Mammoth Lakes City Council
February 21, 2024

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Assessed Value
The assessed valuation of property in the Town is established by the County Assessor, except for public utility property which is assessed by the SBE. Assessed valuations are reported at 100% of the “full value” of the property, as defined in Article XIIIA of the California Constitution.

Certain classes of property, such as churches, colleges, not-for-profit hospitals and charitable institutions, are exempt from property taxation and do not appear on the tax rolls. No reimbursement is made by the State for such exemptions. Property taxes allocated to the Town are collected by the County at the same time and on the same tax rolls as are county and special district taxes. The valuation of secured property by the County Assessor is established as of January 1 and is subsequently equalized in September of each year.

The table below shows the assessed valuation of taxable property in the Town for the ten most recent fiscal years.

Table 9

TOWN OF MAMMOTH LAKES

HISTORIC ASSESSED VALUATIONS
Fiscal Years 2014-15 to 2023-24
Fiscal Year
Ending Total Assessed %
June 30, Local Secured Utility Unsecured Valuation Change 2015 $3,597,792,689 — $325,213,769 $3,923,006,458 n/a
2016 3,677,609,277 — 321,015,524 3,998,624,801 1.93%
2017 3,773,190,823 — 325,654,039 4,098,844,862 2.51
2018 3,865,694,546 — 330,508,988 4,196,203,534 2.38
2019 4,035,492,722 — 340,905,641 4,376,398,363 4.29
2020 4,309,704,357 — 351,674,469 4,661,378,826 6.51
2021 4,513,085,176 — 386,844,390 4,899,929,566 5.12
2022 4,836,705,547 — 339,448,555 5,176,154,102 5.64
2023 5,346,672,950 — 356,154,389 5,702,827,339 10.17
2024 5,806,808,936 — 382,745,719 6,189,554,655 8.53
Source: California Municipal Statistics, Inc.

Assessments may be adjusted during the course of the year when real property changes ownership or new construction is completed. Assessments may also be appealed by taxpayers seeking a reduction as a result of economic and other factors beyond the Town’s control, such as a general market decline in property values, reclassification of property to a class exempt from taxation, whether by ownership or use (such as exemptions for property owned by State and local agencies and property used for qualified educational, hospital, charitable or religious purposes), or the complete or partial destruction of taxable property caused by natural or manmade disaster, such as earthquake, flood, fire, toxic dumping, etc. When necessitated by changes in assessed value in the course of a year, taxes are pro-rated for each portion of the tax year.

Appeals of Assessed Valuation; Blanket Reductions of Assessed Values. There are two basic types of property tax assessment appeals provided for under State law. The first type of appeal, commonly referred

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to as a base year assessment appeal, involves a dispute on the valuation assigned by the assessor immediately subsequent to an instance of a change in ownership or completion of new construction. If the base year value assigned by the assessor is reduced, the valuation of the property cannot increase in subsequent years more than 2% annually unless and until another change in ownership and/or additional new construction activity occurs.

The second type of appeal, commonly referred to as a Proposition 8 appeal (which Proposition 8 was approved by the voters in 1978), can result if factors occur causing a decline in the market value of the property to a level below the property’s then current taxable value (escalated base year value). Pursuant to State law, a property owner may apply for a Proposition 8 reduction of the property tax assessment for such owner’s property by filing a written application, in the form prescribed by the SBE, with the appropriate county board of equalization or assessment appeals board. A property owner desiring a Proposition 8 reduction of the assessed value of such owner’s property in any one year must apply to the county assessment appeals board (the “Appeals Board”). Following a review of the application by the county assessor’s office, the county assessor may offer to the property owner the opportunity to stipulate to a reduced assessment or may confirm the assessment. If no stipulation is agreed to, and the applicant elects to pursue the appeal, the matter is brought before the Appeals Board (or, in some cases, a hearing examiner) for a hearing and decision. The Appeals Board generally is required to determine the outcome of appeals within two years of each appeal’s filing date. Any reduction in the assessment ultimately granted applies only to the year for which application is made and during which the written application is filed. The assessed value increases to its pre-reduction level (escalated to the inflation rate of no more than 2%) following the year for which the reduction application is filed. However, the county assessor has the power to grant a reduction not only for the year for which application was originally made, but also for the then current year and any intervening years as well. In practice, such a reduced assessment may and often does remain in effect beyond the year in which it is granted.

In addition to the above-described taxpayer appeals, county assessors may independently reduce assessed valuations based on changes in the market value of property, or for other factors such as the complete or partial destruction of taxable property caused by natural or man-made disasters such as earthquakes, floods, fire, drought or toxic contamination pursuant to relevant provisions of the State Constitution.

In addition, Article XIIIA of the State Constitution provides that the full cash value base of real property used in determining taxable value may be adjusted 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. This measure is computed on a calendar year basis.

Risk of Decline in Property Values; Fire; Earthquake Risk. Property values could be reduced by factors beyond the Town’s control, including fire, earthquake or a depressed real estate market due to general economic conditions in the Town, the region and the State.

Other possible causes for a reduction in assessed values include the complete or partial destruction of taxable property caused by other natural or manmade disasters, such as flood, fire, drought, toxic dumping, acts of terrorism, etc., or reclassification of property to a class exempt from taxation, whether by ownership or use (such as exemptions for property owned by State and local agencies and property used for qualified educational, hospital, charitable or religious purposes).

No assurance can be given that property tax appeals and/or blanket reductions of assessed property values will not significantly reduce the assessed valuation of property within the Town in the future.

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Assembly Bill 102. On June 27, 2017, the Governor of the State (the “Governor”) signed into law Assembly Bill 102 (“AB 102”). AB 102 restructured the functions of the SBE and created two new separate agencies: (i) the California Department of Tax and Fee Administration, and (ii) the Office of Tax Appeals.

Under AB 102, the California Department of Tax and Fee Administration took over programs previously in the SBE Property Tax Department, such as the Tax Area Services Section, which is responsible for maintaining all property tax-rate area maps and for maintaining special revenue district boundaries. Under AB 102, the SBE continues to perform the duties assigned by the State Constitution related to property taxes, however, effective January 1, 2018, the SBE will only hear appeals related to the programs that it constitutionally administers and the Office of Tax Appeals will hear appeals on all other taxes and fee matters, such as sales and use tax and other special taxes and fees. AB 102 obligates the Office of Tax Appeals to adopt regulations as necessary to carry out its duties, powers, and responsibilities. No assurances can be given as to the effect of such regulations on the appeals process or on the assessed valuation of property within the Town.

State-Assessed Property. Under the Constitution, the SBE assesses property of State-regulated transportation and communications utilities, including railways, telephone and telegraph companies, and companies transmitting or selling gas or electricity. The Board of Equalization also is required to assess pipelines, flumes, canals and aqueducts lying within two or more counties. The value of property assessed by the Board of Equalization is allocated by a formula to local jurisdictions in the county, including school districts, and taxed by the local county tax officials in the same manner as for locally assessed property.

Taxes on privately owned railway cars, however, are levied and collected directly by the Board of Equalization. Property used in the generation of electricity by a company that does not also transmit or sell that electricity is taxed locally instead of by the Board of Equalization. Thus, the reorganization of regulated utilities and the transfer of electricity-generating property to non-utility companies, as often occurred under electric power deregulation in California, affects how those assets are assessed, and which local agencies benefit from the property taxes derived. In general, the transfer of State-assessed property located in the Town to non-utility companies will increase the assessed value of property in the Town, since the property’s value will no longer be divided among all taxing jurisdictions in the County. The transfer of property located and taxed in the Town to a State-assessed utility will have the opposite effect, generally reducing the assessed value in the Town as the value is shared among the other jurisdictions in the County.

The Town is unable to predict future transfers of State-assessed property in the Town and the County, the impact of such transfers on its utility property tax revenues, or whether future legislation or litigation may affect ownership of utility assets, the State’s methods of assessing utility property, or the method by which tax revenues of utility property is allocated to local taxing agencies, including the Town.

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Assessed Valuation by Land Use. The following table gives a distribution of taxable real property located in the Town by principal purpose for which the land is used, and the assessed valuation and number of parcels for each use.

Table 10

TOWN OF MAMMOTH LAKES

ASSESSED VALUATION AND PARCELS BY LAND USE
FY2023-24
Assessed
Valuation (1)
% of
Total
No. of
Parcels
% of
Total
Non-Residential:

Commercial $269,863,214 4.65% 233 2.28%
Resort/Hotel/Motel 195,305,556 3.36 24 0.23
Industrial 15,201,963 0.26 25 0.24
Recreational 16,350,214 0.28 11 0.11
Government/Social/Institutional 16,001,792 0.28 31 0.30 Miscellaneous 111,256,478 1.92 460 4.50
Subtotal Non-Residential $623,979,217 10.75% 784 7.67%
Residential:

Single Family Residence $2,330,473,909 40.13% 2,836 27.74% Condominium 2,567,323,778 44.21 5,612 54.90
Mobile Home 3,149,413 0.05 123 1.20
Mobile Home Park 11,794,976 0.20 2 0.02
2+ Residential Units 10,578,925 0.18 159 1.56
Timeshare 1,910,623 0.03 195 1.91
Subtotal Residential $4,925,231,624 84.82% 8,927 87.33% Vacant Parcels 257,598,095 4.44% 511 5.00%
Total $5,806,808,936 100.00% 10,222 100.00%
Source: California Municipal Statistics, Inc.
(1) Total secured assessed valuation, excluding tax-exempt property.

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Assessed Valuation of Single-Family Homes. The following table focuses on single-family residential properties only, which comprise approximately 40.13% of the assessed value of taxable property in the Town.

Table 11

TOWN OF MAMMOTH LAKES
PER PARCEL – ASSESSED VALUATION OF SINGLE-FAMILY HOMES
Average Median
No. of FY2023-24 Assessed Assessed
Parcels Assessed Valuation Valuation Valuation
Single Family Residential 2,836 $2,330,473,909 $821,747 $643,515 FY2023-24 No. of % of Cumulative Total % of Cumulative
Assessed Valuation Parcels(1) Total % of Total Valuation Total % of Total $0 - $99,999 85 2.997% 2.997% $ 6,302,053 0.270% 0.270% $100,000 - $199,999 199 7.017 10.014 29,506,336 1.266 1.537 $200,000 - $299,999 243 8.568 18.583 61,134,686 2.623 4.160 $300,000 - $399,999 296 10.437 29.020 103,550,842 4.443 8.603 $400,000 - $499,999 248 8.745 37.764 112,181,139 4.814 13.417 $500,000 - $599,999 254 8.956 46.721 139,884,089 6.002 19.419 $600,000 - $699,999 220 7.757 54.478 142,804,187 6.128 25.547 $700,000 - $799,999 244 8.604 63.082 182,313,448 7.823 33.370 $800,000 - $899,999 162 5.712 68.794 136,771,324 5.869 39.239 $900,000 - $999,999 132 4.654 73.449 125,059,276 5.366 44.605 $1,000,000 - $1,099,999 113 3.984 77.433 118,481,456 5.084 49.689 $1,100,000 - $1,199,999 85 2.997 80.430 97,494,833 4.183 53.872 $1,200,000 - $1,299,999 85 2.997 83.427 106,161,987 4.555 58.428 $1,300,000 - $1,399,999 80 2.821 86.248 108,169,989 4.642 63.069 $1,400,000 - $1,499,999 46 1.622 87.870 66,730,951 2.863 65.933 $1,500,000 - $1,599,999 48 1.693 89.563 74,302,650 3.188 69.121 $1,600,000 - $1,699,999 46 1.622 91.185 75,649,933 3.246 72.367 $1,700,000 - $1,799,999 29 1.023 92.207 50,767,497 2.178 74.546 $1,800,000 - $1,899,999 40 1.410 93.618 73,992,430 3.175 77.721 $1,900,000 - $1,999,999 18 0.635 94.252 34,918,684 1.498 79.219 $2,000,000 and greater 163 5.748 100.000 484,296,119 20.781 100.000 Total 2,836 100.000% $2,330,473,909 100.000%
Source: California Municipal Statistics, Inc.
(3) Improved single-family residential parcels. Excludes condominiums and parcels with multiple family units.

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Principal Taxpayers. Based on fiscal year 2023-24 locally assessed taxable valuations, the top twenty taxable property owners in the Town represent approximately 7.09% of the total fiscal year 2023-24 taxable value. The following table shows the 20 largest owners of taxable property in the Town as determined by secured assessed valuation in fiscal year 2023-24. The Town is not aware of any plans by the top twenty largest local secured taxpayers to leave the Town or terminate operations.

Table 12

TOWN OF MAMMOTH LAKES

LARGEST LOCAL SECURED PROPERTY TAXPAYERS
Fiscal Year 2023-24
FY2023-24
Assessed % of
Property Owner Primary Land Use Valuation Total(1)

1. Mammoth Main Lodge Redevelopment LLC Hotel/Motel $ 57,871,359 1.00%

2. IW Mammoth Holdings LLC Ski Resort 42,678,529 0.73

3. SFI Mammoth Crossing LLC Brewery/Undeveloped 39,576,270 0.68

4. JPK Mammoth Village Owner LLC Resort 30,343,279 0.52

5. WH SN Mammoth LLC Resort/Restaurants 28,621,210 0.49

6. Snowcreek Investment Company II LLC Resort 24,113,598 0.42

7. Mammoth View LLC Commercial 20,822,787 0.36

8. Snowcreek Hilltop Development Co. LLC Residential Development 20,327,401 0.35

9. PI Mammoth Lakes LLC Hotel/Motel 17,114,860 0.29

10. Beacon Mammoth Inc. Commercial Land 16,083,022 0.28

11. Limelight Mammoth LLC Hotel/Motel 15,884,161 0.27

12. Scripps Family Trust Residential 15,476,003 0.27

13. Vons Company Inc. Shopping Center 14,404,888 0.25

14. Ormat Nevada Inc. Power Generation 12,710,711 0.22

15. Sierra Holiday MHP LLC RV Park 11,219,173 0.19

16. 452 Om Rd Investors LLC Shopping Center 10,559,018 0.18

17. YSD Park Corporation Shopping Center 9,396,470 0.16

18. Mammoth Mountain Development Company Residential Development 8,448,948 0.15

19. Tcherkoyan Family Trust 2008 Residential 8,210,753 0.14

20. Mammoth Rock Holdings LLC Bowling Alley/Restaurant 7,872,128 0.14 Total Top 20 $411,734,568 7.09%
Source: California Municipal Statistics, Inc.
(3) FY2023-24 Local Secured Assessed Valuation: $5,806,808,936.

Sales and Use Taxes
A sales tax is imposed on the privilege of consuming personal property in the State. The State does not tax services. The tax rate is established by the State Legislature, and is presently 7.25%, statewide (of which 1% is paid to the Town) (the “State Sales Tax”). In addition, many of the State’s cities, counties, districts and communities have special taxing jurisdiction to impose a transaction (sales) or use tax. These so-called district taxes increase the tax rate in a particular area by adding the local option tax to the statewide tax. While more than one district tax may be in effect for a particular location, counties, municipalities, and districts are allowed to increase the sales tax in specific jurisdictions up to a total of 10.25%.

Measure R. On June 3, 2008, the voters of the Town passed Measure R, a ½% special sales and use tax, the proceeds of which are dedicated to planning, construction, operation, maintenance, programming

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and administration of all trails, parks and recreation facilities managed by the Town. Measure R taxes will be collected indefinitely unless Measure R is repealed by the voters of the Town. As a special tax, Measure R taxes are available only for the purposes described above and are not available to the General Fund for General Fund purposes.

The Town’s sales and use tax revenues are dependent in part on economic activity generated by tourism.

The following table shows a breakdown of the composition of the current sales and use tax rate applicable to transactions in the Town:

Table 11

TOWN OF MAMMOTH LAKES

CURRENT SALES AND USE TAX RATES
Component Tax Rate
State Sales Tax 7.250%
Measure R 0.500
Total 7.750%
Source: Town of Mammoth Lakes
The State’s Department of Tax and Fee Administration actual administrative costs with respect to the portion of sales taxes allocable to the Town are deducted before distribution and are determined on a quarterly basis.

Many categories of transactions are exempt for the State Sales Tax. The most important of these exemptions are the sales of food products for home consumption, prescription medicine, edible livestock and their feed, seed and fertilizer used in raising food for human consumption, and gas and electricity and water when delivered to consumers through mains, lines and pipes. In addition, occasional sales (i.e., sales of property not held or used by a seller during activities for which he or she is required to hold a seller’s permit) are generally exempt from both the State Sales Tax; however, the occasional sales exemption does not apply to the sale of an entire business and other sales of machinery and equipment used in a business.

Action by the State Legislature or by voter initiative could change the transactions and items upon which the State Sales Tax are imposed. Such changes or amendments could have either an adverse or beneficial effect on revenues produced by sales taxes. The Town is not currently aware of any proposed legislative change that would have a material adverse effect on the State Sales Tax.

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Other Sources of General Fund Revenues
In addition, the Town receives approximately 20% of its annual General Fund revenues from the following sources:

Charges for Services. The Town’s ability to set charges for services is limited under California law.

Generally, a fee or charge may not exceed the estimated reasonable cost of providing the particular service or product for which the fee is charged, plus overhead.

Licenses and Permits. The Town charges certain permits, licenses and fees for the cost recovery of providing current planning, building inspection, recreation and other municipal services.

Fines, Forfeitures and Penalties. These revenues include parking citations and other fines for municipal code violations.

No Material Reliance on State Revenues
The Town does not rely on the State for a material amount of revenues. There can be no assurance that future State budget difficulties will not adversely affect the Town’s revenues or its ability to make the Lease Payments when due. See “STATE BUDGET INFORMATION.”

OTHER FINANCIAL INFORMATION
Labor Relations
Currently 81 permanent Town employees are covered by negotiated agreements as detailed in the table below. The Town also employs eight additional employees unrepresented by a collective bargaining unit for a total of 89 employees in total.

Table 12

TOWN OF MAMMOTH LAKES

NEGOTIATED EMPLOYEE AGREEMENTS
Contract Number of
Bargaining Unit Expiration Date Employees
General Employee Association June 30, 2026 26
Management Employee Association June 30, 2026 16
Public Works Employee Association June 30, 2026 24
Police Officers Association June 30, 2025 11
Police Supervisory Association June 30, 2025 4
Total 81
Source: Town of Mammoth Lakes

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Risk Management
The Town is a member of the California Joint Powers Insurance Authority (the “Authority”). The Authority is composed of 116 California public entities and is organized under a joint powers agreement pursuant to California Government Code Section 6500. The purpose of the Authority is to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. The California JPIA began covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors. The Board operates through a nine-member Executive Committee. Each member pays an annual contribution at the beginning of the coverage period. The total funding requirement for primary self-insurance programs is based on an actuarial analysis. Costs are allocated to individual agencies based on payroll and claims history, relative to other members of the risksharing pool. Liability claims are pooled separately between police and general government exposures.

Workers Compensation claims are pooled separately between public safety (police and fire) and general government exposures.

The Town participates in the pollution legal liability insurance program which is available through the Authority. The policy covers sudden and gradual pollution of scheduled property, streets, and storm drains owned by the Town. The Town participates in the all-risk property insurance protection program of the Authority. This insurance protection is underwritten by several insurance companies. The Town purchases earthquake and flood insurance on a portion of its property. Earthquake insurance is part of the property protection insurance program of the Authority. The Town purchases crime insurance coverage and fidelity coverage through the Authority. The Town further protects against liability damages by requiring tenant users of certain property to purchase low-cost tenant user liability insurance for certain activities on Town property. The insurance premium is paid by the tenant user and is paid to the Town according to a schedule. The Town then pays for the insurance. The insurance is facilitated by the Authority.

For additional information about the Town’s Risk Management, see APPENDIX B—ANNUAL

COMPREHENSIVE FINANCIAL REPORT OF THE TOWN FOR THE FISCAL YEAR ENDED JUNE 30, 2023, Note 14.

Employee Retirement Plans
The information set forth below regarding the California Public Employees’ Retirement System (“CalPERS”) program, other than the information provided by the Town regarding its annual contributions thereto, has been obtained from publicly available sources which are believed to be reliable but are not guaranteed as to accuracy or completeness, and should not be construed as a representation by either the Town or the Underwriter.

Plan Description. All qualified permanent and probationary employees are eligible to participate in the Public Agency Cost- Sharing Multiple-Employer Defined Benefit Pension Plan (Plan) administered by the California Public Employees’ Retirement System (CalPERS). The Plan consists of individual rate plans (benefit tiers) within a safety risk pool (police and fire) and a miscellaneous risk pool (all other.) Plan assets may be used to pay benefits for any employer rate plan of the safety and miscellaneous risk pools.

Accordingly, rate plans within the safety or miscellaneous pools are not separate plans under GASB Statement No. 68. Individual employers may sponsor more than one rate plan in the miscellaneous or safety risk pools. The Town sponsors two miscellaneous rate plans. Benefit provisions under the Plan are established by State statute and Town resolution. CalPERS issues publicly available reports that include a

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full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

Benefits Provided. CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 (age 52 for Miscellaneous Plan members if membership date is on or after January 1, 2013) with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 5 years of service. The death benefit is one of the following: the Special Death Benefit (Safety only), the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost-of-living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.

Contributions. Section 20814I of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for both Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The 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 Town is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.

PARS Plan. All eligible full-time public safety employees are eligible to participate in the Town’s Retirement Enhancement Plan (the “PARS Plan”), administered through the Public Agency Retirement Services (PARS), which provides additional retirement benefits to public safety employees above that provided from the cost-sharing multiple-employer defined benefit pension plan. Eligibility requirements are based upon years of employment, date of hire, and date of birth which meets the requirements of a pension trust under California Government Code.

The PARS Plan provides service retirement benefits equal to the “3.5% at 55” plan factor less the CalPERS “3.0% at 50” plan factor for all years of Town Safety service as of July 1, 2012. Benefits are frozen effective as of July 1, 2012. Benefits in payment status will increase by 2% per annum on the anniversary of the participant’s date of retirement. The plan does not provide a withdrawal benefit, death benefit, or a disability benefit.

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Historical Pension Contributions. The Town’s combined contributions to its Miscellaneous and Safety CalPERS Plans and its contributions to the PARS Plan for the most recent is summarized in the following table.

Table 13

TOWN OF MAMMOTH LAKES

HISTORICAL PENSION CONTRIBUTIONS
Fiscal Year
Ending
June 30,
Total CalPERS
Combined
Contributions
PARS Plan
Contributions
2019 $ 2,125,168 $ 35,084
2020 2,294,971 38,821
2021 2,698,794 43,006
2022 2,736,606 39,928
2023 3,001,098 22,240
Source: Town of Mammoth Lakes fiscal year 2022-23 Annual Comprehensive Financial Report.

Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions. For the fiscal year ended June 30, 2023, the Town recognized pension expense of $__________ for the combined CalPERS Plans. On June 30, 2023, the Town reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Table 14

TOWN OF MAMMOTH LAKES

DEFERRED OUTFLOWS/INFLOWS OF RESOURCES
Fiscal Year 2022-23
Miscellaneous Plan
Deferred
Outflows
Deferred
Inflows
of Resources of Resources
Changes in assumptions $ 479,484,592 —
Differences between Expected and Actual Experience 93,968,044 ($62,935,700) Differences between Projected and Actual
earnings on Pension Plan investments
857,110,099 —
Total $1,430,562,735 ($62,935,700)
Source: Town of Mammoth Lakes fiscal year 2022-23 Annual Comprehensive Financial Report.

Safety Plan
Deferred
Outflows
Deferred
Inflows
of Resources of Resources
Changes in assumptions $ 692,863,075 —
Differences between Expected and Actual Experience 284,389,647 ($74,619,914) Differences between Projected and Actual
earnings on Pension Plan investments
1,085,118,205 —
Total $1,430,562,735 ($74,619,914)
Source: Town of Mammoth Lakes fiscal year 2022-23 Annual Comprehensive Financial Report.

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For information concerning the Town’s pension obligations, including descriptions of the actuarial methods and assumptions, and an explanation of the discount rate used, please see APPENDIX B—

ANNUAL COMPREHENSIVE FINANCIAL REPORT OF THE TOWN FOR THE FISCAL YEAR ENDED JUNE 30, 2023, Notes 12 and 13.

Funded Status. The following table sets forth a summary of the funding progress for the Town’s combined CalPERS Plans and PARS Plan for the most recent actuarial valuation dates.

Table 15

TOWN OF MAMMOTH LAKES

HISTORICAL PENSION FUNDING PROGRESS
Fiscal Year
Ended
June 30,
Unfunded
Accrued
Liability
(UAL)
Funded
Ratio
Covered
Payroll
CalPERS Plans
2019 $ 20,842,273 75.26% $ 5,296,220
2020 21,932,805 75.26 5,620,984
2021 23,071,697 75.10 5,862,517
2022 15,421,438 79.59 6,701,933
2023 25,394,761 68.93 6,495,446
PARS Plan
2019 $ 90,208 95.76% $ 297,013
2020 131,611 93.83 274,724
2021 (135,859) 106.08 250,623
2022 246,452 88.98 146,487
2023 121,456 94.31 102,885
Source: Town of Mammoth Lakes fiscal year 2022-23 Annual Comprehensive Financial Report.

CalPERS Amortization Period Reform. On February 13, 2018, the CalPERS Board voted to shorten the period over which actuarial gains and losses are amortized from 30 years to 20 years for new pension liabilities. The new 20-year amortization period began with new gains or losses accrued starting with the June 30, 2019 actuarial valuations. The first payments on the new 20-year amortization schedule took place in 2021.

A shorter amortization period will increase annual Unfunded Accrued Liability (“UAL”) contributions for cities that participate in CalPERS so long as CalPERS remains underfunded. The shortened amortization period will also lead to reductions of periods of negative amortization of the UAL, interest cost savings, and faster recoveries of funded status after market downturns.

Cities that participate in CalPERS will also see additional volatility in their future UAL contributions due to market performance as gains or losses will be amortized faster under the new amortization period.

The announcement on July 12, 2021 that CalPERS achieved an investment return of 21.3% for the period from July 1, 2020 through June 30, 2023 caused the CalPERS Board of Administration to lower CalPERS’ discount rate from 7.00% to 6.80% on November 15, 2021 in accordance with a risk mitigation

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policy that was adopted in 2015, which calls for the discount rate to be lowered if returns exceed the thencurrent discount rate by two or more percentage points.

The Town cannot currently estimate the impact the shorter amortization period or lower discount rate will have on its required contributions for its Miscellaneous and Safety Plans. For information concerning the Plans, including descriptions of the actuarial methods and assumptions, please see APPENDIX B—ANNUAL COMPREHENSIVE FINANCIAL REPORT OF THE TOWN FOR THE FISCAL YEAR ENDED JUNE 30, 2023, Note 8.

Other Post-Employment Benefits
Plan Description. The Town provides retiree medical benefits to employees who retire from the Town at age 50 or later with at least 5 years of service and are eligible for a California Public Employees’ Retirement System (CalPERS) pension. Eligible retirees are entitled to the minimum CalPERS medical benefit. The retiree pays the balance of the premium for the option and tier of coverage, which the retiree elects. The Plan does not include a special disability benefit prior to the employee becoming eligible for the regular retirement benefit. Benefit and vesting service is credited from date of hire. The Plan does not include a death benefit or withdrawal benefit. This benefit expires when the employee/retiree qualifies for Medicare.

Employees Covered. Membership of the plan consisted of 72 active employees and 29 retirees and beneficiaries receiving benefits at June 30, 2023.

Changes In Net OPEB Liability. The following table shows the changes in the Town’s net OPEB obligation to the Plan:

Table 16

TOWN OF MAMMOTH LAKES

CHANGE IN NET OPEB LIABILITY
Fiscal Year 2022-23
Service cost
Interest on OPEB liability
Dif. btw. actual and expected experience
Changes in assumptions
Net investment income
Administrative expenses
Employer contributions
Net changes
Net OPEB obligation, beginning of the year
Net OPEB obligation, end of the year
Source: Town of Mammoth Lakes fiscal year 2022-23 Annual Comprehensive Financial Report.

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The following table shows a four-year history of the Town’s outstanding OPEB obligation and covered payroll.

Table 17

TOWN OF MAMMOTH LAKES

HISTORIC OPEB LIABILITY
Fiscal
Year Ending
June 30,
Net OPEB
Obligation
(UAAL)
Funded
Ratio
2019 $ 3,780,962 9.11%
2020 1,937,287 17.09
2021 2,198,663 15.82
2022 2,365,452 17.12
2023
Source: Town of Mammoth Lakes fiscal year 2022-23 Annual Comprehensive Financial Report.

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, investment returns, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the Plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future.

For information concerning the Town’s OPEB obligations, including descriptions of the actuarial methods and assumptions, please see APPENDIX B—ANNUAL COMPREHENSIVE FINANCIAL REPORT OF THE TOWN FOR THE FISCAL YEAR ENDED JUNE 30, 2023, Note 11.

Debt Obligations
In 2015, the Town entered into a private placement lease financing with Compass Mortgage Corporation to refinance its then outstanding Town of Mammoth Lakes Certificates of Participation (2000 Land Acquisition Project) and to fund, in part, a new Town Police Station (the “2015 Lease”). The Town is obligated to make annual payments of approximately $315,000 from its general fund. In connection with the execution and delivery of the Certificates, the Town has determined to prepay the 2015 Lease.

In 2017, the Town issued its 2017 Taxable Judgment Obligation Bonds (the “Judgment Bonds”) to (a) refinance outstanding obligations of the Town under that certain Settlement Agreement, dated as of September 20, 2012, by and among (a) the Town, (b) Mammoth Lakes Land Acquisition, LLC, (c) Terrence E. Ballas, (d) Hot Creek Aviation Management, LLI(e) Hot Creek Hanger Group, LLC, and (f) Hot Creek Water Management Company, LLC, and (b) pay the costs of issuance of the Judgment Bonds.

The Town is obligated to make annual payments of approximately $1,900,000 from its general fund. The Judgment Bonds mature on October 1, 2035.

The Town has certain other debt obligations that are not payable from the Town’s general fund.

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Overlapping Debt
Set forth below is a direct and overlapping debt report (the “Debt Report”) prepared by California Municipal Statistics, Inc. and effective February 1, 2024. The Debt Report is included for general information purposes only. Neither the Town nor the Underwriter has reviewed the Debt Report for completeness or accuracy and neither the Town nor the Underwriter makes any representation in connection therewith.

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

The contents of the Debt Report are as follows: (1) the first column indicates the public agencies which have outstanding debt as of the date of the Debt Report and whose territory overlaps the Town; (2) the second column shows the respective percentage of the assessed valuation of the overlapping public agencies identified in column 1 which is represented by property located in the Town; and (3) the third column is an apportionment of the dollar amount of each public agency’s outstanding debt (which amount is not shown in the table) to property in the Town, as determined by multiplying the total outstanding debt of each agency by the percentage of the Town’s assessed valuation represented in column 2.

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Table 18

TOWN OF MAMMOTH LAKES

DIRECT AND OVERLAPPING BONDED DEBT
as of February 1, 2024

TOWN OF MAMMOTH LAKES
2023-24 Assessed Valuation: $6,189,554,655
OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable Debt 1/1/24 Kern Community College School Facilities Improvement District – Mammoth Campus 100.000% $ 1,751,307 Mammoth Unified School District 90.377 50,461,153
Southern Mono Hospital District 90.342 7,005,620
Town of Mammoth Lakes Community Facilities District No. 2001-1 100.000 4,353,460 TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT 63,571,540
DIRECT AND OVERLAPPING GENERAL FUND DEBT:

Mono County Certificates of Participation 74.526% 18,331,160 Kern Community College District Certificates of Participation 4.808 1,099,926 Kern Community College District Benefit Obligations 4.808 3,455,510 Town of Mammoth Lakes 2015 Lease 100.000 1,816,000
Town of Mammoth Lakes Judgment Bonds 100.000 17,585,000 TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT $42,287,596 COMBINED TOTAL DEBT $105,859,136 (1)
Ratios to 2023-24 Assessed Valuation:

Direct Debt ($19,401,000)....................................................0.31% Total Direct and Overlapping Tax and Assessment Debt.................1.03% Combined Total Debt .......................................................................1.71% Source: California Municipal Statistics, Inc.
(1) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations.

INVESTMENT OF TOWN FUNDS
Revenues collected by the Town will be held and invested by the Town in accordance with the provisions of the Indenture.

Funds held by the Town are invested in accordance with the Town’s Statement of Investment Policy (the “Investment Policy”) prepared by the Finance Director as authorized by section 53601 of the Government Code of California. The Investment Policy is submitted to the Town Council annually. The Investment Policy allows for the purchase of a variety of securities and provides for limitations as to exposure, maturity and rating which vary with each security type. The composition of the portfolio will change over time as old investments mature, or are sold, and as new investments are made. Invested funds are managed to insure preservation of capital through high quality investments, maintenance of liquidity and then yield. Further, operating funds may not be invested in any investment with a maturity greater than five years. The Town has never invested in derivatives or reverse repurchase agreements and such investments and instruments are not allowed by Town policy.

For more information about the Town’s investment policy, see APPENDIX D—TOWN INVESTMENT POLICY.

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THE CORPORATION
The Corporation is a nonprofit, public benefit corporation duly organized and existing under the laws of the State and is entitled to purchase personal and real property and to sell or lease such property, to contract for construction and improvements and to execute operating agreements regarding such property.

The Corporation was formed for the purpose of providing financial assistance to public entities by acquiring, constructing, developing and refinancing certain facilities for the use and benefit of the public. The Corporation has no liability to the Owners of the Certificates.

STATE BUDGET INFORMATION
Information regarding the State Budget is regularly available at various State-maintained websites. The fiscal year 2023-24 State Budget and fiscal year 2024-25 Proposed State Budget described below can be found at the website of the Department of Finance, www.dof.ca.gov, under the heading “California Budget.” Additionally, an impartial analysis of the State’s Budgets is posted by the Office of the Legislative Analyst at www.lao.ca.gov.

The information referred to is prepared by the respective State agency maintaining each website and not by the Town, and neither the Town nor the Underwriter takes responsibility for the continued accuracy of the internet addresses or for the accuracy, completeness or timeliness of information posted there, and such information is not incorporated herein by these references.

State Budget Process. Through the State budget process, the State enacts legislation that significantly impacts the source, amount and timing of the receipt of revenues by local agencies, including the Town. As in recent years, State budget deficits can result in legislation that adversely impacts local agency budgets.

The State’s fiscal year begins on July 1 and ends on June 30. The annual budget is proposed by the Governor by January 10 of each year for the next fiscal year (the “Governor’s Budget”). Under State law, the annual proposed Governor’s Budget cannot provide for projected expenditures more than projected revenues and balances available from prior fiscal years. Following the submission of the Governor’s Budget, the Legislature takes up the proposal.

Under the State Constitution, money may be drawn from the Treasury only through an appropriation made by law. The primary source of the annual expenditure authorizations is the Budget Act as approved by the Legislature and signed by the Governor. The Budget Act must be approved by a twothirds majority vote of each House of the Legislature. The Governor may reduce or eliminate specific line items in the Budget Act or any other appropriations bill without vetoing the entire bill. Such individual lineitem vetoes are subject to override by a two-thirds majority vote of each House of the Legislature.

Appropriations also may be included in legislation other than the Budget Act. Bills containing appropriations (except for K-14 education) must be approved by a two-thirds majority vote in each House of the Legislature and be signed by the Governor. Bills containing K-14 education appropriations only require a simple majority vote. Continuing appropriations, available without regard to fiscal year, may also be provided by statute or the State Constitution.

Funds necessary to meet an appropriation need not be in the State Treasury at the time such appropriation is enacted; revenues may be appropriated in anticipation of their receipt.

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Recent State Budgets. Certain information about the State budgeting process and the State Budget is available through several State sources. A convenient source of information is the State’s website, where recent official statements for State bonds are posted. The references to internet websites shown below are shown for reference and convenience only; the information contained within the websites has not been reviewed by the Town and is not incorporated herein by reference.

The State Treasurer’s Internet home page at www.treasurer.ca.gov, under the heading “Financial Information,” posts the State’s audited financial statements. In addition, the “Financial Information” section includes the State’s Rule 15c2-12 filings for State bond issues. The “Financial Information” section also includes the “Overview of the State Economy and Government, State Finances, State Indebtedness, Litigation” from the State’s most current Official Statement, which discusses the State budget and the state budget process in greater detail.

The State Legislative Analyst’s Office (“LAO”) prepares analyses of the proposed and adopted State budgets. The analyses are accessible on the Legislative Analyst’s Internet home page at www.lao.ca.gov.
2023-24 State Budget
On June 27, 2023, the Governor signed the fiscal year 2023-24 State Budget, which was amended through a series of legislative bills, many of which were signed by the Governor on July 10, 2023 (as amended, the “2023-24 State Budget”). The 2023-24 State Budget reflects downturns in revenues driven by a declining stock market, persistently high inflation, rising interest rates, and job losses in high-wage sectors. The 2023-24 State Budget also reflects the fact that most Californians were granted until October, instead of April, to file income tax returns because of storm-related disaster declarations, leading to delays in revenue collections.

The 2023-24 State Budget projects a budget shortfall of approximately $31.7 billion for the 2023- 24 fiscal year, down from a budget surplus of $7.8 billion in the 2022-23 State Budget. The 2023-24 State Budget addresses the $31.7 billion shortfall though a variety of solutions, including $9.3 billion in funding shifts of spending commitments from the General Fund to other funds, $8.1 billion in General Fund spending reductions or pullbacks of previously approved spending, $7.9 billion in delayed spending across multiple years, $6.1 billion in new revenues, primarily from the Managed Care Organization tax, internal borrowing from special fund balances not projected for programmatic purposes, and $340 million in reductions that will be restored in the State’s 2024-25 Budget if there are sufficient resources to do so at that time.

The 2023-24 State Budget projects a $3 billion increase in general fund revenues as compared to the 2022-23 State Budget (from $205.6 billion to $208.7 billion) despite a projected $4.6 billion decline in projected revenues from personal income taxes. The 2023-24 State Budget reduces General Fund expenditure levels by $8.7 billion as compared to the 2022-23 State Budget (from $234.6 billion to $225.9 billion) with the largest reductions in expenditures occurring in expenditures for legislative, judicial, and executive operations, natural resources, government operations, and environmental protections. The largest areas of increased expenditures in the 2023-24 State Budget are expenditures related to health and human services and K-12 education.

While the 2023-24 State Budget projects a $17 billion draw-down of the State General Fund’s fund balance (from $26.3 billion in 2022-23 to $9.1 billion in 2023-24), the 2023-24 State Budget maintains the

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funding levels of budget stabilization account/rainy day fund (at $22.2 billion) and safety net reserve (at $900 million) while increasing the balance of the State’s public school system stabilization account by $900 million (from $9.9 billion to $10.8 billion).
2024-25 Proposed State Budget
On January 10, 2024, Governor Newsom released his proposed budget for fiscal 2025 (the “2024- 25 Proposed State Budget”). The 2024-25 Proposed State Budget proposes total expenditures of $291.5 billion in total across all State funds (approximately $19 billion less than the 2023-24 State Budget), consisting of approximately $208.7 billion from the State’s General Fund (approximately $22 billion less than the 2023-24 State Budget), $80.8 billion from special funds, and $2 billion from bond funds. The 2024- 25 Proposed State Budget revenues for the General Fund include a one-time draw down of reserves from the Budget Stabilization/Rainy-Day Fund of $12 billion.

Governor Newsom attributes a total budget shortfall projected in the 2024-25 Proposed State Budget (estimated at $37.9 billion) to two separate but related developments during the past two years, first, the substantial decline in the stock market that drove down revenues in 2022-23, and second, the unprecedented delay in critical income tax collections caused by natural disasters that resulted in the State pushing back its filing deadline until October. The combination of reduced revenues from personal income taxes and a later income tax filing deadline meant that the Governor and the State legislature lacked the data normally available during the 2023-24 State budget process. As a result, the 2023-24 State Budget committed money that was not actually available to spending programs underway now. As such, the correction that would have come as part of last year’s May Revision is instead being made in the 2024-25 Proposed State Budget.

Governor Newsom’s plan to close the deficit in the 2024-25 Proposed State Budget includes:
withdrawing $13.1 billion from the budget stabilization/rainy-day and safety net reserve accounts, cutting $8.5 billion from existing programs and services, delaying $5.1 billion worth of spending and deferring another $2.1 billion to 2025-26, and $5.7 billion in internal borrowing from special funds Due to the State’s high reserves levels, the State would have $18.4 billion of reserves remaining even after the drawdowns in the 2024-25 Proposed State Budget.

The 2024-25 Proposed State Budget reduces General Fund expenditures by $22.2 billion compared to 2023-24 levels. The largest areas in General Fund spending reductions in the 2024-25 Proposed State Budget include reductions of $5.8 billion for legislative, judicial and executive expenditures, reductions of $6.8 billion in expenditures for natural resources, and reductions of $2.7 billion in expenditures for business, consumer services, and housing. General Fund revenue sources in the 2024-25 Proposed State Budget are projected to remain relatively similar to 2023-24 levels with only a modest 2.2% increase. The remaining revenues used to balance the General Fund’s budget come primarily from drawdowns of the budget stabilization/rainy day fund.

LAO’s Analysis of the 2024-25 Proposed State Budget. On January 13, 2024, the Legislative Analyst’s Office released its analysis of the 2024-25 Proposed State Budget, which found certain revenue projections contained in the 2024-25 Proposed State Budget to be “optimistic.” The main difference between the estimates in the 2024-25 Proposed State Budget and the LAO’s analysis is that the 2024-25 Proposed State Budget estimates the State will see an 8% increase in income tax collections compared to 2023-24, resulting in $15 billion more in revenues than the LAO’s estimate. While the LAO’s analysis agrees the rebound in

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stock prices that occurred in 2023 is one reason for optimism it also notes that “stock market rallies can reverse as quickly as they start.”
On the spending side, the LAO’s analysis notes strengths and weaknesses. Plans to withdraw $13 billion from reserves are viewed as reasonable, as are the 2024-25 Proposed State Budget’s spending solutions, though some spending-related solutions pose challenges. The reserve drawdown would still leave $11 billion in the State’s budget stabilization/rainy-day fund, which the LAO report called “prudent” since the 2024-25 Proposed State Budget projects operating deficits ranging from $4 billion to $9 billion every year through 2026-27.

The LAO’s analysis recommends that the State legislature be mindful of future deficits by developing a final 2024-25 State budget that plans for lower revenues over the next three years, maintains a similar reserve withdrawal, develops a plan for school and community college funding, maximizes reductions in one-time spending and applies a higher bar for any discretionary proposals and contains ongoing service levels.

For additional information regarding the 2023-24 State Budget or the 2024-25 Proposed State Budget, please see the Department of Finance website at ebudget.ca.gov and the LAO’s website at lao.ca.gov. The Town can take no responsibility for the continued accuracy of the above-referenced internet address as for the or for the accuracy, completeness, or timeliness of information posted therein, and such information is not incorporated herein by reference.

Future State Budgets
Changes in the revenues received by the State can affect the amount of funding, if any, to be received from the State by the Town and other local agencies in the State.

The Town cannot predict the extent of the budgetary problems the State will encounter in this fiscal year or in any future fiscal years, and, it is not clear what measures would be taken by the State to balance its budget, as required by law. In addition, the Town cannot predict the final outcome of future State budget negotiations, the impact that such budgets will have on its finances and operations or what actions will be taken in the future by the State Legislature and Governor to deal with changing State revenues and expenditures. Future State budgets will be affected by national and State economic conditions and other factors over which the Town has no control.

CONSTITUTIONAL AND STATUTORY LIMITATIONS ON

TAXES, REVENUES AND APPROPRIATIONS
The constitutional and statutory provisions discussed in this section have the potential to affect the ability of the Town to levy taxes and spend tax proceeds for operating and other purposes.

Article XIIIA of the California Constitution
On June 6, 1978, California voters approved an amendment (commonly known as both Proposition 13 and the Jarvis-Gann Initiative) to the California Constitution. This amendment, which added Article XIIIA to the California Constitution, among other things affects the valuation of real property for the purpose of taxation in that it defines the full cash property value to mean “the county assessor’s valuation

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of real property as shown on the 1975-76 tax bill under “full cash value,” or thereafter, the appraised value of real property newly constructed, or when a change in ownership has occurred after the 1975 assessment.” The full cash value may be adjusted annually to reflect inflation at a rate not to exceed 2% per year, or a reduction in the consumer price index or comparable local data at a rate not to exceed 2% per year orreduced in the event of declining property value caused by damage, destruction or other factors including a general economic downturn. The amendment further limits the amount of any ad valorem tax on real property to one percent of the full cash value except that additional taxes may be levied to pay debt service on indebtedness approved by the voters prior to July 1, 1978, and 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.

Legislation enacted by the California Legislature to implement Article XIIIA provides that all taxable property is shown at full assessed value as described above. In conformity with this procedure, all taxable property value included in this Official Statement (except as noted) is shown at 100% of assessed value and all general tax rates reflect the $1 per $100 of taxable value. Tax rates for voter approved bonded indebtedness and pension liability are also applied to 100% of assessed value.

The voters of the State subsequently approved various measures which further amended Article XIIIA. One such amendment generally provides that the purchase or transfer of (i) real property between spouses or (ii) the principal residence and the first $1,000,000 of the Full Cash Value of other real property between parents and children, do not constitute a “purchase” or “change of ownership” triggering reappraisal under Article XIIIA. Other amendments permitted the State Legislature to allow persons over the age of 55 who meet certain criteria or “severely disabled homeowners” who sell their residence and buy or build another of equal or lesser value within two years in the same county, to transfer the old residence’s assessed value to the new residence. Other amendments permit the State Legislature to allow persons who are either 55 years of age or older, or who are “severely disabled,” to transfer the old residence’s assessed value to their new residence located in either the same or a different county and acquired or newly constructed within two years of the sale of their old residence.

In the November 1990 election, the voters approved an amendment of Article XIIIA to permit the State Legislature to exclude from the definition of “new construction” certain additions and improvements, including seismic retrofitting improvements and improvements utilizing earthquake hazard mitigation technologies constructed or installed in existing buildings after November 6, 1990.

Article XIIIA has also been amended to provide that there would be no increase in the Full Cash Value base in the event of reconstruction of the property damaged or destroyed in a disaster.

Section 51 of the Revenue and Taxation Code permits county assessors who have reduced the assessed valuation of a property as a result of natural disasters, economic downturns or other factors, to subsequently “recapture” such value (up to the pre-decline value of the property) at an annual rate higher than 2%, depending on the assessor’s measure of the restoration of value of the damaged property.

Section 4 of Article XIIIA also provides that cities, counties and special districts cannot, without a two-thirds vote of the qualified electors, impose special taxes, which has been interpreted to include special fees in excess of the cost of providing the services or facility for which the fee is charged, or fees levied for general revenue purposes.

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

Article XIIIB of the California Constitution
On November 6, 1979, California voters approved Proposition 4, the Gann Initiative, which added Article XIIIB to the California Constitution. In June 1990, Article XIIIB was amended by the voters through their approval of Proposition 111. Article XIIIB of the California Constitution limits the annual appropriations of the State and any city, county, school district, authority or other political subdivision of the State to the level of appropriations for the prior fiscal year, as adjusted annually for changes in the cost of living, population and services rendered by the governmental entity. The “base year” for establishing such appropriation limit is Fiscal Year 1978-79. Increases in appropriations by a governmental entity are also permitted (1) if financial responsibility for providing services is transferred to the governmental entity, or (2) for emergencies so long as the appropriations limits for the three years following the emergency are reduced to prevent any aggregate increase above the Constitutional limit. Decreases are required where responsibility for providing services is transferred from the government entity.

Appropriations subject to Article XIIIB include generally any authorization to expend during the fiscal year the proceeds of taxes levied by the State or other entity of local government, exclusive of certain State subventions, refunds of taxes, benefit payments from retirement, unemployment insurance and disability insurance funds. Appropriations subject to limitation pursuant to Article XIIIB do not include debt service on indebtedness existing or legally authorized as of January 1, 1979, on bonded indebtedness thereafter approved according to law by a vote of the electors of the issuing entity voting in an election for such purpose, appropriations required to comply with mandates of courts or the Federal government, appropriations for qualified outlay projects, and appropriations by the State of revenues derived from any increase in gasoline taxes and motor vehicle weight fees above January 1, 1990 levels. “Proceeds of taxes” include, but are not limited to, all tax revenues and the proceeds to any entity of government from (1) regulatory licenses, user charges, and user fees to the extent such proceeds exceed the cost of providing the service or regulation, (2) the investment of tax revenues and (3) certain State subventions received by local governments. As amended by Proposition 111, the appropriations limit is tested over consecutive two-year periods. Any excess of the aggregate “proceeds of taxes” received by the Town over such two-year period above the combined appropriations limits for those two years is to be returned to taxpayers by reductions in tax rates or fee schedules over the subsequent two years.

As amended in June 1990, the appropriations limit for the Town in each year is based on the limit for the prior year, adjusted annually for changes in the costs of living and changes in population, and adjusted, where applicable, for transfer of financial responsibility of providing services to or from another unit of government. The change in the cost of living is, at the Town’s option, either (1) the percentage change in California per capita personal income, or (2) the percentage change in the local assessment roll for the jurisdiction due to the addition of nonresidential new construction. The measurement of change in population is a blended average of statewide overall population growth and change in attendance at local school and community college (“K-14”) districts.

Article XIIIB permits any government entity to change the appropriations limit by vote of the electorate in conformity with statutory and Constitutional voting requirements, but any such voterapproved change can only be effective for a maximum of four years.

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Articles XIIIC and XIIID (Proposition 218) of the California Constitution On November 5, 1996, the voters of the State approved Proposition 218, a constitutional initiative, entitled the “Right to Vote on Taxes Act” (“Proposition 218”). Proposition 218 added Articles XIIIC and XIIID to the California Constitution and contained a number of interrelated provisions affecting the ability of local governments, including the Town, to levy and collect both existing and future taxes and assessments, fees and charges.

Section 2 of Article XIIIC requires majority voter approval for the imposition, extension or increase of general taxes and requires two thirds voter approval for the imposition, extension or increase of special taxes. These voter approval requirements of Article XIIIC reduce the flexibility of the Town to raise revenues by the levy of general or special taxes and, given such voter approval requirements, no assurance can be given that the Town will be able to enact, impose, extend or increase any such taxes in the future to meet increased expenditure requirements.

Although a portion of the Town’s General Fund revenues are derived from general taxes purported to be governed by Proposition 218, all of such taxes were either imposed, extended or increased prior to the effective date of Proposition 218 or in accordance with the requirements of Proposition 218. No assurance can be given that the voters of the Town will not, in the future, approve an initiative or initiatives which reduce or repeal local taxes, assessments, fees or charges, such as the TOT, Proposition 172 revenues, or storm water fees which support the Town’s General Fund. TOT and other local taxes, assessments, fees and charges, could be subject to reduction or repeal by initiative under Proposition 218.

Section 3 of Article XIIIC expressly extends the initiative power to give voters the power to reduce or repeal local taxes, assessments, fees and charges, regardless of the date such taxes, assessments, fees or charges were imposed. Section 3 expands the initiative power to include reducing or repealing assessments, fees and charges that had previously been considered administrative rather than legislative matters and therefore beyond the initiative power. This extension of the initiative power is not limited by the terms of Article XIIIC to fees imposed after November 6, 1996, the effective date of Proposition 218, and absent other legal authority could result in the reduction in any existing taxes, assessments or fees and charges imposed prior to November 6, 1996.
“Fees” and “charges” are not expressly defined in Article XIIIC or in SB 919, the Proposition 218 Omnibus Implementation Act enacted in 1997 to prescribe specific procedures and parameters for local jurisdictions in complying with Article XIIIC and Article XIIID (“SB 919”). However, on July 24, 2006, the California Supreme Court ruled in Bighorn-Desert View Water Agency v. Virjil (Kelley) (the “Bighorn Decision”) that charges for ongoing water delivery are fees and charges within the meaning Section 3 of Article XIIIC. The California Supreme Court held that such water service charges may, therefore, be reduced or repealed through a local voter initiative pursuant to Section 3 of Article XIIIC. The Bighorn Decision has been interpreted to mean that ongoing water delivery charges are also property-related fees and charges within the meaning of Article XIIID.

In the Bighorn Decision, the Supreme Court stated that nothing in Section 3 of Article XIIIC authorizes initiative measures that impose voter-approval requirements for future increases in fees or charges for water delivery. The Supreme Court stated that water providers may determine rates and charges upon proper action of the governing body and that the governing body may increase a charge which was not affected by a prior initiative or impose an entirely new charge.

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The Supreme Court further stated in the Bighorn Decision that it was not holding that the initiative power is free of all limitations and was not determining whether the initiative power is subject to the statutory provision requiring that water and wastewater service charges be set at a level that will pay debt service on bonded debt and operating expenses. Such initiative power could be subject to the limitations imposed on the impairment of contracts under the contract clause of the United States Constitution.

Additionally, SB 919 provides that the initiative power provided for in Proposition 218 “shall not be construed to mean that any owner or beneficial owner of a municipal security, purchased before or after (the effective date of Proposition 218) assumes the risk of, or in any way consents to, any action by initiative measure that constitutes an impairment of contractual rights” protected by the United States Constitution.

Article XIIIC also removes many of the limitations on the initiative power in matters of reducing or repealing any local tax, assessment, fee or charge. No assurance can be given that the voters of the Town 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 Town’s General Fund. “Assessments,” “fees” and “charges” are not defined in Article XIIIC, and it is unclear whether these terms are intended to have the same meanings for purposes of Article XIIIC as for Article XIIID described below. If not, the scope of the initiative power under Article XIIIC potentially could include any General Fund local tax, assessment, or fee not received from or imposed by the federal or State government or derived from investment income.

If the Town is unable to continue to collect assessment revenues for a particular program, the program might have to be curtailed and/or funded by the Town’s General Fund. Given the approval requirements imposed by Article XIIID, the Town is unable to predict whether it will be able to continue to collect assessment revenues for these programs. If the Town chose to fund any such programs from the General Fund instead, the General Fund budget would be affected.

Article XIIID defines a “fee” or “charge” as any levy other than an ad valorem tax, special tax, or assessment imposed by an agency upon a parcel or upon a person as an incident of property ownership, including a user fee or charge for a property-related service. A “property-related service” is defined as “a public service having a direct relationship to a property ownership” herein. Article XIIID further provides that reliance by an agency on any parcel map (including an assessor’s parcel map) may be considered a significant factor in determining whether a fee or charge is imposed as an incident of property ownership.

In the Bighorn Decision, the Supreme Court stated that ongoing water delivery charges are also propertyrelated fees and charges within the meaning of Article XIIID.

Article XIIID requires that any agency imposing or increasing any property-related fee or charge must provide written notice thereof to the record owner of each identified parcel upon which such fee or charge is to be imposed and must conduct a public hearing with respect thereto. The proposed fee or charge may not be imposed or increased if a majority of owners of the identified parcels file written protests against it. As a result, if and to the extent that a fee or charge imposed by a local government for water service is ultimately determined to be a “fee” or “charge” as defined in Article XIIID, the local government’s ability to increase such fee or charge may be limited by a majority protest.

In addition, Article XIIID also includes a number of limitations applicable to existing fees and charges including provisions to the effect that (i) revenues derived from the fee or charge shall not exceed the funds required to provide the property-related service; (ii) such revenues shall not be used for any purpose other than that for which the fee or charge was imposed; (iii) the amount of a fee or charge imposed upon any parcel or person as an incident of property ownership shall not exceed the proportional cost of the

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service attributable to the parcel; and (iv) no such fee or charge may be imposed for a service unless that service is actually used by, or immediately available to, the owner of the property in question. Propertyrelated fees or charges based on potential or future use of a service are not permitted.

Depending on the interpretation of what constitutes a “property-related fee” under Article XIIID, there could be future restrictions on the ability of the Town’s General Fund to charge its enterprise funds for various services provided. In the event that fees and charges of enterprise funds cannot be appropriately increased or are reduced pursuant to exercise of the initiative power, the Town may have to decide whether to supplement any deficiencies in these enterprise funds with moneys from the General Fund or to curtail service, or both.

The interpretation and application of Proposition 218 will ultimately be determined by the courts or through implementing legislation with respect to a number of the matters described above, and it is not possible at this time to predict with certainty the outcome of such determination or the nature or scope of any such legislation.

Both Articles XIIIA and XIIIB, as well as Articles XIIIC and XIIID described above, were adopted as measures that qualified for the ballot pursuant to California’s constitutional initiative process. From timeto-time other initiative measures could be adopted, affecting the ability of the Town to increase revenues and to increase appropriations.

Proposition 1A of 2004
The California Constitution and existing statutes give the legislature authority over property taxes, sales taxes and the VLF. The legislature has authority to change tax rates, the items subject to taxation and the distribution of tax revenues among local governments, schools, and community college districts. The State has used this authority for many purposes, including increasing funding for local services, reducing State costs, reducing taxation, addressing concerns regarding funding for particular local governments, and restructuring local finance.

The California Constitution generally requires the State to reimburse the local governments when the State “mandates” a new local program or higher level of service. Due to the ongoing financial difficulties of the State, it has not provided in recent years reimbursements for many mandated costs. In other cases, the State has “suspended” mandates, eliminating both responsibility of the local governments for complying with the mandate and the need for State reimbursements.

The 2004 Budget Act, related legislation and the enactment of Proposition 1A of 2004 (described below) dramatically changed the State-local fiscal relationship. These constitutional and statutory changes implemented an agreement negotiated between the Governor and local government officials (the “Statelocal agreement”) in connection with the 2004 Budget Act.

One change related to the reduction of the VLF rate from 2% to 0.65% of the market value of the vehicle. In order to protect local governments, which had previously received all VLF revenues, the 1.35 percent reduction in VLF revenue to cities and counties from this rate change was backfilled by an increase in the amount of property tax revenues they receive. This worked to the benefit of local governments, because the backfill amount annually increases in proportion to the growth in secured roll property tax revenues, which has historically grown at a higher rate than VLF revenues. Proposition 1A of 2004 requires the State to provide local governments with equal replacement revenues.

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On November 3, 2004, the voters of the State approved Proposition 1A (“Proposition 1A of 2004”). Proposition 1A of 2004 amended the State Constitution to, among other things, reduce the Legislature’s authority over local government revenue sources by placing restrictions on the State’s access to local governments’ property tax, sales tax, and VLF revenues as of November 3, 2004. Pursuant to Proposition 1A of 2004, the State is able to borrow up to 8% of local property tax revenues but only if the Governor proclaims such action is necessary due to a severe State fiscal hardship and two-thirds of both houses of the State Legislature approve the borrowing. Any amounts borrowed are required to be repaid within three years. Proposition 1A of 2004 also permits the State to borrow from local property tax revenues for no more than two fiscal years within a period of 10 fiscal years, and only if previous borrowings have been repaid. In addition, the State cannot reduce the local sales tax rate or restrict the authority of the local governments to impose or change the distribution of the statewide local sales tax. Proposition 1A of 2004 generally prohibits the State from mandating activities on cities, counties, or special districts without providing the funding needed to comply with the mandates, and if the State does not provide funding for the activity that has been determined to be mandated, the requirement on cities, counties, or special districts to abide by the mandate is suspended. Proposition 1A of 2004 also expanded the definition of what constitutes a mandate to encompass State action that transfers to cities, counties, and special districts financial responsibility for a required program for which the State previously had partial or complete responsibility. The State mandate provisions of Proposition 1A of 2004 do not apply to schools or community colleges or to mandates relating to employee rights.

Pursuant to statutory changes made in conjunction with amendments to the fiscal year 2008-09 State Budget Act, the Fiscal Year 2009-10 State Budget Act and related budget legislation adopted by the State Legislature and signed by the Governor in February 2012 (collectively, the “February 2012 Budget Package”), the VLF rate increased from 0.65% to 1.15% effective May 19, 2012. Of this 0.50% increase,

0.35% will flow to the State General Fund, and 0.15% will support various law enforcement programs previously funded by the State General Fund.

Proposition 22
Proposition 22 (“Proposition 22”), which was approved by California voters in November 2010, prohibits the State, even during a period of severe fiscal hardship, from delaying the distribution of tax revenues for transportation, redevelopment, or local government projects and services and prohibits fuel tax revenues from being loaned for cash-flow or budget balancing purposes to the State General Fund or any other State fund. Due to the prohibition with respect to State’s ability to take, reallocate, and borrow money raised by local governments for local purposes, Proposition 22 supersedes certain provisions of Proposition 1A of 2004. See “ – Proposition 1 A of 2004” herein. In addition, Proposition 22 generally eliminates the State’s authority to temporarily shift property taxes from cities, counties, and special districts to schools, temporarily increase schools’ and community college districts’ share of property tax revenues, prohibits the State from borrowing or redirecting redevelopment property tax revenues or requiring increased pass-through payments thereof, and prohibits the State from reallocating vehicle license fee revenues to pay for State imposed mandates. In addition, Proposition 22 requires a two-thirds vote of each house of the State Legislature and a public hearing process to be conducted in order to change the amount of fuel excise tax revenues shared with cities and counties. The LAO states that Proposition 22 will prohibit the State from enacting new laws that require redevelopment agencies to shift funds to schools or other agencies.

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Proposition 22 prohibits the State from borrowing sales taxes or excise taxes on motor vehicle fuels or changing the allocations of those taxes among local government except pursuant to specified procedures involving public notices and hearings. In addition, Proposition 22 requires that the State apply the formula setting forth the allocation of State fuel tax revenues to local agencies revert to the formula in effect on June 30, 2009. The LAO anticipated that Proposition 22 would require the State to adopt alternative actions to address its fiscal and policy objectives, particularly with respect to short-term cash flow need. The Town does not believe that Proposition 22 will have a significant impact on its revenues and expenditures.

Proposition 26
Proposition 26 (“Proposition 26”), which was approved by California voters on November 2, 2010, revises the California Constitution to expand the definition of “taxes.” Proposition 26 re-categorizes many State and local fees as taxes and specifies a requirement of two-thirds voter approval for taxes levied by local governments.

Proposition 26 requires the State obtain the approval of two-thirds of both houses of the State Legislature for any proposed change in State statutes, which would result in any taxpayer paying a higher tax. Proposition 26 eliminates the previous practice whereby a tax increase coupled with a tax reduction that resulted in an overall neutral fiscal effect was subject only to a majority vote in the State Legislature.

Furthermore, pursuant to Proposition 26, any increase in a fee above the amount needed to provide the specific service or benefit is deemed to be a tax and the approval thereof will require such two-thirds vote of approval to be effective. In addition, for State imposed fees and charges, any fee or charge adopted after January 1, 2010 with a majority vote of approval of the State Legislature which would have required a twothirds vote of approval of the State Legislature if Proposition 26 were effective at the time of such adoption is repealed as of November 2011 absent the re-adoption by the requisite two-thirds vote.

Proposition 26 amends Article XIII C of the State Constitution to state that a “tax” means a levy, charge or exaction of any kind imposed by a local government, except (1) a charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege; (2) a charge imposed for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product; (3) a charge imposed for the reasonable regulatory costs to a local government for issuing licenses and permits, performing investigations, inspections and audits, enforcing agricultural marketing orders, and the administrative enforcement and adjudication thereof; (4) a charge imposed for entrance to or use of local government property or the purchase rental or lease of local government property; (5) a fine, penalty, or other monetary charge imposed by the judicial branch of government or a local government as a result of a violation of law; (6) a charge imposed as a condition of property development; or (7) assessments and property related fees imposed in accordance with the provisions of Proposition 218.

Proposition 26 applies to any levy, charge or exaction imposed, increased, or extended by local government on or after November 3, 2010, unless exempted, as stated above. Accordingly, fees adopted prior to that date are not subject to the measure until they are increased or extended or if it is determined that an exemption applies. As of the date hereof, none of the Town’s fees or charges has been challenged in a court of law in connection with the requirements of Proposition 26.

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If the local government specifies how the funds from a proposed local tax are to be used, the approval will be subject to a two-thirds voter requirement. If the local government does not specify how the funds from a proposed local tax are to be used, the approval will be subject to a fifty percent voter requirement. Proposed local government fees that are not subject to Proposition 26 generally are subject to the approval of a majority of the governing body. In general, proposed property charges will be subject to a majority vote of approval by the governing body although certain proposed property charges will also require approval by a majority of the affected property owners.

Proposition 19
On November 3, 2020, State voters approved a constitutional amendment entitled Property Tax Transfers, Exemptions and Revenue for Wildfire Agencies and Counties Amendment (“Proposition 19”), which will: (i) expand special rules that give property tax savings to homeowners that are over the age of 55, severely disabled, or whose property has been impacted by a natural disaster or contamination, when they buy a different home; (ii) narrow existing special rules for inherited properties; and (iii) broaden the scope of legal entity ownership changes that trigger reassessment of properties. The Town cannot make any assurance as to what effect the implementation of Proposition 19 will have on assessed valuation of real property in the Town.

Taxpayer Protection and Government Accountability Act Initiative On February 1, 2023, the California Secretary of State announced that a ballot initiative, designated as Initiative 1935 and known as the “Taxpayer Protection and Government Accountability Act,” had received the required number of signatures to appear on the November 5, 2024 ballot.

If approved by a majority of voters casting a ballot at the November 5, 2024 Statewide election, Initiative 1935 would make numerous significant changes to Articles XIII, XIIIA, XIIIC and XIIID of the California Constitution to further limit the authority of local governments, and electors via the initiative process, to adopt and impose taxes and fees. The full text of Initiative 1935 may be viewed at the website of the California Attorney General.

The Town cannot predict whether Initiative 1935 will be approved by a majority of voters casting a ballot at the November 5, 2024 Statewide election. If Initiative 1935 is approved, the Town cannot provide any assurances as to the effect of the implementation or judicial interpretations of Initiative 1935 on the finances of the Town, the County, or the State.

Future Initiatives
Articles XIIIA, XIIIB, XIIIC and XIIID, Propositions 1A, 22, 26 and 19 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, which may place further limitations on the ability of the State, the Town or local districts to increase revenues or to increase appropriations which may affect the Town’s revenues or its ability to expend its revenues.

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RISK FACTORS
This section provides a general overview of certain risk factors which should be considered, in addition to the other matters set forth in this Official Statement, in evaluating an investment in the Certificates. This section is not meant to be a comprehensive or definitive discussion of the risks associated with an investment in the Certificates, and the order in which this information is presented does not necessarily reflect the relative importance of various risks. Potential investors in the Certificates are advised to consider the following factors, among others, and to review this entire Official Statement to obtain information essential to the making of an informed investment decision. Any one or more of the risk factors discussed below, among others, could lead to a decrease in the market value and/or in the marketability of the Certificates. There can be no assurance that other risk factors not discussed herein will not become material in the future.

Lease Payments Are Not Debt
The obligation of the Town to make the Lease Payments under the Lease Agreement does not constitute an obligation of the Town for which the Town is obligated to levy or pledge any form of taxation or for which the Town has levied or pledged any form of taxation. The obligation of the Town to make Lease Payments does not constitute a debt of the Town, the State or any political subdivision thereof within the meaning of any constitutional or statutory debt limitation or restriction.

Although the Lease Agreement does not create a pledge, lien or encumbrance upon the funds of the Town, the Town is obligated under the Lease Agreement to pay the Lease Payments from any source of legally available funds and the Town has covenanted in the Lease Agreement that, for so long as the Property is available for its use, it will make the necessary annual appropriations within its budget for the Lease Payments. The Town is currently liable and may become liable on other obligations payable from general revenues, some of which may have a priority over the Lease Payments, or which the Town, in its discretion, may determine to pay prior to the Lease Payments.

The Town has the capacity to enter into other obligations payable from the Town’s General Fund without the consent of or prior notice to the Owners of the Certificates. To the extent that additional obligations are incurred by the Town, the funds available to make Lease Payments may be decreased. In the event the Town’s revenue sources are less than its total obligations, the Town could choose to fund other municipal services before making Lease Payments. The same result could occur if, because of State constitutional limits on expenditures, the Town is not permitted to appropriate and spend all of its available revenues. The Town’s appropriations, however, have never exceeded the limitations on appropriations under Article XIIIB of the California Constitution. For information on the Town’s current limitations on appropriations, see “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS–Article XIIIB of the California Constitution.” Valid and Binding Covenant to Budget and Appropriate
Pursuant to the Lease Agreement, the Town covenants to take such action as may be necessary to include Lease Payments due in its annual budgets and to make necessary appropriations for all such payments. Such covenants are deemed to be duties imposed by law, and it is the duty of the public officials of the Town to take such action and do such things as are required by law in the performance of the official duty of such officials to enable the Town to carry out and perform such covenants. A court, however, in its discretion may decline to enforce such covenants. Upon delivery of the Certificates, Special Counsel will render its opinion (substantially in the form of APPENDIX D–FORM OF SPECIAL COUNSEL

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OPINION) to the effect that, subject to the limitations and qualifications described therein, the Lease Agreement constitutes a valid and binding obligation of the Town.

Additional Obligations of the Town
The Lease Agreement does not prohibit the Town from incurring additional lease and other obligations payable from the Town’s General Fund. In that regard, the Town may, from time to time, incur General Fund obligations to finance public improvements (see “OTHER TOWN FINANCIAL INFORMATION—Long-Term General Fund-Secured Obligations”), which may also include lease obligations payable from its General Fund.

Cash Management
The Town has numerous internal or external means to manage its cash flow, including but not limited to interfund borrowing, intrafund borrowing and tax and revenue anticipation notes which may be employed to the extent the Town Council is required to make budget adjustments in order to maintain a balanced budget. If the Town does not take required actions and the budget remains out of balance, the cash requirements of the Town may exceed available cash flow. The ability of the Town to borrow on an interim basis to meet any cash shortfalls also may be limited if the budget remains out of balance for a sustained period of time. See “TOWN FINANCIAL INFORMATION.”
Abatement
In the event of loss or substantial interference in the use and possession by the Town of all or any portion of the Property caused by material damage, title defect, destruction to or condemnation of the Property, Lease Payments will be subject to abatement. In the event that such component of the Property, if damaged or destroyed by an insured casualty, could not be replaced during the period of time that proceeds of the Town’s rental interruption insurance will be available in lieu of Lease Payments, or in the event that casualty insurance proceeds or condemnation proceeds are insufficient to provide for complete repair or replacement of such component of the Property or prepayment of the Certificates, there could be insufficient funds to make payments to Owners in full. Reduction in Lease Payments due to abatement as provided in the Lease Agreement does not constitute a default thereunder.

It is not possible to predict the circumstances under which such an abatement of rental may occur.

In addition, there is no statute, case or other law specifying how such an abatement of rental should be measured. For example, it is not clear whether fair rental value is established as of commencement of the lease or at the time of the abatement. If the latter, it may be that the value of the Property is substantially higher or lower than its value at the time of the execution and delivery of the Certificates. Abatement, therefore, could have an uncertain and material adverse effect on the security for and payment of the Certificates.

No Acceleration Upon Default
In the event of a default, there is no remedy of acceleration of the total Lease Payments due over the term of the Lease Agreement and the Trustee is not empowered to foreclose or sell a fee simple interest in the Property and use the proceeds of such sale to prepay the Certificates or pay debt service thereon. Any suit for money damages would be subject to limitations on legal remedies against public agencies in the

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State, including a limitation on enforcement of judgments against funds needed to serve the public welfare and interest as described below. See “—Limitations on Remedies.” Risk of Uninsured Loss
The Town covenants under the Lease Agreement to maintain certain insurance policies on the Property. See “SOURCE OF PAYMENT FOR THE CERTIFICATES—Insurance.” The Town does not insure its facilities against the risk of earthquake. Additionally, the Property could be the subject of an eminent domain proceeding. Under these circumstances an abatement of Lease Payments could occur and could continue indefinitely. There can be no assurance that the providers of the Town’s casualty and rental interruption insurance will in all events be able or willing to make payments under the respective policies for such loss should a claim be made under such policies. Further, there can be no assurances that amounts received as proceeds from insurance or from condemnation of the Property will be sufficient to prepay the Certificates.

Under the Lease Agreement the Town is required to obtain casualty insurance which provides for a deductible up to $250,000. Should the Town be required to meet such deductible expenses, the availability of General Fund revenues to make Lease Payments may be correspondingly affected.

Eminent Domain
If the 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 the Lease Agreement will cease as of the day possession is taken. If less than all of the Property is taken permanently, or if the Property or any part thereof is taken temporarily, under the power of eminent domain, (a) the Lease Agreement will continue in full force and effect and will not be terminated by virtue of such taking, and (b) there will be a partial abatement of Lease Payments as a result of the application of net proceeds of any eminent domain award to the prepayment of the Lease Payments, in an amount to be agreed upon by the Town and the Corporation such that the resulting Lease Payments represent fair consideration for the use and occupancy of the remaining usable portion of the Property. The Town covenants in the Lease Agreement to contest any eminent domain award which is insufficient to either: (i) prepay the Lease Payments in whole, if all the Property is condemned; or (ii) prepay a pro rata share of Lease Payments, in the event that less than all of the Property is condemned.

Concentration of Revenue Sources
The Town’s tax and revenue base are highly concentrated and dependent on taxation of tourism activity to the Town and the Ski Area. In a typical year approximately 80% of the Town’s General Fund Revenues come from three sources, transient occupancy taxes, property taxes, and sales and use taxes. Each of these revenue sources is significantly dependent on tourism activity in the Town and in the Ski Area. As a result, the Town’s General Fund Revenues available to pay principal and interest on the Certificates depend in significant part on the success or continued success of the Ski Area and other tourism related businesses and projects.

The revenue sources discussed above are discussed throughout this official statement, including “TOWN FINANCIAL INFORM–TION - Primary Sources of General Fund Revenues,” “-Property Taxes,” “-Sales and Use Taxes,” and “-Transient Occupancy Taxes” herein. Such sections should be read in their entirety. The Town is not aware of any plans by the Alterra Mountain Company to terminate or

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curtail operations at the Ski Area and expects operations at the Ski Area to continue. The Town is not currently aware of any plans by its largest transient occupancy tax generators to cease operations in the Town.

Dependence on Tourism Industry
As discussed throughout this Official Statement, the Town’s economy is dependent on tourism.

Virtually every aspect of Town life is directly or indirectly linked to tourism, including the attraction of the area and the Ski Area, the diversity of outdoor recreational activities, marketing/PR/branding, the flows of people to and from the Town, and support for basic business activity (dining, gear, ticket sales, support services, shopping, etc.).

The Town is a year-round tourist destination. However, weather can be a significant factor in the level of tourism that takes place within a given year. In the past, the Town’s revenues from tourism during the winter seasons has declined during drought conditions. Excessive rain or snowfall can cause road closures which also affect the level of tourism. The Town derives a significant amount of its General Fund revenuesfrom summer recreation travelers. Changes in climate (including unusually severe or mild winters or drought) or some other event or condition could have a material impact upon the tourism industry in the Town, and result in a significant impact upon the Town’s General Fund revenue sources and the Town’s ability to make payments on the Certificates.

The construction, completion and occupancy of new hotels, motels and time resorts within the Town are essential to ensuring the stability and growth future General Fund Revenues. Continued investment of revenues by the Town and by the Town’s TBID may also work to stabilize and potentially increase tourism derived General Fund Revenues.

While the Town is dependent on tourism, the Town has certain strengths that portend continued tourism into the future. Such strengths include the Town’s, natural setting and abundant outdoor recreational activities, the Town’s favorable climate that can experience 300 days of sun and average of 400 inches of snow each year, the Town’s proximity to the Southern California market, the existence of a diversified business partner in the Alterra Mountain Company who markets, operates, and owns the Ski Area, the size and variety of terrain for all skill levels at the Ski Area, and the ability to make artificial snow at the Ski Area that has reduced the impact of low, natural snow years.

The Town’s tourism industry also faces certain challenges, including natural disasters and earthquakes, a highly weather dependent tourism-based economy, limited access roads, softer shoulder season (spring and fall) visitation, and a shortage of available workforce housing and trained labor. The Town also faces significant competition for its tourist visits from other resorts and ski areas including Big Bear and the Lake Tahoe area ski resorts.

Due to the Town’s location, economic diversification is difficult as access is limited, materials, shipping, and construction and development costs are high, the cost of doing business is relatively higher than other communities, the Town is limited in size and surrounded by public lands, and year-round visitation levels may not be sufficient to sustain local businesses investment.

Should tourism to the Town decline in the future, the ability of the Town to make payments on the Certificates could be threatened.

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Public Health Emergencies
The COVID-19 Pandemic commenced in approximately March 2020 and resulted in a global public health crisis that was fluid and unpredictable with unknown financial and economic impacts. While the health emergency and related declarations have ceased, the Town continues to assess the full impacts that the COVID-19 Pandemic has had either directly or indirectly on its operations and finances.

The impact on the Town’s tourism-based economy was significant and created a sense of uncertainty. Tourism to the Town was rebounding in summer 2020 only to be impacted by wildfire season in the fall with heavy smoke and forest closures. This scenario again repeated itself in the summer of 2021 as California continues to catastrophic wildfires and related smoke impacts. The Town implemented several proactive actions to support the community, to limit financial impacts on the Town, and to meet the demands of the pandemic.

There could be future outbreaks of other COVID-19 variants or other public health emergencies that could have material adverse effects on tourism to the Town and the Town’s operations and finances.

Hazardous Substances
One of the most serious risks in terms of the potential reduction in the value or use of a parcel of property is a claim with regard to a hazardous substance. In general, the owners, lessors and/or lessees of a parcel of real property may be required by law to remedy conditions of the parcel 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 are also stringent and similar in application. 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 contributed to or caused contamination with the hazardous substances. The effect, therefore, should property in the Town be affected by a hazardous substance, is to reduce both marketability and the value of property by the costs of remedying the condition. While the Town is not currently aware of any such condition, it is possible that such hazardous substance conditions do currently exist and that the Town has not been made aware of their existence.

Natural Calamities
General. From time to time, the Town has been and could be subject to natural calamities, including, but not limited to, earthquakes, severe weather, wildfire, or volcanic activity, that may adversely affect economic activity in the Town, and which could have a negative impact on Town finances. There can be no assurance that the occurrence of any natural calamity would not cause substantial damage to persons, property and structures in the Town and could have a substantial negative effect on the Town’s General Fund. The following is a summary of certain natural calamities that have affected the Town and the County and are likely to continue to occur in the future.

Avalanche. Avalanches occur in the mountainous areas of the County, affecting portions of the Town, several unincorporated communities, and several important access roads. Avalanches are a concern from November through April in the County. Avalanches threatening developed community areas in the County originate on public lands managed by the USFS. The Ski Area and June Mountain Ski Area use explosives and other means to control avalanches within ski area boundaries; however, these active mitigation measures are not possible on public lands above communities and roads. TheCounty uses passive

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mitigation, mostly road closures, to manage the avalanche hazard. The most recent major avalanche in the Town occurred on March 3, 2018 at the Ski Area. There were no missing persons or injuries, and the Ski Area was reopened the next day.

Invasive Pests and Disease. Invasive pests have the potential to damage trees; mosquitoes have the potential to spread disease. Due to the rural nature of the County, diseases that impact forests and those that are carried by wildlife are of particular concern, in addition to those affecting human health. Cases of disease outbreak in the County have mostly been limited to small numbers of infections. In 2015, there was a single case of plague, with no additional infected humans or rodents found. Two cases of hantavirus also occurred in 2015, and infections in a single person occurred in 2006 and another single person in 2010.

Beetle infestations have also been prevalent in the Sierra Nevada due to drought conditions, killing tens of millions of trees since 2010. These infestations are not uncommon during drought conditions but have been significantly worse in the last several years.

Dam Failure. The County is susceptible to inundation caused by failure of dams owned by SCE, LADWP, and other private entities, and have experienced warnings of potential dam failure in the recent past. There are 22 dams in unincorporated portions of County. In addition, Rock Creek Lake Dam, in Inyo County, is located upstream of properties located in the County. There are eight dam inundation areas in the County: Agnew Lake, Bridgeport Lake, Gem Lake, Grant Lake, Rhinedollar, Rush Creek Meadows, Saddlebag Lake, and Twin Lakes. There are no dam inundation hazard areas identified by existing inundation mapping in the Town. While there have been no previous dam failures in the County,significant snowpack and melt runoff can cause stress to the dams.

Drought. The County and the Town both depend on groundwater and surface water, which are susceptible to drought. Droughts are a regular feature in California and are almost certain to continue to occur, with varying severity and duration. Any local drought conditions may impact the water supply systems in the County and the Town, as there is no infrastructure to import water from elsewhere in California and, due to the location of the County in the upper portion of the watershed, there is little possibility to divert water from other areas without the cost of pipelines and pumping.

Earthquakes. Like most regions in California, the Town is in an area of significant seismic activity.

Soils in lowland areas away from major faults may be unable to support buildings during major earthquakes.

Landslides are likely on hillsides during major earthquakes. Damage resulting from such an event could have a material adverse effect on the Property as wells as the Town’s financial condition, through unexpected recovery costs and reduced tax and other revenues.

California began extensive mapping of earthquake faults with the Alquist-Priolo Earthquake Fault Zoning Act of 1972. Mapping associated with the act has identified 11 named fault zones in the County.

These are the Fish Slough, Hartley Springs, Hilton Creek, Mono Lake, and Round Valley fault zones, as well as numerous unnamed faults in the Volcanic Tableland, within the Long Valley Caldera- Mono Lake area; the Antelope Valley and West Walker River fault zones in the northern portion of the County; the Robinson Creek fault zone in the Bridgeport area; the Silver Lake fault zone near June Lake; the White Mountains fault zone in the Tri-Valley area; and the Fish Lake Valley fault zone in the Oasis area. Additional faults, located outside the County, could still have impacts in the County. Taken together, these faults are capable of producing strong to severe ground shaking in virtually every populated area of the County.

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The County and the Town are susceptible to earthquake ground shaking, and certain areas may also experience liquefaction, fault rupture, and tectonic subsidence. While seismologists do not know when a large earthquake will hit the Eastern Sierra again it is likely that one will occur in the future. The County’s location on and near numerous faults, including several capable of causing significant earthquakes, means that the County and the Town will continue to face threats from earthquakes and related hazards.

Severe Weather. Severe winter storms and heavy snow frequently block roads, lead to dangerously low temperatures, and can affect utility services. These are frequent impacts for both the County and the Town. The most significant flooding in the County tends to occur with rain-on-snow events, when snowmelt is compounded by rain. Rain runoff gets channelized through the snow instead of being directed into the proper runoff infrastructure. As drains are blocked by snow, roads become the primary pathway of water. The County and Town are also subject to high wind events, especially on exposed and high- altitude roadways, making travel hazardous, as well as downing power lines and causing electricity outages.

A flood in January 1997, discussed in greater detail below, caused damage in the Town and the unincorporated communities of Coleville, Walker, Topaz, and Bridgeport. The flooding followed a rain-onsnow event, with 8 inches of rain over a 36-hour period reported in the Town. The floods destroyed 111 homes and four businesses, at a cost of $25 million. Other damages included $5 million to public facilities and $48 million to the federal highway system, including a 12-mile stretch of US-395.

Volcano. The County and the Town are located in volcano hazard areas. The County contains the most significant volcanic center in California outside of the Cascade Range. The Long Valley-Mono Basin Region is dominated by two distinct but interrelated systems that have produced volcanic and seismic activity for millions of years. The region includes the Long Valley Caldera, a 20-mile-by-10-mile, ovalshaped depression formed about 760,000 years ago. This was one of the largest eruptions in the earth’s history, ejecting more than 70 times as much material as the famous Krakatoa explosion in 1883. A younger system, the Mono-Inyo Craters, runs from Mono Lake to Mammoth Mountain near the rim of the caldera.

The chain has seen small to moderate eruptions, as recently as 250 to 350 years ago.

The impact of an eruption in the Long Valley area would depend o66nsecureocation, size, and type as well as the wind direction. An eruption during the winter months could melt heavy snowpacks, generating mudflows and locally destructive flooding. An explosion from volcanic vents could result in pyroclastic flows or surges traveling miles to the east. To the west, those flows would be blocked by the high Sierra Nevada. Downwind deposits of ash produced by an explosive eruption could reach thicknesses of at least 8 inches at a distance of 22 miles from the eruption, 2 inches at 53 miles, and 0.5 inches at 185 miles.

Significant ash fall could affect large portions of the County and surrounding areas, depending on the wind direction and size of the eruption.

Wildfire. Wildfire hazards are a significant issue in this part of California. Wildland fires in the County have ranged from fires that burned less than 1 acre in size to the Cannon Fire in Walker in 2002, which burned 22,750 acres. With its sloped geography, vegetation, and climate, the County has many fireprone landscapes, on both public and private lands. Wildfire burns indiscriminately across property boundaries, which means that the way potential fuels are managed on one piece of property can affect wildfire risk on neighboring lands. Public lands surrounding communities in the County contain highly flammable vegetation that in many cases has not been thinned in years. The area experiences high temperatures and high winds over mountainous terrain that makes firefighting difficult. Highway and air access to the area is limited, further increasing the difficulty of fighting wildland fires. Continued population

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growth into WUI areas, but unchanging relative isolation from resources, and an increasing frequency of elevated fire weather conditions present major challenges to county residents.

Wildfire is a concern for the entire Town. Certain portions of the Town have higher hazard exposure, including areas close to the Valentine Reserve Ecological Study Area and neighborhoods south of Old Mammoth Road (typically referred to as Old Mammoth and Lake Mary). Overall, roughly 3 percent of the incorporated town is in a very high fire severity zone and close to 34 percent is in a high fire severity zone, based on Cal Fire Hazard Severity Zone Mapping. The Town has identified additional areas for which it enforces very high severity zone regulations and requirements. The major threats to the Town are fires that start on adjacent public lands and spread communities. As a result, most fire mitigation and prevention projects in the area focus on fuel breaks.

In recent years, wildfires have caused extensive damage to cities throughout the State. In some instances, entire neighborhoods have been destroyed. Areas effected by wildfires may be more prone to flooding and mudslides. In addition to the direct impact of wildfires on health and safety and property damage, the smoke from wildfires has negatively impacted the quality of life in the Town and may have short-term and future impacts on residential and commercial activity in the Town.

Climate Change. Climate change caused by human activities may have adverse effects on the Town and its finances. Projections of the impacts of global climate change on the Town are complex and depend on many factors that are outside the Town’s control. The various scientific studies that forecast the amount and timing of adverse impacts of climate change are based on assumptions contained in such studies, but actual events may vary materially. Also, the scientific understanding of climate change and its effects continues to evolve. Accordingly, the Town is unable to forecast with certainty when and where the adverse impacts of climate change will occur or the extent of such impacts. While the impacts of climate change may be mitigated by the Town’s past and future investment in adaptation strategies, the Town can give no assurance about the net effects of those strategies and whether the Town will be required to take additional adaptive mitigation measures.

Hazard Mitigation Plan. The Town and the County have adopted a regularly updated multijurisdictional hazard mitigation plan (the “Hazard Mitigation Plan”) that analyzes and discusses the abovementioned natural calamities and lays out mitigation measures. Reference should be made to the complete Hazard Mitigation Plan, which is available from the County’s website at monocounty.ca.gov/planning/page/local-hazard-mitigation-plan-2017-update. The Hazard Mitigation Plan is not incorporated herein by this reference.

Potential Impact of State Financial Condition on the Town During the 2008-09 recession, the State faced a structural deficit that resulted in substantial annual deficits and reductions in expenditures. Although the State has had a budget surplus in the more recent fiscal years, according to the State there remain a number of major risks and pressures that threaten the State’s financial condition, including the threat of recession, potential changes to federal fiscal policies and unfunded long-term liabilities of more than $200 billion related to pensions and other post-retirement benefits. These risks and financial pressures could result in future reductions or deferrals in amounts payable to the Town. The State’s financial condition and budget policies affect local public agencies throughout California. To the extent that the State budget process results in reduced revenues to the Town, the Town will be required to adjust its budget. State budget policies can also impact conditions in the local economy and could have an adverse effect on the local economy and the Town’s major revenue sources.

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No prediction can be made by the Town as to whether the State will encounter budgetary problems in future fiscal years, and if it were to do so, it is not clear what measures would be taken by the State to balance its budget, as required by law. In addition, the Town cannot predict the final outcome of future State budget negotiations, the impact that such budgets will have on Town finances and operations or what actions will be taken in the future by the Legislature and the Governor to deal with changing State revenues and expenditures. There can be no assurance that actions taken by the State to address its financial condition will not materially adversely affect the financial condition of the Town. Current and future State budgets will be affected by national and State economic conditions and other factors over which the Town has no control (see “STATE BUDGET INFORMATION”). The ability of the State to divert funds from the Town has been limited by Proposition 1A and Proposition 22, which are discussed herein. See “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES, REVENUES AND APPROPRIATIONS.”
Risk of Changing Economic Conditions
While the Town has historically enjoyed strong economic and financial performance, the Town faces several long-term financial challenges including climate change and natural disasters, public health emergencies, changes to the economy of the region and the nation, and the management of pension and post-employment retirement obligations. While the Town has adopted measures and policies to better position its operating budgets for future risks and future economic downturns, such measures may not be sufficient.

Pension Benefit Liability
Many factors influence the amount of the Town’s pension benefit liabilities, including, without limitation, inflationary factors, changes in statutory provisions of CalPERS retirement system laws, changes in the level of benefits provided or in the contribution rates of the Town, increases or decreases in the number of covered employees, changes in actuarial assumptions or methods (including but not limited to the assumed rate of return), mortality rates, and differences between actual and anticipated investment experience of CalPERS. Any of these factors could give rise to additional liability of the Town to its pension plans as a result of which the Town would be obligated to make additional payments to its pension plans in order to fully fund the Town’s obligations to its pension plans.

Risks Related to Cyber Security
The Town relies on computers and technology to conduct its operations. The Town and its departments face cyber threats from time to time including, but not limited to, hacking, viruses, malware and other forms of technology attacks. The Town owns and operates its own enterprise class data network serving the municipal Town government and its operations. The Town has retained information technology professionals to support, maintain and protect these operations locally in a purpose-built and physically secure environment. This network and its operations are governed by and in compliance with all applicable governmental regulations as well as the Town’s own administrative regulations. Within the Town’s operations and guidance is an active cyber-security program designed to protect from, and to quickly identify and mitigate, a multitude of complex security threats. While no network is completely immune from all possible compromise, the Town exercises its due diligence in protecting the data it possesses and the systems it operates. To date, there have been no significant cyber-attacks on the Town’s computers and technologies.

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The Town has cyber-insurance. Additionally, the Town conducts employee training programs for cybersecurity related matters and has a continuity plan which is regularly tested. The Town’s servers are backed up offsite each day and the Town’s systems have insider protection to protect against deletion.

While the Town routinely maintains its technology systems and continuously implements new information security controls, no assurances can be given that the Town’s security and operational control measures will be successful in guarding against all cyber threats and attacks. The results of any attack on the Town’s computer and technology could negatively impact the Town’s operations, and the costs related to such attacks could be substantial.

Bankruptcy
The Town is a unit of State government and therefore is not subject to the involuntary procedures of the United States Bankruptcy Code (the “Bankruptcy Code”). However, pursuant to Chapter 9 of the Bankruptcy Code, the Town may seek voluntary protection from its creditors for purposes of adjusting its debts. A Town bankruptcy petition could have a material adverse effect on the payment of the Certificates.

The following paragraphs present a discussion of certain potential consequences surrounding a potential Town bankruptcy. It is not intended to be an exhaustive discussion of all potential adverse consequences or potential outcomes.

In the event the Town were to become a debtor under the Bankruptcy Code, the Town would be entitled to all of the protective provisions of the Bankruptcy Code as applicable in a Chapter 9 proceeding.

Among the adverse effects of such a bankruptcy might be:(i) the application of the automatic stay provisions of the Bankruptcy Code, which, until relief is granted, would prevent collection of payments from the Town or the commencement of any judicial or other action for the purpose of recovering or collecting a claim against the Town; (ii) the avoidance of preferential transfers occurring during the relevant period prior to the filing of a bankruptcy petition; (iii) the existen69nsecurensecured or court-approved secured debt which may have a priority of payment superior to that of Owners of Certificates; and (iv) the possibility of the adoption of a plan for the adjustment of the Town’s debt (a “Plan”) without the consent of the Trustee or all of the Owners of Certificates, which Plan may restructure, delay, compromise or reduce the amount of any claim of the Owners if the Bankruptcy Court finds that the Plan is fair and equitable.

In addition, the Town could either reject the Lease Agreement or assume the Lease Agreement despite any provision of the Lease Agreement which makes the bankruptcy or insolvency of the Town an event of default thereunder. In the event the Town rejects the Lease Agreement, the Trustee, on behalf of the Owners of the Certificates, would have a pre-petition claim that may be limited under the Bankruptcy Code and treated in a manner under a Plan over the objections of the Trustee or Owners of the Certificates.

Moreover, such rejection would terminate the Lease Agreement and the Town’s obligations to make payments thereunder.

The Town entered into voluntary bankruptcy proceedings in July 2012 due to an adverse ruling regarding litigation over the impairment of the Development Agreement which required the Town to pay $42,186,032.42. The bankruptcy filing resulted in the Town and the other parties entering into a settlement agreement in September 2012, providing for the payment of the judgment over time and other requirements. Following the execution of the settlement agreement, the Town exited the bankruptcy proceedings. The Town has met all the requirements of the settlement agreement. The Town has been and continues to be solvent in meeting all of its obligations.

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Early Redemption Risk
Early redemption of the Certificates may occur in whole or in part without premium, on any date if the Property or a portion thereof is lost, destroyed or damaged beyond repair or taken by eminent domain or from the proceeds of title insurance (see “THE CERTIFICATES—Redemption”).

Limitations on Remedies
The enforcement of any remedies provided in the Lease Agreement and the Trust Agreement could prove both expensive and time consuming. Although the Lease Agreement provides that if the Town defaults the Trustee may enter the Property and re-let the Property, portions of the Property may not be easily recoverable, and even if recovered, could be of little value to others because of the Property’s specialized nature. Additionally, the Trustee may have limited ability to re-let the Property to provide a source of rental payments sufficient to pay the principal of and interest with respect to the Certificates so as to preserve the tax-exempt nature of interest with respect to the Certificates. Furthermore, due to the governmental nature of the Property, it is not certain whether a court would permit the exercise of the remedy of re-letting with respect thereto.

Alternatively, the Trustee may terminate the Lease Agreement and proceed against the Town to recover damages pursuant to the Lease Agreement. Any suit for money damages would be subject to limitations on legal remedies against public agencies in the State, including a limitation on enforcement of judgments against funds needed to serve the public welfare and interest.

The rights of the Owners of the Certificates are subject to certain limitations on legal remedies against cities, redevelopment agencies and other governmental entities in the State, including but not limited to a limitation on enforcement against funds that are otherwise needed to serve the public welfare and interest. Additionally, the rights of the Owners of the Certificates may be subject to (i) bankruptcy, insolvency, reorganization, moratorium, or similar laws limiting or otherwise affecting the enforcement of creditors’ rights generally (as such laws are now or hereafter may be in effect), (ii) equity principles (including but not limited to concepts of materiality, reasonableness, good faith and fair dealing) and the possible unavailability of specific performance or injunctive relief, regardless of whether considered in a proceeding in equity or law, (iii) the exercise by the United States of America of the powers delegated to it by the Constitution, and (iv) the reasonable and necessary exercise, in certain exceptional situations, of the police powers inherent in the sovereignty of the State and its governmental bodies in the interest of serving a significant and legitimate public purpose. Under Chapter 9 of the Bankruptcy Code (Title 11, United States Code), which governs bankruptcy proceedings for public agencies, there are no involuntary petitions in bankruptcy. If the Town were to file a petition under Chapter 9 of the Bankruptcy Code, the Owners, the Trustee and the Corporation could be prohibited or severely restricted from taking any steps to enforce their rights under the Lease Agreement and from taking any steps to collect amounts due from the Town under the Lease Agreement.

Special Counsel has limited its opinion as to the enforceability of the Lease Agreement to the extent that enforceability may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium, or other similar laws affecting generally the enforcement of creditor’s rights, by equitable principles and by the exercise of judicial discretion. Additionally, the Certificates are not subject to acceleration in the event of the breach of any covenant or duty under the Lease Agreement. The lack of

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availability of certain remedies or the limitation of remedies may entail risks of delay, limitation or modification of the rights of the Owners.

Secondary Market Risk
There can be no assurance that there will be a secondary market for purchase or sale of the Certificates, and from time to time there may be no market for them, depending upon prevailing market conditions, the financial condition or market position of firms who may make the secondary market and the financial condition of the Town.

Changes in Law
There can be no assurance that the electorate of the State will not at some future time adopt additional initiatives or that the Legislature will not enact legislation that will amend the laws or the Constitution of the State resulting in a reduction of the General Fund revenues of the Town and consequently, having an adverse effect on the security for the Certificates.

Risks Relating to the Municipal Bond Insurance Policy
In the event of default of the payment of principal and interest with respect to the Certificates when all or some becomes due, any owner of the Certificates shall have a claim under the Municipal Bond Insurance Policy for such payments. The Municipal Bond Insurance Policy does not insure against redemption premium, if any. The payment of principal and interest in connection with mandatory sinking fund or optional redemption of the Certificates by the Town which is recovered by the Town from the Owner as a voidable preference under applicable bankruptcy law is covered by the Municipal Bond Insurance Policy, however, such payments will be made by the Municipal Bond Insurer at such time and in such amounts as would have been due absence such prepayment by the Town unless the Municipal Bond Insurer chooses to pay such amounts at an earlier date.

The Municipal Bond Insurer may direct and must consent to any remedies and the Municipal Bond Insurer’s consent may be required in connection with amendments to any applicable legal documents.

In the event the Municipal Bond Insurer is unable to make payment of principal and interest as such payments become due under the Municipal Bond Insurance Policy, the Certificates are payable solely from the moneys received pursuant to the applicable legal documents. In the event the Municipal Bond Insurer becomes obligated to make payments with respect to the Certificates, no assurance is given that such event will not adversely affect the market price of the Certificates or the marketability (liquidity) for the Certificates.

The long-term ratings on the Certificates are dependent in part on the financial strength of the Municipal Bond Insurer and its claim paying ability. The financial strength and claims paying ability of the Municipal Bond Insurer are predicated upon a number of factors which could change over time. No assurance is given that the long-term ratings of the Municipal Bond Insurer and of the ratings on the Certificates will not be subject to downgrade and such event could adversely affect the market price of the Certificates or the marketability (liquidity) for the Certificates. See “RATINGS.” The obligations of the Municipal Bond Insurer are general obligations of the Municipal Bond Insurer and in an event of default by the Municipal Bond Insurer, the remedies available may be limited by applicable bankruptcy law or other similar laws related to insolvency.

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Neither the Town nor the Underwriter has made independent investigation into the claims paying ability of the Municipal Bond Insurer and no assurance or representation regarding the financial strength or projected financial strength of the Municipal Bond Insurer is given. Thus, when making an investment decision, potential investors should carefully consider the ability of the Town to make the Lease Payments and the claims paying ability of the Municipal Bond Insurer, particularly over the life of the investment.

ABSENCE OF LITIGATION
At the time of delivery of and payment for the Certificates, the Town and the Corporation will certify that there is no action, suit, proceeding, inquiry, or investigation, at law or in equity, before or by any court or regulatory agency, public board, or body pending or threatened against the Town or the Corporation affecting their existence or the titles of their respective officers or seeking to restrain or to enjoin the issuance, sale, or delivery of the Certificates, or the application of the proceeds thereof in accordance with the Trust Agreement, or in any way contesting or affecting the validity or enforceability of the Certificates, any agreement entered into between the Town and any purchaser of the Certificates, the Lease Agreement, the Trust Agreement, the Assignment Agreement, the Site and Facility Lease or any other applicable agreements or any action of the Town or the Corporation contemplated by any of said documents, or in any way contesting the completeness or accuracy of this Official Statement or any amendment or supplement thereto, or contesting the powers of the Town or the Corporation or their authority with respect to the Certificates or any action of the Town or the Corporation contemplated by any of said documents, nor, to the knowledge of the Town or the Corporation, is there any basis therefor. There is no litigation pending or threatened against the Town that could affect the Town’s ability to make the Lease Payments.

CONTINUING DISCLOSURE
Pursuant to Rule 15c2-12 of the Securities and Exchange Commission (the “Rule”), the Town has agreed, for the benefit of holders of the Certificates, to provide certain financial information and operating data relating to the Town relating to the Certificates (the “Annual Reports”) and its audited financial statements, by not later than March 31 of each year commencing with the report for the 2021-22 fiscal year (the “Annual Information”), and to provide notices of the occurrence of certain events. The Annual Reports, audited financial statements and notices of events will be filed by the Town with the Municipal Securities Rulemaking Board (the “MSRB”), via its Electronic Municipal Market Access (“EMMA”) system. The nature of the information to be provided in the Annual Reports and the notices of events is set forth in APPENDIX G—FORM OF CONTINUING DISCLOSURE CERTIFICATE. [INSERT CONTINUING DISCLOSURE COMPLIANCE]

MUNICIPAL ADVISOR
JNA Consulting Group LLC, Boulder City, Nevada (the “Municipal Advisor”), is an independent financial advisory firm registered as a “Municipal Advisor” with the Securities Exchange Commission and Municipal Securities Rulemaking Board. The Municipal Advisor does not underwrite, trade or distribute municipal or other public securities. The Municipal Advisor has assisted the Town in connection with the

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planning, structuring, sale, and delivery of the Certificates. The Municipal Advisor is not obligated to undertake, and has not undertaken to make, an independent verification of or to assume responsibilities for the accuracy, completeness, or fairness of the information contained in this Official Statement not provided by the Municipal Advisor. The fees of the Municipal Advisor in respect to the Certificates are contingent upon their sale and delivery.

LEGAL MATTERS
All legal matters in connection with the execution and delivery of the Certificates are subject to the approval of Quint & Thimmig LLP, Larkspur, California, Special Counsel. Special Counsel’s opinion with respect to the Certificates will be substantially in the form set forth in APPENDIX D—FORM OF SPECIAL COUNSEL OPINION. Certain legal matters will also be passed on for the Town by Quint & Thimmig LLP, Larkspur, California, as Disclosure Counsel, and by Andrew Morris, Esq., the Town Attorney. Certain legal matters will be passed upon for the Underwriter by Kutak Rock LLP, Irvine, California. The fees and expenses of Special Counsel, Disclosure Counsel and Underwriter’s Counsel are contingent upon the delivery of the Certificates.

TAX MATTERS
Federal tax law contains a number of requirements and restrictions which apply to the Certificates, including investment restrictions, periodic payments of arbitrage profits to the United States, requirements regarding the proper use of bond proceeds and the facilities financed therewith, and certain other matters.

The Town has covenanted to comply with all requirements that must be satisfied in order for the interest with respect to the Certificates to be excludable from gross income for federal income tax purposes. Failure to comply with certain of such covenants could cause interest with respect to the Certificates to become includible in gross income for federal income tax purposes retroactively to the date of delivery of the Certificates.

Subject to compliance by the Townwith certain covenants, in the opinion of SpecialCounsel, under present law, interest with respect to the Certificates is excludable from the gross income of the owners thereof for federal income tax purposes and is not included as an item of tax preference in computing the federal alternative minimum tax under the Internal Revenue Code of 1986, as amended (the “Code”).

Interest with respect to the Certificates may affect the corporate alternative minimum tax for certain corporations.

In rendering its opinion, Special Counsel will rely upon certifications of the Town with respect to certain material facts within the Town’s knowledge. Special Counsel’s opinion represents its legal judgment based upon its review of the law and the facts that it deems relevant to render such opinion and is not a guarantee of a result.

Ownership of the Certificates may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, corporations subject to the branch profits tax, financial institutions, certain insurance companies, certain S corporations, individual recipients of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred (or continued) indebtedness to purchase or carry tax-exempt obligations. Prospective purchasers of the Certificates should consult their tax advisors as to applicability of any such collateral consequences.

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The issue price for original issue discount (as further discussed below) and market discount purposes (the “OID Issue Price”) for each maturity of the Certificates is the price at which a substantial amount of such maturity of the Certificates is first sold to the public (excluding bond houses and brokers and similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers). The OID Issue Price of a maturity of the Certificates may be different from the price set forth, or the price corresponding to the yield set forth, on the inside cover page hereof.

If the OID Issue Price of a maturity of the Certificates is less than the principal amount payable at maturity, the difference between the OID Issue Price of each such maturity, if any, of the Certificates (the “OID Certificates”) and the principal amount payable at maturity is original issue discount.

For an investor who purchases an OID Certificate in the initial public offering at the OID Issue Price for such maturity and who holds such OID Certificate to its stated maturity, subject to the condition that the Town complies with the covenants discussed above, (a) the full amount of original issue discount with respect to such OID Certificate constitutes interest which is excludable from the gross income of the owner thereof for federal income tax purposes; (b) such owner will not realize taxable capital gain or market discount upon payment of such OID Certificate at its stated maturity; (c) such original issue discount is not included as an item of tax preference in computing the alternative minimum tax for individuals under the Code; and (d) the accretion of original issue discount in each year may result in certain collateral federal income tax consequences in each year even though a corresponding cash payment may not be received until a later year. Owners of OID Certificates should consult their own tax advisors with respect to the state and local tax consequences of original issue discount on such OID Certificates.

Owners of Certificates who dispose of Certificates prior to the stated maturity (whether by sale, redemption or otherwise), purchase Certificates in the initial public offering, but at a price different from the OID Issue Price or purchase Certificates subsequent to the initial public offering should consult their own tax advisors.

If a Certificate is purchased at any time for a price that is less than the Certificate’s stated redemption price at maturity or, in the case of an OID Certificate, its OID Issue Price plus accreted original issue discount reduced by payments of interest included in the computation of original issue discount and previously paid (the “Revised Issue Price”), the purchaser will be treated as having purchased a Certificate with market discount subject to the market discount rules of the Code (unless a statutory de minimis rule applies). Accrued market discount is treated as taxable ordinary income and is recognized when a Certificate is disposed of (to the extent such accrued discount does not exceed gain realized) or, at the purchaser’s election, as it accrues. Such treatment would apply to any purchaser who purchases an OID Certificate for a price that is less than its Revised Issue Price even if the purchase price exceeds par. The applicability of the market discount rules may adversely affect the liquidity or secondary market price of such Certificate.

Purchasers should consult their own tax advisors regarding the potential implications of market discount with respect to the Certificates.

An investor may purchase a Certificate at a price in excess of its stated principal amount. Such excess is characterized for federal income tax purposes as “bond premium” and must be amortized by an investor on a constant yield basis over the remaining term of the Certificate in a manner that takes into account potential call dates and call prices. An investor cannot deduct amortized bond premium relating to a tax-exempt bond. The amortized bond premium is treated as a reduction in the tax-exempt interest received. As bond premium is amortized, it reduces the investor’s basis in the Certificate. Investors who

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purchase a Certificate at a premium should consult their own tax advisors regarding the amortization of bond premium and its effect on the Certificate’s basis for purposes of computing gain or loss in connection with the sale, exchange, redemption or early retirement of the Certificate.

There are or may be pending in the Congress of the United States legislative proposals, including some that carry retroactive effective dates, that, if enacted, could alter or amend the federal tax matters referred to above or affect the market value of the Certificates. It cannot be predicted whether or in what form any such proposal might be enacted or whether, if enacted, it would apply to Certificates delivered prior to enactment. Prospective purchasers of the Certificates should consult their own tax advisors regarding any pending or proposed federal tax legislation. Special Counsel expresses no opinion regarding any pending or proposed federal tax legislation.

The Internal Revenue Service (the “Service”) has an ongoing program of auditing tax-exempt obligations to determine whether, in the view of the Service, interest on such tax-exempt obligations is includible in the gross income of the owners thereof for federal income tax purposes. It cannot be predicted whether or not the Service will commence an audit of the Certificates. If an audit is commenced, under current procedures the Service may treat the Town as a taxpayer and the Owners may have no right to participate in such procedure. The commencement of an audit could adversely affect the market value and liquidity of the Certificates until the audit is concluded, regardless of the ultimate outcome.

Payments of interest on, and proceeds of the sale, redemption or maturity of, tax-exempt obligations, including the Certificates, are in certain cases required to be reported to the Service.

Additionally, backup withholding may apply to any such payments to any Certificate owner who fails to provide an accurate Form W-9 Request for Taxpayer Identification Number and Certification, or a substantially identical form, or to any Certificate owner who is notified by the Service of a failure to report any interest or dividends required to be shown on federal income tax returns. The reporting and backup withholding requirements do not affect the excludability of such interest from gross income for federal tax purposes.

In the further opinion of Special Counsel, interest with respect to the Certificates is exempt from California personal income taxes.

Ownership of the Certificates may result in other State and local tax consequences to certain taxpayers. Special Counsel expresses no opinion regarding any such collateral consequences arising with respect to the Certificates. Prospective purchasers of the Certificates should consult their tax advisors regarding the applicability of any such State and local taxes.

The complete text of the final opinion that Special Counsel expects to deliver upon the delivery of the Certificates is set forth in APPENDIX D—FORM OF OPINION OF SPECIAL COUNSEL.

UNDERWRITING
The Certificates are being purchased by Piper Sandler & Co. (the “Underwriter”) at a price of $_________ (being $__________ aggregate principal amount of the Certificates, plus a net original premium of $__________, and less $________ of Underwriter’s discount). The Underwriter will purchase all of the Certificates if any are purchased, the obligation to make such purchase being subject to certain terms and conditions set forth in the purchase agreement for the Certificates, the approval of certain

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legal matters by counsel and certain other conditions. The Underwriter may offer and sell Certificates to certain dealers and others at prices lower than the offering prices stated on the inside cover page hereof.

The offering prices may be changed from time to time by the Underwriter.

RATINGS
S&P is expected to assign the rating of “AA” (stable outlook) to the Certificates based on the issuance of the Municipal Bond Insurance Policy by the Municipal Bond Insurer at the time of delivery of the Certificates. See “MUNICIPAL BOND INSURANCE.” In addition, S&P has assigned the underlying rating of “___” to the Certificates without regard to the issuance of the Municipal Bond Insurance Policy.

These ratings reflect only the views of S&P and an explanation of the significance of such ratings may be obtained from S&P. There is no assurance that such ratings will continue for any given period of time or that such ratings will not be revised downward or withdrawn entirely by S&P if, in the judgment of the S&P, circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse effect on the market price of the Certificates.

FINANCIAL STATEMENTS
The Town’s financial statements for the Fiscal Year ended June 30, 2023, included in APPENDIX B—ANNUAL COMPREHENSIVE FINANCIAL REPORT OF THE TOWN FOR THE FISCAL YEAR ENDED JUNE 30, 2023, have been audited by the Town’s Auditor, as stated in its reports appearing in such appendix. The Town’s Auditor has not undertaken to update its reports or to take any action intended or likely to elicit information concerning the accuracy, completeness or fairness of the statements made in this Official Statement, and no opinion is expressed by the Town’s Auditor with respect to any event subsequent to its report.

ADDITIONAL INFORMATION
All of the preceding summaries of the Certificates, the Trust Agreement, the Lease Agreement, the Assignment Agreement, the Site and Facility Lease, and other documents are made subject to the provisions of such documents respectively and do not purport to be complete statements of any or all of such provisions. Reference is hereby made to such documents on file with the Town for further information in connection therewith.

This Official Statement does not constitute a contract with the purchasers of the Certificates.

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

References are made herein to certain documents and reports which are brief summaries thereof which do not purport to be complete or definitive and reference is made to such documents and reports for full and complete statements of the contents thereof.

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The Town will furnish a certificate dated the date of delivery of the Certificates, from an appropriate officer of the Town, to the effect that to the best of such officer’s knowledge and belief, and after reasonable investigation, (i) neither the Official Statement or any amendment or supplement thereto contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements therein, in light of the circumstances in which they were made, not misleading; (ii) since the date of the Official Statement, no event has occurred which should have been set forth in an amendment or supplement to the Official Statement which has not been set forth in such an amendment or supplement, and the Certificates, the Trust Agreement, the Lease Agreement, the Assignment Agreement, the Site and Facility Lease, and other applicable agreements conform as to form and tenor to the descriptions thereof contained in the Official Statement; and (iii) the Town has complied with all the agreements and has satisfied all the conditions on its part to be performed or satisfied under the Trust Agreement at and prior to the date of the issuance of the Certificates.

The execution and delivery of the Official Statement by the Town have been duly authorized by the Town Council on behalf of the Town.

TOWN OF MAMMOTH LAKES
By
Town Manager

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Appendix A

APPENDIX A

GENERAL, ECONOMIC AND DEMOGRAPHIC INFORMATION

RELATING TO THE TOWN AND THE COUNTY
The following information concerning the Town of Mammoth Lakes and Mono County is included only for the purpose of supplying general information regarding the Town and the County. The Certificates are not a debt of the County, the State or any of its political subdivisions, and none of the County, the State nor any of their political subdivisions, except for the Town, are liable therefor.

Although reasonable efforts have been made to include up-to-date information in this Appendix A, some of the information is not current due to delays in reporting of information by various sources. It should not be assumed that the trends indicated by the following data would continue beyond the specific periods reflected herein.

Introduction
The Town. The Town of Mammoth Lakes (the “Town”) is a general law city that was initially incorporated on August 20, 1984. The Town is located in Mono County, California (the “County”), and is the County’s only incorporated community. The Town is located in California’s Eastern Sierra Range approximately 100 mi (160 km) south of the Nevada state line and 50 minutes by car from the Eastern Gate of Yosemite National Park. The Town is home to approximately 7,300 residents. The Town provides municipal services to its citizens including police, public works, airport facilities, community development, parks and recreation and general administrative support.

The Town’s economy is primarily tourism-based. The Town is located immediately to the east of Mammoth Mountain, home to the Mammoth Mountain Ski Area, a 25-lift ski resort owned and operated by the Alterra Mountain Company (the “Ski Area”). The Ski Area is frequented during the winter season by skiers and snowboarders from southern California as the Town is an approximately five-hour drive from Los Angeles via U.S. 395. The Ski Area is much closer to Los Angeles County and Orange County than the Lake Tahoe area resorts. The Town also has significant tourism in the summer season from people who visit the Town and the Ski Area to camp, hike, mountain bike and fish.

The County. The County is located in the east central portion of California. The County is the fifth-least populous county in California. The County seat is Bridgeport. The County is a long, narrow strip of land—108 miles at its greatest length and 38 miles in average width—bounded to the west by the Sierra crest and to the east by the Nevada state line. In total, the County comprises 3,132 square miles of land area. Nearly 94 percent of the County's 3,132 square miles are publicly owned and used mostly for resource conservation or open space. Several mountain ranges, most notably the Sierra Nevada, as well as Mono Lake, the largest and oldest natural lake entirely within California, are located in the County. The ranges generally run north–south along the western side of the County and drop sharply off into the Long Valley Caldera and arid flatter stretches known as the Great Basin. Although dominated by a largely arid landscape, the County has numerous water sources, including hundreds of streams that drain into Mono Lake, the Walker River, or the Owens River.

The Town is the only incorporated town in the County. Mammoth Mountain and June Lake are popular skiing and fishing resorts located in the County. Mono Lake is located in the middle of the County and is a vital habitat for millions of migratory and nesting birds.

Despite its isolation, the County also attracts over 3 million visitors annually to places such as the Town and the Mammoth Mountain and June Lake Ski Areas. Access remains limited to one main transportation route, US 395, which runs through the County along the foot of the Sierra for approximately 120 miles. US 6 also serves as main access to the Tri-Valley region of the County, which includes the communities of Chalfant Valley and Benton.

Appendix A

Recent Development Within the Town
Significant development and infill activity within the Town includes the following:

Commercial Projects
Mammoth Main Lodge Base Redevelopment – The Mammoth Main Lodge Base project is a complete redevelopment of the Mammoth Mountain Ski Area Main Lodge facility and combines diverse overnight accommodations, resort residences, retail, entertainment, food and beverage options and facilities for skiers and summer visitors. The proposed development consists of 35-acres split between two parcels at the base of the Main Lodge ski area that was acquired from the United States Forest Service in 2020 through a land exchange. Parcel A includes two hotels, a range of resort residences and resort residential amenities. Parcel B includes a range of low to medium density resort residential with a small amount of community-serving commercial uses. In total, new and existing development on Parcels A and B, will include up to 209 resort residential units (up to 560,000 square feet of sellable space), up to 250 lodging keys distributed between several locations, up to 100,000 square feet of commercial space, and up to 105,000 square feet of skier services and support areas. The project is currently going through the entitlement review process with an estimated completion date of late 2024/early 2025. No estimated construction date has been set.

Limelight Hotel - The Limelight Hotel is a new condominium hotel project that consists of six levels of hotel guest rooms and managed residences located above one level of subterranean/understructure parking. The project includes 149 hotel rooms and 15 residential units and amenities oriented to guests of the hotel including hotel lounge and meeting rooms, a fitness center, “grab-n-go” food options, Ski Club, childcare, equipment rental, and an outdoor pool and jacuzzi terrace. The entitlements were approved in summer 2022 and construction began in fall 2022.

Occupancy is anticipated in late 2024.

Residence Inn - The Residence Inn boutique hotel by Marriott project is a new four-story, 101 guestroom, condominium hotel with two levels of understructure parking, a bar/lounge area, outdoor patio seating area, as well as an indoor pool and fitness center. The entitlements were approved in spring 2022. Construction is anticipated to begin in late 2024.

Sierra Nevada Resort Expansion and Renovation - The project includes interior and exterior improvements to the existing 149-unit hotel and Rafters restaurant, the construction of 30 new resort cabin units, an expanded event/meeting space and added amenities for both guests and the community. Construction is anticipated to be completed in Spring 2024.

Mammoth Outpost - The proposed project consists of a complete renovation of the existing two-story Mammoth Mall building to improve the existing commercial building consisting of restaurant, retail and office uses as well as the addition of a new feature restaurant, ground floor patio and two second floor outdoor decks. The project is currently going through the entitlement review process with an estimated construction date of spring 2024.

Mammoth Hotel - The Mammoth Hotel project is a complete renovation and remodel of the existing 3-story Sierra Center Mall building to create a new 4-story, 164-room boutique luxury hotel. The project will demolish the current three-story building to the foundation and construct a four-story hotel with accessory office and restaurant uses as well as a partially open fourth story featuring an open-air roof top deck and pool. The total floor area of the project with the proposed revisions would be 125,240 square feet, which equates to an FAR of approximately 1.48.

Entitlements were approved in Fall 2019 with construction to tentatively begin summer 2024.

Five-Forty - The Five-Forty project includes a two- story vertical mixed-use commercial and residential building fronting Old Mammoth Road with six residential buildings behind, for a total of 13 residential units. The residential buildings are three stories and consist of two single unit buildings, two duplexes, and two triplexes. The project is located adjacent to the Sierra Center Mall on a 0.67-acre infill site in the Old Mammoth Road (OMR) zoning district. Construction is anticipated to be completed in 2024.

Appendix A

Residential Projects
Villas III -The Villas III project, located on 4.07 acres within Development Area 2 of the Lodestar at Mammoth Master Plan area, includes three single-family residential structures and 15 duplex residential structures, for a total of 33 units. The entitlements were approved in spring 2022 and construction began in summer 2023.

TerraBlanca -The proposed twelve-unit multi-family residential townhome development features four threestory tri-plex structures ranging in size from 10,571 square feet to 10,765 square feet. Each tri-plex structure provides three separate two-car garages on the first floor, and includes three levels of living space with an overall building height of forty-feet. Entitlements were approved in fall 2022. No estimated construction date has been set.

Innsbruck Lodge -The Innsbruck Lodge project is an adaptive reuse project that will convert the existing Innsbruck Lodge hotel into a 16-unit rental residential project of which 15 units will be affordable to households earning up to 80% of the area median income (AMI). The project is a partnership project between the Town and Mammoth Lakes Housing, Inc (MLH) with funding coming from the State Homekey program, the Town, and the County. Construction began in winter 2022 with an anticipated occupancy date of 2024.

Lakeview Townhomes -The Lakeview Townhomes project is a six-unit multi-family planned unit development (PUD) located in the Specialty Lodging (SL) zone of the North Village Specific Plan area. The six units are arranged in three duplex structures that are located along the north side of the property. The duplex structures are three stories in height, and each unit features three bedrooms and a two-car garage. The project was approved in summer 2020 and construction was completed in 2022.

Snowcreek VII - The Snowcreek VII project consists of 118 condominium units with four approved building designs. There will be a total of 39 buildings consisting of (4) duplexes, (26) triplexes, and (5) four-plexes. The project was developed in three phases beginning in 2006. Two additional floor plan designs were approved by the Town in January 2019 along with some other minor amendments to the project design to allow an additional three buildings.

The project is anticipated to be completed in 2024.

Obsidian – The Obsidian project is a subdivision of the remaining project area within the Tallus project to allow for 24 townhome lots (12 duplexes). There are two approved building designs, and each unit is three-stories tall with approximately 2,300 square feet of habitable area. Construction was completed in 2023.

Gray Bear I, II, III - The Gray Bear residential subdivision includes 45 single-family residential lots located adjacent to the Sierra Star Golf Course. The homes are located in the Resort zoning district meaning they can be used as nightly vacation rentals. Approval of the entitlements for the various phases occurred between 2014-2017, and construction was completed in 2023.

Access Apartments – The Access Apartments project is an adaptive reuse project that will convert two existing commercial buildings into an 11-unit affordable rental residential project that will be affordable to households earning up to 80% AMI. The project will be owned and operated by MLH with construction funding coming from the State CDBG and HOME programs and the Town. Construction is tentatively scheduled to begin in 2024. 60 Joaquin Townhomes – The 60 Joaquin Townhomes project is a four-unit, multi-family planned unit development that is being developed by the Town. The two duplex structures are proposed to be three stories in height, and each unit features two bedrooms and a two-car garage. The units are proposed to be sold as deed-restricted units targeted to households earning up to 150% AMI. Entitlements were approved in summer 2023 with construction tentatively scheduled to begin in 2024.

Appendix A

Community Oriented Projects
Civic Center - The project site is located at 1344 Tavern Road in the Public and Quasi-Public (P-QP) zoning district. The project site is 2.1 acres in size and is a part of the larger 11-acre Civic Center Plaza property. The 19,337 square foot Town Civic Center is conceptually segmented into three elements: public, semi-private, and business operations. The public elements include a main lobby, public restrooms, large conference rooms, and a resiliency center that will be used for Town emergency operations. The semi-private elements include Town Council chambers, storage, meeting rooms, and private restrooms. The business operation element includes a two-story administrative office for various Town departments. The project is currently going through the entitlement review process with an estimated completion date of 2024.

Mammoth Disposal Transfer Station - The project site comprises two separate sites at 59 Commerce Drive (1.87 acres) and 264 Commerce Drive (0.55 acres). The project expands the existing transfer station at the 59 Commerce Drive Site, relocates the buy-back/recycling center (currently at the 59 Commerce Drive Site) to the 264 Commerce Drive Site, and 3) and relocates the fleet maintenance operations (currently at the 264 Commerce Drive Site) to the 59 Commerce Drive Site. Construction was completed in spring 2023.

The Parcel - The Parcel is a 24.5-acre vacant property located adjacent to the Downtown zoning district and several residential zoning districts. The Parcel is envisioned to be developed with up to 450 permanently affordable housing units, to be constructed over multiple phases. The Town Council approved the Parcel Master Plan in January 2021.

Parcel Phase I: Phase 1 of the Parcel Master Plan was approved in February 2021 and includes 80 affordable housing units and one manager’s unit. Phase I is located on 2.7 acres in the north central portion of the site. Also included within Phase 1 is a childcare facility for 34 children, community center and a 0.8 acre public park.

Construction is anticipated to be completed in spring 2024.

Parcel Phase II: Phase 2 of The Parcel includes infrastructure improvements and the construction of one four-story building and four three-story buildings for a total of 148 rental units (146-147 deed restricted affordable housing units and 1-2 manager’s units). Parking for the development is provided within an understructure parking garage that accommodates 72 vehicles, as well as 44 tuck-under carport stalls and 105 surface parking spaces. The project is located on a 4.8-acre site in the northeast portion of the Parcel site.

Community Recreation Center-The approved Multi-Use Facility project includes a roughly 40,000 square foot, prefabricated tensile structure housing a new recreational facility at the Mammoth Creek Park site. Construction was completed in 2023.

Aircraft Rescue and Firefighting (ARFF)/Snow Removal Equipment (SRE) Facility - The project includes the construction of a new 14,580 square foot, seven-bay ARFF/SRE facility including new pavement areas for a parking lot, access apron, and access roads. The proposed structure is two stories and features a 10,350 square foot building footprint with 9,740 square feet of usable area on the first floor and 4,840 square feet on the second floor. The facility is designed to house the Airport’s existing snow removal equipment, ARFF vehicle, and ARFF support rooms.

Entitlements were approved in winter 2023. No estimated construction date has been set.

Appendix A

Population
The table below summarizes population of the Town, the County, and the State for the last five years.

TOWN OF MAMMOTH LAKES, MONO COUNTY, and CALIFORNIA
Population
Year
Town of
Mammoth
Lakes
Mono
County
State of
California
2019 7,889 13,524 39,605,361
2020 7,853 13,449 39,648,938
2021 7,282 13,179 39,286,510
2022 7,267 13,160 39,078,674
2023 7,273 13,156 38,940,231
Source: California Department of Finance, E-4 Population Estimate for Cities, Counties, and the State, 2010-23, with 2020 Census Benchmark.

Appendix A

Employment
The following table summarizes historical employment and unemployment for the County, the State and the United States:

MONO COUNTY, CALIFORNIA, and UNITED STATES
Civilian Labor Force, Employment, and Unemployment
(Annual Averages)
Unemployment
Year Area Labor Force Employment Unemployment Rate (1)
2018 Mono County 8,520 8,200 330 3.8%
California 19,398,200 18,582,800 815,400 4.2
United States 162,075,000 155,761,000 6,314,000 3.9
2019 Mono County 8,510 8,190 310 3.7
California 19,411,600 18,627,400 784,200 4.0
United States 163,539,000 157,538,000 6,001,000 3.7
2020 Mono County 7,850 6,920 930 11.8
California 18,821,200 16,913,100 1,908,100 10.1
United States 160,742,000 147,795,000 12,947,000 8.1
2021 Mono County 8,340 7,770 570 6.8
California 18,923,200 17,541,900 1,381,200 7.3
United States 161,204,000 152,581,000 8,623,000 5.3
2022(2) Mono County 8,670 8,350 320 3.7
California 19,252,000 18,440,900 811,100 4.2
United States 164,287,000 158,291,000 5,996,000 3.6
Source: California Employment Development Department, Monthly Labor Force Data for Counties, Annual Average 2010-22, and US Department of Labor.
(1) The unemployment rate is computed from unrounded data; therefore, it may differ from rates computed from rounded figures available in this table.
(2) Latest available full-year data.

Appendix A

Major Employers in the County
The table below sets forth a list of major employers in the County in 2023.

MONO COUNTY
2023 Major Employers
Employer Name Location Industry
Annett’s Mono Village Bridgeport Resorts
Coleville High School Coleville Schools
County of Mono Mammoth Lakes Government Offices-County
Double Eagle Resort & Spa June Lake Resorts
Footloose Sports Mammoth Lakes Sporting Goods-Retail
Hermosa Hospitality Group Mammoth Lakes Hotel & Motel Management June Meadows Chalet June Lake Skiing Centers & Resorts
Juniper Springs Resort Mammoth Lakes Resorts
Mammoth Elementary School Mammoth Lakes Schools
Mammoth Mountain Ski Area Mammoth Lakes Resorts
Mammoth Ranger District Ctr Mammoth Lakes Government Offices-Federal Mammoth Reservations Inc Mammoth Lakes Vacation Rentals Mammoth Resorts Mammoth Lakes Resorts
Mammoth Unified School Dist Mammoth Lakes Schools
Mammoth Pacific LP Mammoth Lakes Geothermal Exploration Mono County Office-Emergency Bridgeport Government Offices-County Mono County Public Works Dept Bridgeport Utility Contractors Sheriff Office-Finance Bridgeport Sheriff
Sierra Nevada Resort Mammoth Lakes Swimming Pools-Public Sierra Star Golf Course Mammoth Lakes Golf Courses
Tamarack Lodge Resort Mammoth Lakes Resorts
TOOMEY’S Mammoth Lakes Restaurants
Village Lodge Mammoth Mammoth Lakes Resorts
Vons Mammoth Lakes Grocers-Retail
Westin Monache Resort Mammoth Mammoth Lakes Hotels & Motels Source: America’s Labor Market Information System (ALMIS) Employer Database, 2024 1st Edition.

Appendix A

Construction Activity
The following table reflects the five-year history of building permit valuation for the Town and the County:

TOWN OF MAMMOTH LAKES
Building Permits and Valuation
(Dollars in Thousands)
2018 2019 2020 2021 2022(1)
Permit Valuation:

New Single-family $ 5,749 $ 3,851 $ 4,891 $11,175 $ 8,147 New Multi-family 1,451 5,469 6,891 4,945 20,387
Res. Alterations/Additions 3,841 3,642 2,197 2,618 5,475 Total Residential 11,043 12,964 13,980 18,740 34,011
Total Nonresidential 5,518 1,226 955 7,402 6,197
Total All Building $16,561 $14,191 $14,935 $26,142 $40,208 New Dwelling Units:

Single Family 15 12 14 27 18
Multiple Family 7 23 21 17 103
Total 22 35 35 44 121

MONO COUNTY
Building Permits and Valuation
(Dollars in Thousands)
2018 2019 2020 2021 2022(2)
Permit Valuation:

New Single-family $10,025 $ 4,234 $ 5,876 $15,883 $13,702 New Multi-family 1,451 5,469 6,891 4,945 20,387
Res. Alterations/Additions 5,001 3,977 2,579 2,852 6,339 Total Residential 16,478 13,681 15,347 23,681 40,429
Total Nonresidential 6,285 1,496 1,713 8,593 6,699
Total All Building $22,764 $15,178 $17,061 $32,274 $47,128 New Dwelling Units:

Single Family 32 17 17 46 41
Multiple Family 7 23 21 17 103
Total 39 40 38 63 144
Source: Construction Industry Research Board: “Building Permit Summary.” Note: Columns may not sum to totals due to independent rounding. (1) Latest available full year data.

Household 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

Appendix A

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 median household effective buying income for the Town, the County, the State and the nation for the past five years.

TOWN OF MAMMOTH LAKES, MONO COUNTY,

STATE OF CALIFORNIA AND UNITED STATES
Median Household Effective Buying Income
2018 2019 2020 2021 2022
Mammoth Lakes $61,834 $62,974 $65,609 $64,222 $69,967
Mono County 59,222 60,705 63,288 63,466 68,308
California 62,637 65,870 67,956 77,058 77,175
United States 52,841 55,303 56,790 64,448 65,326
Source: Nielsen, Inc.

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Appendix B

APPENDIX B

ANNUAL COMPREHENSIVE FINANCIAL REPORT OF THE TOWN
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
The Auditor was not requested to consent to the inclusion of its report in this Appendix B and it has not undertaken to update financial statements included in this Appendix B. No opinion is expressed by the Auditor with respect to any event subsequent to its report.

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Appendix C

APPENDIX C

INVESTMENT POLICY OF THE TOWN

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Appendix D

APPENDIX D

FORM OF SPECIAL COUNSEL OPINION
[Letterhead of Quint & Thimmig LLP]
[Closing Date]
Town Council of the
Town of Mammoth Lakes
437 Old Mammoth Road, Suite 230
Mammoth Lakes, California 93546
OPINION: $_____* Certificates of Participation (2024 Capital Improvement Financing Project) Evidencing Direct, Undivided Fractional Interests of the Owners Thereof in Lease Payments to be Made by the Town of Mammoth Lakes, as the Rental for Certain Property Pursuant to a Lease Agreement with the Mammoth Lakes Municipal Service Corporation
Members of the Town Council:

We have acted as special counsel in connection with the delivery by the Town of Mammoth Lakes (the “Town”), of its $_______* Lease Agreement, dated as of July 1, 2024, by and between the Mammoth Lakes Municipal Service Corporation (the “Corporation”) and the Town (the “Lease Agreement”), pursuant to the California Government Code. The Corporation has, pursuant to the Assignment Agreement, dated as of July 1, 2024 (the “Assignment Agreement”), by and between the Corporation and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), assigned certain of its rights under the Lease Agreement, including its right to receive a portion of the lease payments made by the Town thereunder (the “Lease Payments”), to the Trustee.

Pursuant to the Trust Agreement, dated as of July 1, 2024, by and among the Trustee, the Corporation and the Town (the “Trust Agreement”), the Trustee has executed and delivered certificates of participation (the “Certificates”) evidencing direct, undivided fractional interests of the owners thereof in the Lease Payments. We have examined the law and such certified proceedings and other papers as we deem necessary to render this opinion.

As to questions of fact material to our opinion, we have relied upon representations of the Town contained in the Lease Agreement and in the certified proceedings and certifications of public officials and others furnished to us without undertaking to verify the same by independent investigation.

Based upon our examination, we are of the opinion, under existing law, as follows:

1. The Town is duly created and validly existing as a municipal corporation and general law city organized and existing under the laws of the State of California with the power to enter into the Site and Facility Lease (as defined in the Trust Agreement), the Lease Agreement and the Trust Agreement and to perform the agreements on its part contained therein.

2. The Site and Facility Lease, the Lease Agreement and the Trust Agreement have been duly authorized, executed and delivered by the Town and are obligations of the Town valid, binding and enforceable against the Town in accordance with their respective terms.
* Preliminary, subject to change.

Appendix D

3. The Assignment Agreement is valid, binding and enforceable in accordance with their terms.

4. Subject to the terms and provisions of the Lease Agreement, the Lease Payments to be made by the Town are payable from general funds of the Town lawfully available therefor. By virtue of the Assignment Agreement, the owners of the Certificates are entitled to receive their fractional share of the Lease Payments in accordance with the terms and provisions of the Trust Agreement.

5. Subject to the Town’s compliance with certain covenants, interest with respect to the Certificates is excludable from gross income of the owners thereof for federal income tax purposes and is not included as an item of tax preference in computing the alternative minimum tax for individuals under the Internal Revenue Code of 1986, as amended. Interest with respect to the Certificates may affect the corporate alternative minimum tax for certain corporations. Failure to comply with certain of such covenants could cause interest with respect to the Certificates to be includable in gross income for federal income tax purposes retroactively to the date of delivery of the Certificates.

6. The portion of the Lease Payments designated as and comprising interest and received by the owners of the Certificates is exempt from personal income taxation imposed by the State of California.

Ownership of the Certificates may result in other tax consequences to certain taxpayers, and we express no opinion regarding any such collateral consequences arising with respect to the Certificates.

The rights of the owners of the Certificates and the enforceability of the Site and Facility Lease, the Lease Agreement, the Assignment Agreement and the Trust Agreement may be subject to the Bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights heretofore or hereafter enacted and also may be subject to the exercise of judicial discretion in accordance with general principles of equity.

Our opinion represents our legal judgment based upon such review of the law and the facts that we deem relevant to render our opinion and is not a guarantee of a result. 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 hereafter occur.

Respectfully submitted,

Appendix E

APPENDIX E

SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS

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Appendix F

APPENDIX F
DTC’S BOOK-ENTRY ONLY SYSTEM
The information in this Appendix F, concerning The Depository Trust Company, New York, New York (“DTC”), and DTC’s book-entry system, has been furnished by DTC for use in official statements and the Town takes no responsibility for the completeness or accuracy thereof. The Town cannot and does not give any assurances that DTC, DTC Participants or Indirect Participants will distribute to the Beneficial Owners (a) payments of interest or principal with respect to the Certificates, (b) certificates representing ownership interest in or other confirmation of ownership interest in the Certificates, or (c) redemption or other notices sent to DTC or Cede & Co., its nominee, as the registered owner of the Certificates, 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 F. 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. Information Furnished by DTC Regarding its Book-Entry Only System

1. The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the Certificates (as used in this Appendix FE, the “Securities”). The Securities will be issued as fully registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully registered Security certificate will be issued for each maturity of the Securities, in the aggregate principal amount of such 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 pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC is rated AA+ by Standard & Poor’s. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org.

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

Appendix F

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 affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.

Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit the 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) will consent or vote with respect to the Securities unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Town as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).

8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Town or the paying agent or bond trustee, 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 nor its nominee, the paying agent or bond trustee, or the Town, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Town or the paying agent or bond trustee, 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. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to the Town or the paying agent or bond trustee. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered.

10. The Town 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.

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

Appendix G

APPENDIX G

FORM OF CONTINUING DISCLOSURE CERTIFICATE
This CONTINUING DISCLOSURE CERTIFICATE (the “Disclosure Certificate”) is executed and delivered by the TOWN OF MAMMOTH LAKES (the “Town”) in connection with the execution and delivery of $_______* Certificates of Participation (2024 Capital Improvement Financing Project) (the “Certificates”). The Certificates are being executed and delivered pursuant to a Trust Agreement, dated as of July 1, 2024, by and among U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), the Town and the Mammoth Lakes Municipal Service Corporation (the “Trust Agreement”).

Pursuant to Section 11.08 of the Trust Agreement, the Town covenants and agree as follows:

Section 1. Definitions. In addition to the definitions set forth above and in the Trust Agreement which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section 1, the following capitalized terms shall have the following meanings:
“Annual Report” means any Annual Report provided by the Town pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate.
“Annual Report Date” means the date that is nine months after the end of the Town’s fiscal year (currently March 31 based on the Town’s fiscal year end of June 30). “Dissemination Agent” shall mean, initially, JNA Consulting Group LLC, doing business as Applied Best Practices, or any successor Dissemination Agent designed in writing by the Town and which has been filed with the then current Dissemination Agent a written acceptance of such designation. “Fiscal Year” means any twelve–month period beginning on July 1 in any year and extending to the next succeeding June 30, both dates inclusive, or any other twelve–month period selected and designated by the Town as its official fiscal year period under a Certificate of the Town filed with the Trustee. “MSRB” means the Municipal Securities Rulemaking Board, which has been designated by the Securities and Exchange Commission as the sole repository of disclosure information for purposes of the Rule, or any other repository of disclosure information that may be designated by the Securities and Exchange Commission as such for purposes of the Rule in the future. “Official Statement” means the final official statement executed by the Town in connection with the issuance of the Certificates.
“Participating Underwriter” means Piper Sandler & Co., the original underwriter of the Certificates. “Rule” means Rule 15c2–12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as it may be amended from time to time. “Significant Events” means any of the events listed in Section 5(a) of this Disclosure Certificate. * Preliminary, subject to change.

Appendix G

Section 2. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Town for the benefit of the holders and beneficial owners of the Certificates and in order to assist the Participating Underwriter in complying with S.E.C. Rule 15c2– 12(b)(5).

Section 3. Provision of Annual Reports.
(a) The Town shall, or shall cause the Dissemination Agent to, not later than the Annual Report Date, commencing March 31, 2025, with the report for fiscal year 2023-24 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 Town shall provide the Annual Report to the Dissemination Agent (if other than the Town). If by 15 Business Days prior to the Annual Report Date the Dissemination Agent (if other than the Town) has not received a copy of the Annual Report, the Dissemination Agent shall contact the Town to determine if the Town 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 Town 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 Town’s fiscal year changes, it shall give notice of such change in the same manner as for a Significant Event under Section 5(b). The Town shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by the Town hereunder. (b) If the Town does not provide (or cause the Dissemination Agent to provide) an Annual Report by the Annual Report Date, the Town in a timely manner shall provide (or cause the Dissemination Agent to provide) to the MSRB, in an electronic format as prescribed by the MSRB, a notice in substantially the form attached as Exhibit A.
(c) With respect to each Annual Report, the Dissemination Agent shall:
(i) determine each year prior to the Annual Report Date the then–applicable rules and electronic format prescribed by the MSRB for the filing of annual continuing disclosure reports; and
(ii) if the Dissemination Agent is other than the Town, file a report with the Town 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 Town’s Annual Report shall contain or incorporate by reference the following:
(a) The Town’s audited financial statements prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the Town’s audited financial statements are not available by the Annual Report Date, 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.

Appendix G

(b) Unless otherwise provided in the audited financial statements filed on or prior to the annual filing deadline for Annual Reports provided for in Section 3 above, financial information and operating data with respect to the Town for preceding fiscal year, as follows:
(c) In addition to any of the information expressly required to be provided under this Disclosure Certificate, the Town 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 Town or related public entities, which are available to the public on the MSRB’s Internet web site or filed with the Securities and Exchange Commission. The Town shall clearly identify each such other document so included by reference.

Section 5. Reporting of Significant Events.
(a) The Town shall give, or cause to be given, notice of the occurrence of any of the following Significant Events with respect to the Certificates:
(i) Principal and interest payment delinquencies;
(ii) Non–payment related defaults, if material;
(iii) Unscheduled draws on debt service reserves reflecting financial difficulties; (iv) Unscheduled draws on credit enhancements reflecting financial difficulties; (v) Substitution of credit or liquidity providers, or their failure to perform; (vi) 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 security, or other material events affecting the tax status of the security;
(vii) Modifications to rights of security holders, if material; (viii) Bond calls, if material, and tender offers;
(ix) Defeasances;
(x) Release, substitution, or sale of property securing repayment of the securities, if material;
(xi) Rating changes;
(xii) Bankruptcy, insolvency, receivership or similar event of the Town or other obligated person;

Appendix G

(xiii) The consummation of a merger, consolidation, or acquisition involving the Town or an obligated person, or the sale of all or substantially all of the assets of the Town or an obligated person (other than in the ordinary course of business), the entry into a definitive agreement to undertake such an action, or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material;
(xiv) Appointment of a successor or additional trustee or the change of name of a trustee, if material;
(xv) The incurrence of a financial obligation of the Town or other obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the Town or other obligated person, any of which affect security holders, if material; and
(xvi) A default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the Town or other obligated person, any of which reflect financial difficulties.
(b) The Town shall or shall cause the Dissemination Agent (if not the Town) to, file a notice of such occurrence with the MSRB, in an electronic format as prescribed by the MSRB, in a timely manner not in excess of 10 business days after the occurrence of the Significant Event. Notwithstanding the foregoing, notice of Significant Events described in subsection (a)(viii) 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 Certificates under the Trust Agreement.
(c) The Town acknowledges that the events described in subparagraphs (a)(ii), (a)(vii), (a)(viii) (if the event is a bond call), (a)(x), (a)(xiii), (a)(xiv) and (a) (xv) of this Section 5 contain the qualifier “if material.” The Town 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 the Town determines the event’s occurrence is material for purposes of U.S. federal securities law. The Town intends that the words used in paragraphs (xv) and (xvi) and the definition of “financial obligation” to have the meanings ascribed thereto in the Rule. (d) For purposes of this Disclosure Certificate, any event described in paragraph (a)(xii) above is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the Town or an obligated person 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 Town or an obligated person, 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 Town.

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

Section 7. Termination of Reporting Obligation. The Town’s obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the

Appendix G

Certificates. If such termination occurs prior to the final maturity of the Certificates, the Town shall give notice of such termination in the same manner as for a Significant Event under Section 5(b).

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

Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the Town may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of Sections 3(a), 4, 5(a), 5(b) or 5(c), 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 Certificates, 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 Certificates, after considering 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 Certificates in the manner provided in the Trust Agreement for amendments to the Trust Agreement with the consent of holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the holders or beneficial owners of the Certificates.

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 information 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 statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison shall include a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information, in order to provide information to investors to enable them to evaluate the ability of the Town to meet its obligations. To the extent reasonably feasible, the comparison shall be quantitative.

The Dissemination Agent shall not be obligated to enter into any amendment increasing or affecting its duties or obligations hereunder.

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

Appendix G

Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Town 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 Significant Event, in addition to that which is required by this Disclosure Certificate. If the Town chooses to include any information in any Annual Report or notice of occurrence of a Significant Event in addition to that which is specifically required by this Disclosure Certificate, the Town 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 Significant Event.

Section 11. Default. If the Town fails to comply with any provision of this Disclosure Certificate, the Participating Underwriter or any holder or beneficial owner of the Certificates may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Town 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 Trust Agreement, and the sole remedy under this Disclosure Certificate in the event of any failure of the Town to comply with this Disclosure Certificate shall be an action to compel performance.

Section 12. Duties, Immunities and Liabilities of Dissemination Agent. (a) Article VIII of the Trust Agreement is hereby made applicable to this Disclosure Certificate as if this Disclosure Certificate were (solely for this purpose) contained in the Trust Agreement. The Dissemination Agent shall be entitled to the protections and limitations from liability afforded to the Trustee thereunder. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the Town agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which they may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys’ fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The Dissemination Agent shall have no duty or obligation to review any information provided to it by the Town hereunder and shall not be deemed to be acting in any fiduciary capacity for the Town, the Bond holders or any other party. The obligations of the Town under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Certificates.
(b) The Dissemination Agent shall be paid compensation by the Town 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 Town, the Dissemination Agent, the Participating Underwriter and the holders and beneficial owners from time to time of the Certificates and shall create no rights in any other person or entity.

Appendix G

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: [Closing Date]

TOWN OF MAMMOTH LAKES
By
_________
ACKNOWLEDGED:

JNA CONSULTING GROUP LLC, as
Dissemination Agent
By
Authorized Officer

Appendix G

EXHIBIT A

NOTICE TO MSRB OF FAILURE TO FILE ANNUAL REPORT
Name of Obligor: Town of Mammoth Lakes
Name of Issue: Certificates of Participation (2024 Capital Improvement Financing Project) Evidencing Direct, Undivided Fractional Interests of the Owners Thereof in Lease Payments to be made by the Town of Mammoth Lakes, as the Rental for Certain Property Pursuant to a Lease Agreement with the Mammoth Lakes Municipal Service Corporation
Date of Issuance: [Closing Date]
NOTICE IS HEREBY GIVEN that the Obligor has not provided an Annual Report with respect to the above-named Issue as required by the Continuing Disclosure Certificate, dated [Closing date], furnished by the Obligor in connection with the Issue. The Obligor anticipates that the Annual Report will be filed by _________________.

Date: ________________
JNA CONSULTING GROUP LLC, as
Dissemination Agent
By
Authorized Officer

Appendix H

APPENDIX H

SPECIMEN MUNICIPAL BOND INSURANCE POLICY

THIS PAGE INTENTIONALLY LEFT BLANK

Quint & Thimmig LLP 01/17/24
13021.16
$_____

CERTIFICATES OF PARTICIPATION
(2024 Capital Improvement Financing Project)
Evidencing the Direct, Undivided Fractional Interests
of the Owners Thereof in Lease Payments to be Made by the

TOWN OF MAMMOTH LAKES
(Mono County, California),
As the Rental for Certain Property Pursuant to a Lease Agreement with the Mammoth Lakes Municipal Service Corporation

CERTIFICATE PURCHASE AGREEMENT
June 18, 2024
Town of Mammoth Lakes
437 Old Mammoth Road, Suite 230
Mammoth Lakes, CA 93546
Attention: Town Manager
Ladies and Gentlemen:

The undersigned, Piper Sandler & Co., as underwriter (the “Underwriter”), hereby offers to enter into this Certificate Purchase Agreement (this Certificate Purchase Agreement, together with the exhibits hereto, being herein called the “Purchase Agreement”) with the Town of Mammoth Lakes (the “Town”), which, upon acceptance, will be binding upon the Town and the Underwriter. This offer is made subject to the acceptance by the Town, by execution of this Purchase Agreement and its delivery to the Underwriter prior to 11:59 P.M., Pacific Standard time, on the date hereof, and, if not so accepted, will be subject to withdrawal by the Underwriter upon notice delivered to the Town at any time prior to such acceptance.

Capitalized terms used in this Purchase Agreement and not otherwise defined herein shall have the meanings given to such terms as set forth in Trust Agreement, dated as of July 1, 2024 (the “Trust Agreement”) by and among Trust Agreement by and among the Mammoth Lakes Municipal Service Corporation (the “Corporation”), the Town, and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”).

The Town hereby acknowledges and agrees that (a) the Underwriter has financial and other interests that differ from those of the Town, (b) the primary role of the Underwriter is to purchase securities for sale to investors in an arm’s-length commercial transaction between the Town and the Underwriter, (c) in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Underwriter is and has been acting solely as a principal and is not acting as the agent or fiduciary of the Town, (d) the Underwriter is not acting as a municipal advisor, financial advisor or fiduciary to the Town and has not assumed any advisory or fiduciary responsibility to the Town with respect to the transaction contemplated hereby and the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriter has provided or is currently providing other

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services to the Town on other matters), (e) the only obligations the Underwriter has to the Town with respect to the transaction contemplated hereby are expressly set forth in this Certificate Purchase Agreement, and (f) the Town has consulted its own financial, municipal, legal, accounting, tax and/or other advisors, as applicable, to the extent it has deemed appropriate in connection with the issuance of the Certificates and the other matters contemplated by this Certificate Purchase Agreement. The Town has a municipal advisor in this transaction that has legal fiduciary duties to the Town.

The Town hereby acknowledges 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.

Section 1. Purchase and Sale. Upon the terms and conditions and upon the basis of the representations, warranties and agreements herein set forth, the Town hereby agrees to sell and deliver to the Underwriter all of the $_____ aggregate principal amount of Town of Mammoth Lakes Certificates of Participation (2024 Capital Improvement Financing Project) (the “Certificates”), evidencing the direct, undivided fractional interests of the owners thereof in lease payments (the “Lease Payments”) to be made by the Town pursuant to a Lease Agreement, dated as of July 1, 2024 (the “Lease Agreement”), with the Corporation. The purchase price of the Certificates shall be $___________ (representing an aggregate principal amount of the Certificates of $_____, plus an original issue premium of $___________, less an Underwriter’s discount of $___________).

As an accommodation to the Town, the Underwriter will pay, from the purchase price of the Certificates, the sum of $_________ to ___________ (the “Municipal Bond Insurer”) as the premium for the Municipal Bond Insurer’s municipal bond insurance policy (the “Municipal Bond Insurance Policy”) issued for the Certificates and the sum of $__________ to the Municipal Bond Insurer as the premium for the Municipal Bond Insurer’s reserve fund municipal bond insurance policy issued for the Certificates (the “Reserve Fund Policy”).

Section 2. The Certificates. The Certificates will be dated their date of delivery and will be substantially in the form described in, shall be authorized, executed and delivered under the provisions of, and shall be payable as provided in, the Trust Agreement. The Certificates are being executed and delivered to provide funds to (a) finance (i) the cost of constructing and equipping a new Town Hall facility and (ii) the cost of acquiring certain land and improvements and (c) pay costs incurred in connection with executing and delivering the Certificates including the purchase of the Municipal Bond Insurance Policy and the Reserve Fund Policy.

The Town will lease certain property and the site thereof (the “Property”) to the Corporation pursuant to a Site and Facility Lease, dated as of July 1, 2024 (the “Site Lease”). The Corporation will sublease the Property back to the Town pursuant to the Lease Agreement. The Corporation will assign its right to receive Lease Payments from the Town under the Lease to the Trustee pursuant to an Assignment Agreement, dated as of July 1, 2024 (the “Assignment Agreement”).

The Town will also enter into a Continuing Disclosure Certificate, dated the Closing Date (the “Continuing Disclosure Certificate”). The Trust Agreement, the Site Lease, the Lease Agreement, the Assignment Agreement, the Continuing Disclosure Certificate and this Purchase Agreement are hereinafter referred to as the “Legal Documents.”

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Section 3. Public Offering and Establishment of Issue Price. (a) The Underwriter agrees to assist the Town in establishing the issue price of the Certificates and shall execute and deliver to the Town at Closing an “issue price” or similar certificate, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit B, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the Town and Special Counsel, to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Certificates.
(b) Except as otherwise set forth in Schedule I to Exhibit B, the Town will treat the first price at which 10% of each maturity of the Certificates (the “10% test”) is sold to the public as the issue price of that maturity (if different interest rates apply within a maturity, each separate CUSIP number within that maturity will be subject to the 10% test). At or promptly after the execution of this Purchase Agreement, the Underwriter shall report to the Town the price or prices at which it has sold to the public each maturity of Certificates. If at that time the 10% test has not been satisfied as to any maturity of the Certificates, the Underwriter agrees to promptly report to the Town the prices at which it sells the unsold Certificates of that maturity to the public. That reporting obligation shall continue, whether or not the Closing Date has occurred, until the 10% test has been satisfied as to the Certificates of that maturity or until all Certificates of that maturity have been sold to the public.
(c) The Underwriter confirms that it has offered the Certificates to the public on or before the date of this Purchase Agreement at the offering price or prices (the “initial offering price”), or at the corresponding yield or yields, set forth in Schedule I to Exhibit B, except as otherwise set forth therein. Schedule I to Exhibit B also sets forth, as of the date of this Purchase Agreement, the maturities, if any, of the Certificates for which the 10% test has not been satisfied and for which the Town and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the Town to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the “hold-theoffering-price rule”). So long as the hold-the-offering-price rule remains applicable to any maturity of the Certificates, the Underwriter will neither offer nor sell unsold Certificates of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following:
(i) the close of the fifth (5th) business day after the sale date; or (ii) the date on which the Underwriter has sold at least 10% of that maturity of the Certificates to the public at a price that is no higher than the initial offering price to the public.

The Underwriter shall promptly advise the Town when it has sold 10% of that maturity of the Certificates to the public at a price that is no higher than the initial offering price to the public, if that occurs prior to the close of the fifth (5th) business day after the sale date. (d) The Underwriter confirms that any selling group agreement and any retail distribution agreement relating to the initial sale of the Certificates to the public, together with the related pricing wires, contains or will contain language obligating each dealer who is a member of the selling group and each broker-dealer that is a party to such retail distribution agreement, as applicable, to (A) report the prices at which it sells to the public the unsold Certificates of each maturity allotted to it until it is notified by the Underwriter that either the 10% test has been satisfied as to the Certificates of that maturity or all Certificates of that maturity have been sold to the public and (B) comply with the hold-the-offering-price rule, if

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applicable, in each case if and for so long as directed by the Underwriter. The Town acknowledges that, in making the representation set forth in this subsection, the Underwriter will rely on (i) in the event a selling group has been created in connection with the initial sale of the Certificates to the public, the agreement of each dealer who is a member of the selling group to comply with the hold-the-offering-price rule, if applicable, as set forth in a selling group agreement and the related pricing wires, and (ii) in the event that a retail distribution agreement was employed in connection with the initial sale of the Certificates to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the hold-the-offeringprice rule, if applicable, as set forth in the retail distribution agreement and the related pricing wires. The Town further acknowledges that the Underwriter shall not be liable for the failure of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a retail distribution agreement, to comply with its corresponding agreement regarding the hold-theoffering-price rule as applicable to the Certificates. (e) The Underwriter acknowledges that sales of any Certificates to any person that is a related party to the Underwriter shall not constitute sales to the public for purposes of this section. Further, for purposes of this section:
(i) “public” means any person other than an underwriter or a related party, (ii) “underwriter” means (A) any person that agrees pursuant to a written contract with the Town (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Certificates to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Certificates to the public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Certificates to the public), (iii) a purchaser of any of the Certificates is a “related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (i) at least 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (ii) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other), and
(iv) “sale date” means the date of execution of this Purchase Agreement by all parties.

Section 4. The Official Statement.
(a) By its acceptance of this proposal, the Town ratifies, confirms and approves of the use and distribution by the Underwriter prior to the date hereof of the preliminary official statement, dated June 7, 2024, relating to the Certificates (including the cover page, the inside cover page, all appendices and all information incorporated therein, the “Preliminary Official Statement”). The Town hereby certifies that such Preliminary Official Statement is deemed final as of its date, for purposes of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 (“Rule 15c2-12”) except for certain omissions with respect to the pricing of the Certificates permitted to be omitted therefrom by Rule 15c2-12.

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The Town hereby agrees to deliver or cause to be delivered to the Underwriter, within seven business days of the date hereof, copies of the final official statement, dated the date hereof, relating to the Certificates (including all information previously permitted to have been omitted by Rule 15c2-12, the cover page, the inside cover page all appendices, all information incorporated therein and any amendments or supplements as have been approved by the Town and the Underwriter, the “Official Statement”) in such quantity as the Underwriter shall reasonably request. The Town has approved the use and distribution by the Underwriter of the Official Statement, and the Town hereby authorizes the use by the Underwriter of the Legal Documents in connection with the offer and sale of the Certificates.

Section 5. Closing. At 8:00 A.M., Pacific Daylight time, on July 2, 2024, or at such other time and date as may be agreed upon by the Town and the Underwriter (the “Closing Date”), (i) the Town will cause to be delivered to the Underwriter the Certificates in definitive form, bearing CUSIP numbers and fully registered, through the book-entry system of The Depository Trust Company, New York, New York (“DTC”); and (ii) the Town will cause to be delivered to the Underwriter the other documents herein mentioned at the offices of Quint & Thimmig LLP in Larkspur, California, or another place to be agreed upon by the Town and the Underwriter.

The Underwriter will accept such delivery and pay the purchase price of the Certificates as set forth in Section 1 hereof in immediately available funds to the order of the Trustee on behalf of the Town. This payment and delivery, together with the delivery of the aforementioned documents, is herein called the “Closing.” Notwithstanding the foregoing, neither the failure to print CUSIP numbers on any Certificate nor any error with respect thereto shall constitute cause for a failure or refusal by the Underwriter to accept delivery of and pay for the Certificates on the Closing Date in accordance with the terms of this Purchase Agreement.

Section 6. Representation, Warranties and Covenants of the Town. The Town represents, warrants and covenants to the Underwriter that:
(a) The Town is a municipal corporation and general law city duly organized and validly existing under the Constitution and laws of the State of California (the “State”). The Town has all necessary power and authority and has taken all official action necessary to enter into and perform its duties under the Site Lease, the Lease Agreement, the Trust Agreement and this Purchase Agreement (collectively, the “Town Documents”). The Town Documents and the Official Statement have been duly executed and delivered by the Town and, assuming the due authorization, execution and delivery by the other respective parties thereto, the Town Documents to the best knowledge of the Town will constitute legally valid and binding obligations of the Town enforceable against the Town in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium or other similar laws or equitable principles relating to or limiting creditors’ rights generally.
(b) To the best of its knowledge, except as may be required under Blue Sky or other securities laws of any state (as to which no representation is made), there is no consent, approval, authorization or other order of, or filing with, or certification by, any regulatory authority having jurisdiction over the Town required for the execution, delivery and sale of the Certificates or the consummation by the Town of the transactions contemplated by the Town Documents and by the Official Statement, which has not been duly obtained or made on or prior to the date hereof.
(c) There is no action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court or governmental or public entity pending, or to the best knowledge of the Town, threatened against the Town which affects or seeks to prohibit, restrain or enjoin the

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execution or delivery of the Certificates, or contesting the powers of the Town to enter into or perform its obligations under any of the Town Documents or the existence or powers of the Town.
(d) the distribution of the Preliminary Official Statement and the Official Statement have been duly authorized by the Town and as of the date hereof and at all times subsequent thereto up to and including the time of the Closing, the statements and information contained in the Official Statement (excluding statements under the captions “THE CORPORATION,” “UNDERWRITING,” information relating to the Municipal Bond Insurer, the Municipal Bond Insurance Policy, the Reserve Fund Insurance Policy, DTC and the book-entry only system and information as to bond prices on the cover of the Official Statement, as to which no opinion or view is expressed) are and will be true, correct and complete in all material respects and the Official Statement does not and will not omit to state a material fact required to be stated therein or necessary to make such statements and information therein, in the light of the circumstances under which they were made, not misleading in any material respect; (e) The Town agrees that, if at any time before the Closing Date any event of which it has knowledge occurs, as a result of which the Official Statement as then in effect would include any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading, the Town shall promptly prepare or cooperate in the preparation of an amendment or supplement to the Official Statement if in the opinion of the Town and the Underwriter or their respective counsel, such event requires the preparation and publication of a supplement or amendment to the Official Statement. The Town shall advise the Underwriter promptly of any proposal to so amend or supplement the Official Statement and shall effect such amendment or supplement in a form and manner approved by the Underwriter. The Town shall promptly advise the Underwriter of the institution of any action, suit, proceeding, inquiry or investigation seeking to prohibit, restrain or otherwise affect the use of the Official Statement in connection with the offering, sale or distribution of the Certificates.

If any information relating to the Town contained in the Official Statement is amended or supplemented pursuant to the immediately preceding subparagraph, at the time of each supplement or amendment thereto and (unless subsequently supplemented or amended pursuant to such subparagraph) at all times subsequent thereto up to and including the date of the Closing, the portions of the Official Statement so supplemented or amended (including any financial and statistical data contained therein) will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make such information therein concerning the Town or the Town’s affairs, in the light of the circumstances under which it was presented, not misleading. (f) The Town shall furnish or cause to be furnished to the Underwriter, in such quantities as shall be reasonably required by the Underwriter, copies of the Official Statement and all amendments and supplements thereto, in each case as soon as available. (g) The proceeds from the sale to the Underwriter of the Certificates will be applied in the manner and for the purposes specified in the Trust Agreement. (h) The resolution of the Town approving the execution and delivery of the Town Documents and the Official Statement has been duly adopted by the Town, has not been amended, modified or repealed and is in full force and effect on the date hereof. (i) To the best of its knowledge, neither the execution and delivery by the Town of the Town Documents nor the Town’s adoption of the resolution, nor the Town’s compliance with

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such documents or such resolution, nor the consummation of the transactions contemplated by such documents, such resolution or the Official Statement, conflicts with or constitutes a breach of or default under, or will conflict with or constitute a breach of or default under, any term or provision of any applicable law or any administrative rule or regulation of the State or the United States or any applicable judgment, decree, order, license, permit, agreement or instrument to which the Town is subject or is otherwise bound has or will have a material adverse effect on the ability of the Town to perform its obligations under the Town Documents, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or an event of default under any such instruments. (j) The Town agrees to cooperate with the Underwriter in endeavoring to qualify the Certificates for offer and sale under the securities or Blue Sky laws of as many jurisdictions of the states of the United States as the Underwriter may request; provided, however, that the Town will not be required to expend any of its own funds in connection with such qualifications and will not be required to consent to service of process in any such jurisdiction in which it is not now subject to service of process or to qualify as a broker or a foreign corporation in connection with any such qualification in any jurisdiction. (k) The Town covenants that it will not take any action which would cause interest payable with respect to the Certificates to be subject to federal income taxation or State personal income taxation.
(l) Other than as described in the Preliminary Official Statement and the Official Statement, the Town has not failed to comply with any previous continuing disclosure undertaking within the prior 5 years.

Section 7. Conditions to the Obligations of the Underwriter. The Underwriter has entered into this Purchase Agreement in reliance upon the representations and warranties of the Town contained herein. The obligations of the Underwriter to accept delivery of and pay for the Certificates on the Closing Date shall be subject, at the option of the Underwriter, to the performance by the Town of its obligations, to be performed hereunder and to the performance by the Town and the Corporation of their obligations, to be performed under the Legal Documents, at or prior to the Closing Date and the following additional conditions:
(a) The representations, warranties and covenants of the Town contained herein shall be true and correct at the date hereof and at the time of the Closing, as if made on the Closing Date; (b) At the time of Closing, the Legal Documents shall be in full force and effect as valid and binding agreements between or among the various parties thereto and the Legal Documents and the Official Statement shall not have been amended, modified or supplemented except as may have been agreed to in writing by the Underwriter, and all such reasonable actions as, in the opinion of Special Counsel or counsel to the Underwriter, shall reasonably deem necessary in connection with the transactions contemplated hereby; (c) Between the date hereof and the Closing Date, the market price or marketability, at the initial public offering prices set forth on the inside cover page of the Official Statement, of the Certificates shall not have been materially adversely affected, in the reasonable judgment of the Underwriter, by reason of any of the following:
(i) the marketability of the Certificates or the market price thereof, in the opinion of the Underwriter, has been materially adversely affected by an amendment to the Constitution of the United States or by any legislation in or by the Congress of the United States or by the State, or the amendment of legislation pending as of the date of

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the Purchase Agreement in the Congress of the United States, or the recommendation to Congress or endorsement for passage (by press release, other form of notice or otherwise) of legislation by the President of the United States, the Treasury Department of the United States, the Internal Revenue Service or the Chairman or ranking minority member of the Committee on Finance of the United States Senate or the Committee on Ways and Means of the United States House of Representatives, or the proposal for consideration of legislation by either such Committee or by any member thereof, or the presentment of legislation for consideration as an option by either such Committee, or by the staff of the Joint Committee on Taxation of the Congress of the United States, or the favorable reporting for passage of legislation to either House of the Congress of the United States by a Committee of such House to which such legislation has been referred for consideration, or any decision of any federal or state court or any ruling or regulation (final, temporary or proposed) or official statement on behalf of the United States Treasury Department, the Internal Revenue Service or other federal or state authority affecting the federal or state tax status of the Corporation or the Town, or the interest with respect to bonds or notes (including the Certificates); (ii) the declaration of war or engagement in major military hostilities by the United States or the occurrence or escalation of any other national emergency or calamity relating to the normal operation of the government of or the financial community in the United States;
(iii) the declaration of a general banking moratorium by federal, New York or California authorities, or the general suspension of trading on any national securities exchange;
(iv) the imposition by the New York Stock Exchange or other national securities exchange, or any governmental authority, of any material restrictions not now in force with respect to the Certificates or obligations of the general character of the Certificates or securities generally, or the material increase of any such restrictions now in force, including those relating to the extension of credit by, or the charge to the net capital requirements of, underwriters;
(v) an order, decree or injunction issued by any court of competent jurisdiction, or order, ruling, regulation (final, temporary or proposed), official statement or other form of notice or communication issued or made by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter, to the effect that (i) obligations of the general character of the Certificates, or the Certificates, including any or all underlying arrangements, are not exempt from registration under the Securities Act of 1933, as amended, or that the Trust Agreement is not exempt from qualification under the Trust Indenture Act of 1939, as amended, or (ii) the execution and delivery, offering or sale of obligations of the general character of the Certificates, or the execution and delivery, offering or sale of the Certificates, including any or all underlying obligations, as contemplated hereby or by the Official Statement, is or would be in violation of the federal securities laws as amended and then in effect; (vi) any event shall occur which makes untrue any material statement or results in an omission to state a material fact that is necessary to make the statements in the Official Statement, in the light of the circumstances under which they were made, not misleading, which event, in the reasonable opinion of the Underwriter would materially or adversely affect the ability of the Underwriter to market the Certificates

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(vii) any legislation, ordinance, rule or regulation shall be enacted by any governmental body, department or authority of the State, or a decision by any court of competent jurisdiction within the State shall be rendered which materially adversely affects the market price of the Certificates;
(viii) legislation shall be enacted by the Congress of the United States, or a decision by a court of the United States shall be rendered, to the effect that obligations of the general character of the Certificates, or the Certificates, are not exempt from registration under or other requirements 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 that the Trust Agreement is not exempt from qualification under or other requirements of the Trust Indenture Act of 1939, as amended and as then in effect; (ix) any rating of the Certificates or the rating of any obligations of the Town shall have been downgraded or withdrawn by a national rating service, which, in the opinion of the Underwriter, materially adversely affects the market price of the Certificates; or
(x) the commencement of any action, suit or proceeding described in Section 6(c). (d) at or prior to the Closing, the Underwriter shall receive the following documents, in each case to the reasonable satisfaction in form and substance of the Underwriter:
(i) the Legal Documents duly executed and delivered by the respective parties thereto, with only such amendments, modifications or supplements as may have been agreed to in writing by the Underwriter;
(ii) the approving opinion of Special Counsel, dated the Closing Date and addressed to the Town, in substantially the form attached as Appendix B to the Official Statement, together with reliance letters addressed to the Underwriter and the Trustee; (iii) a supplemental opinion of Special Counsel dated the Closing Date and addressed to the Underwriter and the Town, in form and substance acceptable to each of them to the effect that:
(A) the statements in the Official Statement under the captions, “INTRODUCTION,” “THE CERTIFICATES,” “CONTINUING DISCLOSURE,” “TAX MATTERS,” “APPENDIX A–SUMMARY OF PRINCIPAL LEGAL
DOCUMENTS,” “APPENDIX C–FORM OF CONTINUING DISCLOSURE
CERTIFICATE” AND “APPENDIX D–FORM OF SPECIAL COUNSEL
OPINION,” insofar as such statements purport to summarize certain provisions of the Certificates, security for the Certificates, the Trust Agreement, the Site Lease, the Lease, the Assignment Agreement, the Continuing Disclosure Certificate and the legal opinion of Special Counsel with respect thereto concerning the validity and tax status of interest with respect to the Certificates, are accurate in all material respects; but excluding therefrom information about DTC and the book-entry only system;
(B) the Purchase Agreement has been duly authorized, executed and delivered by the Town and, assuming due authorization, execution and delivery by the other respective parties thereto, constitutes the valid and binding agreement of the Town and is enforceable in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization,

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arrangement, fraudulent conveyance, moratorium or other similar laws affecting enforcement of creditors’ rights and by the application of equitable principles if equitable remedies are sought; and
(C) the Certificates are exempt from registration pursuant to the Securities Act of 1933, as amended, and the Trust Agreement is exempt from qualification as a Trust Agreement pursuant to the Trust Indenture Act of 1939, as amended;
(iv) the letter of Quint & Thimmig LLP, in its capacity as Disclosure Counsel, dated the Closing Date and addressed to the Town and the Underwriter, to the effect that, based upon its participation in the preparation of the Official Statement as Disclosure Counsel and upon the information made available to it in the course of the foregoing, but without having undertaken to determine or verify independently or assuming any responsibility for the accuracy, completeness or fairness of the statements contained in the Official Statement (except to the extent expressly set forth in the opinion referred to in Section 7(c)(iii) above), nothing has come to the attention of the personnel directly involved in rendering legal advice and assistance in connection with the preparation of the Official Statement that causes them to believe that the Official Statement as of its date or as of the Closing Date 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, are not misleading (except for the description of any litigation, any information relating to information relating to the Municipal Bond Insurer, the Municipal Bond Insurance Policy, the Reserve Fund Insurance Policy, DTC, Cede & Co., the book-entry system, any financial statements, forecasts, projections, estimates, assumptions and expressions of opinions and the other financial and statistical data included therein, as to all of which they express no view);
(v) the opinion of ________, Town Attorney, dated the Closing Date, and addressed to the Underwriter, to the effect:
(A) the Town is a municipal corporation and chartered Town organized and existing under and by virtue of the laws and the Constitution of the State and has full legal power and lawful authority to execute and deliver and perform all obligations under the Town Documents and to participate in the transactions contemplated by the Official Statement;
(B) the resolution adopted by the Town Council of the Town approving the form and authorizing the execution of the Town Documents has been duly adopted at a meeting of the Town Council of the Town, which was called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout and such Resolution is in full force and effect and has not been modified, amended or rescinded; (C) the Town has duly authorized, executed and delivered the Town Documents and, assuming due authorization, execution and delivery by the parties thereto other than the Town, the Town Documents constitute the legally valid and binding obligations of the Town enforceable against the Town in accordance with their respective terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws affecting the enforcement of creditors’ rights generally and by the application of equitable principles, if equitable remedies are sought.

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(D) there is no action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court, government agency, public board or body, pending or, to our knowledge after reasonable investigation, threatened: (1) which would materially adversely affect the financial position of the Town; (2) affecting, contesting or seeking to prohibit, restrain or enjoin the execution and delivery of any of the Certificates or the Town Documents, or in any way contesting or affecting the validity of or security for the Certificates or the Town Documents or the consummation of the transactions contemplated thereby, or contesting the powers of the Town or its authority to execute and deliver the Town Documents or perform its obligations thereunder; or (3) contesting the completeness or accuracy of the Official Statement or asserting that the Official Statement contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and to our knowledge there is no basis for any action, suit, proceeding, inquiry or investigation of the nature described in subparagraphs (1) through (3) of this paragraph (D);
(E) the Town is not in material breach of or default under any applicable constitutional provision, law or administrative regulation of the State or the United States of America or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Town is a party or to which the Town or any of its property or assets is otherwise subject, and no event has occurred or is continuing which with the passage of time or the giving of notice, or both, would constitute a default or an event of default under any such instrument; and the execution and delivery of the Town Documents and compliance with the provisions thereof by the Town, will not result in a violation of, a breach of, or a default under the articles of incorporation or bylaws of the Town or any statute, indenture, mortgage, deed of trust, note agreement, or other agreement or instrument to which the Town is a party or by which it or any of its property is bound, or any order, rule, law or regulation of any court or other governmental body having jurisdiction of the Town;
(F) no authorization, approval, consent or order of the State or any other governmental authority or agency within the State, other than the governing body of the Town, is required for the valid authorization, execution and delivery by the Town of the Town Documents and the performance by the Town of its obligations thereunder.
(G) as of the date hereof, nothing has come to such attorney’s attention causing us to believe that the information contained in the Official Statement relating to the Town under the caption “THE TOWN” as of its date or as of the date hereof contained any untrue statement of material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;
(vi) a certificate, dated the Closing Date, signed by a duly authorized official of the Town satisfactory in form and substance in the reasonable judgment of the Underwriter to the effect that:

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(A) the Town is a municipal corporation and chartered Town, duly organized and existing under the laws of the State and has all necessary power and authority to enter into and perform its duties under the Town Documents; (B) by official action of the Town, the Town has approved the execution and delivery of and the performance by the Town of the obligations on its part contained in the Town Documents;
(C) the execution and delivery of the Town Documents to which it is a party, compliance with the provisions thereof and performance of its duties thereunder, will not conflict with or constitute a breach of or default under the Town’s duties under any law, administrative regulation, judgment, decree, note, resolution, charter, by-law or other agreement to which the Town is a party or is otherwise subject or by which its properties may be affected; (D) the information relating to the Town contained in the Official Statement does not contain any untrue or misleading statement of a material fact or omit to state any material fact which is necessary to make such statements therein, in the light of the circumstances under which they were made, not misleading;
(E) to the best knowledge of the Town, there is no consent, approval, authorization or other order of, or filing with, or certification by, any regulatory authority having jurisdiction over the Town required for the execution, delivery and sale of the Certificates or the consummation by the Town of the transactions on its part contemplated by the Town Documents;
(F) to the best knowledge of the Town, the Town is not in breach of or default under any applicable law or administrative regulation of the State or the United States or any applicable judgment or decree, agreement or other instrument to which the Town is a party or is otherwise subject, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or an event of default under any such instrument, which breach or default has or may have a material adverse effect on the ability of the Town to perform its obligations under the Town Documents; (G) there is no action, suit, proceeding, inquiry or investigation, at law or in equity before or by any court or governmental agency or body, pending or, to the best knowledge of the Town, threatened against the Town, except as disclosed in the Official Statement, to restrain or enjoin the execution or delivery of the Certificates, or in any way contesting or affecting the validity or enforceability of the Certificates or the Town Documents or contesting the powers of the Town to enter into or perform its obligations under any of the foregoing; and
(H) the Town covenants that it will not take any action which would cause interest with respect to the Certificates to be subject to federal income taxation or California personal income taxes;
(vii) a certificate, dated the Closing Date, signed by a duly authorized official of the Corporation satisfactory in form and substance in the reasonable judgment of the Underwriter to the effect that:

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(A) the Corporation is nonprofit, public benefit corporation, duly organized and validly existing under the laws of the State; (B) the Corporation has all necessary power and authority and has taken all official actions necessary to execute, deliver and perform its duties under each of the Corporation Documents and each of the Legal Documents has been duly authorized, executed and delivered by the Corporation and, assuming the due authorization, execution and delivery by the other respective parties thereto, will constitute legally valid and binding obligations of the Corporation enforceable against the Corporation in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or limiting creditors’ rights generally or principles of equity involving judicial discretion; (C) the Corporation is not in material breach of, or default under, any applicable constitutional provision, law or administrative rule or regulation of the State or the United States of America material to the conduct of its functions or any applicable judgment or decree or any loan agreement, indenture, bond, certificate, note, resolution or other agreement or instrument to which the Corporation is a party or to which the Corporation or any of its properties is otherwise subject, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or an event of default under any of the foregoing; and the authorization, execution and delivery of the Legal Documents, and compliance with the provisions thereof, will not conflict with or constitute a breach of or default under any constitutional provision, law, administrative rule or regulation, or any judgment, decree, license, permit, loan agreement, indenture, bond, certificate, note, resolution, agreement or other instrument to which the Corporation (or any of its officers in their respective capacities as such) is subject or by which it or any of its properties is bound, nor will any such authorization, execution, delivery 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 its assets or properties or under the terms of any such law, regulation or instrument except as may be provided by the Legal Documents;
(D) there is no consent, approval, authorization or other order of, or filing with, or certification by, any regulatory entity having jurisdiction over the Corporation required for the execution and delivery of the Legal Documents, or the consummation by the Corporation of the transactions contemplated in the Official Statement or in the Legal Documents, which has not been duly obtained or made on or prior to the date hereof;
(E) there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court or governmental or public entity pending or, to the knowledge of the Corporation, threatened against the Corporation which affects or seeks to prohibit, restrain or enjoin the execution or delivery of the Certificates or any of the Legal Documents, or contesting the validity of the Certificates or any of the Legal Documents or the powers of the Corporation to enter into or perform its obligations under the Legal Documents or the existence or powers of the Corporation;
(F) no event affecting the Corporation has occurred since the date of the Official Statement which either makes untrue or incorrect in any material respect

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as of the Closing Date the statements or information regarding the Corporation contained in the Official Statement or is not reflected in the Official Statement but should be reflected therein in order to make the statements and information therein regarding the Corporation not misleading in any material respect; (viii) a certificate of the Trustee, dated the Closing Date, signed by a duly authorized officer of the Trustee, and in form and substance satisfactory to the Underwriter, to the effect that:
(A) the Trustee is a national banking association duly organized and existing under and by virtue of the laws of the United States of America authorized to carry out corporate trust powers and has all necessary power and authority to enter into and perform its duties under the Trust Agreement and the Assignment Agreement and to execute the Certificates;
(B) the representations of the Trustee in the Trust Agreement and the Assignment Agreement are true and correct in all material respects as of the Closing Date;
(C) to the best of its knowledge, no litigation is pending or threatened (either in state or federal courts) (1) to restrain or enjoin the execution or delivery of any of the Certificates, or (2) in any way contesting or affecting any authority for the execution or delivery of the Certificates or the validity or enforceability of the Trust Agreement or the Assignment Agreement;
(D) the Trustee is duly authorized to execute and deliver the Certificates to the Underwriter upon instruction by the Town pursuant to the terms of the Trust Agreement, and the Trust Agreement and the Assignment Agreement constitute legal, valid and binding obligations of the Trustee enforceable in accordance with its respective terms;
(E) to the best of its knowledge, the execution and delivery of the Trust Agreement and the Assignment Agreement, and compliance with the provisions thereof, will not conflict with, or constitute a breach of or default under, the Trustee’s duties under said documents or any law, administrative regulation, court decree, resolution, charter, bylaws or other agreement to which the Trustee is subject or by which it is bound; and
(F) the Certificates have been validly executed and delivered by the Trustee;
(ix) the opinion of counsel to the Trustee, addressed to the Underwriter and the Town, dated the Closing Date, to the effect that;
(A) the Trustee has been duly organized and is validly existing in good standing as a national banking association under the laws of the United States of America, with full corporate power to enter into the Trust Agreement and the Assignment Agreement and to accept the trust as provided therein, and to perform its obligations under the Trust Agreement and the Assignment Agreement;
(B) the Trustee has duly authorized, executed and delivered the Trust Agreement and the Assignment Agreement and by all proper corporate action has authorized the acceptance of the trust of the Trust Agreement;

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(C) assuming the due authorization, execution and delivery by the other party to the Trust Agreement and the Assignment Agreement, the Trust Agreement and the Assignment Agreement, constitute legally valid and binding agreements of the Trustee, enforceable against the Trustee in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, moratorium or other similar laws or equitable principles relating to or limiting creditors’ rights generally;
(D) the Certificates have been validly executed by the Trustee; and (E) to the best of such counsel’s knowledge, no authorization, approval, consent or order of any governmental agency or any other person or corporation is required for the valid authorization, execution and delivery of the Trust Agreement and the Assignment Agreement by the Trustee or the authentication by the Trustee of the Certificates;
(x) the opinion of Stradling Yocca Carlson & Rauth, as counsel to the Underwriter, dated the Closing Date and addressed to the Underwriter, in form and substance acceptable to the Underwriter.
(xi) a copy of the Official Statement, executed on behalf of the Town; (xii) a copy of the general resolution of the Trustee authorizing the execution and delivery of the Trust Agreement and the Assignment Agreement; (xiii) copies of all resolutions relating to the Certificates, the Official Statement and the Legal Documents adopted by the Corporation and the Town, as applicable, and certified by an authorized official of the Corporation and the Town; (xiv) a tax certificate by the Town in form and substance acceptable to Special Counsel;
(xv) a copy of the Municipal Bond Insurance Policy;
(xvi) a copy of the Reserve Fund Insurance Policy;
(xvii) an opinion of counsel to the Municipal Bond Insurer, addressed to the Town and the Underwriter to the effect that:
(A) the descriptions of the Municipal Bond Insurer, the Municipal Bond Insurance Policy and the Reserve Fund Insurance Policy included in the Official Statement are accurate;
(B) the Municipal Bond Insurance Policy and the Reserve Fund Insurance Policy constitute legal, valid and binding obligations of the Municipal Bond Insurer, enforceable in accordance with their respective terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or limiting creditor’s rights generally and by the application of equitable principles if equitable remedies are sought, and

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(C) as to such other matters as the Town or the Underwriter may reasonably request;
(xviii) a certificate of the Municipal Bond Insurer, signed by an authorized officer of the Municipal Bond Insurer, to the effect that:
(A) the information contained in the Official Statement relating to the Municipal Bond Insurer, the Municipal Bond Insurance Policy and the Reserve Fund Insurance Policy is true and accurate and
(B) as to such other matters as the Town or the Underwriter may reasonably request;
(xix) a letter from S&P Global Ratings, a Standard & Poor’s Financial Services LLC business, indicating that the Certificates have been assigned an insured rating of “AA” and all Certificates have been assigned an underlying rating of “___.” (xx) evidence of good standing of the Corporation with the State; and (xxi) such additional legal opinions, certificates, proceedings, instruments or other documents as Special Counsel and counsel to the Underwriter, if any, may reasonably request to evidence compliance by the Corporation and the Town with legal requirements, the truth and accuracy, as of the Closing Date, of the representations and warranties of the Corporation and the Town contained herein, and the due performance or satisfaction by the Corporation and the Town at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the Corporation and the Town.

Section 8. Changes in Official Statement. After the Closing, the Town will not adopt any amendment of or supplement to the Official Statement to which the Underwriter shall object in writing. Within 90 days after the Closing or within 25 days following the end of the underwriting period, whichever occurs first, if any event relating to or affecting the Certificates, the Trustee, the Corporation or the Town shall occur as a result of which it is necessary, in the opinion of the Underwriter, to amend or supplement the Official Statement in order to make the Official Statement not misleading in any material respect in the light of the circumstances existing at the time it is delivered to a purchaser, the Town will forthwith prepare and furnish to the Underwriter an amendment or supplement that will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time the Official Statement is delivered to purchaser, not misleading. The Town shall cooperate with the Underwriter in the filing by the Underwriter of such amendment or supplement to the Official Statement with a nationally recognized municipal securities repository. For the purposes of this section the Trustee, the Corporation and the Town will each furnish such information with respect to itself as the Underwriter may reasonably request from time to time during such period.

Section 9. Expenses. Whether or not the transactions contemplated by this Purchase Agreement are consummated, the Underwriter shall be under no obligation to pay, and the Town shall pay from the proceeds of the Certificates or otherwise, all expenses and costs of the Town and the Corporation incident to the performance of their obligations in connection with the authorization, execution, sale and delivery of the Certificates to the Underwriter, including, without limitation, printing costs, rating agency fees and charges, initial fees of the Trustee, including fees and disbursements of its counsel, if any, fees and disbursements of Special

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Counsel and Disclosure Counsel and other professional advisors employed by the Town or the Corporation, the fee of counsel to the Underwriter and costs of preparation, printing, signing, transportation, delivery and safekeeping of the Certificates. The Underwriter shall pay all outof-pocket expenses of the Underwriter, including, without limitation, advertising expenses, the California Debt and Investment Advisory Commission fee, CUSIP Service Bureau charges, regulatory fees imposed on new securities issuers and any and all other expenses incurred by the Underwriter in connection with the public offering and distribution of the Certificates, shall be paid by the Underwriter.

Section 10. Notices. Any notice or other communication to be given to the Town under this Purchase Agreement may be given by delivering the same in writing to the Town and the Corporation at the addresses set forth on the first page of this Purchase Agreement, and any notice or other communication to be given to the Underwriter under this Purchase Agreement may be given by delivering the same in writing to: Piper Sandler & Co., ______________, Attention: ______________, Managing Director.

The approval of the Underwriter when required hereunder or the determination of the Underwriter’s satisfaction as to any document referred to herein shall be in writing signed by the Underwriter and delivered to you.

Section 11. Parties in Interest. This Purchase Agreement is made solely for the benefit of the Town and the Underwriter (including the successors or assigns thereof) and no other person shall acquire or have any right hereunder or by virtue hereof. All representations, warranties and agreements of the Town in this Purchase Agreement shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Underwriter and shall survive the delivery of and payment of the Certificates.

Section 12. Counterparts. This Purchase Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

Section 13. Governing Law. This Purchase Agreement shall be governed by the laws of the State of California.

PIPER SANDLER & CO., as Underwriter
By
Managing Director
Accepted and Agreed to:

TOWN OF MAMMOTH LAKES
By
______________
Town Manager
Time of Execution: ___________

Exhibit A

EXHIBIT A

MATURITY SCHEDULE
$_____

CERTIFICATES OF PARTICIPATION
(2024 Capital Improvement Financing Project)
Evidencing the Direct, Undivided Fractional Interests
of the Owners Thereof in Lease Payments to be Made by the

TOWN OF MAMMOTH LAKES
(Mono County, California),
As the Rental for Certain Property Pursuant to a Lease Agreement with the Mammoth Lakes Municipal Service Corporation

MATURITY SCHEDULE
Maturity Date Principal Interest
(June 1) Amount Rate Yield Price
c Priced to the June 1, ____, par call date.

T Term Certificates.

Optional Redemption. The Certificates maturing on and after June 1, ____, are subject to optional redemption in whole or in part on any date on and after June 1, ____, in such order of maturity as shall be designated by the Town (or, if the Town shall fail to so designate the order of redemption, in pro rata among maturities) and by lot within a maturity, at a redemption price equal to the principal amount thereof, together with accrued interest to the date fixed for redemption, without premium, from the proceeds of the optional prepayment of Lease Payments made by the Town pursuant to the Lease Agreement.

Extraordinary Redemption. The Certificates are subject to extraordinary redemption, in whole or in part, on any Interest Payment Date, in an order of maturity determined by the Town, from the Net Proceeds of insurance or eminent domain proceedings credited towards the redemption of the Lease Payments pursuant to the Lease Agreement, at a redemption price equal to 100% of the principal amount to be redeemed, together with accrued interest represented thereby to the date fixed for redemption, without premium.

Sinking Fund Redemption. The Certificates maturing on June 1, ____, are subject to mandatory redemption in part on June 1 in each year on and after June 1, ____, to and including June 1, ____, from the principal components of scheduled Lease Payments required to be paid by the Town pursuant to the

Exhibit A

Lease Agreement with respect to each such redemption date (subject to abatement, as set forth in the Lease Agreement), at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date fixed for redemption, without premium, as follows:

Year Principal Amount of
(June 1) Certificates to be Redeemed
†Maturity.

The Certificates maturing on June 1, ____, are subject to mandatory redemption in part on June 1 in each year on and after June 1, ____, to and including June 1, ____, from the principal components of scheduled Lease Payments required to be paid by the Town pursuant to the Lease Agreement with respect to each such redemption date (subject to abatement, as set forth in the Lease Agreement), at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date fixed for redemption, without premium, as follows:

Year Principal Amount of
(June 1) Certificates to be Redeemed
†Maturity.

Exhibit A

EXHIBIT B

FORM OF ISSUE PRICE CERTIFICATE
$_____

CERTIFICATES OF PARTICIPATION
(2024 Capital Improvement Financing Project)
Evidencing the Direct, Undivided Fractional Interests
of the Owners Thereof in Lease Payments to be Made by the

TOWN OF MAMMOTH LAKES
(Mono County, California),
As the Rental for Certain Property Pursuant to a Lease Agreement with the Mammoth Lakes Municipal Service Corporation

ISSUE PRICE CERTIFICATE
The undersigned, on behalf of Piper Sandler & Co. (“Piper”), based on the information available to it, hereby certifies as set forth below with respect to the sale and issuance of the above-captioned obligations (the “Certificates”).

I. General

1. Piper and the Town of Mammoth Lakes (the “Issuer”) have executed a certificate purchase agreement in connection with the Certificates on the Sale Date. Piper has not modified the certificate purchase agreement since its execution on the Sale Date.

II. Price

1. Piper offered the Hold-the-Offering-Price Maturities to the Public for purchase at the respective initial offering prices listed in Schedule I (the “Initial Offering Prices”) on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Certificates is attached to this certificate as Schedule II.

2. As set forth in the certificate purchase agreement, Piper has agreed in writing that, (i) for each Maturity of the Hold-the-Offering-Price Maturities, it would neither offer nor sell any of the Certificates of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the “hold-the-offering-price rule”), and (ii) any selling group agreement would contain the agreement of each dealer who is a member of the selling group, and any retail distribution agreement would contain the agreement of each broker-dealer who is a party to the retail distribution agreement, to comply with the hold-the-offering-price rule.

3. No Underwriter (as defined below) has offered or sold any Maturity of the Hold-theOffering-Price Maturities at a price that is higher than the respective Initial Offering Price for that Maturity during the Holding Period.

III. Defined Terms

1. General Rule Maturities means those Maturities of the Certificates not listed in Schedule I hereto as the “Hold-the-Offering-Price Maturities.”

2. Hold-the-Offering-Price Maturities means those Maturities of the Certificates listed in Schedule I hereto as the “Hold-the-Offering-Price Maturities.”

3. Holding Period means, with respect to a Hold-the-Offering-Price Maturity, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale Date, or (ii) the date on which the Underwriter has sold at least 10% of such Hold-the-Offering-Price

Exhibit A

Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold-theOffering-Price Maturity.

4. Maturity means Certificates with the same credit and payment terms. Certificates with different maturity dates, or Certificates with the same maturity date but different stated interest rates, are treated as separate maturities.

5. Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a Related Party to an Underwriter.

6. A person is a “Related Party” to an Underwriter if the Underwriter and the person are subject, directly or indirectly, to (i) at least 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (ii) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other).

7. Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Certificates. The Sale Date of the Certificates is June 18, 2024.

8. Underwriter means (i) any person that agrees pursuant to a written contract with the Issuer (or with Piper to form an underwriting syndicate) to participate in the initial sale of the Certificates to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Certificates to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Certificates to the Public).

All terms not defined herein shall have the same meanings as in the Tax Exemption Certificate and Agreement with respect to the Certificates, to which this Certificate is attached. The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents Piper’ interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in its documents and with respect to compliance with the federal income tax rules affecting the Certificates, and by Quint & Thimmig LLP in connection with rendering its opinion that the interest on the Certificates is excluded from gross income for federal income tax purposes, the preparation of Internal Revenue Service Form 8038-G, and other federal income tax advice it may give to the Issuer from time to time relating to the Certificates.

IV. Credit
Piper has calculated that the present value of the amounts paid to obtain the _______________ (the “Municipal Bond Insurer”) municipal bond insurance and reserve fund municipal bond insurance policies (the “Policies”) is less than the present value of the debt service reasonably expected to be saved as a result of having the Policies, using as the discount factor for this purpose the expected Yield with respect to the Certificates treating the fees paid as interest with respect to the Certificates.

Exhibit A

To the best of Piper’s knowledge, the fees paid to obtain the Policies were determined in arm’slength negotiations and were required as a condition to the issuance by the Municipal Bond Insurer of the Policies.

Dated: July 2, 2024
PIPER SANDLER & CO., as Underwriter
By
Authorized Officer

Exhibit A

SCHEDULE I TO ISSUE PRICE CERTIFICATE
$_____

CERTIFICATES OF PARTICIPATION
(2024 Capital Improvement Financing Project)
Evidencing the Direct, Undivided Fractional Interests
of the Owners Thereof in Lease Payments to be Made by the

TOWN OF MAMMOTH LAKES
(Mono County, California),
As the Rental for Certain Property Pursuant to a Lease Agreement with the Mammoth Lakes Municipal Service Corporation
Hold-theOffering General
Price Rule
Maturities Maturities Maturity Date Principal Interest
(if Marked) (if Marked) (June 1) Amount Rate Price
c Priced to the June 1, ____, par call date.

T Term Certificates.

Exhibit A

SCHEDULE II TO ISSUE PRICE CERTIFICATE

PRICING WIRE OR EQUIVALENT COMMUNICATION

Quint & Thimmig LLP 01/17/24
13021.16
AFTER RECORDATION PLEASE RETURN TO:

Quint & Thimmig LLP
900 Larkspur Landing Circle, Suite 270
Larkspur, CA 94939-1726
Attention: Brian D. Quint, Esq.

THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT TO SECTION 11929 OF THE CALIFORNIA REVENUE AND TAXATION CODE. THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE CALIFORNIA GOVERNMENT CODE.

SITE AND FACILITY LEASE
Dated as of July 1, 2024
by and between the
TOWN OF MAMMOTH LAKES, as Lessor
and the
MAMMOTH LAKES MUNICIPAL SERVICE CORPORATION, as Lessee
(2024 Capital Improvement Financing Project)

SITE AND FACILITY LEASE
THIS SITE AND FACILITY LEASE (this “Site and Facility Lease”), dated as of July 1, 2024, is by and between the TOWN OF MAMMOTH LAKES, a municipal corporation and general law city duly organized and existing under and by virtue of the laws of the State of California, as lessor (the “Town”), and the MAMMOTH LAKES MUNICIPAL SERVICE CORPORATION, a nonprofit public benefit corporation organized and existing under the laws of the State of California, as lessee (the “Corporation”); WITNESSETH:

WHEREAS, the Corporation intends to assist The Town to finance the cost of constructing and equipping a new Town Hall facility and the cost of acquiring certain land and improvements (collectively, the “Project”), by leasing certain land and improvements to The Town pursuant to a Lease Agreement, dated as of July 1, 2024, a memorandum of which is recorded concurrently herewith (the “Lease Agreement”); and WHEREAS, The Town proposes to enter into this Site and Facility Lease with the Corporation as a material consideration for the Corporation’s agreement to lease such land and improvements to The Town;
NOW, THEREFORE, IT IS HEREBY MUTUALLY AGREED, as follows:

Section 1. Definitions. Capitalized terms used, but not otherwise defined, in this Site and Facility Lease shall have the meanings ascribed to them in the Lease Agreement.

Section 2. Site and Facility Lease. The Town hereby leases to the Corporation and the Corporation hereby leases from The Town, on the terms and conditions hereinafter set forth, those certain parcels of real property situated in Mono County, State of California, more particularly described in Exhibit A attached hereto and made a part hereof (collectively, the “Site”), and those certain improvements located on the Site, more particularly described in Exhibit B attached hereto and made a part hereof (collectively, the “Facility”).

Section 3. Term. The term of this Site and Facility Lease shall commence on the Closing Date, and shall end on June 1, ____, unless the Term of the Lease Agreement is extended as hereinafter provided. If, on June 1, ____, the Trust Agreement shall not be discharged by its terms or if the Lease Payments or Additional Payments, if any, payable under the Lease Agreement shall have been abated at any time and for any reason, then the term of this Site and Facility Lease shall be extended without the need to execute any amendment to this Section 3 until there has been deposited with the Trustee an amount sufficient to pay all obligations due under the Lease Agreement, but in no event shall the term of this Site and Facility Lease extend beyond June 1, ____. If, prior to June 1, ____, the Trust Agreement shall be discharged by its terms, the term of this Site and Facility Lease shall thereupon end.

Notwithstanding the foregoing, the term of this Site and Facility Lease shall not end so long as any amounts are owed to the Municipal Bond Insurer with respect to the Municipal Bond Insurance Policy or the Reserve Policy (as such capitalized terms are defined in the Lease Agreement).

Section 4. Advance Rental Payment. The Town agrees to lease the Site and the Facility to the Corporation in consideration of the payment by the Corporation of an advance rental payment of _________________ dollars ($_____). The Town and the Corporation agree that by reason of the sale of the Certificates and deposit of proceeds pursuant to the provisions of the

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Trust Agreement, dated as of July 1, 2024, by and among The Town, the Corporation and U.S.

Bank Trust Company, National Association, as trustee thereunder (the “Trust Agreement”), the advance rental payment referenced in the preceding sentence shall be deemed to have been paid.

Section 5. Purpose. The Corporation shall use the Site and the Facility solely for the purpose of leasing the Site and the Facility to The Town pursuant to the Lease Agreement and for such purposes as may be incidental thereto; provided, however, that in the event of default by The Town under the Lease Agreement, the Corporation and its assigns may exercise the remedies provided in the Lease Agreement.

Section 6. Town’s Interest in the Site and the Facility. The Town covenants that it is the owner in fee of the Site and the Facility.

Section 7. Assignments and Subleases. Unless The Town shall be in default under the Lease Agreement, the Corporation may not assign its rights under this Site and Facility Lease or sublet the Site or the Facility, except as provided in the Lease Agreement, without the prior written consent of the District and the Municipal Bond Insurer.

Section 8. Right of Entry. The Town reserves the right for any of its duly authorized representatives to enter upon the Site and the Facility at any reasonable time to inspect the same or to make any repairs, improvements or changes necessary for the preservation thereof.

Section 9. Termination. The Corporation agrees, upon the termination of this Site and Facility Lease, to quit and surrender the Site and the Facility in the same good order and condition as the same were in at the time of commencement of the term hereunder, reasonable wear and tear excepted, and agrees that any permanent improvements and structures existing upon the Site at the time of the termination of this Site and Facility Lease shall remain thereon and title thereto shall vest in The Town.

Section 10. Default. In the event the Corporation shall be in default in the performance of any obligation on its part to be performed under the terms of this Site and Facility Lease, which default continues for thirty (30) days following notice and demand for correction thereof to the Corporation, The Town may exercise any and all remedies granted by law, except that no merger of this Site and Facility Lease and of the Lease Agreement shall be deemed to occur as a result thereof and The Town shall have no right to terminate this Site and Facility Lease as a remedy for such default; provided, however, that so long as any Certificates are Outstanding and unpaid in accordance with the terms thereof, the Lease Payments assigned by the Corporation to the Trustee under the Assignment Agreement shall continue to be paid to the Trustee.

Section 11. Quiet Enjoyment. The Corporation, at all times during the term of this Site and Facility Lease, shall peaceably and quietly have, hold and enjoy all of the Site subject to the provisions of the Lease Agreement and the Trust Agreement.

Section 12. Waiver of Personal Liability. All liabilities under this Site and Facility Lease on the part of the Corporation are solely liabilities of the Corporation and The Town hereby releases each and every, member, director, officer, employee and agent of the Corporation of and from any personal or individual liability under this Site and Facility Lease. No member, director, officer, employee or agent of the Corporation shall at any time or under any circumstances be individually or personally liable under this Site and Facility Lease for anything done or omitted to be done by the Corporation hereunder.

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Section 13. Taxes. All assessments of any kind or character and also all taxes, including possessory interest taxes, levied or assessed upon the Site and the Facility (including both land and improvements) will be paid in accordance with the Lease Agreement.

Section 14. Eminent Domain. In the event the whole or any part of the Site or the Facility thereon is taken by eminent domain proceedings, the interest of the Corporation shall be recognized and is hereby determined to be the amount of then unpaid Certificates including the unpaid principal and interest with respect to any then outstanding Certificates and, subject to the provisions of the Lease Agreement and payment of all amounts owed to the Municipal Bond Insurer, the balance of the award, if any, shall be paid to The Town.

Section 15. Use of the Proceeds. The Town and the Corporation hereby agree that the lease to the Corporation of The Town’s right and interest in the Site and the Facility pursuant to Section 2 serves the public purposes of The Town by providing funds to enable The Town to finance the 2024 Project.

Section 16. Partial Invalidity. If any one or more of the terms, provisions, covenants or conditions of this Site and Facility Lease shall, to any extent, be declared invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, the finding, order or decree of which becomes final, none of the remaining terms, provisions, covenants and conditions of this Site and Facility Lease shall be affected thereby, and each provision of this Site and Facility Lease shall be valid and enforceable to the fullest extent permitted by law.

Section 17. Notices. All notices, statements, demands, consents, approvals, authorizations, offers, designations, requests or other communications hereunder by either party to the other shall be in writing and shall be sufficiently given and served upon the other party if delivered personally or if mailed by United States registered mail, return receipt requested, postage prepaid, and, if to the Town, addressed to The Town in care of the Town Manager, Town of Mammoth Lakes, 437 Old Mammoth Road, Suite 230, Mammoth Lakes, CA 93546, or if to the Corporation, addressed to the Corporation in care of the Town Manager, Town Manager, Town of Mammoth Lakes, 437 Old Mammoth Road, Suite 230, Mammoth Lakes, CA 93546, if to the Municipal Bond Insurer, addressed to ___________, Attention:
__________, Re: Policy No. _________, Telephone: (___) ___-____; Fax: (___) ___-____, or to such other addresses as the respective parties may from time to time designate by notice in writing.

Section 18. Municipal Bond Insurer as Third Party Beneficiary. To the extent that this Site and Facility Lease confers upon or give or grant to the Municipal Bond Insurer any right, remedy or claim under or by reason of the Trust Agreement or the Lease Agreement, the Municipal Bond Insurer is explicitly recognized as being a third party beneficiary hereunder and may enforce any such right, remedy or claim conferred, given or granted hereunder.

Section 19. Binding Effect. This Site and Facility Lease shall inure to the benefit of and shall be binding upon The Town and the Corporation and their respective successors and assigns.

Section 20. Amendment. This Site and Facility Lease may not be amended except as permitted under Section 10.01 of the Trust Agreement.

Section 21. Section Headings. All section headings contained herein are for convenience of reference only and are not intended to define or limit the scope of any provision of this Site and Facility Lease.

Section 22. Applicable Law. This Site and Facility Lease shall be governed by and construed in accordance with the laws of the State of California.