of property under a Lease Agreement dated as of July 1, 2022 (the “Lease Agreement”), between the Authority, as lessor, and the City, as lessee, concerning the leaseback of the City’s interest in the City’s streets (as more particularly described herein, the “Leased Property”). The Bonds are also secured by certain funds on deposit under the Indenture.

Under an Assignment Agreement dated as of _______ 1, 2022 (the “Assignment Agreement”), between the Authority and the Trustee, the Authority has transferred to the Trustee all of the rights of the Authority in the Lease Agreement (other than the rights of the Authority under the provisions of the Lease Agreement regarding Additional Ren tal Payments, advances, release and indemnification covenants, and agreement to pay attorneys’ fees).

To provide an upfront site lease payment to facilitate the financing plan, the City and the Authority will enter into a Site Lease dated as of _______ 1, 2022 (the “Site Lease”), under which the City will lease the Leased Property to the Authority. Concurrently, the City and the Authority will enter into the Lease Agreement, under which the Authority will lease the Leased Property back to the City. See SECURITY FOR THE BONDS” and “THE LEASED PROPERTY.”

[No Reserve Fund. The Authority will not establish a debt service reserve fund for the Bonds.]

[Bond Insurance. To come, if applicable.]

Covenant to Budget and Appropriate Lease Payments . The Lease Payments are payable from any source of available funds of the City, subject to the provisions of the Lease Agreement regarding abatement. See “ – Abatement” below. The City covenants in the Lease Agreement to take all actions required to include the Lease Payments in each of its budgets during the Term of the Lease Agreement and to make the necessary appropriations for all Lease Payments and Additional Rental Payments, subject to the provisions of the Lease Agreement regarding abatement. Such covenant con stitutes a duty imposed by law and each and every public official of the City is required to take all actions 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 agreed to be carried out and performed by the City under the Lease Agreement.

Pledge of Pension Tax Override. On April 9, 1946, the voters in the City approved a retirement tax to support amounts owed by the City to CalPERS pursuant to the CalPERS Contract (the “Pension Tax Override”), which Pension Tax Override is accounted for in a special fund, separate and apart from the General Fund, and available only for its authorized purposes.

In furtherance of its authorized purposes, under the Lease Agreement , the City pledges the Pension Tax Override to the payment of the Lease Payments.

Form of Bonds; Book -Entry Only. The Bonds will be issued in fully registered form, registered in the name of The Depository Trust Company ( “DTC”), or its nominee, which will act as securities depository for the Bonds . Purchasers of the Bonds will not receive certificates City Council Regular Meeting - Page 313 of 473

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representing the Bonds that are purchased. See “THE BONDS – Book-Entry Only System” and “APPENDIX F – DTC AND THE BOOK-ENTRY ONLY SYSTEM.”

Other General Fund Obligations. The Lease Agreement may be amended to obligate the City to pay additional amounts of rental for the use and occupancy of the Leased Property if certain conditions are met. See “APPENDIX B – SUMMARY OF PRINCIPAL LEGAL DOCUMENTS.” The Lease Agreement does not limit the City’s right to incur additional obligations payable from its General Fund. The City has existing obligations payable from its General Fund.

See “APPENDIX A – FINANCIAL, ECONOMIC AND DEMOGRAPHIC INFORMATION FOR THE CITY” for more information.

Redemption. The Bonds are subject to optional redemption, mandatory sinking fund redemption, and special mandatory redemption from the proceeds of insurance or condemnation proceeds prior to their stated maturity dates. See “THE BONDS – Redemption.”

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 Bond Owners would receive less than the full amount of principal of and interest on the Bonds. To the extent proceeds of property insurance (as described in this Off icial Statement), Lease Payments (or a portion thereof) may be made from those proceeds during periods of abatement. The City is neither required nor will it maintain rental interruption insurance with respect to the Leased Property. See “SECURITY FOR THE BONDS – Abatement” and “BOND OWNERS’ RISKS.”

Legal Opinion. Upon delivery of the Bonds, Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel (“Bond Counsel”) will release its final approving legal opinion with respect to the Bonds, regarding the validity of the Bonds, in the form attached hereto as Appendix D. See “APPENDIX D – PROPOSED FORM OF OPINION OF BOND COUNSEL.”

Risks of Investment; COVID-19 Pandemic. Debt service on the Bonds is payable only from Lease Payments and other amounts payable by the City to the Authority under the Lease Agreement. While the City’s General Fund has not experienced a material adverse impact due to the COVID-19 pandemic to date, continued and/or renewed outbreaks could lead to additional or modified public health restrictions and have an adverse effect on the City’s op erations and financial condition in the future, and the effect could be material. For a discussion of some of the risks associated with the purchase of the Bonds, including the potential impact of the COVID-19 pandemic on the City’s operations, see “BOND OWNERS’ RISKS,” and in particular “ – Public Health Emergencies” and “– COVID-19 Pandemic.”

The Bonds are special obligations of the Authority, payable solely from and secured by a pledge of the Revenues as specified therein and in the Indenture. Neither the faith and credit nor the taxing power of the Authority, the City or the State, or any po litical subdivision thereof, is pledged to the payment of the Bonds.

The obligation of the City to pay Lease Payments does not constitute an indebtedness of the City, the State, or any of its political subdivisions within the meaning of any constitutional or statutory debt limitation or restriction, and does not constitute an obligation for which the City or the State is obligated to levy or pledge any form of taxation or for which the City or the State has levied or pledged any form of taxation, except for the City Council Regular Meeting - Page 314 of 473

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pension tax override levied and collected by the City as described herein . The Authority has no power to tax.

REFINANCING PLAN

Refinancing of CalPERS Contract

The City is obligated by the Public Employees’ Retirement Law, commencing with Section 20000 of the Government Code of the State, as amended (the “Retirement Law ”) to make payments relating to pension benefits accruing to the California Public employees ’ Retirement System’s (“CalPERS”) members, including the City. The City is obligated specifically to make certain payments to CalPERS in respect of current and retired public safety employees and miscellaneous employees under the pension programs of CalPER S that amortize such obligations over a fixed period of time, including normal costs (collectively, the “CalPERS Obligation”). The CalPERS Obligation is evidenced by a contract or contracts with CalPERS with respect to public safety employees and miscellaneous employees of the City, as heretofore and hereafter amended from time to time (collectively, the “CalPERS Contract”).

According to the most recent actuarial valuations performed by CalPERS, dated June 30, 2021, the City ’s unfunded accrued liability (t he “UAL”) with respect to the City’s pension plans totaled approximately $_____ million. Upon the issuance of the Bonds, the City will apply proceeds thereof in the amount of $ _____ million* to refund a portion of the CalPERS Contract.

The City projects that, i mmediately after the refunding of the CalPERS Contract with such proceeds, the funding level of the City’s pension plans will be raised to an estimated ___%, saving the City approximately $____ million in fiscal year 2022-23, and an additional $___ million after fiscal year 2022-23 (across all City funds, including the General Fund).* The City anticipates using such savings, commencing in fiscal year 2022-23, to mitigate projected decreases in General Fund revenues, establish and fund a trust under Section 115 of the Internal Revenue Code for the purpose of paying costs associated with its pension plans, and rebuild reserves.

Estimated Sources and Uses of Funds

The estimated sources and uses of funds relating to the Bonds are as follows:

SOURCES: Amount
Principal Amount of Bonds $
Plus/Less: [Net] Original Issue [Premium/Discount]
TOTAL SOURCES $

USES:

Refund Portion of CalPERS Contract $
Costs of Issuance (2)
TOTAL USES $

(1) Includes, among other things, Underwriter’s discount, the fees and expenses of Bond Counsel and Disclosure Counsel, the Trustee, the Municipal Advisor, rating agency fees, and printing Official Statement.

* Preliminary; subject to change.

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THE LEASED PROPERTY

Description and Location

Lease Payments will be made by the City under the Lease Agreement for the use and occupancy of the Leased Property. The Leased Property consists of the City ’s interest in the roadway portion of the City ’s public streets, whether fee simple or easement, includ ing arterial/collector streets, local streets and alleys. According to the City’s Pavement Management Program Final Report, dated June 29, 2020 (the “ 2020 PMP Report ”), the City’s pavement management network consists of approximately 24.4 section miles of arterial/collector streets (approximately 7,267,122 square feet of pavement), 60.2 section miles of local streets (approximately 10,976,318 square feet of pavement), and 10.6 section miles of alleys (approximately 975,467 square feet of pavement).

According to the 2020 PMP Report, the City estimates the total replacement value of the Leased Property is approximately $288,283,600. As stated in the 2020 PMP Report, “This value clearly indicates that the City’s pavement network is the most valuable and esse ntial asset to Lynwood.”

Simultaneously with the delivery of the Bonds, the Authority will a cquire a leasehold interest in the Leased Property from the City. The Authority will sublease the Leased Property to the City pursuant to the Lease Agreement. While the City is in possession of the Leased Property, all maintenance and repair of the Leased Property is the responsibility of the City. The City has determined that the replacement value of the Leased Property is in excess of the principal amount of the Bonds and the fair rental value of the Leased Property is commensurate with the Lease Payments.

Under the Lease Agreement, remedies available to the Authority and the Trustee to collect amounts due from the City do not include (i) the right to accelerat e the Lease Payments or otherwise declare any Lease Payments not then in default to be immediately due and payable or (ii) right to re -lease any portion of the Leased Property that constitutes a City street. See “SECURITY FOR THE BONDS – Default; Remedies” below and “BOND OWNERS’ RISKS – Limitation on Remedies.”

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 portion 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, must be of a value which is not substantially less than the value thereof immediately prior to the making of such a dditions, modifications and improvements.

The City will not permit any mechanic ’s or other lien to be established or remain against the Leased Property for labor or materials furnished in connection with any remodeling, additions, modifications, improve ments, repairs, renewals or replacements made by the City under the City Council Regular Meeting - Page 316 of 473

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Lease Agreement; except that if any such lien is established and the City first notifies or causes to be notified the Authority 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 shall provide the Authority with f ull security against any loss or forfeiture which might arise from the nonpayment of any such item, in form satisfactory to the Authority. The Authority will cooperate fully in any such contest, upon the request and at the expense of the City.

Substitution

Under the Lease Agreement, the City has the option at any time and from time to time, to substitute other real property (the “Substitute Property”) for the Leased Property or any portion thereof (the “Former Property”), upon satisfaction of all of the requirements set forth in the Lease Agreement, which includes (among others) the following:
• The City has filed with the Authority and the Trustee, and, if the Substitute Property is property other than the City’s streets, caused to be recorded in the office of the Los Angeles County Recorder sufficient memorialization of an amendment of the Lease Agreement that adds the legal description of the Substitute Property to the Lease Agreement and deletes therefrom the legal description of the Former Property, and, if applicable, has filed and caused to be recorded corresponding amendments to the Site Lease and Assignment Agreement.

• If the Substitute Property is property other than the City ’s streets, the City has obtained a CLTA policy of title insurance insuring the City’s leasehold estate under the Lease Agreement in the Substitute Property, subject only to Permitted Encumbrances, in an amount at least equal to the estimated value thereof. • The City has certified in writing to the Authority and the Trustee that the Substitute Property serves the municipal purposes of the City and constitutes property which the City is permitted to lease under the laws of the State, and has been determined to be essential to the proper, efficient and economic operation of the City and to serve an essential governmental function of the City.
• The Substitute Property does not cause the City to violate any of its covenants, representations and warranties made in the Lease Agreement, as certified in writing by the City.
• The City has filed with the Authority and the Trustee a written certificate of the City or other written evidence stating that the useful life of the Substitute Property at least extends to the final maturity of the Bonds, that the estimated value of the Leased Property, after substitution of the Substitute Property and release of the Former Property, is at least equal to the aggregate Outstanding principal amount of the Bonds, and the fair rental value of the Leased Property, after substitution of the Substitute Property and release of the Former Property, is at least equal to the Lease Payments thereafter coming due and payable under the Lease Agreement.

Upon the satisfaction of all such conditions precedent, 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 Property.

The City is not entitled to any reduction, diminution, extension or other modification of the Lease City Council Regular Meeting - Page 317 of 473

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Payments whatsoever as a result of any substitution of property under the Lease Agreement. If applicable, the Authority and the City will execute, deliver and cause to be recorded all documents required to discharge the Site Lease, the Lease Agreement and the Assignment Agreement of record against the Former Property and to cause the Substitute Property to become subject to all of the terms and conditions of the Site Lease, the Lease Agreement and the Assignment Agreement.

See “APPENDIX B – SUMMARY OF PRINCIPAL LEGAL DOCUMENTS.”

Release of Leased Property

Under the Lease Agreement, the City has the option at any time and from time to time to release any portion of the Leased Property from the Lease Agreement (the “Released Property”) provided that the City has satisfied all of the requirements under the Lease Agreement that are conditions precedent to such release, which include (among others) the following:
• The City has filed with the Authority and the Trustee, and, if applicable, caused to be recorded in the office of the Los Angeles County Recorder sufficient memorialization of an amendment of the Lease Agreement, the Site Lease and the Assignment Agreement which removes the Released Property from the Sit e Lease, the Assignment Agreement and the Lease Agreement.

• The City has certified in writing to the Authority and the Trustee that the value of the property which remains subject to the Lease Agreement following such release is at least equal to the aggregate Outstanding principal amount of the Bonds, and the fair rental value of the property which remains subject to the Lease Agreement following such release is at least equal to the Lease Payments ther eafter coming due and payable under the Lease Agreement.

Upon the satisfaction of all such conditions precedent, 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. If applicable, the Authority and the City shall execute, deliver and cause to be recorded all documents required to discharge the Site Lease, the Lease Agreement and t he Assignment Agreement of record against the Released Property.

See “APPENDIX B – SUMMARY OF PRINCIPAL LEGAL DOCUMENTS.”

THE BONDS

This section provides summaries of the Bonds and certain provisions of the Indenture .

See APPENDIX B for a more complete summary of the Indenture . Capitalized terms used but not defined in this section have the meanings given in APPENDIX B.

Authority for Issuance

The Bonds are being issued under the Bond Law, the Authority Resolution, the City Resolution, and the Indenture. Under Section 863 of the California Code of Civil Procedure, any interested person may bring an action within 60 days from the date the City Resolution and City Council Regular Meeting - Page 318 of 473

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Authority Resolution were adopted to determine the validity of the Bonds and related lease documents. The period for bringing such action will expire on [July 16], 2022.

General Provisions

Bond Terms. The Bonds will be dated their date of delivery and issued in fully registered form without coupons in integral multiples of $5,000, so long as no Bond has more than one maturity date. The Bonds will mature on October 1 in each of the years and in the amounts, and bear interest at the rates, set forth on the inside cover page of this Official Statement.

Calculation of Interest. Interest on the Bonds will be payable on April 1 and October 1 in each year, commencing October 1, 2022 (each an “Interest Payment Date”).

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

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

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

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

Interest with respect to the Bonds will be computed on the basis of a 360 -day year composed of 12 months of 30 days each.

Record Date. Under the Indenture, “Record Date” means, with respect to any Interest Payment Date, the 15 th calendar day of the month preceding such Interest Payment Date, whether or not such day is a Business Day.

Payments of Principal and Interest. Interest is payable on each Interest Payment Date to the persons in whose names the ownership of the Bonds is registered on the Registration Books at the close of business on the immediately preceding Record Date, except as provided below. Interest on any Bond which is not punctually paid or duly provided for on any Interest Payment Date is payable to the person in whose name the ownership of such Bond is registered on the Registration Books at the close of business on a special record date for the payment of such defaulted interest to be fixed by the Trustee, notice of which is given to such Owner by first- class mail not less than 10 days prior to such special record date.

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United States of America as specified in such written request, which will remain in effect until rescinded in writing by the Owner.

The Trustee will pay principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of the Bonds in lawful money of the United States of America by check of the Trustee upon presentation and surrender thereof at the Office of the Trustee. While the Bonds are subject to the book -entry system, the principal, interest and any redemption premium with respect to the Bonds will be paid by the Trustee to DTC for subsequent disbursement to beneficial owners of the Bonds. See “– Book-Entry Only System” below.

Redemption*

Optional Redemption. The Bonds maturing on or after October 1, 20__, will be subject to redemption, as a whole or in part at the option of the Authority, on October 1, 20__, and on any date thereafter, at a redemption price equal to 100% of the principal amount of Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium.

Special Mandatory Redemption From Insurance or Condemnation Proceeds . The Bonds are subject to redemption as a whole, or in part among maturities, on any date, from any Net Proceeds required to be used for such purpose as provided in the Indenture, at a redemption price equal to 100% of the principal amount thereof plus interest accrued thereon to the date fixed for redemption, without premium.

Mandatory Sinking Fund Redemption . The Bonds maturing on Oct ober 1, 20__ and October 1, 20__ (collectively, the “Term Bonds”) are subject to mandatory redemption in whole, from sinking fund payments made under the Indenture, at a redemption price equal to the principal amount thereof to be redeemed, without premium, plus accrued interest to the date of redemption, in the aggregate respective principal amounts and on October 1 in the years as set forth in the following tables:

Term Bonds Maturing
October 1, _____

Payment Date
(October 1)
Payment
Amount

(Maturity)

* Preliminary; subject to change.

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Term Bonds Maturing
October 1, _____

Payment Date
(October 1)
Payment
Amount

(Maturity)

If some but not all of the Term Bonds have been redeemed under optional or special mandatory redemption from insurance or condemnation proceeds provisions of the Indenture as described above, the total amount of all future sinking fund payments will be reduced by the aggregate principal amount of the Term Bonds so redeemed, to be allocated among such sinking fund payments on a pro rata basis as determined by the Authority, which shall notify the Trustee in writing of such determination.

Selection of Bonds for Redemption. If less than all of the Bonds are to be redeemed, the particular maturities of Bonds to be redeemed at the option of the Authority will be determined by the Authority in its sole discretion.

If the Bonds are registered in book -entry only form and so long as DTC or a successor securities depository is the sole registered owner of such Bonds, if less than all of the Bonds of a maturity are called for prior redemption, the particular Bonds or portions thereof to be redeemed shall be allocated on a pro rata pass -through distribution of principal basis in accordance with DTC procedures, provided that, so long as the Bonds are held in book-entry form, the selection for redemption of such Bonds shall be made in accordance with the operational arrangements of DTC then in effect, and, if the DTC operational arrangements do not allow for redemption on a pro rata pass-through distribution of principal basis, the Bonds will be selected for redemption, in accordance with DTC procedures, by lot.

Notice of Redemption. The Trustee shall mail notice of redemption of the Bonds by first class mail, postage prepaid, not less than 20 nor more than 60 days before any redemption date, to the respective Owners of any Bonds designated for redemption at their addresses appearing on the Registration Books and to one or more Securities Depositories and to the Municipal Securities Rulemaking Board.

Neither the failure to receive any notice nor any defect therein will affect the sufficiency of the proceedings for such redemption or the cessation of accrual of interest from and after the redemption date.

Conditional Redemption Notices; Rescission of Redemption. Redemption notices may be conditional. The Authority has the right to rescind any notice of redemption of the Bonds by written notice to the Trustee on or prior to the date fixed for redemption . Any notice of redemption will be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for redemption for the payment in full of the Bonds then called for redemption, and such cancellation will not constitute an Event of Default under the Indenture.

The Authority and the Trustee have no liability to the Bond Owners or any other party related to or arising from such rescission of redemption . The Trustee will mail notice of such City Council Regular Meeting - Page 321 of 473

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rescission of redemption in the same manner as the original notice of redemption was sent under the Indenture.

Effect of Redemption. If notice of redemption has been duly given as provided in the Indenture, and moneys for payment of the redemption price of, together with interest accrued to the date fixed for red emption on, including any applicable premium, the Bonds (or portions thereof) so called for redemption being held by the Trustee, on the redemption date designated in such notice, the Bonds (or portions thereof) so called for redemption will become due and payable, interest on the Bonds so called for redemption will cease to accrue, said Bonds (or portions thereof) will cease to be entitled to any benefit or sec urity under the Indenture, and the Owners of said Bonds will have no rights in respect thereof except to receive payment of the redemption price thereof.

Book-Entry Only System

The Bonds will be issued as fully registered bonds in book -entry only form, registered in the name of Cede & Co. as nominee of DTC, and will be available to ultimate purcha sers in the denomination of $5,000 or any integral multiple of $5,000, under the book -entry system maintained by DTC. While the Bonds are subject to the book-entry system, the principal, interest and any redemption premium with respect to a Bond will be paid by the Trustee to DTC, which in turn is obligated to remit such payment to its DTC Participants for subsequent disbursement to Beneficial Owners of the Bonds. Purchasers of the Bonds will not receive certificates representing their interests therein, which will be held at DTC.

See “APPENDIX F – DTC AND THE BOOK -ENTRY ONLY SYSTEM ” for further information regarding DTC and the book-entry system.

Transfer, Registration and Exchange

The following provisions regarding the exchange and transfer of the Bonds apply only during any period in which the Bonds are not subject to DTC ’s book-entry system. While the Bonds are subject to DTC ’s book -entry system, their exchange and transfer will be effected through DTC and the Participants and will be subject to the procedures, rules and requirements established by DTC. See “APPENDIX F – DTC AND THE BOOK-ENTRY ONLY SYSTEM.”

Bond Register. The Trustee will keep or cause to be kept, at the Office of the Tr ustee, sufficient records for the registration and transfer of ownership of the Bonds, which shall upon reasonable notice as agreed to by the Trustee, be open to inspection during regular business hours by the Authority; and, upon presentation for such pur pose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on such records, the ownership of the Bonds as provided in the Indenture.

Transfer of Bonds. Any Bond may, in a ccordance with its terms, be transferred, upon the Registration Books, by the person in whose name it is registered, in person or by a duly authorized attorney of such person, upon surrender of such Bond to the Trustee at its Office for cancellation, accompanied by delivery of a written instrument of transfer in a form acceptable to the Trustee, duly executed. The Trustee will require the Owner requesting such transfer to pay any tax or other governmental charge required to be paid with respect to such transfer. Whenever any Bond or Bonds are surrendered for transfer, the Authority will execute and the Trustee will authenticate and deliver to the transferee a new Bond or Bonds of like series, interest rate, maturity and aggregate principal amount . The Authority will pay the cost of printing Bonds and City Council Regular Meeting - Page 322 of 473

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any services rendered or expenses incurred by the Trustee in connection with any transfer of Bonds.

Exchange of Bonds. The Bonds may be exchanged at the Office of the Trustee for a like aggregate principal amount of Bonds of other authorized denominations and of the same series, interest rate and maturity. The Trustee will require the Owner requesting such exchange to pay any tax or other governmental charge required to be paid with respect to such exchange.

The Authority will pay the cost of printing Bonds and any services rendered or expenses incurred by the Trustee in connection with any exchange of Bonds.

Limitations on Transfer and Exchange . The Trustee may refuse to transfer or exchange, und er these provisions of the Indenture , any Bonds selected by the Trustee for redemption under the Indenture, or any Bonds during the period established by the Trustee for the selection of Bonds for redemption.

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DEBT SERVICE SCHEDULE

The table below shows annualized debt service payments on the Bonds, assuming no optional redemption or special mandatory redemption from insurance or condemnation proceeds.

Year Ending
June 30

Principal

Interest
Total
Debt Service

Total:

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SECURITY FOR THE BONDS

The principal of and interest on the Bonds are not a debt of the Authority or the City, nor a legal or equitable pledge, charge, lien or encumbrance, upon any of their respective property, or upon any of their income, receipts, or revenues except the Revenues and other amounts pledged under the Indenture.

This section provides summaries of the security for the Bonds and certain provisions of the Indenture, the Lease Agreement and the Site Lease. See “APPENDIX B – SUMMARY OF PRINCIPAL LEGAL DOCUMENTS” for a more complete summary of the Indenture, the Lease Agreement and the Site Lease.

Revenues; Pledge of Revenues

Pledge of Revenues and Other Amounts. Subject only to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth therein, all of the Revenues and all amounts (including proceeds of the sale of the Bonds) held in any fund or account established under the Indenture other than the Costs of Issuance Fund are pledged to secure the payment of the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and interest and premium (if any) on the Bonds in accordance with their terms and the provisions of the Indenture. Said pledge constitutes a lien on and security interest in the Revenues and such amounts and will attach, be perfected and be valid and binding fr om and after the Closing Date, without the need for any physical delivery thereof or further act.

Definition of Revenues. “Revenues” are defined in the Indenture as follows:

(a) all amounts received by the Authority or the Trustee under or with respect to the Lease Agreement, including, without limiting the generality of the foregoing, all of the Lease Payments (including both timely and delinquent payments, any late charges, and whether paid from any source), but excluding (i) any additional amounts of rental paid by the City for the use and occupancy of the Leased Property that are pledged to other bonds, notes or other obligations in accordance with the terms of the Lease Agreement , and (ii) any Additional Rental Payments (consisting of certain administrative costs due to the Authority and the Trustee under the Lease Agreement), and

(b) all interest, profits or other income derived from the investment of amounts in any fund or account established under the Indenture.

Assignment to Trustee. Under the Assignment Agreement, the Authority has transferred to the Trustee all of the rights of the Authority in the Lease Agreement (other than the rights of the Authority under the provisions of the Lease Agreement regarding Additional Rental Payments, advances, release and indemnification covenants, and agreement to pay attorneys’ fees).

The Trustee is entitled to collect and receive all of the Revenues, and any Revenues collected or received by the Authority will be deemed to be held, and to have been collected or received, by the Authority as the agent of the Trustee and will forthwith be paid by the Authority to the Trustee.

The Trustee is also entitled to and required to, subject to the provisions of the Indenture regarding rights of the Trustee , take all steps, actions and proceedings which the Trustee City Council Regular Meeting - Page 325 of 473

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determines to be reasonably necessary in its judgment to enforce, either jointly with the Authority or separately, all of the rights of the Authority and all of the obligations of the City under the Lease Agreement.

Allocation of Revenues by Trustee; Application of Funds

Deposit of Revenues in Bond Fund . All Revenues will be promptly deposited by the Trustee upon receipt thereof in a special fund designated as the “Bond Fund” which the Trustee will establish, maintain and hold in trust; except that all moneys received by the Trustee and required under the Indenture or under the Lease Agreement to be deposited in the Redemption Fund or the Insurance and Condemnation Fund will be promptly deposited in such funds.

All Revenues deposited with the Trustee will be held, disbursed, allocated and applied by the Trustee only as provided in th e Indenture. Any surplus remaining in the Bond Fund, after payment in full of the principal of and interest on the Bonds or provision therefore under Indenture, and any applicable fees and expenses to the Trustee, will be withdrawn by the Trustee and remitted to the City.

Allocation of Revenues . On or before each Interest Payment Date, the Trustee will transfer from the Bond Fund and deposit into the following respective accounts and subaccounts (each of which the Trustee will establish and maintain within the Bond Fund), the following amounts in the following order of priority:

(a) Deposit to Interest Account . The Trustee will deposit in the Interest Account an amount required to cause the aggregate amount on deposit in the Interest Account to be at least equal to the amount of interest becoming due and payable on such Interest Payment Date on all Bonds then Outstanding.

(b) Deposit to Principal Account . The Trustee will deposit in the Principal Account an amount required to cause the aggregate amount o n deposit in the Principal Account to equal the principal amount of the Bonds coming due and payable on such Interest Payment Date (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption).

Application of Interest Account. All amounts in the Interest Account shall be used and withdrawn by the Trustee solely for the purpose of paying interest on the Bonds as it comes due and payable (including accrued interest on any Bonds purchased or redeemed prior to maturity).

Application of Principal Account . All amounts in the Principal Account shall be used and withdrawn by the Trustee solely to pay the principal amount of the Bonds at their respective maturity dates (including the principal amount of any Term Bonds tha t is subject to mandatory sinking fund redemption).

No Reserve Account. The Authority will not establish a debt service reserve fund for the Bonds.

Lease Payments; Covenant to Appropriate

Obligation to Pay. Under the Lease Agreement, subject to the provisions of the Lease Agreement regarding abatement and prepayment, the City agrees to pay to the Authority, its successors and assigns, the Lease Payments in the amounts specified in the Lease Agreement, City Council Regular Meeting - Page 326 of 473

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to be due and payable in immediately available funds on the Interest Payment Dates immediately following each of the respective Lease Payment Dates specified in the Lease Agreement, and to be deposited by the City with the Trustee on each of the Lease Payment Dates specified in the Lease Agreement.

Any amount held in the Bond Fund, the Interest Account and the Principal Account on any Lease Payment Date (other than amounts resulting from the prepayment of the Lease Payments in part but not in whole under the Lease Agreement, and amounts required for payment of past due principal or interest on any Bonds not presented for payment) will be credited towards the Lease Payment then required to be paid thereunder. The City is not required to deposit any Lease Payment with the Trustee on any Lease Payment Date if the amounts then held in the Bond Fund, the Interest Account and the Principal Account are at least equal to the Lease Payment then required to be deposited with the Trustee . The Lease Payments payable in any Rental Period are for the use of the Leased Property during that Rental Period.

Fair Rental Value. The aggregate amount of the Lease Payments and Additional Rental Payments coming due and payable during each Rental Period constitute the total rental for the Leased Property for such Rental Period, and are payable 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 City and the Authority 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, other obligations of the City and the Authority under the Lease Agreement, the uses and purposes which may b e served by the Leased Property and the benefits therefrom which will accrue to the City and the general public.

Source of Payments; Covenant to Budget and Appropriate; Pledge of Pension Tax Override. Under the Lease Agreement, the Lease Payments are payable from any source of available funds of the City, subject to the provisions of the Lease Agreement regarding abatement.

See “– Abatement” below.

The City covenants in the Lease Agreement to take all actions required to include the Lease Payments in each of its budgets during the Term of the Lease Agreement and to make the necessary appropriations for all Lease Payments and Additional Rental Payments, subject to the provisions of the Lease Agreement regarding abatement . Such covenant constitutes a duty imposed by law and each and every public official of the City is required to take all actions 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 agreed to be carried out and performed by the City under the Lease Agreement.

In addition, in furtherance of its authorized purposes, the City pledges the Pension Tax Override under the Lease Agreement to the payment of the Lease Payments.

Limited Obligation

The Bonds are special obligations of the Authority, payable solely from and secured by a pledge of the Revenues as specified therein and in the Indenture. Neither the faith and credit nor the taxing power of the Authority, the City or the State, or any political subdivision thereof, is pledged to the payment of the Bonds.

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The obligation of the City to pay Lease Payments does not constitute an indebtedness of the City, the State, or any of its political subdivisions within the meaning of any constitutional or statutory debt limitation or restriction, and does not constitute an obligation for which the City or the State is obligated to levy or pledge any form of taxation or for which the City or the State has levied or pledged any form of taxation, except for the pension tax override levied and collected by the City as described herein. The Authority has no power to tax.

Abatement

Termination or Abatement Due to Eminent Domain . Under the Lease Agreement, if the Leased Property is taken permanently under the power of eminent domain or sold to a government threatening to exercise the power of eminent domain, the Term of th e Lease Agreement thereupon ceases as of the day possession is taken. If less than all of the Leased Property is taken permanently, or if the Leased Property is taken temporarily, under the power of eminent domain, then:

(a) the Lease Agreement will continue in full force and effect with respect thereto and does not terminate by virtue of such taking, and the parties waive the benefit of any law to the contrary; and

(b) the Lease Payments are subject to abatement in an amount determined by the City such that the resulting Lease Payments represent fair considerat ion for the use and occupancy of the remaining usable portions of the Leased Property.

Abatement Due to Damage or Destruction . Under the Lease Agreement, the Lease Payments are subject to abatement during any period in which by reason of damage or destruction (other than by eminent domain as described above) there is substantial interference with the use and occupancy by the City of the Leased Property or any portion thereof.

The Lease Payments are subject to abatement in an amount determined by the City such that the resulting Lease Payments represent fair consideration for the use and occupancy of the remaining usable portions of the Leased Property not damaged or destroyed . Such abatement will continue for the period commencing with such 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, the Lease Agreement continues in full force and effect and the City waives any right to terminate the Lease Agreement by virtue of any such damage and destruction.

Notwithstanding the foregoing, there will be no abatement of Lease Payments under the Lease Agreement to the extent that the proceeds of property insurance are available to pay Lease Payments that would otherwise be abated , it being declared that such proceeds and amounts constitute a special fund for the payment of the Lease Payments.

Default; Remedies

The occurrence of a ny one or more of the certain events constitute an Event of Default under the Lease Agreement, including:

(a) Failure by the City to pay any Lease Payment or other payment required to be paid under the Lease Agreement at the time specified therein.

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(b) Failure by the City to observe and perform any covenant, condition or agreement on its part to be observed or performed Agreement (subject to a cure period as described in the Lease Agreement).

Whenever any Event of Default has happened and is continuing, the Authority may exercise any and all remedies available under law or granted under the Lease Agreement to collect the amounts then due and thereafter to become due thereunder or to enforce any other of its rights thereunder, except as provided therein. N otwithstanding anything in the Lease Agreement or in the Indenture to the contrary, (a) neither the Authority nor the Trustee may accelerate the Lease Payments or otherwise declare any Lease Payments not then in default to be immediately due and payable (the Authority expressly waives the right to receive any amount from the City pursuant to Section 1951.2 of the California Civil Code to accelerate payment of the Lease Payments under the Lease Agreement) and (b) the Authority shall have no right to re-lease any portion of the Leased Property that constitutes a City street.

Each covenant in the Lease Agreement to be kept and performed by the City is expressly made a condition and upon the breach thereof the Authority may exercise any and all rights granted under the Lease Agreement; except that no termination of the Lease Agreement may be effected either by operation of law or acts of the parties hereto, except only in the manner therein expressly provided.

Insurance

Liability Insurance. Under the Lease Agreement, the City is required to maintain or cause to be maintained throughout the Term of the Lease Agreement, but only if and to the extent available from reputable insurers at reasonable cost in the reasonable opinion of the City, a standard commercial general liability insurance policy or policies in protection of the Authority, the City, and their respective members, officers, agents, employees and assigns . Said policy or policies shall provide for indemnification of said parties against direct 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.

Such policy or policies shall provide coverage in such liability limits and be subject to such deductibles as the City deems adequate and prudent. 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 self-insurance by the City, subject to the provisions of the Lease Agreement, or in the form of the participation by the City in a joint powers agency or other program providing pooled insurance.

The proceeds of such liability insurance must be applied toward extinguishment or satisfaction of the liability with respect to which paid.

Property Insurance. Solely to the extent the Leased Property is property other than the City’s streets, the City shall procure and maintain, or cause to be procured and maintaine d, throughout the Term of the Lease Agreement, property insurance against loss or damage to all improvements situated on the Leased Property, in an amount at least equal to the lesser of (a) 100% of the replacement value of the improvements, or (b) 100% of the aggregate principal amount of the Outstanding Bonds. Such insurance must, 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; provided, that such coverage shall include City Council Regular Meeting - Page 329 of 473

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earthquake insurance only if available at reasonable cost from reputable insurers in the judgment of the City. Such insurance may be subject to such deductibles as the City deems adequate and prudent. 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 agency or other program providing pooled ins urance; provided that such insurance may not be maintained by the City in the form of self-insurance. The Net Proceeds of such insurance must be applied as provided in the Lease Agreement and described below.

No Rental Interruption Insurance. The City is neither required nor will it maintain rental interruption insurance with respect to the Leased Property.

Application of Net Proceeds . The Trustee, as assignee of the Authority under the Assignment Agreement, has the right to receive all Net Proceeds. As provided in the Indenture, the Trustee will deposit all Net Proceeds in the Insurance and Condemnation Fund to be applied to the redemption of Bonds as set forth in the Indenture.

Additional Lease Payments and Additional Bonds

The City may a mend or supplement the Lease Agreement to obligate itself to pay additional amounts of rental for the use and occupancy of the Leased Property, subject to the following:

(A) such additional amounts of rental are pledged or assigned for the payment of any bonds, notes, leases or other obligations the proceeds of which are applied to finance authorized expenditures of the City for the common benefit, and

(B) the City has obtained and filed with the Trustee an appraisal or other evidence of value satisfactory to the City showing that the estimated value of the Leased Property is at least equal to the aggregate principal amount of the Outstanding Bonds and all such other bonds, notes, leases or other obligations.

Accordingly, the City and the Authority have the ability to enter into other long -term obligations secured by the payment of lease payments on the Leased Property without the prior consent of the Trustee or the Owners of the Bonds.

[Remainder of page intentionally left blank]

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THE AUTHORITY

The Authority was formed pursuant to the provisions of Articles 1 through Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the “Act”) and the Join Exercise of Powers Agreement, dated as of December 1, 1992, by and between the City and the Lynwood Redevelopment Agency (which has been succeeded by the Successor Agency to the former Lynwood Redevelopment Agency), to assist in financing s undertaken by either member.

The City Council of the City serves as the governing body of the Authority.

THE CITY

General

The City of Lynwood (the “City”) was incorporated in 1921 under the general laws of the State of California (the “State”). The City is situated approximately 13 miles south of downtown Los Angeles at the intersection of two major freeways. The local economy represents a diverse blend of industrial, commercial, agricultural and residential development. The City covers 4.9 square miles and serves a population of 69,880.

The City provides the full range of municipal services contemplated by statute, including those functions delegated to cities under State law. These services including public safety (which are contracted to Los Angeles County), public works, recreational and cultural activities, public improvements, planning, zoning, and general administrative services. Other services -such as sanitation, flood control and transportation are provides by special districts with the City being a member.

City Government

The City has a Council -Manager form of government made up of five council members elected to four-year, overlapping terms. The Mayor and the Council appoint a City Manager who is responsible for daily administration of City affairs, including preparation and submission of the annual budget, which is done under the direction of the Mayor and the City Council for the Mayor’s submission to the City Council. The City Treasurer, an elected position, invests public funds in a prudent manner that provides maximum security while meeting daily cash flow demands and conforming to all statutes governing the investment of public funds.

The City Attorney, directly appointed by the City Council, and the deputy city attorney are responsible for administration of all legal affairs of the city, including the City Council, the various city commissions, as well as all city departments and officers.

Member Position Term Expires
Jorge Casanova Mayor December 20__
José Luis Solache Mayor Pro Tem December 20__
Oscar Flores Council Member December 20__
Marisela Santana Council Member December 20__
Rita Soto Council Member December 20__

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Following are short biographies of the City Manager and Finance Director:

Ernie, Hernandez , City Manager . Mr. Hernandez was City Manager in neighboring Hawaiian Gardens where he served in that position for four years. Prior to that he was Deputy City Manager in Norwalk for nearly a decade. He has extensive experience in leading and directing municipal administrative and operational functions. Mr. Hernandez, who also worked for the cities of Santa Ana, Long Beach and South El Monte, holds a Master ’s Degree in Public Administration from Long Beach State University, and a Bachelor of Arts Degree fro m the California State University Dominguez Hills.

Harry Wong , Finance Director . Mr. Wong has more than 10 years of financial management experience in municipalities , together with more than 3 years of audit experience with PWC and a Big -4 Accounting firm. Mr. Wong also has a bachelor’s in accountancy from California State University Northridge , an MBA from University of Irvine and has been a CPA since 2004.

Labor Relations

As of May 3, 2022, the City employed 100 full-time equivalent (FTE) employees and 21 part-time employees. Two unions represent 109.5 of the FTEs. The following table identifies the number of employees covered and the current status of the contracts with the bargaining units.

Labor Organization

Employees
Current Contract
Expiration Date
LEA Association 93.5 June 30, 2023
LEA Management Group 16.0 June 30, 2023

CITY FINANCIAL INFORMATION

Accounting and Financial Reporting

The City maintains its accounting records in accordance with Generally Accepted Accounting Principles (“GAAP”) and the standards established by the Governmental Accounting Standards Board (“GASB”).

The Governmental Accounting Standards Board published its Statement No. 34, Basic Financial Statements – and Management ’s Discussion and Analysis – for State and Local Governments, on June 30, 1999 (“GASB Statement No. 34”). GASB Statement No. 34 provides guidelines to auditors, state and local governments and special purpose governments such as school districts and public utilities, on new requirements for financial reporting for all governmental agencies in the United States. Generally, the basic financial statements and required supplementary information should include (i) Management ’s Discussion and Ana lysis; (ii) government-wide financial statements prepared using the economic measurement focus and the accrual basis of accounting and fund financial statements prepared using both the current financial resources measurement focus and the modified accrual method of accounting (governmental funds) and funds using the economic measurement focus and the accrual basis of accounting (proprietary funds) and (iii) required supplementary information. The City ’s financial statements are prepared in conformance with the requirements of GASB Statement No. 34.

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In the government-wide Statement of Net Position and Statement of Activities in the City’s audited financial statements for the Fiscal Year ending June 30, 2021, both governmental and proprietary activities are presented using the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset is used.

Revenues, expenses, gains, losses, assets and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place.

In the fund financial statements, governmental funds are presented on the modified accrual basis of accounting. Under the modified accrual bas is of accounting, revenues are recognized when “measurable and available. ” Measurable means knowing or being able to reasonably estimate the amount. Available means collectible within the current period or soon enough thereafter to pay current liabilities. The City defines available to be within 60 days of year- end. Expenditures (including capital outlay) are recorded when the related fund liability is incurred, except for principal and interest on long-term liabilities, claims and judgments, and compensated absences, which are reported when due. Governmental capital asset acquisitions are reported as expenditures in governmental funds. Proceeds for governmental long -term liabilities and acquisitions under capital leases are reported as other financing sources.

Those revenues susceptible to accrual include taxes and intergovernmental revenues. All other revenue items are considered to be measurable and available only when cash is received by the government. Impact fees are received and recognized as revenue upon project completion and inspection. Certain indirect costs are included in program expenses reported for individual functions and activities.

Grant revenues are recognized in the Fiscal Year in which all eligibility requirements are met. Under the terms of grant agreements, the City may fund certain programs with a combination of cost -reimbursement grants, categorical block grants, and general revenues. Thus, both restricted and unrestricted net position are available to finance program expenditures. The City’s policy is to first apply restricted grant resources to such programs, followed by general revenues if necessary.

All proprietary funds utilize the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset is used. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and pr oducing and delivering goods in connection with a proprietary funds ’ principal operations. The principal operating revenues of the enterprise and internal service funds are charges for services. Operating expenses for proprietary funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non -operating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources as they are needed.

The City’s fiduciary funds consist of a private-purpose trust fund, which is reported using the economic resources measurement focus, and agency funds, which have no measurement focus, but utilizes the accrual basis for reporting assets and liabilities.

The City Council employs, at the beginning of each Fiscal Year, an independent certified public accounting firm which, at such time or times as sp ecified by the City Council, at least City Council Regular Meeting - Page 333 of 473

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annually, at such other times as such firm shall determine, examines the books, records, inventories and reports of all officers and employees who receive, control, handle or disburse public funds and of all such other officers, employees or departments as the City Council may direct. As soon as practicable after the end of the Fiscal Year, a final audit and report is submitted by such firm to the City Council and a copy of the financial statements as of the close of the Fiscal Year is published.

Pension Tax Override; Bartel Report

Overview. On April 9, 1946, the voters in the City approved the Pension Tax Override, which is accounted for in a special fund, separate and apart from the General Fund, and available only for its authorized purposes. The Pension Tax Override is accounted for in the Retirement Special Revenue Fund maintained by the City. Pension Tax Override revenues for the fiscal year ended June 30, 2021 were $___________.

AB 377 Limitation. Although t he 1946 ballot measure approving the Pension Tax Override authorizes the City to levy the Pension Tax Override in an amount sufficient to provide revenues to meet all of the City’s obligations for contributions to CalPERS under the Retirement Law, the maximum tax rate for the Pension Tax Override was capped by Assembly Bill 377 (“AB 377”), enacted in July 1983 as Chapter 491 of Statutes of 1983, now codified as Section 96.31 of the California Revenue and Taxation Code. AB 377 prohibits the levying of a ret irement tax to pay for pension system costs in excess of the rate imposed in Fiscal Year 1982 -83 or 1983-84, whichever is higher. The Fiscal Year ________ rates were $_____ per $100 of assessed valuation, which established the maximum rate of the Pension Override Tax per AB 377. In addition, the City was previously involved in litigation regarding the amount of the Pension Tax Override. In accordance with a settlement of the lawsuit relating to the Pension Tax Override, the City fixed the rate of tax at $0.125 per $100 of assessed valuation.

California courts have held that Proposition 13, discussed further herein, permits additional property taxation to pay for pension plans with special tax authority approved by the voters prior to July 1, 1978; prov ided, the imposition of such tax is limited to the funding of employee retirement benefits at a level not in excess of the retirement benefits in existence prior to July 1, 1978.

Bartel Report. In order to ascertain the amount or revenues that may be pledged to the payment of Lease Payments in accordance with applicable limitations, the City commissioned Bartel Associates, LLC to prepare a report, dated __________, 2022 (the “Bartel Report”).

General Fund Overview and Budget

Overview. The City’s General Fund is its primary operating fund, and is where the City accounts for all its general -purpose revenues. It is distinguished from the City ’s other governmental funds that are used to account for special purpose revenues, capital projects, debt service activities, and monies held for the benefit of others.

The City operates on a Fiscal Year basis that begins on the first day of July of each year and ends on the thirtieth day of June the following year. The annual budget adopted by the City Council provides for the general operation of the City. Development of the City ’s annual budget is a process which generally begins in February and March and continues until the budget is adopted by the City Council in June. The General City Budget includes program s which are provided on a largely city -wide basis. The programs and services are financed primarily by the City Council Regular Meeting - Page 334 of 473

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City’s share of sales tax, property tax, revenues from the State and/or federal government, and charges for services provided.

The City Council appr oves total budgeted appropriations and any amendments to appropriations throughout the Fiscal Year. Appropriations lapse at Fiscal Year -end. The City Council generally reauthorizes appropriations for continuing projects and activities. The City Council has the legal authority to amend the budget of any fund at any time during the Fiscal Year. The budgetary level of control (the level on which expenditures may not legally exceed appropriations) is generally at the fund level. The City Manager is authorized to transfer budgeted amounts within departments within any fund; however, any revisions that alter the total expenditures of any fund must be approved by the City Council.

Long-Term Financial Planning . The City continues to explore additional sources of revenue to meet expectations for community services. The City utilizes a combination of expenditure spending limits, budget cuts, some increases in fees and the prudent use of reserves to balance each year’s budget. The City must continue to be conservative and manage its fiscal affairs in a prudent manner.

Budgetary Control Policy. The City maintains budgetary controls. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Council. Activities of the general fund, special revenue funds, debt service funds, capital projects funds, enterprise funds, and internal service funds are included in the annual appropriated budget. The level of budgetary control (the level at which expenditures cannot legally exceed the appropriated amount) is established by function and activity within an individual fund.

The City’s budgetary records are maintained on a modified accrual basis. Revenues are recorded when measurable and available and expenditures are recorded when goods or services are received and the liability incurred. Based on the City’s financial management policies, the City is required to maintain a balanced operating budget, which is adopted by resolution on or before June 30th for the ensuing Fiscal Year.

Following the adoption of the budget, it is sometimes necessary to amend the budget.

Appropriations in the budget may be adjusted by recommendation of the Finance Director and approval by the City Manager when the budget is not increased in total amount. Savings from appropriations in one section of a department budget may be used to fund another section of a department budget. Any increase in appropriations that increases the total adopted budget must be approved by the City Council. The City Council formally reviews the City’s fiscal condition and amends appropriations, if necessary, six months after the beginning of each fiscal year.

COVID-19 Pandemic. The City continues to monitor the spread of COVID -19 and has been working with local, state, and national agencies to address the potential impact of the pandemic upon the City since its outbreak in the United States in 2020. There can be no assurances that the spread of COVID-19 and/or responses intended to slow the spread of COVID- 19 such as declining business and travel activity, will not materially adversely impact the state and national economies and, accordingly, materially adversely impact the financial condition of the City and the City’s General Fund. In a ddition, the City may experience increased personnel costs and/or reduced revenues due to the COVID-19 situation and the related impact on economic and other activity in and around the City. See the references to COVID -19 in the following subsection in connection with the unknown impacts on the City’s budgeting process.

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Most Recently Adopted Budget. The adopted biannual budget for fiscal years 2021-22 and 2022-23 was approved on July 20, 2021 (the “Adopted Budget”). The Fiscal Year 2021-22 and Fiscal Year 2022-23 Proposed Budgets were developed in the context of the City gradually recovering from the impact of the Covid-19 pandemic. The adopted Fiscal Year 2021-22 operating revenues for all funds, excluding the Successor Agency, is $97.77M and $42.24M for adopted transfers in, for a total of $140.01M. The approved Fiscal Year 2022 -23 operating revenues for all funds, excluding the Successor Agency, is $91.03M and $18.38M for approved transfers in, for a total of $109.42M.

The adopted Fiscal Year 2021 -22 op erating expenditures for all funds, excluding the Successor Agency, is $110.27M and $42.24M for adopted transfers out, for a total of $152.51M.

The approved Fiscal Year 2022-23 operating expenditures for all funds, excluding the Successor Agency, is $89.57M and $18.38M for approved transfers out, for a total of $107.96M. The adopted General Fund operating revenue budget for Fiscal Year 2021 -22 is $35.95M with an additional $2.09M for non -operating transfers in for a total of $38.04M. The approved General Fu nd operating revenue budget for Fiscal Year 2022-23 is $36.56M with an additional $2.21M for non- operating transfers in for a total of $38.77M.

The adopted General Fund operating expenditure budget for Fiscal Year 2021 -22 is $36.26M with an additional $3. 14M for non -operating transfers out for a total of $39.40M. The approved operating expenditure budget for Fiscal Year 2022 -23 is $37.65M with an additional $2.42M for non-operating transfers out for a total of $40.07M.

Current Budget and Historical Budget Information. Set forth in Table 1 are the General Fund budgets that were adopted for Fiscal Years 2020-21 through 2022-23, as well as the audited actuals for Fiscal Year 2020-21. The budget may be amended and revised as necessary by the City Council.

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TABLE 1
City of Lynwood General Fund Budget Summary
Fiscal Years 2020-21 through 2022-23

2020-21
Revised
Budget
2020-21
Audited
2021-22
Adopted
Budget
2022-23
Approved
Budget
Revenues
Property taxes $11,646,501 $12,237,047 $11,844,069 $11,749,505 Sales taxes 9,228,862 12,886,776 12,173,400 12,558,100
Utility users tax 5,270,000 5,225,838 5,270,000 5,270,000 Franchise fees 833,144 1,103,890 973,144 973,144
Licenses and permits 786,000 1,038,026 594,820 614,600
Revenues from other agencies 124,229 144,666 149,929 159,929 Charges for current services 1,210,064 953,382 1,604,025 1,933,450 Other revenue 1,128,650 2,412,879 2,036,001 1,885,474
Fines and Forfeitures 1,210,000 2,323,943 906,000 1,016,000 Use of money and property 442,997 246,191 395,497 395,497 Transfers in - - -
Total Revenues 34,922,283 38,572,647 35,946,885 36,555,699

Expenditures
Current:

General Government 4,609,215 3,951,512 4,772,211 5,037,430 Public safety 19,660,906 19,042,384 20,541,020 21,544,072 Public works 6,764,664 6,201,299 7,063,923 7,289,390
Community development 229,467 88,181 467,414 307,644
Parks and recreation 3,188,630 2,334,105 3,419,876 3,472,725 Capital outlay - - - -
Debt Service: - - - -
Principal retirement - - - -
Interest and fiscal charges - - - -
Total expenditures 34,452,882 31,617,481 36,264,444 37,651,261

Excess (deficiency) of revenues over (under)
expenditures 469,401 6,955,166 (317,559)

(1,095,562)

Other financing sources(uses)
Transfers in 3,446,240 2,725,050 2,097,474 2,218,674
Transfers out (5,417,574) (4,505,549) (3,138,612) (2,421,931) Proceeds from sale of land 2,000,000 - - -
Total other financing sources 28,666 (1,780,499) (1,041,138) (203,257)

Net Change in fund balances 498,067 5,174,667 (1,358,697) (1,298,819)

Beginning of year 5,529,106 5,529,106 6,253,309 4,894,611 End of year 6,027,173 10,703,773 4,894,611 3,595,793
____________________
Source: City of Lynwood Finance Department.

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General Fund Key Revenue Sources. The three major general fund revenue sources of the City for Fiscal Year 2020 -21 (collectively, the “Key Revenue Sources ”), are Sales Tax (approximately 39.6% of total general fund revenue), Property Tax (approximately 36.3% of total general fund revenue) and Utility User ’s Taxes (approximately 16.1% of total general fund revenue). Also see “APPENDIX A – AUDITED FINANCIAL STATEMENTS OF THE CITY FOR FISCAL YEAR 2020-21” herein.

The following Table 2 sets forth the audited revenues received by the City for each of the Key Revenue Sources for Fiscal Years 2016 -17 through 2020-21, which have been totaled and compared to the prior Fiscal Year to illustrate the amount and percent of change.

Table 2

CITY OF LYNWOOD
Fiscal Years 2016-17 through 2020-21
General Fund Key Revenue Sources and Change From Prior Year(1)

Fiscal
Year
Property
Taxes
Utility
User’s
Taxes
Sales
Taxes
Franchise
Taxes
Business
License
Taxes
Other
Taxes
Total of
Key Tax
Sources
Taxes
%
Change
From
Prior
Year
2016-17 $9,265,676 $5,169,598 $4,814,034 $577,959 $876,656 $185,814 $20,889,737 --% 2017-18 9,795,477 5,196,640 9,176,594 671,343 885,191 143,648 25,868,893 23.8 2018-19 10,683,709 5,014,483 10,236,088 673,766 896,212 192,692 27,696,950 7.1 2019-20 10,877,603 4,736,649 10,107,253 702,844 800,001 201,617 27,425,967 (1.0) 2020-21 11,807,523 5,225,838 12,886,776 652,305 764,016 410,021 31,746,479 15.8

(1) Includes transfers in from other funds.

Source: City of Lynwood - audited financial statements 2018-19 through 2020-21.

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The following Table 3 sets forth the audited revenues received by the City for the total of Key Revenue Sources and total of Other General Fund Revenue Sources for Fiscal Years 2018- 19 through 2020-21.

TABLE 3
City of Lynwood
General Fund Revenues by Revenue Source
Fiscal Years 2018-19 through 2020-21

2018-19 2019-20 2020-21
Category Revenues
% of
Total Revenues
% of
Total Revenues
% of
Total
Taxes:

Property tax $10,683,709 32.2% $10,877,603 32.3% $11,807,523 36.3% Utility users 5,014,483 15.1 4,736,649 14.1 5,225,838 16.1 Sales Tax 10,236,088 30.8 10,107,253 30.1 12,886,776 39.6 Franchise taxes 673,766 2.0 702,844 2.1 652,305 2.0
Business license tax 896,212 2.7 800,001 2.4 764,016 2.3 Other taxes 192,692 0.6 201,617 0.6 410,021 1.3
Use of money and property 4,371,883 13.2 6,076,939 18.1 (11,930) 0.0 Miscellaneous 1,158,007 3.5 127,625 0.4 823,915 2.5
Total Revenues(1) $33,226,840 100% $33,630,531 100% $32,558,464 100% ________________
(1) Totals may not add due to rounding.

Source: City of Lynwood - audited financial statements 2018-19 through 2020-21.

Sales and Use Taxes

Sales & Use Taxes represented the largest source of tax revenues to the City ’s General Fund for the most recent fiscal year , accounting for approximately 39.6% of total General Fund revenues for Fiscal Year 2020-21. Sales & uses taxes are less stable sources of revenues to the City, given that they are based on consumer spending within the City which is impacted by a variety of factors including the overall economy and other factors.

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Historic Taxable Transactions. The following table shows historical taxable transactions in the City for the most recent five years available.

TABLE 4
City of Lynwood
Taxable Transactions
Fiscal Years 2017 through 2021
(In Thousands)

2017 2018 2019 2020 2021
Motor Vehicle and Parts Dealers $23,702 $23,316 $26,389 $24,852 $28,014 Home Furnishings and Appliances 6,776 11,044 18,895 16,012 21,848 Building Materials 32,762 37,310 35,596 38,410 46,570
Food and beverage stores 41,736 42,863 43,481 46,957 47,257 Gasoline stations 51,543 63,082 69,490 53,414 73,906
Apparel stores 26,020 26,990 26,025 22,780 37,981
General merchandise stores 17,089 14,057 5,670 5,586 7,566 Food services and drinking places 85,634 88,206 94,000 86,974 102,747 Other retail stores 22,323 24,146 24,819 31,344 41,606
All other outlets 43,605 40,403 49,275 57,571 97,330
Total All Outlets $351,191 $371,417 $393,641 $383,880 $504,825 ____________________
Source: California Department of Tax and Fee Administration (as of January 11, 2022).

State-Wide Sales Tax Law. Taxable transactions in the City are currently subject to the following sales and use tax, of which the City ’s share is only a portion. The City collects a percentage of taxable sales in the City (minus certain administrative costs) pursuant to the Bradley-Burns Uniform Local Sales and Use Tax (the “Sales Tax Law”). The State collects and administers the sales tax under the Sales Tax Law, and makes distributions on taxes collected within the City, as shown in the following table.

TABLE 5
City of Lynwood
Sales Tax Rate
Effective April 1, 2022
Statewide Rate 6.00%
Los Angeles County Sales Tax 0.25
Los Angeles County Special Tax 3.00
City of Lynwood Transactions and Use Tax 1.00
Total 10.25%
____________
Source: City of Lynwood Finance Department.

Sales and use taxes are complementary taxes; when one applies, the other does not. In general, the statewide sales tax applies to gross receipts of retailers from the sale of tangible personal property in the State. The use tax is imposed on the purchase, for storage, use or other consumption in the State of tangible personal property from any retailer. The use tax generally applies to purchases of personal property from a retailer outside the State where the use will occur within the State. The sales t ax is imposed upon the same transactions and items as the statewide sales tax and the statewide use tax.

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Certain transactions are exempt from the State sales tax, including sales of the following products:

• food products for home consumption;
• prescription medicine;
• newspapers and periodicals;
• edible livestock and their feed;
• seed and fertilizer used in raising food for human consumption; and • gas, electricity and water when delivered to consumers through mains, lines and pipes.

This is not an exhaustive list of exempt transactions. A comprehensive list can be found in the State Board of Equalization’s Publication No. 61 (February 2017) entitled “Sales and Use Taxes: Exemptions and Exclusions, ” which can be found on the State Board of Equalization’s website at http://www.boe.ca.gov/. 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.

Sales Tax Collection Procedures. Collection of the sales and use tax is administered by the California Department of Tax and Fee Administration (the “CDTFA”). This process was formerly administered by t he State Board of Equalization. The Taxpayer Transparency and Fairness Act of 2017, which took effect July 1, 2017, restructured the State Board of Equalization and separated its functions among three separate entities: the State Board of Equalization, th e CDTFA and the Office of Tax Appeals. The State Board of Equalization will continue to perform the duties assigned to it by the State Constitution, while all other duties will be transferred to the newly established CDTFA and the Office of Tax Appeals. C DTFA will handle most of the taxes and fees previously collected by the State Board of Equalization, including sales and use tax.

Under the Sales and Use Tax Law, all sales and use taxes collected by the CDTFA under a contract with any city, city and coun ty, or county are required to be transmitted by the CDTFA to such city, city and county, or county periodically as promptly as feasible. These transmittals are required to be made at least twice in each calendar quarter.

Under its procedures, the CDTFA projects receipts of the sales and use tax on a quarterly basis and remits an advance of the receipts of the sales and use tax to the City on a monthly basis. The amount of each monthly advance is based upon the CDTFA ’s quarterly projection.

During the last month of each quarter, the CDTFA adjusts the amount remitted to reflect the actual receipts of the sales and use tax for the previous quarter.

The CDTFA receives an administrative fee based on the cost of services provided by the Board to the City in administering the City’s sales tax, which is deducted from revenue generated by the sales and use tax before it is distributed to the City.

As part of the State government ’s response to the COVID -19 pandemic, certain businesses were able to defer the payment of their sales taxes due to the City.

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Property Taxes

Property Taxes represents the second-largest sources of taxes to the City’s General Fund, after sales/use taxes. Property taxes represent a very stable source of revenue to the City, and are based in large part on assessed valuations of property located in the City.

General Method of Property Tax Calculations . Proposition 13 , passed in 1978, established the current property tax regime for local agencies, including the City, throughout the State. Under Proposition 13, subject to voter -approved debt and certain other exceptions, the base property tax rate on a parcel is limite d to 1% of its assessed value and the property tax collected by this 1% County-wide rate is shared by the local agencies eligible to receive property taxes within the applicable County pursuant to applicable State law. Under Proposition 13, the 1975-76 fiscal year serves as the original base year used in determining the assessment for real property. Thereafter, annual increases to the base year value are limited to the inflation rate, as measured by the California Consumer Price Index, or 2%, whichever is less. A new base year value, however, is also established whenever a property, or portion thereof, has had a change in ownership or has been newly constructed. See “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS – Article XIIIA of the State Constitution” for additional information.

Proposition 8, enacted in 1978, allows for a temporary reduction in assessed value when a property suffers a “decline-in-value.” As of the January 1st (lien date) each year, the Assessor must enroll eith er a property ’s Proposition 13 value (adjusted annually for inflation by no more than 2%) or its current market value, whichever is less. When the current market value replaces the higher Proposition 13 value, the lower value is commonly referred to as a “Proposition 8 Value.” “Proposition 8 values” are temporary and, once enrolled, must be reviewed annually by the assessor until the Proposition 13 adjusted base year value is enrolled.

The California Tax on Commercial and Industrial Properties for Educati on and Local Government Funding Initiative has qualified to appear on the ballot in California as an initiated Constitutional amendment on November 3, 2020. The ballot initiative would amend the State Constitution to require commercial and industrial prop erties, except those zoned as commercial agriculture, to be taxed based on their market value. The proposal to assess taxes on commercial and industrial properties at market value, while continuing to assess taxes on residential properties based on purchase price as described above, is known as “split roll.” At this time, the City is unable to determine the likelihood of passage of the measure or the impact on the City ’s property tax receipts from passage.

Levy and Collection of Property Taxes. Property taxes are levied for each fiscal year on taxable real and personal property as of the preceding January 1. For assessment and collection purposes, property is classified either as “secured” or “unsecured” and is listed accordingly on separate parts of the assessment roll. The “secured roll ” is that part of the assessment roll containing State-assessed public utilities property and real property the taxes on which have a viable tax lien, in the opinion of the County Assessor, to secure payment of the taxes. Other property is assessed on the “unsecured roll.”

Property taxes on the secured roll are due in two installments, on November 1 and February 1 of each fiscal year, and become delinquent on December 10 and April 10, respectively.

A penalty of 10% attaches immediately to all delinquent payments. Property on the secured roll with respect to which taxes are delinquent become tax defaulted on or about June 30 of the fiscal year. Such property may thereafter be redeemed by payment of a penalty of 1% per month to the City Council Regular Meeting - Page 342 of 473

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time of redemption, plus costs and a redemption fee. If taxes are unpaid for a period of five years or more, the property is deeded to the State and may be sold at public auction.

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

Beginning in 1978-79, Proposition 13 and its implementing legislation shifted the function of property tax allocation to the counties, except for levies to support prior voted debt, and prescribed how levies on county-wide property values are to be shared with local taxing entities within each county.

Historical Assessed Valuations . The table below presents the assessed valuation of taxable property in the City from fiscal year 2012-13 through fiscal year 2021-22.

TABLE 6
City of Lynwood
Assessed Valuations of All Taxable Property
Fiscal Years 2012-13 through 2021-22

Fiscal Year Local Secured Utility Unsecured Total
%
Change
2012-13 $2,683,399,346 $977 $87,408,507 $2,770,808,830 --% 2013-14 2,589,115,897 191 90,514,780 2,679,630,868 (3.3) 2014-15 2,694,961,056 182 89,872,751 2,784,833,989 3.9
2015-16 2,831,887,191 177 91,500,901 2,923,388,269 5.0
2016-17 2,960,766,716 159 87,435,655 3,048,202,530 4.3
2017-18 3,112,901,366 153 86,372,576 3,199,274,095 5.0
2018-19 3,388,317,977 0 125,816,908 3,514,134,885 9.8
2019-20 3,475,747,092 0 131,942,448 3,607,689,540 2.7
2020-21 3,761,035,322 0 98,013,824 3,859,049,146 7.0
2021-22 4,017,350,210 0 102,846,558 4,120,196,768 6.8

Source: California Municipal Statistics Inc.

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Historical Secured Property Tax Levies and Collections. The table below presents secured property tax collections and delinquencies in the City for the for fiscal years shown.

TABLE 7
City of Lynwood
Secured Property Tax Levies and Collections
Fiscal Years 2016-17 through 2020-21

Fiscal Year
Secured Tax
Charge(1)
Amount
Delinquent
June 30
%
Delinquent
June 30
2016-17 $3,504,433.67 $41,620.71 1.19%
2017-18 3,694,410.57 45,896.21 1.24
2018-19 4,035,343.98 55,151.38 1.37
2019-20 4,157,736.12 93,766.39 2.26
2020-21 4,440,356.83 75,698.69 1.70

(1) 1% General Fund apportionment. Excludes redevelopment agency impounds.

Source: California Municipal Statistics Inc.

Assessed Valuations and Parcels by Land Use . The following table shows secured assessed valuations and parcels by land use for fiscal year 2021 -22. As shown in the table, approximately 89.15% of the parcels in the City, representing almost 70.87% of the assessed valuation in the City, has residential uses.

Table 8
City of Lynwood
Secured Assessed Valuation and Parcels by Land Use
Fiscal Year 2021-22

2021-22 % of No. of % of
Non-Residential: Assessed Valuation (1) Total Parcels Total Commercial $502,075,052 12.50% 564 5.40%
Vacant Commercial 13,232,592 0.33 83 0.80
Industrial 407,752,814 10.15 206 1.97
Vacant Industrial 16,359,725 0.41 31 0.30
Recreational 4,097,904 0.10 3 0.03
Government/Social/Institutional 217,602,947 5.42 174 1.67 Miscellaneous 9,272,788 0.23 72 0.69
Subtotal Non-Residential $1,170,393,822 29.13% 1,133 10.85%

Residential:

Single Family Residence $1,936,833,150 48.21% 7,187 68.85% Condominium/Townhouse 16,768,067 0.42 59 0.57
Mobile Home 928,203 0.02 35 0.34
Mobile Home Park 1,671,868 0.04 1 0.01
2-4 Residential Units 567,853,557 14.14 1,543 14.78
5+ Residential Units/Apartments 312,520,698 7.78 373 3.57 Vacant Residential 10,380,845 0.26 108 1.03 Subtotal Residential $2,846,956,388 70.87% 9,306 89.15%

Total $4,017,350,210 100.00% 10,439 100.00%
_________________
(1) Local Secured Assessed Valuation, excluding tax exempt property.

Source: California Municipal Statistics, Inc.

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Per Parcel Assessed Valuation of Single-Family Homes. Table 8 below shows the per parcel assessed valuation for improved single -family homes (according to 2021 -22 assessed valuation) in the City. The average assessed valuation is $ 269,491, and the median assessed valuation is $252,366.

Table 9

CITY OF LYNWOOD
Fiscal Year 2021-22
Per Parcel Assessed Valuation of Single-Family Homes

No. of 2021-22 Average Median
Parcels Assessed Valuation Assessed Valuation Assessed Valuation Single Family Residential 7,187 $1,936,833,150 $269,491 $252,366

2021-22 No. of % of Cumulative Total % of Cumulative
Assessed Valuation Parcels (1) Total % of Total Valuation Total % of Total $0 - $24,999 17 0.237% 0.237% $340,684 0.018% 0.018%
$25,000 -$49,999 275 3.826 4.063 11,200,788 0.578 0.596 $50,000 - $74,999 310 4.313 8.376 18,971,861 0.980 1.575 $75,000 - $99,999 194 2.699 11.076 16,818,626 0.868 2.444 $100,000 - $124,999 201 2.797 13.872 22,578,936 1.166 3.610 $125,000 - $149,999 250 3.479 17.351 34,428,099 1.778 5.387 $150,000 - $174,999 384 5.343 22.694 62,715,499 3.238 8.625 $175,000 - $199,999 524 7.291 29.985 98,646,645 5.093 13.718 $200,000 - $224,999 703 9.782 39.766 149,957,684 7.742 21.461 $225,000 - $249,999 686 9.545 49.311 162,746,521 8.403 29.863 $250,000 - $274,999 537 7.472 56.783 140,765,197 7.268 37.131 $275,000 - $299,999 471 6.553 63.337 135,507,953 6.996 44.128 $300,000 - $324,999 405 5.635 68.972 126,414,420 6.527 50.654 $325,000 - $349,999 323 4.494 73.466 108,616,571 5.608 56.262 $350,000 - $374,999 291 4.049 77.515 105,375,216 5.441 61.703 $375,000 - $399,999 284 3.952 81.467 110,108,037 5.685 67.388 $400,000 - $424,999 267 3.715 85.182 110,040,568 5.681 73.069 $425,000 - $449,999 254 3.534 88.716 111,082,076 5.735 78.805 $450,000 - $474,999 235 3.270 91.986 108,453,204 5.600 84.404 $475,000 - $499,999 160 2.226 94.212 77,833,212 4.019 88.423 $500,000 and greater 416 5.788 100.000 224,231,353 11.577 100.000 7,187 100.000% $1,936,833,150 100.000%

(1) Improved single-family residential parcels. Excludes condominiums and parcels with multiple family units.

Source: California Municipal Statistics, Inc.

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Principal Property Taxpayers. The top twenty largest local secured property taxpayers in the City, as shown on the 2021-22 secured tax roll, are listed in the table below. For fiscal year 2021-22, the total assessed valuation of the twenty largest local secured taxpayers is 10.60% of the total City fiscal year 2021-22 assessed valuation of $425,931,536.

TABLE 10
City of Lynwood
Principal Property Taxpayers (Secured Roll)
Fiscal Year 2021-22
2021-22 % of
Property Owner Primary Land Use Assessed Valuation Total (1)

1. Duke Lynwood LP Industrial $72,417,502 1.80%

2. Terreno Lynwood LLC Industrial 64,887,602 1.62

3. Plamex Investment LLC Shopping Center 48,220,864 1.20

4. Rexford Industrial Industry Way Industrial 24,427,126 0.61

5. Prime Desert Properties LLC Professional Building 24,336,813 0.61

6. Primrose 19 LP Office Building 21,641,910 0.54

7. Earl M. Jorgensen Co. Industrial 20,682,478 0.51

8. EK Lynwood LLC Shopping Center 16,640,575 0.41

9. Lee Riviera Enterprises LLC Professional Building 15,282,705 0.38

10. Albi Lynwood Investments LLC Commercial 14,937,452 0.37

11. 805 Property LLC Shopping Center 14,816,150 0.37

12. Shapco Partnership Industrial 11,864,476 0.30

13. Lynwood MFT LLC Professional Building 11,232,643 0.28

14. Jones Holdings I, II & III LLC Industrial 11,101,937 0.28

15. El Segundo Boulevard Property Apartments 10,742,115 0.27

16. Yousuf H. Haroon Industrial 8,840,650 0.22

17. Deborah Drooz Commercial 8,712,380 0.22

18. Tony Trinh Trust Commercial 8,639,796 0.22

19. Nova Storage Lynwood LP Industrial 8,316,163 0.21

20. NP Wright LLC Industrial 8,190,199 0.20
$425,931,536 10.60%
_________________________________
(1) The total City secured assessed valuation for fiscal year 2021-22 is $4,017,350,210.

Source: California Municipal Statistics, Inc.

Other Sources of Revenues

Utility Tax. It is the third largest, which comprises about 14% of the City’s total annual General Fund revenues. Currently, a 9% utility users tax is imposed on the City’s water, telephone, gas, electricity and cable television services.

Business License Tax and Permit Fee. The City collects fees for licenses and permits provided by the City, including, but not limited to, regulatory permits, development permits, plan check and permitting, building permits and inspections and other development fees. The business license tax is an annual charge that is applied to either gross receipts of payroll for each business or more commonly, the number of employees per business depending on the type of business.

There are some exceptions and additional fees that may apply to certain specialty or professional businesses. The permit fee is project based.

Franchise Tax. The City levies a franchise tax on its pipelines, cable, towing, and utility services franchises. A franchise tax of 5% is imposed on any franchise holder operating within the boundaries of the City.

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Financial Statements

General. The City ’s accoun ting policies conform to generally accepted accounting principles and reporting standards set forth by the State Controller. The audited financial statements also conform to the principles and standards for public financial reporting established by GASB.

Basis of Accounting and Financial Statement Presentation. The government -wide financial statements are reported using the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of t he timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

Governmental fund financial statements are reported using the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available.

Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures are recorded only when payment is due.

Most Recent Audited Financial Statements. Set forth in the following tables is the City’s General Fund balance sheets and statements of revenues, expenditures and changes in General Fund Balance for fiscal years 2016-17 through 2020-21, which are based on the City ’s audited financial statements. The balance sheets and statements presented in this Official Statement are subject to the various notes attached to the City ’s financial statements for the respective years.

The City’s Annual Comprehensive Financial Report (“ACFR”) for Fiscal Year 2020-21, including the City’s audited financial statements, is set forth in Appendix A.

General Fund Historical Financial Data

The following Tables 11 and 12 provide a five-year history of (i) the City ’s General Fund revenues, expenditures, and changes in fund balances for Fiscal Years 2016 -17 through 2020- 21 and (ii) the City’s Comparative Balance Sheet for Fiscal Years 2016-17 through 2020-21.

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TABLE 11
City of Lynwood
Statements of Revenues, Expenditures and Changes in General Fund Balance Fiscal Years 2016-17 through 2020-21
2016-17 2017-18 2018-19 2019-20 2020-21
Revenues
Taxes and assessments $20,005,982 $24,941,479 $28,505,748 $26,806,601 $31,453,560 Licenses and permits 943,700 815,194 945,896 942,376 1,038,026 Fines, penalties and forfeitures 1,601,620 1,751,217 2,344,777 1,654,693 2,323,943 Use of money and property 298,652 346,348 588,774 618,797 246,191 Intergovernmental 131,653 118,915 119,595 137,311 144,666 Charges for service 1,720,903 1,546,418 1,872,551 1,907,408 953,382 Administrative support 1,118,246 1,118,246 1,118,246 1,118,674 1,118,674 Miscellaneous 1,086,943 1,924,946 1,192,765 370,148 1,294,205 Total Revenues 26,907,699 32,562,763 36,688,352 33,556,008 38,572,647

Expenditures
Current:

General Government 4,306,522 5,330,570 4,433,873 5,100,825 3,951,512 Public safety 16,326,446 17,437,065 17,729,040 18,742,412 19,042,384 Public works 4,293,658 5,495,132 6,841,748 6,822,296 6,201,299 Community development 113,187 48,519 138,816 -- 88,181
Parks and recreation 2,935,450 3,377,729 3,453,952 3,393,928 2,334,105 Capital outlay 1,191 7,893 138,883 83,100 --
Total expenditures 27,976,454 31,696,908 32,736,312 34,142,561 31,617,481

Excess (deficiency) of revenues over (under)
expenditures (1,068,755) 865,855 3,952,040 (586,553) 6,955,166

Other financing sources(uses)
Transfers in 2,635,588 3,094,178 2,677,967 1,105,160 2,725,050 Transfers out (1,457,756) (1,650,331) (4,446,163) (2,052,818) (4,505,549) Total other financing sources 1,177,832 1,443,847 (1,768,196) (947,658) (1,780,499)

Net Change in fund balances 109,077 2,309,702 2,183,844 (1,534,211) 5,174,667

Beginning of year 2,460,694 2,569,771 4,879,473 7,063,317 5,529,106 End of year $2,569,771 $4,879,473 $7,063,317 $5,529,106 $10,703,773 ____________
Source: City Finance Department and City of Lynwood - audited financial statements for fiscal years 2016-17 through 2020-21.

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TABLE 12
City of Lynwood
General Fund Balance Sheets
Fiscal Years 2016-17 through 2020-21

2016-17 2017-18 2018-19 2019-20 2020-21
Assets
Cash and investments $4,454,157 $4,644,238 $9,177,157 $5,516,506 $8,633,865 Receivables:

Accounts 1,161,134 1,329,982 1,374,808 1,170,756 2,763,310 Interest 8,160 12,927 97,159 40,433 5,813
Intergovernmental 1,299,671 2,076,734 1,936,313 2,289,577 2,873,421 Due from other funds 3,604,714 5,021,046 3,125,668 4,681,451 4,998,943 Other assets 19,161 -- -- -- --
Restricted cash and investments:

Cash and investments 7,329 7,330 7,330 7,331 7,331
Cash and investments with fiscal agents -- -- -- -- --
Total Assets 10,554,326 13,092,257 15,718,435 13,706,054 19,282,683

Deferred Inflow of Resources
Unavailable revenues 627,166 687,255 515,820 505,722 1,078,424 Total Deferred Outflow of Resources 627,166 687,255 515,820 505,722 1,078,424

Liabilities
Accounts payable and accrued liability 3,074,338 3,171,269 3,755,016 3,513,809 3,420,166 Deposits 1,242,826 1,314,035 1,344,057 1,117,192 1,040,095 Advances from successor agency 3,040,225 3,040,225 3,040,225 3,040,225 3,040,225 Total Liabilities 7,357,389 7,525,529 8,139,298 7,671,226 7,500,486

Fund Balances
Restricted 7,329 7,330 7,330 7,331 7,331
Committed 75,372 561,594 1,621,084 3,159,083 4,828,977
Unassigned 2,487,070 4,310,549 5,434,903 2,362,692 5,867,465 Total Fund Balance 2,569,771 4,879,473 7,063,317 5,529,106 10,703,773 Total Liabilities & Fund Balance $10,554,326 $13,092,257 $15,718,435 $13,706,054 $19,282,683 _____________
Source: City of Lynwood - Audited Financial Statements for fiscal years 2016-17 through 2020-21.

Relevant Fiscal Policies

Reserve Policy . Pursuant to the City’s adopted fiscal and budget policies, the City maintain General Operating Reserves at a level equal to at least 10% of the total General Fund budgeted revenue. These reserves are created and maintained to provide sufficient cash flow to meet daily financial needs and sustain City services in the event of a catastrophic event such as a natural/manmade disaster ( for example, earthquake, windstorm, flood, terrorist attack) or a major downturn in the economy.

In general, the City endea vors to support ongoing operations with ongoing revenue but uses reserves on a one-time basis to support City services pending the development of a longer- term financial solution. However, in no event will reserves be used longer than one biennium to support City operation. If reserves are used, the City will begin to replenish these reserves at the end of biennium if a surplus exists, but no later than biennium following their use.

Surplus balances in the General Fund are used to fund one -time operations and capital expenditures, dedicated to the Capital Improvement Program or places in an economic City Council Regular Meeting - Page 349 of 473

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contingency account if there are surplus balances remaining after all current expenditu re obligations and reserve requirements are met and if the City has made a determination that revenues for the ensuing biennium are sufficient to support budgeted General Fund operations.

Debt Policy. The City has adopted Debt Management Policies in com pliance with California Government Code Section 8855. The Debt Management Policies sets forth the purposes for which long-term debt financings may be undertaken (i.e., for projects that will provide benefit to constituents over multiple years). The Debt Management Policies provide that short - term financings may be undertaken for operational cash flow purposes and for short-lived capital projects (i.e. equipment leases).

City Investment Policy. To maximize interest income and maintain liquidity, the City pools operating cash for its various funds and invests the monies in securities of various maturities. City and Agency funds are invested pursuant to the City ’s Investment Policy in compliance w ith Section 53601 of the California Government Code. The investment types authorized for investment by the City include the Local Agency Investment Fund (State Pool), U.S. Treasury Obligations, U.S. Government Agency Issues, Certificates of Deposit, Commercial Paper, as well as Mutual Funds and Money Market Funds comprised of eligible securities. The objectives of the Investment Policy are to preserve capital, provide adequate liquidity to meet cash disbursements of the City, and to achieve market- average rates of return. Investments are secured by collateral as required under law, with maturity dates staggered to ensure that cash is available as needed. The City Council receives regular reports from the City Treasurer on the performance of the City’s pooled investment program.

Investment of debt proceeds held by bond trustees are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City ’s Investment Policy.

The City manages its exposure to interest rate risk by purchasing a combination of shorter term and longer-term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.

Risk Management

The City is a member of Independent Cities Risk Management Authority (“ ICRMA”).

ICRMA was established in 1980 to provide excess insurance coverage, risk management and self-insurance services for California cities. ICRMA is a Joint Powers Authority (“ JPA”) directed by a Governing Board consisting of one representative from each Member City.

ICRMA offers members excess liability, excess workers’ compensation, property and special events coverage. Currently there are 22 member cities. ICRMA maintains a management services agreement with Bickmore Risk Services to provide staff services to the Authority. See APPENDIX A Note 12 for additional details regarding the City’s Risk Management.

Employee Retirement System; CalPERS

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 City Council Regular Meeting - Page 350 of 473

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the information provided by CalPERS and makes no representations and expresses no opinion 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. None of the Authority, City or Underwriter 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.

General Information about the Pensi on Plans. The City contributes to two defined benefit pension plans: Employees Retirement Plan (“Miscellaneous Plan”) and Fire Retirement Plan (“Safety Plan”). Each plan provides retirement and disability benefits, annual cost -of-living adjustments, and death benefits to plan members and beneficiaries. The Miscellaneous Plan is part of the Public Agency portion of the California Public Employees Retirement System (“CalPERS”), an agent multiple -employer plan administered by CalPERS, which acts as a common investment and administrative agent for the participating public employers within the State of California. Benefit provisions under the Plan are established by State statute and City resolution. CalPERS’ audited financial statements can be obtained at CalPE RS’ website under Forms and Publications
Effective November 1, 2000, the City’s fire department was transferred to the County. As a result, certain safety members (employees of the fire department) of CalPERS have ceased to be employed by the fire department of the City and have been employed by the County, and upon such transfer, these safety members have become members of Los Angeles County Employees Retirement Association ( “LACERA”). This transfer did not apply to safety members who have retired on or before the effective date of the transfer. Those retirees will continue to receive their pension benefits from the City ’s Safety Plan with CalPERS. The City ’s Safety Plan is currently part of the CalPERS Inactive Agency Risk Pool, a cost-sharing multiple-employer defined benefit plan.

Employees Covered. At the June 30, 2019 Valuation date, the following employees were covered by the benefit terms for each Plan:

Miscellaneous Safety
Active employees 120 0
Transferred and terminated employees 191 5
Retired employees and beneficiaries 255 111
Total 566 116

Source: City of Lynwood.

PEPRA. On September 12, 2012, the California Governor signed AB 340, a bill that enacted the California Public Employees’ Pension Reform Act of 2012 ( “PEPRA”) and that also amended various sections of the California Education and Government Codes, including the County Employees Retirement Law of 1937. Effective January 1, 2013, PEPRA: (i) requires public retirement systems and their participating employers to share equally with employees the normal cost rate for such retirement systems; (ii) prohibits employers from paying employer paid City Council Regular Meeting - Page 351 of 473

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member contributions to such retirement systems for employees hired after January 1, 2013; (iii) establishes a compulsory m aximum non safety benefit formula of 2.5% at age 67; (iv) defines final compensation as the highest average annual pensionable compensation earned during a 36 month period; and (v) caps pensionable income at $110,100 ($132,120 for employees not enrolled in Social Security) subject to Consumer Price Index increases. Other provisions reduce the risk of the City incurring additional unfunded liabilities, including prohibiting retroactive benefits increases, generally prohibiting contribution holidays, and prohibiting purchases of additional non- qualified service credit.

Benefits Provided. CalPERS provides retirement and disability benefits, annual cost-of- living adjustments, and death benefits to plan members and beneficiaries. Benefit provisions under both plans are established by the State statute and City resolution as follows:

Miscellaneous Plan

Hire Date Prior to January 1, 2013 On or after January 1, 2013 Benefit Formula 2.0% @ 55 2.0% @ 60
Benefit Vesting Schedule 5 years of service 5 years of service Benefit Payments Monthly for life Monthly for life
Retirement Age 50-55 52-67
Monthly Benefits, As a % of Eligible
Compensation

2.0% to 2.7%

1.0% to 2.5%
Required Employee Contribution Rates 8.000% 5.250%
Required Employer Contributions Rates 27.244% 27.244%

Safety Plan

Hire Date Prior to January 1, 2013 On or after January 1, 2013 Benefit Formula 2.0% @ 50 2.0% @ 57
Benefit Vesting Schedule 5 years of service 5 years of service Benefit Payments Monthly for life Monthly for life
Retirement Age 50 50-57
Monthly Benefits, As a % of Eligible
Compensation

3.0%

2.0% to 2.7%
Required Employee Contribution Rates 0.000% 0.000%
Required Employer Contributions Rates 0.000% 0.000%
_____________
Source: City of Lynwood Audit Fiscal Year ended June 30, 2021.

See APPENDIX A Note 9 for additional details regarding the City ’s pension and other employee benefits.

Contributions. Section 20814(c) of the California Public Employees ’ Retirement Law (“PERL”) 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. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. 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 employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.

The City is required to contribute at an actuarially determined rate of annual covered payroll, plus a fixed payment of unfunded liability. The actuarially determined normal cost rates City Council Regular Meeting - Page 352 of 473

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and UAL contribution amounts for each Plan for the Fiscal Years ended June 30, 2022, through June 30, 2023, are as follows:

CITY’S REQUIRED EMPLOYER CONTRIBUTION RATES & PAYMENTS

Fiscal Year 2021-22 Fiscal Year 2022-23
Pension Plan
Employer
Normal
Cost Rate
Employer
Normal
Cost
Payment
Employer
Normal
Cost Rate
Employer
Normal
Cost
Payment
Miscellaneous 10.940% $3,530,648 10.81% $3,887,362
Safety 11.003 2,642,352 0.00 797,804

Source: CalPERS Annual Valuation Report as of June 2019 and 2020.

Projected Employer Contributions . The following tables show the City ’s actuarially- determined required employer contribution for Fiscal Year 2022 -23 and projected employer contributions (before cost sharing) for Fiscal Years 2023 -24 through 2027 -28 for each Plan by normal cost (expressed as a percentage of total active payroll) and amortization of the unfunded accrued liability (expressed as a dollar amount).

Miscellaneous

Required
Contribution
Projected Future Employer Contributions
(Assumes 7.00% Return for Fiscal Year 2020-21)
Fiscal Year 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 Normal Cost % 10.81% 10.6% 10.5% 10.3% 10.2% 10.0% UAL Payment $3,887,362 $3,373,000 $3,567,000 $3,415,000 $3,549,000 $3,617,000 Safety
Required
Contribution Projected Future Employer Contributions
(Assumes 7.00% Return for Fiscal Year 2020-21)
Fiscal Year 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 Normal Cost % 0.00% 0.0% 0.0% 0.0% 0.0% 0.0%
UAL Payment $797,804 $798,000 $798,000 $798,000 $798,000 $798,000

Source: CalPERS Annual Valuation Report as of June 30, 2020.

Funding History. The funding history for the Miscellaneous Pension Plan and the Safety Pension Plan is shown in the tables below, listing for each plan the actuarial accrued liability, share of the pool’s market value of assets, share of the pool’s unfunded liability, funded ratio, and annual covered payroll.

MISCELLANEOUS PLAN

Valuation
Date
Accrued
Liability (AL)
Market Value
of Assets
(MVA)
Unfunded
Liability
Funded
Ratio
Annual
Covered
Payroll
6/30/2018 $98,338,645 $70,958,787 $27,379,858 72.2% $5,143,023 6/30/2019 108,448,698 74,444,764 34,003,934 68.6 8,089,873 6/30/2020 113,717,205 76,893,685 36,823,520 67.6 8,484,551

Source: CalPERS Annual Valuation Report as of June 30, 2020.

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SAFETY PLAN

Valuation
Date
Accrued
Liability (AL)
Market Value
of Assets
(MVA)
Unfunded
Liability
Funded
Ratio
Annual
Covered
Payroll
06/30/2018 $20,965,985 $13,130,338 $7,835,647 62.6% $0 06/30/2019 19,787,845 11,982,990 7,804,855 60.6 0
06/30/2020 19,193,302 11,225,642 7,967,660 58.5 0

Source: CalPERS Annual Valuation Report as of June 30, 2020.

Payable to the Pension Plan. At June 30, 2021, the City reported a payable of $51,444 for the outstanding amount of contributions to the pension plan required for the year ended June 30, 2021.

Actions Taken by CalPERS Related to Discount Rate and Other Assumptions . In 2013, the CalPERS ’ Board of Administration (the “Board of Administration ”) approved a recommendation to change the CalPERS amortization and smoothing policies. In 2018, the Board of Administration voted to shorten the period over which CalPERS will amortize actuarial gains and losses from 30 years to 20 years for new pension liabilities. In 2014, the Board of Administration approve d new demographic actuarial assumptions based on a 2013 study of recent experience. The largest impact, applying 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. In 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. In 2016, the Board of Administration voted to lower its discount rate for local agencies per the following schedule:

Fiscal Year
Discount
Rate
2018-19 7.375%
2019-20 7.250
2020-21 7.000

On July 12, 2021, CalPERS announced it had achieved a preliminary investment return of 21.3% for the 12-month period ending June 30, 2021. Under the Funding Risk Mitigation Policy approved by the CalPERS Board of Administration in 2015, the double -digit return triggered a November 2021 reduction in the discount rate from 7.00% to 6.80%.

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 l iabilities.

Active members hired after January 1, 2013, under PEPRA will also see their contribution rates rise. PEPRA included certain other provisions to try to minimize pension costs for covered employees. The three -year reduction of the discount rate will result in average employer rate increases of about 1 percent to 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 employer s will see a 30 to 40 percent increase in their current unfunded accrued liability payments. These payments are made to amortize unfunded liabilities over 20 years to bring the pension fund to a fully funded status over the long-term.

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Fiscal Year 2020 -21 investment returns and changes to the discount rate and other assumptions, including demographic changes, will be reported on the June 30, 2021 CalPERS actuarial reports. These changes, including the newly determined discount rate, will be reflected in contribution levels for cities, counties, and special districts in Fiscal Year 2023-24.

Asset Volatility Ratio (AVR) . Plans that have higher asset -to-payroll ratios experience more volatile employer contributions (as a percentage of payroll) due to investme nt return. For example, a plan with an asset-to-payroll ratio of 8 may experience twice the contribution volatility due to investment return volatility, than a plan with an asset-to-payroll ratio of 4. Shown below is the asset volatility ratio for the Miscellaneous Plan which measure the plan’s current contribution volatility. It should be noted that this ratio is a measure of the current situation. It increases over time but generally tends to stabilize as the plan matures.

Liability Volatility Ratio (LVR). Plans that have higher liability -to-payroll ratios experience more volatile employer contributions (as a percentage of payroll) due to investment return and changes in liability. For example, a plan that has a higher LVR experience more volatile employer contribution (as a percentage of payroll) due to changes in liability. For example, a plan with LVR of 8 is expected to have twice the contribution volatility of a plan with LVR of 4 when there is a change in accrued liability, such as when there is a change in actuarial assumptions. It should be noted that this ratio indicates a longer-term potential for contribution volatility, since the AVR, described above, will tend to move closer to the LVR as the funded status approaches 100%.

Rate Volatility
Miscellaneous
Plan* Safety Plan*
Market Value of Assets $76,461,330 $11,225,642
Payroll 8,484,551 --
Asset Volatility Ratio (AVR) 9.0 N/A
Accrued Liability 113,717,205 19,193,302
Liability Volatility Ratio (LVR) 13.4 N/A

* As of June 30, 2020
Source: CalPERS Annual Valuation Report as of June 30, 2020.

Deferred Compensation Plan. The City offers a deferred compensation plan (the “Plan”), created in accordance with the Internal Revenue Code Section 457, to its employees. Amounts deferred may no t be paid to the employee during employment with the City, except for a catastrophic circumstance creating an undue financial hardship for the employee. The Plan is administered by an independent financial institution that has fiduciary responsibilities ov er the Plan assets. Consistent with the amended IRC Section 457, which took effect on January 1, 1997, the City no longer reports the Plan assets and liabilities on its financial statements.

Other Post-Employment Benefits (OPEB)

Plan Description. In addition to the retirement plan described in Note 10, the City provides healthcare and life insurance benefits, in accordance with memorandum of understandings, to eligible retired employees. The City joined and contributed to CalPERS California Employers ’ Retiree Benefit Trust ( “CERBT”) Fund. As of June 2018, there is no separate audited financial report available for the said plan.

Employees Covered. At the June 30, 2020 measurement date, the following employees were covered by the benefit terms for each Plan:

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Active employees 113
Transferred and terminated employees 30
Retired employees and beneficiaries 111
Total 254

Source: City of Lynwood.

Contributions. The City contributed $1,170,498 during the measurement period and $1,245,311 during the fiscal year ended June 30, 2021.

Changes in OPEB Liability of the District. The changes in OPEB liability of the City as of June 30, 2019 measurement date, is shown in the following table:

CHANGES IN TOTAL OPEB LIABILITY
City of Lynwood

Total OPEB Liability
Balance at June 30, 2018 $27,299,477
Service Cost 509,557
Interest 1,837,851
Changes of assumptions or other inputs (503,935)
Benefit payments (1,163,219)
Net changes 680,254
Balance at June 30, 2019 $27,979,731

Source: City of Lynwood - 2020-21 Audit Report.

OPEB Expense. For the year ended June 30, 2021, the City recognized OPEB expenses of $1,671,742. See Note 10 to the City ’s audited financial statements for the fiscal year ending June 30, 2021 attached hereto as Appendix A for more information.

General Fund Long-Term Indebtedness

The following table shows the outstanding long -term obligations of the City and the Authority payable from the City’s general fund.

Governmental Activities Final Maturity
Original Par
Amount
Par Amount
Outstanding

2017 Lease Revenue Bonds September 1, 2035 7,685,000 6,015,567 2019A PFA Lease Revenue Bonds October 1, 2040 8,465,000 8,013,703 2019B PFA Lease Revenue Bonds October 1, 2040 13,955,000 13,643,666 2020A PFA Lease Revenue Bonds October 1, 2040 13,500,000 13,388,185 Total $85,615,000 $78,086,901

2017 Lease Revenue Bonds. In April 2017, the City issued $7,685,000 Lease Revenue Bonds to current refund Lynwood Public Financing Authority 2003 Lease Revenue Refunding Bonds Series A and B, to finance the costs of the 2017 capital improvements projects (“ 2017 Project”), and to pay for the cost of issuance. Interest on the bonds is payable semi -annually each March 1 and September 1, beginning September 1 , 2017 at a rate of 3.72% annum.

Principals matures each September 1 beginning 2017 and maturing in 2035. The refunding resulted in economic gain in the amount of $60,285 and the saving in debt service in the amount of $74,625. The principal balance outstanding at June 30, 2021 was $6,015,567.

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2019 Lease Revenue Bonds . On November 26, 2019 , the Lynwood Public Financing Authority issued $ 8,465,000 Lynwood Public Financing Authority Lease Revenue Refunding Bonds, Series 2019A (federally taxable) to provide funds to refund Lease Revenue Bonds, 2010 Series A (Civic Center Improvement Project), and to pay cost of issuance of the bonds. Interest will be payable on April 1, and October 1 of each year commencing April 1, 2020. Interest rate on the bonds will be payable on June 1 and October 1 of each year commencing October 1, 2020 to 2040. Interest rates on the bonds vary between 2.153% and 3.961%. The principal balance outstanding at June 30, 2021, including unamortized discount of $11,297 was $8,013,703.

On N ovember 26, 2019, the Lynwood Public Financing Authority issued $13,955,000 Lynwood Public Financing Authority Lease Revenue Refunding Bonds, Series 2019B (tax - exempt) to provide funds to finance a portion of the costs associated with certain park improvements within the City limits and to pay cost of issuance of the bonds. Interest will be payable on April 1, and October 1 of each year commencing April 1, 2020. Interest rate on the bonds will be payable on June 1 and October 1 of each year commencing October 1, 2020.

Interest rates on the bonds vary between 2.750% and 3.150%. The principal balance outstanding at June 30, 2021, including unamortized discount of $311,334 was $13,643,666.

2020 Lease Revenue Bonds . On December 10, 2020, the City issued the $13,500,000 Lynwood Public Financing Authority Lease Revenue Bonds Series 2020A to provide funds to finance working capital for the City’s General Fund or such other purposes as the City may determine including public capital improvements and to fund a debt service reserve fund for the bonds, and to pay costs of issuance of the bonds. Interest on the bonds is payable semiannually on April 1, and October 1 of each year commencing April 1, 202 1. Interest rates on t he bonds vary between 1.793% and 4.195%. The principal balance outstanding at June 30, 2021, including unamortized discount of $111,815 was $13,388,185.

See Note 8 to the City ’s audited financial statements for the fiscal year ending June 30, 2021 attached hereto as Appendix A for more information.

Direct and Overlapping Bonded Debt

Set forth on the following page is a direct and overlapping debt report for the City (the “Debt Report”) prepared by California Municipal Statistics, Inc. and dated as of May 1, 2022. The Debt Report is included for general information purposes only. The City has not reviewed the Debt Report for completeness or accuracy and makes no representations in connection therewith.

The Debt Report generally includes long term obliga tions 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 necessari ly obligations secured by land within the City. In many cases long -term obligations issued by a public agency are payable from the general fund or other revenues of such public agency. The total 2021-22 assessed valuation of $ 4,120,196,768 reflected in t he Debt Report is provided by California Municipal Statistics, Inc. Neither the City, the Authority nor the Underwriter has verified this information.

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TABLE 13
City of Lynwood
Direct and Overlapping Debt Statement
(as of May 1, 2022)

2021-22 Assessed Valuation: $4,120,196,768

OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable Debt 5/1/22 Metropolitan Water District 0.121% $24,412
Compton Community College District 16.181 17,679,496
Los Angeles Community College District 0.006 248,791
Compton Unified School District 0.722 1,745,823
Los Angeles Unified School District 0.007 753,904
Lynwood Unified School District 98.242 120,801,783
TOTAL GROSS OVERLAPPING TAX AND ASSESSMENT DEBT $141,254,209 Less: Los Angeles Unified School District General Obligation Bonds, Election of 2005, Series J (2010) Qualified School Construction Bonds:

Election of 2005, Series H (2009) Qualified School Construction Bonds:

Amount accumulated in Interest and Sinking Fund and Set Asides for Repayment 10,841 TOTAL NET OVERLAPPING TAX AND ASSESSMENT DEBT $141,243,368

DIRECT AND OVERLAPPING GENERAL FUND DEBT:

Los Angeles County General Fund Obligations 0.233% $6,614,118 Los Angeles County Superintendent of Schools Certificates of Participation 0.233 9,255 Compton Unified School District Certificates of Participation 0.722 210,066 Los Angeles Unified School District Certificates of Participation 0.007 8,450 Lynwood Unified School District Certificates of Participation 98.242 15,988,886 City of Lynwood General Fund Obligations 100.000 40,861,044 (1) Los Angeles County Sanitation District No. 1 Authority 11.307 111,154 TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT $63,802,973

OVERLAPPING TAX INCREMENT DEBT (Successor Agency): 100.000% $38,300,000

GROSS COMBINED TOTAL DEBT $243,357,182 (2)
NET COMBINED TOTAL DEBT $243,346,341

Ratios to 2021-22 Assessed Valuation:

Total Gross Overlapping Tax and Assessment Debt ............. 3.43% Total Net Overlapping Tax and Assessment Debt ................. 3.43% Total Direct Debt ($40,861,044) .......................................... 0.99% Gross Combined Total Debt ................................................... 5.91% Net Combined Total Debt ....................................................... 5.91%

Ratios to Redevelopment Successor Agency Incremental Valuation ($1,236,716,919) Overlapping Tax Increment Debt ........................................... 3.10% ____________________________________
(1) Excludes issue to be sold.
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations.

Source: California Municipal Statistics, Inc.

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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.

Limitations on Revenues

Article XIIIA of the California Constitution . Article XIIIA of the State Constitution, adopted and known as Proposition 13, was a pproved by the voters in June 1978 and has been amended on occasions, including most recently on November 7, 2000 to reduce the voting percentage required for the passage of school bonds. Section 1(a) of Article XIIIA limits the maximum ad valorem tax on real property to one percent of “full cash value,” and provides that such tax shall be collected by the counties and apportioned according to State statutes. Section 1(b) of Article XIIIA provides that the one -percent limitation does not apply to ad valor em taxes levied to pay interest and redemption charges on (i) indebtedness approved by the voters prior to July 1, 1978, or (ii) bonded indebtedness for the acquisition or improvement of real property approved on or after July 1, 1978, by two -thirds of the votes cast by the voters voting on the proposition, or (iii) bonded indebtedness incurred by a school district or community college district or county office of education for the construction, reconstruction, rehabilitation or replacement of school facilities, including the furnishing and equipping of school facilities or the acquisition or lease of real property for school facilities, approved by 55% of the voters voting on the proposition.

The tax for payment of the City ’s general obligation bonds falls within the exception for bonds approved by a two-thirds vote.

Section 2 of Article XIIIA defines “full cash value” to mean the county assessor’s valuation of real property as shown on the 1975 -76 Fiscal Year tax bill, or thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred. The full cash value may be adjusted annually to reflect inflation at a rate not to exceed two percent per year, or to reflect a reduction in the consumer price index or comparable data for the area under taxing jurisdiction, or may be reduced in the event of declining property value caused by substantial damage, destruction or other factors. See “Litigation Relating to Two Percent Limitation” below. Legislation implementing Article XIIIA provides that, notwithstanding any other law, local agencies may not levy any ad valorem property tax except the 1% base tax levied by each County and taxes to pay debt service on indebtedness approved by the voters as described above. Such legislation further provides that each county will levy the maximum tax permitted by Article XIIIA, which is $1.00 per $100 of assessed market value.

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

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

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Articles XIIIC and XIIID of the California Constitution.

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

On November 2, 2010, California voters approved Proposition 26, 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 into 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, Charges and Assessments . 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 servic es and programs. These provisions include, among other things, (i) a prohibition against assessments which exceed the reasonable cost of the proportional special benefit conferred on a parcel, (ii) a requirement that assessments must confer a “special benefit,” as defined in Article XIIID, over and above any general benefits conferred, (iii) a majority protest procedure for assessments which involves the mailing of notice and a ballot to the record owner of each affected parcel, a public hearing and the tab ulation of ballots weighted according to the proportional financial obligation of the affected party, and (iv) a prohibition against fees and charges which are used for general governmental services, including police, fire or library services, where the service is available to the public at large in substantially the same manner as it is to property owners.

Reduction or Repeal of Taxes, Fees and Charges. Article XIIIC also removes limitations on the initiative power in matters of reducing or repealing local taxes, assessments, fees or charges. No assurance can be given that the voters of the City will not, in the future, approve an initiative or initiatives which reduce or repeal local taxes, assessments, fees or charges currently comprising a substantial part of the City’s General Fund. If such repeal or reduction occurs, the City’s ability to pay debt service on the Bonds could be adversely affected.

Burden of Proof. Article XIIIC provides that local government “bears the burden of proving by a preponderance of the evidence that a levy, charge, or other exaction is not a tax, that the amount is no more than necessary to cover the reasonable costs of the governmental activity, and that the manner in which those costs are allocated to a payor bear a f air or reasonable relationship to the payor ’s burdens on, or benefits received from, the governmental activity. ” City Council Regular Meeting - Page 360 of 473

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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, charges or taxes in the future that it may need to meet increased expenditure needs.

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

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

Expenditures and Appropriations

In addition to the limits Article XIIIA imposes on property taxes that may be collected by local governments, certain other revenues of the State and local governments are subject to an annual “appropriations limit” or “Gann Limit” imposed by Article XIIIB of the State Constitution, which effectively limits the amount of such revenues that government entities are permitted to spend. Article XIIIB, approved by the voters in June 1979, was modified substantially by Proposition 111 in 1990. The appropriations limit of each government entity applies to “proceeds of taxes,” which consist of tax revenues, state subventions and certain other funds, including proceeds from regulatory licenses, user charges or other fees to the extent that such proceeds exceed “the cost reasonably borne by such entity in providing the regulation, product or service.” “Proceeds of taxes ” exclude tax refunds and some benefit payments such as unemployment insurance. No limit is imposed on the appropriation of funds which are not “proceeds of taxes,” such as reasonable user charges or fees, and certain other non-tax funds.

Article XIIIB also does not limit appropriation of local revenues to pay debt service on bonds existing or authorized by January 1, 1979, o r subsequently authorized by the voters, appropriations required to comply with mandates of courts or the federal government, appropriations for qualified capital outlay projects, and appropriation by the State of revenues derived from any increase in gasoline taxes and motor vehicle weight fees above January 1, 1990, levels. The appropriations limit may also be exceeded in cases of emergency; however, the appropriations limit for the three years following such emergency appropriation must be reduced to the extent by which it was exceeded, unless the emergency arises from civil disturbance or natural disaster declared by the Governor, and the expenditure is approved by two -thirds of the legislative body of the local government.

The State and each local government entity has its own appropriations limit. Each year, the limit is adjusted to allow for changes, if any, in the cost of living, the population of the jurisdiction, and any transfer to or from another government entity of financial responsibility fo r providing services. Each school district is required to establish an appropriations limit each year.

In the event that a school district ’s revenues exceed its spending limit, the district may increase its appropriations limit to equal its spending by taking appropriations limit from the State.

Proposition 111 requires that each agency ’s actual appropriations be tested against its limit every two years. If the aggregate “proceeds of taxes ” for the preceding two -year period City Council Regular Meeting - Page 361 of 473

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exceed the aggregate limit, the excess must be returned to the agency ’s taxpayers through tax rate or fee reductions over the following two years.

Statutory Revenue Limitations - Proposition 62

Proposition 62 was adopted by the voters at the November 4, 1986, general election and (a) requires that any new or higher taxes for general governmental purposes imposed by local governmental entities such as the City be approved by a two -thirds vote of the governmental entity’s legislative body and by a majority vote of the voters of the governmental entity voting in an election on the tax, (b) requires that any special tax (defined as taxes levied for other than general governmental purposes) imposed by a local governmental entity be approved by a two - thirds vote of the voters of the gove rnmental entity voting in an election on the tax, (c) restricts the use of revenues from a special tax to the purposes or for the service for which the special tax was imposed, (d) prohibits the imposition of ad valorem taxes on real property by local governmental entities except as permitted by Article XIIIA, (e) prohibits the imposition of transaction taxes and sales taxes on the sale of real property by local governmental entities, and (f) requires that any tax imposed by a local governmental entity on o r after August 1, 1985, be ratified by a majority vote of the voters voting in an election on the tax within two years of the adoption of the initiative or be terminated by November 15, 1988.

Following its adoption by the voters, various provisions of Pro position 62 were declared unconstitutional at the appellate court level . On September 28, 1995, however, the California Supreme Court, in Santa Clara City Local Transportation Authority v . Guardino, upheld the constitutionality of the portion of Proposition 62 requiring a two –thirds vote in order for a local government or district to impose a special tax and, by implication, upheld a parallel provision requiring a majority vote in order for a local government or district to impose any general tax. The Guardino decision did not address whether it should be applied retroactively.

In response to Guardino, the California Legislature adopted Assembly Bill 1362, which provided that Guardino should apply only prospectively to any tax that was imposed or increased by an ordinance or resolution adopted after December 14, 1995. Assembly Bill 1362 was vetoed by the Governor; hence the application of the Guardino decision on a retroactive basis remains unclear.

Proposition 62, as an initiative statute, does not have the same level of authority as a constitutional initiative. It is analogous to legislation adopted by the State Legislature, except that it may be amended only by a vote of the State ’s electorate. However, Proposition 218, as a constitutional amendment, is applicable to charter cities and supersedes many of the provisions of Proposition 62.

Proposition 1A

Proposition 1A, proposed by the Legislature in connection with the State ’s Fiscal Year 2004-2005 Budget, approved by the voters in November 20 04 and generally effective in fiscal year 2006-2007, provides that the State may not reduce any local sales tax rate, limit existing local government authority to levy a sales tax rate or change the allocation of local sales tax revenues, subject to certain exceptions. Proposition 1A generally prohibits the State from shifting to schools or community colleges any share of property tax revenues allocated to local governments for any fiscal year, as set forth under the laws in effect as of November 3, 2004.

Any change in the allocation of property tax revenues among local governments within a county must be approved by two -thirds of both houses of the Legislature. Proposition 1A provides, City Council Regular Meeting - Page 362 of 473

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however, that beginning in fiscal year 2008-2009, the State may shift to schools and community colleges up to 8% of local government property tax revenues, which amount must be repaid, with interest, within three years, if the Governor proclaims that the shift is needed due to a severe state financial hardship, the shift is approved by two-thirds of both houses and certain other conditions are met. The State may also approve voluntary exchanges of local sales tax and property tax revenues among local governments within a county. Proposition 1A also provides that if the State reduces the motor vehicle license fee rate currently in effect, 0.65 percent of vehicle value, the State must provide local governments with equal replacement revenues. Further, Proposition 1A requires the State, beginning July 1, 2005, to suspend Stat e mandates affecting cities, counties and special districts, excepting mandates relating to employee rights, schools or community colleges, in any year that the State does not fully reimburse local governments for their costs to comply with such mandates.

Proposition 1A may result in increased and more stable City revenues. The magnitude of such increase and stability is unknown and would depend on future actions by the State.

However, Proposition 1A could also result in decreased resources being avail able for State programs. This reduction, in turn, could affect actions taken by the State to resolve budget difficulties. Such actions could include increasing State taxes, decreasing spending on other State programs or other action, some of which could be adverse to the City.

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 amended the state Constitution to eliminate or reduce the State’s authority to (i) temporarily shift property taxes from cities, counties and special districts to schools, (ii) use vehicle license fee revenues to reimburse local governments for State-mandated costs (the State will have to use other revenues to reimburse local governments), (iii) redirect property tax increment from redevelopment agencies to any other local government, (iv) use State fuel tax revenues to pay debt service on State transportation bonds, or (v) borrow or change the distribution of State fuel tax revenues .

This Proposition was intended to, among other things, stabilize local government revenue sources by restricting the State’s control over local property taxes.

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 Fiscal Year 1988-89, are allocated as follows: (i) each jurisdiction will receive up to 102% of its prior year State –assessed revenue; and (ii) 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 benefit of the excess revenues by a specified formula . This provision applies to all Unitary Property except railroads, whose 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 of 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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Possible Future Initiatives

Articles XIIIA, XIIIB, XIIIC and XIIID and Propositions 62, 111, 218 and 1A were each adopted as measures that qualified for the ballot pursuant to the State ’s initiative process. From time to time other initiative measures could be adopted, further affecting revenues of the City or the City ’s ability to expend revenues. There is no assurance that the California electorate or Legislature will not at some future time approve additional limitations.

BOND OWNERS’ RISKS

The following describes certain special considerations and risk factors affecting the payment of and security for the Bonds. The following discussion is not meant to be an exhaustive list of the risks associated with the purchase of any Bonds and does not necessarily reflect the relative importance of the various risks. Potential investors in the Bonds are advised to consider the following special factors along with all other information in this Official Statement in evaluating the Bonds. There can be no assurance that other considerations will not materialize in the future.

The Bonds are limited obligations of the Authority payable solely from and secured solely by the Revenues pledged therefor under the Indenture, together with amounts on deposit from time to time in certain funds and accounts held by the Trustee. Revenues consist primarily of Lease Payments. If for any of the reasons described below, or for any other reason, the Authority does not receive sufficient Lease Payments to pay debt service on the Bonds, the Authority will not be obligated to utilize any other of its funds, other than amounts on deposit in certain fu nds and accounts established under the Indenture, to pay debt service on the Bonds.

The Lease Payments are payable from all funds lawfully available to the City , which includes is the Pension Override Tax . The City has the capacity to enter into other ob ligations that may constitute additional obligations against its revenues. In the event the City ’s revenue sources are less than its total obligations, the City could choose to fund other obligations before making Lease Payments; in that case, the failure to pay Lease Payments in full would constitute a default under the Lease Agreement . The same result could occur if, because of State constitutional limits on expenditures, the City is not permitted to appropriate and spend all of its available revenues; in that case, the failure to pay Lease Payments in full would constitute a default under the Lease Agreement. The City must adopt a balanced Budget each year, and has covenanted in the Lease Agreement to budget for, appropriate and make the Lease Payments in each year that it has possession and use of the Leased Property.

Abatement of Lease Payments

Under California law, the obligation of the City to make Lease Payments is contingent upon the availability of th e Leased Property for use and occupancy by the City. The Lease Payments will be abated proportionately during any period in which by reason of material damage or destruction, there is substantial interference with the use and occupancy of any portion of t he Leased Property by the City, and such abatement will continue until substantial completion of the work of repair or replacement of the portion of the Leased Property damaged or destroyed; provided that, in determining the amount of abatement. Any abatement of Lease Payments could affect the Authority’s ability to pay debt service on the Bonds.

In the event Lease Payments are abated, no assurances can be given that moneys on deposit in the Revenue Fund or the proceeds of property insurance (which is not expected to be City Council Regular Meeting - Page 364 of 473

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available to cover earthquake damage) will be sufficient to pay the debt service on the Bonds during the period of such abatement. The City is neither required nor will it maintain rental interruption insurance with respect to the Leased Property.

Notwithstanding the provisions of the Lease Agreement specifying the extent of abatement in the event of the City ’s failure to have full use and occupancy of the Leased Property, such provisions may be superseded by operat ion of law, and, in such event, the resulting Lease Payments of the City may not be sufficient to pay all of the remaining principal and interest with respect to the Bonds.

Limitation on Remedies

The enforcement of a ny remedies provided for in the Lease Agreement and in the Indenture could prove to be both expensive and time-consuming. The Lease Agreement provides that upon the occurrence and during the continuance of the City ’s failure to deposit with the Trustee any Lease Payments when due, the bankruptcy of the City, or if the City breaches any other terms, covenants, conditions or agreements contained in the Lease Agreement (subject to a cure period as described in the Lease Agreement), neither the Authority nor th e Trustee may accelerate the Lease Payments or otherwise declare any Lease Payments not then in default to be immediately due and payable, and the Authority shall have no right to re-lease any portion of the Leased Property that constitutes a City street. See “APPENDIX B – SUMMARY OF PRINCIPAL LEGAL DOCUMENTS.”

In addition to the limitations on remedies contained in the Lease Agreement and the Indenture, the rights and remedies provided in those documents may be limited by and are subject to provisions of federal bankruptcy laws, as now or hereafter enacted, and to other laws or equitable principles that may affect creditors ’ rights generally. The various legal opinions to be delivered concurrently with the issuance of the Bonds will be qualified as to th e enforceability of the various legal instruments by limitations imposed by State and federal laws, rulings and decisions affecting remedies, and by bankruptcy, reorganization or other laws of general application affecting the enforcement of creditors ’ rights, including equitable principles. See “– Bankruptcy Risks” below.

No Acceleration Upon Default

In the event of a default, there is no remedy of acceleration of the total Lease Payments for the term of the Lease. Any suit for money damages would be subject to the legal limitations on remedies against cities and counties in the State, including a limitation on enforcement of judgments against funds needed to serve the public welfare and interest. See “APPENDIX B – SUMMARY OF PRINCIPAL LEGAL DOCUMENTS.”

Early Prepayment Risk

Early payment of the Lease Payments and early prepayment of the Bonds may occur in whole or in part, without premium, from the proceeds of title insurance, on any date, if the Leased Property, or a portion thereof, is lost, destroyed or damaged beyond repair or taken by eminent domain and if the City exercises it right to prepay the Lease Payments in whole or in part pursuant to the provisions of the Lease Agreement and the Indenture.

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Bankruptcy Risks

The rights of the owners of the Bonds and the enforceability of the Authority ’s obligation to make payments on the Bonds may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights under currently existing law or laws enacted in the future, and may also be subject to the exercise of judicial discretion under certain circumstances.

Under existing law, the City is eligible to file for bankruptcy. Sh ould the City file for bankruptcy, there could be adverse effects on the holders of the Bonds. In a bankruptcy of the City, the Authority or the Trustee as its assignee and the owners of the Bonds may be prohibited from taking any action against the City, any official of the City, or any property of the City (including the Leased Property) to enforce the terms of the Lease Agreement, unless the consent of the bankruptcy court is first obtained. The bankruptcy court is not required to give its consent. This prohibition on action may even prohibit the Trustee from using funds in its possession to make payments on the Bonds. As a result, Owners may experience temporary or permanent delays in the payment of the Bonds.

In a bankruptcy case, a plan of adjustment for the City could be confirmed that would allow for enforcement of the Lease Agreement, but the priority, interest rate, payment terms, collateral, maturity dates, payment sources, covenants and other terms or provisions of the Lease Agreement and the Bo nds may be altered by the bankruptcy court. Such a plan could be confirmed even over the objections of the Authority or the Trustee as its assignee and the owners of the Bonds, and without their consent. Additionally, the resulting plan could adjust some o r all of the City’s financial obligations, which include the City ’s lease payment obligations under the Lease Agreement and the City’s obligation to fund certain retirement benefits.

The adjustment plans approved by the Bankruptcy Courts in connection wi th the bankruptcies of the cities of Vallejo, San Bernardino and Stockton resulted in significant reductions in the amounts payable by the cities under lease revenue obligations substantially identical or similar to the Bonds. The City can provide no assur ance about the outcome of the bankruptcy cases of other California municipalities of the nature of any adjustment plan it if were to file for bankruptcy.

In addition, if the Lease Agreement is determined to constitute a “true lease ” by the bankruptcy court (rather than a financing lease providing for the extension of credit), the City could choose not to perform under the Lease Agreement and the claim of the owners of the Bonds could be substantially limited. An allowable claim could be substantially less than the amount of the Bonds outstanding, resulting in the owners of the Bonds suffering a substantial loss.

The opinions of counsel, including Bond Counsel, delivered in connection with the issuance and delivery of the Bonds will be so qualified. Bankruptcy proceedings, or the exercising of powers by the federal or state government, if initiated, could subject the owners of the Bonds to judicial discretion and interpretation of their rights in bankruptcy or otherwise and consequently may entail risks of delay, limitation, or modification of their rights.

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State Audits

Pursuant to the California State Auditor’s “high -risk local government agency audit program,” the California State Auditor released its audit report 2018 -803 regarding the City (the “State Audit Report”) in December 2018. According to the State Audit Report, the audit alleged that the City was a “high -risk city” due to its financial and organizational risks. Specifically, the State Audit Report alleged that t he City’s general fund operating revenues were projected to exceed its operating expenditures in Fiscal Year 2018-19, that the City had violated State law by using restricted funds to pay for certain personnel costs, and that organizational inefficiencies (for example, high turnover in key leadership positions and an inability to effectively measure staffing needs) limited the City’s ability to provide public services. The State Audit Report also included several recommendations for improvements.

A follow-on report for the City, Report 2021 -808, was released by the California State Auditor in September 2021, and concluded the City remained high-risk. It acknowledged that the City had taken actions to address risk areas identified in the State Audit Report , but there was uncertainty regarding the City’s long -term fiscal outlook. It further alleged the City had violated State law by subsidizing the General Fund with restricted revenue from water and sewer fees.

The City also failed to develop a strategic plan or other efforts to provide meaningful guidance to its departments on aligning resources with Citywide goals and priorities. Certain recommendations were proposed by the California State Auditor in the follow-up report.

The City has reviewed the State Audit Report and follow -on report, and taken certain actions to address the alleged deficiencies included therein. More specifically, in response to the State Audit, the City Manager submitted a Corrective Action Plan on November 22, 2021, which outlined and itemized corrective actions towards the State Audit findings. These corrective actions include updating the City’s policies to beef up the City’s internal controls and preparing a new cost allocation to properly substantiate all inter -fund charges/tra nsfers. Moreover, both the City Manager and the Finance Director of the City have been recently hired and were not employees of the City during the time periods described in the reports.

State Law Limitations on Appropriations

Article XIIIB of the California Constitution limits the amount that local governments can appropriate annually. The ability of the City to make Lease Payments may be affected if the City should exceed its appropriations limit. The State may increase the appropriation limit of cities in the State by decreasing the State ’s own appropriation limit. The City does not anticipate exceeding its appropriations limit in the foreseeable future. See “CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING CITY REVENUES AND APPROPRIATIONS – Limitations on Revenues – Expenditures and Appropriations.”

Limitations on Taxes and Fees

General. 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 State Constitution. Based upon the outcome of an election by the voters, such fees, charges, assessments 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 . The City has assessed the potential impact on its financial condition of the provisions of Article XIIIC and Article XIIID of the State Constitution respecting the imposition and increase of taxes, fees, charges and assessments and does not believe that an election by the voters to reduce or eliminate the City Council Regular Meeting - Page 367 of 473

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imposition of certain existing fees, charges, assessments and taxes would substantially affect its financial condition. However, the City believes that if the initiative power was exercised so that all local taxes, assessments, fees and charges that may be subject to Article XIIIC and Article XIIID of the State Constitution are eliminated or substantially reduced, the financial condition of the City, including its General Fund, could be materially adversely affected.

Although the City does not currently anticipate that the provisions of Article XIIIC and Article XIIID of the State Constitution would adversely affect its ability to pay Lease Payments and its other obligations payable from the General Fund, no assurance can be given regarding the ultimate interpretation or effect of Article XIIIC and Article XIIID of the State Constitution on the City’s finances. See “CONSTITUTIONAL AND STAT UTORY LIMITATIONS ON TAXES AND APPROPRIATIONS.”

Pension Tax Override. On April 9, 1946, the voters in the City approved the Pension Tax Override, which is accounted for in a special fund, separate and apart from the General Fund, and available only for its authorized purposes. In furtherance of its authorized purposes, under the Lease Agreement, the City pledges the Pension Tax Override to the payment of the Lease Payments. In accordance with a settlement of a lawsuit relating to the Pension Tax Override, the City fixed the rate of tax at $0.125 per $100 of assessed valuation. See “CITY FINANCIAL INFORMATION – Pension Tax Override” for additional information regarding the City’s ability to levy and collect the Pension Tax Override.

Additional Obligations of the City

The City has existing obligations payable from its General Fund . See “APPENDIX A – “FINANCIAL, ECONOMIC AND DEMOGRAPHIC INFORMATION FOR THE CITY – Outstanding General Fund Lease Obligations. ” The City is permitted to enter into other oblig ations which constitute additional charges against its revenues without the consent of Owners of the Bonds.

To the extent that additional obligations are incurred by the City, the funds available to pay Lease Payments may decline.

The Lease Payments and other payments due under the Lease Agreement (including payment of costs of repair and maintenance of the Leased Property , taxes and other governmental charges levied against the Leased Property ) are payable from funds lawfully available to the City. If the amounts that the City is obligated to pay in a fiscal year exceed the City’s revenues for such year, the City may choose to make some payments rather than making other payments, including Lease Payments and Additional Rental, based on the perceived needs of the City. The same result could occur if, because of California Constitutional limits on expenditures, the City is not permitted to appropriate and spend all of its available revenues or is required to expend available revenues to preserve the public health, safety and welfare.

Property Taxes

Levy and Collection . Any reduction in the tax rate or the implementation of any constitutional or legislative property tax decrease could reduce the City’s property tax revenues, and accordingly, could have an adverse impact on the ability of the City to make Lease Payments.

Likewise, delinquencies in the payment of property taxes could have an adverse effect on the City’s ability to pay principal of and interest on the Bonds when due.

Reduction in Inflationary Rate. Article XIIIA of the California Constitution provides that the full cash value base of real property used in determining assessed value may be adjusted City Council Regular Meeting - Page 368 of 473

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from year to year to reflect the inflationary rate, not to exceed a 2% increase for any given year, or may be reduced to reflect a reduction in the consumer price index or comparable local data .

See “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS.” Such measure is computed on a calendar year basis . Because Article XIIIA limits inflationary assessed value adjustments to the lesser of the actual inflationary rate or 2%, there have been years in which the assessed values were adjusted by actual inflationary rates, which were less than 2% . Since Article XIIIA was approved , the annual adjustment for inflation has fallen below the 2% limitation a limited number of times.

The City is unable to predict if any adjustments to the full cash value base of real property within the City, whether an increase or a reduction, will be realized in the future.

Appeals of Assessed Values. There are two types of appeals of assessed values that could adversely impact property tax revenues:

Proposition 8 Appeals. Most of the appeals that might be filed in the City would be based on Section 51 of the Revenue and Taxation Code, which requires that for each lien date the value of real property must be the lesser of its base year value annually adjusted by the inflation factor pursuant to Article XIIIA of the State Constitution or its fu ll cash value, taking into account reductions in value due to damage, destruction, depreciation, obsolescence, removal of property or other factors causing a decline in value.

Under California law, property owners may apply for a reduction of their prop erty tax assessment by filing a written application, in form prescribed by the State Board of Equalization, with the appropriate county board of equalization or assessment appeals board. In most cases, the appeal is filed because the applicant believes th at present market conditions (such as residential home prices) cause the property to be worth less than its current assessed value. These market-driven appeals are known as “Proposition 8” appeals.

Any reduction in the assessment ultimately granted as a Proposition 8 appeal applies to the year for which application is made and during which the written application was filed. These reductions are often temporary and are adjusted back to their original values when market conditions improve. Once the property has regained its prior value, adjusted for inflation, it once again is subject to the annual inflationary factor growth rate allowed under Article XIIIA.

Base Year Appeals . A second type of assessment appeal is called a base year appeal, where the property owners challenge the original (basis) value of their property .

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

No assurance can be given that property tax appeals in the future will not significantly reduce the City’s property tax revenues.

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Public Health Emergencies

In recent years, public health authorities have warned of threats posed by outbreaks of disease and other public health threats. The spre ad of the novel strain of coronavirus called COVID-19 is having significant negative impacts throughout the world, including within the City.

The COVID -19 pandemic has negatively affected travel, commerce, and is widely expected to continue to negatively affect economic output worldwide and within the City. See “BOND OWNERS ’ RISK – U.S. Economic Recession. ” While federal and state governments (including California) have enacted legislation and taken executive actions seeking to mitigate the negative public health and economic impacts of the COVID -19 pandemic, the City offers no assurances that these interventions will have the intended effects. These negative economic impacts may reduce or otherwise negatively affect revenues to the City’s General Fund and result in unexpected increases in expenditures. See “APPENDIX A – FINANCIAL, ECONOMIC AND DEMOGRAPHIC INFORMATION FOR THE CITY – CITY FINANCES – Management Discussion Regarding COVID-19 Impacts.” The City cannot predict the magnitude of these impacts on such revenues, but such impacts could be materially adverse.

The financial and operating data contained in this Official Statement are the latest available, but unless otherwise indicated are as of dates and for periods before the economic impact of the COVID-19 pandemic and measures instituted to slow it. Accordingly, they are not necessarily indicative of the current financial condition or future prospects of the City and the region. While the overall potential impact of the COVID -19 pandemic on the City cannot be fully quantified at this time, the continued outbreak of COVID -19 could lead to additional or modified public health restrictions and have an adverse effect on the City ’s operations and financial condition, and the effect could be material. Prospe ctive investors should assume that the restrictions and limitations related to COVID -19, and the current disruption to the national and global economies, will increase at least over the near term, recovery may be prolonged and, therefore, may have an adverse impact on the City’s finances.

Certain Risks Associated with Sales Tax and Other Local Tax Revenues

For fiscal year 2020-21, sales tax revenues were the second largest source of revenue to the City. See “APPENDIX A – FINANCIAL, ECONOMIC AND DEMOGRAPHIC INFORMATION FOR THE CITY – Sales Taxes.” Sales tax revenues are based upon the gross receipts of retail sales of tangible goods and products by retailers with taxable transactions in the City, which could be impacted by a variety of factors.

For example, in times of economic recession, the gross receipts of retailers often decline, and such a decline would cause the sales tax revenues received by the City to also decline. As described further below, there has been volatility in the United States and global financial markets associated with the COVID-19 outbreak, resulting in significant declines and a national and global recession.

In addition, changes or amendments in the laws applicable to the City ’s receipt of sales tax revenues or other local taxes, whether implemented by State legislative action or voter initiative, could have an adverse effect on sales tax revenues received by the City. See “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS – Proposition 218 – Article XIIIC and Article XIIID.”

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For example, many categories of transactions are exempt from the statewide sales tax, and additional categories could be added in the future. Currently, most sales of food products for human consumption are exempt; this exemption, however, does not apply to liquor or to restaurant meals. The rate of sales tax levied on taxable transactions in the City or the fee charged by the California Department of Tax and Fee Administration for administering the City’s sales tax could also be changed.

See “APPENDIX A – FINANCIAL, ECONOMIC AND DEMOGRAPHIC INFORMATION FOR THE CITY – CITY FINANCES – Management Discussion Regarding COVID-19 Impacts.”

Natural Calamities

The City, like all California communities, may be subject to unpredictable seismic activity, wildfires, flood, or other natural disasters . Seismic activity, wildfires, floods and other natural disasters represent a potential risk for damage to buildings, roads, bridges and other property within the City. Such natural calamities may adversely affect economic activity in the City, which could have a negative impact on the City’s finances. Additionally, a natural calamity adversely affecting the Leased Property could have a negative impact on the City’s use of such pro perty, which could result in abatement of Lease Payments. See “– Abatement” above.

Fire Hazards. 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.

Several fires which occurred in 2017 damaged or destroyed property in areas that were not previously considered to be at risk from such events. In November 2018, the Camp Fire occurred in Butte County, California. The Camp Fire is the deadliest and most destructive wildfire in the recorded history of the State burning more than 150,000 acres and destroying more than 11,500 structures, including most of the structures in the City of Paradise, California. Some commentators believe that climate change will lead to even more frequent and damaging wildfires in the future.

In Los Angeles County, wildland fires historically have occurred in the brush-covered hills that frame many communities, including the Palos Verdes Hills, in the southern portion of the City, and south of the City, in what is now Rolling Hills, Rolling Hills Estates, and Palos Verdes Estates.

Small vegetation fires occasionally still occur on these slopes, but the Fire Department is able to respond quickly and minimize threats to adjacent structures. To prevent fires in the City’s hillside areas, the City ’s municipal code allows the Fire Chief broad authority to carry out preventive measures to minimize fire risks.

Droughts. California is subject to droughts from time -to-time, including currently . On April 1, 2015, for the first time in California ’s history, Governor Edmund G. Brown directed the State Water Resources Control Board to implement mandatory water reductions in cities and towns across California to reduce water usage by 25%. After a few wet years which alleviated drought conditions, California is once again in a drought following a dry 2021-22 winter. The City cannot predict or make any representations regarding the effects that the recent (or future) droughts and related conditions had or may have on the value of taxable property within the City, or to what extent the effects the current (or future) droughts may have had or have on economic activity in the City. See also “– Potential Impact of Climate Change” below.

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Hazardous Substances

Owners and operators of real property may be required by law to remedy conditions of the property relating to releases or threatened releases of hazardous substances. The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, sometimes referred to as “CERCLA” or the “Superfund Act,” is the most well-known and widely applicable of these laws, but California laws with regard to hazardous substances area also stringent and similar. Under many of these laws, the owner (or operator) is obligated to remedy a hazardous substance condition of property whether or not the owner (or operator) has anything to do with creating or handling the hazardous substance. Further, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling it . All of these possibilities could significantly and adversely affect assessed values of property in the City and the operations and finances of the City.

Potential Impact of Climate Change

The issue of climate change has become an important factor in water resources planning in the State. There is evidence that increasing concentrations of greenhouse gases have caused and will continue to cause a rise in temperatures around the world, which will result in a wide range of changes in climate patterns. Moreover, there is evidence that a warming trend occurred during the latter part of the 20th century and will likely continue through the 21st century. These changes will have a direct effect on water resources in the State, and numerous studies on climate and water in the State have been conducted to determine the potential impacts. Based on these studies, global warming could result in the following types of water resources impacts in the State, including impacts on the City:

• Changes in the timing, intensity, and variability of precipitation, and an increased amount of precipitation falling as rain instead of as snow,

• Long-term changes in watershed vegetation and increased incidence of wildfires that could affect water quality,

• Sea level rise and an increase in saltwater intrusion,

• Increased water temperatures with accompanying adverse effects on some fisheries,

• Increases in evaporation and concomitant increased irrigation need, and

• Changes in urban and agricultural water demand.

However, other than the general trends listed above, there is no clear scientific consensus on exactly how global warming will quantitatively affect the State’s water supplies.

The City is unable to predict timing or magnitude of the impacts of climate change, if any, or whether they will have a material adverse effect on the business operations or financial condition of the City and the local economy.

COVID-19 Pandemic

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The spread of COVID-19 has impacted governments, businesses and people in a manner that is having negative effects on global and local economies. In response to the pandemic, the City took actions to activate its emergency operations center, temporarily close all non-essential City services, introduced teleworking as and where appropriate, implemented daily screening of all employees, and abided by all state and federal guidelines and orders. The City actively monitors the COVID-19 situation in the communi ty and acts swiftly to issue executive orders to mitigate the spread of the virus. Additionally, the City has forged a strong relationship with the Mendocino County Health Department and local medical clinics to ensure timely sharing of information and coordinated responses to issues.

The City continues to monitor the spread of COVID -19 and is working with local, state, and national agencies to address the potential impact of the pandemic upon the City. There can be no assurances that the spread of COVID-19 and/or responses intended to slow the spread of COVID-19 such as declining business and travel activity, will not materially adversely impact the state and national economies and, accordingly, materially adversely impact the financial condition of the City and the City’s General Fund. In addition, the City may experience increased personnel costs and/or reduced revenues due to the COVID-19 situation and the related impact on economic and other activity in and around the City.

Cyber Security

The City, like many other public and private entities, relies on computer and other digital networks and systems to conduct its operations. As a recipient and provider of personal, private or other sensitive electronic information, the City is potentially subject t o multiple cyber threats, including without limitation hacking, viruses, ransomware, malware and other attacks . No assurance can be given that the City’s efforts to manage cyber threats and attacks will be successful in all cases, or that any such attack will not materially impact the operations or finances of the City. The City is also reliant on other entities and service providers in connection with the administration of the Bonds, including without limitation the County tax collector for the levy and collection of property taxes, and the Trustee.

No assurance can be given that the City and the other entities the City relies on will not be affected by cyber threats and attacks in a manner that may affect the Bond owners.

Litigation

The City is and may become a party to litigation that has the potential to have an impact on the City’s General Fund. Although the City maintains certain insurance policies that provide coverage under certain circumstances and with respect to certain types of incidents, the City cannot predict what types of liabilities may arise in the future and whether these may adversely affect the ability of the City to pay Lease Payments under the Lease Agreement when due.

Secondary Market for Bonds

There can be no guarantee tha t there will be a secondary market for the Bonds or, if a secondary market exists, that any Bonds can be sold for any particular price. Occasionally, because of general market conditions or because of adverse history or economic prospects connected with a particular issue, secondary marketing practices in connection with a particular issue are suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon then-prevailing circumstances. Such prices could be substantially different from the original purchase price.

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TAX MATTERS

The interest on the Bonds is not intended by the Authority to be excluded from gross income for federal income tax purposes. However, in the opinion of Jones Hall, A Professional Law Corporation (“Bond Counsel”), San Francisco, California, interest on the Bonds is exempt from California personal income taxes.

The proposed form of opinion of Bond Counsel with respect to the Bonds to be delivered on the date of issuance of the Bonds is set forth in “APPENDIX D – PROPOSED FORM OF OPINION OF BOND COUNSEL.”

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

CERTAIN LEGAL MATTERS

Jones Hall, A Professional Law Corporation, Bond Counsel, will render an opinion with respect to the validity of the Bonds, the form of which is set forth in “APPENDIX D – PROPOSED FORM OF OPINION OF BOND COUNSEL.”

Certain legal matters will also be passed upon for the City and the Authority by Jones Hall, A Professional Law Corporation, as Disclosure Counsel . Certain legal matters will be passed upon for the City and the Authority by the City Attorney. In addition, certain legal matters will be passed on by Quint & Thimmig LLP , as Underwriter ’s Counsel. Payment of the fees and expenses of Special Counsel, Disclosure Counsel and Underwriter’s counsel is contingent upon execution and delivery of the Bonds.

NO LITIGATION

To the best knowledge of the City, there is no action, suit, proceeding, inquiry or investigation before or by any court or federal, state, municipal or other governmental authority pending and notice of which has been served on and received by the City or, to the knowledge of the City, threatened against or affecting the City or the assets, properties or operations of the City which, if determined adversely to the City or its interests, would have a material and adverse effect upon the consummation of the transactions contemplated by or the validity of the Lease Agreement, the Site Lease or the Indenture, or upon the financial condition, assets, properties or operations of the City.

Neither the City nor the Authority is in default with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or other governmental authority, which default might have consequences that would materially adversely affect the consummation of the transactions contemplated by the Lease Agreement, the Site Lease or the City Council Regular Meeting - Page 374 of 473

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Indenture, or the financial conditions, assets, properties or operations of the City, including but not limited to the payment and performance of the City’s obligations under the Lease Agreement.

RATING[S]

[Add Insured Rating, if applicable] S&P Global Ratings (“S&P”) has assigned a rating of “__” to the Bonds. The rating reflects only the views of S&P and any desired explanation of the significance of such 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).

There is no assurance that such rating will continue for any given period of time or that such rating will not be revised downward or withdrawn entirely by the rating agency, if in the judgment of the rating agency, circumstances so warrant . Any such downward revision or withdrawal of any rating on the Bonds may have an adverse effect on the market price or marketability of the Bonds.

CONTINUING DISCLOSURE

The City (on behalf of the Authority and itself) will covenant for the benefit of owners of the Bonds to provide certain financial information and operating data relating to the City (the “Annual Report”), by not later than nine months after the end of the City’s fiscal year (presently June 30) and commencing April 1, 2023 with the report for the fiscal year ending June 30, 2022, and to provide notices of the occurrence of certain listed events.

These covenants have been made in order to assist the Underwriter in complying with Securities Exchange Commission Rule 15c2 -12(b)(5), as amended (the “Rule”). The specific nature of the information to be contained in the Annual Report or the notices of listed events is set forth in “APPENDIX E — FORM OF CONTINUING DISCLOSURE CERTIFICATE.”

In the last five years, the City did not timely file audited financial statements in connection with various series of bonds and other long-term obligations for Fiscal Years 2015-16 and 2016-

17. The City also failed to timely file no tices of a rating change and to timely file notices of late annual financial information in connection with certain of the bonds and other long -term obligations.

In addition, the City has had continuing disclosure obligation in connection with certain bonds issued by the Lynwood Utility Authority, and within the past five years, the City failed to file in a timely manner its audited financial statements for Fiscal Year 2015-16, and timely notice of a rating change for these bonds.

_________, serving as dissemination agent, will assist the City in timely filing the Annual Reports and notices of certain enumerated events in the future.

UNDERWRITING

The Bonds are being purchased pursuant a bond purchase agreement by and between the Authority, the City and Cabrera Capital Markets, LLC, as underwriter (the “Underwriter”). The City Council Regular Meeting - Page 375 of 473

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Underwriter has agreed to purchase the Bonds at a purchase price of $________________ (which is equal to the par amount of the Bonds, less a purchaser’s discount of $_____________, and [plus/less] a [net] original issue [premium/discount] of $____________).

The Underwriter may offer the Bonds to the public at the offering prices set forth on the cover page of this Official Statement. The Underwriter may offer and sell to certain dealers and others at a price lower than the offering prices stated on the cover page hereof. The offering price may be changed from time to time by the Underwriter.

MUNICIPAL ADVISOR

The Authority has retained Kosmont Transac tions Services, Inc. , Manhattan Beach , California, as the Authority’s Municipal Advisor in connection with the preparation of this Official Statement and with respect to the issuance of the Bonds. Kosmont Transactions Services, Inc. is not obligated to und ertake, and has not undertaken to make, an independent verification or assume responsibility for the accuracy, completeness, or fairness of the information contained in this Official Statement. Kosmont Transactions Services, Inc. is an independent register ed municipal advisory firm and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities. Kosmont Transactions Services, Inc.’ s compensation is contingent upon the delivery of the Bonds.

EXECUTION

The execution of this Official Statement and its delivery have been authorized by the Board of the Authority and the City Council of the City.

LYNWOOD PUBLIC FINANCING AUTHORITY

By:

Ernie Hernandez
Executive Director

CITY OF LYNWOOD

By:

Ernie Hernandez
City Manager
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APPENDIX A

GENERAL INFORMATION ABOUT THE CITY OF LYNWOOD

AND THE COUNTY OF LOS ANGELES

The following information concerning the County of Los Angeles (the “County”) and the City of Lynwood (the “City”) is included only for the purpose of supplying general information regarding the area. The Bonds are not a debt of the County, the City, the State of California (the “State”) or any of its political subdivisions, and neither the County, the City, the State nor any of its political subdivisions is liable therefor. The City and the Underwriter take no responsibility for the accuracy or completeness of such information.

General

The City. The City of Lynwood (the “City”) was incorporated in 1921 under the general laws of the State of California (the “State”). The City is situated approximately 13 miles south of downtown Los Angeles at the intersection of two major freeways. The local economy represents a diverse blend of industrial, commercial, agricultural and residential development. The City covers 4.9 square miles and serves a population of 69,880.

The County. The County of Los Angeles (the “County”) is located along the southern coast of California, Los Angeles Coun ty covers about 4,080 square miles. It measures approximately 75 miles from north to south and 70 miles from east to west. The county includes Santa Catalina and San Clemente Islands and is bordered by the Pacific Ocean and Ventura, San Bernardino and Orange Counties.

Almost half of the county is mountainous and some 14 percent is a coastal plain known as the Los Angeles Basin. The low Santa Monica Mountains and Hollywood Hills run east and west and form the northern boundary of the Basin and the southern boundary of the San Fernando Valley. The San Fernando Valley terminates at the base of the San Gabriel Mountains whose highest peak is over 10,000 feet. Beyond this mountain range the rest of the county is a semi-dry plateau, the beginning of the vast Mojave Desert.

According to the Los Angeles County Regional Planning Commission, the 86 incorporated cities in the county cover about 1,344 square miles or 27 percent of the total county. About 16 percent of the land in the County is devoted to residential use and over two thirds of the land is open space and vacant.

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Population

The following table lists population estimates for the City, the County and the State for the last five years, as of January 1 each year.

CITY OF LYNWOOD, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA Population Estimates
Years 2017 through 2021, as of January 1

Year
City of
Lynwood
Los Angeles
County
State of
California
2017 71,864 10,181,162 39,352,398
2018 71,972 10,192,593 39,519,535
2019 71,726 10,163,139 39,605,361
2020 71,399 10,135,614 39,648,938
2021 69,880 10,044,458 39,466,855

Source: California Department of Finance, Demographic Research Unit.

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Industry and Employment

The seasonally adjusted unemployment rate in Los Angeles County decreased over the month to 5.8 percent in March 2022, from a revised 6.3 percent in February 2022, and was below the rate of 10.5 percent one year ago. Civilian employment increased by 41,000 to 4,733,000 i n March 2022, while unemployment decreased by 24,000 to 290,000. The civilian labor force increased by 16,000 over the month to 5,023,000 in March 2022. (All of the above figures are seasonally adjusted.) The unadjusted unemployment rate for the county was 4.9 percent in March 2022.

The California seasonally adjusted unemployment rate was 4.9 percent in March 2022,

5.3 percent in February 2022, and 8.4 percent a year ago in March 2021. The comparable estimates for the nation were 3.6 percent in March 2022, 3.8 percent in February 2022, and 6.0 percent a year ago.

The table below lists employment by industry group for the County for the past five years for which data is available.

LOS ANGELES-LONG BEACH-GLENDALE MD (LOS ANGELES COUNTY) Annual Average Civilian Labor Force, Employment and Unemployment, Calendar Years 2017 through 2021
(March 2021 benchmark)

2017 2018 2019 2020 2021
Civilian Labor Force (1) 5,109,800 5,121,300 5,153,100 4,968,900 4,994,100 Employment 4,864,100 4,885,300 4,926,100 4,355,900 4,548,900 Unemployment 245,700 235,900 227,000 613,000 445,200
Unemployment Rate 4.8% 4.6% 4.4% 12.3% 8.9%
Wage and Salary Employment:(2)
Agriculture 5,700 4,600 4,400 4,400 4,600
Mining and Logging 2,000 1,900 1,900 1,700 1,600
Construction 138,700 146,300 149,800 146,500 149,800
Manufacturing 350,400 342,600 340,700 315,100 311,700
Wholesale Trade 221,500 223,200 220,500 200,000 202,000 Retail Trade 425,900 424,600 417,700 380,200 401,400
Transportation, Warehousing, Utilities 198,200 203,600 212,900 207,800 214,200 Information 214,000 214,700 215,300 191,000 213,200
Financial Activities 221,600 223,200 223,600 212,600 210,800 Professional and Business Services 613,200 632,300 647,000 599,800 629,500 Educational and Health Services 797,400 817,900 839,900 820,300 839,600 Leisure and Hospitality 524,600 536,500 547,200 393,500 429,300 Other Services 155,700 158,800 158,400 128,700 134,100
Federal Government 48,000 47,300 47,300 50,200 47,600
State Government 92,500 91,700 86,500 89,000 89,200
Local Government 445,600 451,600 453,000 431,000 421,400 Total all Industries (3) 4,455,000 4,520,700 4,566,100 4,171,700 4,300,000

(1) Labor force data is by place of residence; includes self -employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(2) Industry employment is by place of work; excludes self -employed individuals, unpaid family workers , household domestic workers, and workers on strike.
(3) Columns may not sum to totals due to rounding.

Source: State of California Employment Development Department.

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Principal Employers

The following table lists the principal employers within the City for fiscal year 2020-21.

CITY OF LYNWOOD
Principal Employers
Fiscal Year 2020-21

Employer Name
No. of
Employees
St. Francis Medical Center 1,853
Lynwood Unified School District 1,468
LA County Sheriff Department 263
City of Lynwood 202
PL Development 175
California Post-Acute Care 174
Granada Post-Acute 145
El Super 130
Superior Warehouse Grocers Inc. 127
Earle M. Jorgensen Company 120

Source: City of Lynwood.

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The following table lists, in alphabetical order, the largest manufacturing and non - manufacturing employers within the County as of April 2022.

COUNTY OF LOS ANGELES
Major Employers
As of April 2022
(In Alphabetical Order)

Employer Name Location Industry
AHMC Healthcare Inc Alhambra Health Care Management
All Nations Church Sylmar Churches
California State Univ NRTHRDG Northridge Schools-Universities & Colleges Academic Cedars-Sinai Health System West Hollywood Health Care Management Infineon Technologies Americas El Segundo Semiconductor Devices (mfrs) Kaiser Permanente Los Angeles Los Angeles Hospitals
Live Nation Los Angeles Entertainment Bureaus
Long Beach City Hall Long Beach City Hall
Longshore Dispatch Wilmington Nonclassified Establishments Los Angeles County Sheriff Monterey Park Government Offices-County Los Angeles Intl Airport-Lax Los Angeles Airports
Los Angeles Medical Ctr Los Angeles Pathologists
Los Angeles Police Dept Los Angeles Police Departments
National Institutes of Health Pasadena Physicians & Surgeons Security Industry Specialist Culver City Security Systems Consultants Six Flags Valencia Amusement & Theme Parks
Sony Pictures Entrtn Inc Culver City Motion Picture Producers & Studios Space Exploration Tech Corp Hawthorne Aerospace Industries (mfrs) Twentieth Century Fox Los Angeles Motion Picture Producers & Studios UCLA Community Based Learning Los Angeles Junior-Community College-Tech Institutes University of Ca Los Angeles Los Angeles Schools-Universities & Colleges Academic University of Ca Los Angeles Los Angeles University-College Dept/Facility/Office Vision X Los Angeles Call Centers
Walt Disney Co Burbank Water Parks
Water Garden Management Santa Monica Office Buildings & Parks

Source: State of California Employment Development Department, extracted from The America ’s Labor Market Information System (ALMIS) Employer Database, 2022 2nd edition.

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Effective Buying Income

“Effective Buying Income ” is defined as personal income less personal tax and nontax payments, a number often referred to as “disposable” or “after-tax” income. Personal income is the aggregate of wages and salaries, other labor-related income (such as employer contributions to private pension funds), proprietor ’s income, rental income (which includes imputed rental income of owner -occupants of non -farm dwellings), dividends paid by corporations, interest income from all sources, and transfer payments (such as pensions and welfare assistance).

Deducted from this total are personal taxes (federal, state and local), nontax payments (fines, fees, penalties, etc.) and personal contributions to social insurance. According to U.S. government definitions, the resultant figure is commonly known as “disposable personal income.”

The following table summarizes the total effective buying income for the City, the County, the State, and the United States for the period 2018 through 2022.

CITY OF LYNWOOD, LOS ANGELES COUNTY,

STATE OF CALIFORNIA AND UNITED STATES

EFFECTIVE BUYING INCOME
As of January 1, 2018 through 2022

Year

Area
Total Effective
Buying Income
(000’s Omitted)
Median Household
Effective
Buying Income

2018 City of Lynwood $773,863 $43,143
Los Angeles County 271,483,825 56,831
California 1,183,264,399 62,637
United States 9,017,967,563 52,841

2019 City of Lynwood $811,764 $44,123
Los Angeles County 271,483,825 56,831
California 1,183,264,399 62,637
United States 9,017,967,563 52,841

2020 City of Lynwood $854,790 $46,137
Los Angeles County 281,835,290 60,174
California 1,243,564,816 65,870
United States 9,487,165,436 55,303

2021 City of Lynwood $894,319 $48,821
Los Angeles County 289,720,470 62,353
California 1,290,894,604 67,956
United States 9,809,944,764 56,790

2022 City of Lynwood $1,035,105 $57,406
Los Angeles County 327,445,237 71,404
California 1,452,426,153 77,058
United States 11,208,582,541 64,448

Source: The Nielsen Company (US), Inc for year 2018; Claritas, LLC for 2019 through 2022.

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Commercial Activity

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

Total taxable sales during the four quarters of calendar year 2021 in the City were reported to be $ 501,930,416, a 24.09% increase over the total taxable sales of $ 374,322,690 reported during the four quarters of calendar year 2020.

CITY OF LYNWOOD
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions Calendar Years 2016 through 2020
(Dollars in Thousands)

Retail Stores Total All Outlets

Number
of Permits

Taxable
Transactions

Number
of Permits

Taxable
Transactions
2016 797 $288,480 1,159 $331,746
2017 837 307,586 1,199 351,191
2018 879 331,014 1,285 371,417
2019 925 342,942 1,384 387,448
2020 1,040 321,844 1,582 374,323

Source: State Department of Tax and Fee Administration.

Total taxable sales during the four quarters of calendar year 2021 in the County were reported to be $191,825,807,206, a 21.61% increase over the total taxable sales of $157,737,984,456 reported during the four quarters of calendar year 2020.

COUNTY OF LOS ANGELES
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions Calendar Years 2016 through 2020
(Dollars in Thousands)

Retail Stores Total All Outlets

Number
of Permits

Taxable
Transactions

Number
of Permits

Taxable
Transactions
2016 196,929 $109,997,043 311,295 $154,208,333
2017 197,452 113,280,347 313,226 159,259,356
2018 200,603 119,145,054 328,047 166,023,796
2019 206,732 122,137,664 342,359 171,776,327
2020 226,643 112,044,029 376,990 155,678,156

Source: State Department of Tax and Fee Administration.

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Construction Activity

Construction activity in the City and the County for the past five years for which data is available is shown in the following tables.

CITY OF LYNWOOD
Building Permit Valuation
For Calendar Years 2016 through 2020
(Dollars in Thousands)(1)

2016 2017 2018 2019 2020
Permit Valuation
New Single-family $1,260.0 $2,806.0 $1,587.0 $1,458.8 $0.0 New Multi-family 0.0 565.0 0.0 0.0 0.0
Res. Alterations/Additions 0.0 0.0 4,468.0 906.3 240.0 Total Residential 1,260.0 3,371.0 6,055.0 2,365.1 240.0

New Commercial 0.0 0.0 0.0 3,900.0 0.0
New Industrial 0.0 0.0 0.0 0.0 0.0
New Other 0.0 0.0 1,035.4 259.1 55.0
Com. Alterations/Additions 135.0 0.0 12,238.0 751.0 190.0 Total Nonresidential 135.0 0.0 13,273.4 4,910.1 245.0

New Dwelling Units
Single Family 4 14 8 10 0
Multiple Family 0 3 0 0 0
TOTAL 4 17 8 10 0

(1) Totals may not foot due to rounding.

Source: Construction Industry Research Board, Building Permit Summary.

LOS ANGELES COUNTY
Building Permit Valuation
For Calendar Years 2016 through 2020
(Dollars in Thousands)(1)

2016 2017 2018 2019 2020
Permit Valuation
New Single-family $2,162,018.2 $2,352,614.8 $2,277,101.5 $1,967,219.3 $1,874,304.5 New Multi-family 2,774,294.3 3,257,833.4 3,222,530.3 2,61,257.4 2,789,673.9 Res. Alterations/Additions 1,639,294.3 1,757,904.1 1,941,369.5 1,625,839.3 1,014,422.1 Total Residential 6,575,607.5 7,368,352.3 7,441,001.3 6,554,316.0 5,678,400.5

New Commercial 1,728,443.4 2,196,089.2 2,844,173.0 2,675,678.8 1,885,027.0 New Industrial 138,408.6 134,534.3 101,201.3 63,727.8 32,196.2 New Other 791,078.1 563,679.3 952,347.7 446,182.7 354,758.2 Com. Alterations/Additions 2,880,916.6 3,143,200.2 2,796,375.3 3,404,012.3 1,241,068.1 Total Nonresidential 2,657,930.1 6,037,503.0 6,694,097.3 6,589,601.6 3,513,049.5

New Dwelling Units
Single Family 4,780 5,456 6,070 5,738 6,198
Multiple Family 15,589 17,023 17,152 15,884 14,056
TOTAL 20,369 22,479 23,222 21,622 20,254

(1) Totals may not foot due to rounding.

Source: Construction Industry Research Board, Building Permit Summary.

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APPENDIX B

SUMMARY OF PRINCIPAL LEGAL DOCUMENTS

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APPENDIX C

AUDITED FINANCIAL STATEMENTS
FOR FISCAL YEAR ENDING JUNE 30, 2021

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APPENDIX D

PROPOSED FORM OF OPINION OF BOND COUNSEL

_______, 2022

Lynwood Public Financing Authority
11330 Bullis Road
Lynwood, CA 90262

OPINION: $___________ Lynwood Public Financing Authority Lease Revenue Bonds, Series 2022 (Federally Taxable)

Members of the Governing Body of the Authority:

We have acted as bond counsel to the Lynwood Public Financing Authority (the “Authority”) in connection with the issuance by the Authority of the captioned bonds dated the date hereof (the “Bonds”). In such capacity, we have examined such law and such certified proceedings, certifications and other documents as we have deemed necessary to re nder this opinion.

The Bonds are issued pursuant to the Marks-Roos Local Bond Pooling Act of 1985, being Article 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Bond Law”), the Indenture of Trust, dated as of July 1, 2022 (the “Indenture”), by and between the Authority and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), and a resolution (the “Resolution”) of the governing body of the Authority adopted [May 17], 2022. Under the Indenture, the Autho rity has pledged certain revenues (the “Revenues”) for the payment of principal, premium (if any), and interest on the Bonds when due, including lease payments made by the City of Lynwood (the “City”) under a Lease Agreement dated as of July 1, 2022 (the “Lease Agreement”) between the Authority and the City.

Regarding questions of fact material to our opinion, we have relied on representations of the Authority contained in the Indenture and the City contained in the Lease Agreement, and in the certified pr oceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation.

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

1. The Authority is a duly created and va lidly existing joint exercise of powers authority with the power to adopt the Resolution, enter into the Indenture and perform the agreements on its part contained therein, and issue the Bonds.

2. The City is a duly created and validly existing general la w city and municipal corporation with the power to enter into the Lease Agreement and perform the agreements on its part contained therein.

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3. The Indenture has been duly authorized, executed and delivered by the Authority, and constitutes a valid and binding obligation of the Authority, enforceable against the Authority.

4. The Lease Agreement has been duly authorized, executed and delivered by the Authority and the City, and constitutes a valid and binding obligation of the Authority and the City, enforceable against the Authority and the City.

5. The Indenture creates a valid lien on the Revenues and other funds pledged by the Indenture for the security of the Bonds, on a parity with other bonds (if any) issued or to be issued under the Indenture.

6. The Bonds have been duly authorized and executed by the Authority, and are valid and binding limited obligations of the Authority, payable solely from the Revenues and other funds provided therefor in the Indenture.

7. Interest on the Bonds is exempt from personal income taxation imposed by the State of California.

We express no opinion regarding any other tax consequences arising with respect to the ownership, sale or disposition of, or the amount, accrual or receipt of interest on, the Bonds.

The r ights of the owners of the Bonds and the enforceability of the Bonds and the Indenture are limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights generally, and by equitable principles, whether cons idered at law or in equity.

This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law that may hereaf ter occur. Our engagement with respect to this matter has terminated as of the date hereof.

Respectfully submitted,

A Professional Law Corporation
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APPENDIX E

FORM OF CONTINUING DISCLOSURE CERTIFICATE

$_________

LYNWOOD PUBLIC FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2022
(FEDERALLY TAXABLE)

This Continuing Disclosure Certificate (this “Disclosure Certificate ”) is executed and delivered by the City of Lynwood (the “City”) in connection with the issuance by the Lynwood Public Financing Authority (the “Authority”) of the bonds captioned above (the “Bonds”). The Bonds are being issued under an Indenture of Trust dated as of July 1, 2022 (the “Indenture”), by and between the Authority and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). The City hereby covenants and agrees as follows:

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

Section 2. Definitions. In addition to the definitions set forth above and in the Indenture, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:

“Annual Report ” means any Annual Report provided by the City pursuant to , and as described in, Sections 3 and 4 of this Disclosure Certificate.

“Annual Report Date” means nine months after the end of the City’s fiscal year (currently April 1, based on the City’s fiscal year-end of June 30).

“Dissemination Agent ” means, initially, ______________, and any successor Dissemination Agent designated in writing by the City and which has filed with the City a written acceptance of such designation.

“Listed Events” means any of the events listed in Section 5(a) of this Disclosure Certificate.

“MSRB” means the Municipal Securities Rulemaking Board, which has been designated by the Securities and Exchange Commission as the sole repository of disclosure information for purposes of the Rule, or any other repository of disclosure information that may be designated by the Securities and Exchange Commission as such for purposes of the Rule in the future.

“Official Statement ” means the final official executed by the City and the Authority in connection with the issuance of the Bonds.

“Participating Underwriter” means, Cabrera Capital Markets, LLC, the original purchaser of the Bonds required to comply with the Rule in connection with offering of the Bonds.

“Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time.

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Section 3. Provision of Annual Reports.

(a) The City shall, or shall cause the Dissemination Agent to, not later than the Annual Report Date, commencing April 1, 2023, with the report for Fiscal Year 2021-22, provide to the MSRB, in an electronic format as prescribed by the MSRB, an Annual Report that is consistent with the requirements of Section 4 of this Disclosure Certificate. Not later than 15 Business Days prior to the Annual Report Date, the City shall provide the Annual Report to the Dissemination Agent (if other than the City). If by 15 Business Days prior to the Annual Report Date the Dissemination Agent (if other than the City) has not received a copy of the Annual Report, the Dissemination Agent shall contact the City to determine if the City is in compliance with the previous sentence. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the City may be submitted separately from the balance of the Annual Report, and later than the Annual Report Date, if not available by that date. If the City’s Fiscal Year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(b). The City shall provide a written general fund with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by the City hereunder.

(b) If the City does not provide (or cause the Dissemination Agent to provide) an Annual Report by the Annual Report Date, the City shall provide (or cause the Dissemination Agent to provide) a notice to the MSRB, in an electronic format as prescribed by the MSRB.

(i) determine each year prior to the Annual Report Date the then -applicable rules and electronic format prescribed by the MSRB for the filing of annual continuing disclosure reports; and

(ii) if the Dissemination Agent is other than the City, file a report with the City certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, and stating the date it was provided.

Section 4 . Content of Annual Reports . The City’s Annual Report shall contain or incorporate by reference the following:

(a) Financial Statements. Audited financial statements of the City for the preceding fiscal year, prepared in accordance generally accepted accounting pr inciples. If the City’s audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available.

(b) Other Annual Information. To the extent not included in the audited final statements of the City, the Annual Report shall also include financial and operating data with respect to the City for preceding fiscal year, substantially similar to that provided in the corresponding tables and charts in the Official Statement, as follows:

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1. City of Lynwood General Fund Budget Summary in substantially the form of Table 1;

2. Statements of Revenues, Expenditures and Changes in General Fund Balance in substantially the form of Table 11;

3. General Fund Balance Sheets Five Year Comparison shown in Table 12;

4. General Fund Revenues by Revenue Source in substantially the form of Table 3;

5. Assessed Valuation of All Taxable Property in substantially the form of Table 6;

6. Secured Property Levies and Collections in substantially the form of Table 7; and

7. Principal Property Taxpayers in substantially the form of Table 10

(c) In addition to any of the information expressly required to be provided under this Disclosure Certificate, the City shall provide such further material information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading.

(d) Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the City or related public entities, which are available to the public through the MSRB . The City shall clearly identify each such other document so included by reference . If the document included by reference is a final official statement, it must be available from the MSRB.

Section 5. Reporting of Listed Events.

(a) The City shall give, or cause to be given, notice of the occurrence of any of the following Listed Events with respect to the Bonds:

(1) Principal and interest payment delinquencies.

(2) Non-payment related defaults, if material.

(3) Unscheduled draws on debt service reserves reflecting financial difficulties.

(4) Unscheduled draws on credit enhancements reflecting financial difficulties.

(5) Substitution of credit or liquidity providers, or their failure to perform.

(6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds.

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(7) Modifications to rights of security holders, if material.

(8) Bond calls, if material, and tender offers.

(9) Defeasances.

(10) Release, substitution, or sale of property securing repayment of the securities, if material.

(11) Rating changes (without any obligation to provide any notices of changes in the outlook assigned to or associated with any rating).

(12) Bankruptcy, insolvency, receivership or similar event of the City.

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

(14) Appointment of a successor or additional Trustee or the change of name of the Trustee, if material.

(15) Incurrence of a financial obligation of the City, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the City, any of which affect security holders, if material.

(16) Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the City, any of which reflect financial difficulties.

(b) Upon the occurrence of a Listed Event, the City shall, or shall cause the Dissemination Agent (if not the City) to, file a notice of such occurrence with the MSRB, in an electronic format as prescribed by the MSRB, in a timely manner not in excess of 10 Busines s Days after the occurrence of the Listed Event. Notwithstanding the foregoing, notice of Listed Events described in subsection (a)(8) above need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to holders of affected Bonds under the Indenture.

(c) The City acknowledges that the events described in subparagraphs (a)(2), (a)(7), (a)(8) (if the event is a bond call), (a)(10), (a)(13), (a)(14), and (a)(15) of this Section 5 contain the qualifier “if mat erial” and that subparagraph (a)(6) also contains the qualifier “material” with respect to certain notices, determinations or other events affecting the tax status of the Bonds.

The City shall cause a notice to be filed as set forth in paragraph (b) above with respect to any such event only to the extent that it determines the event’s occurrence is material for purposes of U.S. federal securities law. Upon occurrence of any of these Listed Events, the City will as soon as possible determine if such event would be material under applicable federal securities law. If such event is determined to be material, the City will cause a notice to be filed as set forth in paragraph (b) above.

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(d) For purposes of this Disclosure Certificate, any event described in paragraph (a)(12) above is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the City in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the City.

(e) For purposes of Section 5(a)(15) and (16), “financial obligation ” means a (i) debt obligation; (ii) derivative instrument ent ered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii) . The term financial obligation shall not include municipal securities as to which a final official statement has been provided to the Municipal Securities Rulemaking Board consistent with the Rule.

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

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

Section 8. Dissemination Agent. The City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Agent, with or without appointing a successor Dissemination Agent.

The initial Dissemination Agent will be the City. Any Dissemination Agent may resign by providing 30 days’ written notice to the City.

Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the City may amend this Disclosure Certificate, and any provision of thi s Disclosure Certificate may be waived, provided that the following conditions are satisfied:

(a) if the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of an obligated person with respect to the Bonds, or type of business conducted;

(b) the undertakings herein, as proposed to be amended or waived, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the primary offering of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and

(c) the proposed amendment or waiver either (i) is approved by holders of the Bonds in the manner provided in the Indenture for amendments to the Indenture with the consent of holders, or (ii) does not, in the opinion of nationally recognized bond City Council Regular Meeting - Page 393 of 473

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counsel, materially impair the interests of the holders or beneficial owners of the Bonds.

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

If an amendment is made to the undertaking specifying the accounting principles to be followed in preparing financial statements, the annual financial information for the year in which the change is made shall present a comparison between the financial sta tements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles . The comparison shall include a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information, in order to provide information to investors to enable them to evaluate the ability of the City to meet its obligations. To the extent reasonably feasible, the comparison shall be quantitative.

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

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

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

Section 12. Duties, Immunities and Liabilities of Dissemination Agent.

(a) The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the City agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent ’s negligence or willful misconduct. The Dissemination Agent shall have no duty or obligation to review any information provided to it hereunder and shall not be deemed to be acting in any fiduciary capa city for the City Council Regular Meeting - Page 394 of 473

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City, the Bond owners or any other part y. The obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds.

(b) The Dissemination Agent shall be paid compensation by the City for its services provided hereunder in accordance with its schedule of fees as amended from time to time, and shall be reimbursed for all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder.

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

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

Date: _______, 2022

CITY OF LYNWOOD

By:

City Manager

[_____________________],
as Dissemination Agent

By:

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APPENDIX F

DTC AND THE BOOK-ENTRY ONLY SYSTEM

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

Neither the Authority (the “Issuer”) nor the Trustee (the “Agent”) take any responsibility for the information contained in this Appendix.

No assurances can be given that DTC, DTC Participants or Indirect Participants will distribute to the Beneficial Owners (a) payments of interest, principal or premium, i f any, with respect to the Bonds, (b) certificates representing ownership interest in or other confirmation or ownership interest in the Bonds, or (c) redemption or other notices sent to DTC or Cede & Co ., its nominee, as the registered owner of the Bonds, or that they will so do on a timely basis, or that DTC, DTC Participants or DTC Indirect Participants will act in the manner described in this Appendix. The current “Rules” applicable to DTC are on file with the Securities and Exchange Commission and the current “Procedures” of DTC to be followed in dealing with DTC Participants are on file with DTC.

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

2. DTC, the world ’s largest securities depository, is a limited -purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC ’s participants ( “Direct Participants ”) deposit with DTC . DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book -entry transfers and pl edges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates.

Direct Participants include both U .S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations . DTC is a wholly -owned subsidiary of The Depository Trust & Clearing Corporation ( “DTCC”). DTCC is the holding City Council Regular Meeting - Page 396 of 473

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company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are re gistered clearing agencies . DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U .S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securitie s and Exchange Commission . More information about DTC can be found at www .dtcc.com and www .dtc.org. The information contained on this Internet site is not incorporated herein by reference.

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

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

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

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

7. Neither DTC nor Cede & Co . (nor any other DTC nominee) w ill consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC ’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible after the record date . The Omnibus Proxy assigns Cede & Co .’s consenting or voting City Council Regular Meeting - Page 397 of 473

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rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).

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

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

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

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

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

City Council Regular Meeting - Page 398 of 473
Quint & Thimmig LLP 04/27/22
03095.06
$__________ LYNWOOD PUBLIC FINANCING AUTHORITY Lease Revenue Bonds, Series 2022 (Federally Taxable) BOND PURCHASE AGREEMENT __________, 2022 Lynwood Public Financing Authority 11330 Bullis Road Lynwood, CA 90262 City of Lynwood 11330 Bullis Road Lynwood, CA 90262 Ladies and Gentlemen: Cabrera Capital Markets, LLC (the “Underwriter) hereby offers to enter into this bond purchase agreement (the “Bond Purchase Agreement”) with the Lynwood Public Financing Authority (the “Authority”) and the City of Lynwood (the “City”). Upon the acceptance hereof by the Authority and the City, this offer will be binding upon the Authority, the City and the Underwriter. This offer is made subject to (a) the written acceptance hereof by the Authority and the City and (b) withdrawal by the Underwriter upon written notice (by telecopy or otherwise) delivered to the Authority and the City at any time prior to each of their acceptance hereof by the Authority and the City. 1. Purchase and Sale. Upon the terms and conditions and upon the basis of the representations, warranties and agreements set forth herein, the Underwriter hereby agrees to purchase on the Closing Date (as defined herein), and the Authority and the City hereby agree to sell and deliver to the Underwriter on the Closing Date, $__________ principal amount of Lynwood Public Financing Authority Lease Revenue Bonds, Series 2022 (Federally Taxable) (the “Bonds). The Bonds are being issued pursuant to Article 4, Chapter 5, Division 7, Title 1 of the California Government Code, a resolution of the Authority authorizing the issuance of the Bonds, adopted on May 17, 2022 (the “Authority Resolution”), and an Indenture of Trust, dated as of June 1, 2022 (the “Indenture”), by and between the Authority and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). The City will lease certain real property to the Authority, consisting of various streets throughout the boundaries of the City (collectively, the “Leased Property”) to the Authority pursuant to a Site Lease, dated as of June 1, 2022 (the “Site Lease”). The Leased Property will be leased by the Authority to the City pursuant to the Lease Agreement, dated as of June 1, 2022 (the “Lease Agreement”), by and between the Authority and the City. Pursuant to an Assignment Agreement, dated as of June 1, 2022 (the “Assignment Agreement”), by and between the Authority and the Trustee, the Authority will assign, for the benefit of the owners of the Bonds, its right to receive Lease City Council Regular Meeting - Page 399 of 473

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Payments (the “Lease Payments”) made by the City under the Lease Agreement and its right to exercise rights and remedies of the Authority under the Lease Agreement. All capitalized terms not defined herein shall have the respective meaning specified in the Indenture. Under the Lease Agreement, the City is required to make Lease Payments and Additional Rental Payments from legally available funds in amounts calculated to be sufficient to pay principal of and interest on the Bonds when due. All of the Authority’s right, title and interest in and to the Lease Agreement (except for the right to receive Additional Rental Payments to the extent payable to the Authority and certain rights to indemnification), including the right to receive Lease Payments under the Lease Agreement, are assigned to the Trustee for the benefit of the Owners of the Bonds. The Bonds are being issued for the purposes of funding: (i) all or a portion of the City’s projected total unfunded accrued actuarial liability to the California Public Employees’ Retirement System for its Miscellaneous and Safety Plans; and (ii) the costs of issuing the Bonds. The purchase price to be paid by the Underwriter for the Bonds is hereby agreed to be $___________, which amount represents the principal amount of the Bonds of $__________.00, less $___________, representing the Underwriter’s discount (such payment and delivery of the Bonds and the other actions contemplated hereby to take place at the time of such payment and delivery being herein sometimes called the “Closing”). The Authority and the City acknowledge and agree that (i) the purchase and sale of the Bonds pursuant to this Bond Purchase Agreement is an arm’s-length commercial transaction between the Authority and the City and the Underwriter; (ii) in connection with such transaction, the Underwriter is acting solely as a principal and not as an agent or a fiduciary of the Authority or the City; (iii) the Underwriter has not assumed a fiduciary responsibility in favor of the Authority or the City with respect to the offering of the Bonds or the process leading thereto (whether or not the Underwriter, or any affiliates of the Underwriter, has advised or is currently advising the Authority or the City on other matters) nor has it assumed any other obligation to the Authority or the City except the obligations expressly set forth in this Bond Purchase Agreement, (iv) the Underwriter has financial and other interests that differ from those of the Authority and the City; and (v) the Authority and the City have consulted with their own legal and financial advisors to the extent they deemed appropriate in connection with the offering of the Bonds. The Authority and the City hereby acknowledge receipt from the Underwriter of disclosures required by the Municipal Securities Rulemaking Board (“MSRB”) Rule G-17 (as set forth in MSRB Notice 2012-25 (May 7, 2012), relating to disclosures concerning the Underwriter’s role in the transaction, disclosures concerning the Underwriter’s compensation, conflict disclosures, if any, and disclosures concerning complex municipal securities financing, if any. A Preliminary Official Statement of the City and the Authority, dated _______, 2022 (together with the Appendices thereto, any documents incorporated therein by reference and any supplements or amendments thereto and as disseminated in its printed physical form or in electronic form in all respects materially consistent with such physical form, the “Preliminary Official Statement”), has been prepared for use in marketing the Bonds, and a final Official Statement relating to the Bonds, to be dated the date hereof, as amended to conform to the terms of this Purchase Contract, and with such changes and amendments as are mutually agreed to by the Authority, the City and the Underwriter, including the cover page, inside cover City Council Regular Meeting - Page 400 of 473

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page, the appendices and all information incorporated therein by reference, is herein collectively referred to as the “Official Statement,” which shall be in substantially the form of the Preliminary Official Statement, with such changes and amendments thereto as may be mutually agreed upon by the Underwriter, the Authority and the City. The Bonds shall be dated their date of delivery, and shall have the maturities, bear interest at the rates, have reoffering yields, and be subject to redemption as shown on Exhibit A hereto. It shall be a condition to the Authority’s obligation to sell and to deliver the Bonds to the Underwriter and to the obligation of the Underwriter to purchase, to accept delivery of and to pay for the Bonds that the entire $__________ principal amount of the Bonds as authorized by the Indenture shall be sold and delivered by the Authority and accepted and paid for by the Underwriter at the Closing. The Underwriter may change the offering prices (or yields) of the Bonds from time to time at any time. The Bonds may be offered and sold to certain dealers at prices lower than such initial public offering prices. The obligation of the Authority to sell and deliver the Bonds to the Underwriter shall also be conditioned upon the delivery by Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel (“Bond Counsel”), of its approving legal opinion with respect to the Bonds. The Authority and the City hereby authorize the Underwriter to use and distribute the Site Lease, the Lease Agreement, the Assignment Agreement, the Indenture and the Preliminary Official Statement, and the information contained in such documents in connection with the public offering and sale of the Bonds. The Authority and the City have authorized the use of the Preliminary Official Statement in connection with the public offering of the Bonds by the Underwriter prior to the date hereof. The obligation of the City to make Lease Payments under the Lease Agreement does not constitute an 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. Neither the Bonds nor the obligation of the City to make Lease Payments under the Lease Agreement constitutes a debt of the Authority, the City, the State of California or any of its political subdivisions in contravention of any constitutional or statutory debt limitation or restriction. The obligation of the City to make Lease Payments, as set forth in the Lease Agreement, shall be deemed to be and shall be construed to be a ministerial duty imposed by law and it shall be the ministerial duty of each and every public official of the City to take such actions and do such things as are required by law in the performance of such duty, subject to abatement in the event of damage or destruction to, or condemnation of, the Leased Property or a portion thereof. 2. Bona Fide Public Offering. The Underwriter agrees to make a bona fide public offering of all of the Bonds, at prices not in excess of the initial public offering yields or prices set forth on the cover page of the Official Statement. The Bonds may be offered and sold to certain dealers at prices lower than such initial public offering prices; provided, however, that the Underwriter may offer a portion of the Bonds for sale to selected dealers who are members of the Financial Industry Regulatory Authority, and the Underwriter reserves the right to change such offering prices or yields as the Underwriter shall deem necessary in connection with the marketing of the Bonds and to offer and sell the Bonds to certain dealers (including dealers depositing the Bonds into investment trusts) and others at prices lower than the initial offering prices or at yields higher than the initial yields set forth on Exhibit A attached hereto. The Underwriter also reserves the right to over-allot or effect transactions that stabilize or maintain the market price of the Bonds at a level above that which might otherwise prevail in the open market and to discontinue such stabilizing, if commenced, at any time. None of such activities City Council Regular Meeting - Page 401 of 473

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shall affect the principal amounts, maturity dates, interest rates, redemption or other provision of the Bonds or the amount to be paid by the Underwriter to the Authority for the Bonds. 3. The Bonds. The Bonds will be issued, executed and delivered pursuant to the Indenture. The City Council of the City has adopted a resolution on May 17, 2022, relating to the Bonds (the “City Resolution”). This Bond Purchase Agreement, the Site Lease, the Lease Agreement and the Continuing Disclosure Agreement (hereinafter defined) are collectively referred to as the “City Documents.” This Bond Purchase Agreement, the Indenture, the Site Lease, the Lease Agreement and the Assignment Agreement are collectively referred to as the “Authority Documents.” 4. Official Statement, Continuing Disclosure. (a) The Authority and the City represent that they have deemed the Preliminary Official Statement to be final as of its date, except for either revisions or additions to the offering price(s), interest rate(s), yield(s) to maturity, selling compensation, aggregate principal amount, principal amount per maturity, delivery date, rating(s) and other terms of the Bonds which depend upon the foregoing as provided in and pursuant to Rule 15c2-12 of the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the “Rule”). (b) The Underwriter agrees that, prior to the time the final Official Statement is available, the Underwriter will send to any potential purchaser of the Bonds, upon the request of such potential purchaser, a copy of the most recent Preliminary Official Statement. Such Preliminary Official Statement shall be sent by first class mail (or other equally prompt means) not later than the second business day following the date upon which each such request is received. (c) The Authority agrees to deliver to the Underwriter, at such addresses as the Underwriter shall specify, as many copies of the final Official Statement relating to the Bonds as the Underwriter shall reasonably request as necessary to comply with paragraph (b)(4) of the Rule and with Rule G-32, Rule G-36 and all other applicable rules of the Municipal Securities Rulemaking Board. The Authority agrees to deliver such copies of the Official Statement within seven business days after the execution hereof. The Underwriter agrees to give notice to the Authority on the date after which the Underwriter shall no longer be obligated to deliver copies of the Official Statement pursuant to paragraph (b)(4) of the Rule, which date shall be no earlier than 25 days after the “end of the underwriting period,” as determined in accordance with Section 14 herein. (d) Prior to the earlier of (i) receipt of notice from the Underwriter that no participating underwriter, as such term is defined in the Rule, remains obligated to deliver Official Statements pursuant to paragraph (b)(4) of the Rule or (ii) 25 days after the date of the Closing (as defined below), the Authority and the City shall provide the Underwriter with such information regarding the Authority and the City, each of their current financial conditions and ongoing operations as the Underwriter may reasonably request. (e) The City hereby covenants and agrees that it will, on or prior to the Closing Date, execute a certificate for the benefit of the owners of the Bonds in which the City will undertake to provide financial information, operating data and notices of material events as required by paragraph (d)(2)(ii) of the Rule substantially in the form of Appendix D to the Official Statement (the “Continuing Disclosure Agreement”).

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5. Representations, Warranties and Agreements of the City. The City represents, warrants and agrees as follows: (a) The City is a municipal corporation and general law city duly organized and validly existing under the Constitution and laws of the State of California. (b) The City has full legal right, power and authority (i) to enter into, execute and deliver the City Documents; and (ii) to carry out and consummate the transactions on its part contemplated by the City Documents and the Official Statement. (c) By all necessary official action, the City has duly authorized and approved the City Documents, has duly authorized and approved the Preliminary Official Statement and the Official Statement and approved the distribution thereof (including in electronic form), has duly authorized and approved the execution and delivery of, and the performance by the City of the obligations in connection with the execution and delivery of the Bonds on its part contained in the City Documents, and the consummation by it of all other transactions contemplated by the City Documents in connection with the execution and delivery of the Bonds, all pursuant to the City Resolution adopted at a meeting duly called and held in accordance with the requirements of all applicable laws and at which a quorum of the members of the City Council was continuously present. The City Resolution has not been modified, amended or rescinded since the date of its adoption. (d) The City is not in any material respect in breach of or default under any applicable constitutional provision, law or administrative regulation of the State of California or of the United States, or any agency or instrumentality of either, or any applicable judgment or decree, or any loan agreement, indenture, bond, note, resolution, agreement (including, without limitation, the City Documents) or other instrument to which the City is a party which breach or default has or may have an adverse effect on the ability of the City to perform its obligations under the City Documents, and no event has occurred and is continuing which with the passage of time or the giving of notice, or both, would constitute such a default or event of default under any such instrument; and the execution and delivery of the Bonds and the City Documents, and compliance with the provisions on the City’s part contained therein, will not conflict in any material way with or constitute a material breach of or a material default under any constitutional provision, law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the Leased Property or assets of the City or under the terms of any such law, regulation or instrument, except as provided by the Bonds and the City Documents. (e) All authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by, the City of its obligations in connection with the execution and delivery of the Bonds under the City Documents or the consummation by it of all other transactions contemplated by the City Documents have been duly obtained, except for such approvals, consents and orders as may be required under the Blue Sky or securities laws of any state in connection with the offering and sale of the Bonds; except as described in or contemplated by the Official Statement, all authorizations, approvals, licenses, permits, consents and orders of any governmental authority, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition City Council Regular Meeting - Page 403 of 473

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precedent to or the absence of which would materially adversely affect the due performance by, the City of its obligations under the City Documents have been duly obtained. (f) There is no action, suit, proceeding, inquiry or investigation, notice of which has been duly served on the City, at law or in equity before or by any court, government agency, public board or body, pending or to the best knowledge of the officer of the City executing this Bond Purchase Agreement, threatened against the City, affecting the existence of the City or the titles of its officers to their respective offices, or affecting or seeking to prohibit, restrain or enjoin the sale, execution or delivery of the Bonds pursuant to the Indenture, or contesting or affecting as to the City the validity or enforceability of the City Documents, or contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement, or contesting the powers of the City to cause the execution and delivery or adoption by the City of the City Documents, or in any way contesting or challenging the consummation of the transactions contemplated hereby or thereby; nor, to the best knowledge of the City, is there any basis for any such action, suit, proceeding, inquiry or investigation, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity of the Bonds or the authorization, execution, delivery or performance by the City of the City Documents. (g) The City will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request in order (i) to qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may designate and (ii) to determine the eligibility of the Bonds for investment under the laws of such states and other jurisdictions, and will use its best efforts to continue such qualifications in effect so long as required for the distribution of the Bonds; provided, however, that the City shall not be required to execute a general or special consent to service of process or qualify to do business in connection with any such qualification or determination in any jurisdiction, and the Underwriter shall bear all costs in connection with the foregoing. (h) As of the date thereof, the Preliminary Official Statement (other than information therein regarding DTC or its book-entry system or any information provided by the Underwriter) did not, except for the omission of certain information permitted to be omitted in accordance with the Rule, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (i) At the time of the City’s acceptance hereof, and (unless an event occurs of the nature described in paragraph (k) of this Section 5) at all times subsequent thereto up to and including the Closing Date, the Official Statement (other than information therein regarding DTC or its book-entry system or any information provided by the Underwriter) did not and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (j) If the Official Statement is supplemented or amended pursuant to paragraph (k) of this Section 5, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such paragraph) at all times subsequent thereto up to and including the Closing Date, the Official Statement (other than information therein provided by the Underwriter) as so supplemented or amended will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

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(k) If between the date of this Bond Purchase Agreement and that date which is 25 days after the end of the underwriting period (as determined in accordance with Section 14 hereof) any event of which the officer of the City executing this Bond Purchase Agreement has knowledge shall occur affecting the City which might adversely affect the marketability of the Bonds or the market prices thereof, or which might cause the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the City shall notify the Underwriter thereof, and if in the opinion of the Underwriter such event requires the preparation and publication of a supplement or amendment to the Official Statement, the City will at its expense prepare and furnish to the Underwriter a reasonable number of copies of such supplement to, or amendment of, the Official Statement in a form and in a manner approved by the City, Bond Counsel, Disclosure Counsel and the Underwriter. (l) Any certificate signed by any officer of the City and delivered to the Underwriter pursuant to the City Documents or any document contemplated thereby or required for the valid execution and delivery of the Bonds shall be deemed a representation and warranty by the City to the Underwriter as to the statements made therein. (m) The City will cause the proceeds from the sale of the Bonds to be paid to the Trustee for the purposes specified in the Indenture and the Official Statement. So long as any of the Bonds are outstanding and except as may be authorized by the Indenture, the City will not issue or sell, or cause to be issued or sold, any bonds or other obligations, other than the Bonds delivered thereunder, the interest on and premium, if any, or principal of which will be payable from Lease Payments. 6. Representations, Warranties and Agreements of the Authority. The Authority represents, warrants and agrees as follows: (a) The Authority is a joint exercise of powers entity duly organized and validly existing under the laws of the State of California pursuant to a Joint Exercise of Powers Agreement between the City and the Lynwood Redevelopment Agency, dated March 16, 1993 (the “JPA Agreement”). (b) The Authority has full legal right, power and authority (i) to enter into, execute and deliver the Authority Documents and to sell and deliver the Bonds to the Underwriter as provided herein; and (ii) to carry out and consummate the transactions on its part contemplated by the Authority Documents and the Official Statement. (c) By all necessary official action, the Authority has duly authorized and approved the issuance of the Bonds and the Authority Documents, has duly authorized and approved the Preliminary Official Statement and the Official Statement and approved the distribution thereof (including in electronic form), has duly authorized and approved the execution and delivery of, and the performance by the Authority of the obligations in connection with the execution and delivery of the Bonds on its part contained in the Bonds and the Authority Documents, and the consummation by it of all other transactions contemplated by the Authority Documents in connection with the execution and delivery of the Bonds, all pursuant to the Authority Resolution adopted at a meeting duly called and held in accordance with the requirements of all applicable laws and at which a quorum of the board members of the Authority was continuously present. The Authority Resolution has not been modified, amended or rescinded since the date of its adoption and each Authority Document is or will be, when delivered, as applicable, the valid and binding obligation of the Authority.

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(d) The Authority is not in any material respect in breach of or default under any applicable constitutional provision, law or administrative regulation of the State of California or of the United States, or any agency or instrumentality of either, or any applicable judgment or decree, or the JPA Agreement, or any loan agreement, indenture, bond, note, resolution, agreement (including, without limitation, the Authority Documents) or other instrument to which the Authority is a party which breach or default has or may have an adverse effect on the ability of the Authority to perform its obligations under the Bonds or the Authority Documents, and no event has occurred and is continuing which with the passage of time or the giving of notice, or both, would constitute such a default or event of default under any such instrument; and the execution and delivery of the Bonds and the Authority Documents, and compliance with the provisions on the Authority’s part contained therein, will not conflict in any material way with or constitute a material breach of or a material default under any constitutional provision, law, administrative regulation, judgment, decree, loan agreement, indenture, Bond, note, resolution, agreement or other instrument to which the Authority is a party nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the Leased Property or assets of the Authority or under the terms of any such law, regulation or instrument, except as provided by the Bonds and the Authority Documents. (e) All authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by, the Authority of its obligations in connection with the issuance of the Bonds under the Authority Documents or the consummation by it of all other transactions contemplated by the Authority Documents, including all filings with the California Secretary of State, have been duly obtained, except for such approvals, consents and orders as may be required under the Blue Sky or securities laws of any state in connection with the offering and sale of the Bonds; except as described in or contemplated by the Official Statement, all authorizations, approvals, licenses, permits, consents and orders of any governmental authority, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by, the Authority of its obligations under the Bonds and the Authority Documents have been duly obtained. (f) The Bonds, when executed, issued, authenticated and delivered in accordance with the Indenture, and sold to the Underwriter as provided herein, will be validly executed and outstanding obligations, entitled to the benefits of the Indenture, and upon such execution and delivery, the Indenture will provide, for the benefit of the Owners from time to time of the Bonds, the legally valid and binding security interest it purports to create. (g) There is no action, suit, proceeding, inquiry or investigation, notice of which has been duly served on the Authority, at law or in equity before or by any court, government agency, public board or body, pending or to the best knowledge of the officer of the Authority executing this Bond Purchase Agreement, threatened against the Authority, affecting the existence of the Authority or the titles of its officers to their respective offices, or affecting or seeking to prohibit, restrain or enjoin the sale, issuance, execution or delivery of the Bonds pursuant to the Indenture, or contesting or affecting as to the Authority the validity or enforceability of the Bonds or the Authority Documents, or contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement, or contesting the powers of the Authority to cause the issuance of the Bonds, or the execution and delivery or adoption by the Authority of the Authority Documents, or in any way contesting or challenging the consummation of the transactions contemplated hereby or thereby; nor, to the best City Council Regular Meeting - Page 406 of 473

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knowledge of the Authority, is there any basis for any such action, suit, proceeding, inquiry or investigation, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity of the Bonds or the authorization, execution, delivery or performance by the Authority of the Bonds or the Authority Documents. (h) The Authority will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request in order (i) to qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may designate and (ii) to determine the eligibility of the Bonds for investment under the laws of such states and other jurisdictions, and will use its best efforts to continue such qualifications in effect so long as required for the distribution of the Bonds; provided, however, that the Authority shall not be required to execute a general or special consent to service of process or qualify to do business in connection with any such qualification or determination in any jurisdiction, and the Underwriter shall bear all costs in connection with the foregoing. (i) As of the date thereof, the Preliminary Official Statement did not, except for the omission of certain information permitted to be omitted in accordance with the Rule, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (j) At the time of the Authority’s acceptance hereof, and (unless an event occurs of the nature described in paragraph (l) of this Section 6) at all times subsequent thereto up to and including the Closing Date, the information under the caption “THE AUTHORITY” in the Official Statement (other than information therein provided by the Underwriter) did not and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (k) If the Official Statement is supplemented or amended pursuant to paragraph (l) of this Section 6, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such paragraph) at all times subsequent thereto up to and including the Closing Date, the Official Statement (other than information therein provided by the Underwriter) as so supplemented or amended will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (l) If between the date of this Bond Purchase Agreement and that date which is 25 days after the end of the underwriting period (as determined in accordance with Section 14 hereof) any event of which the officer of the Authority executing this Bond Purchase Agreement has knowledge shall occur affecting the Authority which might adversely affect the marketability of the Bonds or the market prices thereof, or which might cause the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Authority shall notify the Underwriter thereof, and if in the opinion of the Underwriter such event requires the preparation and publication of a supplement or amendment to the Official Statement, the Authority will at its expense prepare and furnish to the Underwriter a reasonable number of copies of such supplement to, or amendment of, the Official Statement in a form and in a manner approved by the City, Bond Counsel, Disclosure Counsel and the Underwriter.

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(m) Any certificate signed by any officer of the Authority and delivered to the Underwriter pursuant to the Authority Documents or any document contemplated thereby or required for the valid execution and delivery of the Bonds shall be deemed a representation and warranty by the Authority to the Underwriter as to the statements made therein. (n) The Authority will cause the proceeds from the sale of the Bonds to be paid to the Trustee for the purposes specified in the Indenture and the Official Statement. So long as any of the Bonds are outstanding and except as may be authorized by the Indenture, the Authority will not issue or sell any bonds or other obligations, other than the Bonds delivered thereunder, the interest on and premium, if any, or principal of which will be payable from the Revenues. (o) The Authority shall honor all other covenants on its part contained in the Indenture and the Lease Agreement which are incorporated herein and made a part of this Bond Purchase Agreement. 7. Closing. At 8:00 A.M., Pacific Daylight time, on _________, 2022, or on such other date time, as may be mutually agreed upon by the Authority, the City and the Underwriter (the “Closing Date”), the Authority will, subject to the terms and conditions hereof, deliver to the Underwriter, through the facilities of The Depository Trust Company (“DTC”), or at such other place as the Authority, the City and the Underwriter may mutually agree, the Bonds in definitive, fully registered form (one Bond for each maturity), duly executed and registered in the name of Cede & Co. as nominee of DTC; and, subject to the terms and conditions hereof, the Underwriter shall wire to the Trustee immediately available funds in the amount of the purchase price of the Bonds. 8. Closing Conditions. The Underwriter has entered into this Bond Purchase Agreement in reliance upon the representations and warranties of the Authority and the City contained herein, and in reliance upon the representations and warranties to be contained in the documents and instruments to be delivered at the Closing and upon the performance by the Authority and the City of its obligations hereunder, both as of the date hereof and as of the Closing Date. Accordingly, the Underwriter’s obligations under this Bond Purchase Agreement to purchase, to accept delivery of and to pay for the Bonds shall be conditioned upon the performance by the Authority and the City of their respective obligations to be performed hereunder and under such documents and instruments at or prior to the Closing Date, shall be subject, at the option of the Underwriter, to the accuracy in all material respects of the statements the officers and other officials of the Authority and of the City, as the Underwriter, authorized representatives of Bond Counsel, the Trustee, and the City Attorney made in any certification or other documents furnished pursuant to the provisions hereof, and shall also be subject to the following additional conditions: (a) The respective representations and warranties of the Authority and the City contained herein shall be true, complete and correct on the date hereof and on and as of the Closing Date, as if made on the Closing Date; (b) At the time of Closing, the City Documents and the Authority Documents shall be in full force and effect in accordance with their terms and shall not have been amended, modified or supplemented and the Official Statement shall not have been supplemented or amended, except in any such case as may have been agreed to by the Underwriter; (c) All necessary official action of the Authority, the City and of the other parties thereto relating to the City Documents and the Authority Documents shall have been taken and shall be in full force and effect and shall not have been amended, modified or supplemented in any material respect; City Council Regular Meeting - Page 408 of 473

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(d) Subsequent to the date hereof, there shall not have occurred any change in or affecting particularly the Authority, the City or the Bonds, as the foregoing is described in the Official Statement, which in the reasonable opinion of the Underwriter materially impairs the investment quality of the Bonds; and (e) At or prior to the Closing Date, the Underwriter shall have received copies of each of the following documents: (i) The Official Statement and each supplement or amendment, if any, thereto, executed by authorized officers of the Authority and the City; (ii) A copy of the Indenture, executed by the parties thereto; (iii) A copy of the Lease Agreement, executed by the parties thereto; (iv) A copy of the Site Lease, executed by the parties thereto; (v) A copy of the Continuing Disclosure Agreement, executed by the City and ___________, as dissemination agent; (vi) A certified copy of the JPA Agreement; (vii) A certificate or certificates of the City, dated the Closing Date, to the effect that: (A) the representations and warranties of the City contained herein are true and correct in all material respects on and as of the Closing Date as if made on the Closing Date and the City has complied with all of the terms and conditions of this Purchase Agreement required to be complied with by the City at or prior to the Closing Date; (B) none of the proceedings or authority for (i) the authorization, sale, execution and delivery of the Bonds, (ii) the adoption of the City Resolution, or (iii) the execution and delivery of the City Documents and performance of its obligations thereunder, has been repealed, modified, amended, revoked or rescinded; (C) subsequent to June 30, 2019, and prior to Closing, other than as described in the Official Statement, there have been no material adverse changes in the financial position of the City; (D) no event affecting the City has occurred since the date of the Official Statement that should be disclosed in the Official Statement for the purposes for which it is to be used or which it is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect; and (E) No consent is required for the inclusion of the City’s 2018-19 audited financial statements in the Official Statement. (viii) A certificate or certificates of the Authority, dated the Closing Date, to the effect that:

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(A) the representations and warranties of the Authority contained herein are true and correct in all material respects on and as of the Closing Date as if made on the Closing Date and the Authority has complied with all of the terms and conditions of this Purchase Agreement required to be complied with by the Authority at or prior to Closing Date; (B) none of the proceedings or authority for (i) the authorization, sale, execution and delivery of the Bonds, (ii) the adoption of the Authority Resolution, or (iii) the execution and delivery of the Authority Documents, has been repealed, modified, amended, revoked or rescinded; and (C) no event affecting the Authority has occurred since the date of the Official Statement that should be disclosed in the Official Statement for the purposes for which it is to be used or which it is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect. (ix) An opinion or opinions, dated the Closing Date and addressed to the Underwriter and the Trustee, of Jones & Mayer, the City Attorney, to the effect that: (A) The City is a municipal corporation and general law city duly organized and validly existing under the Constitution and laws of the State of California; (B) The City Documents have been duly approved by a resolution of the City adopted at a meeting duly called and held in accordance with the requirements of all applicable laws, with all public notice required by law, and at which a quorum of the members of the City Council was continuously present and such resolution has not been modified, amended or rescinded since the date of its adoption; (C) Except as described in the Official Statement, there is no litigation, inquiry, or investigation pending or to the best of such counsel’s knowledge after due inquiry, threatened, which: (1) challenges the right or title of any member or officer of the City to hold his or her office or exercise or perform the powers and duties pertaining thereto; (2) challenges the validity or enforceability of the Bonds or the City Documents; (3) seeks to restrain or enjoin the sale of the Bonds or the execution and delivery by the City of, or the performance by the City of its legal obligations under, the City Documents or in which a final adverse decision could materially adversely affect the operations of the City with respect to the Leased Property; or (4) contests in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement, nor, to the best of such counsel’s knowledge, is there any basis therefor; (D) The execution and delivery by the City of, and the performance by the City of its obligations under, the City Documents, do not conflict with, violate or constitute a default under any provision of any law, court order or decree or any contract, instrument or agreement to which the City is a party or by which it is bound and of which such counsel has knowledge; (E) As of the date hereof, the statements and information relating to the City contained in the Preliminary Official Statement and Official Statement did City Council Regular Meeting - Page 410 of 473

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not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and (F) The City Documents have been duly authorized, executed and delivered by the City and, assuming due authorization, execution and delivery of the City Documents by the parties thereto other than the City, the City Documents constitute legal, valid and binding agreements of the City, enforceable against the City in accordance with their respective terms except as enforcement may be limited by bankruptcy, insolvency and other laws affecting the enforcement of creditors’ rights and remedies in general, or by the application of equitable principles if equitable remedies are sought. (G) Except as may be required under the “blue sky” or securities laws of the United States or any state, there is no authorization, approval, consent or other order of, or filing with, or certification by, the State or any other governmental authority or agency within the State having jurisdiction over the City required for the issuance of the Bonds or the consummation by the City of the other financial transactions contemplated by the Official Statement and the City Documents. (H) Based on the information made available to the City Attorney in its role as City Attorney to the City, and without having undertaken to determine independently or assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Official Statement, nothing has come to its attention which would lead it to believe that the Official Statement as of its date and as of the date of Closing (excluding therefrom the financial and statistical data and forecasts included therein, as to which no opinion is expressed and information relating to the Authority and the Depository Trust Company and its book entry system) contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (x) An opinion or opinions, dated the Closing Date and addressed to the Underwriter and the Trustee, of the City Attorney, as counsel for the Authority, to the effect that: (A) The Authority is a joint exercise of powers authority duly organized and validly existing under the laws of the State of California pursuant to the JPA Agreement; (B) The Authority Documents have been duly approved by the Authority Resolution adopted at a meeting duly called and held in accordance with the requirements of all applicable laws, with all public notice required by law, and at which a quorum of the members of the Board of the Authority was continuously present and such resolution has not been modified, amended or rescinded since the date of its adoption; (C) Except as described in the Official Statement, there is no litigation, inquiry, or investigation pending to the best of such counsel’s knowledge after due inquiry, or threatened, which: (1) challenges the right or title of any Board member or officer of the Authority to hold his or her office or exercise or perform City Council Regular Meeting - Page 411 of 473

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the powers and duties pertaining thereto; (2) challenges the validity or enforceability of the Bonds or the Authority Documents; (3) seeks to restrain or enjoin the sale of the Bonds or the execution and delivery by the Authority of, or the performance by the Authority of its legal obligations under, the Authority Documents or in which a final adverse decision could materially adversely affect the operations of the Authority with respect to the Leased Property; or (4) contests in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement, nor, to the best of such counsel’s knowledge, is there any basis therefor; (D) The execution and delivery by the Authority of, and the performance by the Authority of its obligations under, the Authority Documents, do not conflict with, violate or constitute a default under any provision of any law, court order or decree or any contract, instrument or agreement to which the Authority is a party or by which it is bound and of which such counsel has knowledge; and (E) The Authority Documents have been duly authorized, executed and delivered by the Authority and, assuming due authorization, execution and delivery of the Authority Documents by the parties thereto other than the Authority, the Authority Documents constitute legal, valid and binding agreements of the Authority, enforceable against the Authority in accordance with their respective terms except as enforcement may be limited by bankruptcy, insolvency and other laws affecting the enforcement of creditors’ rights and remedies in general, or by the application of equitable principles if equitable remedies are sought. (F) Except as may be required under the “blue sky” or securities laws of the United States or any state, there is no authorization, approval, consent or other order of, or filing with, or certification by, the State or any other governmental authority or agency having jurisdiction over the Authority required for the issuance of the Bonds or the consummation by the Authority of the other financial transactions contemplated by the Official Statement and the Authority Documents. (G) Based on the information made available to such City Attorney in its role as counsel to the Authority, and without having undertaken to determine independently or assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Official Statement under the captions entitled “THE AUTHORITY,” and “LITIGATION”, nothing has come to such City Attorney’s attention that would lead it to believe that the statements contained in the above-referenced captions as of the date of the Official Statement and as of the date of Closing (excluding therefrom the financial and statistical data and forecasts included therein, as to which no opinion is expressed) contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (xi) An opinion, dated the Closing Date and addressed to the Authority, of Bond Counsel, substantially in the form set forth in Appendix E to the Official Statement, together with a letter or letters from such counsel, dated the Closing Date and addressed to the Underwriter and the Trustee, to the effect that the foregoing opinion may be relied upon by the Underwriter and the Trustee to the same extent as if such opinion was addressed to them; City Council Regular Meeting - Page 412 of 473

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(xii) A supplemental opinion, dated the Closing Date and addressed to the Underwriter, of Bond Counsel, to the effect that: (A) the Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended; (B) the Bond Purchase Agreement has been duly executed and delivered by the Authority and the City and is a valid and binding agreement of the Authority and the City; and (C) the statements contained in the Official Statement under the captions “DESCRIPTION OF THE BONDS,” “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS” and “TAX MATTERS” and in APPENDIX C–”SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS” and APPENDIX E—FORM OF OPINION OF BOND COUNSEL,” insofar as such statements expressly summarize certain provisions of the Indenture, the Lease Agreement, the Site Lease and the final opinion of Bond Counsel concerning certain tax matters relating to the Bonds, are accurate in all material respects; (xiii) A letter, dated the Closing Date and addressed to the Authority, the City and the Underwriter of Jones Hall, A Professional Law Corporation, San Francisco, California, as disclosure counsel (“Disclosure Counsel”), to the effect that, based on among other things, (i) inquiries and discussions of various legal matters, (ii) review of and reliance on certain documents, certificates, instructions, records and opinions of counsel, and (iii) participation in meetings and telephone conferences with representatives of the Authority and the City, Wolf & Company Inc. and NHA Advisors, as municipal advisors to the City, and others including the City Attorney and Underwriter’s counsel, during which the content of the Preliminary Official Statement and the Official Statement and related matters were discussed, no information has come to the attention of Disclosure Counsel with respect to the issuance of the Bonds which caused Disclosure Counsel to believe that (a) the Preliminary Official Statement as of its date (excluding therefrom financial, demographic and statistical data; forecasts, projections, estimates, assumptions and expressions of opinions; information relating to DTC and its book-entry only system; information under the captions “TAX MATTERS” and “UNDERWRITING”; and the Appendices to the Preliminary Official Statement (other than Appendices A and E) as to which we express no view) contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except for such information as is permitted to be excluded from the Preliminary Official Statement pursuant to Rule 15c2-12, including but not limited to information as to pricing, yields, interest rates, maturities, amortization, redemption provisions, ratings, debt service requirements, Underwriter’s discount and CUSIP numbers; or (b) the Official Statement as of its date and as of the Closing Date (excluding therefrom financial, demographic, statistical or economic or demographic data; forecasts, numbers, charts, tables, graphs, projections, estimates, assumptions and expressions of opinions; information relating to DTC and its book-entry only system or CUSIP numbers; information under the captions “TAX MATTERS” and “UNDERWRITING”; and the Appendices to the Official Statement (other than Appendices A and E) as to which we express no view) contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements made therein, in the light of the circumstances under which they were City Council Regular Meeting - Page 413 of 473

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made, not misleading. However, in providing advice and assistance as Disclosure Counsel, Disclosure Counsel provided no independent diligence on the MSRB’s Electronic Municipal Market Access website, and we express no view regarding the City’s or the City’s related entities’ compliance with any obligation to file annual reports or provide notice of events, each as described in Rule 15c2-12; (xiv) the opinion of Quint & Thimmig LLP, as counsel to the Underwriter, dated the Closing Date and addressed to the Underwriter, in form and substance acceptable to the Underwriter. (xv) A certificate of an authorized officer of the Trustee satisfactory to the Underwriter, certifying substantially as follows: (A) The Trustee is a national banking association duly organized and in good standing under the laws of the United States of America and has all necessary power and authority to enter into the Indenture and to perform its duties under the Indenture; (B) The Trustee is duly authorized to enter into the Indenture and to authenticate and deliver the Bonds to the Underwriter pursuant to the terms of the Indenture and, when executed by the other parties thereto, the Indenture will constitute a legal, valid and binding obligation of the Trustee enforceable in accordance with its terms; (C) The Bonds have been duly authenticated and delivered to the Underwriter pursuant to direction from the Authority; (D) The Trustee is not in breach of or default under any law or administrative rule or regulation of the State of California or of any department, division, agency or instrumentality thereof, of any applicable court or administrative decree or order, or any other material instrument to which the Trustee is a party or is otherwise subject or bound and which would materially impair the ability of the Trustee to perform its obligations under the Indenture; (E) To its knowledge, no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body, is pending or threatened in any way against the Trustee affecting the existence of the Trustee or the titles of its directors or officers to their respective offices, or seeking to restrain or enjoin the execution, sale or delivery of the Bonds, the application of the proceeds thereof in accordance with the Indenture, or in any way contesting or affecting the validity or enforceability of the Bonds or the Indenture; (F) The execution and delivery of the Indenture will not conflict with or constitute a breach of or default under the Trustee’s duties under such documents, or any law, administrative regulation, court decree, resolution, articles of association, bylaws or other material agreement to which the Trustee is subject or by which it is bound; and (G) No consent, approval, authorization or other action by any governmental or regulatory authority having jurisdiction over the Trustee that has not been obtained is or will be required for the authentication and delivery of the Bonds, the execution and delivery of the Indenture, the performance of the City Council Regular Meeting - Page 414 of 473

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Trustee’s duties under the Indenture or the consummation by the Trustee of the other transactions contemplated by the Indenture, except as such may be required under the state securities or blue sky laws in connection with the distribution of the Bonds by the Underwriter. (xvi) An opinion of counsel to the Trustee in form and substance acceptable to the Underwriter; (xvii) 15c2-12 certificates of City and the Authority; (xviii) Certified copies of the City Resolution and the Authority Resolution; (xix) Evidence, satisfactory to the Underwriter, that the Bonds have been assigned the rating of “___” by S&P Global Ratings, a Standard & Poor’s Financial Services LLC business; (xx) Transcripts of all proceedings relating to the authorization, issuance, execution and delivery of the Bonds certified by the City and the Authority as applicable; and (xxi) Such additional legal opinions, certificates, instruments and other documents as the Underwriter may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the date of the Closing, of the City’s representations and warranties contained herein and of the statements and information contained in the Official Statement and the due performance or satisfaction by the City and the Authority on or prior to the date of the Closing of all the agreements then to be performed and conditions then to be satisfied by each of them. All the opinions, letters, certificates, instruments and other documents mentioned above or elsewhere in this Bond Purchase Agreement shall be deemed to be in compliance with the provisions hereof if, but only if, they are in form and substance satisfactory to Bond Counsel, Disclosure Counsel and the Underwriter. If the City shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase, to accept delivery of and to pay for the Bonds contained in this Bond Purchase Agreement, or if the obligations of the Underwriter to purchase, to accept delivery of and to pay for the Bonds shall be terminated for any reason permitted by this Bond Purchase Agreement, this Bond Purchase Agreement shall terminate and none of the Underwriter, the Authority or the City shall be under any further obligation hereunder. 9. Termination. The Underwriter shall have the right to terminate the Underwriter’s obligations under this Bond Purchase Agreement to purchase, to accept delivery of and to pay for the Bonds by notifying the Authority and the City in writing, of its election to do so, if, after the execution hereof and prior to the Closing: (a) the United States has become engaged in, or there has been an escalation of, hostilities which, in the reasonable opinion of the Underwriter, materially adversely affects the marketability or market price of the Bonds; (b) there shall have occurred the declaration of a general banking moratorium by any authority of the United States or the State of New York or the State of California; City Council Regular Meeting - Page 415 of 473

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(c) an event shall have occurred, or been discovered as described in paragraph (k) of Section 5 or paragraph (l) of Section 6 hereof, which in the opinion of the Underwriter requires the preparation and publication of disclosure material or a supplement or amendment to the Official Statement; (d) any legislation, ordinance, rule or regulation shall be introduced in, or be enacted by any governmental body, department or agency in the State of California, or a decision by any court of competent jurisdiction within the State of California shall be rendered which, in the Underwriter’s reasonable opinion, materially adversely affects the market price of the Bonds; (e) there shall have occurred or any notice shall have been given of any intended downgrading, suspension, withdrawal or negative change in credit watch status by any national rating service to any of the Authority’s or the City’s obligations; (f) legislation shall be introduced, by amendment or otherwise, or be enacted by the House of Representatives or the Senate of the Congress of the United States, or a decision by a court of the United States shall be rendered, or a stop order, ruling, regulation or official statement by or on behalf of the Securities and Exchange Commission or other governmental agency having jurisdiction of the subject matter shall be made or proposed, to the effect that the execution, issuance, delivery, offering or sale of obligations of the general character of the Bonds, or the Bonds, as contemplated hereby or by the Official Statement, is or would be in violation of any provision of the Securities Act of 1933, as amended and as then in effect, or the Securities Exchange Act of 1934, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect, or with the purpose or effect of otherwise prohibiting the issuance, offering or sale of obligations of the general character of the Bonds, or the Bonds, as contemplated hereby or by the Official Statement; (g) additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any governmental authority or by any national securities exchange; (h) the New York Stock Exchange, or other national securities exchange or association or any governmental authority, shall impose as to the Bonds, or obligations of the general character of the Bonds, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by or the charge to the net capital requirements of broker-dealers; (i) trading in securities on the New York Stock Exchange or other national securities exchange or association shall have been suspended or limited or minimum prices have been established on either such exchange; (j) any action shall have been taken by any government in respect of its monetary affairs which, in the reasonable opinion of the Underwriter, has a material adverse effect on the United States municipal securities market; or as of the date hereof that in the Underwriter’s reasonable opinion materially adversely affects the marketability or market price of the Bonds; or (k) the marketability of the Bonds or the market price thereof, in the reasonable opinion of the Underwriter, has been materially and adversely affected by disruptive events, occurrences or conditions in the securities or debt markets. If this Bond Purchase Agreement shall be terminated pursuant to this Section 9, or if the purchase provided for herein is not consummated because any condition to the Underwriter’s obligations hereunder is not satisfied or because of any refusal, inability or failure on the part of City Council Regular Meeting - Page 416 of 473

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the City or the Authority to comply with any of the terms or to fulfill any of the conditions of this Bond Purchase Agreement, or if for any reason the City or the Authority shall be unable to perform all of its respective obligations under this Bond Purchase Agreement, neither the City nor the Authority shall be liable to the Underwriter for damages on account of loss of anticipated profits arising out of the transactions covered by this Bond Purchase Agreement. The Underwriter may, in its sole discretion, waive any of the conditions set forth in Section 9 or this Section 9. 10. Changes in Official Statement. After the Closing, neither the Authority nor the City will adopt any amendment of or supplement to the Official Statement to which the Underwriter shall reasonably object in writing. 11. Payment of Costs and Expenses. (a) All costs and expenses incident to the sale and delivery of the Bonds to the Underwriter shall be payable by the Authority from the proceeds of the Bonds, including, but not limited to: (i) the fees and expenses of the City, its counsel and consultants; (ii) the fees and expenses of the Authority, its counsel and consultants; (iii) the fees and expenses of Bond Counsel; (iv) the fees and expenses of Disclosure Counsel; (v) the fees and expenses of Wolf & Company, Inc. and NHA Advisors, the City’s municipal advisors; (vi) all expenses in connection with the preparation and printing of the Bonds; (vii) all expenses in connection with the preparation, printing, distribution and delivery of the Preliminary Official Statement, the Official Statement and any amendment or supplement thereto; (viii) the initial fees and expenses of the Trustee, including the reasonable fees and expenses of its counsel; (ix) the fees and expenses of any rating agency rating the Bonds; and (x) any credit enhancement costs for the Bonds. (b) The Underwriter shall pay all expenses incurred by it in connection with the public offering and distribution of the Bonds including, but not limited to: (i) all advertising expenses in connection with the offering of the Bonds; (ii) the fees and disbursements of Underwriter’s counsel, if any, and (iii) all out-of-pocket disbursements and expenses incurred by the Underwriter in connection with the offering and distribution of the Bonds, including, air travel and hotel accommodations in connection with the pricing of the Bonds; investor meetings, rating agency trips and meetings; the Closing; meals and transportation for the City, the Underwriter and other working group personnel during rating agency, investor meetings; pricing and Closing trips; expenses related to attending working group meetings, such as parking, meals and transportation and any other miscellaneous costs associated with the Closing; (iv) all other expenses incurred by the Underwriter in connection with the public offering and distribution of Bonds, except as provided in (a) above or as otherwise agreed to by the Underwriter and the City, and (v) the fees of the California Debt and Investment Advisory Commission.

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12. Notices. Any notice or other communication to be given under this Bond Purchase Agreement may be given by delivering the same in writing: To the Authority: Lynwood Public Financing Authority c/o City of Lynwood 11330 Bullis Road Lynwood, CA 90262 Attention: City Manager To the City: City of Lynwood 11330 Bullis Road Lynwood, CA 90262 Attention: City Manager To the Underwriter: Cabrera Capital Markets, LLC 444 South Flower Street, 13th Floor Los Angeles, CA 90071 Attention: Mr. Brian Corley, Senior Vice President 13. Parties in Interest. This Bond Purchase Agreement is made solely for the benefit of the Authority, the City and the Underwriter (including the successors or assigns of the Underwriter) and no other person shall acquire or have any right hereunder or by virtue hereof. All of the Authority’s and the City’s representations, warranties and agreements contained in this Bond Purchase Agreement shall remain operative and in full force and effect, regardless of: (a) any investigations made by or on behalf of the Underwriter; (b) delivery of and payment for the Bonds pursuant to this Bond Purchase Agreement; and (c) any termination of this Bond Purchase Agreement. 14. Determination of End of the Underwriting Period. For purposes of this Bond Purchase Agreement, the end of the underwriting period for the Bonds shall mean the earlier of (a) the Closing Date unless the City and the Authority have been notified in writing by the Underwriter, on or prior to the Closing Date, that the “end of the underwriting period” for the Bonds for all purposes of the Rule will not occur on the Closing Date, or (b) the date on which notice is given to the City and the Authority by the Underwriter in accordance with the following sentence. In the event that the Underwriter has given notice to the City and the Authority pursuant to clause (a) above that the “end of the underwriting period” for the Bonds will not occur on the Closing Date, the Underwriter agrees to notify the City and the Authority in writing as soon as practicable following the “end of the underwriting period” for the Bonds for all purposes of the Rule. The Underwriter agrees to file a copy of the Official Statement with each of the nationally recognized municipal securities information repositories. 15. No Assignment. This Bond Purchase Agreement is entered into between the City, the Authority and the Underwriter, and is solely for the benefit of the City, the Authority, the Underwriter and their respective successors or assigns, and no person other than the foregoing shall acquire or have any right under or by virtue of this Bond Purchase Agreement. All of the representations, warranties and agreements contained in this Bond Purchase Agreement shall survive the delivery of and payment for the Bonds and any termination thereof. 16. Effectiveness. This Bond Purchase Agreement shall become effective upon the execution of the acceptance by an authorized representative of the City and an authorized representative of the Authority and shall be valid and enforceable at the time of such acceptance. 17. Headings. The headings of the sections of this Bond Purchase Agreement are inserted for convenience only and shall not be deemed to be a part hereof.

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18. Governing Law. This Bond Purchase Agreement shall be interpreted, governed and enforced in accordance with the laws of the State of California. 19. Counterparts. This Bond Purchase Agreement may be executed in any number of counterparts, each of which shall be an original and all of which shall constitute one and the same instrument. If the foregoing is in accordance with your understanding of this Bond Purchase Agreement please sign and return to us the enclosed duplicate copies hereof, whereupon it will become a binding agreement among the City, the Authority and the Underwriter in accordance with its terms. Very truly yours, CABRERA CAPITAL MARKETS, LLC, as Underwriter By Brian Corley Senior Vice President LYNWOOD PUBLIC FINANCING AUTHORITY By Ernie Hernandez Executive Director Time of Signature CITY OF LYNWOOD By Ernie Hernandez City Manager Time of Signature City Council Regular Meeting - Page 419 of 473

Exhibit A Page 1
EXHIBIT A MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES, PRICES AND YIELDS $__________ LYNWOOD PUBLIC FINANCING AUTHORITY Lease Revenue Bonds, Series 2022 (Federally Taxable) Principal Interest Maturity Amount Rate Yield Price Redemption Provisions Optional Redemption. The Bonds maturing on or after August 1, ____ shall be subject to redemption prior to their respective maturity dates as a whole or in part on any date on or after August 1, ____, in any order deemed reasonable by the Authority, and by lot within a maturity, from prepayments of Lease Payments made at the option of the City pursuant to the Lease Agreement, at a redemption price equal to the principal amount of the Bonds to be redeemed, plus accrued but unpaid interest to the date fixed for redemption, without premium. Mandatory Sinking Fund Redemption. The Bonds maturing on August 1, ____, is subject to mandatory redemption, in part by lot, from sinking account payments set forth in the following schedule commencing August 1, ____, and on August 1 in each year thereafter to and including August 1, ____ at a redemption price equal to the principal amount thereof to be redeemed (without premium), together with interest accrued thereon to the date fixed for redemption. Sinking Fund Principal Amount Redemption Date to be Redeemed † Maturity The Bonds maturing on August 1, ____, is subject to mandatory redemption, in part by lot, from sinking account payments set forth in the following schedule commencing August 1, ____, and on August City Council Regular Meeting - Page 420 of 473

Exhibit A Page 2
1 in each year thereafter to and including August 1, ____ at a redemption price equal to the principal amount thereof to be redeemed (without premium), together with interest accrued thereon to the date fixed for redemption. Sinking Fund Principal Amount Redemption Date to be Redeemed † Maturity Extraordinary Mandatory Redemption. The Bonds are subject to redemption prior to their respective maturity dates, upon notice as hereinafter provided, as a whole or in part on any date, from prepayments of Lease Payments made by the City pursuant to the Lease Agreement from funds received by the City due to a taking of the Leased Property or any portion thereof under the power of eminent domain or from insurance proceeds received by the City due to damage to or destruction of the Leased Property or any portion thereof, under the circumstances and upon the conditions and terms prescribed in the Indenture and in the Lease Agreement.

City Council Regular Meeting - Page 421 of 473
Agenda Item # 13.

AGENDA STAFF REPORT
DATE:

May 17, 2022

TO:

Honorable Mayor and Members of the City Council

APPROVED BY:

Ernie Hernandez, City Manager

PREPARED BY:

Patrick Matson, Director of Human Resources

SUBJECT:

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD ADOPTING A

STEP PLACEMENT AND SALARY SETTING POLICY IN ACCORDANCE WITH THE

AUDITOR OF THE STATE OF CALIFORNIA'S AUDIT FINDINGS AND

CONCLUSIONS
Recommendation:

Staff recommends that the City Council of the City of Lynwood adopt the attached resolution entitled, "A

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD ADOPTING A STEP PLACEMENT

AND SALARY SETTING POLICY IN ACCORDANCE WITH THE AUDITOR OF THE STATE OF CALIFORNIA'S AUDIT FINDINGS AND CONCLUSIONS."

Background:

The City of Lynwood underwent an audit during October and November of 2017 by the Auditor of the State of California.

In its follow-up reports dated December of 2018 and September of 2021, the State Auditor identified the need for the City to develop a policy on how to prepare salary surveys and provide justification to the City Council in instances when it proposed salary increases above the amounts recommended by the study.

As such, the City implemented a "Salary Setting" policy in June of 2019 to address the concerns outlined in the State Auditor's report. However, in its most recent report, the State Auditor determined that the City was not complying with its own policy, citing the use of non-comparable agencies in its surveys, the absence of supporting documentation, and lack of staff analysis when bringing the proposed salary increases to the City Council for approval.

Discussion and Analysis:

As mentioned, the City implemented a "Salary Setting" policy in response to the initial State Auditor's report outlining its concerns with respect to salary adjustments. Around the same time, the City also implemented a "Step Placement" policy, which was created to outline the process for employees' salary step placement within a City Council Regular Meeting - Page 422 of 473
particular salary range for various personnel actions.

In streamlining its efforts, staff has combined both policies into one and is recommending that the City Council adopt the proposed resolution in order to comply with the recommendations set forth by the State Auditor.

If adopted, the
City Manager will then task the Director of Human Resources to consistently administer and apply the new policy and its and procedures therein. Furthermore, the Director of Human Resources will be charged with the responsibility of ensuring that the ten (10) mutually agreed upon comparable cities, between the City and bargaining units, are utilized when conducting its salary surveys and/or
classification and compensation studies.

Fiscal Impact:

N/A.

Coordinated With:

N/A.

ATTACHMENTS:

Description
Exhibit A - Step Placement and Salary Setting Policies (Final) Resolution - Step Placement and Salary Setting Policy
City Council Regular Meeting - Page 423 of 473
Exhibit A
P a g e 1 | 10

CITY OF LYNWOOD

ADMINISTRATIVE POLICY

STEP PLACEMENT AND SALARY SETTING POLICIES

STEP PLACEMENT POLICY

I. PURPOSE
To provide guidelines to employees and potential employees on step placement and step increases and ensure a uniform interpretation and application of the City’s compensation and classification system.

II. POLICY
In accordance with the applicable Memoranda of Understanding, new employees, as well as current employees accepting another position within the City shall be appointed at the first step of the salary range to which their class is assigned, except when the education and /or previous training or experience of a proposed employee are substantially superior to those required of the class and justify a beginning salary in excess of such minimum compensation as deemed appropriate by the Director of Human Resources and/or the City Manager.

III. APPLICABILITY
This policy applies to all employees and applicants to classified positions.

IV. DEFINITIONS

A. Anniversary Date:

An employee’s in itial anniversary date will be one year following the employee’s initial appointment to a classification, minus any unpaid absences. Changes to an employee’s classification resulting from a promotion and/or a reclassification will result in a new anniversary date.

B. Seniority Date:

An employee seniority date starts when the employee was hired as a fulltime employee. When an employee is on an unpaid leave of absence, such time does not count as service time for step increases, longevity or seniority.

C. Merit Step Increase:

An employee is eligible for the next step increase following a satisfactory completion of their probation period and thereafter in intervals of one (1) year to the next step on their anniversary date, until they reached the top step of the salary range. There will be no accelerated advancements of steps in between anniversary dates.

City Council Regular Meeting - Page 424 of 473
Exhibit A
P a g e 2 | 10

D. Salary Upgrade:

The movement of a classification to a higher salary rate of pay within the salary schedule assigned to a particular classification. Salary upgrades are processed in accordance with the provisions found under the “Salary Setting Policy” heading on page 6 of this policy.

E. Promotion:

The movement of an employee from one classification to another classification which is allocated to a higher max imum rate of pay through a Civil Service recruitment process or a reclassification.

The employee will be on probation for six (6) months and shall receive the next step upon successfully completing probation. Thereafter, the employee shall receive the next step salary advancement on a yearly basis using the employee’s new anniversary date.

F. Probationary Period:

A working test period during which an employee is required to demonstrate his/her fitness for the duties to which he/she is appointed by actual performance of the duties of the position. The probation period is six (6) month and can be extended up to a year.

G. Demotion:

The movement of an employee from one class ification to another class ification having a lower ma ximum rate of pay due to disciplinary process. The employee will be placed on the step closest to, but less than, his/her/their current rate of pay.

If the employee makes more than the highest step of the new (lower) range, he/she will be placed at Step E.

The employee’s anniversary date and seniority dates to the classification shall be adjusted to the date of the demotion.

H. Lateral Transfer:

A change of an employee from one position to another position in the same classification. Transfers may be inter-or intra-departmental. In order to be eligible for a voluntary transfer, an employee must have complete d his/her /their probationary period and be in good standing in his/her/their position.

I. Reclassification:

Positions, the duties of which have changed materially , so as to necessitate reclassification. A reclassific ation will follow the procedures es tablished in accordance with the provisions found under the “Salary Setting Policy” heading on page 6 of this policy. Reclassifications shall not be used for the purpose of avoiding rules and regulations for demotions and promotions.

J. Pay Grade Advancement:

City Council Regular Meeting - Page 425 of 473
Exhibit A
P a g e 3 | 10

The movement of an employee from one pay grade in a classification to another grade in the same classification through a selection process or a reclassification.

K. Temporary Appointment:

An appointment acquired by a person who possesses the minimum qualifications established for a particular class, and who has been appointed to a position in that class in the absence of available eligible list for a maximum period of six (6) months and may be extended up to a year.

L. Modified Work Assignment:

When an employee is temporarily assigned modified or alternative work due to a work related illness or injury, the employee will receive all pay and benefits as though the employee continued in his/her /their normal assignments, less any premium payments for which the employee is no longer eligible because of duties he/she/they are not performing while on light duty.

M. Classification Consolidation:

When two or more classifications are consolidated, employees in the positions are transferred to the new salary range with no change in step placement.

N. Salary Ranges
Each job classification is assigned to a pay range with a minimum and maximum salary range and identifies steps in between the minimum and maximum rate.

The Salary Schedule is composed of five (5) steps, A -E. These steps were developed through the collective bargaining process for represented employees.

The salary steps were approved by the City Council after receiving recommendations from the City Manager and/or the Human Resources Director.

See the Salary Setting Policy on page 6 for additional information.

O. Unpaid Leave

Occasionally an employee will be absent from work without pay due to an authorized leave, temporary disability, extended leave of absence or suspension.

In these instances, the anniversary, longevity and or seniority date , may be adjusted for each full workday of unpaid leave of absence.

P. Probationary Reversion
When an employee fail s probation and revert to the classific ation in which he/she/they formerly held status, he/she/they will be returned to the position at the same step held prior to the promotion.

V. STEP PLACEMENT GUIDELINES

A. Salary Upgrade

City Council Regular Meeting - Page 426 of 473
Exhibit A
P a g e 4 | 10

The approval of the City Council is required to implement a salary upgrade. Upon City Council’s approval, the employee(s) will be placed in the new salary range effective the beginning of the pay period following approval by the City Council.

The employee(s) in the classification that receives a salary range upgrade will be placed on a step that is closest to their current range and step, but not lower. The employee will not be required to serve a new probationary period, but will have an adjusted anniver sary date. The next step increase will be on the employee’s anniversary date, the year following the salary adjustment and every year thereafter, until the top of the range is reach.

B. Pay Grade Advancement

Upon the pay grade advancement, an employee will be placed in the new range on the step that provides for a pay increase and will be effective at the beginning of the pay period. The employee will not re-serve probation and will be eligible for his/her/their next step increase one year following the initial placement into the new pay grade.

A Pay Grade Advancement will not result in a change in an employee’s seniority in the classification.

C. Reclassification
The approval of the City Council is required to implement a reclassification. Upon City Council’s approval, the employee will be place in the new position effective the beginning of the pay period following the approval of the City Council. The employee will be placed no higher than the step in the new range that provides for a pay increase and will be required to complete a six -month probationary period.

Thereafter, the employee shall receive the next step salary advancement on a yearly basis using the employee’s new anniversary date.

D. Temporary Appointment

In the absence of an appropriate employment eligibility list, a temporary appointment may be made by the appointing authority of a classified employee or non-employee, who meets the minimum training and experience qualifications for the position.

Temporary Appointments are limited to a six (6 months) period and may be extended up to a year. The employee should be placed in the step in the new range that provides for a pay increase. Temporarily appointed employees do not serve a probationary period, are not eligible for subsequent step increases nor are they eligible for incentive/special pays or other benefits that may be afforded the new classification.

City Council Regular Meeting - Page 427 of 473
Exhibit A
P a g e 5 | 10

E. Promotion

When an employee is promoted to a position with skill pay, the skill pay is not included as part of the one-step minimum salary increase. In other words, the skill pay is in addition to the increase received as a result of the promotion.

When promoting from a position with a skill pay to a position with no skill pay, the skill pay is included when determining step placement. In determining step placement when both positions have a different skill pay, include the skill pay in the former classification, and treat the new skill pay as being in addition to the increase received as a result of the promotion.

When promoting from a position with skill pay to a position with the same skill pay (i.e. ICBO Specialty Certification), do not include the skill pay in the former position to determine step placement. Treat the new skill pay as being in addition to the increase received as a result of the promotion.

VI. FULL-TIME NEW HIRE/EMPLOYEE

A newly hired employee shall be placed on Step A of the salary range established for the position.

A current employee promoting to a higher classification shall be placed on Step A of the salary range established for the position or the next closest step that provides for an increase in pay.

To hire an employee at other than Step A, a department is required to complete the “Request for Exception to Step Placement” form found at the end of this policy.

A department should review the resume/application of the potential employee, recognizing that approval will be based on individual qualifications and education, market availability, and the salaries of employees already in the classification. The completed form is then forward to the Human Resources Department for review.

The HR Department will indicate either approval or disapproval of the request and then return the form to the originating department. Departments are advised not to commit to other than the first step without first receiving authorization.

VII. ANNUAL STEP INCREASES

An increase within any salary range established in the salary schedule shall be based on satisfactory job performance. Salary increases are not automatic.

Supervisors shall complete a performance evaluation prior to the employee’s anniversary date along with a Personnel Action Form (PAF).

If the supervisor fail s to complete an employee’s performance evaluation prior to the employee’s anniversary date, the increase shall be retroactive to the anniversary date once the evaluation is served and processed.

City Council Regular Meeting - Page 428 of 473
Exhibit A
P a g e 6 | 10

If an employee is not recommended for a step increase, the supervisor shall issue a subsequent evaluation six months from the date of the original evaluation.

The anniversary date for an employee who does not receive a step increase due to unsatisfactory performance will be reset to the date the step increase is received (i.e., original anniversary date on 6/01/19; step withheld for three months and step then given on 9/01/19. New anniversary date is 9/1/20). An employee whose probationary period is extended, will not be eligible for a merit increase until the probationary period is satisfactorily completed.

VIII. PART-TIME, SEASONAL EMPLOYEE
A newly h ired part-time, seasonal employee shall be hire d at Step A of the applicable salary range.

Should a department request to place a newly hired part-time employee at a higher step other than Step A, a “Request for Exception to Step Placement” form must be submitted to the Director of Human Resources who will review the request and determine whether to approve or deny the request.

A part-time employee, regardless of the type of position assigned, is eligible for a step increase upon receiving a favorable ann ual performance evaluation of “Satisfactory” or higher, one-year from the date of hire of the part -time employee and every year thereafter, until the employee has reached his/her final step within the salary range.

SALARY SETTING POLICY

I. PURPOSE

The purpose of this policy is to establish guidelines and procedures for the City in setting and adjusting employees’ salaries and salary ranges. This policy is not intended to supplant contract negotiations with recognized employee organizations over wages, hours and terms and conditions of employment.

II. DEFINITIONS

A. Internal Equity - Situation in which employees who do similar jobs within an organization receive salaries, and the amount they are paid is related in a fair way to the type of job that they do.

B. Meet and Confer – Requirement under the Meyers -Milias-Brown Act (“MMBA”) (Government Code §3500.5 et seq.) for public employers to meet with recognized employee organizations over wages, hours and terms of conditions of employment.

C. Recruitment and Retention – The ability to attract, hire and retain qualified employees to fill positions.

D. Salary Ranges – Biweekly pay ranges paid to all employees duly adopted by the Lynwood City Council.

City Council Regular Meeting - Page 429 of 473
Exhibit A
P a g e 7 | 10

E. Salary Surveys – Surveys conducted to benchmark sal aries paid for Lynwood classification against other local agencies and cities, generally conducted within the same job market, to the extent possible, taking into consideration similar job duties of the comparable positions, similarities between the agenci es being compared (i.e., population, budget, economic conditions).

F. Subordinate Salary Compression – The percentage of difference between salaries of a supervisor and his/her subordinate.

III. POLICY

It is the policy of the City of Lynwood to pay employees a fair and competitive wage, in keeping with budget limitations, and to ensure that internal equity is maintained when setting or increasing salaries.

IV. APPLICABILITY

This policy applies to all classified, part-time unclassified and at-will salaries.

V. PROCEDURES AND RESPONSIBILITIES

New Position

A. When a classification is created, Human Resources will conduct a salary survey using ten (10) benchmarked cities, as agree to by the employee associations. There may be a need for different benchmark agencies based on the classification to be analyzed, such as water positions.

B. The ten benchmark cities shall be updated as needed, subject to meet and confer.

C. The final salary provided a new position will be based on the following factors:

1. Salary (Benchmarking) Surveys

2. Internal Equity

3. Recruitment and Retention issues

4. Subordinate Salary Compression/Compaction

5. Meet and Confer with employee organizations.

6. Existing Salary Ranges
D. Human Resources will document the final decision made and the reasons for setting the salary at the level selected and provide the analysis and justification to City Council as part of the staff report.

Existing Position

City Council Regular Meeting - Page 430 of 473
Exhibit A
P a g e 8 | 10

A. An existing position may be evaluated when there has been a change in duties, and at the request of a department head or the employee association, using ten (10) benchmarked cities, as agree to by the employee associations. There may be a need for different benchmark agencies based on the classification to be analyzed, such as utility positions.

B. When there has been a change in duties, the incumbent will complete a position evaluation on a form provided by Human Resources. A classification analysis will be conducted. If necessary, a salary survey will also be conducted, based on the results of the classification analysis.

C. If there are no change in duties, a salary survey may be conducted if it is believed that the position is paid below market and salary survey has not previously been conducted within the prior 24 months.

D. The ten benchmark cities shall be updated as needed, subject to meet and confer.

E. The final salary provided to an existing position, with or without a change in duties, will be based on the following factors:

1. Salary (Benchmarking) Survey

2. Internal Equity

3. Recruitment and Retention issues

4. Subordinate Salary Compression/Compaction

5. Meet and Confer with employee organizations.

6. Existing Salary Ranges

F. Human Resources will document the final decision made and the reasons for setting the salary at the level selected and provide the analysis and justification to City Council as part of the staff report.

VI. APPROVALS

In accordance with Title 18 of the Lynwood Municipal Code, all classification and salary changes must be approved by the Lynwood City Council. New classifications or classification changes must also be approved by the Personnel Board.

No employee shall be appointed until the necessary approvals are received.

VII. DISSEMINATION OF POLICY

All employees shall receive a copy of this Policy when they are hired. The Policy may be updated from time to time.

City Council Regular Meeting - Page 431 of 473
Exhibit A
P a g e 9 | 10

VIII. APPROVED BY THE CITY MANAGER

__________________________________________

IX. ACTION

This Policy is effective on May 3, 2022.

City Council Regular Meeting - Page 432 of 473
Exhibit A
P a g e 10 | 10

REQUEST FOR EXCEPTION TO

STEP PLACEMENT

Instructions: Department should review the resume/application of a potential employee, recognizing that approval wi ll be based on individual qualifications and education , market availability, and the salaries employees already in the classification. Submit completed form , along with documentation, if appropriate, to the HR Department for review. The HR Department wil l indicate either approval or disapproval of the request and return the form to the originating department. Departments are advised not to commit to other than the first step without first receiving authorization for HR.

Date:

To: Director of HR & Risk Management

From:

Applicant’s Name:

Title/Position: FT: PT:

Salary Range: Step Requesting:

Justification for Request:

Department Head Signature : Date:

FOR HR ONLY
Approved: Not Approved:

Salary Range/Step

Comments:

Director of Human Resources, Signature Date
City Council Regular Meeting - Page 433 of 473

RESOLUTION NO. [XX]

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD ADOPTING

A STEP PLACEMENT AND SALARY SETTING POLICY IN ACCORDANCE WITH THE AUDITOR OF THE STATE OF CALIFORNIA’S AUDIT FINDINGS AND

CONCLUSIONS

WHEREAS, in its reports dated December 2018 and September 2021, the Auditor of the State of California identified the need for the City to develop a policy on the preparations of its salary surveys and/or classification and compensation studies; and

WHEREAS, in response to these reports from the Auditor of the State of California, the City of Lynwood created a “Salary Setting” policy in June of 2019; and

WHEREAS, the City is proposing to combine its “Step Placement” and “Salary Setting” policies into one as shown in Exhibit A; and

WHEREAS, the City desires to renew its commitment to adhere to its own policy to satisfy the recommendations listed in the Auditor of the State of California’s reports; and

WHEREAS, the City Manager will direct the Director of Human Resources to consistently administer the policy in Exhibit A and its procedures therein; and

WHEREAS, the Director of Human Resources will be responsible for ensuring that the ten (10) mutually agreed upon compar able cities, between the City and bargaining units, are utilized when conducting its salary surveys and/or classification and compensation studies; and

NOW, THEREFORE, THE LYNWOOD CITY COUNCIL DOES HEREBY
RESOLVE AND DETERMINE AS FOLLOWS:

Section 1. The City Council of the City of Lynwood hereby finds and declares that the foregoing recitals are true and correct, and incorporates them herein as findings and as a substantive part of this Resolution.

Section 2. That the City Council adopts the revised “Step Plac ement” and “Salary Setting” policies into one as shown in Exhibit A.

Section 3. Authorize the Mayor to execute the Resolution for and on behalf of the City of Lynwood.

Section 4. This Resolution shall take full force and effect immediately upon adoption by the City Council.

City Council Regular Meeting - Page 434 of 473

PASSED, APPROVED and ADOPTED this 17th day of May, 2022

Jorge Casanova
MAYOR

ATTEST:

Maria Quinonez

CITY CLERK

APPROVED AS TO FORM: APPROVED AS TO CONTENT:

Noel Tapia Patrick Matson
CITY ATTORNEY DIR. OF HUMAN RESOURCES

City Council Regular Meeting - Page 435 of 473
Agenda Item # 14.

AGENDA STAFF REPORT
DATE:

May 17, 2022

TO:

Honorable Mayor and Members of the City Council

APPROVED BY:

Ernie Hernandez, City Manager

PREPARED BY:

Mark Flores, Director of Recreation and Community Services John Yonai, Interim Director of Community Development
Jose Trejo, Deputy Director

SUBJECT:

AUTHORIZING THE PROCUREMENT OF CITY FLEET VEHICLES AND SPORTS

FIELD EQUIPMENT
Recommendation:

Staff recommends that the Lynwood City Council adopt the attached resolution entitled: “A RESOLUTION OF

THE CITY COUNCIL OF THE CITY OF LYNWOOD APPROVING THE PURCHASE OR LEASE OF CITY

FLEET VEHICLES AND SPORTS FIELD EQUIPMENT AS DETERMINED APPROPRIATE BY THE CITY MANAGER FOR CITY OPERATIONS”

Background:

The approved 2021-2023 Citywide Budget with amendments includes funds for the appropriation of fleet and equipment purchases. Pursuant to Lynwood Municipal Code Section 6-3.7(b)(2), purchases of supplies, equipment and routine services where dollar amount involved are $25,000 or more shall be by formal competitive bid.

Annually the City budgets for and purchases fleet vehicles and equipment to either replace existing vehicles and equipment or to provide the necessary equipment for related programs and services. Staff is recommending that the City purchase or lease vehicles as appropriate for City operations to include public safety, parking enforcement and recreational activities.

Discussion and Analysis:

Procurement activities will include staff contacting multiple local dealerships to obtain pricing on comparable vehicles and field equipment. However, local dealerships may not be able to provide pricing due to no availability of comparable vehicles, delays in manufacturer build schedules and general production backlogs throughout the country. Consequently, as the
City Council previously approved the use of a cooperative purchasing agreement City Council Regular Meeting - Page 436 of 473
for the purchase of vehicles and equipment on December 15, 2020 (Resolution #2020.166), staff will also utilize this option to purchase or lease the authorized fleet and equipment.

If the cooperative agreement option best meets the City's needs, staff will utilize Sourcewell
’s national cooperative
agreement #091521-NAF with National Auto Fleet Group and the National Intergovernmental Purchasing Alliance Company (NIPA) cooperative agreement #2017025 with the Toro Company for the purchase of fleet and sports equipment.

This type of purchase option is similar to “piggyback” procurement pursuant to Lynwood Municipal Code Section 6-6.8(A) for public works contracts which allows securing a contract for a public project with this purchasing method. Piggyback procurement utilizes another public agency’s contract or agreement to obtain more advantageous prices and terms that cannot be otherwise obtained on the open market.

Both of the national master agreements offer
competitive pricing. This meets the City’s goal of receiving competitive pricing through competitive bidding.

This is an
alternate procurement procedure and as we revise the purchasing policy we will include such processes to satisfy the current language in the municipal code requiring a four-fifths vote of the City Council as this action is recommending. This alternate procurement waives the formal bidding process by utilizing cooperative agreements to complete the purchases and making a finding, by way of a four-fifths vote of the City Council that such a purchase is more economically and efficiently effected through the use of this alternate procurement method.

Staff has identified the desired vehicles and field equipment.

Where possible staff will seek to purchase or lease
alternate fuel vehicles that generally have a higher price point but qualify for State AQMD funds currently in the City's budget. Staff will prioritize the acquisition of alternate fuel vehicles to take advantage of special restricted funds. Staff is seeking authorization to procure three regular or alternate fuel mid size trucks with MSRPs not to exceed $29,999; one regular or alternate fuel full size sport utility vehicle and one heavy duty truck with MSRPs not to exceed $49,999; two regular or alternate fuel full size trucks with MSRP not to exceed $39,999; and one infield groomer utility vehicle with MSRP not to exceed $29,999 for City operations to include recreation, public works, and public safety related activities.

It is anticipated that it will take approximately 3 - 8 months for the City to take delivery of said vehicles and equipment. With this in mind and if needed, staff further recommends that the purchase orders for the truck and equipment be authorized to be carried over into the new FY 23 budget.

Fiscal Impact:

Funds for the purchase of fleet vehicles and equipment are included in the existing City budget. There are $215,000 in City funds and $250,000 in AQMD funds for alternate fuel vehicles.

Coordinated With:

City Attorney’s Office
Finance Department
ATTACHMENTS:

Description
Reso- Vehicle and Field Equipment
City Council Regular Meeting - Page 437 of 473
RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD APPROVING

THE PROCUREMENT OF CITY FLEET VEHICLES AND SPORTS FIELD EQUIPMENT

WHEREAS, annually the City budgets for and purchases fleet vehicles and equipment to either replace existing vehicles and equipment or to provide the necessary equipment to provide related programs and services; and

WHEREAS, pursuant to the Lynwood Municipal Code Section 6 -3.7(b)(2), purchases of supplies, equipment and routine services where the dollar amount involved is $25,000 or more shall be by formal competitive bid; and

WHEREAS, the Lynwood Municipal Code Section 6 -3.13(a)(3) allows for an exception to the formal bidding process if the City Council finds by resolution adopted by not less t han 4/5ths of its members that such an acquisition may be more economically and efficiently effected through the use of an alternate procedure such as using a cooperative purchasing contracts; and

WHEREAS, cooperative purchasing contracts offer competitive pricing on the purchase of qualifying vehicles and equipment; and

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LYNWOOD DOES HEREBY FIND, PROCLAIM, ORDER, AND RESOLVE AS FOLLOWS:

Section 1. The City Council for the City of Lynwood finds and declares that the forgoing recitals are true and correct, and incorporates said recitals fully into this Resolution as substantive findings.

Section 2. The City Council for the City of Lynwood finds and declares that it is in the City’s best interest to purchasing or lease vehicles and equipment for City operations.

Section 3. The City Council of the City of Lynwood approves and authorizes the City Manager to purchase or lease the following fleet and equipment acquisitions and execute corresponding purchase orders with the qualifying vendor: three regular or alternate fuel mid size trucks with MSRPs not to exceed $29,999; one regular or alternate fuel full size sport utility vehicle and one heavy duty truck with MSRPs not to exceed $49,999; two regular or alternate fuel full size trucks with MSRP not to exceed $39,999; and one infield groomer utility vehicle with MSRP not to exceed $29,999, for City operational activities.

Section 4. The City Council of the City of Lynwood finds that if vehicles and equipment bids are not available from local vendors the City by a four-fifths vote of its members finds City Council Regular Meeting - Page 438 of 473
that such acquisition is more economically and efficiently effected through the use of an alternate procedure such as cooperative purchasing agencies.

Section 5. The City Council of the City of Lynwood authorizes the payment through the pre-pay process should the selected vendors require payment upon delivery.

Section 6. The City Council of the City of Lynwood authorizes the City Manager to execute a purchase order for each purchase and allow s the designated funding to be carried over into the new FY-23 as it is anticipated that it will take approximately three to nine months to receive the vehicles and equipment.

Section 7. The City Clerk shall certify to the adoption of this resolution and hereafter the same shall be in full force and effect.

PASSED, APPROVED and ADOPTED this 17th day of May 2022.

________________________________
Jorge Casanova, Mayor

ATTEST:

___________________________ _________________________________ Maria Quinonez, Ernie Hernandez,
City Clerk City Manager

APPROVED AS TO FORM: APPROVED AS TO CONTENT:

_________________________ ________________________________ Noel Tapia,
City Attorney
City Council Regular Meeting - Page 439 of 473

STATE OF CALIFORNIA )
) §

COUNTY OF LOS ANGELES )

I, the undersigned, City Clerk of the City of Lynwood, do hereby certify that the above and foregoing resolution was duly adopted by the City Council of said City at its regular meeting thereof held in the City Hall of the City on the 3rd day of May, 2022 and passed by the following vote:

AYES: COUNCIL MEMBERS FLORES, SANTANA, SOTO MAYOR PRO TEM

SOLACHE, AND MAYOR CASANOVA

NOES: NONE

ABSTAIN: NONE

ABSENT: NONE

Maria Quinonez,
City Clerk

STATE OF CALIFORNIA )
) §

COUNTY OF LOS ANGELES )

I, the undersigned City Clerk of the City of Lynwood, and Clerk of the City Council of said City, do hereby certify that the above and foregoing is a full, true and correct copy of Resolution No. on file in my office and that said resolution was adopted on the date and by the vote therein stated. Dated this 3rtd day of May, 2022.

Maria Quinonez,
City Clerk

City Council Regular Meeting - Page 440 of 473
Agenda Item # 15.

AGENDA STAFF REPORT
DATE:

May 17, 2022

TO:

Honorable Mayor and Members of the City Council

APPROVED BY:

Ernie Hernandez, City Manager

PREPARED BY:

Mir T. Fattahi, Acting City Engineer

George Cambero, Interim Utility Manager
Lorry Hempe, Public Works Special Projects Manager

SUBJECT:

CONTINUATION OF AN EMERGENCY ACTION PER PUBLIC CONTRACT CODE SECTION 22050 FOR THE EMERGENCY ACTION AT WELL NO. 19
Recommendation:

Staff recommends for the City Council to adopt the attached resolution entitled:
“A RESOLUTION OF THE CITY

COUNCIL OF THE CITY OF LYNWOOD FINDING THAT THERE IS A NEED TO CONTINUE THE

EMERGENCY ACTION, BY WAY OF A FOUR-FIFTHS VOTE OF ITS MEMBERS, PURSUANT TO PUBLIC CONTRACT CODE SECTION 22050(c)(1) WITH RESPECT TO THE EMERGENCY REHABILITATION ON WELL NO. 19.”

Background:

The
City Council delegated to the City Manager the authority to order any action specified under California Public Contract Code Section 22050(a)(1) and pursuant to Section 22050(b). This delegation gave the City Manager the authority, in case of an emergency, to take any directly related and immediate action required by that emergency, and procure the necessary equipment, services and supplies for those purposes, without giving notice for bids to let contracts.

On April 5, 2022, the City Council found that an emergency existed at Well No. 19 necessitating immediate actions. At the same meeting, the City Council authorized the City Manager to begin emergency rehabilitation work which includes backfilling the well, brushing of the casing with Sterilene to remove bio-fouling, patching the seven (7) holes in the well casing, changing the pump from oil to water lubrication, and disinfecting the well and approved the additional optional work on the zone sampling while the well is offline.

Discussion and Analysis:

The approved emergency work at Well No. 19 has not yet been completed. There is a need to continue the City Council Regular Meeting - Page 441 of 473
emergency work.

Four-fifths Vote Requirement to Continue the Action

Pursuant to Public Contract Code Section 22050(c)(1) at every regularly scheduled meeting after the initial review of the emergency action, a four-fifths vote of the City Council is needed to continue the action until the emergency action is terminated.

Fiscal Impact:

Finance Department
City Attorney’s Office

Coordinated With:

Finance Department
City Attorney’s Office
ATTACHMENTS:

Description
Resolution
City Council Regular Meeting - Page 442 of 473
1 RESOLUTION._____________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD FINDING

THAT THERE IS A NEED TO CONTINUE THE EMERGENCY ACTION, BY WAY OF A

FOUR-FIFTHS VOTE OF ITS MEMBERS, PURSUANT TO PUBLIC CONTRACT CODE SECTION 22050(c)(1) WITH RESPECT TO THE EMERGENCY REHABILITATION ON WELL NO. 19

WHEREAS, Well No. 19 produces water at 2,054 acre feet per year; and

WHEREAS, Well No. 19 water production is almost half of the City’s entire water system; and

WHEREAS, staff has observed that Well No. 19 started producing an overwhelming amount of sand and silt during normal pumping and subsequent videos of the well exposed the holes in the well casing; and

WHEREAS, upon recommendation from the City’s Utility Services Manager and Acting City Engineer, immediate rehabilitation of Well No. 19 is needed to resolve water quality issues and to bring the well back into production; and

WHEREAS, it is cost-effective to conduct the option al zone sampling at a cost of $49,690 while the well is off-line; and

WHEREAS, California Public Contract Code Section 22050 provides that in the case of an emergency, a city, pursuant to a 4/5 s vote of its governing body, may repair or replace a public facility, take any directly related and immediate action required by that emergency, and procure the necessary equipment, services and supplies for those purposes, without giving notice for bids to let contracts provided the public agency is able to make a finding, based on substantial evidence, that the emergency will not permit a delay resulting from a competitive solicitation for bids, and that the action is necessary to respond to the emergency; and

WHEREAS, California Public Contract Code Section 22050 provides that in the case of an emergency, a city, pursuant to a 4/5s v ote of its governing body , a public agency may delegate to the City Manager the authority to order any action pursuant to California Public Contract Code Section 22050(a)(1) to address the emergency; and

WHEREAS, on April 5, 2022 , the City Council found that there is substantial evidence in the record demonstrating that the production and presence of an overwhelming amount of sand and silt during normal pumping and subsequent videos of Wells No. 19 and the existence of holes in the well casing has created an emergency requiring immediate action to procure the necessary equipment, services, and supplies for those purposes, without giving notice for bids to let contracts; and City Council Regular Meeting - Page 443 of 473
2 WHEREAS, the City Council delegated the authority to the City Manager or his or her designee upon recommendation from the Director of Public Works and/or City Engineer the authority to order any action pursuant to the California Public Contract Code Section 22050 (a)(1) including the waiving of formal competitive bidding requirements to engage a consultant to assess and expose Well No. 19 deficiencies as evidenced by the significant presence of sand and silt as well as holes to the well casing; and

WHEREAS, the City Council authorized the City Manager to begin emergency rehabilitation wo rk which includes backfilling the well, brushing of the casing with Sterilene to remove bio -fouling, patching the seven (7) holes in the well casing, changing the pump from oil to water lubrication, and disinfecting the well and approves the additional optional work on the zone sampling while the well is offline; and

WHEREAS, the approved emergency work at Well No. 19 has not yet been completed, thus requiring continuation of the emergency work.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LYNWOOD DOES HEREBY FIND, PROCLAIM, ORDER AND RESOLVE AS FOLLOWS:

Section 1. That the City Council has reviewed the emergency action and finds that by way of a four-fifths vote of its members, finds that there is a need to continue the action pursuant to Public Contract Code Section 22050(c)(2).

Section 2. This resolution shall take effect immediately upon its adoption.

Section 3. The City Clerk shall certify as to the adoption of this City Council Resolution.

PASSED, APPROVED and ADOPTED this 17th day of May, 2022.

______________________________
Jorge Casanova
Mayor
ATTEST:

___________________________ ______________________________ María Quiñónez Ernie Hernandez
City Clerk City Manager

City Council Regular Meeting - Page 444 of 473
3 APPROVED AS TO FORM: APPROVED AS TO CONTENT:

__________________________ ______________________________ Noel Tapia Mir T. Fattahi
City Attorney Acting City Engineer
City Council Regular Meeting - Page 445 of 473
4 STATE OF CALIFORNIA )
)

COUNTY OF LOS ANGELES )

I, the undersigned, City Clerk of the City of Lynwood, d o hereby certify that the foregoing Resolution was passed and adopted by the City Council of the City of Lynwood at a regular meeting held on the 17th day of May 2022, and passed by the following votes:

AYES:

NOES:

ABSTAIN:

ABSENT:

________________________
Maria Quinonez, City Clerk

STATE OF CALIFORNIA )
)

COUNTY OF LOS ANGELES )

I, the undersigned, City Clerk of the City of Lynwood, and the Clerk of the City Council of said City, do hereby certify that the above foregoing is a full, true and correct copy of Resolution No. ____________ on file in my office and that said Resolution was adopted on the date and by the vote therein stated. Dated this 17th day of May 2022.

________________________
Maria Quinonez, City Clerk

City Council Regular Meeting - Page 446 of 473
Agenda Item # 16.

AGENDA STAFF REPORT
DATE:

May 17, 2022

TO:

Honorable Mayor and Members of the City Council

APPROVED BY:

Ernie Hernandez, City Manager

PREPARED BY:

Mir T. Fattahi, Acting City Engineer

Lorry Hempe, Public Works Special Projects Manager

SUBJECT:

CONTINUATION OF AN EMERGENCY ACTION PER PUBLIC CONTRACT CODE SECTION 22050 FOR THE EMERGENCY ACTION AT THE NATATORIUM Recommendation:

Staff recommends for the City Council to adopt the attached resolution entitled:
“A RESOLUTION OF THE CITY

COUNCIL OF THE CITY OF LYNWOOD FINDING THAT THERE IS A NEED TO CONTINUE THE

EMERGENCY ACTION, BY WAY OF A FOUR-FIFTHS VOTE OF ITS MEMBERS, PURSUANT TO PUBLIC CONTRACT CODE SECTION 22050(c)(1) WITH RESPECT TO THE EMERGENCY REHABILITATION AT THE NATATORIUM.”

Background:

On April 5, 2022, the City Council found that an emergency existed at the Natatorium necessitating immediate actions.

Discussion and Analysis:

Findings of Emergency Actions

On April 5, 2022, the City Council found that
there is substantial evidence in the record demonstrating that the patio wall shows major signs of compromised structural deficiencies, the pool deck shows evidence of detaching and cracking throughout the surface of the pool deck, the electrical system requires replacement to prevent City Council Regular Meeting - Page 447 of 473
electrical shorts and possible fire, and the pool wall requires replacement to avoid collapse has created an created an emergency requiring immediate action to procure the necessary equipment, services, and supplies for those purposes, without giving notice for bids to let contracts.

The conditions necessitating the emergency actions continue to exist. The emergency renovations and repairs have not been completed.

Four-fifths Vote Requirement to Continue the Action

Fiscal Impact:

No additional appropriation is needed.

Coordinated With:

City Attorney
ATTACHMENTS:

Description
Resolution
City Council Regular Meeting - Page 448 of 473
1 RESOLUTION._____________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD FINDING

THAT THERE IS A NEED TO CONTINUE THE EMERGENCY ACTION BY WAY OF A

FOUR-FIFTHS VOTE OF ITS MEMBERS, PURSUANT TO THE PUBLIC CONTRACT CODE SECTION 22050(c)(1) WITH RES PECT TO THE EMERGENCY

RENOVATIONS AND EMERGENCY REPAIRS AT THE NATATORIUM

WHEREAS, on March 1, 2022, the City Council by minute action approved the recommended repairs at the Natatorium, the City’s pool and the budget of $5,000,000 for these repairs ; and

WHEREAS, the patio wall shows major signs of compromised structural deficiencies, the pool deck shows evidence of detaching and cracking throughout the surface of the pool deck, the electrical system requires replacement to prevent electrical shorts and possible fire, and the pool wall requires replacement to avoid collapse; and

WHEREAS, based on the recommendation from the Acting City Engineer on the immediate repairs of the patio wall, pool deck floor, electrical and interior wall to the City Manag er, the City Manager approved the emergency action s waiving the informal competitive bidding requirements; and

WHEREAS, California Public Contract Code Section 22050 provides that in the case of an emergency, a city, pursuant to a 4/5s vote of its governing body , a public agency may delegate to the City Manager the authority to order any action pursuant to California Public Contract Code Section 22050(a)(1) to address the emergency; and

WHEREAS, on April 5, 2022, the City Council found that there is substantial evidence in the record demonstrating that t he patio wall shows major signs of compromised structural deficiencies, the pool deck shows evidence of detaching and cracking throughout the surface of the pool deck, the electrical system requires replacement to prevent electrical shorts and possible fire, and the pool wall require s replacement to avoid collapse has created an created an emergency requiring immediate action to procure the necessary equipment, services, and supplies for those purposes, without giving notice for bids to let contracts; and City Council Regular Meeting - Page 449 of 473
2 WHEREAS, the City Council delegated the authority to the City Manager o r his or her designee upon recommendation from the Director of Public Works and/or City Engineer the authority to order any action pursuant to the California Public Contract Code Section 22050 (a)(1) including the waiving of formal or informal competitive bidding requirements to tear down and replace the patio wall, to replace the pool deck, to upgrade the electrical system, and to replace the pool wall.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LYNWOOD DOES HEREBY FIND, PROCLAIM, ORDER AND RESOLVE AS FOLLOWS:

Section 2. This resolution shall take effect immediately upon its adoption.

Section 3. The City Clerk shall certify as to the adoption of this City Council Resolution.

PASSED, APPROVED and ADOPTED this 17th day of May, 2022.

______________________________
Jorge Casanova
Mayor
ATTEST:

___________________________ ______________________________ María Quiñónez Ernie Hernandez
City Clerk City Manager

APPROVED AS TO FORM: APPROVED AS TO CONTENT:

__________________________ ______________________________ Noel Tapia Mir T. Fattahi
City Attorney Acting City Engineer
City Council Regular Meeting - Page 450 of 473
3 STATE OF CALIFORNIA )
)

COUNTY OF LOS ANGELES )

I, the undersigned, City Clerk of the City of Lynwood, do hereby certify that the foregoing Resolution was passed and adopted by the City Council of the City of Lynwood at a regular meeting held on the 17th day of May 2022, and passed by the following votes:

AYES:

NOES:

ABSTAIN:

ABSENT:

________________________
Maria Quinonez, City Clerk

STATE OF CALIFORNIA )
)

COUNTY OF LOS ANGELES )

________________________
Maria Quinonez, City Clerk

City Council Regular Meeting - Page 451 of 473
Agenda Item # 17.

AGENDA STAFF REPORT
DATE:

May 17, 2022

TO:

Honorable Mayor and Members of the City Council

APPROVED BY:

Ernie Hernandez, City Manager

PREPARED BY:

Noel Tapia, City Attorney

SUBJECT:

CONSIDERATION OF A RESOULTION PROCLAIMING A LOCAL EMERGENCY,

RATIFYING THE PROCLAMATION OF A STATE OF EMERGENCY BY GOVERNOR

NEWSOM, FINDING THAT THE PROCLAIMED STATE OF EMERGENCY

CONTINUES TO IMPACT THE ABILITY TO MEET SAFELY IN PERSON, AND

DECLARING THAT THE CITY COUNCIL AND CITY COMMISSIONS AND

COMMITTEES WILL COTINUE TO MEET REMOTELY IN ADHERENECE WITH AB 361 IN ORDER TO ENSURE THE HEALTH AND SAFETY OF THE PUBLIC Recommendation:

Staff is recommending that the City Council adopt a City Council Resolution entitled: “A Resolution Proclaiming a Local Emergency, Ratifying the Proclamation of a State of Emergency by Governor Newsom, Finding that the Proclaimed State of Emergency Continues to Impact the Ability to Meet Safely in Person, and Declaring that the City Council and City Commissions and Committees Will Continue to Meet Remotely in Adherence With AB 361 in Order to Ensure the Health and Safety of the Public”

Background:

Beginning in March 2020, Governor Newsom issued a series of Executive Orders aimed at containing the novel coronavirus (COVID-19). Among these were several Executive Orders N-25-20, N-29-20, N-35-20 (collectively, the Brown Act Orders) that waived requirements in the Brown Act expressly or impliedly requiring the physical presence of city councilmembers, staff, or the public at local agency meetings.

Discussion and Analysis:

City Council Regular Meeting - Page 452 of 473
Beginning in March 2020, Governor Newsom issued a series of Executive Orders aimed at containing the novel coronavirus (COVID-19). Among these were several Executive Orders N-25-20, N-29-20, N-35-20 (collectively, the Brown Act Orders) that waived requirements in the Brown Act expressly or impliedly requiring the physical presence of city councilmembers, staff, or the public at local agency meetings. Specifically, the orders:

• Waived the requirement that local agencies provide notice of each teleconference location from which a member of the legislative body will be participating in a public meeting; • Waived the requirement that each teleconference location be accessible to the public; • Waived the requirement that members of the public be able to address the legislative body at each teleconference conference location;
• Waived the requirement that local agencies post agendas at all teleconference locations; and, • Waived the requirement that at least a quorum of the members of the local body participate from locations within the boundaries of the territory over which the local body exercises jurisdiction.

On June 11, 2021, the Governor issued Executive Order (EO) N-08-21 to begin winding down some of the prior measures that were adopted to respond to COVID-19. Notably, EO N-08-21 rescinds the Brown Act Orders, effective September 30, 2021.

On September 16, 2021, Governor Newsom signed Assembly Bill AB 361 (Rivas, 2021), which allows cities to continue to meet remotely during proclaimed states of emergency under modified Brown Act requirements that are similar, but not identical to the rules and procedures established by the Brown Act Orders. The pending expiration of the Brown Act Orders and the enactment of AB 361 created some ambiguity. To provide clarification, the Governor issued Executive Order N-15-21, explaining that cities may continue to hold meetings in accordance with the Brown Act Orders until September 30, or they may hold meetings in accordance with the requirements of AB 361.

Should the City Council wish to continue meeting remotely beyond September 30 pursuant to AB 361, the City Council would be required to adopt the attached resolution. If the City Council chooses to utilize the option for remote meetings under AB 361, it can continue using the remote meeting procedures it has been using throughout the COVID-19 pandemic, subject to certain requirements that must be considered as part of the initial determination to adopt remote meeting protocols. Once adopted, the initial authorizing resolution is effective for no more than thirty (30) days.

The City may extend the authorization for an additional thirty (30) days via another resolution that makes specific findings in support of continuing remote meetings. The City may continue to extend the authorization for additional thirty (30) day increments for the duration of the declared emergency, or until the City Council decides to return to in-person meetings, or otherwise complies with the regular remote meeting requirements of the Brown Act.

To implement remote meetings under AB 361, one of three criteria must be met at the time the City is holding a meeting during a proclaimed state of emergency by the Governor that includes area within the jurisdictional boundaries of the City:

• State or local officials have imposed or recommended measures to promote social distancing; or • For the purpose of determining, by majority vote, whether as a result of the state of emergency, meeting in person would present imminent risks to the health or safety of attendees; or • The City Council has previously determined, by majority vote, that, as a result of the state of emergency, meeting in person would present imminent risks to the health or safety of attendees.

If one of these three criteria are met, then the City can conduct meetings remotely via Government Code §§ 54953(e), et seq.

If the City Council makes the required findings and chooses to meet remotely, every 30 days the City Council will be required to make findings about whether the circumstances still apply. The City Council must find that it reconsidered the circumstances of the State of Emergency and that one of the following circumstances remains:

• The City Council finds that meeting in person would present imminent risks to the health or safety of attendees; or

• State or local officials have imposed or recommended measures to promote social distancing.

City Council Regular Meeting - Page 453 of 473

If the City Council makes the findings to continue having remote meetings, the City must meet the following requirements:

1. The City must give notice and post agendas as otherwise required by the Brown Act, including directions for how the public can access the meetings;

2. Provide members of the public access to the meeting and an opportunity to address the body directly;

3. Provide members of the public the opportunity to comment in real time;

4. Suspend further action on items in the meeting agenda in the event that there is a disruption in the ability of the meeting to be broadcast to members of the public or in the ability for members of the public to comment;

Fiscal Impact:

No fiscal impact is anticipated the proposed action.

Coordinated With:

ATTACHMENTS:

Description
Reso- Continue Remote Meetings
City Council Regular Meeting - Page 454 of 473
RESOLUTION NO. __________

A RESOLUTION OF THE CITY OF LYNWOOD PROCLAIMING A LOCAL

EMERGENCY, RATIFYING THE PROCLAMATION OF A STATE OF

EMERGENCY BY GOVERNOR NEWSOM, FINDING THAT THE PROCLAIMED

STATE OF EMERGENCY CONTINUES TO IMPACT THE ABILITY TO MEET

SAFELY IN PERSON, AND DECLARING THAT THE CITY COUNCIL AND CITY

COMMISSIONS AND COMMITTEES WILL CONTINUE TO MEET REMOTELY IN ADHERENCE WITH AB 361 IN ORDER TO ENSURE THE HEALTH AND SAFETY OF THE PUBLIC.

WHEREAS, all meetings of the City of Lynwood City Council as a legislative body are open and public, as required by the Brown Act (Cal. Gov. Code 54950 – 54963), so that any member of the public may attend, participate, and watch the City Council as a legislative body conduct their business; and

WHEREAS, th e Brown Act, Government Code section 54953(e), makes provisions for remote teleconferencing participation in meetings by members of a legislative body, without compliance with the requirements of Government Code section 54953(b)(3), subject to the existence of certain conditions; and

WHEREAS, on March 4, 2020, Governor Newsom declared a State of Emergency to make additional resources available, formalize emergency actions already underway across multiple state agencies and departments, and help the state prepare for a broader spread of COVID-19; and

WHEREAS, on March 17, 2020, Governor Newsom issued Executive Order N-29-20, which suspended certain provisions of the Brown Act in order to allow local legislative bodies to conduct meetings electronically with out a physical meeting place; and

WHEREAS, on June 11, 2021, the Governor issued Executive Order N -08- 21, which extended the provision of N -29-20 concerning the Brown Act and the conduct of public meetings through September 30, 2021; and

WHEREAS, since t he issuance of Executive Order N -08-21, the Delta variant has emerged, causing a spike in COVID-19 cases throughout the state; and

WHEREAS, Governor Newsom’s proclaimed State of Emergency remains in effect, and State and local officials, including the Los Angeles County Department of Public Health, have imposed or recommended measures to promote social distancing; and

WHEREAS, on September 16, 2021, California Assembly Bill 361 was signed into law, as urgency legislation that goes in effect on October 1, 2021, amending Government Code Section 54953 of the Ralph M. Brown Act to allow City Council Regular Meeting - Page 455 of 473
2 legislative bodies to continue to meet remotely during a proclaimed state of emergency, provided certain conditions are met and certain findings are made; and

WHEREAS, the Cit y of Lynwood is committed to preserving and nurturing public access and participation in meetings of the Lynwood City Council; and

WHEREAS, the City Council desires to take the actions necessary to comply with AB 361 and to continue to hold its City Council, Commission and Committee meetings remotely.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LYNWOOD DOES HEREBY RESOLVE AND DETERMINE AS FOLLOWS:

Section 1. The City Council for the City of Lynwood finds and declares that the foregoing recitals are true and correct, and incorporates said recitals fully into this Resolution as substantive findings.

Section 2. The City Council hereby proclaims that a local emergency now exists throughout the City, and social distancing and condition caus ing imminent risk to attended has caused, and will continue to cause, conditions of peril to the safety of persons within the City that are likely to be beyond the control of services, personnel, equipment, and facilities of the City, and desires to procla im a local emergency and ratify the proclamation of State of Emergency by the Governor of the State of California.

Section 3. That the City Council has reconsidered the circumstances of the State of Emergency and finds the following circumstances:

a. The factors triggering the State of Emergency continue to directly impact the ability of the members of the City Council and the City’s subordinate Commissions and Committees to meet safely in person; and

b. The State of California and the City of Lynwood continue to impose or recommend measures to promote social distancing.

Section 4. City Council and City Commission and Committee meetings will continue to be conducted remotely for the next 30 days in compliance with AB 361 and Government Code Section ( e)(2), in order to ensure the health and safety of the public while provides access to public meetings.

Section 5. This Resolution shall become effective immediately and shall be reconsidered by the City Council in 30 days or sooner to assess the State o f Emergency and determine whether to continue with the provisions set forth in Assembly Bill 361.

City Council Regular Meeting - Page 456 of 473
3 PASSED, APPROVED and ADOPTED this_____ day of ________, 2022.

_________________________
Jorge Casanova, Mayor
City of Lynwood

ATTEST:

________________________
Maria Quinonez, City Clerk

APPROVED AS TO FORM: APPROVED AS TO CONTENT:

______________________ __________________________
Noel Tapia Ernie Hernandez,
City Attorney City Manager

STATE OF CALIFORNIA )
) §

COUNTY OF LOS ANGELES )

I, the undersigned, City Clerk of the City of Lynwood, do hereby certify that the above and foregoing resolution was duly adopted by the City Council of said City at its regular meeting thereof held in the City Hall of the City on the _________day of____________, 2022 and passed by the following vote:

City Council Regular Meeting - Page 457 of 473
4 AYES:

NOES:

ABSTAIN:

ABSENT:

__________________________
City Clerk, City of Lynwood

STATE OF CALIFORNIA )
) §

COUNTY OF LOS ANGELES )

I, the undersigned City Clerk of the City of Lynwood, and Clerk of the City Council of said City, do hereby certify that the above and foregoing is a full, true and correct copy of Resolution No. _________ on file in my office and that said resolution was adopted on the date and by the vote therein stated.

Dated this ______ day of ________________, 2022.

__________________________
City Clerk, City of Lynwood
City Council Regular Meeting - Page 458 of 473
Agenda Item # 18.

AGENDA STAFF REPORT
DATE:

May 17, 2022

TO:

Honorable Mayor and Members of the City Council

APPROVED BY:

Ernie Hernandez, City Manager

PREPARED BY:

Ernie Hernandez, City Manager

SUBJECT:

AWARD OF CONTRACT AND APPROVAL TO FS CONTRACTORS, INC. FOR THE

SIDEWALK IMPROVEMENT PROJECT AT WRIGHT ROAD FROM FERNWOOD AVE TO DUNCAN AVE AND CITYWIDE PRIORITY 1 SIDEWALK IMPROVEMENT PROJECT FY22/FY23 PROJECT (CIP 4011.68.022)
Recommendation:

Staff recommends that the City Council adopt the attached resolution entitled: “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD AWARDING A CONTRACT TO FS Contractors, inc. AS THE LOWEST RESPONSIBLE BIDDER, IN THE Amount OF $556,090 FOR THE SIDEWALK IMPROVEMENT PROJECT WRIGHT ROAD FROM FERNWOOD AVE TO DUNCAN AVE AND CITYWIDE PRIORITY 1 SIDEWALK IMPROVEMENT PROJECT FY22/FY23 PROJECT (sidewalk and wheelchair ramp repairs- cip 4011.68.022); AUTHORIZING THE MAYOR TO EXECUTE THE AGREEMENT; APPROVING TO REDUC

THE PROJECT BUDGET FOR THE ALEXANDER AVENUE, LOUISE STREET, POPE AVENUE,

PENDLETON AVENUE, SEMINOLE AVENUE, AND SHIRLEY AVENUE STREET, WATER, AND SEWER IMPROVEMENT PROJECT (CIP 4011.68.088) IN THE AMOUNT OF $150,000 AND APPROPRIATING SAID AMOUNT OF $150,000 FROM THE MEASURE M BOND (FUND 2357) TO THE SIDEWALK AND WHEELCHAIR RAMP REPAIRS –CIP 4011.68.022).

Background:

Over the course of a year, Lynwood residents have submitted requests for sidewalk improvements on various locations throughout the City. Staff collected all requests and created a list of priority locations where sidewalk improvements are most needed. In addition, the resident derived priority list, the City identified needed sidewalk improvements along Wright Road from Fernwood Avenue to Duncan Avenue. As such, the Public Works Department, Engineering Division commissioned of Willdan Engineering to develop plans, specifications and estimate for the aforementioned sidewalk improvements along Wright Road and the Citywide Priority 1 Sidewalk Improvement locations.

Project Scope
The work encompassed by the Sidewalk Improvement Project Wright Road from Fernwood Ave to Duncan Ave and Citywide Priority 1 Sidewalk Improvement Project (CIP NO. 4011.68.022-SIDEWALK AND WHEELCHAIR City Council Regular Meeting - Page 459 of 473
RAMP REPAIRS) FY22/FY23 (“Project”) is more specifically defined in the contract documents, but in general consists of, but is not limited to removal and reconstruction of sidewalk, curb and gutter, and driveway improvements; and the replacement of trees impacted by the repairs.

Project Limit
Various location throughout the City
Wright Road from Fernwood Ave to Duncan Ave
Discussion and Analysis:

On April 12, 2022, the Notice Inviting Bids (NIB) was advertised on the City’s web site (PlanetBids). The Bid opening took place in the PlanetBids Platform on Thursday, May 05, 2022, at 10:00 am (PST).

The following three (3) bids were received:

Bidder
Bid

1. FS Contractors, Inc
$556,090.00

2. Gentry General Engineering, Inc
$586,107.00

3. EBS General Engineering, Inc
$618,595.00

An analysis of all bidders was conducted, including a review of their bid schedule, license, references, and federal documents. FS Contractors, Inc. was the apparent lowest responsible bidder with a low base bid of $556,090.00.

The bidder’s previous performance reveals that the contractor has the necessary experience and contractor’s license for this type of project.

It is estimated that this project will take approximately forty (40) working days to complete the work set forth in the specifications. Upon authorization, staff will circulate the contract documents, set up a pre-construction meeting, and schedule work to commence.

Bid Items and Construction Budget
:

SIDEWALK IMPROVEMENT PROJECT WRIGHT ROAD FROM FERNWOOD AVE TO
DUNCAN AVE AND CITYWIDE PRIORITY 1 SIDEWALK IMPROVEMENT PROJECT FY22/FY23
Amount
Bid Schedule A
Mobilization
$10,000.00
Traffic Control
$5,000.00
Remove and Construct 4-Inch PCC Sidewalk per SPPWC Std Plan 113-2 $25,415.00
Remove and Construct Residential Driveway per SPPWC Std Plan 110-2, Type B, Match Width to Existing
$4,290.00
Remove and Construct Commercial Driveway per SPPWC 110-2, Type A, Match Width to Existing
$15,150.00
Remove and Construct Type A2-8 Curb and Gutter Per SPPWC Std Plan 120-2 $24,375.00
Remove and Construct Curb Ramp Per SPPWC Std Plan 111-5, Case A, Type 1 and Detail $7,500.00
Remove and Construct Curb Ramp Per SPPWC Std Plan 111-5, Modified Case A, Type 5 and Detail
$18,000.00
Remove and Construct Curb Drain per SPPWC Std Plan 151-2 and Detail $5,670.00
Remove and Plant New Tree
$37,400.00

Mobilization and Traffic Control
$10,000.00
Remove and Plant New Tree
$189,000.00
Remove and Construct 4-Inch PCC per SPPWC Std Plan 113-2 $88,550.00
Remove and Construct Type A2-8 Curb and Gutter Per SPPWC Std Plan 120-2, Match Existing Height and Gutter Width.
$25,740.00
Remove and Construct Curb Ramp Per SPPWC Std Plan 111-5. $90,000.00
Total Proposed Cost
$556,090.00

City Council Regular Meeting - Page 460 of 473

Fiscal Impact:

The Sidewalk and Wheelchair Ramp Repairs (CIP NO. 4011.68.022) has an approved FY22 Budget of $400,916 and an approved FY23 Budget of $252,204. Additional appropriation in the amount of $150,000 is needed to fully fund the Project inclusive of all of its soft costs, hard costs and contingency. The total budget for this project will be $803,120.

Available funds have been fully programmed for FY22 and FY23. On April 19, 2022, the City Council accepted the completion of
Alexander Avenue, Louise Street, Pope Avenue, Pendleton Avenue, Seminole Avenue, And Shirley Avenue Street, Water, and Sewer Improvement Project (CIP 4011.68.088). Staff recommends reducing the adopted budget for this accepted Project to release the unused funds back to the Measure M Bonds to be appropriated to the Sidewalk and Wheelchair Ramp Repairs (CIP No. 4011.68.022).

Staff recommends the following budget adjustment and appropriation:

Budget Adjustment (FY22)
Fund
Dept
Div
Object
Description
Amount
Budgetary Transfer Out
4011
68 088

Alexander Ave.et al.
$150,000

Budgetary Transfer In
2357
Measure M Bonds
$150,000

Appropriation (FY22)
Fund
Dept
Div
Object
Description
Amount
Budgetary Transfer Out
2357

Measure M Bonds
$150,000

Budgetary Transfer In
4011
68 022
To Be
Determined
Sidewalk and
Wheelchair Ramp
Repairs
$150,000

To move forward with this project, it is necessary for the City Council to approve the above appropriation and budget.

Coordinated With:

City Manager’s Office
Department of Finance and Administration Services
ATTACHMENTS:

Description
Resolution
City Council Regular Meeting - Page 461 of 473
1 RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD AWAR DING A CONTRACT TO FS CONTR ACTORS, INC. AS THE LOWEST RESPONSIBLE BIDDER, IN THE AMOUNT OF $55 6,090 FOR THE SIDEWALK IMPROVEMENT PROJECT

WRIGHT ROAD FROM FERNWOOD AVE TO DUNCAN AVE AND CITYWIDE PRIORITY 1 SIDEWALK IMPROVEME NT PROJECT FY22/FY23 PROJECT ( SIDEWALK AND WHEELCHAIR RAMP REPA IRS- CIP 4011.68.022 ); AUTHORIZING THE M AYOR TO EXECUTE THE AGREEMENT; APPROVING TO REDUCE THE PROJECT BUDGET FOR

THE ALEXANDER AVENUE, LOUISE STREET, POPE AVENUE, PENDLETON AVENUE,

SEMINOLE AVENUE, AND SHIRLEY AVENUE STREET, WATER, AND SEWER IMPROVEMENT PROJECT (CIP 4011.68.088) IN THE AMOUNT OF $150,000 AND APPROPRIATING SAID AMOUNT OF $150,000 FROM THE MEASURE M BOND (FUND 2357) TO THE SIDEWALK AND WHEELCHAIR RAMP REPAIRS –CIP 4011.68.022

WHEREAS, the City of Lynwood has received requests from residents for sidewalk improvements for various locations throughout the City; and

WHEREAS, Staff has collected all resident requests and created a list of priority locations, including Wright Road from Fernwood Avenue to Duncan Ave; and

WHEREAS, the Sidewalk Improvement Project Wright Road from Fernwood Ave to Duncan Ave and Citywide Pr iority 1 Sidewalk Improvement Project FY22/FY23 (“Project”) consists of removing and reconstructing sidewalks, curb and gutter, driveway improvements, furnishing and replacing trees; and

WHEREAS, on April 12 , 2022, the Notice Inviting Bids for the Project was advertised on the City’s web site (PlanetBids); and

WHEREAS, the bid opening took place in the PlanetBids Platform on May 05, 2022, at 10:00 A.M. (Pacific Time); and
WHEREAS, staff received three (3) bid proposals; and

WHEREAS, FS Contractors, Inc. is determined the lowest responsible bidder; and

WHEREAS, to move forward with this Project, appropriation is needed.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LYNWOOD DOES HEREBY FIND, PROCLAIM, ORDER, AND RESOLVE AS FOLLOWS:

Section 2. The City Council of the City of Lynwood authorizes the Mayor to execute the agreement between the City of Lynwood and FS Contractors , Inc . for the Sidewalk City Council Regular Meeting - Page 462 of 473
2 Improvement Project Wright Road from Fernwood Ave to Duncan Ave and Citywide Priority 1 Sidewalk Improvement Project FY22/FY23 (“Project”) in the amount of $556,090.00.

Section 3. The City Council approves the following budget adjustment and appropriation:

Budget Adjustment (FY22)
Fund Dept Div Object Description Amount
Budgetary Transfer Out
4011 68 088 Alexander Ave.et al. $150,000

Budgetary Transfer In
2357

Measure M Bonds $150,000

Appropriation (FY22)
Fund Dept Div Object Description Amount
Budgetary Transfer Out
2357 Measure M Bonds $150,000

Budgetary Transfer In
4011 68 022 To Be
Determined
Sidewalk and Wheelchair
Ramp Repairs
$150,000

Section 4. The City Council of the City of Lynwood authorizes the City Manager under LMC 6-3.15(d) to exceed the specific dollar amounts or percentage limitations under LMC 6-3.15(a) and authorizes the City Manager to approve consultant, vendor agreements, modifications, change orders or agreement amendments related to the Project up to the available Project Budget.

Section 5. Authorize the Mayor to execute the Resolution for and on behalf of the City of Lynwood.

Section 6. This Resolution shall take full force and effect immediately upon adoption by the City Council.

(Signatures on Next Page)
City Council Regular Meeting - Page 463 of 473
3 PASSED, APPROVED and ADOPTED this 17th day of May 2022.

Jorge Casanova
Mayor

ATTEST:

Maria Quinonez Ernie Hernandez
City Clerk City Manager

APPROVED AS TO FORM: APPROVED AS TO CONTENT:

Noel Tapia Ernie Hernandez
City Attorney Interim Director of Public Works
City Council Regular Meeting - Page 464 of 473
4 STATE OF CALIFORNIA )
)

COUNTY OF LOS ANGELES )

I, the undersigned, City Clerk of the City of Lynwood, do hereby certify that the foregoing Resolution was passed and adopted by the City Council of the City of Lynwood at a regular meeting held on the 17th day of May 2022, and passed by the following votes:

AYES:

NOES:

ABSTAIN:

ABSENT:

Maria Quinonez, City Clerk

STATE OF CALIFORNIA )
)

COUNTY OF LOS ANGELES )

I, the undersigned, City Clerk of the City of Lynwood, and the Clerk of the City Council of said City, do hereby certify that the above foregoing is a full, true and correct copy of Resolution No. on file in my office and that said Resolution was adopted on the date and by the vote therein stated. Dated this 17th day of May 2022.

Maria Quinonez, City Clerk
City Council Regular Meeting - Page 465 of 473
Agenda Item # 19.

AGENDA STAFF REPORT
DATE:

May 17, 2022

TO:

Honorable Mayor and Members of the City Council

APPROVED BY:

Ernie Hernandez, City Manager

PREPARED BY:

Ernie Hernandez, City Manager

SUBJECT:

AWARD OF CONTRACT AND APPROVAL TO HARDY AND HARPER, INC. FOR THE SAN CARLOS AVE., SAN JUAN AVE., SAN LUIS AVE., SAN VICENTE AVE., THORSON AVE., AND ALVADA ST. STREET IMPROVEMENT PROJECT (CDBG FUNDED PROJECT NO:4011.68.103)
Recommendation:

Staff recommends that the City Council adopt the attached resolution entitled: “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD AWARDING A CONTRACT TO HARDY AND HARPER, INC. AS THE LOWEST RESPONSIBLE BIDDER, IN THE AMOUNT OF $650,000 FOR THE SAN CARLOS

AVENUE, SAN JUAN AVENUE, SAN LUIS AVENUE, SAN VICENTE AVENUE, ALVADA STREET AND

THORSON AVENUE STREET IMPROVEMENT PROJECT (CDBG FUNDED PROJECT NO:4011.68.103); AUTHORIZING THE MAYOR TO EXECUTE THE AGREEMENT; AND AUTHORIZING AN APPROPRIATION AND BUDGET IN THE AMOUNT OF $737,317 FOR THE PROJECT."

Background:

In 2017, the City commissioned Bucknam Infrastructure Group, Inc. to prepare a report on the City’s pavement network, “2017 Pavement Management Program” (PMP). The PMP provides current data on the City’s street network and cost-effective maintenance strategies to maintain a desirable level of pavement performance on a network scale, while optimizing the expenditure of limited fiscal resources.

On April 20, 2021, Alvada Street, San Carlos Avenue, San Juan Avenue, San Luis Avenue, San Vicente Avenue and Thorson Avenue Street and Sidewalk Improvement Project was included in the City’s FY2021-22 Annual Action Plan for the use of CDBG in the amount of $376,000.

On June 15, 2021, the City Council approved to include Alvada Street, San Carlos Avenue, San Juan Avenue, San Luis Avenue, San Vicente Avenue and Thorson Avenue Street and Sidewalk Improvement Project in the FY22 CIP Budget to be funded by SB1Fund (Fund 2121) in the amount of $361,317.

On January 18, 2022, City Council adopted a resolution approving FY22 Capital Improvement Program Budget and include Alvada Street, San Carlos Avenue, San Juan Avenue, San Luis Avenue, San Vicente Avenue and City Council Regular Meeting - Page 466 of 473
Thorson Avenue (CIP No. 4011.8.103 Street Improvement Project) The Public Works Department, Engineering Division requested the services of Infrastructure Engineers (IE) to develop plans, specifications and estimate for the aforementioned roadway improvements also known as Priority 2 Streets Improvements – Phase I.

Project Scope
The work encompassed by the San Carlos Avenue, San Juan Avenue, San Luis Avenue, San Vicente Avenue, Alvada Street, and Thorson Avenue Street Improvement Project (CDBG funded project No: 4011.68.103) (“Project”) is more specifically defined in the contract documents, but in general consists of, but is not limited to, the following work: street resurfacing, ADA compliant curb ramps, gutters, driveway approaches, traffic signing and striping, and utility covers.

Project Limit
San Carlos Avenue between Abbot Road and North City Limit San Juan Avenue between Abbot Road and North City Limit San Luis Avenue between Abbot Road and North City Limit San Vicente Avenue between Abbot Road and North City Limit Thorson Avenue between South City Limit and Harris Avenue Alvada Street between Virginia Avenue and Duncan Avenue

Discussion and Analysis:

On March 21, 2022, the Notice of Inviting Bids (NIB) was advertised on the City’s web site (PlanetBids). The Bid opening took place in the PlanetBids Platform on Thursday, April 14, 2022, at 10:00 am (PST).

The following two (2) bids were received:

Bidder
Bid

1. Hardy and Harper, Inc.
$650,000.00

2. Excel Paving Company
$684,499.00

An analysis of all bidders was conducted, including a review of their bid schedule, license, references, and federal documents. Hardy and Harper, Inc. was the apparent lowest responsible bidder with a low base bid of $650,000.00. The bidder’s precious performance reveals that his contractor has the necessary experience and contractor’s license for this type of project.

It is estimated that it will take approximately fifteen (15) working days to complete the work set forth in the specifications. Upon authorization, staff will circulate the contract documents, set up a pre-construction meeting, and schedule work to commence.

Project Budget:

SAN CARLOS AVE, SAN JUAN AVE, SAN LUIS, AVE, SAN VICENTE AVE, THORSON AVE, AND ALVADA ST. STREET IMPROVEMENT PROJECT
(CDBG FUNDED PROJECT NO:4011.68.103);
Amount
Mobilization/ Demobilization (Not to exceed 3% of total of all other prime contract Bid Items) $15,000.00
Traffic Control
$76,141.00
Sawcut and Remove AC Pavement, Base, Subbase and Subgrade $78,660.00
Cold Mill Existing Asphalt Concrete (AC) Pavement (3” depth) $3,589.00
Cold Mill Existing Asphalt Concrete (AC) Pavement (2” depth) $11,873.00
Prune Tree Roots and Install Root Barriers
$2,400.00
Sawcut and Remove Existing Concrete Longitudinal Gutter $5,837.00
City Council Regular Meeting - Page 467 of 473
Remove and Construct Concrete Sidewalk (4” Thick)
$6,792.00
Remove and Construct Concrete Curb & Gutter
$8,190.00
Remove and Construct Concrete Curb Ramp
$7,000.00
Remove and Construct Concrete Driveway Approach (6” Thick) $27,952.00
Remove Concrete Curb and Construct Concrete Curb & Gutter $15,390.00
Remove and Construct Concrete Cross Gutter
$7,860.00
Remove and Construct Concrete Local Depression
$1,330.00
Construct Detectable Warning Surface (Truncated Domes)
$6,000.00
Construct Concrete Longitudinal Gutter
$118,440.00
Remove and Construct Concrete Alley Intersection
$10,170.00
Construct Concrete Driveway approach
$12,016.00
Provide and Place Crushed Aggregate Base (CAB)
$68,640.00
Construct Conventional AC Base Course Over 95% Compacted Native Soil (2.5” Thick) $3,150.00
Construct AC Leveling Course (1" Thick)
$37,800.00
Construct ARHM Overlay (2" Thick)
$97,200.00
Construct Asphalt Concrete Berm
$7,070.00
Adjust Existing Storm Drain/ Sewer/ Utility Manhole Frames and Covers to Finished Grade $5,000.00
Adjust Existing Water Valve Can and Cover to Finished Grade $4,500.00
Traffic Striping, Marking, Curb Painting, House Addresses, and Signs $4,000.00
Install Public Improvement Project Signs
$8,000.00
Total Proposed Cost
$650,000.00

By way of resolution approved by the City Council, City of Lynwood Municipal Code Section 6-3.15(d) authorizes the City Manager to exceed specific dollar amounts or percentage limitations established pursuant to LMC Section 6-3(a) for the purposed of approving consultant, vendor agreements, modifications, change orders or agreement amendments related to the Project up to the available Project Budget. City staff is requesting the City Council to authorize the City Manager to exercise this authority.

Fiscal Impact:

Financial Impact:

Staff recommends the following appropriation:

APPROPRIATION
Fund
Dept
Div
Object
Description
Amount
Budgetary Transfer Out
2941
95 991
68020
CDBG – Fund
$376,000
2121
95 991
68020
SB 1 Fund to
Capital
Projects
Fund
$361,317

To move forward with this project, it is necessary for the City Council to approve the above appropriation and budget.

City Council Regular Meeting - Page 468 of 473
Coordinated With:

City Manager’s Office
Department of Finance and Administration Services
ATTACHMENTS:

Description
Resolution
City Council Regular Meeting - Page 469 of 473
1 RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD AWARDING A CONTRACT TO HARDY AND HARPER, INC. AS THE
LOWEST RESPONSIBLE BIDDER, IN THE AMOUNT OF $650,000 FOR

THE SAN CARLOS AVENUE, SAN JUAN AVENUE, SAN LUIS AVENUE,

SAN VICENTE AVENUE, THORSON AVENUE, AND ALAVADA STREET

STREET IMPROVEMENT PROJECT (CDBG FUNDED PROJECT
NO:4011.68.103); AUTHORIZING THE MAYOR TO EXECUTE THE
AGREEMENT; AND AUTHORIZING AN APPROPRIATION AND BUDGET
IN THE AMOUNT OF $737,317 FOR THE PROJECT

WHEREAS, on January 18 , 2022, the City Council approved the FY22 Capital Improvement Program Budget and project referred to as Alvada Street, San Carlos Avenue, San Juan Avenue, San Luis Avenue, San Vicente Avenue and Thorson Avenue (CIP No. 4011.8.103 Street Improvement Project); and

WHEREAS, the street segments of 1) San Carlos Avenue between Abbot Road and North City Limit, 2) San Juan Avenue between Abbot Road and North City Limit, 3) San Luis Avenue between Abbot Road and North City Limit, 4) San Vicente Avenue between Abbot Road and North City Limit, 5) Thorson Ave nue between South City Limit and Harris Avenue, 6) Alvada Street between Virginia Avenue and Duncan Avenue are included in the Priority 2 Streets list; and

WHEREAS, the San Carlos Ave, San Juan Ave, San Luis Ave, San Vicente Ave, Thorson Ave, and Alavada St Street Improvement Project (CDBG funded project No:
4011.68.103) (“Project”) consists of street resurfacing; ADA compliant curbs ramps, gutters, driveway approaches; traffic signing and striping; and utility covers; and

WHEREAS, on March 21 , 2022, the Notice Inviting Bids for the Project was advertised on the City’s web site (PlanetBids); and

WHEREAS, the bid opening took place in the PlanetBids Platform on April 14, 2022, at 10:00 A.M. (Pacific Time); and
WHEREAS, staff received two (2) bid proposals; and

WHEREAS, Hardy and Harper, Inc is the lowest responsible bidder; and

WHEREAS, to move forward with this Project, appropriation is needed.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LYNWOOD DOES HEREBY FIND, PROCLAIM, ORDER, AND RESOLVE AS FOLLOWS:

City Council Regular Meeting - Page 470 of 473
2 Section 2. The City Council of the City of Lynwood authorizes the Mayor to execute the agreement between the City of Lynwood and Hardy and Harper, Inc . for the San Carlos Ave., San Juan Ave ., San Luis Ave ., San Vicente Ave ., Thorson Ave ., and Alvada St .

Street Improvement Project (CDBG funded project No: 4011.68.103) (“Project”) in the amount of $650,000.

Section 3. The City Council approves the following appropriation:

APPROPRIATION
Fund Dept Div Object Description Amount
Budgetary Transfer Out
2941 95 991 68020 CDBG – Fund $376,000
2121 95 991 68020 SB 1 Fund to Capital
Projects Fund
$361,317

Section 5. Authorize the Mayor to execute the Resolution for and on behalf of the City of Lynwood.

Section 6. This Resolution shall take full force and effect immediately upon adoption by the City Council.

(Signatures on Next Page)
City Council Regular Meeting - Page 471 of 473
3 PASSED, APPROVED and ADOPTED this 17th day of May 2022.

Jorge Casanova
Mayor

ATTEST:

Maria Quinonez Ernie Hernandez
City Clerk City Manager

APPROVED AS TO FORM: APPROVED AS TO CONTENT:

Noel Tapia Ernie Hernandez
City Attorney Interim Director of Public Works
City Council Regular Meeting - Page 472 of 473
4 STATE OF CALIFORNIA )
)

COUNTY OF LOS ANGELES )

I, the undersigned, City Clerk of the City of Lynwood, do hereby certify that the foregoing Resolution was passed and adopted by the City Council of the City of Lynwood at a regular meeting held on the 17th day of May 2022, and passed by the following votes:

AYES:

NOES:

ABSTAIN:

ABSENT:

Maria Quinonez, City Clerk

STATE OF CALIFORNIA )
)

COUNTY OF LOS ANGELES )

I, the undersigned, City Clerk of the City of Lynwood, and the Clerk of the City Council of said City, do hereby certify that the above foregoing is a full, true and correct copy of Resolution No. on file in my office and that said Resolution was adopted on the date and by the vote therein stated. Dated this 17th day of May 2022.

Maria Quinonez, City Clerk
City Council Regular Meeting - Page 473 of 473
This Agenda contains a brief general description of each item to be considered. Copies of the Staff reports or other written documentation relating to each item of business referred to on the Agenda are on file in the Office of the City Clerk and are available for public inspection. Any person who has a question concerning any of the agenda items may call the City Manager at (310) 603-0220, ext. 200.

Procedures for Addressing the Council

IN ORDER TO EXPEDITE CITY COUNCIL BUSINESS, WE ASK THAT ALL PERSONS WISHING TO ADDRESS THE

COUNCIL SUBMIT YOUR COMMENTS IN ADVANCE TO
[email protected]

OR FILL OUT A FORM

PROVIDED AT THE PODIUM, AND TO TURN IT IN TO THE CITY CLERK PRIOR TO THE START OF THE MEETING. FAILURE TO FILL OUT SUCH A FORM WILL PROHIBIT YOU FROM ADDRESSING THE COUNCIL IN THE ABSENCE OF THE UNANIMOUS CONSENT OF THE COUNCIL.

AGENDA
Lynwood Public Financing Authority

TO BE HELD ON

May 17, 2022

COUNCIL CHAMBERS - 11350 BULLIS RD. LYNWOOD, CA 90262 or Web conference via ZOOM - To participate via Zoom or by telephone: 1-669-900-9128 or 1-253-215-8782 Meeting ID: 835 2029 8238
Duly Posted on 5/13/2022 By MQ
6:00 PM

1. CALL TO ORDER

2. CERTIFICATION OF AGENDA POSTING BY SECRETARY

3. ROLL CALL OF MEMBERS
Jorge Casanova, President
Jose Luis Solache
, Vice President
Oscar Flores, Member
Marisela Santana, Member
Rita Soto, Member

4. GOVERNMENT CODE SECTION 54954.3
Members of the City Council are also members of Lynwood Public Financing Authority, which is concurrently convening with the City Council this evening and each Council Member is paid an Additional Stipend of $100 for Attending the Lynwood Public Financing Authority Meeting. Further, the Authority is scheduled to meet four (4) timer per year. If additional meetings are required beyond the scheduled four (4) meetings, the City Council will only get paid for the first four(4) meetings.

PUBLIC ORAL COMMUNICATIONS
(Regarding Agenda Items Only)

NON-AGENDA PUBLIC ORAL COMMUNICATIONS
Lynwood Public Financing Authority - Page 1 of 242

THIS PORTION PROVIDES AN OPPORTUNITY FOR THE PUBLIC TO ADDRESS THE LYNWOOD PUBLIC

FINANCING AUTHORITY ON ITEMS WITHIN THE JURISDICTION OF THE

LYNWOOD PUBLIC FINANCING

AUTHORITY
AND NOT LISTED ON THE AGENDA. IF AN ITEM IS NOT ON THE AGENDA, THERE SHOULD BE NO

SUBSTANTIAL DISCUSSION OF THE ISSUE BY

LYNWOOD PUBLIC FINANCING AUTHORITY
, BUT

LYNWOOD

PUBLIC FINANCING AUTHORITY

MAY REFER THE MATTER TO STAFF OR SCHEDULE SUBSTANTIVE
DISCUSSION FOR A FUTURE MEETING. (The Ralph M. Brown Act, Government Code Section 54954.2 (a).)

CONSENT CALENDAR

ALL MATTERS LISTED UNDER THE CONSENT CALENDAR WILL BE ACTED UPON BY ONE MOTION AFFIRMING THE ACTION RECOMMENDED ON THE AGENDA. THERE WILL BE NO SEPARATE DISCUSSION ON

THESE ITEMS PRIOR TO VOTING UNLESS MEMBERS OF THE COUNCIL OR STAFF REQUEST SPECIFIC ITEMS TO BE REMOVED FROM THE CONSENT CALENDAR FOR SEPARATE ACTION.

5. TREASURER'S MONTHLY INVESTMENT REPORT
Comments:

The purpose of this item is to have the Honorable President and Members of the Public Finance Authority review the Treasurer’s Monthly Investment Report as required by State Statutes. (CT)

Recommendation:

It is recommended that the Honorable President and Members of the Public Finance Authority receive and file the attached Monthly Investment Report. The following information is provided to ensure the City Council is informed of the investment activities for the City.

6. APPROVING PENSION UNFUNDED ACCRUED LIABILITY (“UAL”) REFINANCE

WITH THE ISSUANCE OF LEASE REVENUE BONDS BY THE LYNWOOD PUBLIC FINANCING AUTHORITY IN MAXIMUM AMOUNT OF $50,000,000 (FEDERALLY TAXABLE); APPROVING, AUTHORIZING AND DIRECTING EXECUTION OF

CERTAIN LEASE FINANCING DOCUMENTS AND DIRECTING CERTAIN RELATED

ACTIONS
Comments:

The City Council previously directed staff to evaluate the potential financial benefits of refinancing the City of Lynwood's (“City”) Pension Unfunded Accrued Liability (“UAL”) with the California Public Employees’ Retirement System (“CalPERS”). Based on analysis done to date, it appears savings to the City’s General Fund may be achieved from a refinancing; however, the municipal bond market is experiencing high levels of volatility and ultimate expected savings will not be known until interest rates can be locked. Staff recommends the City Council approve the resolutions and related lease documents so that the Lynwood Public Financing Authority (“Financing Authority”) is in a position to issue Lease Revenue Bonds to refinance the City’s pension obligation with CalPERS. Staff will work with its financial consultants to closely monitor the market in the coming months. (FIN)

Recommendation:

1. Staff
recommends that the City Council consider adoption of the attached Resolution No. ______ entitled, “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD

APPROVING THE ISSUANCE OF LEASE REVENUE BONDS BY THE LYNWOOD

PUBLIC FINANCING AUTHORITY, APPROVING, AUTHORIZING AND DIRECTING

EXECUTION OF CERTAIN LEASE FINANCING DOCUMENTS AND DIRECTING CERTAIN RELATED ACTIONS”

2. Staff recommends that the Lynwood Public Financing Authority consider adoption of the attached Resolution No. ______ entitled, “A RESOLUTION OF THE LYNWOOD PUBLIC

FINANCING AUTHORITY AUTHORIZING THE ISSUANCE OF LEASE REVENUE

BONDS, AUTHORIZING AND DIRECTING EXECUTION OF AN INDENTURE, A LEASE,

A SITE LEASE, AND CERTAIN OTHER DOCUMENTS, AUTHORIZING THE

NEGOTIATION FOR THE SALE OF BONDS, AND AUTHORIZING OTHER RELATED Lynwood Public Financing Authority - Page 2 of 242
ACTIONS”

ADJOURNMENT

THE LYNWOOD PUBLIC FINANCE AUTHORITY MEETINGS WILL BE POSTED AS NEEDED. THE NEXT MEETING WILL BE HELD IN THE COUNCIL CHAMBERS OF CITY HALL ANNEX, 11350 BULLIS ROAD, CITY OF LYNWOOD, CALIFORNIA.

Lynwood Public Financing Authority - Page 3 of 242
Agenda Item # 5.

AGENDA STAFF REPORT
DATE:

May 17, 2022

TO:

Honorable President and Members of the Public Finance Authority

APPROVED BY:

Ernie Hernandez, City Manager

PREPARED BY:

Gabriela Camacho, City Treasurer
Sheila Harding, Deputy City Treasurer

SUBJECT:

TREASURER'S MONTHLY INVESTMENT REPORT
Recommendation:

Background:

Government Code Section 53607, last amended 1996, with reference to the reporting of investment transactions states that the Treasurer
shall
make a monthly report of those transaction to the legislative body. Government Code Section 53646 (b) (1), last amended 2004, with reference to discussion related to establishment of an Investment Policy and investment reporting states that “the Treasurer may render a quarterly report”. To determine the applicable code inasmuch as reference to Government Code Section 53607 or non-compliance thereof has never been included in past audit findings. While Government Code Section 53646 (b) (1) which is the most current version related to Investment Reporting utilizes the word “may” indicating the reporting mechanism is optional, to err on the side of caution, and in order to ensure that we are in compliance with all Government Codes, a new procedure of submitting monthly reports to the Council/Agency agenda was implemented. Attached for Council/Agency review is the City’s/Agency’s Monthly Treasurer’s Report.

Subsequent reports will be provided on a monthly basis at the second meeting of each month.

Discussion and Analysis:

The investment transactions were executed in accordance with the City's Investment Policy and the California State Government Code Section 5346(b)(3) that requires the general fund is able to meet its expenditure requirements for the next six months.

Lynwood Public Financing Authority - Page 4 of 242 Agenda Item # 2 Fiscal Impact:

The action recommended in this report will not have a fiscal impact on the City.

Coordinated With:

FHN Financial Main Street Advisors currently monitors the City’s investment activities.

ATTACHMENTS:

Description
ACTIVITY & PERFORMANCE - APRIL 2022
FHN REPORT - APRIL 2022
ECONOMIC REPORT - APRIL 2022
Lynwood Public Financing Authority - Page 5 of 242 Agenda Item # 2 The following is the City’s cash flow and the monthly investment report. The monthly report includes a summary of the City’s investment portfolio, a monthly review of the investment market as prepared by the investment managers and detailed information on monthly transactions, cash flows and investments by issuer.

FHN Investment Advisors manage the portion of investments not invested by LAIF (State Local Agency Investment Fund).

The table below provide key statistics regarding the City’s cash flow and investment portfolio as of April 30, 2022.

Type Balances Held
Cash - US Bank $ 54,147,849.66
Cash - JPMorgan Chase Bank $ 7,518,250.93
Local Agency Investment Fund $ 9,537,751.55
FHN Investment Advisors/BNY $ 16,027,753.18
TOTAL $ 87,231,605.32

ACCOUNT SUMMARY

30-Apr-22 31-Mar-22
Market Value $25,573,021 $25,697,469
Book Value $26,227,898 $26,207,517
Variance ($654,878) ($510,048)
Par Value $26,181,918 $26,159,477
Net Asset Value $97.50 $98.05
Book Yield 1.03% 0.96%
Market Yield 1.80% 1.49%
Years to Maturity 1.49 1.5
Effective Duration 1.44 1.45

INVESTMENT COMPLIANCE
% %
Company Book Value of Portfolio of Total
US Treasuries 6,502,257.27 25% 100%
US Federal Agencies 3,223,961.53 12% 100%
Supranational Obligations 0.00 0% 30%
LAIF 9,545,267.55 36% 100%
Commercial Paper 349,786.09 1% 25%
Money Market Funds 618,649.97 2% 20%
Negotiable Certificates of Deposit 3,966,959.31 15% 30% Corporate Obligations 2,021,016.67 8% 30%
State and Local Governments 0.00 0% 100%

All of the City’s rated investments are rated “A” or higher by at least two rating agencies on April 30, 2022. The City’s investments comply with its current investment policy, which emphasizes the safety, liquidity, and return of its investments, allowing the city to meet its expenditures for the next six months.

Lynwood Public Financing Authority - Page 6 of 242 Agenda Item # 2 Run Date: 5/10/2022 - 10:36 AM
Amortizing Page 2
Portfolio Summary
City of Lynwood 4/30/2022

SECTOR ALLOCATION MATURITY DISTRIBUTION CREDIT QUALITY (MOODY'S)

ACCOUNT SUMMARY MONTH-END PORTFOLIO BOOK YIELD TOP ISSUERS 4/30/22 3/31/22 Issuer % Portfolio
Market Value $25,573,021 $25,697,469 LAIF 36.4%
Book Value $26,227,898 $26,207,517 U.S. Treasury 24.8%
Variance -$654,878 -$510,048 FHLB 3.9%
FNMA 3.8%
Par Value $26,181,918 $26,159,477 FFCB 2.7%
Goldman Sachs Govt MMF 2.4%
Net Asset Value $97.50 $98.05 JPMorgan 1.9%
FHLMC 1.9%
Book Yield 1.03% 0.96% Royal Bank of Canada 1.3%
Exxon Mobil 1.0%
Market Yield 1.80% 1.49% Toyota 1.0%
US Bancorp 1.0%
Years to Maturity 1.49 1.50 Jackson National Life 1.0%
New York Life 1.0%
Effective Duration 1.44 1.45 Charles Schwab 1.0%
May-21
Jun-21
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22
Feb-22
Mar-22
Apr-22

0.60%

0.65%

0.70%

0.75%

0.80%

0.85%

0.90%

0.95%

1.00%

1.05%

1.10%

1.3%

2.4%

7.7%

12.3%

15.1%

24.8%

36.4%
CP
MMF
CORP
AGY
CD
TSY
LAIF
100%75%50%25%0%

50.5%

12.3% 13.4% 13.2% 10.5%
0-1Y 1-2Y 2-3Y 3-4Y 4-5Y+
0%
10%
20%
30%
40%
50%
60%
70%

51.5%

3.8%

1.9%

1.0%

40.4%

1.3%
NR
A3
A2
A1
Aa3
Aa2
Aa1
Aaa
P-1
100%75%50%25%0%
2 Lynwood Public Financing Authority - Page 7 of 242 Agenda Item # 2 Run Date: 5/10/2022 - 10:36 AM
Amortizing Page 3
Investment Policy Compliance
City of Lynwood 4/30/2022
Category Book Value % of Portfolio % Allowed by Policy In ComplianceReserved row US Treasuries 6,502,257.27 24.79% 100% Yes
US Federal Agencies 3,223,961.53 12.29% 100% Yes
Supranational Obligations 0.00 0.00% 30% Yes
LAIF 9,545,267.55 36.39% 100% Yes
Commercial Paper 349,786.09 1.33% 25% Yes
Money Market Funds 618,649.97 2.36% 20% Yes
Negotiable Certificates of Deposit 3,966,959.31 15.12% 30% Yes Corporate Obligations 2,021,016.67 7.71% 30% Yes
State and Local Governments 0.00 0.00% 100% Yes
Total 26,227,898.39 100.00%
Other Metrics Portfolio Metric In Compliance
Weighted Average Maturity 1.49 Less than 3.0 Years Yes
Liquidity 50.53% 30% Under 365 Days Yes
Ratings Yes
3 Lynwood Public Financing Authority - Page 8 of 242 Agenda Item # 2 Holdings Report
City of Lynwood April 30, 2022
Call Date
Maturity Date
Par Value
Settle Date
Book Value
Original Value
Mkt YTM
Mkt Price
Gain/Loss
% of Port
Fitch
Moody/S&P
Eff. Dur.

WAM
Accrued Int.

Market Value
CUSIP Coupon Rate
Issuer
Book Yield
Remaining
Certificates of Deposit
27002YEM4 248,000.00EagleBank 05/10/2019 248,000.00 100.06 248,141.60 0.95% NR/NR 0.0305/10/2022 141.60 NR 0.03 370.98 2.60% 248,000.00 0.56%2.600%
33847E2J5 248,000.00Flagstar Bank 06/12/2019 248,000.00 100.22 248,546.05 0.95% NR/NR 0.1206/13/2022 546.05 NR 0.12 2,378.08 2.50% 248,000.00 0.67%2.500% 1404203Z1 248,000.00Capital One Bank USA 08/03/2017 247,417.20 100.31 248,759.37 0.95% NR/NR 0.2608/02/2022 789.39 NR 0.26 1,375.21 2.35% 247,969.98 1.11%2.300% 795450D36 248,000.00Sallie Mae Bank 08/24/2017 247,417.20 100.39 248,967.56 0.95% NR/NR 0.3208/23/2022 1,004.29 NR 0.31 1,069.80 2.40% 247,963.28 1.11%2.350% 61747MF63 248,000.00Morgan Stanley Bank 01/12/2018 247,417.20 100.39 248,959.16 0.95% NR/NR 0.7001/11/2023 1,040.91 NR 0.68 1,980.60 2.70% 247,918.25 2.09%2.650% 59013J5Z8 248,000.00Merrick Bank 12/19/2018 247,516.40 100.89 250,214.53 0.95% NR/NR 0.8102/21/2023 2,308.71 NR 0.79 295.90 3.41% 247,905.82 2.24%3.350% 20033AZK5 248,000.00Comenity Capital Bank 06/29/2018 247,427.12 100.71 249,748.40 0.95% NR/NR 1.1606/29/2023 1,881.74 NR 1.12 44.84 3.40% 247,866.66 2.68%3.300%
38148PR33 248,000.00Goldman Sachs Bank 07/09/2018 247,432.08 100.71 249,754.97 0.95% NR/NR 1.1807/06/2023 1,889.55 NR 1.14 2,578.52 3.35% 247,865.42 2.69%3.300% 949763TF3 248,000.00Wells Fargo Bank NA 08/31/2018 247,429.60 100.68 249,677.19 0.94% NR/NR 1.3308/30/2023 1,829.40 NR 1.29 717.50 3.35% 247,847.79 2.78%3.300% 29278TLY4 248,000.00EnerBank 09/30/2019 247,523.84 98.93 245,357.61 0.94% NR/NR 1.4109/27/2023 -2,474.19 NR 1.38 54.36 2.05% 247,831.81 2.77%2.000% 17312Q3B3 248,000.00Citibank 02/28/2019 247,427.12 100.14 248,335.38 0.94% NR/NR 1.8302/27/2024 545.07 NR 1.76 1,284.16 3.05% 247,790.31 2.92%3.000% 32100LCB9 248,000.00First Missouri State Bank 09/13/2019 248,000.00 97.26 241,203.07 0.95% NR/NR 2.3809/13/2024 -6,796.93 NR 2.31 615.92 1.85% 248,000.00 3.06%1.850% 05580AXF6 248,000.00BMW Bank 09/25/2020 248,000.00 91.66 227,312.58 0.95% NR/NR 3.4109/25/2025 -20,687.42 NR 3.37 125.70 0.50% 248,000.00 3.10%0.500% 856283S98 248,000.00State Bank of India 04/27/2021 248,000.00 92.26 228,793.19 0.95% NR/NR 3.9904/27/2026 -19,206.81 NR 3.91 27.18 1.00% 248,000.00 3.08%1.000% 89235MLC3 248,000.00Toyota Financial Savings Bank 07/15/2021 248,000.00 91.69 227,383.13 0.95% NR/NR 4.2107/15/2026 -20,616.87 NR 4.11 684.21 0.95% 248,000.00 3.07%0.950% 90348JR93 248,000.00UBS Bank USA 08/11/2021 248,000.00 91.51 226,956.55 0.95% NR/NR 4.2808/11/2026 -21,043.45 NR 4.18 129.10 0.95% 248,000.00 3.07%0.950% 3,963,007.76 3,888,110.34 15.12% 1.71
3,966,959.31 2.28% 3,968,000.00 2.31% 13,732.06 -78,848.96 1.67Total Certificates of Deposit Commercial Paper
Run Date: 5/10/2022 - 10:37 AM
Amortizing
16Lynwood Public Financing Authority - Page 9 of 242 Agenda Item # 2 Holdings Report
City of Lynwood April 30, 2022
Call Date
Maturity Date
Par Value
Settle Date
Book Value
Original Value
Mkt YTM
Mkt Price
Gain/Loss
% of Port
Fitch
Moody/S&P
Eff. Dur.

WAM
Accrued Int.

Market Value
CUSIP Coupon Rate
Issuer
Book Yield
Remaining
Commercial Paper
78015DG61 350,000.00Royal Bank of Canada, NY 12/20/2021 349,364.75 99.82 349,374.38 1.33% P-1/A-1+ 0.1807/06/2022 -411.71 F1+ 0.19 0.00 0.33% 349,786.09 0.98%0.000%
349,364.75 349,374.38 1.33% 0.18
349,786.09 0.33% 350,000.00 0.98% 0.00 -411.71 0.19Total Commercial Paper Corporate Bonds
46849LSW2 250,000.00Jackson National Life 07/12/2017 247,795.00 100.13 250,322.50 0.95% A2/A 0.1606/27/2022 392.91 A 0.15 2,152.78 2.69% 249,929.59 1.67%2.500%
90331HNV1 250,000.00US Bank 03/01/2019 253,307.50 100.84 252,097.50 0.96% A1/AA- 1.2307/24/2023 1,169.81 AA- 1.15 2,290.28 3.08% 250,927.69 2.70%3.400% 06/23/2023 89236TFS9 250,000.00Toyota Motor Credit 02/28/2019 253,545.00 100.58 251,455.00 0.96% A1/A+ 1.6901/08/2024 223.37 A+ 1.62 2,628.82 3.03% 251,231.63 2.99%3.350% 46625HJX9 500,000.00JPMorgan Chase & Co 05/13/2019 515,115.00 100.86 504,315.00 1.93% A2/A- 2.0405/13/2024 -1,840.16 AA- 1.92 8,458.33 2.97% 506,155.16 3.18%3.625% 64952WDL4 250,000.00New York Life 01/22/2020 249,102.50 96.09 240,217.50 0.95% Aaa/AA+ 2.7301/22/2025 -9,292.86 AAA 2.62 1,375.00 2.08% 249,510.36 3.52%2.000% 30231GBH4 250,000.00Exxon Mobil 06/22/2020 272,752.50 99.09 247,725.00 1.01% Aa2/AA- 2.8903/19/2025 -16,123.77 NR 2.72 872.67 0.99% 263,848.77 3.32%2.992% 02/19/2025 808513BW4 250,000.00Charles Schwab 04/12/2022 249,407.50 98.21 245,520.00 0.95% A2/NR 4.9204/01/2027 -3,893.46 NR 4.43 687.50 3.35% 249,413.46 3.70%3.300% 2,041,025.00 1,991,652.50 7.71% 2.22
2,021,016.67 2.63% 2,000,000.00 3.04% 18,465.38 -29,364.16 2.07Total Corporate Bonds LAIF
9819499 9,545,267.55LAIF 04/15/2022 9,545,267.55 1.00 9,545,267.55 36.39% NR/NR 0.0005/01/2022

0.00 NR 0.00 0.00 0.52% 9,545,267.55 0.52%0.520%
9,545,267.55 9,545,267.55 36.39% 0.00
9,545,267.55 0.52% 9,545,267.55 0.52% 0.00 0.00 0.00Total LAIF Money Market Funds
FGTXX 618,649.97Goldman Sachs Govt MMF 618,649.97 1.00 618,649.97 2.36% Aaa/AAA 0.0005/01/2022

0.00 NR 0.00 98.76 0.31% 618,649.97 0.31%0.308%
Run Date: 5/10/2022 - 10:37 AM
Amortizing
17Lynwood Public Financing Authority - Page 10 of 242 Agenda Item # 2 Holdings Report
City of Lynwood April 30, 2022
Call Date
Maturity Date
Par Value
Settle Date
Book Value
Original Value
Mkt YTM
Mkt Price
Gain/Loss
% of Port
Fitch
Moody/S&P
Eff. Dur.

WAM
Accrued Int.

Market Value
CUSIP Coupon Rate
Issuer
Book Yield
Remaining
618,649.97 618,649.97 2.36% 0.00
618,649.97 0.31% 618,649.97 0.31% 98.76 0.00 0.00Total Money Market Funds U.S. Agencies
3135G0T78 500,000.00FNMA 11/30/2017 497,400.00 100.28 501,415.00 1.91% Aaa/AA+ 0.4310/05/2022 1,645.95 AAA 0.42 722.22 2.11% 499,769.05 1.34%2.000% 3133EKTV8 500,000.00FFCB 07/02/2019 499,900.00 98.48 492,420.00 1.91% Aaa/AA+ 2.1707/01/2024 -7,536.59 AAA 2.10 3,166.67 1.90% 499,956.59 2.62%1.900% 3133EK3B0 200,000.00FFCB 10/17/2019 198,370.00 97.09 194,176.00 0.76% Aaa/AA+ 2.4710/16/2024 -5,021.23 AAA 2.40 125.00 1.67% 199,197.23 2.73%1.500% 3130A4CH3 500,000.00FHLB 10/07/2020 541,330.00 98.61 493,065.00 2.01% Aaa/AA+ 2.8703/14/2025 -33,694.69 AAA 2.75 1,550.35 0.49% 526,759.69 2.88%2.375% 3136G4H71 500,000.00FNMA 08/18/2020 500,000.00 92.52 462,580.00 1.91% Aaa/AA+ 3.2908/12/2025 -37,420.00 AAA 3.24 506.94 0.50% 500,000.00 2.91%0.500% 02/18/2022 3137EAEX3 500,000.00FHLMC 10/20/2020 497,505.00 91.80 458,975.00 1.90% Aaa/AA+ 3.4009/23/2025 -39,303.97 AAA 3.34 197.92 0.48% 498,278.97 2.93%0.375% 3130AQEC3 500,000.00FHLB 12/30/2021 500,000.00 93.96 469,775.00 1.91% Aaa/AA+ 4.6712/30/2026 -30,225.00 AAA 4.31 2,302.36 1.37% 500,000.00 2.76%1.370% 06/30/2022 3,234,505.00 3,072,406.00 12.29% 2.79
3,223,961.53 1.17% 3,200,000.00 2.58% 8,571.46 -151,555.53 2.68Total U.S. Agencies U.S. Treasuries
912828ZD5 500,000.00U.S. Treasury 12/16/2020 504,140.63 98.72 493,615.00 1.91% Aaa/AA+ 0.8703/15/2023 -7,997.77 AAA 0.86 319.29 0.13% 501,612.77 1.98%0.500% 91282CAW1 1,000,000.00U.S. Treasury 07/22/2021 999,960.94 96.58 965,820.00 3.81% Aaa/AA+ 1.5511/15/2023 -34,153.96 AAA 1.52 1,153.31 0.25% 999,973.96 2.52%0.250% 91282CBV2 500,000.00U.S. Treasury 11/22/2021 496,308.59 95.60 478,010.00 1.89% Aaa/AA+ 1.9604/15/2024 -18,969.37 AAA 1.93 81.97 0.69% 496,979.37 2.69%0.375% 912828YV6 1,000,000.00U.S. Treasury 07/22/2021 1,035,742.19 96.68 966,840.00 3.92% Aaa/AA+ 2.5911/30/2024 -60,687.60 AAA 2.50 6,263.74 0.43% 1,027,527.60 2.84%1.500% 912828ZT0 500,000.00U.S. Treasury 06/29/2021 491,542.97 92.25 461,270.00 1.88% Aaa/AA+ 3.0905/31/2025 -32,074.22 AAA 3.04 521.98 0.69% 493,344.22 2.89%0.250% 91282CAZ4 1,000,000.00U.S. Treasury 07/22/2021 989,492.19 91.36 913,590.00 3.78% Aaa/AA+ 3.5911/30/2025 -77,763.50 AAA 3.52 1,565.93 0.62% 991,353.50 2.93%0.375% 91282CBH3 500,000.00U.S. Treasury 02/25/2021 494,433.59 90.96 454,805.00 1.89% Aaa/AA+ 3.7601/31/2026 -40,954.51 AAA 3.68 466.16 0.60% 495,759.51 2.94%0.375% Run Date: 5/10/2022 - 10:37 AM
Amortizing
18Lynwood Public Financing Authority - Page 11 of 242 Agenda Item # 2 Holdings Report
City of Lynwood April 30, 2022
Call Date
Maturity Date
Par Value
Settle Date
Book Value
Original Value
Mkt YTM
Mkt Price
Gain/Loss
% of Port
Fitch
Moody/S&P
Eff. Dur.

WAM
Accrued Int.

Market Value
CUSIP Coupon Rate
Issuer
Book Yield
Remaining
U.S. Treasuries
91282CCF6 1,000,000.00U.S. Treasury 07/22/2021 1,002,382.81 91.61 916,130.00 3.82% Aaa/AA+ 4.0905/31/2026 -85,874.03 AAA 3.97 3,131.87 0.70% 1,002,004.03 2.94%0.750% 91282CCZ2 500,000.00U.S. Treasury 10/19/2021 492,949.22 91.50 457,480.00 1.88% Aaa/AA+ 4.4209/30/2026 -36,222.29 AAA 4.28 370.56 1.17% 493,702.29 2.94%0.875% 6,506,953.13 6,107,560.00 24.79% 2.90
6,502,257.27 0.56% 6,500,000.00 2.76% 13,874.81 -394,697.25 2.83Total U.S. Treasuries 26,258,773.16 25,573,020.73 100.00% 1.49
54,742.47 -654,877.61 1.45 1.80% 26,227,898.39 1.03% 26,181,917.52TOTAL PORTFOLIO TOTAL MARKET VALUE PLUS ACCRUED INTEREST 25,627,763.20 Run Date: 5/10/2022 - 10:37 AM
Amortizing
19Lynwood Public Financing Authority - Page 12 of 242 Agenda Item # 2 Maturity Report
City of Lynwood April 30, 2022
CUSIP Date
Purchase
Value
Book
Rate
Coupon
Date
Maturity
Par
Remaining
Term Value
Market
YTMIssuer
Days to
Maturity
Book
FGTXX 0.308% 1Goldman Sachs Govt MMF 618,649.97 05/01/2022 1 0.31% 618,649.97 618,649.97 9819499 0.520% 1LAIF 05/18/2020 9,545,267.55 05/01/2022 1 0.52% 9,545,267.55 9,545,267.55 27002YEM4 2.600% 1,086EagleBank 05/10/2019 248,000.00 05/10/2022 10 2.60% 248,000.00 248,141.60 33847E2J5 2.500% 1,053Flagstar Bank 06/12/2019 248,000.00 06/13/2022 44 2.50% 248,000.00 248,546.05 46849LSW2 2.500% 1,753Jackson National Life 07/12/2017 249,929.59 06/27/2022 58 2.69% 250,000.00 250,322.50 78015DG61 0.000% 131Royal Bank of Canada, NY 12/20/2021 349,786.09 07/06/2022 67 0.33% 350,000.00 349,374.38 1404203Z1 2.300% 1,731Capital One Bank USA 08/03/2017 247,969.98 08/02/2022 94 2.35% 248,000.00 248,759.37 795450D36 2.350% 1,710Sallie Mae Bank 08/24/2017 247,963.28 08/23/2022 115 2.40% 248,000.00 248,967.56 3135G0T78 2.000% 1,612FNMA 11/30/2017 499,769.05 10/05/2022 158 2.11% 500,000.00 501,415.00 61747MF63 2.650% 1,569Morgan Stanley Bank 01/12/2018 247,918.25 01/11/2023 256 2.70% 248,000.00 248,959.16 59013J5Z8 3.350% 1,228Merrick Bank 12/19/2018 247,905.82 02/21/2023 297 3.41% 248,000.00 250,214.53 912828ZD5 0.500% 500U.S. Treasury 12/16/2020 501,612.77 03/15/2023 319 0.13% 500,000.00 493,615.00 20033AZK5 3.300% 1,401Comenity Capital Bank 06/29/2018 247,866.66 06/29/2023 425 3.40% 248,000.00 249,748.40 38148PR33 3.300% 1,391Goldman Sachs Bank 07/09/2018 247,865.42 07/06/2023 432 3.35% 248,000.00 249,754.97 90331HNV1 3.400% 1,156US Bank 03/01/2019 250,927.69 07/24/2023 450 3.08% 250,000.00 252,097.50 949763TF3 3.300% 1,338Wells Fargo Bank NA 08/31/2018 247,847.79 08/30/2023 487 3.35% 248,000.00 249,677.19 29278TLY4 2.000% 943EnerBank 09/30/2019 247,831.81 09/27/2023 515 2.05% 248,000.00 245,357.61 91282CAW1 0.250% 282U.S. Treasury 07/22/2021 999,973.96 11/15/2023 564 0.25% 1,000,000.00 965,820.00 89236TFS9 3.350% 1,157Toyota Motor Credit 02/28/2019 251,231.63 01/08/2024 618 3.03% 250,000.00 251,455.00 17312Q3B3 3.000% 1,157Citibank 02/28/2019 247,790.31 02/27/2024 668 3.05% 248,000.00 248,335.38 91282CBV2 0.375% 159U.S. Treasury 11/22/2021 496,979.37 04/15/2024 716 0.69% 500,000.00 478,010.00 46625HJX9 3.625% 1,083JPMorgan Chase & Co 05/13/2019 506,155.16 05/13/2024 744 2.97% 500,000.00 504,315.00 3133EKTV8 1.900% 1,033FFCB 07/02/2019 499,956.59 07/01/2024 793 1.90% 500,000.00 492,420.00 32100LCB9 1.850% 960First Missouri State Bank 09/13/2019 248,000.00 09/13/2024 867 1.85% 248,000.00 241,203.07 3133EK3B0 1.500% 926FFCB 10/17/2019 199,197.23 10/16/2024 900 1.67% 200,000.00 194,176.00 912828YV6 1.500% 282U.S. Treasury 07/22/2021 1,027,527.60 11/30/2024 945 0.43% 1,000,000.00 966,840.00 64952WDL4 2.000% 829New York Life 01/22/2020 249,510.36 01/22/2025 998 2.08% 250,000.00 240,217.50 3130A4CH3 2.375% 570FHLB 10/07/2020 526,759.69 03/14/2025 1,049 0.49% 500,000.00 493,065.00 30231GBH4 2.992% 677Exxon Mobil 06/22/2020 263,848.77 03/19/2025 1,054 0.99% 250,000.00 247,725.00 912828ZT0 0.250% 305U.S. Treasury 06/29/2021 493,344.22 05/31/2025 1,127 0.69% 500,000.00 461,270.00 3136G4H71 0.500% 620FNMA 08/18/2020 500,000.00 08/12/2025 1,200 0.50% 500,000.00 462,580.00 3137EAEX3 0.375% 557FHLMC 10/20/2020 498,278.97 09/23/2025 1,242 0.48% 500,000.00 458,975.00 05580AXF6 0.500% 582BMW Bank 09/25/2020 248,000.00 09/25/2025 1,244 0.50% 248,000.00 227,312.58 91282CAZ4 0.375% 282U.S. Treasury 07/22/2021 991,353.50 11/30/2025 1,310 0.62% 1,000,000.00 913,590.00 91282CBH3 0.375% 429U.S. Treasury 02/25/2021 495,759.51 01/31/2026 1,372 0.60% 500,000.00 454,805.00 856283S98 1.000% 368State Bank of India 04/27/2021 248,000.00 04/27/2026 1,458 1.00% 248,000.00 228,793.19 Run Date: 5/10/2022 - 10:37 AM
Amortizing
20Lynwood Public Financing Authority - Page 13 of 242 Agenda Item # 2 Maturity Report
City of Lynwood April 30, 2022
CUSIP Date
Purchase
Value
Book
Rate
Coupon
Date
Maturity
Par
Remaining
Term Value
Market
YTMIssuer
Days to
Maturity
Book
91282CCF6 0.750% 282U.S. Treasury 07/22/2021 1,002,004.03 05/31/2026 1,492 0.70% 1,000,000.00 916,130.00 89235MLC3 0.950% 289Toyota Financial Savings Bank 07/15/2021 248,000.00 07/15/2026 1,537 0.95% 248,000.00 227,383.13 90348JR93 0.950% 262UBS Bank USA 08/11/2021 248,000.00 08/11/2026 1,564 0.95% 248,000.00 226,956.55 91282CCZ2 0.875% 193U.S. Treasury 10/19/2021 493,702.29 09/30/2026 1,614 1.17% 500,000.00 457,480.00 3130AQEC3 1.370% 121FHLB 12/30/2021 500,000.00 12/30/2026 1,705 1.37% 500,000.00 469,775.00 808513BW4 3.300% 18Charles Schwab 04/12/2022 249,413.46 04/01/2027 1,797 3.35% 250,000.00 245,520.00 Net Maturities and Averages 26,227,898.39 545 1.03% 25,573,020.73 26,181,917.52 Run Date: 5/10/2022 - 10:37 AM
Amortizing
21Lynwood Public Financing Authority - Page 14 of 242 Agenda Item # 2 Income Earned
City of Lynwood April 01, 2022 - April 30, 2022
CUSIP Value
Ending Par
Date
Maturity
Book Value
Beginning
Value
Ending Book
Accrued
Beginning
/Purchased
Int.Received
Accrued
Ending
Issuer Earned
Interest Amortization/
Accretion Earned
Net Income
Certificates of Deposit
27002YEM4 05/10/2022 248,000.00EagleBank 248,000.00 248,000.00 388.65 547.64 370.98 529.97 0.00 529.97 33847E2J5 06/13/2022 248,000.00Flagstar Bank 248,000.00 248,000.00 1,868.49 0.00 2,378.08 509.59 0.00 509.59 1404203Z1 08/02/2022 248,000.00Capital One Bank USA 247,960.40 247,969.98 906.39 0.00 1,375.21 468.82 9.58 478.40 795450D36 08/23/2022 248,000.00Sallie Mae Bank 247,953.70 247,963.28 590.78 0.00 1,069.80 479.02 9.58 488.60 61747MF63 01/11/2023 248,000.00Morgan Stanley Bank 247,908.67 247,918.25 1,440.44 0.00 1,980.60 540.16 9.58 549.74 59013J5Z8 02/21/2023 248,000.00Merrick Bank 247,896.30 247,905.82 318.66 705.61 295.90 682.85 9.51 692.36 20033AZK5 06/29/2023 248,000.00Comenity Capital Bank 247,857.25 247,866.66 67.27 695.08 44.84 672.65 9.41 682.06 38148PR33 07/06/2023 248,000.00Goldman Sachs Bank 247,856.07 247,865.42 1,905.86 0.00 2,578.52 672.66 9.35 682.01 949763TF3 08/30/2023 248,000.00Wells Fargo Bank NA 247,838.41 247,847.79 44.84 0.00 717.50 672.66 9.38 682.04 29278TLY4 09/27/2023 248,000.00EnerBank 247,822.01 247,831.81 67.95 421.26 54.36 407.67 9.80 417.47 17312Q3B3 02/27/2024 248,000.00Citibank 247,780.89 247,790.31 672.66 0.00 1,284.16 611.50 9.42 620.92 32100LCB9 09/13/2024 248,000.00First Missouri State Bank 248,000.00 248,000.00 238.83 0.00 615.92 377.09 0.00 377.09 05580AXF6 09/25/2025 248,000.00BMW Bank 248,000.00 248,000.00 23.78 0.00 125.70 101.92 0.00 101.92 856283S98 04/27/2026 248,000.00State Bank of India 248,000.00 248,000.00 1,059.95 1,236.60 27.18 203.83 0.00 203.83 89235MLC3 07/15/2026 248,000.00Toyota Financial Savings Bank 248,000.00 248,000.00 490.56 0.00 684.21 193.65 0.00 193.65 90348JR93 08/11/2026 248,000.00UBS Bank USA 248,000.00 248,000.00 135.55 200.10 129.10 193.65 0.00 193.65 Certificates of Deposit - Sub Total 3,968,000.00 3,966,873.71 3,966,959.31 10,220.66 3,806.29 13,732.06 7,317.69 85.60 7,403.29 Commercial Paper
4497W1DM5 04/21/2022 0.00ING US Funding LLC 349,952.95 0.00 0.00 0.00 0.00 0.00 47.06 47.06 78015DG61 07/06/2022 350,000.00Royal Bank of Canada, NY 349,692.10 349,786.09 0.00 0.00 0.00 0.00 93.99 93.99 Commercial Paper - Sub Total
350,000.00 699,645.04 349,786.09 0.00 0.00 0.00 0.00 141.05 141.05 Corporate Bonds
59217GCD9 04/08/2022 0.00MetLife 250,008.78 0.00 3,183.68 3,312.50 0.00 128.82 -8.78 120.04 46849LSW2 06/27/2022 250,000.00Jackson National Life 249,893.76 249,929.59 1,631.94 0.00 2,152.78 520.84 35.82 556.66 90331HNV1 07/24/2023 250,000.00US Bank 250,988.28 250,927.69 1,581.94 0.00 2,290.28 708.34 -60.59 647.75 89236TFS9 01/08/2024 250,000.00Toyota Motor Credit 251,292.41 251,231.63 1,930.90 0.00 2,628.82 697.92 -60.77 637.15 46625HJX9 05/13/2024 500,000.00JPMorgan Chase & Co 506,398.68 506,155.16 6,947.92 0.00 8,458.33 1,510.41 -243.52 1,266.89 64952WDL4 01/22/2025 250,000.00New York Life 249,495.90 249,510.36 958.33 0.00 1,375.00 416.67 14.46 431.13 30231GBH4 03/19/2025 250,000.00Exxon Mobil 264,235.31 263,848.77 249.33 0.00 872.67 623.34 -386.54 236.80 808513BW4 04/01/2027 250,000.00Charles Schwab 0.00 249,413.46 0.00 -252.08 687.50 435.42 5.96 441.38 Corporate Bonds - Sub Total
2,000,000.00 2,022,313.13 2,021,016.67 16,484.04 3,060.42 18,465.38 5,041.76 -703.96 4,337.80 Run Date: 5/10/2022 - 10:37 AM
Amortizing
24Lynwood Public Financing Authority - Page 15 of 242 Agenda Item # 2 Income Earned
City of Lynwood April 01, 2022 - April 30, 2022
CUSIP Value
Ending Par
Date
Maturity
Book Value
Beginning
Value
Ending Book
Accrued
Beginning
/Purchased
Int.Received
Accrued
Ending
Issuer Earned
Interest Amortization/
Accretion Earned
Net Income
LAIF
9819499 05/01/2022 9,545,267.55LAIF 9,537,751.55 9,545,267.55 7,516.00 7,516.00 0.00 0.00 0.00 0.00 LAIF - Sub Total 9,545,267.55 9,537,751.55 9,545,267.55 7,516.00 7,516.00 0.00 0.00 0.00 0.00 Money Market Funds
FGTXX 05/01/2022 618,649.97Goldman Sachs Govt MMF 253,724.99 618,649.97 28.27 28.27 98.76 98.76 0.00 98.76 Money Market Funds - Sub Total
618,649.97 253,724.99 618,649.97 28.27 28.27 98.76 98.76 0.00 98.76 U.S. Agencies
3135G0T78 10/05/2022 500,000.00FNMA 499,724.36 499,769.05 4,888.89 5,000.00 722.22 833.33 44.70 878.03 3133EKTV8 07/01/2024 500,000.00FFCB 499,954.97 499,956.59 2,375.00 0.00 3,166.67 791.67 1.61 793.28 3133EK3B0 10/16/2024 200,000.00FFCB 199,170.96 199,197.23 1,375.00 1,500.00 125.00 250.00 26.28 276.28 3130A4CH3 03/14/2025 500,000.00FHLB 527,510.20 526,759.69 560.76 0.00 1,550.35 989.59 -750.51 239.08 3136G4H71 08/12/2025 500,000.00FNMA 500,000.00 500,000.00 298.61 0.00 506.94 208.33 0.00 208.33 3137EAEX3 09/23/2025 500,000.00FHLMC 498,238.16 498,278.97 41.67 0.00 197.92 156.25 40.81 197.06 3130AQEC3 12/30/2026 500,000.00FHLB 500,000.00 500,000.00 1,731.53 0.00 2,302.36 570.83 0.00 570.83 U.S. Agencies - Sub Total
3,200,000.00 3,224,598.65 3,223,961.53 11,271.46 6,500.00 8,571.46 3,800.00 -637.12 3,162.88 U.S. Treasuries
912828ZD5 03/15/2023 500,000.00U.S. Treasury 501,764.44 501,612.77 115.49 0.00 319.29 203.80 -151.67 52.13 91282CAW1 11/15/2023 1,000,000.00U.S. Treasury 999,972.57 999,973.96 946.13 0.00 1,153.31 207.18 1.39 208.57 91282CBV2 04/15/2024 500,000.00U.S. Treasury 496,852.81 496,979.37 865.38 937.50 81.97 154.09 126.56 280.65 912828YV6 11/30/2024 1,000,000.00U.S. Treasury 1,028,401.50 1,027,527.60 5,027.47 0.00 6,263.74 1,236.27 -873.89 362.38 912828ZT0 05/31/2025 500,000.00U.S. Treasury 493,167.05 493,344.22 418.96 0.00 521.98 103.02 177.17 280.19 91282CAZ4 11/30/2025 1,000,000.00U.S. Treasury 991,155.49 991,353.50 1,256.87 0.00 1,565.93 309.06 198.01 507.07 91282CBH3 01/31/2026 500,000.00U.S. Treasury 495,666.79 495,759.51 310.77 0.00 466.16 155.39 92.72 248.11 91282CCF6 05/31/2026 1,000,000.00U.S. Treasury 1,002,044.33 1,002,004.03 2,513.74 0.00 3,131.87 618.13 -40.30 577.83 91282CCZ2 09/30/2026 500,000.00U.S. Treasury 493,585.23 493,702.29 11.95 0.00 370.56 358.61 117.06 475.67 U.S. Treasuries - Sub Total
6,500,000.00 6,502,610.22 6,502,257.27 11,466.76 937.50 13,874.81 3,345.55 -352.95 2,992.60 26,181,917.52Grand Total 26,207,517.28 26,227,898.39 56,987.19 21,848.48 54,742.47 19,603.76 -1,467.38 18,136.38 Run Date: 5/10/2022 - 10:37 AM
Amortizing
25Lynwood Public Financing Authority - Page 16 of 242 Agenda Item # 2 Realized Gains and Losses
City of Lynwood April 01, 2022 - April 30, 2022
Par Value Sale Date Days Held Maturity/Sales RealizedCUSIP Coupon Rate Maturity Date Book Value Proceeds Gain/LossPurchase Date TermIssuer Commercial Paper
4497W1DM5 350,000.0012/21/2021 04/21/2022 121 350,000.00 0.00 350,000.00 04/21/2022 121ING US Funding LLC 0.000%
Total Commercial Paper 0.00 350,000.00 350,000.00
Corporate Bonds
59217GCD9 250,000.0011/02/2017 04/08/2022 1,618 250,000.00 0.00 250,000.00 04/08/2022 1,618MetLife 2.650%
Total Corporate Bonds 0.00 250,000.00 250,000.00
Grand Total 0.00 600,000.00 600,000.00
Run Date: 5/10/2022 - 10:37 AM
Amortizing
26Lynwood Public Financing Authority - Page 17 of 242 Agenda Item # 2 Transaction Report
City of Lynwood April 01, 2022 - April 30, 2022
Transaction Transaction Security Security Maturity
Date Type ID Description Date Purchases Redemptions Interest Deposits Withdrawals 04/04/2022 Interest FGTXX GSGF - - 28.27 - -
04/05/2022 Interest 3135G0T78 FNMA 2 10/05/22 10/05/2022 - - 5,000.00 - - 04/08/2022 Interest 59217GCD9 MET 2.65 04/08/22 04/08/2022 - - 3,312.50 - - 04/08/2022 Maturity 59217GCD9 MET 2.65 04/08/22 04/08/2022 - 250,000.00 - - - 04/11/2022 Interest 27002YEM4 EGBN 2.6 05/10/22 05/10/2022 - - 547.64 - - 04/11/2022 Interest 90348JR93 UBS 0.95 08/11/26 08/11/2026 - - 200.10 - - 04/12/2022 Purchase 808513BW4 SCHW 3.3 04/01/27 04/01/2027 -249,407.50 - -252.08 - - 04/15/2022 Interest 9819499 LAIF - - 7,516.00 - - 04/18/2022 Interest 91282CBV2 T 0 3/8 04/15/24 04/15/2024 - - 937.50 - - 04/18/2022 Interest 59013J5Z8 MERICK 3.35 02/21/23 02/21/2023 - - 705.61 - - 04/18/2022 Interest 3133EK3B0 FFCB 1 1/2 10/16/24 10/16/2024 - - 1,500.00 - - 04/21/2022 Maturity 4497W1DM5 ING (US) FUNDING 04/21/2022 - 350,000.00 - - - 04/27/2022 Interest 856283S98 SBIIN 1 04/27/26 04/27/2026 - - 1,236.60 - - 04/27/2022 Interest 29278TLY4 CMS 2 09/27/23 09/27/2023 - - 421.26 - - 04/29/2022 Interest 20033AZK5 ADS 3.3 06/29/23 06/29/2023 - - 695.08 - - Grand Total: -249,407.50 600,000.00 21,848.48 0.00 0.00 Run Date: 5/10/2022 - 10:37 AM
Amortizing
27Lynwood Public Financing Authority - Page 18 of 242 Agenda Item # 2 Consumer Prices
Although U.S. consumer prices rose less than expected in March, inflation remained elevated at a 40-year high. The Consumer Price Index (CPI) was up 8.5% year-over-year in March, versus up 7.9% year-over-year in February. Core CPI (CPI less food and energ y) was up 6.5% year -over-year in March, versus up 6.4% year-over-year in February. Gasoline costs drove half of the monthly increase, while food was also a sizable contributor. Used vehicle prices declined, resulting in lower than forecast core increases f or the month. The Personal Consumption Expenditures (PCE) index was up 6.4% year-over-year in February, up from 6.0% in January. Core PCE was up 5.4% year -over-year in February, versus up 5.2% in January.

Current inflation readings continue to run well abo ve the Fed’s longer-run target of around 2.0%. While gas prices have started to decline in recent weeks in part due to COVID lockdowns in China, we believe pricing pressures may remain elevated longer than anticipated because of the conflict in Europe.

Retail Sales
Retail sales edged higher in February, but there are signs that higher gas prices are affecting discretionary spending. On a year-over-year basis, retail sales were up 17.6% in February versus 14% in January. On a month-over-month basis, retail s ales moderated, rising 0.3% in February versus an upwardly revised increase of 4.9% in January. Excluding vehicles and gas, retail sales were down 0.4% month -over-month.

Although inflation threatens to put a dent in expected growth, we believe high levels of consumer savings along with improvement in the health situation and continued improvement in the labor market should provide a healthy tailwind for consumer spending. The Consumer Confidence Index rebounded to 107.2 in March following declines in Januar y and February, primarily driven by positive assessments of employment. However, while consumers’ evaluations of the present situation were strong, future expectations have been deteriorating.

Labor Market
The U.S. economy added 431,000 jobs in March, with upward revisions from the prior months totaling 95,000. Trends in employment remain strong, with the three-month moving average payrolls at 561,000 and the six -month moving average at 600,000. Job gains were broad based in March, led by leisure, hospitality, professional, and business services. The unemployment rate fell to 3.6% from 3.8%, the lowest level since February 2020. The labor participation rate increased marginally to 62.4% in March from 62.3% in February but remains lower than the pre -pandemic level of 63.4%. The U -6 underemployment rate, which includes those who are marginally attached to the labor force and employed part time for economic reasons, fell to 6.9% in March from 7.2% in February, declining below its pre -pandemic level of 7.0% in February 2020. Wage growth accelerated in March, with average hourly earnings rising 5.6% from 5.2% year-over-year. As more participants enter the labor force, wage inflation dynamics should start to moderate, helping to lower the current elevated inflation readings.

Housing Starts
Total housing starts rebounded 6.8% to an annual rate of 1,769,000 in February. Single -family starts increased 5.7%, and multi -family starts increased 9.3%, month -over-month. On a year -over-year basis, total housing starts were up 22.3% in February driven by multi-family starts. According to the Case-Shiller 20-City home price index, home prices were up 19.1% year -over-year in January versus up 18.6% year - over-year in December, suggesting tight supply may be continuing to support prices. Rising mortgage rates and affordability could be headwinds to further price growth.

Lynwood Public Financing Authority - Page 19 of 242 Agenda Item # 2 Agenda Item # 6.

AGENDA STAFF REPORT
DATE:

May 17, 2022

TO:

Honorable Mayor and Members of the City Council

APPROVED BY:

Ernie Hernandez, City Manager

PREPARED BY:

Harry Wong, Director of Finance & Administration

SUBJECT:

APPROVING PENSION UNFUNDED ACCRUED LIABILITY (“UAL”) REFINANCE

WITH THE ISSUANCE OF LEASE REVENUE BONDS BY THE LYNWOOD PUBLIC FINANCING AUTHORITY IN MAXIMUM AMOUNT OF $50,000,000 (FEDERALLY TAXABLE); APPROVING, AUTHORIZING AND DIRECTING EXECUTION OF

CERTAIN LEASE FINANCING DOCUMENTS AND DIRECTING CERTAIN RELATED

ACTIONS
Recommendation:

1. Staff
recommends that the City Council consider adoption of the attached Resolution No. ______ entitled, “A

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD APPROVING THE ISSUANCE OF

LEASE REVENUE BONDS BY THE LYNWOOD PUBLIC FINANCING AUTHORITY, APPROVING,

AUTHORIZING AND DIRECTING EXECUTION OF CERTAIN LEASE FINANCING DOCUMENTS AND DIRECTING CERTAIN RELATED ACTIONS”

2. Staff recommends that the Lynwood Public Financing Authority consider adoption of the attached Resolution No. ______ entitled, “A RESOLUTION OF THE LYNWOOD PUBLIC FINANCING AUTHORITY

AUTHORIZING THE ISSUANCE OF LEASE REVENUE BONDS, AUTHORIZING AND DIRECTING

EXECUTION OF AN INDENTURE, A LEASE, A SITE LEASE, AND CERTAIN OTHER DOCUMENTS,

AUTHORIZING THE NEGOTIATION FOR THE SALE OF BONDS, AND AUTHORIZING OTHER RELATED ACTIONS”

Background:

Lynwood Public Financing Authority - Page 20 of 242 Agenda Item # 3

The City’s pension plans are managed under contract with CalPERS. The City’s annual pension payments to CalPERS consist of two components which include the Normal Cost, and UAL. The normal cost is the amount CalPERS charges the City, as a percentage of its payroll, that is estimated to annually fully fund a share of all future pension obligations. The UAL repayment portion is the amount that is charged to the City to repay the City’s estimated long-term UAL that is owed to CalPERS for past changes in benefits, underperforming CalPERS investment returns, and changes in the discount rate.

The UAL represents the difference between the amount necessary to pay actuarially determined future benefits already earned by current and former employees and the market value of the assets currently on deposit with CalPERS. The City’s UAL constitutes a debt that must be repaid to CalPERS and it is listed as a liability on the City’s Balance Sheet in accordance with the Governmental Accounting Standards Board requirements.

CalPERS currently charges the City 7.00% interest on this debt (scheduled to change to 6.80% for Fiscal Year ending June 30, 2024), and has a repayment structure that will result in a significant increase in annual pension costs over the coming years. As in many other cities in California, the growing obligations related to employee retirements represent a significant financial burden to the City.

CalPERS calculates the actuarial value of benefits owed to plan members and the market value of plan assets annually, but it takes them one year to publish results. Furthermore, CalPERS determines the UAL amortization schedules based on the projected future UAL balance at the end of the year in which results are published. This means that results based on a June 30, 2020 valuation date, which are released in July of 2021, project the UAL balance at June 30, 2022 to determined UAL amortization payments for Fiscal Year Ending June 30, 2023.

Therefore, UAL amortization payments for the Fiscal Year Ending June 30, 2023 (the upcoming Fiscal Year) are based on the City’s projected unfunded liabilities to CalPERS of $35,582,515 for the Miscellaneous Plan and $7,516,349 for the Safety Plan.

CalPERS’ investment returns for 2021-22 and demographic and other changes that are currently being calculated by CalPERS could further increase this amount.

Current taxable municipal bond rates are currently lower than the 7.00% (soon to be 6.80%) CalPERS is currently charging the City. By issuing its own obligations to finance the UAL (instead of continuing to make payments to CalPERS on its terms), the City may be able to realize substantial budgetary savings and better manage future pension costs. Under IRS regulations, obligations that are issued to finance a UAL must be issued at taxable (as opposed to tax-exempt) interest rates.

The financing team is recommending that the City authorize the Financing Authority to issue Lease Revenue Bonds secured by lease payments to be made by the City for the lease of certain City assets, which are anticipated to consist of City streets, but which may instead consist of other City facilities such as Police Stations, Fire Stations, City maintenance facilities, or combinations thereof, to refinance some or all of the UAL. Similar financings have been done in various other cities in the State over the past several years to similarly refinance UAL amounts owed to CalPERS.

Discussion and Analysis:

Overview of Bond Financing
. The proposed financing is in the form of Lease Revenue Bonds (“Bonds”) to be issued by the Lynwood Public Financing Authority, similar to financings undertaken by Lynwood in 2019 and 2020.

Pursuant to the documents to be approved, the City and Financing Authority would enter into (1) a Site Lease, pursuant to which the Financing Authority leases City property in exchange for an upfront site lease payment used for the UAL pay-off, and (2) a Lease Agreement, pursuant to which the City leases back the property from the Financing Authority in exchange for semi-annual lease payments. The lease payments would be assigned under the Assignment Agreement to the trustee, which would administer the Bonds under the Indenture of Trust.

The lease payments would be payable from any legally available funds of the City, and are anticipated to be further secured by a pledge of the pension tax override approved by the voters of the City in 1946. The pension tax override is accounted for in a special fund, apart from the General Fund, and may only be used for pension costs in accordance with applicable law.

Lynwood Public Financing Authority - Page 21 of 242 Agenda Item # 3

The property to be leased under the leases will be determined to have adequate value and other characteristics necessary to satisfy legal and marketing requirements. Valuation of the leased properties will be performed by Kosmont Realty. The resolutions contain a provision that allows City staff to determine the appropriate combination of City assets for use as the leased property.

Preliminary Official Statement; Continuing Disclosure
. The resolutions also approve the form of Preliminary Official Statement (POS) for the Bonds. The POS is the document pursuant to which material information concerning the City and the Bonds is conveyed to prospective purchasers of the Bonds. It also includes various risk factors for Bond holders to consider. Included as an exhibit to the POS is a Continuing Disclosure Certificate, pursuant to which the City will agree to provide its audited financial statements and certain other financial and operating information to Bondholders on an annual basis, as well as notification of certain enumerated events.

Bond Purchase Agreement
. The final document approved by the resolutions is the Bond Purchase Agreement, pursuant to which the Bonds would be sold by the Financing Authority to the underwriter, for further resale and distribution to ultimate investors. The agreement contains customary representations, warranties and covenants of the City and Financing Authority and closing conditions.

Financing Team
.

Transaction support is being provided to the City and the Financing Authority by Kosmont Transactions Services as the City’s municipal advisor. Additional transaction team members include Jones Hall (Bond Counsel); U.S.

Bank Trust Company, National Association (Trustee), and Cabrera Capital Markets (Underwriter).

Fiscal Impact:

Current projections indicate that refinancing the CalPERS UAL and thereby restructuring the currently front-loaded UAL amortization schedule to level payments could produce significant budget savings that average approximately $462,000 per year over the next 10 fiscal years, with the greatest savings of approximately $714,000 to occur in the upcoming 2023 Fiscal Year. Net Present Value savings over the remaining life of the Bonds would be approximately $2.25 million, for an NPV% savings of 5.21%. It is generally considered advisable to proceed with a refinancing transaction when NPV savings amounts are greater than 3%.

In accordance with Government Code Section 5852.1, the following information has been obtained and disclosed to the City Council and Financing Authority prior to the issuance of the Bonds: (i) the estimated true interest cost of the Bonds (being the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Bonds) is 5.5457%; (ii) the estimated finance charge of the Bonds (being the sum of all fees and charges paid to third parties) is $769,641; (iii) the estimated proceeds of the Bonds expected to be received, net of proceeds for finance charges in (ii) above to paid from the principal amount of the Bonds and any reserves or capitalized interest paid or funded with Bonds is $43,098,864, and (iv) the estimated total payment amount of the Bonds (being the sum of debt service plus finance to be paid to final maturity, plus any financing costs not paid from proceeds of the Bonds) is $75,410,107. This information is based on good-faith estimates provided by the City’s municipal advisor.

The foregoing is based on analysis done to date; however, the municipal bond market is experiencing high levels of volatility and ultimate expected savings will not be known until interest rates can be locked. Staff will work with its financial consultants to closely monitor the market in the coming months.

Coordinated With:

City Manager's Office
City Attorney
Kosmont Transactions Services, as Municipal Advisor
Jones Hall, as Bond Counsel
Lynwood Public Financing Authority - Page 22 of 242 Agenda Item # 3 ATTACHMENTS:

Description
Attach A - City Reso
Attach B -JPA Reso
Attach C - Indenture
Attach D - Site Lease
Attach E - Lease Agmt
Attach F - Assignment Agmt
Attach G - Lynwood LRBs POS
Attach H - LynwoodBPA
Lynwood Public Financing Authority - Page 23 of 242 Agenda Item # 3

RESOLUTION NO. ____________________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD

APPROVING THE ISSUANCE OF LEASE REVENUE BONDS BY THE

LYNWOOD PUBLIC FINANCING AUTHORITY , APPROVING,

AUTHORIZING AND DIRECTING EXECUTION OF CERTAIN LEASE

FINANCING DOCUMENTS AND DIRECTING CERTAIN RELATED

ACTIONS

WHEREAS, the City of Lynwood (the “City”) and the Lynwood Redevelopment Agency (which has been succeeded by the Successor Agency to the former Lynwood Redevelopment Agency) (the “Successor Agency ”) entered into a Joint Exercise of Powers Agreement, dated as of December 1, 1992, establishing the Lynwood Public Financing Authority (the “Authority”) for the purpose, among others, of providing assistance to the City and the Successor Agency with their financing programs; and

WHEREAS, the City is obligated by the Public Employees’ Retirement Law, commencing with Section 20000 of the Government Code of the State of California, as amended (the “Retirement Law”), to make payments relating to pension benefits accruing to the California Public Employees’ Retirement System’s (“CalPERS”) members, including the City; and

WHEREAS, the City is obligated specifically to make certain payments to CalPERS in respect of current and retired public safety employees and miscellaneous employees under the pension programs of CalPERS that amortize such obligations over a fixed period of time, including normal costs (collectively, the “CalPERS Obligation”); and

WHEREAS, the CalPERS Obligation is evidenced by a contract or contracts with CalPERS with respect to public safety employees and miscellaneous employees of the City, as heretofore and hereafter amended from time to time (collectively, the “CalPERS Contract”); and

WHEREAS, on April 9, 1946, the voters in the City approved a retirement tax to support amounts owed by the City to CalPERS pursuant to the CalPERS Contract (the “Pension Tax Override”), which Pension Tax Override is accounted for in a special fund, separate and apart from the General Fund, and available only for its authorized purposes; and

WHEREAS, the City is authorized under Section 37350 and 37380 of the California Government Code to lease, receive, hold, and enjoy real and personal property, and control and dispose of it for the common benefit; and

WHEREAS, the Authority is authorized under the Marks-Roos Local Bond Pooling Act of 1985, being Article 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Bond Law”) to issue revenue bonds for the purpose of providing working capital and/or refunding any evidence of indebtedness of its members; and

Lynwood Public Financing Authority - Page 24 of 242 Agenda Item # 3 2 WHEREAS, the Authority proposes to issue lease revenue bonds under the Bond Law for the purpose of refunding all or a portion of the CalP ERS Obligation, including paying all costs of issuing the lease revenue bonds; and

WHEREAS, pursuant to a Site Lease (the “Site Lease”), the City proposes to lease to the Authority certain real property (as described more fully in the Site Lease, as executed, the “Leased Property”); and

WHEREAS, pursuant to a Lease Agreement, between the City and the Authority (the “Lease”), the City proposes to lease the Leased Property from the Authority, and the Authority will use the lease payments paid by the City to the Authority under the Lease to pay debt service on the lease revenue bonds;

WHEREAS, the Authority propose s to sell the lease revenue bonds to Cabrera Capital Markets, LLC , as underwriter (the “Underwriter”), pursuant to a bond purchase agreement (the “Bond Purchase Agreement”); and

WHEREAS, in order to assist the Underwriter in complying with Rule 15c2 -12 of the Securities and Exchange Commi ssion, the City will undertake certain continuing disclosure obligations with respect to the lease revenue bonds pursuant to a continuing disclosure certificate to be executed by the City (the “Continuing Disclosure Certificate”); and

WHEREAS, in order to comply with Government Code Section 5852.1, certain information relating to the proposed lease revenue bonds is set forth in the staff report accompanying this Resolution, and such information is hereby disclosed and made public; and

WHEREAS, the City has duly considered such transactions and wishes at this time to approve the transactions as being in the public interest of the City;

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LYNWOOD DOES HEREBY FIND, PROCLAIM, ORDER AND RESOLVE AS FOLLOWS:

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

Section 2. The City Council hereby approves the issuance of the lease revenue bonds (the “Bonds”) by the Authority under the Bond Law in the maximum principal amount of $50,000,000. The Bonds shall be issued pursuant to an Indenture of Trust between the Authority and a corporate trustee (the “Indenture”).

Section 3. The City Council hereby approves the forms of the Site Lease and the Lease on file with the City Clerk, with such additions thereto and changes therein as the City Manager, the Finance Director, the Treasurer or the designee of any of them (each, an “Authorized Officer”) deem necessary, desirable or appropriate upon consultation with the bond counsel, the execution of which by an Authorized Officer shall be conclusive evidence of the approval of any such additions and changes. In furtherance of the foregoing, the Leased Property is anticipated to consist of the City’s interest in City streets; however, other real property of the City may be leased instead. In addition, Lynwood Public Financing Authority - Page 25 of 242 Agenda Item # 3 3 as described more fully in the Lease, the Pension Tax Override shall be pledged by the City to the payment of the lease payments . The Authorized Officers and all other appropriate officials of the City are hereby authorized and directed to execute, and the City Clerk is hereby authorized to attest, as appropriate, the Site Lease and the Lease and such other a greements, documents and certificates as may be necessary or desirable to effectuate the purposes of this resolution and the financing herein authorized, including, without limitation, such other agreements, documents and certificates as may be required by the Site Lease, and the Lease. The City Council hereby authorizes the performance by the City of its obligations under the Site Lease and the Lease.

Section 4. The City Council hereby approves the preliminary Official Statement describing the Bonds, and Continuing Disclosure Certificate included therein in substantially the form on file with the City Clerk. Each of the Authorized Officers is hereby authorized and directed to approve any changes in or additions to said preliminary Official Statement, an d to execute an appropriate certificate stating the City’s determination that the preliminary Official Statement (together with any changes therein or additions thereto) has been deemed nearly final within the meaning of Rule 15c2 -12 of the Securities Exch ange Act of 1934. Distribution of the preliminary Official Statement by the Underwriter is hereby approved. An Authorized Officer is hereby authorized and directed to approve any changes in or additions to a final form of said Official Statement, and the execution thereof by an Authorized Officer shall be conclusive evidence of approval of any such changes and additions. The City Council hereby authorizes the distribution of the final Official Statement by the Underwriter. The final Official Statement and the Continuing Disclosure Certificate shall be executed on behalf of the City by an Authorized Officer.

Section 5. The City Council hereby approves the form of the Bond Purchase Agreement on file with the City Clerk, with such additions thereto and cha nges therein as the Authorized Officers deem necessary, desirable or appropriate upon consultation with bond counsel, the execution of which by an Authorized Officer shall be conclusive evidence of the approval of any such additions or changes; provided th at no such addition or change shall increase the aggregate principal amount of the Bonds in excess of the maximum principal amount set forth in Section 2, or shall provide for a true interest cost in excess of 5.95% or an Underwriter’s discount (exclusive of any original issue discount) of greater than 0.8%. The Authorized Officers, each acting alone, are hereby authorized and directed to execute the Bond Purchase Agreement and to take all actions necessary to fulfill the City ’s obligations thereunder.

Section 6. Notwithstanding the foregoing references to the Bonds, the Indenture, the preliminary Official Statement and the Bond Purchase Agreement , if an Authorized Officer determines that a private placement lease financing is more advantageous to the City and the Authority , the lease payments payable by the City to the Authority may be assigned by the Authority to a private placement bank without further action of the City Council so long as the parameters included in this Resolution are met.

Lynwood Public Financing Authority - Page 26 of 242 Agenda Item # 3 4 Section 7. The City Council hereby approves the appointment of (a) Jones Hall, A Professional Law Corporation, as bond counsel and disclosure counsel; (b) Kosmont Transactions Services, Inc. , as municipal advisor; and (c) Cabrera Capital Market s, LLC, as underwriter/private placement agent .

The Authorized Officers, each acting alone, are hereby authorized to execute new or amended services agreements with these financing team members in connection with the issuance of the Bonds, as deemed necessary by such Authorized Officer executing the same.

Section 8. The Authorized Officers, the City Clerk and any and all other officers of the City are hereby authorized and directed, for and in the name of and on behalf of the City, to do any and all things and take any and all actions, including execution and delivery of any and al l documents, assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and documents, which they, or any of them, may deem necessary or advisable in order to consummate the transactions described herein. The City Council hereby authorizes the Authorized Officers, each acting alone, to provide for a debt service reserve fund and debt service and reserve fund insurance policies.

Section 9. This Resolution shall take effect immediately upon its passage and adoption.

Adoption of this Resolution is intended to start the 60 day period provided for in California Code of Civil Procedure Section 863 for an interested person to bring an action to determine the validity of the matters approved herein, including, but not limited to, the validity of the Bonds, the Indenture, the Site Lease (including the property proposed to be leased to the Authority by the City therein), and the Lease, and the legality and validity of this Resolution, the use of the proceeds of the Bonds, and the payment of the lease payments and the Bonds.

Lynwood Public Financing Authority - Page 27 of 242 Agenda Item # 3 5 PASSED, APPROVED AND ADOPTED THIS 17th day of May 2022.

Jorge Casanova, Mayor

ATTEST:

Maria Quinonez, City Clerk

Ernie Hernandez, City Manager

APPROVED AS TO FORM:

Noel Tapia, City Attorney

APPROVED AS TO CONTENT:

Ernie Hernandez, City Manager

[Insert City Clerk certification page]
Lynwood Public Financing Authority - Page 28 of 242 Agenda Item # 3

RESOLUTION NO. ___________

A RESOLUTION OF THE LYNWOOD PUBLIC FINANCING AUTHORITY

AUTHORIZING THE ISSUANCE OF LEASE REVENUE BONDS,

AUTHORIZING AND DIRECTING EXECUTION OF AN INDENTURE, A

LEASE, A SITE LEASE, AND CERTAIN OTHER DOCUMENTS,

AUTHORIZING THE NEGOTIATION FOR THE SALE OF BONDS, AND

AUTHORIZING OTHER RELATED ACTIONS

WHEREAS, the City of Lynwood (the “City”) and the Lynwood Redevelopment Agency (which has been succeeded by the Successor Agency to the former Lynwood Redevelopment Agency) (the “Su ccessor Agency”) entered into a Joint Exercise of Powers Agreement, dated as of December 1, 1992, establishing the Lynwood Public Financing Authority (the “Authority”) for the purpose, among others, of providing assistance to the City and the Successor Agency with their financing programs; and

WHEREAS, on April 9, 1946, the voters in the City approved a retirement tax to support the City’s contributions owed to CalPERS pursuant to the CalPERS Contract (the “Pension Tax Override”), which Pension Tax Override is accounted for in a special fund, separate and apart from the General Fund, and available only for its authorized purposes; and

WHEREAS, the Authority is authorized under the Marks-Roos Local Bond Pooling Act of 1985, being Article 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Bond Law”) to issue revenue bonds for the purpose of pro viding working capital and/or refunding any evidence of indebtedness of its members; and

Lynwood Public Financing Authority - Page 29 of 242 Agenda Item # 3

2 WHEREAS, the Authority proposes to issue lease revenue bonds under the Bond Law for the purpose of refunding all or a portion of the CalPERS Obligation, including paying all costs of issuing the lease revenue bonds; and

WHEREAS, pursuant to a Site Lease (the “Site Lease”), the City proposes to lease to the Authority certain real property ( as described more fully in the Site Lease, as executed, the “Leased Property”); and

WHEREAS, the Authority proposes to sell the lease revenue bonds to Cabrera Capital Markets, LLC , as underwriter (the “Underwriter”), pursuant to a bond purchase agreement (the “Bond Purchase Agreement”); and

WHEREAS, the Authority has duly considered these transactions and wishes at this time to approve these transactions and make certain findings regarding significant public benefits to the Authority’s members with respect to these transactions;

NOW, THEREFORE, THE LYNWOOD PUBLIC FINANCING AUTHORITY DOES HEREBY FIND, PROCLAIM, ORDER AND RESOLVE AS FOLLOWS:

Section 1. The Authority hereby finds and determines that the issuance of the lease revenue bonds and the transactions related thereto will re sult in significant public benefits to the City.

Section 2. The Authority hereby authorizes the issuance of the lease revenue bond s (the “Bonds”) under the Bond Law in the maximum principal amount of not to exceed $50,000,000. The Bonds shall be issued pursuant to an Indenture of Trust between the Authority and a corporate trustee (the “Indenture”).

The Authority hereby approves the Indenture in the form on file with the Secretary of the Authority (the “Secretary”), together with such additions thereto and changes therein as the Chief Administrative Officer, the Authority Finance Director, the Authority Treasurer or the designee of any of them (each, a “Authorized Officer”), deems necessary, desirable or appropriate upon consultation with bond counsel , t he execution of which by an Authorized Officer shall be conclusive evidence of the approval of any such additions and changes. The Leased Property is anticipated to consist of the City’s interest in City streets; however, other real property of the City may be leased instead. The Authorized Officers, each acting alone, are hereby authorized and directed to execute, and the Secretary is hereby authorized and directed to attest, the final form of the Indenture for and in the name and Lynwood Public Financing Authority - Page 30 of 242 Agenda Item # 3

3 on behalf of the Authority. The Authority hereby authorizes the performance by the Authority of its obligations under the Indenture.

Section 3. The Authority hereby approves the form of the Lease and the Site Lease by and between the Authority and the City in the form on file with the Secretary together with such additions thereto and changes therein as the Authorized Officers deem necessary, desirable or appropriate upon consultation with bond counsel, the execution of which by an Authorized Officer shall be conclusive evidence of the approval of any such additions and changes. The Authorized Officers, each acting alone, are hereby authorized and directed to execute, and the Secretary is hereby authorized and directed to attest, the final forms of the Lease and the Site Lease for and in the name of and on behalf of the Authority. The Authority hereby authorizes the performance by the Authority of its obligations under the Lease and the Site Lease.

Section 4. The Authority shall assign to th e Trustee its right to receive the lease payments from the City under an Assignment Agreement. The Authority hereby approves the Assignment Agreement in the form on file with the Secretary, together with such additions thereto and changes therein as a Authorized Officer deems necessary, desirable or appropriate upon consultation with bond counsel, the execution of which by an Authorized Officer shall be conclusive evidence of the approval of any such additions and changes. The Authorized Officers, each ac ting alone, are hereby authorized and directed to execute, and the Secretary is hereby authorized and directed to attest, the final form of the Assignment Agreement for and in the name and on behalf of the Authority. The Authority hereby authorizes the pe rformance by the Authority of its obligations under the Assignment Agreement.

Section 5. The Authority hereby approves the preliminary Official Statement describing the Bonds in substantially the form on file with the Secretary. Each of the Authorized Officers is hereby authorized and directed to approve any changes in or additions to said preliminary Official Statement, and to execute an appropriate certificate stating the Authority’s determination that the preliminary Official Statement (together with any changes therein or additions thereto) has been deemed nearly final within the meaning of Rule 15c2-12 of the Securities Exchange Act of 1934. Distribution of the preliminary Official Statement by the Underwriter is hereby appro ved. An Authorized Officer is hereby authorized and directed to approve any changes in or additions to a final form of said Official Statement, and the execution thereof by an Authorized Officer shall be conclusive evidence of approval of any such changes and additions. The Authority hereby authorizes the distribution of the final Official Statement by the Underwriter. The final Official Statement shall be executed on behalf of the Authority by an Authorized Officer.

Section 6. The Authority hereby authorizes and directs an Authorized Officer to authorize the sale of the Bonds pursuant to a negotiated sale to the Underwriter. The Authority hereby approves the form of the Bond Purchase Agreement on file with the Secretary, with s uch additions thereto and changes therein as Authorized Officers deem necessary, desirable or appropriate upon consultation with bond counsel, the execution of which by Lynwood Public Financing Authority - Page 31 of 242 Agenda Item # 3

4 the Authority shall be conclusive evidence of the approval of any such additions or changes, provided that no such addition or change may increase the aggregate principal amount of Bonds to be in excess of the amount specified in Section 2, or shall provide for a true interest cost in excess of

5.95% or an Underwriter’s discount (exclusive of any original issue discount) of greater than 0.8%. The Authorized Officers, each acting alone, are hereby authorized and directed to execute the Bond Purchase Agreement and to take all actions necessary to fulfill the Authority’s obligations thereunder.

Section 7. Notwithstanding the foregoing references to the Bonds, the Indenture, the preliminary Official Statement and the Bond Purchase Agreement , if an Authorized Officer determines that a private placement lease financing is more advantageous to th e City and the Authority , the lease payments payable by the City to the Authority may be assigned by the Authority to a private placement bank without further action of the Authority so long as the parameters included in this Resolution are met.

Section 8. The Authority hereby approves the appointment of (a) Jones Hall, A Professional Law Corporation, as bond counsel and disclosure counsel; (b) Kosmont Transactions Services, Inc., as municipal advisor; and (c) Cabrera Capital Markets, LLC, as underwriter/p rivate placement agent .

Section 9. The Authorized Officers, the Secretary and any and all other officers of the Authority are hereby authorized and directed, for and in the name of and on behalf of the Authority, to do any and all things and take any and all actions, including execution and delivery of any and all documents, assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and documents, which they, or any of them, may deem necessary or advisable in order to consummate the transactions described herein. The Authority hereby authorizes the Authorized Officers, each acting alone, to provide for a debt service reserve fund and debt service and reserve fund insurance policies.

Section 10. This Resolution shall take effect immediately upon its passage and adoption.

Adoption of this Resolution is intended to start the 60 day period provided for in California Code of Civil Procedure Section 863 for an interested person to bring an action to determine t he validity of the matters approved herein, including, but not limited to, the validity of the Bonds, the Indenture, the Site Lease (including the property proposed to be leased to the Authority by the City therein), and the Lease, and the legality and validity of this Resolution, the use of the proceeds of the Bonds, and the payment of the lease payments and the Bonds.

Lynwood Public Financing Authority - Page 32 of 242 Agenda Item # 3

5 PASSED, APPROVED AND ADOPTED THIS 17th day of May 2022.

Jorge Casanova, President

ATTEST:

Maria Quinonez, City Clerk/Secretary

Ernie Hernandez,
Chief Administrative Officer

APPROVED AS TO FORM:

Noel Tapia, City Attorney

APPROVED AS TO CONTENT:

Ernie Hernandez,
Chief Administrative Officer

[Insert City Clerk certification page]

Lynwood Public Financing Authority - Page 33 of 242 Agenda Item # 3 Jones Hall Draft of May 11, 2022

INDENTURE OF TRUST

Dated as of July 1, 2022

between

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

and the

LYNWOOD PUBLIC FINANCING AUTHORITY

Authorizing the Issuance of

$__________
Lynwood Public Financing Authority
Lease Revenue Bonds, Series 2022
(Federally Taxable)

Lynwood Public Financing Authority - Page 34 of 242 Agenda Item # 3

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TABLE OF CONTENTS

ARTICLE I ................................ ................................ ................................ ................................ .. 3 DEFINITIONS; RULES OF CONSTRUCTION ................................ ................................ ...................... 3 SECTION 1.01. Definitions ................................ ................................ ................................ ........... 3 SECTION 1.02. Authorization ................................ ................................ ................................ ....... 3 SECTION 1.03. Interpretation ................................ ................................ ................................ ....... 3 ARTICLE II ................................ ................................ ................................ ................................ . 3 The Bonds ................................ ................................ ................................ ................................ . 3 SECTION 2.01. Authorization of Bonds ................................ ................................ ........................ 3 SECTION 2.02. Terms of the Bonds ................................ ................................ ............................. 4 SECTION 2.03. Transfer and Exchange of Bonds ................................ ................................ ........ 5 SECTION 2.04. Book-Entry System ................................ ................................ ............................. 6 SECTION 2.05. Registration Books ................................ ................................ .............................. 7 SECTION 2.06. Form and Execution of Bonds ................................ ................................ ............. 8 SECTION 2.07. Bonds Mutilated, Lost, Destroyed or Stolen ................................ ........................ 8 ARTICLE III ................................ ................................ ................................ ................................ 9 Issuance of Bonds; Application of Proceeds ................................ ................................ .............. 9 SECTION 3.01. Issuance of the Bonds................................ ................................ ......................... 9 SECTION 3.02. Application of Proceeds of Sale of Bonds................................ ............................ 9 SECTION 3.03. Establishment and Application of Costs of Issuance Fund ................................ .. 9 SECTION 3.04. Validity of Bonds ................................ ................................ ................................ . 9 ARTICLE IV ................................ ................................ ................................ .............................. 10 Redemption of Bonds................................ ................................ ................................ ................10 SECTION 4.01. Terms of Redemption................................ ................................ ........................ 10 SECTION 4.02. Selection of Bonds for Redemption ................................ ................................ ... 11 SECTION 4.03. Notice of Redemption; Rescission................................ ................................ ..... 12 SECTION 4.04. Partial Redemption of Bonds ................................ ................................ ............. 12 SECTION 4.05. Effect of Redemption ................................ ................................ ........................ 12 ARTICLE V ................................ ................................ ................................ ............................... 13 Revenues; Funds and Accounts; Payment of Principal and Interest ................................ ..........13 SECTION 5.01. Security for the Bonds; Bond Fund................................ ................................ .... 13 SECTION 5.02. Allocation of Revenues ................................ ................................ ..................... 13 SECTION 5.03. Application of Interest Account ................................ ................................ .......... 14 SECTION 5.04. Application of Principal Account ................................ ................................ ........ 14 SECTION 5.05. No Reserve Account ................................ ................................ ......................... 14 SECTION 5.06. Application of Redemption Fund ................................ ................................ ....... 14 SECTION 5.07. Insurance and Condemnation Fund ................................ ................................ .. 14 SECTION 5.08. Investments ................................ ................................ ................................ ...... 16 SECTION 5.09. Valuation and Disposition of Investments ................................ .......................... 17 ARTICLE VI ................................ ................................ ................................ .............................. 18 Covenants of the Authority ................................ ................................ ................................ ........18 SECTION 6.01. Punctual Payment ................................ ................................ ............................. 18 SECTION 6.02. Extension of Payment of Bonds ................................ ................................ ........ 18 SECTION 6.03. Against Encumbrances ................................ ................................ ..................... 18 SECTION 6.04. Power to Issue Bonds and Make Pledge and Assignment ................................ 18 SECTION 6.05. Accounting Records ................................ ................................ .......................... 18 SECTION 6.06. Limitation on Additional Obligations ................................ ................................ .. 19 SECTION 6.07. Federal Tax Law ................................ ................................ ............................... 19 Lynwood Public Financing Authority - Page 35 of 242 Agenda Item # 3

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SECTION 6.08. Enforcement of Lease ................................ ................................ ....................... 19 SECTION 6.09. Waiver of Laws ................................ ................................ ................................ . 19 SECTION 6.10. Further Assurances ................................ ................................ ........................... 19 ARTICLE VII ................................ ................................ ................................ .............................19 Events of Default and Remedies ................................ ................................ ............................... 19 SECTION 7.01. Events of Default ................................ ................................ ............................... 19 SECTION 7.02. Remedies Upon Event of Default ................................ ................................ ...... 20 SECTION 7.03. Application of Revenues and Other Funds After Default ................................ ... 21 SECTION 7.04. Trustee to Represent Bond Owners ................................ ................................ .. 21 SECTION 7.05. Limitation on Bond Owners' Right to Sue ................................ .......................... 22 SECTION 7.06. Absolute Obligation of Authority ................................ ................................ ........ 22 SECTION 7.07. Termination of Proceedings ................................ ................................ .............. 22 SECTION 7.08. Remedies Not Exclusive ................................ ................................ ................... 22 SECTION 7.09. No Waiver of Default ................................ ................................ ......................... 23 SECTION 7.10. Notice to Bond Owners of Default ................................ ................................ ..... 23 ARTICLE VIII ................................ ................................ ................................ ............................23 The Trustee ................................ ................................ ................................ .............................. 23 SECTION 8.01. Appointment of Trustee ................................ ................................ ..................... 23 SECTION 8.02. Acceptance of Trusts; Removal and Resignation of Trustee ............................. 23 SECTION 8.03. Merger or Consolidation ................................ ................................ .................... 25 SECTION 8.04. Liability of Trustee ................................ ................................ ............................. 25 SECTION 8.05. Right to Rely on Documents................................ ................................ .............. 28 SECTION 8.06. Preservation and Inspection of Documents ................................ ....................... 29 SECTION 8.07. Compensation and Indemnification ................................ ................................ ... 29 ARTICLE IX ................................ ................................ ................................ .............................. 30 Modification or Amendment Hereof ................................ ................................ ...........................30 SECTION 9.01. Amendments Permitted ................................ ................................ ..................... 30 SECTION 9.02. Effect of Supplemental Indenture ................................ ................................ ...... 31 SECTION 9.03. Endorsement of Bonds; Preparation of New Bonds ................................ .......... 31 SECTION 9.04. Amendment of Particular Bonds ................................ ................................ ........ 31 ARTICLE X ................................ ................................ ................................ ............................... 32 Defeasance ................................ ................................ ................................ ............................... 32 SECTION 10.01. Discharge of Indenture ................................ ................................ .................... 32 SECTION 10.02. Discharge of Liability on Bonds ................................ ................................ ....... 32 SECTION 10.03. Deposit of Money or Securities with Trustee ................................ ................... 33 SECTION 10.04. Unclaimed Funds ................................ ................................ ............................ 33 ARTICLE XI ................................ ................................ ................................ .............................. 34 Miscellaneous ................................ ................................ ................................ ...........................34 SECTION 11.01. Liability of Authority Limited to Revenues ................................ ........................ 34 SECTION 11.02. Limitation of Rights to Parties and Bond Owners ................................ ............ 34 SECTION 11.03. Funds and Accounts ................................ ................................ ....................... 34 SECTION 11.04. Waiver of Notice; Requirement of Mailed Notice ................................ ............. 34 SECTION 11.05. Destruction of Bonds ................................ ................................ ....................... 35 SECTION 11.06. Severability of Invalid Provisions ................................ ................................ ..... 35 SECTION 11.07. Notices ................................ ................................ ................................ ............ 35 SECTION 11.08. Evidence of Rights of Bond Owners ................................ ................................ 35 SECTION 11.09. Disqualified Bonds ................................ ................................ .......................... 36 SECTION 11.10. Money Held for Particular Bonds ................................ ................................ ..... 36 SECTION 11.11. Waiver of Personal Liability ................................ ................................ ............. 36 SECTION 11.12. Successor Is Deemed Included in All References to Predecessor .................. 37 SECTION 11.13. Execution in Several Counterparts ................................ ................................ .. 37 Lynwood Public Financing Authority - Page 36 of 242 Agenda Item # 3

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SECTION 11.14. Payment on Non-Business Day ................................ ................................ ...... 37 SECTION 11.15. Governing Law ................................ ................................ ................................ 37

APPENDIX A DEFINITIONS

APPENDIX B FORM OF BOND

Lynwood Public Financing Authority - Page 37 of 242 Agenda Item # 3

INDENTURE OF TRUST

This INDENTURE OF TRUST (this “Indenture”), dated for convenience as of July 1, 2022, is between the LYNWOOD PUBLIC FINANCING AUTHORITY, a joint powers authority duly organized and existing under the laws of the State of California (the “Authority”), and U.S.

BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, with a corporate trust office in Los Angeles, being qualified to accept and administer the trusts hereby created (the “Trustee”).

R E C I T A L S :

1. The City of Lynwood (the “City”) and the Lynwood Redevelopment Agency (which has been succeeded by the Successor Agency to the former Lynwood Redevelopment Agency ) (the “ Successor Agency ”) entered into a Joint Exercise of Powers Agreement, dated as of December 1, 1992 , establishing the Authority for the purpose, among others, of providing assistance to the City and the Successor Agency with their financing programs.

2. The City is obligated by the Public Employees’ Retirement Law, commencing with Section 20000 of the Government Code of the State of California, as amended (the “Retirement Law ”), to make payments relating to pension benefits accruing to the California Public Employees’ Retirement System’s (“ CalPERS”) members, including the City.

3. The City is obligated specifically to make certain payments to CalPERS in respect of current and retired public safety employees and miscellaneous employees under the pension programs of CalPERS that amortize such obligations over a fixed period of time, including normal costs (collectively, the “CalPERS Obligation”).

4. The CalPERS Obligation is evidenced by a contract or contracts with CalPERS with respect to public safety employees and miscellaneous employees of the City, as heretofore and hereafter amended from time to tim e (collectively, the “CalPERS Contract”).

5. The City is authorized under Section 37350 and 37380 of the California Government Code to lease, receive, hold, and enjoy real and personal property, and control and dispose of it for the common benefit, and the Authority is authorized under the Marks-Roos Local Bond Pooling Act of 1985, being Article 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “ Bond Law”) to issue revenue bonds for the purpose of providing working capital and/ or refunding any evidence of indebtedness of its members.

6. The Authority proposes to issue lease revenue bonds under the Bond Law and this Indenture for the purpose of refunding all or a portion of the City’s obligations under the CalPERS Contract, including paying all costs of issuing the lease revenue bonds and of refunding the CalPERS Contract.

7. To that end, the City has proposed to lease to the Authority certain real property (the “Leased Property”), under a Site Lease, dated as of the date hereof, by and Lynwood Public Financing Authority - Page 38 of 242 Agenda Item # 3

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between the City and the Authority (the “Site Lease”) in consideration of the payment by the Authority of an upfront rental payment (the “Site Lease Payment”) which is sufficient to provide funds for the refunding of the CalPERS Contract.

8. The Authority wishes to issue its Lynwood Public Financing Authority Lease Revenue Bonds, Series 2022 (Federally Taxable) in the aggregate principal amount of $__________ (the “Bonds”) under this Indenture for the purpose of providing the funds to enable the Authority to pay the Site Lease Payment to the City in accordance with the Site Lease.

9. The Authority has leased the Leased Property back to the City under a Lease Agreement dated the date hereof (the “Lease”), under which the City has agreed to pay semiannual Lease Payments as the rental for the Leased Property thereunder.

10. The lease payments made by the City under the Lease have been assigned by the Authority to the Trustee for the security of the Bonds under an Assignment Agreement, dated the date hereof, between the Authority as assignor and the Trustee as assignee.

11. In order to provide for the authentication and delivery of the Bonds, to establish and declare the terms and conditions upon which the Bonds are to be issued and to secure the payment of the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) thereof, premium (if any) and interest thereon, the Authority has authorized the execution and delivery of this Indenture.

12. The Authority has found and determined, and hereby affirms, that all acts and proceedings required by law necessary to make the Bonds, when executed by the Authority, authenticated and delivered by the Trustee and duly issued, the valid, binding and legal special obligations of the Authority, and to constitute this Indenture a valid and binding agreement for the uses and purposes herein set forth in accordance with its terms, have been done and taken, and the execution and delivery of this Indenture have been in all respects duly authorized.

A G R E E M E N T :

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

Lynwood Public Financing Authority - Page 39 of 242 Agenda Item # 3

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ARTICLE I

DEFINITIONS; RULES OF CONSTRUCTION

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

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

SECTION 1.03. Interpretation.

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

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

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

ARTICLE II

THE BONDS

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

The Authority hereby authorizes the issuance of Bonds in the aggregate principal amount of $__________ under the Bond Law for the purposes of providing funds to pay the Site Lease Payment to the City and thereby provide funds to refund all or a portion of the CalPERS Contract. The Bonds are authorized and issued under, and are subject to the terms of, this Indenture and the Bond Law. The Bonds are designated the “Lynwood Public Financing Authority Lease Revenue Bonds, Series 2022 (Federally Taxable).” Lynwood Public Financing Authority - Page 40 of 242 Agenda Item # 3

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SECTION 2.02. Terms of the Bonds.

(a) Payment Provisions . The Bonds shall be issued in fully registered form without coupons in denominations of $5,000 or any integral multiple thereof, so long as no Bond has more than one maturity date. The Bonds shall mature on October 1 in each of the years and in the amounts, and bear interest (calculated on the basis of a 360-day year of twelve 30-day months) at the rates, as follows:

Maturity Date
(October 1)
Principal
Amount
Interest
Rate
Issue
Price

(T): Term Bond

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

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

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

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

Interest is payable on each Interest Payment Date to the persons in whose names the ownership of the Bonds is registered on the Registration Books at the close of business on the immediately preceding Record Date, except as provided below. Interest on any Bond which is not punctually paid or duly provided for on any Interest Payment Date is payable to the person in whose name the ownership of such Bond is registered on the Registration Books at the close of business on a special record date for the payment of Lynwood Public Financing Authority - Page 41 of 242 Agenda Item # 3

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such defaulted interest to be fixed by the Trustee, notice of which is given to such Owner by first-class mail not less than 10 days prior to such special record date.

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

SECTION 2.03. Transfer and Exchange of Bonds.

(a) Transfer. Any Bond may, in accordance with its terms, be transferred, upon the Registration Books, by the person in whose name it is registered, in person or by a duly authorized attorney of such person, upon surrender of such Bond to the Trustee at its Office for cancellation, accompanied by delivery of a written instrument of transfer in a form acceptable to the Trustee, duly executed. The Trustee shall require the Owner requesting such transfer to pay any tax or other governmental charge required to be paid with respect to such transfer. Whenever any Bond or Bonds shall be surrendered for transfer, the Authority shall execute and the Trustee shall authenticate and deliver to the transferee a new Bond or Bonds of like series, interest rate, maturity and aggrega te principal amount. The Authority shall pay the cost of printing Bonds and any services rendered or expenses incurred by the Trustee in connection with any transfer of Bonds.

Prior to any transfer of the Bonds outside the book-entry system (including, but not limited to, the initial transfer outside the book-entry system) the transferor shall provide or cause to be provided to the Trustee all information necessary to allow the Trustee to comply with any applicable tax reporting obligations, including without limitation any cost basis reporting obligations under Internal Revenue Code Section 6045, as amended. The Trustee shall conclusively rely on the information provided to it and shall have no responsibility to verify or ensure the accuracy of such information.

(b) Exchange. The Bonds may be exchanged at the Office of the Trustee for a like aggregate principal amount of Bonds of other authorized denominations and of the same series, interest rate and maturity. The Trustee shall require the Owner req uesting such exchange to pay any tax or other governmental charge required to be paid with respect to such exchange. The Authority shall pay the cost of printing Bonds and any services rendered or expenses incurred by the Trustee in connection with any ex change of Bonds.

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

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SECTION 2.04. Book-Entry System.

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

With respect to Bonds the ownership of which shall be registered in the name of the Nominee, the Authority and the Trustee has no responsibility or obligation to any Depository System Participant or to any person on behalf of which the Nominee holds an interest in the Bonds. Without limiting the generality of the immediately preceding sentence, the Authority and the Trustee has no responsibility or obligation with respect to (i) the accuracy of the records of the Depository, the Nominee or any Depository System Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Depository System Participant or any other person, other than a Bond Owner as shown in the Registration Books, of any notice with respect to the Bonds, including any notice of redemption, (iii) the selection by the Depository of the beneficial interests in the Bonds to be redeemed if the Authority elects to redeem the Bonds in part, (iv) t he payment to any Depository System Participant or any other person, other than a Bond Owner as shown in the Registration Books, of any amount with respect to principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) , premium, if any, or interest on the Bonds or (v) any consent given or other action taken by the Depository as Owner of the Bonds. The Authority and the Trustee may treat and consider the person in whose name each Bond is registered as th e absolute owner of such Bond for the purpose of payment of principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and premium, if any, and interest on such Bond, for the purpose of giving notic es of redemption and other matters with respect to such Bond, for the purpose of registering transfers of ownership of such Bond, and for all other purposes whatsoever. The Trustee shall pay the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and the interest and premium, if any, on the Bonds only to the respective Owners or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge all obligations with respect to payment of principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and interest and premium, if any, on the Bonds to the extent of the sum or sums so paid. No person other than a Bond Owner shall receive a Bond evidencing the obligation of the Authority to make payments of principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) , interes t and premium, if any, under this Indenture. Upon delivery by the Depository to the Authority of written notice to the effect that the Depository has determined to substitute a new Nominee in its place, and subject to the provisions herein with respect to Record Dates, such new nominee shall become the Nominee hereunder for all purposes; and upon receipt of such a notice the Authority shall promptly deliver a copy of the same to the Trustee.

(b) Representation Letter. In order to qualify the Bonds for th e Depository’s book-entry system, the Authority shall execute and deliver to such Depository a letter in which the Authority will agree to the Depository’s operational arrangements. To the extent Lynwood Public Financing Authority - Page 43 of 242 Agenda Item # 3

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required to do so by the Depository, the Trustee shall also execute such representation letter and agree to the Depository’s operational arrangements. The execution and delivery of such letter shall not in any way limit the provisions of subsection (a) above or in any other way impose upon the Authority or the Trus tee any obligation whatsoever with respect to persons having interests in the Bonds other than the Bond Owners. In addition to the execution and delivery of such letter, the Authority may take any other actions, not inconsistent with this Indenture, to qu alify the Bonds for the Depository’s book -entry program.

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

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

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

SECTION 2.05. Registration Books. The Trustee will keep or cause to be kept, at the Office of the Trustee, sufficient records for the registration and transfer of ownership of the Bonds, which shall upon reasonable notice as agreed to by the Trustee, be open to inspection during regular business hours by the Authority; and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on such records, the ownership of the Bonds as hereinbefore provided.

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SECTION 2.06. Form and Execution of Bonds. The Bonds, the form of Trustee’s certificate of authentication, and the form of assignment to appear thereon, are set forth in Appendix B attached hereto and by this reference incorporated herein, with necessary or appropriate variations, omissions and insertions, as permitted or required by this Indenture.

The Chief Administrative Officer of the Authority shall execute, and the Secretary of the Authority shall attest each Bond. Either or both of such signatures may be made manually or may be affixed by facsimile thereof. If any officer whose signature appears on any Bond ceases to be such officer before the Closing Date, such signature will nevertheless be as effective as if the officer had remained in office until the Closing Date.

Any Bond may be signed and attested on behalf of the Authority by such persons as at the actual date of the execution of such Bond are the proper officers of the Authority, duly authorized to execute debt instruments on behalf of the Authority, although on the date of such Bond any such person was not an officer of the Authority.

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

SECTION 2.07. Bonds Mutilated, Lost, Destroyed or Stolen . If any Bond is mutilated, the Authority, at the expense of the Owner of such Bond, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor in exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. The Trustee shall cancel every mutilated Bond surrendered to it and deliver such mutilated Bond to, or upon the order of, the Authority. If any Bond is lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence is satisfactory and if indemnity satisfactory to the Trustee and the Authority is given, the Authority, at the expense of the Owner, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor in li eu of and in substitution for the Bond so lost, destroyed or stolen. The Trustee may require payment of a sum not exceeding the actual cost of preparing each new Bond issued under this Section and of the expenses which may be incurred by the Trustee in co nnection therewith. Any Bond issued under the provisions of this Section in lieu of any Bond alleged to be lost, destroyed or stolen will constitute an original additional contractual obligation on the part of the Authority whether or not the Bond so alle ged to be lost, destroyed or stolen be at any time enforceable by anyone, and shall be equally and proportionately entitled to the benefits of this Indenture with all other Bonds issued under this Indenture.

Notwithstanding any other provision of this Section 2.07, in lieu of delivering a new Bond for which principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) has become due for a Bond which has been mutilated, lost, destroyed or stolen, the Trust ee may make payment of such Bond in accordance with its terms upon receipt of indemnity satisfactory to the Trustee.

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ARTICLE III

ISSUANCE OF BONDS; APPLICATION OF

PROCEEDS

SECTION 3.01. Issuance of the Bonds . At any time after the execution of this Indenture, the Authority may execute and the Trustee shall authenticate and, upon the Written Request of the Authority, deliver the Bonds to the Original Purchaser.

SECTION 3.02. Application of Proceeds of Sale of Bonds . On the Closing Date, the Original Purchaser will pay a purchase price for the Bonds in the amount of $___________, which is equal to the original principal amount of the Bonds ($__________), less an underwriter’s discount of $___________. On the Closing Date, the Original Purchaser will wire the purchase price as follows:

(a) the Original Purchaser will wire to the Trustee the amount of $_________, and the Trustee shall deposit such amount into the Costs of Issuance Fund, and

(b) the Original Purchaser will wire to the City the amount of $___________, and the City will apply such amount to refund a portion of the City’s obligations under the CalPERS Contract.

The Trustee may establish a temporary fund or account in its records to facilitate such deposits or transfers. The deposits described in paragraphs (a) and (b) represent the full amount of the Site Lease Payments under Section 3 of the Site Lease.

SECTION 3.03. Establishment and Application of Costs of Issuance Fund . The Trustee shall establish, maintain and hold in trust a separate fund designated as the “Costs of Issuance Fund” into which the Trustee shall deposit a portion of the proceeds of sale of the Bonds under Section 3.02(c). The Trustee shall disburse amounts in the Costs of Issuance Fund from time to time to pay the Costs of Issuance upon submission of a Written Requisition of the Authority stating the person to whom payment is to be made, the amount to be paid, the purpose for which the oblig ation was incurred and that such payment is a proper charge against said fund. Each such Written Requisition of the Authority shall be sufficient evidence to the Trustee of the facts stated therein and the Trustee shall have no duty to confirm the accurac y of such facts. The Trustee may conclusively rely on such Written Requisitions and shall be fully protected in relying thereon. On the date that is 3 months after the Closing Date, or upon the earlier Written Request of the Authority, the Trustee shall transfer all amounts remaining in the Costs of Issuance Fund to the Interest Account and shall thereupon close the Costs of Issuance Fund.

SECTION 3.04. Validity of Bonds. The recital contained in the Bonds that the same are issued under the Constitution and laws of the State of California shall be conclusive evidence of their validity and of compliance with the provisions of law in their issuance.

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ARTICLE IV

REDEMPTION OF BONDS

SECTION 4.01. Terms of Redemption.

(a) Optional Redemption. The Bonds maturing on or after October 1, 20__ are subject to redemption, as a whole or in part, at the option of the Authority, on October 1, 20___, and on any date thereafter, at a redemption price equal to 100% of the principal amount of Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium.

The Authority must give the Trustee at least 10 days’ written notice of its intention to redeem Bonds under this subsection (a), and the manner of selecting such Bonds for redemption from among the maturit ies thereof, in sufficient time for the Trustee to give notice of such redemption in accordance with Section 4.03.

(b) Special Mandatory Redemption From Insurance or Condemnation Proceeds.

The Bonds are subject to redemption as a whole, or in part , on a ny date, from any Net Proceeds required to be used for such purpose as provided in Section 5.07, at a redemption price equal to 100% of the principal amount thereof plus interest accrued thereon to the date fixed for redemption, without premium.

(c) Mandatory Sinking Fund Redemption of Term Bonds. The Term Bonds are subject to mandatory redemption in whole, from sinking fund payments made under Section 5.02(b), at a redemption price equal to the principal amount thereof to be redeemed, without premium, pl us accrued interest to the date of redemption, in the aggregate respective principal amounts and on October 1 in the years as set forth in the following tables:

Term Bonds Maturing
October 1, 20___

Payment Date
(October 1)
Payment
Amount

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Term Bonds Maturing
October 1, 20___

Payment Date
(October 1)
Payment
Amount

If some but not all of the Term Bonds have been redeemed under subsections (a) or (b) of this Section, the total amount of all future sinking fund payments will be reduced by the aggregate principal amount of the Term Bonds so redeemed, to be allocated among such sinking fund payments on a pro rata basis as determined by the Authority, which shall notify the Trustee in writing of such determination (and such writing shall include a revised sinking fund payment schedule).

SECTION 4.02. Selection of Bonds for Redemption . If less than all of the Bonds are to be redeemed, the particular maturities of Bonds to be redeemed at the option of the Authority will be determined by the Authority in its sole discretion.

If the Bonds are registered in book -entry only form and so long as DTC or a successor securities depository is the sole registered owner of such Bonds, if less than all of the Bonds of a maturity are called for prior redemption, the particular Bonds or portions thereof to be redeemed shall be allocated on a pro rata pass -through distribution of principal basis in accordance with DTC procedures, p rovided that, so long as the Bonds are held in book-entry form, the selection for redemption of such Bonds shall be made in accordance with the operational arrangements of DTC then in effect, and, if the DTC operational arrangements do not allow for redemp tion on a pro rata pass -through distribution of principal basis, the Bonds will be selected for redemption, in accordance with DTC procedures, by lot.

In connection with any repayment of principal, including payments of scheduled mandatory sinking fund payments, the Trustee will direct DTC to make a pass -through distribution of principal to the holders of the Bonds.

For purposes of calculation of the “pro rata pass-through distribution of principal,” “pro rata” means, for any amount of principal to be paid, the application of a fraction to each denomination of the respective Bonds where (a) the numerator of which is equal to the amount due to the respective bondholders on a payment date, and (b) the denominator of which is equal to the total original par amount of the respective Bonds.

If the Bonds are no longer registered in book -entry-only form, each owner will receive an amount of Bonds equal to the original face amount then beneficially held by that owner, registered in such investor’s name. Thereafter, any redemption of less than all of the Bonds of any maturity will continue to be paid to the registered owners of such Bonds on a pro-rata basis, based on the portion of the original face amount of any such Bonds to be redeemed.

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SECTION 4.03. Notice of Redemption; Rescission. The Trustee shall mail notice of redemption of the Bonds by first class mail, postage prepaid, not less than 20 nor more than 60 days before any redemption date, to the respective Owners of any Bonds designated for redemption at their addresses appearing on the Registration Books and to one or more Securities Depositori es and to the Municipal Securities Rulemaking Board.

Each notice of redemption shall state the date of the notice, the redemption date, the place or places of redemption, whether less than all of the Bonds (or all Bonds of a single maturity) are to be red eemed, the CUSIP numbers and (in the event that not all Bonds within a maturity are called for redemption) Bond numbers of the Bonds to be redeemed and the maturity or maturities of the Bonds to be redeemed, and in the case of Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be redeemed. Each such notice shall also state that on the redemption date there will become due and payable on each of said Bonds the redemption price thereof, and that from and after such redemption date interest thereon shall cease to accrue, and shall require that such Bonds be then surrendered to the Trustee. Neither the failure to receive any notice nor any defect therein shall affect the sufficiency of the proceedings for such redemption or the cessation of accrual of interest from and after the redemption date.

Notice of redemption of Bonds shall be given by the Trustee, at the expense of the Authority, for and on behalf of the Authority.

Redemption notices may be conditional. The Authority has the right to rescind any notice of the redemption of Bonds under Section 4.01(a) by written notice to the Trustee on or prior to the dated fixed for redemption. Any notice of redemption shall be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for redemption for the payment in full of the Bonds then called for redemption, and such cancellation shall not constitute an Event of Default. The Authority and the Trustee have no liability to the Bond Owners or any other party related to or arising from such rescission of redemption. The Trustee shall mail notice of such rescission of redemption in the same manner as the original notice of redemption was sent under this Section.

SECTION 4.04. Partial Redemption of Bonds . Upon surrender of any Bonds redeemed in part only, the Authority shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Authorit y, a new Bond or Bonds of authorized denominations equal in aggregate principal amount to the unredeemed portion of the Bonds surrendered.

SECTION 4.05. Effect of Redemption. Notice of redemption having been duly given as aforesaid, and moneys for payment of the redemption price of, together with interest accrued to the date fixed for redemption on, including any applicable premium, the Bonds (or portions thereof) so called for redemption being held by the Trustee, on the redemption date designated in such notice, the Bonds (or portions thereof) so called for redemption shall become due and payable, interest on the Bonds so called for redemption shall cease to accrue, said Bonds (or portions thereof) shall ce ase to be entitled to any benefit or security under this Indenture, and the Owners of said Bonds shall have no rights in respect thereof except to receive payment of the redemption price thereof.

All Bonds redeemed under the provisions of this Article sha ll be canceled by the Trustee upon surrender thereof and destroyed in accordance with the retention policy of the Trustee then in effect.

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ARTICLE V

REVENUES; FUNDS AND ACCOUNTS; PAYMENT OF

PRINCIPAL AND INTEREST

SECTION 5.01. Security for the Bonds; Bond Fund.

(a) Pledge of Revenues and Other Amounts . Subject only to the provisions of this Indenture permitting the application thereof for the purposes and on the terms and conditions set forth herein, all of the Revenues and all amounts (including proceeds of the sale of the Bonds) held in any fund or account established under this Indenture other than the Costs of Issuance Fund are hereby pledged to secure the payment of the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and interest and premium (if any) on the Bonds in accordance with their terms and the provisions of this Indenture. Said pledge constitutes a lien on and security interest in the Revenues and such amounts and shall attach, be perfected and be valid and binding from a nd after the Closing Date, without the need for any physical delivery thereof or further act.

(b) Assignment to Trustee. Under the Assignment Agreement, the Authority has transferred to the Trustee all of the rights of the Authority in the Lease (other than the rights of the Authority under Sections 4.5, 5.10, 7.3 and 8.4 thereof and its rights to give approvals and consents thereunder). The Trustee is entitled to collect and receive all of the Revenues, and any Revenues collected or received by the Authority shall be deemed to be held, and to have been collected or received, by the Authority as the agent of the Trustee and shall forthwith be paid by the Authority to the Trustee. The Trustee is also entitled to and may, subject to the provisions of Arti cle VIII, take all steps, actions and proceedings which the Trustee determines to be reasonably necessary in its judgment to enforce, either jointly with the Authority or separately, all of the rights of the Authority and all of the obligations of the City under the Lease.

(c) Deposit of Revenues in Bond Fund . All Revenues shall be promptly deposited by the Trustee upon receipt thereof in a special fund designated as the “Bond Fund” which the Trustee shall establish, maintain and hold in trust; except that all moneys received by the Trustee and required hereunder or under the Lease to be deposited in the Redemption Fund or the Insurance and Condemnation Fund shall be promptly deposited in such funds. All Revenues deposited with the Trustee shall be held, disbursed, allocated and applied by the Trustee only as provided in this Indenture. Any surplus remaining in the Bond Fund, after payment in full of (i) the principal of and interest on the Bonds or provision therefore under Article X, and (ii) any app licable fees and expenses to the Trustee, shall be withdrawn by the Trustee and remitted to the City.

SECTION 5.02. Allocation of Revenues. On or before each Interest Payment Date, the Trustee shall trans fer from the Bond Fund and deposit into the following respective accounts and subaccount (each of which the Trustee shall establish and maintain within the Bond Fund), the following amounts in the following order of priority:

(a) Deposit to Interest Account. The Trustee shall deposit in the Interest Account an amount required to cause the aggregate amount on Lynwood Public Financing Authority - Page 50 of 242 Agenda Item # 3

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deposit in the Interest Account to be at least equal to the amount of interest becoming due and payable on such Interest Payment Date on all Bonds then Outstanding.

(b) Deposit to Principal Account . The Trustee shall deposit in the Principal Account an amount required to cause the aggregate amount on deposit in the Principal Account to equal the principal amount of the Bonds coming due and payable on such Interest Payment Date (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption).

SECTION 5.03. Application of Interest Account. All amounts in the Interest Account shall be used and withdrawn by the Trustee solely for the purpose of paying interest on the Bonds as it comes due and payable (including accrued interest on any Bonds purchased or redeemed prior to maturity).

SECTION 5.04. Application of Principal Account . All amounts in the Principal Account shall be used and withdrawn by the Trustee solely to pay the principal amount of the Bonds at their respective maturity dates (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption).

SECTION 5.05. No Reserve Account. The Authority has not established a debt service reserve fund for the Bonds.

SECTION 5.06. Application of Redemption Fund. The Trustee shall establish and maintain the Redemption Fund, into which the Trustee shall deposit a portion of the Revenues received, in accordance with a Written Request of the Authority, amounts in which shall be used and withdrawn by the Trustee sol ely for the purpose of paying the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) and premium (if any) of the Bonds to be redeemed under Section

4.01; provided, however, that at any time pri or to the selection of Bonds for redemption, the Trustee may apply such amounts to the purchase of Bonds at public or private sale, when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Interest Account) as shall be directed under a Written Request of the Authority, except that the purchase price (exclusive of accrued interest) may not exceed the redemption price then applicable to the Bonds. The Trustee shall be entitled to conclusively r ely on any Written Request of the Authority received under this Section 5.06, and shall be fully protected in relying thereon.

SECTION 5.07. Insurance and Condemnation Fund.

(a) Establishment of Fund. Upon the receipt of proceeds of insurance or eminent domain with respect to the Leased Property, the Trustee shall establish and maintain an Insurance and Condemnation Fund, to be held and applied as hereinafter set forth in this Section 5.07.

(b) Application of Insurance Proceeds. Any Net Proceeds of insurance against accident to or destruction of the Leased Property collected by the City or the Authority in the event of any such accident or destruction shall be paid to the Trustee under Section

6.3 of the Lease and deposited by the Trustee promptly upon receipt thereof in the Lynwood Public Financing Authority - Page 51 of 242 Agenda Item # 3

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Insurance and Condemnation Fund. If the City fails to determine and notify the Trustee in writing of its determination, within 90 days following the date of such deposit, to replace, repair, restore, modify or improve the Leased Property which has been damaged or destroyed, then such Net Proceeds shall be promptly transferred by the Trustee to the Redemption Fund and applied to the redemption of Bonds under Section 4.01(b).

Notwithstanding the foregoing sentence, however, if the Leased Property is damaged or destroyed in full, the Net Proceeds of such insurance shall be used by the City to rebuild or replace the Leased Property if such proceeds are not sufficient to redeem Outstanding Bonds equal in aggregate principal amount to the unpaid Lease Payments allocable to the Leased Property. All proceeds deposited in the Insurance and Condemnation Fund and not so transferred to the Redemption Fund shall be applied to the prompt r eplacement, repair, restoration, modification or improvement of the damaged or destroyed portions of the Leased Property by the City, upon receipt of a Written Request of the City which: (i) states with respect to each payment to be made (A) the requisition number, (B) the name and address of the person to whom payment is due, (C) the amount to be paid and (D) that each obligation mentioned therein has been properly incurred, is a proper charge against the Insurance and Condemnation Fund and has not been the basis of any previous withdrawal; and (ii) specifies in reasonable detail the nature of the obligation. Any balance of the proceeds remaining after such work has been completed as certified by the City under a Written Certificate to the Trustee shall be paid to the City. The Trustee shall be entitled to conclusively rely on any Written Request or Written Certificate received under this subsection (b) of this Section 5.07 and in each case, shall be fully protected in relying thereon.

(c) Application of Eminent Domain Proceeds . If all or any part of the Leased Property is taken by eminent domain proceedings (or sold to a government threatening to exercise the power of eminent domain) the Authority shall deposit or cause to be deposited with the Trustee t he Net Proceeds therefrom, which the Trustee shall deposit in the Insurance and Condemnation Fund under Section 6.2(b) of the Lease and which shall be applied and disbursed by the Trustee as follows:

(i) If the City has not given written notice to the Tru stee, within 90 days following the date on which such Net Proceeds are deposited with the Trustee, of its determination that such Net Proceeds are needed for the replacement of the Leased Property or such portion thereof, the Trustee shall transfer such Net Proceeds to the Redemption Fund to be applied towards the redemption of the Bonds under Section

4.01(b).

(ii) If the City has given written notice to the Trustee, within 90 days following the date on which such Net Proceeds are deposited with the Trustee, of its determination that such Net Proceeds are needed for replacement of the Leased Property or such portion thereof, the Trustee shall pay to the City, or to its order, from said proceeds such amounts as the City may expend for such replacement, upon the filing of Written Requisitions of the City as agent for the Authority.

In each case, the Trustee may conclusively rely upon any notice received under this subsection (c)(ii) of this Section and is protected in relying thereon.

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(d) Reliance on Independent Advice. In making any such determination whether to repair, replace or rehabilitate the Leased Property under this Section 5.07, the City may obtain, but is not required to obtain, at its expense, the report of an independent engineer or other inde pendent professional consultant, a copy of which must be filed with the Trustee. The Trustee shall have no duty to review or examine such report. Any such determination by the City is final.

(e) Effect of Substitution or Release. Notwithstanding any other provision of this Section 5.07 or the Lease, the Trustee shall pay to the City all moneys in the Insurance and Condemnation Fund upon the Trustee’s receipt of a written notice executed by a City Representative which states that, pursuant to the Lease, t he City has substituted other real property for the Leased Property that was damaged, destroyed or condemned and that there will be no abatement of the Lease Payments as a result of such damage, destruction or condemnation.

SECTION 5.08. Investments. All moneys in any of the funds or accounts established with the Trustee under this Indenture shall be invested by the Trustee solely in Permitted Investments. Such investments shall be directed by the Authority in a Written Request of the Authority filed with the Trustee at least 2 Business Days in advance of the making of such investments. In the absence of any such directions from the Authority, the Trustee shall invest any such moneys in Permitted Investments which c onstitute money market funds; provided, however, that any such investment shall be made by the Trustee only if, prior to the date on which such investment is to be made, the Trustee shall have received a Written Request of the Authority specifying a specific money market fund and, if no such Written Request of the Authority is so received, the Trustee shall hold such moneys uninvested. Permitted Investments purchased as an investment of moneys in any fund shall be deemed to be part of such fund or account . To the extent Permitted Investments are registrable, such Permitted Investments must be registered in the name of the Trustee.

All interest or gain derived from the investment of amounts in any of the funds or accounts established hereunder shall be de posited in the Bond Fund. For purposes of acquiring any investments hereunder, the Trustee may commingle funds held by it hereunder. The Trustee or any of its affiliates may act as principal or agent in the acquisition or disposition of any investment an d may impose its customary charges therefor. The Trustee shall incur no liability for losses arising from any investments made under this Section 5.08.

Subject to applicable law, 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 sponsor, advisor or manager to the investment provider in connection with any investments made by the Trustee hereun der. The Trustee is hereby authorized, in making or disposing of any investment permitted by this Section, to deal with itself (in its individual capacity) or with any one or more of its affiliates, whether it or such affiliate is acting as an agent of th e Trustee or for any third person or is dealing as a principal for its own account. The Trustee may, from time to time, provide the City and the Authority with a list of investments that are available on the Trustee’s investment platform, but the Trustee will not give investment advice to the City or the Authority, and the City or the Authority may direct the Trustee to purchase investments that are not included on the list provided by the Trustee . The Lynwood Public Financing Authority - Page 53 of 242 Agenda Item # 3

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Trustee shall be entitled to rely conclusively on the Authority’s investment direction as to the suitability and legality of the directed investments.

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

SECTION 5.09. Valuation and Disposition of Investments.

(a) Except as otherwise provided in subsection (b) of this Section, the Authority covenants that all investments of amounts deposited in any fund or account created by or under this Indenture, or otherwise containing gross proceeds of the Bonds shall be acquired, disposed of and valued at the fair market value thereof, as determined by the Authority. The Trustee shall have no duty in connection with the determination of fair market value other than to follow the investment directions of the Authority in any Written Request of the Authority.

(b) For the purpose of determining the amount in any fund or account established hereunder, the value of Permitted Investments credited to such fund shall be valued by the Trustee at least annually on or before July 15 . The Trustee may sell or present for redemption, any Permitted Investment so purchased by the Trustee whenever it is necessary in order to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund to which such Permitted Investment is credited, and the Trustee shall not be liable or responsible for any loss resulting from any such Permitted Investment.

(c) To the extent of any valuations made by the Trustee hereunder, the Trustee may utilize and rely upon computerized or generally recognized securities pricing services that may be available to it, including those available through its regular accounting system (including brokers and dealers).

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ARTICLE VI

COVENANTS OF THE AUTHORITY

SECTION 6.01. Punctual Payment. The Authority shall punctually pay or cause to be paid the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and interest and premium (if any) on all the Bonds in strict conformity with the terms of the Bonds and of this Indenture, according to the true intent and meaning thereof, but only out of the Revenues and other amounts pledged for such payment as provided in this Indenture.

SECTION 6.02. Extension of Payment of Bonds. The Authority shall not directly or indirectly extend or assent to the extension of the maturity of any of the Bonds or the time of payment of any claims for interest by the purchase of such Bonds or by any other arrangement, and in case the maturity of any of the Bonds or the time of payment of any such claims for interest shall be extended, such Bonds or claims for interest shall not be entitled, in case of any default hereunder, to the benefits of this Indenture, except subject to the prior payment in full of the principal of all of the Bonds then Outstanding and of all claims for interest thereon which have not been so extended. Nothing in this Section 6.02 limits the right of the Authority to issue Bonds for the purpose of refunding any Outstanding Bonds, and such issuance does not constitute an extension of maturity of the Bonds.

SECTION 6.03. Against Encumbrances. The Authority shall not create, or permit the creation of, any pledge, lien, charge or other encumbrance upon the Revenues and other assets pledged or assigned under this Indenture while an y of the Bonds are Outstanding, except the pledge and assignment created by this Indenture. Subject to this limitation, the Authority expressly reserves the right to enter into one or more other indentures for any of its corporate purposes, and reserves t he right to issue other obligations for such purposes.

SECTION 6.04. Power to Issue Bonds and Make Pledge and Assignment . The Authority is duly authorized under law to issue the Bonds and to enter into this Indenture and to pledge and assign the Revenues and other amounts purported to be pledged and assigned, respectively, under this Indenture and under the Assignment Agreement in the manner and to the extent provided in this Indenture and the Assignment Agreement. The Bonds and the provisions of this Indenture are and will be the legal, valid and binding special obligations of the Authority in accordance with their terms, and the Authority and the Trustee shall at all times, s ubject to the provisions of Article VIII and to the extent permitted by law, defend, preserve and protect said pledge and assignment of Revenues and other assets and all the rights of the Bond Owners under this Indenture against all claims and demands of all persons whomsoever.

SECTION 6.05. Accounting Records. The Trustee shall at all times keep, or cause to be kept, proper books of record and account, prepared in accordance with corporate industry standards, in which complete and accurate entries shall be made of all transactions made by it relating to the proceeds of Bonds and all funds and accounts established under this Indenture. The Trustee shall make such books of record and account available for inspection by the Authority and the City, during business hours, upon reasonable notice, and under reasonable circumstances.

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SECTION 6.06. Limitation on Additional Obligations. The Authority covenants that no additional bonds, notes or other indebtedness shall be issued or incurred which are payable out of the Revenues in whole or in part.

SECTION 6.07. Federal Tax Law. The Authority does not intend the interest on the Bonds to be excluded from gross income for federal income tax purposes.

SECTION 6.08. Enforcement of Lease . The Trustee shall promptly collect all amounts (to the extent any such amounts are available for collection) due from the City under the Lease. Subject to the provisions of Article VIII, the Trustee may enforce, and take all steps, actions and proceedings which are determined to be reasonably necessary for the enforcement of all of its rights thereunder as assignee of the Authority and for the enforcement of all of the obligations of the City under the Lease.

SECTION 6.09. Waiver of Laws. The Authority shall not at any time insist upon or plead in any manner whatsoever, or claim or take the benefit or advantage of, any stay or extension law now or at any time hereafter in force that may affect the covenants and agreements contained in this Indenture or in the Bonds, and all benefit or advantage of any such law or laws is hereby expressly waived by the Authority to the extent permitted by law.

SECTION 6.10. Further Assurances. The Authority will make, execute and deliver any and all such further indentures, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Indenture and for the better assuring and confirming unto the Owners of the Bonds of the rights and benefits provided in this Indenture.

ARTICLE VII

EVENTS OF DEFAULT AND REMEDIES

SECTION 7.01. Events of Default. The following events constitute Events of Default hereunder:

(a) Failure to pay any installment of the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of any Bonds when due, whether at maturity as therein expressed, by proceedings for redemption, by acceleration, or otherwise.

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

(c) Failure by the Authority to observe and perform any of the other covenants, agreements or conditions on its part contained in this Indenture or in the Bonds, if such failure has continued for a period of 30 days after written notice thereof, specifying such failure and requiring the same to be remedied, has been given to the Authority by the Trustee; provided, however, if in the reasonable opinion of the Authority the failure stated in the notice can be corrected, but not Lynwood Public Financing Authority - Page 56 of 242 Agenda Item # 3

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within such 30-day period, such failure shall not constitute an Event of Default if the Authority institutes corrective action within such 30 - day period and thereafter diligently and in good faith cures the failure in a reasonable period of time, which period shall end 180 days after the delivery of such default notice.

(d) The commencement by the Authority of a voluntary case under Title 11 of the United States Code or any substitute or successor statute.

(e) The occurrence and continuation of an event of default under and as defined in the Lease.

SECTION 7.02. Remedies Upon Event of Default. If any Event of Default occurs, then, and in each and every such case during the continuance of such Event of Default, the Trustee may, and at the written direction of the Owne rs of a majority in aggregate principal amount of the Bonds at the time Outstanding shall, in each case, upon receipt of indemnification satisfactory to Trustee against the costs, expenses and liabilities to be incurred in connection with such action, upon notice in writing to the Authority, declare the principal of all of the Bonds then Outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in this Indenture or in the Bonds contained to the contrary notwithstanding; provided, however, that no such acceleration will have the effect of accelerating the City’s obligations under the Lease Agreement.

Any such declaration is subject t o the condition that if, at any time after such declaration and before any judgment or decree for the payment of the moneys due shall have been obtained or entered, the Authority deposits with the Trustee a sum sufficient to pay all the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and installments of interest on the Bonds payment of which is overdue, with interest on such overdue principal at the rate borne by the respective Bonds to th e extent permitted by law, and the reasonable fees, charges and expenses (including those of its legal counsel, including the allocated costs of internal attorneys) of the Trustee, and any and all other Events of Default actually known to the Trustee (other than in the payment of principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and interest on the Bonds due and payable solely by reason of such declaration) have been made good or cured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate has been made therefor, then, and in every such case, the Owners of a majority in aggregate principal amount of the Bonds then Outstanding, by written notice to the Authority, the City and the Trustee, may, on behalf of the Owners of all of the Bonds, rescind and annul such declaration and its consequences and waive such Event of Default; but no such rescission and annulment shall extend to or shall affect any subsequent Event o f Default, or shall impair or exhaust any right or power consequent thereon.

Nothing herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Bondholder any plan of reorganization, arrangement, adjustment, or composition affecting the Bonds or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Bondholder in any such proceeding without the approval of the Bondholders so affected.

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SECTION 7.03. Application of Revenues and Other Funds After Default. If an Event of Default occurs and is continuing, all Revenues and any other funds then held or thereafter received by the Trustee under any of the provisions of this Indenture shall be applied by the Trustee in the following order of priority:

(a) To the payment of reasonable fees, charges and expenses of the Trustee (including reasonable fees and disbursements of its legal counsel including outside counsel and the allocated costs of internal attorneys) incurred in and about the performance of its powers and duties under this Indenture;

(b) To the payment of the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and interest then due on the Bonds (upon presentation of the Bonds to be paid, and stamping or otherwise noting thereon of the payment if only partially paid, or surrender thereof if fully paid) in acco rdance with the provisions of this Indenture, as follows:

First: To the payment to the persons entitled thereto of all installments of interest then due in the order of the maturity of such installments, and, if the amount available shall not be sufficient to pay in full any installment or installments maturing on the same date, then to the payment thereof ratably, according to the amounts due thereon, to the persons entitled thereto, without any discrimination or preference;

Second: To the payment to the persons entitled thereto of the unpaid principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of any Bonds which shall have become due, whether at maturity or by
acceleration or redemption, with i nterest on the overdue principal at the rate borne by the respective Bonds (to the extent permitted by law), and, if the amount available shall not be sufficient to pay in full all the Bonds, together with such interest, then to the payment thereof ratably , according to the amounts of principal due on such date to the persons entitled thereto, without any discrimination or preference; and

SECTION 7.04. Trustee to Represent Bond Owners . The Truste e is hereby irrevocably appointed (and the successive respective Owners of the Bonds, by taking and holding the same, shall be conclusively deemed to have so appointed the Trustee) as trustee and true and lawful attorney-in-fact of the Owners of the Bonds for the purpose of exercising and prosecuting on their behalf such rights and remedies as may be available to such Owners under the provisions of the Bonds, this Indenture and applicable provisions of any law. All rights of action under this Indenture or the Bonds may be prosecuted and enforced by the Trustee without the possession of any of the Bonds or the production thereof in any proceeding relating thereto, and any such suit, action or proceeding instituted by the Trustee shall be brought in the name of the Trustee for the benefit and protection of all the Owners of such Bonds, subject to the provisions of this Indenture.

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SECTION 7.05. Limitation on Bond Owners’ Right to Sue . Notwithstanding any other provision hereof, no Owner of any Bonds has the right to institute any suit, action or proceeding at law or in equity, for the protection or enforcement of any right or remedy under this Indenture, the Lease or any other applicabl e law with respect to such Bonds, unless (a) such Owner has given to the Trustee written notice of the occurrence of an Event of Default; (b) the Owners of a majority in aggregate principal amount of the Bonds then Outstanding have requested the Trustee in writing to exercise the powers hereinbefore granted or to institute such suit, action or proceeding in its own name; (c) such Owner or Owners have tendered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in c ompliance with such request; (d) the Trustee has failed to comply with such request for a period of 60 days after such written request has been received by, and said tender of indemnity has been made to, the Trustee; and (e) no direction inconsistent with such written request has been given to the Trustee during such 60 day period by the Owners of a majority in aggregate principal amount of the Bonds then Outstanding.

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 Bonds of any remedy hereunder or under law; it being understood and intended that no one or more Owners of Bonds shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security of this Indenture or the rights of any other Owners of Bonds, or to enforce any right under the Bonds, this Indenture, the Lease or other applicable law with respect to the Bonds, except in the manner herein provided, and that all proceedings at law or in equity to enforce any such right shall be instituted, had and maintained in the manner herein provided and for the benefit and protection of all Owners of the Outstanding Bonds, subject to the provisions of this Indenture.

SECTION 7.06. Absolute Obligation of Authority . Nothing herein or in the Bonds contained affects or impairs the obligation of the Authority, which is absolute and unconditional, to pay the principal (including the principal amount of any Term Bonds that is subject to mandatory sinking fund redemption) of and interest and premium (if any) on the Bonds to the respective Owners of the Bonds at their respective dates of maturity, or upon acceleration or call for redemption, as herein provided, but only out of the Revenues and other assets herein pledged therefor, or affect or impair the right of such Owners, which is also absolute and unconditional, to enforce such payment by virtue of the contract embodied in the Bonds.

SECTION 7.07. Termination of Proceedings. In case any proceedings taken by the Trustee or by any one or more Bond Owners on account of any Event of Default have been discontinued or abandoned for any reason or have been determined adversely to the Trustee or the Bond Owners, then in every such case the Authority, the Trustee and the Bond Owners, subject to any determination in such proceedings, shall be restored to their former positions and rights hereunder, severally and respectively, and all rights, remedies, powers and duties of the Authority, the Trustee and the Bond Owners shall continue as though no such proceedings had been taken.

SECTION 7.08. Remedies Not E xclusive. No remedy herein conferred upon or reserved to the Trustee, to the Owners of the Bonds is intended to be exclusive of any other remedy or remedies, and each and every such remedy, to the extent pe rmitted by law, shall be cumulative and in addition to any other remedy given hereunder or now or hereafter existing at law or in equity or otherwise.

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SECTION 7.09. No Waiver of Default. No delay or omission of the Trustee or any Owner of the Bonds to exercise any right or power arising upon the occurrence of any default or Event of Default shall impair any such right or power or shall be construed to be a waiver of any such default or Event of Default or an acquiescence therein; and every power and remedy given by this Indenture to the Trustee or to the Owners of the Bonds may be exercised from time to time and as often as may be deemed expedient by the Trustee or the Bond Owners.

SECTION 7.10. Notice to B ond Owners of Default . Immediately upon becoming aware of the occurrence of an Event of Default, but in no event later than five Business Days following becoming aware of such occurrence, the Trus tee shall promptly give written notice thereof by first class mail, postage prepaid, to the Owner of each Outstanding Bond, unless such Event of Default has been cured before the giving of such notice; provided, however that except in the case of an Event of Default described in Sections 7.01(a) or 7.01(b), the Trustee may elect not to give such notice to the Bond Owners if and so long as the Trustee in good faith determines that it is in the best interests of the Bond Owners not to give such notice.

ARTICLE VIII

THE TRUSTEE

SECTION 8.01. Appointment of Trustee . U.S. Bank Trust Company, National Association is hereby appointed Trustee by the Author ity for the purpose of receiving all moneys required to be deposited with the Trustee hereunder and to allocate, use and apply the same as provided in this Indenture. The Authority will maintain a Trustee which is qualified under the provisions of the foregoing provisions of this Article VIII, so long as any Bonds are Outstanding.

SECTION 8.02. Acceptance of Trusts; Removal and Resignation of Trustee . The Trustee hereby accepts the express trusts imposed upon it by this Indenture, and agrees to perform said trusts, but only upon and subject to the following express terms and conditions:

(a) The Trustee shall, prior to an Event of Default, and after the curing or waiver of all Events of Default which may have occurred, perform such duties and only such duties as are expressly and specifically set forth in this Indenture and no implied duties or covenants shall be read into this Indenture against the Tru stee. If an Event of Default has occurred (which has not been cured), the Trustee shall exercise such of the rights and powers vested in it by hereunder, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.

(b) The Authority may remove the Trustee upon 30 days’ prior notice , unless an Event of Default has occurred and is then continuing, and shall remove the Trustee (a) if at any time requested to do so by the Lynwood Public Financing Authority - Page 60 of 242 Agenda Item # 3

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Owners of a majority in aggregate principal amount of the Bonds then Outstanding (or their attorneys duly authorized in writing) or (b) if at any time the Trustee ceases to be eligible in accordance with Section

8.02, or becomes incapable of acti ng, or is adjudged a bankrupt or insolvent, or a receiver of the Trustee or its property is appointed, or any public officer takes control or charge of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation.

(c) The Trustee may at any time resign by giving written notice of such resignation to the Authority and the City, and by giving the Bond Owners notice of such resignation by mail at the addresses shown on the Registration Books.

(d) Any removal or res ignation of the Trustee and appointment of a successor Trustee shall become effective upon acceptance of appointment by the successor Trustee. In the event of the removal or resignation of the Trustee under subsections (b) or ( c), respectively, the Author ity shall promptly appoint a successor Trustee.

If no successor Trustee has been appointed and accepted appointment within 45 days of giving notice of removal or notice of resignation as aforesaid, the retiring Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee, and such court may thereupon, after such notice (if any) as it may deem proper, appoint such successor Trustee. Any successor Trustee appointed under this Indenture, must signify its acceptance of such appointment by executing and delivering to the Authority, to its predecessor Trustee a written acceptance thereof, and after payment by the Authority of all unpaid fees and expenses of the predecessor Trustee, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect as if originally named Trustee herein; but, nevertheless at the Written Request of the Authority or the request of the successor Trustee, such predecessor Trustee shall execute and deliver any and all instruments of conveyance or further assurance and do such other things as may reasonably be required for more f ully and certainly vesting in and confirming to such successor Trustee all the right, title and interest of such predecessor Trustee in and to the Leased Property held by such predecessor Trustee under this Indenture and shall pay over, transfer, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Upon request of the successor Trustee, the Authority shall execute and deliver any and all instruments as may be reasonably required for more fully and certainly vesting in and confirming to such successor Trustee all such moneys, estates, properties, rights, powers, trusts, duties and obligations. Upon acceptance of appointment by a successor Trustee as provided in Lynwood Public Financing Authority - Page 61 of 242 Agenda Item # 3

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this subsection, the Au thority shall promptly mail or cause the successor trustee to mail a notice of the succession of such Trustee to the trusts hereunder to each rating agency which is then rating the Bonds and to the Bond Owners at the addresses shown on the Registration Books. If the Authority fails to mail such notice within 15 days after acceptance of appointment by the successor Trustee, the successor Trustee shall cause such notice to be mailed at the expense of the Authority.

(e) Any Trustee appointed under this Indenture shall be a corporation or association organized and doing business under the laws of any state or the United States of America or the District of Columbia, shall be authorized under such laws to exercise corporate trust powers, shall have (or, in the case of a corporation or association that is a member of a bank holding company system, the related bank holding company has) a combined capital and surplus of at least $50,000,000, and shall be subject to supervision or examination by a federal or state a gency, so long as any Bonds are Outstanding. If such corporation or association publishes a report of condition at least annually under law or to the requirements of any supervising or examining agency above referred to, then for the purpose of this subsection (e), the combined capital and surplus of such corporation or association shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If the Trustee at any time ceases to be eligible in acc ordance with the provisions of this subsection (e), the Trustee shall resign immediately in the manner and with the effect specified in this Section.

SECTION 8.03. Merger or Consolidation. Any bank, national banking association, federal savings association, or trust company into which the Trustee may be merged or converted or with which it may be consolidated or any bank, national banking association, federal savings association, or trust company resultin g from any merger, conversion or consolidation to which it shall be a party or any bank, national banking association, federal savings association, or trust company to which the Trustee may sell or transfer all or substantially all of its corporate trust b usiness, provided such bank, national banking association, federal savings association, or trust company shall be eligible under subsection (e) of Section 8.02 shall be the successor to such Trustee, without the execution or filing of any paper or any furt her act, anything herein to the contrary notwithstanding.

SECTION 8.04. Liability of Trustee.

(a) The recitals of facts herein and in the Bonds contained shall be taken as statements of the Authority, and the Trustee shall not assume responsibility for the correctness of the same, or make any representations as to the validity or sufficiency of this Indenture, the Bonds or the Lease (including any right to receive moneys thereunder or the value of or title to the premises upon which the Leased Property is located), nor shall the Trustee incur any responsibility in respect thereof, other than as expressly stated herein in connection with the respective duties or obligations of Trustee herein or in the Bonds assigned to or imposed upon it. The Trustee shall, however, be responsible for its representations contained in its certificate of authentication on the Bonds. The Trustee Lynwood Public Financing Authority - Page 62 of 242 Agenda Item # 3

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shall not be liable in connection with the performance of its duties hereunder, exc ept for its own negligence or willful misconduct. The Trustee may become the Owner of Bonds with the same rights it would have if it were not Trustee, and, to the extent permitted by law, may act as depository for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Bond Owners, whether or not such committee shall represent the Owners of a majority in principal amount of the Bonds then Outstanding.

(b) The Trustee is not liable for any error of judgment made by a responsible officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts.

(c) The Trustee is not liable with respect to any action taken or omitted to be taken by it in accordance with the direction of the Owners of a majority in aggregate principal amount of the Bonds at the time Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Indenture or assigned to it under the Assignment Agreement.

Lynwood City CouncilMay 17, 2022

Lynwood City Council
May 17, 2022