Agenda packet, joint meeting — Montebello City Council, June 24, 2026 (part 2 of 3)

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without effecting a surrender of this Lease Agreement, and further agrees that no acts of the Authority in effecting such re-letting shall constitute a surrender or termination of this Lease Agreement irrespective of the use or the term for which such re-letting is made or the terms and conditions of such re-letting, or otherwise, but that, on the contrary, in the event of such default by the City the right to terminate this Lease Agreement shall vest in the Authority to be effected in the sole and exclusive manner provided for in subparagraph (1) hereof. The City further agrees to pay the Authority the cost of any alterations or additions to the Property necessary to place the Property in condition for re-letting immediately upon notice to the City of the completion and installation of such additions or alterations.

The City hereby waives any and all claims for damages caused or which may be caused by the Authority in re-entering and taking possession of the Property as herein provided and all claims for damages that may result from the destruction of or injury to the Property and all claims for damages to or loss of any property belonging to the City, or any other person, that may be in or upon the Property. (b) If (i) the City’s interest in this Lease Agreement or any part thereof is assigned or transferred, either voluntarily or by operation of law or otherwise, without the written consent of the Authority and, as hereinafter provided for, or (ii) the City or any assignee shall file any petition or institute any proceeding under any act or acts, state or federal, dealing with or relating to the subject or subjects of bankruptcy or insolvency, or under any amendment of such act or acts, either as a bankrupt or as an insolvent, or as a debtor, or in any similar capacity, wherein or whereby the City asks or seeks or prays to be adjudicated a bankrupt, or is to be discharged from any or all of the City’s debts or obligations, or offers to the City’s creditors to elect a composition or extension of time to pay the City’s debts or asks, seeks or prays for reorganization or to effect a plan of reorganization, or for a readjustment of the City’s debts, or for any other similar relief, or if any such petition or any such proceedings of the same or similar kind or character be filed or be instituted or taken against the City, or if a receiver of the business or of the property or assets of the City shall be appointed by any court, except a receiver appointed at the instance or request of the Authority, or if the City shall make a general assignment for the benefit of the City’s creditors, or (iii) the City shall abandon or vacate the Property, then the City shall be deemed to be in default hereunder. (c) In addition to the other remedies set forth in this Section, upon the occurrence of an event of default, the Authority and its assignee shall be entitled to proceed to protect and enforce the rights vested in the Authority and its assignee by the Lease Agreement or by law. The provisions of the Lease Agreement and the duties of the City and of its city council, officers or employees shall be enforceable by the Authority or its assignee by mandamus or other appropriate suit, action or proceeding in any court of competent jurisdiction. Without limiting the generality of the foregoing, the Authority and its assignee shall have the right to bring the following actions:
(i) Accounting. By action or suit in equity to require the City and its city council, officers and employees and its assigns to account as the trustee of an express trust. (ii) Injunction. By action or suit in equity to enjoin any acts or things which may be unlawful or in violation of the rights of the Authority or its assignee. (iii) Mandamus. By mandamus or other suit, action or proceeding at law or in equity to enforce the Authority’s or its assignee’s rights against the City (and its city council, officers and employees) and to compel the City to perform and carry out its duties and obligations under the law and its covenants and agreements with the City as provided herein.

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Each and all of the remedies given to the Authority hereunder or by any law now or hereafter enacted are cumulative and the single or partial exercise of any right, power or privilege hereunder shall not impair the right of the Authority to the further exercise thereof or the exercise of any or all other rights, powers or privileges. The term “re-let” or “re-letting” as used in this Section shall include, but not be limited to, re-letting by means of the operation by the Authority of the Property. If any statute or rule of law validly shall limit the remedies given to the Authority hereunder, the Authority nevertheless shall be entitled to whatever remedies are allowable under any statute or rule of law.

In the event the Authority shall prevail in any action brought to enforce any of the terms and provisions of this Lease Agreement, the City agrees to pay a reasonable amount as and for attorney’s fees incurred by the Authority in attempting to enforce any of the remedies available to the Authority hereunder.

Notwithstanding anything to the contrary contained in this Lease Agreement, the Authority shall have no right upon a default hereunder by the City to accelerate Rental Payments. (d) Notwithstanding anything to the contrary contained in this Lease Agreement, the termination of this Lease Agreement by the Authority and its assignees on account of a default by the City under this Section shall not effect or result in a termination of the Ground Lease.

Section 7.02 Waiver. Failure of the Authority to take advantage of any default on the part of the City shall not be, or be construed as, a waiver thereof, nor shall any custom or practice which may grow up between the parties in the course of administering this instrument be construed to waive or to lessen the right of the Authority to insist upon performance by the City of any term, covenant or condition hereof, or to exercise any rights given the Authority on account of such default. A waiver of a particular default shall not be deemed to be a waiver of any other default or of the same default subsequently occurring. The acceptance of Rental Payments hereunder shall not be, or be construed to be, a waiver of any term, covenant or condition of this Lease Agreement.

ARTICLE VIII

EMINENT DOMAIN; PREPAYMENT
Section 8.01 Eminent Domain. If all of the Property (or portions thereof such that the remainder is not usable for public purposes by the City) shall be taken under the power of eminent domain, the term hereof shall cease as of the day that possession shall be so taken. If less than all of the Property shall be taken under the power of eminent domain and the remainder is usable for public purposes by the City at the time of such taking, then the Lease Agreement shall continue in full force and effect as to such remainder, and the parties waive the benefits of any law to the contrary, and in such event there shall be a partial abatement of the Rental Payments in accordance with the provisions of Section 3.06 hereof. So long as any Bonds shall be Outstanding, any award made in eminent domain proceedings for the taking of the Property, or any portion thereof, shall be paid to the Trustee and applied to the redemption of Bonds as provided in subsection (a) of Section 4.01 of the Indenture, in the corresponding provisions of any Supplemental Indenture pursuant to which Additional Bonds are issued and in Section 5.03 of the Indenture. Any such award made after all of the Bonds, and all other amounts due under the Indenture and hereunder, have been fully paid, shall be paid to the Authority and to the City as their respective interests may appear.

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Section 8.02 Prepayment.
(a) The City may prepay all or a portion of the Base Rental Payments attributable to the Series 2026A Bonds which are payable after June 1, [2037] from any source of available funds, on any date on or after June 1, [2036], by paying (i) all or a portion, as selected by the City, of the principal components of such Base Rental Payments, and (ii) the accrued but unpaid interest component of such Base Rental Payments to be prepaid to the date of such prepayment. (b) The City may prepay, from any source of available funds, all or any portion of the Base Rental Payments attributable to the Series 2026A Bonds by depositing with the Trustee moneys or securities as provided, and subject to the terms and conditions set forth, in Article X of the Indenture sufficient to make such Base Rental Payments when due or to make such Base Rental Payments through a specified date on which the City has a right to prepay such Base Rental Payments pursuant to subsection (a) of this Section, and to prepay such Base Rental Payments on such prepayment date, at a prepayment price determined in accordance with subsection (a) of this Section. (c) If less than all of the Base Rental Payments attributable to the Series 2026A Bonds are prepaid pursuant to this Section then, as of the date of such prepayment pursuant to subsection (a) of this Section, or the date of a deposit pursuant to subsection (b) of this Section, the principal and interest components of such Base Rental Payments shall be recalculated by the City and transmitted to the Trustee in order to take such prepayment into account. The City agrees that if, following a partial prepayment of such Base Rental Payments, the Property is damaged or destroyed or taken by eminent domain, or a defect in title to the Property is discovered, the City shall not be entitled to, and by such prepayment waives the right of, abatement of such prepaid Base Rental Payments and the City shall not be entitled to any reimbursement of such Base Rental Payments. (d) If all of the Base Rental Payments are prepaid in accordance with the provisions of this Lease Agreement then, as of the date of such prepayment pursuant to subsection (a) of this Section and, if applicable, the corresponding provisions hereof relating to the prepayment of Base Rental Payments attributable to Additional Bonds, or deposit pursuant to subsection (b) of this Section and, if applicable, such corresponding provisions, and payment of all other amounts owed under this Lease Agreement, the term of this Lease Agreement shall be terminated. (e) Prepayments of Base Rental Payments attributable to the Series 2026A Bonds made pursuant to this Section shall be applied to the redemption of the Series 2026A Bonds as directed by the City and as provided in Section 4.01 of the Indenture. (f) Before making any prepayment pursuant to this Article, the City shall give written notice to the Authority and the Trustee specifying the date on which the prepayment will be made (conditionally or otherwise), which date shall be not less than 20 nor more than 60 days from the date such notice is given to the Authority.

ARTICLE IX

COVENANTS
Section 9.01 Right of Entry. The Authority and its assignees shall have the right to enter upon and to examine and inspect the Property during reasonable business hours (and in emergencies

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at all times) for any purpose connected with the Authority’s rights or obligations under this Lease Agreement, and for all other lawful purposes.

Section 9.02 Liens. In the event the City shall at any time during the term of this Lease Agreement cause any changes, alterations, additions, improvements, or other work to be done or performed or materials to be supplied, in or upon the Property, the City shall pay, when due, all sums of money that may become due for, or purporting to be for, any labor, services, materials, supplies or equipment furnished or alleged to have been furnished to or for the City in, upon or about the Property and which may be secured by a mechanics’, materialmen’s or other lien against the Property or the Authority’s interest therein, and will cause each such lien to be fully discharged and released at the time the performance of any obligation secured by any such lien matures or becomes due, except that, if the City desires to contest any such lien, it may do so as long as such contestment is in good faith.

If any such lien shall be reduced to final judgment and such judgment or such process as may be issued for the enforcement thereof is not promptly stayed, or if so stayed and said stay thereafter expires, the City shall forthwith pay and discharge said judgment.

Section 9.03 Quiet Enjoyment. The parties hereto mutually covenant that the City, by keeping and performing the covenants and agreements herein contained, shall at all times during the term of this Lease Agreement peaceably and quietly have, hold and enjoy the Property without suit, trouble or hindrance from the Authority.

Section 9.04 Authority Not Liable. The Authority and its directors, officers, agents and employees, shall not be liable to the City or to any other party whomsoever for any death, injury or damage that may result to any person or property by or from any cause whatsoever in, on or about the Property. To the extent permitted by law, the City shall, at its expense, indemnify and hold the Authority and the Trustee and all directors, members, officers and employees thereof harmless against and from any and all claims by or on behalf of any person, firm, corporation or governmental authority arising from the acquisition, construction, occupation, use, operation, maintenance, possession, conduct or management of or from any work done in or about the Property or from the subletting of any part thereof, including any liability for violation of conditions, agreements, restrictions, laws, ordinances, or regulations affecting the Property or the occupancy or use thereof, but excepting the negligence or willful misconduct of the persons or entity seeking indemnity. The City also covenants and agrees, at its expense, to pay and indemnify and save the Authority and the Trustee and all directors, officers and employees thereof harmless against and from any and all claims arising from (a) any condition of the Property and the adjoining sidewalks and passageways, (b) any breach or default on the part of the City in the performance of any covenant or agreement to be performed by the City pursuant to this Lease Agreement, (c) any act or negligence of licensees in connection with their use, occupancy or Operation of the Property, or (d) any accident, injury or damage whatsoever caused to any person, firm or corporation in or about the Property or upon or under the sidewalks and from and against all costs, reasonable counsel fees, expenses and liabilities incurred in any action or proceeding brought by reason of any claim referred to in this Section, but excepting the negligence or willful misconduct of the person or entity seeking indemnity. In the event that any action or proceeding is brought against the Authority or the Trustee or any director, member, officer or employee thereof, by reason of any such claim, the City, upon notice from the Authority or the Trustee or such director, member, officer employee thereof, covenants to resist or defend such action or proceeding by counsel reasonably satisfactory to the Authority or the Trustee or such director, member, officer or employee thereof.

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Section 9.05 Assignment and Subleasing. This Lease Agreement may not be assigned by the City. The City may sublease the Property or any portion thereof to any person or entity for any purpose, subject to the satisfaction of all of the following conditions (a) through (d) below:
(a) this Lease Agreement and the obligation of the City to make all Rental Payments hereunder shall remain the primary obligation of the City; (b) the City shall, within 30 days after the delivery thereof, furnish or cause to be furnished to the Authority and the Trustee a true and complete copy of such sublease; (c) any sublease of the Property by the City shall explicitly provide that such sublease is subject to all rights of the Authority under the Lease Agreement, including, the right to re-enter and re-let the Property or terminate the Lease Agreement upon a default by the City; and (d) the City shall furnish the Authority and the Trustee with an Opinion of Counsel to the effect that such sublease will not, in and of itself, cause the interest on the Bonds to be included in gross income for federal income tax purposes.

Section 9.06 Title to Property. Upon the termination or expiration of this Lease Agreement (other than as provided in Section 7.01 and Section 8.01 hereof), and the first date upon which the Bonds are no longer Outstanding, all right, title and interest in and to the Property shall vest in the City.

Upon any such termination or expiration, the Authority shall execute such conveyances, deeds and other documents as may be necessary to effect such vesting of record.

Section 9.07 Authority’s Purpose. The Authority covenants that, prior to the discharge of this Lease Agreement and the Bonds, it will not engage in any activities inconsistent with the purposes for which the Authority is organized, as set forth in the Joint Powers Agreement.

Section 9.08 Representations of the City. The City represents and warrants to the Authority that (a) the City has the full power and authority to enter into, to execute and to deliver this Lease Agreement and the Indenture, and to perform all of its duties and obligations hereunder and thereunder, and has duly authorized the execution and delivery of this Lease Agreement and the Indenture, and (b) the Property will be used in the performance of essential governmental functions.

Section 9.09 Representation of the Authority. The Authority represents and warrants to the City that the Authority has the full power and authority to enter into, to execute and to deliver this Lease Agreement, the Assignment Agreement and the Indenture, and to perform all of its duties and obligations hereunder and thereunder, and has duly authorized the execution and delivery of this Lease Agreement, the Assignment Agreement and the Indenture.

ARTICLE X

NO CONSEQUENTIAL DAMAGES;
USE OF THE PROPERTY; SUBSTITUTION OR RELEASE
Section 10.01 No Consequential Damages. In no event shall the Authority or the Trustee be liable for any incidental, indirect, special or consequential damage in connection with or arising out of this Lease Agreement or the City’s use of the Property.

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Section 10.02 Use of the Property. The City will not use, operate or maintain the Property improperly, carelessly, in violation of any applicable law or in a manner contrary to that contemplated by this Lease Agreement. In addition, the City agrees to comply in all respects (including, without limitation, with respect to the use, maintenance and operation of the Property) with all laws of the jurisdictions in which its operations may extend and any legislative, executive, administrative or judicial body exercising any power or jurisdiction over the Property; provided, however, that the City may contest in good faith the validity or application of any such law or rule in any reasonable manner which does not, in the opinion of the Authority, adversely affect the estate of the Authority in and to any of the Property or its interest or rights under this Lease Agreement.

Section 10.03 Substitution or Release of the Property. The City shall have the right to substitute alternate real property for any portion of the Property or to release a portion of the Property from this Lease Agreement. All costs and expenses incurred in connection with such substitution or release shall be borne by the City. Notwithstanding any substitution or release of Property pursuant to this subsection, there shall be no reduction in or abatement of the Base Rental Payments due from the City hereunder as a result of such substitution or release. Any such substitution or release of any portion of the Property shall be subject to the following specific conditions, which are hereby made conditions precedent to such substitution or release:
(a) the City shall have found (as set forth in a certificate delivered by the City to the Trustee) that the Property, as constituted after such substitution or release, (i) has an annual fair rental value at least equal to the maximum Base Rental Payments payable by the City in any Rental Period, and (ii) has a useful life in excess of the final maturity of any Outstanding Bonds; (b) the City shall have obtained or caused to be obtained a CLTA or ALTA title insurance policy or policies with respect to any substituted property in the amount at least equal to the aggregate principal amount of any Outstanding Bonds of the type and with the endorsements described in Section 6.02 hereof;
(c) the City shall have provided the Trustee with an Opinion of Counsel to the effect that such substitution or release will not, in and of itself, cause the interest on the Bonds to be included in gross income for federal income tax purposes; (d) the City, the Authority and the Trustee shall have executed, and the City shall have caused to be recorded with the San Bernardino County Recorder, any document necessary to reconvey to the City the portion of the Property being released and to include any substituted real property in the description of the Property contained herein and in the Ground Lease; (e) the City shall have provided notice of such substitution to each rating agency then rating the Bonds;
(f) no event of default (as described in Article VII hereof) has occurred and is continuing;
(g) the City will give, or cause to be given, any notice of the occurrence of such substitution required to be given pursuant to the Continuing Disclosure Certificate; (h) the City will certify to the Trustee that the City has a current need for the substituted real property; and

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(i) the City shall certify to the Trustee that any substitution shall not cause the City to violate any of its covenants, representations and warranties made in the Lease Agreement.

ARTICLE XI

MISCELLANEOUS
Section 11.01 Law Governing. THIS LEASE AGREEMENT SHALL BE GOVERNED

EXCLUSIVELY BY THE PROVISIONS HEREOF AND BY THE LAWS OF THE STATE OF CALIFORNIA AS THE SAME FROM TIME TO TIME EXIST.

Section 11.02 Notices. All written notices, statements, demands, consents, approvals, authorizations, offers, designations, requests or other communications hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely:

If to the City: City of Montebello
1600 West Beverly Boulevard
Montebello, California 90640
Attention: City Manager
If to the Authority: Montebello Public Financing Authority 1600 West Beverly Boulevard
Montebello, California 90640
Attention: Executive Director
Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if personally served or delivered, upon delivery, (b) if given by electronic communication, whether by telex, telegram or telecopier, upon the sender’s receipt of an appropriate answerback or other written acknowledgment, (c) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, (d) if given by overnight courier, with courier charges prepaid, 24 hours after delivery to said overnight courier, or (e) if given by any other means, upon delivery at the address specified in this Section.

Section 11.03 Validity and Severability. If for any reason this Lease Agreement shall be held by a court of competent jurisdiction to be void, voidable or unenforceable by the Authority or by the City, or if for any reason it is held by such a court that any of the covenants and conditions of the City hereunder, including the covenant to pay Rental Payments, is unenforceable for the full term hereof; then and in such event this Lease Agreement is and shall be deemed to be a Lease Agreement under which the Rental Payments are to be paid by the City annually in consideration of the right of the City to possess, occupy and use the Property, and all of the terms, provisions and conditions of this Lease Agreement, except to the extent that such terms, provisions and conditions are contrary to or inconsistent with such holding, shall remain in full force and effect.

Section 11.04 Net-Net-Net Lease. This Lease Agreement shall be deemed and construed to be a “net-net-net lease” and the City hereby agrees that the Rental Payments shall be an absolute net

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return to the Authority, free and clear of any expenses, charges or set-offs whatsoever and notwithstanding any dispute between the City and the Authority.

Section 11.05 Taxes. The City shall pay or cause to be paid all taxes and assessments of any type or nature charged to the Authority or affecting the Property or the respective interests or estates therein; provided, however, that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the City shall be obligated to pay only such installments as are required to be paid during the term of this Lease Agreement as and when the same become due.

The City or any sublessee may, at the City’s or such sublessee’s expense and in its name, in good faith contest any such taxes, assessments, utility and other charges and, in the event of any such contest, may permit the taxes, assessments or other charges so contested to remain unpaid during the period of such contest and any appeal therefrom unless the Authority or the Trustee shall notify the City or such sublessee that, in the opinion of independent counsel, by nonpayment of any such items, the interest of the Authority in the Property will be materially endangered or the Property, or any part thereof, will be subject to loss or forfeiture, in which event the City or such sublessee shall promptly pay such taxes, assessments or charges or provide the Authority with full security against any loss which may result from nonpayment, in form satisfactory to the Authority and the Trustee.

Section 11.06 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 Lease Agreement.

Section 11.07 Amendments.
(a) This Lease Agreement and the Ground Lease may be amended and the rights and obligations of the Authority and the City hereunder and thereunder may be amended at any time by an amendment hereto or thereto which shall become binding upon execution and delivery by the Authority and the City, but only with the prior written consent of the Owners of a majority of the principal amount of the Bonds then Outstanding pursuant to the Indenture, provided that no such amendment shall (i) extend the payment date of any Base Rental Payments, reduce the interest component or principal component of any Base Rental Payments or change the prepayment terms and provisions, without the prior written consent of the Owner of each Bond so affected, or (ii) reduce the percentage of the principal amount of the Bonds the consent of the Owners of which is required for the execution of any amendment of this Lease Agreement or the Ground Lease. (b) This Lease Agreement and the Ground Lease and the rights and obligations of the Authority and the City hereunder and thereunder may also be amended at any time by an amendment hereto or thereto which shall become binding upon execution by the Authority and the City, without the written consents of any Owners, but only to the extent permitted by law and only for any one or more of the following purposes:
(i) to add to the agreements, conditions, covenants and terms required by the Authority or the City to be observed or performed herein or therein other agreements, conditions, covenants and terms thereafter to be observed or performed by the Authority or the City, or to surrender any right or power reserved herein or therein to or conferred herein or therein on the Authority or the City, and which in either case shall not materially adversely affect the interests of the Owners, as evidenced by an Opinion of Bond Counsel;

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(ii) to make such provisions for the purpose of curing any ambiguity or of correcting, curing or supplementing any defective provision contained herein or therein or in regard to questions arising hereunder or thereunder which the Authority or the City may deem desirable or necessary and not inconsistent herewith or therewith, and which shall not materially adversely affect the interests of the Owners, as evidenced by an Opinion of Bond Counsel; (iii) to make such additions, deletions or modifications as may be necessary or appropriate to assure the exclusion from gross income for federal income tax purposes of the interest on the Bonds;
(iv) to provide for the substitution or release of a portion of the Property in accordance with the provisions of Sections 10.03 or 10.04 hereof; (v) to provide for the issuance of Additional Bonds in accordance with Article III of the Indenture; or
(vi) to make such other changes herein or therein or modifications hereto or thereto as the Authority or the City may deem desirable or necessary, and which shall not materially adversely affect the interests of the Owners, as evidenced by an Opinion of Bond Counsel.

Section 11.08 Assignment. The City and the Authority hereby acknowledge the assignment of this Lease Agreement (except for the Authority’s obligations and its rights to give consents or approvals hereunder), and the Base Rental Payments payable hereunder, to the Trustee pursuant to the Assignment Agreement. To the extent that this Lease Agreement confers upon or gives or grants the Trustee any right, remedy or claim under or by reason of this Lease Agreement, the Trustee is hereby explicitly recognized as being a third-party beneficiary hereunder and may enforce any such right, remedy or claim conferred, given or granted hereunder.

Section 11.09 Execution. This Lease Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all together shall constitute but one and the same Lease Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

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IN WITNESS WHEREOF, the Authority and the City have caused this Lease Agreement to be executed by their respective officers thereunto duly authorized, all as of the day and year first above written.

CITY OF MONTEBELLO
By:

City Manager
ATTEST:

City Clerk

MONTEBELLO PUBLIC FINANCING

AUTHORITY
By:

Executive Director
ATTEST:

Secretary

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EXHIBIT A

LEGAL DESCRIPTION OF THE PROPERTY
THE PROPERTY DESCRIBED IN THIS GROUND LEASE CONSISTS OF THE HOME2SUITES HOTEL BUILDING LOCATED AT THE FOLLOWING REAL PROPERTY:

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

PARCEL A: 5267-009-903
LOTS 375 384, INCLUSIVE, OF TRACT NO. 10034, IN THE OF MONTEBELLO, COUNTY OF LOS ANGELES, STATE CALIFORNIA, AS PER MAP RECORDED IN BOOK 146, PAGES 51 TO 57 OF MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

PARCEL B: 5267-010-904
LOT A OF NO. 10034, IN THE CITY OF MONTEBELLO, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 146, PAGES 51 TO 57 OF MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

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EXHIBIT B

BASE RENTAL PAYMENT SCHEDULE
Base Rental Deposit Date
(Third Business Day
Prior to) Principal Component Interest Component
Total Base
Rental Payment
12/01/2026
06/01/2026
12/01/2027
06/01/2027
12/01/2028
06/01/2028
12/01/2029
06/01/2029
12/01/2030
06/01/2030
12/01/2031
06/01/2031
12/01/2032
06/01/2032
12/01/2033
06/01/2033
12/01/2034
06/01/2034
12/01/2035
06/01/2035
12/01/2036
06/01/2036
12/01/2037
06/01/2037
12/01/2038
06/01/2038
12/01/2039
06/01/2039
12/01/2040
06/01/2040
12/01/2041
06/01/2041
12/01/2042
06/01/2042
12/01/2043
06/01/2043
12/01/2044
06/01/2044
12/01/2045
06/01/2045
12/01/2046
06/01/2046
Total

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RECORDING REQUESTED BY:

Montebello Public Financing Authority
AND WHEN RECORDED RETURN TO:

Stradling Yocca Carlson & Rauth LLP
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660
Attention: Vanessa S. Legbandt, Esq.

[Space above for Recorder’s use.]

THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT TO SECTION 11921 OF THE CALIFORNIA REVENUE AND TAXATION CODE.

THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE CALIFORNIA GOVERNMENT CODE. THE ASSIGNOR IS A GOVERNMENTAL AGENCY.

ASSIGNMENT AGREEMENT
by and between

MONTEBELLO PUBLIC FINANCING AUTHORITY
and
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
as Trustee
Dated as of __________ 1, 2026
Relating to
$_________

MONTEBELLO PUBLIC FINANCING AUTHORITY
LEASE REVENUE REFUNDING BONDS, 2026 SERIES A
(MONTEBELLO HOME2 SUITES BY HILTON HOTEL PROJECT)

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ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT (this “Assignment Agreement”), executed and entered into as of __________ 1, 2026, is by and between the MONTEBELLO PUBLIC FINANCING AUTHORITY, a joint exercise of powers entity organized and existing under and by virtue of the laws of the State of California (the “Authority”), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association organized and existing under the laws of the United States, as Trustee (the “Trustee”).

WITNESSETH:

WHEREAS, the Authority previously issued its Lease Revenue Bonds, 2016 Series A (Montebello Home2 Suites by Hilton Hotel Project) (the “Series 2016A Bonds”) for the purpose of financing the acquisition, construction and equipping of the Home2 Suites Hotel located at 988 Via San Clemente, Montebello, California (the “2016 Project” or the “Project”); WHEREAS, the City and Authority desire to refinance all or a portion of the Series 2016A Bonds;
WHEREAS, the City and the Authority have determined that it would be in the best interests of the City and residents of the City to authorize the preparation, sale and delivery of the “Montebello Public Financing Authority Lease Revenue Refunding Bonds, 2026 Series A (Montebello Home2 Suites by Hilton Hotel Project)” (the “Series 2026A Bonds”) for the purpose of refinancing the Series 2016A Bonds and the City’s related lease payments;
WHEREAS, in order to facilitate the issuance of the Series 2026A Bonds, the City will lease the Home2 Suites Hotel facility (the improvements only) located on the real property described on Exhibit A hereto (the “Property”) to the Authority pursuant to a Ground Lease, dated as of the date hereof and recording concurrently herewith, and the City will sublease the Property back from the Authority pursuant to a Lease Agreement, dated as of the date hereof and recording concurrently herewith (the “Lease Agreement”);
WHEREAS, under the Lease Agreement, the City is obligated to make Base Rental Payments (as defined in the Lease Agreement) to the Authority;
WHEREAS, the Authority desires to assign without recourse certain of its rights in the Ground Lease and the Lease Agreement, including its right to receive the Base Rental Payments, to the Trustee for the benefit of the owners of the Series 2026A Bonds to be issued pursuant to the Indenture, dated as of the date hereof (the “Indenture”), by and among the Authority, the City and the Trustee; WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this Assignment Agreement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Assignment Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual agreements and covenants contained herein and for other valuable consideration, the parties hereto do hereby agree as follows:

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Section 1. Assignment. The Authority, for good and valuable consideration, the receipt of which is hereby acknowledged, does hereby sell, assign and transfer to the Trustee, irrevocably and absolutely, without recourse, for the benefit of the owners of the Series 2026A Bonds, all of its right, title and interest in and to the Ground Lease and the Lease Agreement including, without limitation, its right to receive the Base Rental Payments to be paid by the City under and pursuant to the Lease Agreement; provided, however, that the Authority shall retain its obligations under the Lease Agreement and Ground Lease, the rights to indemnification, to give approvals and consents under the Lease Agreement and the Ground Lease and to payment or reimbursement of its reasonable costs and expenses under the Lease Agreement.

Section 2. Acceptance. The Trustee hereby accepts the foregoing assignment, subject to the terms and provisions of the Indenture, and all such Base Rental Payments shall be applied and the rights so assigned shall be exercised by the Trustee as provided in the Lease Agreement and the Indenture.

Section 3. Conditions. This Assignment Agreement shall impose no obligations upon the Trustee beyond those expressly provided in the Indenture.

Section 4. Further Assurances. The Authority shall make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Assignment Agreement, and for the better assuring and confirming to the Trustee, for the benefit of the owners of the Series 2026A Bonds, the rights intended to be conveyed pursuant hereto.

Section 5. Governing Law. THIS ASSIGNMENT AGREEMENT SHALL BE

GOVERNED EXCLUSIVELY BY THE PROVISIONS HEREOF AND BY THE LAWS OF THE STATE OF CALIFORNIA AS THE SAME FROM TIME TO TIME EXIST.

Section 6. Execution. This Assignment Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all together shall constitute but one and the same Assignment Agreement.
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IN WITNESS WHEREOF, the Authority and the Trustee have caused this Assignment Agreement to be executed by their respective officers thereunto duly authorized, all as of the day and year first above-written.

MONTEBELLO PUBLIC FINANCING

AUTHORITY
By:

Raul Alvarez,
City Manager
ATTEST:

Christopher Jimenez,
Secretary
[SIGNATURES CONTINUED ON NEXT PAGE.]

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[SIGNATURE PAGE CONTINUED.]

THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., as Trustee
By:

Amy Green,
Vice President

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A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA )
) ss.

COUNTY OF LOS ANGELES )

On ___________________ before me, ____________________________________, Notary Public,

personally appeared _____________________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal

SIGNATURE OF NOTARY PUBLIC

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STATE OF CALIFORNIA )
) ss.

COUNTY OF __________ )

On ___________________ before me, ____________________________________, Notary Public,

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal

SIGNATURE OF NOTARY PUBLIC

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EXHIBIT A

LEGAL DESCRIPTION OF THE PROPERTY

THE PROPERTY DESCRIBED IN THIS ASSIGNMENT AGREEMENT CONSISTS OF THE HOME2SUITES HOTEL BUILDING LOCATED AT THE FOLLOWING REAL PROPERTY:

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF MONTEBELLO,

IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

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ESCROW AGREEMENT (2016 BONDS)
THIS ESCROW AGREEMENT, dated as of _________ 1, 2026, by and between the Montebello Public Financing Authority (the “Authority”) and The Bank of New York Mellon Trust Company, N.A., acting in its capacity as escrow bank (the “Escrow Bank”) pursuant to this Escrow Agreement (2016 Bonds) (the “Agreement”) and as 2016 Trustee (as defined below); WITNESSETH:

WHEREAS, the Authority has previously caused to be issued its Lease Revenue Bonds, 2016 Series A (Montebello Home2 Suites by Hilton Hotel Project) (the “2016 Bonds”), in the original aggregate principal amount of $54,860,000, pursuant to an Indenture, dated as of October 1, 2016 (the “2016 Indenture”), by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the “2016 Trustee”), of which $_________ aggregate principal amount is currently outstanding; and
WHEREAS, the City of Montebello (the “City”) and the Authority have determined that it is in its best interests and desirable that the 2016 Bonds be redeemed and defeased; and WHEREAS, in order to accomplish such redemption it is necessary and desirable for the City to prepay a portion of its Base Rental obligation under that certain Lease Agreement, dated as of October 1, 2016 (the “2016 Lease Agreement”), by and between the City and the Authority, and to thereby defease the 2016 Bonds in accordance with the terms of Section 10.01 of the 2016 Indenture and Section 5.07 of the 2016 Lease Agreement; and
WHEREAS, the City and the Authority have agreed to provide funds necessary to secure redemption and defeasance of the 2016 Bonds through the issuance by the Authority of its $_________ aggregate principal amount Montebello Public Financing Authority Lease Revenue Refunding Bonds, 2026 Series A (Montebello Home2 Suites by Hilton Hotel Project) (the “2016 Bonds”); and NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the City, the Authority and the Escrow Bank agree as follows:

SECTION 1. Deposit of Moneys. The Authority hereby deposits with the Escrow Bank $_________ from the net proceeds of the 2016 Bonds and direct the 2016 Trustee to transfer $______ to the Escrow Bank from certain funds and accounts established in connection with the 2016 Bonds.

Such moneys shall be held [uninvested] in irrevocable escrow by the Escrow Bank separate and apart from other funds of the City, the Authority, the Escrow Bank and the 2016 Trustee in a fund hereby created and established and to be known as the “Escrow Fund,” and shall be applied solely as provided in this Agreement. Such moneys are at least equal to an amount sufficient to redeem on _________ 1, 2026 (the “Redemption Date”) the 2016 Bonds maturing on and after June 1, 2027. [Amounts on deposit in the Escrow Fund shall be held uninvested as cash.] SECTION 2. Use of Moneys. The Escrow Bank acknowledges receipt of the moneys described in Section 1 and agrees:
(a) to deposit such moneys in the Escrow Fund; and

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(b) to pay the principal of the 2016 Bonds and accrued interest thereon, without premium (the “Redemption Price”), on the Redemption Date.

SECTION 3. Payment and Redemption of the 2016 Bonds.

The Authority hereby requests and irrevocably instructs the Escrow Agent to pay on the Redemption Date, from the amounts on deposit in the Escrow Fund, the Redemption Price of the 2016 Bonds, as set forth in Schedule C hereto. Upon payment in full of the 2016 Bonds, the Escrow Agent shall transfer any moneys remaining in the Escrow Fund to the City and, after provision for payment of amounts due to the 2016 Trustee and the Escrow Agent pursuant to this Section 3 and Section 10 hereof, this Agreement shall terminate. Pursuant to the 2016 Indenture, as a result of the irrevocable deposit in the Escrow Fund pursuant to Section 2 of this Escrow Agreement to pay and redeem all of the 2016 Bonds, the entire indebtedness of the outstanding 2016 Bonds has been discharged within the meaning of the 2016 Indenture.

The holders of the 2016 Bonds shall have a first lien on the moneys in the Escrow Fund which are allowable and sufficient to pay the 2016 Bonds until such moneys are used and applied as provided in this Agreement. Cash and investments held in the Escrow Fund are irrevocably pledged only to the 2016 Bond holders.

SECTION 4. Performance of Duties. The Escrow Bank agrees to perform the duties set forth herein.

SECTION 5. Indemnity. The Authority hereby assumes liability for, and hereby agree (whether or not any of the transactions contemplated hereby are consummated) to indemnify, protect, save and keep harmless the Escrow Bank and its respective successors, assigns, agents, employees and servants, from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements (including reasonable legal fees and disbursements) of whatsoever kind and nature which may be imposed on, incurred by, or asserted against, the Escrow Bank at any time (whether or not also indemnified against the same by the Authority or any other person under any other agreement or instrument, but without double indemnity) in any way relating to or arising out of the execution, delivery and performance of this Agreement, the establishment hereunder of the Escrow Fund, the acceptance of the funds and securities deposited therein and any payment, transfer or other application of moneys or securities by the Escrow Bank in accordance with the provisions of this Agreement; provided, however, that the Authority shall not be required to indemnify the Escrow Bank against the Escrow Bank’s own negligence or willful misconduct or the negligent or willful misconduct of the Escrow Bank’s respective successors, assigns, agents and employees or the breach by the Escrow Bank of the terms of this Agreement. In no event shall the City, the Authority or the Escrow Bank be liable to any person by reason of the transactions contemplated hereby other than to each other as set forth in this section. The indemnities contained in this section shall survive the termination of this Agreement and the resignation or removal of the Escrow Bank.

SECTION 6. Responsibilities of the Escrow Bank. The Escrow Bank and its respective successors, assigns, agents and servants shall not be held to any personal liability whatsoever, in tort, contract or otherwise, in connection with the execution and delivery of this Agreement, the establishment of the Escrow Fund, the acceptance of the moneys deposited therein, the sufficiency of such moneys to accomplish the defeasance of the 2016 Bonds or any payment, transfer or other application of moneys or obligations by the Escrow Bank in accordance with the provisions of this

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Agreement or by reason of any non negligent act, non negligent omission or non negligent error of the Escrow Bank made in good faith in the conduct of its duties. The recitals of fact contained in the “Whereas” clauses herein shall be taken as the statements of the Authority and the Escrow Bank assumes no responsibility for the correctness thereof. The Escrow Bank makes no representation as to the sufficiency of the moneys deposited in the Escrow Fund to accomplish the defeasance of the 2016 Bonds or to the validity of this Agreement as to the Authority and, except as otherwise provided herein, the Escrow Bank shall incur no liability with respect thereto. The Escrow Bank shall not be liable in connection with the performance of its duties under this Agreement except for its own negligence, willful misconduct or default, and the duties and obligations of the Escrow Bank shall be determined by the express provisions of this Agreement. In no event shall the Escrow Bank be liable for any special indirect or consequential damages. The Escrow Bank may consult with counsel, who may or may not be counsel to the Authority, and in reliance upon the written opinion of such counsel shall have full and complete authorization and protection with respect to any action taken, suffered or omitted by it in good faith in accordance therewith. Whenever the Escrow Bank shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering, or omitting any action under this Agreement, such matter may be deemed to be conclusively established by a certificate signed by an authorized officer of the City or the Authority. The Escrow Bank shall incur no liability for losses arising from any investment made pursuant to this Agreement. No provision of this Agreement shall require the Escrow Bank to expend or risk its own funds or otherwise incur any financial liability in the performance or exercise of any of its duties hereunder, or in the exercise of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Any company into which the Escrow Bank may be merged or converted or with which it may be consolidated, or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Escrow Bank may sell or transfer all or substantially all of its corporate trust business shall be the successor to the Escrow Bank without the execution or filing of any paper or further act, anything herein to the contrary notwithstanding.

SECTION 7. Irrevocable Instructions to Provide Notice. The forms of the notices required to be mailed pursuant to Sections 4.06 and 10.01 of the Indenture and the Continuing Disclosure Agreement, dated as of November 1, 2016, between the City and the 2016 Trustee (the “Continuing Disclosure Agreement”), are substantially in the forms attached hereto as Exhibits A and B. [The Escrow Bank confirms that it sent the conditional notice of redemption in the form attached hereto as Exhibit B on _______________, 2026 in accordance with Section 4.06 of the 2016 Indenture.] The Authority hereby irrevocably instructs the Escrow Bank to mail a notice of defeasance of the 2016 Bonds in the form attached hereto as Exhibit A, in accordance with Section 10.01 of the 2016 Indenture and the Continuing Disclosure Agreement.

SECTION 8. Amendments. This Agreement is made for the benefit of the City, the Authority and the holders from time to time of the 2016 Bonds and it shall not be repealed, revoked, altered or amended without the written consent of all such holders, the Escrow Bank and the City; provided, however, but only after the receipt by the Escrow Bank of an opinion of nationally recognized bond counsel that the exclusion from gross income of interest with respect to the 2016 Bonds and the 2016 Bonds will not be adversely affected for federal income tax purposes, that the City, the Authority and the Escrow Bank may, without the consent of, or notice to, such holders, amend this Agreement or enter into such agreements supplemental to this Agreement as shall not adversely affect the rights of such holders and as shall not be inconsistent with the terms and provisions of this Agreement for any one or more of the following purposes: (i) to cure any ambiguity or formal defect or omission in this Agreement; (ii) to grant to, or confer upon, the Escrow Bank for the benefit of the

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holders of the 2016 Bonds any additional rights, remedies, powers or authority that may lawfully be granted to, or conferred upon, such holders or the Escrow Bank; and (iii) to include under this Agreement additional funds, securities or properties. The Escrow Bank shall be entitled to rely conclusively upon an unqualified opinion of nationally recognized municipal bond attorneys with respect to compliance with this section, including the extent, if any, to which any change, modification, addition or elimination affects the rights of the holders of the 2016 Bonds or that any instrument executed hereunder complies with the conditions and provisions of this section.

SECTION 9. Term. This Agreement shall commence upon its execution and delivery and shall terminate on the later to occur of either: (i) the date upon which the 2016 Bonds have been paid in accordance with this Agreement; or (ii) the date upon which no unclaimed moneys remain on deposit with the Escrow Bank pursuant to this Agreement.

SECTION 10. Compensation. The Escrow Bank shall receive its reasonable fees and expenses as previously agreed to; provided, however, that under no circumstances shall the Escrow Bank be entitled to any lien nor will it assert a lien whatsoever on any moneys in the Escrow Fund for the payment of fees and expenses for services rendered by the Escrow Bank under this Agreement.

SECTION 11. Resignation or Removal of Trustee as Escrow Bank. (a) The Escrow Bank may resign by giving notice in writing to the City and the Authority. The Escrow Bank may be removed: (1) by: (i) filing with the City and the Authority an instrument or instruments executed by the holders of at least 51% in aggregate principal amount of the 2016 Bonds then remaining unpaid; and (ii) the delivery of a copy of the instruments filed with the City and the Authority to the Escrow Bank; or (2) by a court of competent jurisdiction for failure to act in accordance with the provisions of this Agreement upon application by the City or the Authority or the holders of 5% in aggregate principal amount of the 2016 Bonds then remaining unpaid. (b) If the position of Escrow Bank becomes vacant due to resignation or removal of the Escrow Bank or any other reason, a successor Escrow Bank may be appointed by the City and the Authority. Within one year after a vacancy, the holders of a majority in principal amount of the 2016 Bonds then remaining unpaid may, by an instrument or instruments filed with the City and the Authority, appoint a successor Escrow Bank who shall supersede any Escrow Bank theretofore appointed by the City and the Authority. If no successor Escrow Bank is appointed by the City and the Authority or the holders of such 2016 Bonds then remaining unpaid, within 45 days after any such resignation or removal, the holder of any such 2016 Bonds or any retiring Escrow Bank may apply to a court of competent jurisdiction for the appointment of a successor Escrow Bank. The responsibilities of the Escrow Bank under this Escrow Agreement will not be discharged until a new Escrow Bank is appointed and until the cash held under this Escrow Agreement is transferred to the new Escrow Bank.

SECTION 12. Severability. If any one or more of the covenants or agreements provided in this Agreement on the part of the City, the Authority or the Escrow Bank to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenants or agreements shall be null and void and shall be deemed separate from the remaining covenants and agreements herein contained and shall in no way affect the validity of the remaining provisions of this Agreement.

SECTION 13. Counterparts. This Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as one original and shall constitute and be but one and the same instrument.

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SECTION 14. Governing Law. This Agreement shall be construed under the laws of the State of California.

SECTION 15. Holidays. If the date for making any payment or the last date for performance of any act or the exercising of any right, as provided in this Agreement, shall be a legal holiday or a day on which banking institutions in the city in which is located the principal office of the Escrow Bank are authorized by law to remain closed, such payment may be made or act performed or right exercised on the next succeeding day not a legal holiday or a day on which such banking institutions are authorized by law to remain closed, with the same force and effect as if done on the nominal date provided in this Agreement, and no interest shall accrue for the period from and after such nominal date.

SECTION 16. Assignment. This Agreement shall not be assigned by the Escrow Bank or any successor thereto without the prior written consent of the City.

SECTION 17. Standard and Poor’s. The City agrees to provide to S&P Global Ratings, prior notice of each amendment entered into pursuant to Section 8 hereof and a copy of such proposed amendment, and to forward a copy (as soon as possible) of: (i) each amendment hereto entered into pursuant to Section 8 hereof; and (ii) any action relating to severability or contemplated by Section 12 hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers.

MONTEBELLO PUBLIC FINANCING

AUTHORITY
By:

Executive Director
ATTEST:

By:

Secretary
[SIGNATURES CONTINUED ON NEXT PAGE.]

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[SIGNATURE PAGE CONTINUED.]

THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., as Escrow Bank and 2016 Trustee
By:

Authorized Officer

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Schedule A-1
4908-1686-6474/200907-0004

SCHEDULE A
2016 Bonds
Maturity Date
(June 1)
Interest
Rate Par Amount Call Price
2027 5.000% $ 1,415,000 100%
2028 5.000 1,490,000 100
2029 5.000 1,560,000 100
2030 5.000 1,640,000 100
2031 5.000 1,720,000 100
2032 5.000 1,810,000 100
2033 5.000 1,900,000 100
2034 5.000 1,995,000 100
2035 5.000 2,095,000 100
2036 5.000 2,200,000 100
2041 5.000 12,755,000 100
2046 5.000 6,000,000 100
2046 4.000 10,080,000 100

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Schedule B-1
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SCHEDULE B
[Reserved]

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Schedule C-1
4908-1686-6474/200907-0004

SCHEDULE C

REDEMPTION PRICE OF PRIOR BONDS
Payment Date
Principal
Redeemed Interest Debt Payment

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EXHIBIT A

NOTICE OF DEFEASANCE OF

MONTEBELLO PUBLIC FINANCING AUTHORITY
LEASE REVENUE BONDS, 2016 SERIES A
(MONTEBELLO HOME2 SUITES BY HILTON HOTEL PROJECT)
Notice is hereby given to the owners of the outstanding bonds (the “2016 Bonds”) captioned above: (i) that there has been deposited with The Bank of New York Mellon Trust Company, N.A., as Escrow Bank, moneys as permitted by the Indenture of Trust, dated as of October 1, 2016 (the “2016 Indenture”), by and between the Montebello Public Financing Authority (the “Authority”) and The Bank of New York Mellon Trust Company, N.A., as 2016 Trustee, which, together with such other moneys deposited with the Escrow Bank, shall be sufficient and available to pay on _________ 1, 2026 the redemption price equal to 100% aggregate principal amount of the 2016 Bonds maturing on and after June 1, 2027; and (ii) that the 2016 Bonds are deemed to be paid and that the 2016 Indenture and the pledge of Base Rental (as such term is defined in the 2016 Indenture) and other assets made under the 2016 Indenture and all covenants, agreements and other obligations of the Authority under the 2016 Indenture have ceased, terminated, become void and been completely discharged and satisfied in accordance with Section 10.01 of the 2016 Indenture.

The obligations of the City of Montebello under the Continuing Disclosure Agreement dated November 1, 2016, by and between the City of Montebello and Hilltop Securities Inc. have terminated as of the date hereof.

No representation is made as to the correctness of the CUSIP number either as printed on any of the 2016 Bonds or as contained herein and any error in the CUSIP number shall not affect the validity of the proceedings for redemption of the 2016 Bonds.

Dated this ____ day of ________, 2026.

MONTEBELLO PUBLIC FINANCING

AUTHORITY

THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A.
as 2016 Trustee

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EXHIBIT B

CONDITIONAL NOTICE OF FULL OPTIONAL REDEMPTION
Montebello Public Financing Authority
Lease Revenue Bonds, 2016 Series A
(Montebello Home2 Suites by Hilton Hotel Project)

NOTICE IS HEREBY GIVEN to the owners of the above-captioned bonds (the “2016 Bonds”) pursuant to the Indenture of Trust, dated as of October 1, 2016, by and between the Montebello Public Financing Authority (the “Authority”) and The Bank of New York Mellon Trust Company, N.A., as trustee (the “2016 Trustee”), that all of the outstanding 2016 Bonds in the aggregate principal amount of $46,660,000 have been called for redemption on _________, 2026 (the “Redemption Date”). The 2016 Bonds were originally issued on November 1, 2016 and are described in the following table:

CUSIP
Maturity
(June 1) Rate
Principal
Amount
Redemption
Price
612286DG6 2027 5.000% $ 1,415,000 100%
612286DH4 2028 5.000 1,490,000 100
612286DJ0 2029 5.000 1,560,000 100
612286DK7 2030 5.000 1,640,000 100
612286DL5 2031 5.000 1,720,000 100
612286DM3 2032 5.000 1,810,000 100
612286DN1 2033 5.000 1,900,000 100
612286DP6 2034 5.000 1,995,000 100
612286DQ4 2035 5.000 2,095,000 100
612286DU5 2036 5.000 2,200,000 100
612286DR2 2041 5.000 12,755,000 100
612286DS0 2046 5.000 6,000,000 100
612286DT8 2046 4.000 10,080,000 100

On the Redemption Date, the principal amount of the 2016 Bonds at a redemption price of 100% of the principal amount plus accrued interest thereon to such date (the “Redemption Price”) will become due and payable at the principal office of the 2016 Trustee. The Redemption Price of the 2016 Bonds will become due and payable on the Redemption Date. Interest on the 2016 Bonds will cease to accrue and be payable from and after the Redemption Date, and such 2016 Bonds will be surrendered to the 2016 Trustee.

Redemption of the Bonds is conditioned upon the receipt by the Trustee of sufficient funds on or before the Redemption Date to pay the Redemption Price. In the event that such funds are not received, the redemption of the 2016 Bonds will be cancelled and the Trustee will give written notice of such cancelation to the owners of the Bonds and this notice will be deemed to be canceled and rescinded. No representation is made as to the accuracy or correctness of the CUSIP numbers printed herein or on the Bonds.

To receive payment on the Redemption Date, owners of the 2016 Bonds should present and surrender said 2016 Bonds on the Redemption Date at the address of the 2016 Trustee set forth below:

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First
Class/Registered/Certified
Express Delivery Only By Hand Only
The Bank of New York Mellon
Global Corporate Trust
500 Ross Street, Ste 625
Pittsburgh, PA 15262

The Bank of New York Mellon
Global Corporate Trust
500 Ross Street, Ste 625
Pittsburgh, PA 15262

The Bank of New York Mellon
Global Corporate Trust
Corporate Trust Window
500 Ross Street, Ste 625
Pittsburgh, PA 15262

IMPORTANT NOTICE
Federal law requires the 2016 Trustee to withhold taxes at the applicable rate from the payment if an IRS Form W-9 or applicable IRS Form W-8 is not provided. Please visit www.irs.gov for additional information on the tax forms and instructions.

If the owner of any 2016 Bond fails to deliver such 2016 Bond to the 2016 Trustee on the Redemption Date, such 2016 Bond shall nevertheless be deemed redeemed on the Redemption Date and the owner of such 2016 Bond shall have no rights in respect thereof except to receive payment of the Redemption Price from funds held by the 2016 Trustee for such payment.

Note: The Authority and the 2016 Trustee shall not be responsible for the selection or use of the CUSIP numbers selected, nor is any representation made as to their correctness in the notice or as printed on any 2016 Bond. They are included solely for the convenience of the holders.

THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., as 2016 Trustee
Dated this _______________, 2026

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1 4937-1990-4693v1/200907-0004
$_________

MONTEBELLO PUBLIC FINANCING AUTHORITY
LEASE REVENUE REFUNDING BONDS, 2026 SERIES A
(MONTEBELLO HOME2 SUITES BY HILTON HOTEL PROJECT)

BOND PURCHASE AGREEMENT
__________, 2026
Montebello Public Financing Authority
1600 West Beverly Boulevard
Montebello, CA 90640

City of Montebello
1600 West Beverly Boulevard
Montebello, CA 90640

Ladies and Gentlemen:

The undersigned Cabrera Capital Markets LLC (the “Underwriter”) offers to enter into this Bond Purchase Agreement (this “Purchase Agreement”) with the Montebello Public Financing Authority (the “Authority”) and the City of Montebello, California (the “City”), which, upon the acceptance by the Authority and the City, will be binding upon the Authority, the City and the Underwriter. This offer is made subject to acceptance by the Authority and by the City by the execution of this Purchase Agreement and delivery of the same to the Underwriter prior to 11:59 P.M., California time, on the date hereof, and, if not so accepted, will be subject to withdrawal by the Underwriter upon notice delivered to the Authority and the City at any time prior to the acceptance hereof by the Authority and the City. Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Indenture (defined herein).

Section 1. Purchase and Sale. Upon the terms and conditions and on the basis of the representations, warranties and agreements herein set forth, the Underwriter hereby agrees to purchase from the Authority, and the Authority hereby agrees to issue, sell and deliver to the Underwriter all (but not less than all) of the Montebello Public Financing Authority Lease Revenue Refunding Bonds, 2026 Series A (Montebello Home2 Suites by Hilton Hotel Project) (the “Bonds”) in the aggregate principal amount of $___________. The Bonds shall be dated as of their date of delivery. Interest on the Bonds shall be payable semiannually on June 1 and December 1 in each year, commencing December 1, 2026 (each an “Interest Payment Date”) and will bear interest at the rates and on the dates as set forth in Exhibit A hereto. The purchase price for the Bonds shall be $__________ (which represents the principal amount of the Bonds in the amount of $__________, plus net original issue premium in the amount of $__________, less an Underwriter’s discount of $__________).

The payment of principal of and interest on the Bonds, when due, will be insured by a municipal bond insurance policy (the “Municipal Bond Insurance Policy”) to be issued by _____________ (the “Municipal Bond Insurer”) concurrently with the delivery of the Bonds. As an accommodation to the Authority and the City, the Underwriter will pay, from the purchase price of the

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Bonds, the sum of $__________ to the Municipal Bond Insurer as the premium for the Municipal Bond Insurance Policy. The remaining sum of $____________ will be paid to The Bank of New York Mellon Trust Company, N.A., as Trustee (the “Trustee”).

The City and the Authority acknowledge and agree that: (i) the purchase and sale of the Bonds pursuant to this Purchase Agreement is an arm’s-length commercial transaction among the City, the Authority and the Underwriter; (ii) 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 principals and is not acting as a municipal advisor (as defined in Section 15B of the Securities Exchange Act of 1934, as amended), financial advisor or fiduciary; (iii) the Underwriter has not assumed an advisory or fiduciary responsibility in favor of the City or the Authority with respect to the offering contemplated hereby or the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriter has provided other services or is currently providing other services to the City or the Authority on other matters); and (iv) the City and the Authority have consulted their own legal, financial, municipal and other advisors to the extent they have deemed appropriate.

Section 2. The Bonds. The Bonds shall be secured by Base Rental Payments to be made by the City for the right to use certain real property (the “Property”) pursuant to a Lease Agreement, dated as of _________ 1, 2026 (the “Lease Agreement”), by and between the Authority and the City, and certain amounts on deposit in certain funds and accounts established under the Indenture, dated as of _________ 1, 2026 (the “Indenture”), by and between the Authority and the Trustee. The Authority’s right to receive the Base Rental Payments due under the Lease Agreement and to exercise remedies upon default under such Lease Agreement shall be assigned to the Trustee for the benefit of the owners of the Bonds pursuant to an Assignment Agreement, dated as of _________ 1, 2026 (the “Assignment”), by and between the Authority and the Trustee.

Section 3. Public Offering and Establishment of Issue Price. The Underwriter agrees to make a bona fide initial public offering of all the Bonds at the public offering prices (or yields) set forth on Exhibit A attached hereto and incorporated herein by reference. Subsequent to the initial public offering, the Underwriter reserves the right to change the public offering prices (or yields) as they deem necessary in connection with the marketing of the Bonds, provided that the Underwriter shall not change the interest rates set forth on Exhibit A. The Bonds may be offered and sold to certain dealers at prices lower than such initial public offering prices.

The Underwriter agrees to assist the Authority in establishing the issue price of the Bonds and shall execute and deliver to the Authority at Closing (as defined below) 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 Authority and Bond Counsel (as defined below), to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds.

Except for the Hold-the-Price Maturities described below and as otherwise set forth in Exhibit A attached hereto, the Authority will treat the first price at which 10% of each maturity of the Bonds (the “10% test”) is sold to the public as the issue price of that maturity. At or promptly after the execution of this Purchase Agreement, the Underwriter shall report to the Authority the price or prices at which it has sold to the public each maturity of the Bonds.

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With respect to the maturities of the Bonds that are not 10% Test Maturities, as described in Exhibit A attached hereto (the “Hold-the-Price Maturities”), the Underwriter confirms that it has offered the Bonds 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 Exhibit A attached hereto. The Authority and the Underwriter agree that the restrictions set forth in the next sentence shall apply to the Hold-the-Price Maturities, which will allow the Authority 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-the-offering-price rule”). So long as the hold-the-offering-price rule remains applicable to any maturity of the Bonds, the Underwriter will neither offer nor sell unsold Bonds 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:
(A) the close of the fifth (5th) business day after the sale date; or (B) the date on which the Underwriter has sold at least 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public.

The Underwriter shall promptly advise the Authority when they have sold 10% of that maturity of the Bonds 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.

The Underwriter acknowledges that sales of any Bonds 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 Authority (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds 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 Bonds 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 Bonds to the public); (iii) a purchaser of any of the Bonds is a “related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (i) more than 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.

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Section 4. The Official Statement. By their acceptance of this Purchase Agreement, the Authority and the City ratify, confirm and approve of the use and distribution by the Underwriter prior to the date hereof of the Preliminary Official Statement relating to the Bonds, dated __________, 2026 (including the cover page, all appendices and all information incorporated therein and any supplements or amendments thereto and as disseminated in its printed physical form or in electronic form in all respects materially consistent with such physical form, the “Preliminary Official Statement”) that authorized officers of the City and the Authority deemed “final” as of its date, for purposes of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934, as amended (“Rule 15c2-12”) except for certain omissions permitted to be omitted therefrom by Rule 15c2-12. The Authority and the City hereby agree to deliver or cause to be delivered to the Underwriter, within seven (7) business days of the date hereof, copies of the final official statement, dated the date hereof, relating to the Bonds (including all information previously permitted to have been omitted by Rule 15c2-12, the cover page, all appendices, all information incorporated therein and any amendments or supplements as have been approved by the Authority, the City and the Underwriter (the “Official Statement”)) in such quantity as the Underwriter shall reasonably request to comply with Rule 15c2-12(b)(4) and the rules of the Municipal Securities Rulemaking Board (the “MSRB”).

Section 5. Closing. At 8:30 a.m., California time, on ___________, 2026, or at such other time or date as the Authority, the City and the Underwriter mutually agree upon, the Authority shall deliver or cause to be delivered to the Trustee, and the Trustee shall deliver or cause to be delivered through the facilities of The Depository Trust Company, New York, New York (“DTC”), the Bonds in definitive form, duly executed and authenticated. Concurrently with the delivery of the Bonds, the Authority and the City shall deliver the documents hereinafter mentioned at the offices of Stradling Yocca Carlson & Rauth LLP, Newport Beach, California (“Bond Counsel”) or another place to be mutually agreed upon by the Authority, the City and the Underwriter. The Underwriter will accept such delivery and pay the purchase price of the Bonds as set forth in Section 1 hereof by wire transfer in immediately available funds. This payment for and delivery of the Bonds, together with the delivery of the aforementioned documents referenced herein, is called the “Closing.” The Bonds shall be registered in the name of Cede & Co., as nominee of DTC in denominations of $5,000 and any integral multiple thereof, and shall be made available to the Underwriter at least one (1) business day before the Closing for purposes of inspection and packaging. The Authority and the City acknowledge that the services of DTC will be used initially by the Underwriter to permit the issuance of the Bonds in book-entry form, and agree to cooperate fully with the Underwriter in employing such services.

Section 6. Representations, Warranties and Covenants of the Authority. The Authority represents, warrants and covenants to the Underwriter and the City that:
(a) The Authority is and will be at the date of Closing a joint exercise of powers authority organized and existing under the laws of the State of California (the “State”), including Section 6500 et seq. of the Government Code of the State of California (the “JPA Act”) with all necessary power and authority to enter into and perform its duties under the Ground Lease, dated as of _________ 1, 2026 (the “Ground Lease”), by and between the City and the Authority, the Lease Agreement, the Indenture, the Assignment, the Escrow Agreement (2016 Bonds), dated as of _________ 1, 2026 (the “Escrow Agreement”), by and between the Authority The Bank of New York Mellon Trust Company, N.A., as escrow bank (the “Escrow Bank”), and this Purchase Agreement (collectively, the “Authority Documents”).

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(b) The Authority has complied with all filing requirements of the JPA Act. (c) By official action of the Authority prior to or concurrently with the acceptance hereof, the Authority has duly approved the distribution of the Preliminary Official Statement and the distribution of the Official Statement (including in electronic form), and has duly authorized and approved the execution and delivery of, and the performance by the Authority of the obligations on its part contained, in the Authority Documents. When executed and delivered, each Authority Document will constitute the legal, valid and binding obligation of the Authority enforceable in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or affecting creditors’ rights generally. (d) Prior to the date hereof, the Authority has provided to the Underwriter for its review the Preliminary Official Statement that an authorized officer of the Authority has deemed final for purposes of Rule 15c2-12, has approved the distribution of the Preliminary Official Statement and the Official Statement and has duly authorized the execution and delivery of the Official Statement (including in electronic form). The Preliminary Official Statement, at the date thereof, did not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein (other than the information relating to DTC and its book-entry system, as to which no view is expressed), in light of the circumstances under which they were made, not misleading. As of the date hereof and on the Closing, the final Official Statement did not and will not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein (other than the information relating to DTC and its book-entry system, as to which no view is expressed), in light of the circumstances under which they were made, not misleading. (e) The execution and delivery by the Authority of the Authority Documents and the approval and execution by the Authority of the Official Statement and compliance with the provisions on the Authority’s part contained in the Authority Documents, will not conflict with or constitute a breach of or default under any law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Authority is a party or is otherwise subject, which conflict, breach or default has or may have a material adverse effect on the ability of the Authority to carry out its obligations under the Authority Documents, nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any material lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the properties or assets of the Authority under the terms of any such law, administrative regulation, judgment, decree, loan agreement, indenture, trust agreement, bond, note, resolution, agreement or other instrument, except as provided by the Authority Documents. (f) The Authority will advise the Underwriter promptly of any proposal to amend or supplement the Official Statement and will not effect or consent to any such amendment or supplement without the consent of the Underwriter, which consent will not be unreasonably withheld.

The Authority will advise the Underwriter promptly of the institution of any proceedings known to it by any governmental agency prohibiting or otherwise affecting the use of the Official Statement in connection with the offering, sale or distribution of the Bonds. (g) The Authority is not in breach of or default under any applicable law or administrative regulation of the State or the United States of America or any applicable judgment or decree or any loan agreement, indenture, trust agreement, bond, note, resolution, agreement or other instrument to which the Authority 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

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or an event of default under any such instrument, in each case which breach or default has or may have a material adverse effect on the ability of the Authority to perform its obligations under the Authority Documents.
(h) As of the time of acceptance hereof and as of the date of Closing, no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, is pending with respect to which the Authority has been served or, to the best knowledge of the officers of the Authority, threatened (i) in any way questioning the corporate existence of the Authority or the titles of the officers of the Authority to their respective offices, (ii) affecting, contesting or seeking to prohibit, restrain or enjoin the execution or delivery of any of the Bonds, or in any way contesting or affecting the validity of the Bonds or the Authority Documents or the consummation of the transactions contemplated thereby, or contesting the exclusion of the interest on the Bonds from gross income for federal income tax purposes or contesting the powers of the Authority to enter into the Authority Documents or (iii) contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or asserting that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and there is no basis for any action, suit, proceeding, inquiry or investigation of the nature described in clause (i) through (iii) of this sentence. (i) Any certificate signed by any officer of the Authority authorized to execute such certificate in connection with the issuance, sale and delivery of the Bonds and delivered to the Underwriter shall be deemed a representation and warranty of the Authority to the Underwriter and the City as to the statements made therein but not of the person signing such certificate. (j) The Authority will apply the proceeds of the Bonds in accordance with the Indenture.

Section 7. Representations, Warranties and Covenants of the City. The City represents, warrants and covenants to the Underwriter and the Authority that:
(a) The City is and will be at the date of Closing a municipal corporation duly organized and existing pursuant to and under the Constitution and laws of the State and has all necessary power and authority to enter into and perform its duties under the Continuing Disclosure Certificate relating to the Bonds (the “Continuing Disclosure Certificate”), the Ground Lease, the Lease Agreement and this Purchase Agreement (collectively, the “City Documents” and, together with the Authority Documents, the “Legal Documents”) and has by official action duly authorized and approved the execution and delivery of, and the performance by the City of the obligations on its part contained in the City Documents.
(b) By official action of the City prior to or concurrently with the acceptance hereof, the City has duly approved the distribution of the Preliminary Official Statement and the distribution of the Official Statement (including in electronic form), and has duly authorized and approved the execution and delivery of, and the performance by the City of the obligations on its part contained, in the City Documents. When executed and delivered, each City Document will constitute the legally valid and binding obligation of the City enforceable in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or affecting creditors’ rights generally.

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(c) The Preliminary Official Statement heretofore delivered to the Underwriter is hereby deemed final by the City as of its date and as of the date hereof, except for the omission of such information as is permitted to be omitted in accordance with paragraph (b)(i) of Rule 15c2-12. The Preliminary Official Statement, at the date thereof, did not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein (other than the information relating to DTC and its book-entry system, as to which no view is expressed), in the light of the circumstances under which they were made, not misleading. As of the date hereof and on the Closing, the final Official Statement did not and will not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein (other than the information relating to DTC and its book-entry system, as to which no view is expressed), in the light of the circumstances under which they were made, not misleading. (d) The execution and delivery by the City of the City Documents and the approval by the City of the Official Statement and compliance with the provisions on the City’s part contained in the City Documents, will not conflict with or constitute a breach of or default under any law, administrative regulation, judgment, decree, loan agreement, indenture, trust agreement, bond, note, resolution, agreement or other instrument to which the City is a party or is otherwise subject to, which conflict, breach or default has or may have a material adverse effect on the ability of the City to carry out its obligations under the City Documents, nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any material lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the properties or assets of City under the terms of any such law, administrative regulation, judgment, decree, loan agreement, indenture, trust agreement, bond, note, resolution, agreement or other instrument, except as provided by the City Documents. (e) The City will advise the Underwriter promptly of any proposal to amend or supplement the Official Statement and will not effect or consent to any such amendment or supplement without the consent of the Underwriter, which consent will not be unreasonably withheld. The City will advise the Underwriter promptly of the institution of any proceedings known to it by any governmental authority prohibiting or otherwise affecting the use of the Official Statement in connection with the offering, sale or distribution of the Bonds. (f) The City is not in breach of or default under any applicable 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 City 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, in each case which breach or default has or may have a material adverse effect on the ability of the City to perform its obligations under the City Documents. (g) The financial statements relating to the receipts, expenditures and cash balances of the City as of June 30, 2025 as set forth in the Official Statement fairly represent the receipts, expenditures and cash balances of the General Fund. Except as disclosed in the Preliminary Official Statement, the Official Statement or otherwise disclosed in writing to the Underwriter, there has not been any materially adverse change in the financial condition of the General Fund or in its operations since June 30, 2025 and, except as disclosed in the Preliminary Official Statement, the Official Statement or otherwise disclosed in writing to the Underwriter, there has been no occurrence, circumstance or combination thereof which is reasonably expected to result in any such materially adverse change.

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(h) As of the time of acceptance hereof and as of the date of Closing, no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, is pending or, to the knowledge of the officers of the City, threatened (i) in any way questioning the corporate existence of the City or the titles of the officers of the City to their respective offices; (ii) affecting, contesting or seeking to prohibit, restrain or enjoin the execution or delivery of any of the Bonds, or in any way contesting or affecting the validity of the Bonds or the City Documents or the consummation of the transactions contemplated thereby, or contesting the exclusion of the interest on the Bonds from gross income for federal income tax purposes or contesting the power of the City to enter into the City Documents; (iii) which may result in any material adverse change to the financial condition of the City or to its ability to pay the Base Rental Payments when due; or (iv) contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or asserting that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and there is no basis for any action, suit, proceeding, inquiry or investigation of the nature described in clause (i) through (iv) of this sentence.
(i) To the extent required by law, the City will undertake, pursuant to the Continuing Disclosure Certificate, to provide annual reports and notices of certain events. A description of this undertaking is set forth in the Preliminary Official Statement and will also be set forth in the final Official Statement. Except as otherwise disclosed in the Preliminary Official Statement, the City has not failed to comply in all material respects with any previous undertakings with regard to the Rule 15c2-12 to provide annual reports or notices of enumerated events in the past five years.
(j) Any certificate signed by any officer of the City authorized to execute such certificate in connection with the issuance, sale and delivery of the Bonds and delivered to the Underwriter shall be deemed a representation and warranty of the City to the Underwriter and the Authority as to the statements made therein but not of the person signing such certificate. (k) As of the date hereof, the City does not have any material obligations secured by payments from the General Fund of the City, except as disclosed in the Official Statement. (l) The exceptions set forth in the title insurance policy for the Property insuring, subject only to Permitted Encumbrances, the fee interest of the City in the Property, the Authority’s leasehold estate in the Property under the Ground Lease, and the City’s leasehold estate in the Property under the Lease Agreement, do not materially impair the use of the Property, the existing facilities and the sites thereof for the purposes for which they are or may reasonably be expected to be held.

Section 8. Conditions to the Obligations of the Underwriter. The Underwriter has entered into this Purchase Agreement in reliance upon the representations and warranties of the Authority and the City contained herein. The obligations of the Underwriter to accept delivery of and pay for the Bonds on the date of the Closing shall be subject, at the option of the Underwriter, to the accuracy in all respects of the statements of the officers and other officials of the Authority and of the City, as well as authorized representatives of Bond Counsel, Disclosure Counsel and the Trustee made in any certificates, opinions or other documents furnished pursuant to the provisions hereof; to the performance by the Authority and the City of their obligations to be performed hereunder at or prior to the date of the Closing; and to the following additional conditions:

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(a) The representations, warranties and covenants of the City and the Authority contained herein shall be true, complete and correct at the date hereof and at the time of the Closing, as if made on the date of the Closing;
(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 Bond Counsel, shall reasonably deem necessary in connection with the transactions contemplated hereby; (c) At the time of the Closing, no default shall have occurred or be existing under the Authority Documents, the City Documents, or any other agreement or document pursuant to which any of the City’s financial obligations were executed and delivered, and the City shall not be in default in the payment of principal or interest with respect to any of its financial obligations, which default would adversely impact the ability of the City to make the Base Rental Payments; (d) In recognition of the desire of the Authority, the City and the Underwriter to effect a successful public offering of the Bonds, and in view of the potential adverse impact of any of the following events on such a public offering, this Purchase Agreement shall be subject to termination in the absolute discretion of the Underwriter by notification, in writing, to the Authority and the City prior to delivery of and payment for the Bonds, if at any time prior to such time, regardless of whether any of the following statements of fact were in existence or known of on the date of this Purchase Agreement:
(i) any event shall occur which makes untrue any statement or results in an omission to state a material fact 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 Bonds; or (ii) the marketability of the Bonds or the market price thereof, in the reasonable opinion of the Underwriter, has been materially adversely affected by an amendment to the Constitution of the United States of America or by any legislation in or by the Congress of the United States of America or by the State, or the amendment of legislation pending as of the date of this Purchase Agreement in the Congress of the United States of America, 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 of America, the Treasury Department of the United States of America, 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 of America, or the favorable reporting for passage of legislation to either House of the Congress of the United States of America 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

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federal or State authority affecting the federal or State tax status of the Authority or the City, or the interest on or with respect to bonds or notes (including the Bonds); or (iii) any legislation, ordinance, rule or regulation shall be introduced in, or be enacted by any governmental body, department or agency 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 Bonds; or (iv) 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 Bonds, or the Bonds, including any or all underlying arrangements, are not exempt from registration under the Securities Act of 1933, as amended, or that the Indenture is not exempt from qualification under the Trust Indenture Act of 1939, as amended; or (ii) the issuance, offering or sale of obligations of the general character of the Bonds, or the issuance, offering or sale of the Bonds, 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; or (v) legislation shall be enacted by the Congress of the United States of America, or a decision by a court of the United States of America shall be rendered, to the effect that obligations of the general character of the Bonds, or the Bonds 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 Indenture is not exempt from qualification under or other requirements of the Trust Indenture Act of 1939, as amended and as then in effect; or (vi) additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any domestic governmental authority or by any domestic national securities exchange, which are material to the marketability of the Bonds; or
(vii) a general banking moratorium shall have been declared by federal, State or New York authorities, or the general suspension of trading on any national securities exchange; or
(viii) there shall have occurred any outbreak or escalation of hostilities, declaration by the United States of America of a national emergency or war or other calamity or crisis the effect of which on financial markets is materially adverse such as to make it, in the sole judgment of the Underwriter, impractical to proceed with the purchase or delivery of the Bonds as contemplated by the final Official Statement (exclusive of any amendment or supplement thereto); or
(ix) any rating of the Bonds or the rating of any obligations of the City secured by the City’s general fund shall have been downgraded or withdrawn by a national rating service, which, in the reasonable opinion of the Underwriter, materially adversely affects the market price of the Bonds; or

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(x) the commencement of any action, suit or proceeding described in Section 6(h) or Section 7(h);
(e) 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 resolution relating to the Bonds adopted by the Authority on _________, 2026, certified by an authorized official of the Authority, authorizing the execution and delivery of the Bonds, the Authority Documents and the Official Statement;
(ii) the resolution relating to the Bonds adopted by the City on __________, 2026, certified by an authorized official of the City, authorizing the execution and delivery of the City Documents and the delivery of the Bonds and the Official Statement;
(iii) 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;
(iv) the approving opinion of Bond Counsel, dated the date of Closing and addressed to the Authority and the City, in substantially the form attached as Appendix E to the Official Statement, together with a reliance letter thereon addressed to the Underwriter;
(v) a supplemental opinion of Bond Counsel dated the date of Closing and addressed to the Underwriter, in the form set forth in Exhibit D. (vi) the Official Statement, executed on behalf of the Authority and the City;
(vii) evidence that the Bonds have received an underlying rating of “____” and an insured rating of “____” by S&P Global Ratings;
(viii) a certificate, dated the date of Closing, signed by a duly authorized officer of the Authority satisfactory in form and substance to the Underwriter to the effect that: (i) the representations, warranties and covenants of the Authority contained in this Purchase Agreement are true and correct in all material respects on and as of the date of Closing with the same effect as if made on the date of the Closing by the Authority, and the Authority has complied with all of the terms and conditions of this Purchase Agreement required to be complied with by the Authority at or prior to the date of Closing; (ii) to the best of such officer’s knowledge, no event affecting the Authority has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purposes for which it is to be used or which is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect; (iii) the information and statements contained in the Official Statement (other than information relating to DTC and its book-entry system) did not as of its date and do not as of the Closing contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements

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therein, in the light of the circumstances under which they were made, not misleading in any material respect; (iv) the Authority is not in breach of or default under any applicable 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 Authority is a party or is otherwise subject, which would have a material adverse impact on the Authority’s ability to perform its obligations under the Authority Documents, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute such a default or an event of default under any such instrument; (v) no Event of Default under the Indenture has occurred and is outstanding and no event which, when all notice or grace periods have passed, would constitute an Event of Default under the Indenture currently exists as of the Closing; and (vi) the individual signing the Certificate has read the provisions of the Indenture and the Lease Agreement and has made or caused to be made such examination or investigation as is necessary to enable such individual to express an informed opinion as to the matters set forth in this Certificate regarding compliance with the applicable provisions of the Indenture and the Lease Agreement;
(ix) a certificate, dated the date of Closing, signed by a duly authorized officer of the City satisfactory in form and substance to the Underwriter to the effect that: (i) the representations, warranties and covenants of the City contained in this Purchase Agreement are true and correct in all material respects on and as of the date of Closing with the same effect as if made on the date of the Closing by the City, and the City has complied with all of the terms and conditions of the Purchase Agreement required to be complied with by the City at or prior to the date of Closing; (ii) to the best of such officer’s knowledge, no event affecting the City has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purposes for which it is to be used or which is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect; (iii) the information and statements contained in the Official Statement (other than information relating to DTC and its book-entry system) did not as of its date and do not as of the Closing contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading in any material respect; (iv) the City is not in breach of or default under any applicable 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 (including but not limited to the Lease Agreement) or other instrument to which the City is a party or is otherwise subject, which would have a material adverse impact on the City’s ability to perform its obligations under the City Documents, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute such a default or an event of default under any such instrument; (v) no further consent is required for inclusion of its audited financial statements in the Official Statement; (vi) no Event of Default under the Indenture has occurred and is outstanding and no event which, when all notice or grace periods have passed, would constitute an Event of Default under the Indenture currently exists as of the Closing; and (vii) the individual signing the Certificate has read the provisions of the Indenture and the Lease Agreement and has made or caused to be made such examination or investigation as is necessary to enable such individual to express an informed opinion as to the matters

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set forth in this Certificate regarding compliance with the applicable provisions of the Indenture and the Lease Agreement;
(x) an opinion dated the date of Closing and addressed to the Underwriter, the Trustee and Bond Counsel, of the City Attorney of the City, as Counsel to the Authority, to the effect that:
(A) the Authority is a joint exercise of powers authority organized and existing under the laws of the State of California; (B) the resolution of the Authority approving and authorizing the execution and delivery of the Authority Documents, the Bonds and the Official Statement and other actions of the Authority was duly adopted at a meeting of the governing body of the Authority 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 the resolution is now in full force and effect and has not been amended or superseded in any way;
(C) there is no action, suit, proceeding, inquiry or investigation at law or in equity before or by any court or public body pending with respect to which the Authority has been served or, to the best of such counsel’s knowledge, threatened against or affecting the Authority, except as may be disclosed in the Official Statement, which would materially adversely impact the Authority’s ability to complete the transactions contemplated by the Authority Documents, the Official Statement or any other document or certificate related to such transactions, restrain or enjoin the collection of Base Rental Payments with respect to the Lease Agreement, or in any way contesting or affecting the validity of the Bonds, the Official Statement, the Authority Documents or the transactions described in and contemplated thereby wherein an unfavorable decision, ruling or finding would materially adversely affect the validity and enforceability of the Bonds or the Authority Documents or in which a final adverse decision could materially adversely affect the operations of the Authority;
(D) the execution and delivery of the Authority Documents and the issuance of the Bonds and compliance with the provisions thereof, do not and will not in any material respect conflict with or constitute on the part of the Authority a breach of or default under any agreement or other instrument to which the Authority is a party or by which it is bound or any existing law, regulation, court order or consent decree to which the Authority is subject, which breach or default has or may have a material adverse effect on the ability of the Authority to perform its obligations under the Authority Documents; and (E) no authorization, approval, consent, or other order of the State of California or any other governmental body within the State of California is required for the valid authorization, execution and delivery of the Authority Documents or the Official Statement by the Authority or the consummation by the Authority of the transactions on its part contemplated therein, except such as have been obtained and except such as may be required under state securities

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or blue sky laws in connection with the purchase and distribution of the Bonds by the Underwriter.
(xi) an opinion dated the date of Closing and addressed to the Underwriter, the Trustee and the Bond Counsel, of the City Attorney of the City, to the effect that:
(A) the City is a municipal corporation duly organized and validly existing under the Constitution and laws of the State of California; (B) the resolution of the City approving and authorizing the execution and delivery of the City Documents and approving and authorizing the issuance of the Bonds and the delivery of the Official Statement and other actions of the City was duly adopted at a meeting of the governing body of the City 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 the resolution is now in full force and effect and has not been amended or superseded in any way;
(C) there is no action, suit, proceeding, inquiry or investigation at law or in equity before or by any court or public body pending with respect to which the City has been served or, to the best of such City Attorney’s knowledge, threatened against or affecting the City, except as may be disclosed in the Official Statement, which would materially adversely impact the City’s ability to complete the transactions contemplated by the City Documents, the Official Statement or any other document or certificate related to such transactions, restrain or enjoin the collection of Base Rental Payments with respect to the Lease Agreement, or in any way contesting or affecting the validity of the Bonds, the Official Statement or the City Documents; (D) the execution and delivery of the City Documents and compliance with the provisions thereof, do not and will not in any material respect conflict with or constitute on the part of the City a breach of or default under any agreement or other instrument to which the City is a party or by which it is bound or any existing law, regulation, court order or consent decree to which the City is subject, which breach or default has or may have a material adverse effect on the ability of the City to perform its obligations under the City Documents; and
(E) no authorization, approval, consent, or other order of the State of California or any other governmental body within the State of California is required for the valid authorization, execution and delivery of the City Documents or the consummation by the City of the transactions on its part contemplated therein, except such as have been obtained and except such as may be required under state securities or blue sky laws in connection with the purchase and distribution of the Bonds by the Underwriter. (xii) A defeasance opinion related to the Montebello Public Financing Authority Lease Revenue Bonds, 2016 Series A (Montebello Home2 Suites by Hilton Hotel Project) of Stradling Yocca Carlson & Rauth LLP, Newport Beach, California,

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Bond Counsel, addressed to the Underwriter satisfactory in form and substance to the Underwriter and Underwriter’s Counsel;
(xiii) an opinion of Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, Disclosure Counsel to the Authority and the City dated the date of Closing and addressed to the Authority, the City, the Underwriter in the form set forth in Exhibit C;
(xiv) an opinion of counsel to the Trustee, addressed to the Underwriter and the Authority, dated the date of the Closing, to the effect that:
(A) the Trustee is a national banking association duly organized and validly existing under the laws of the United States of America, having full corporate power to undertake the trust created under the Indenture; (B) the Indenture and the Assignment Agreement (together, the “Trustee Documents”) have each been duly authorized, executed and delivered by the Trustee and, assuming due authorization, execution and delivery by the other parties thereto, the Trustee Documents constitute the valid, legal and binding obligations of the Trustee enforceable in accordance with their terms, except as enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors’ rights generally and by the application of equitable principles, if equitable remedies are sought; and (C) the Trustee has duly authenticated the Bonds upon the order of Authority.
(xv) a certificate, dated the date of Closing, signed by a duly authorized officer of the Trustee satisfactory in form and substance to the Underwriter, to the effect that:
(A) the Trustee is duly organized and existing as a national banking association under the laws of the United States of America, having the full corporate power and authority to enter into and perform its duties under the Trustee Documents;
(B) the Trustee is duly authorized to enter into the Trustee Documents and has duly executed and delivered the Trustee Documents, and assuming due authorization and execution by the other parties thereto, the Trustee Documents are legal, valid and binding upon the Trustee and enforceable against such party in accordance with its terms; (C) the Trustee has duly authenticated the Bonds under the Indenture and delivered the Bonds to or upon the order of the Underwriter; (D) to the knowledge of the Trustee, no consent, approval, authorization or other action by any governmental or regulatory authority having jurisdiction over the banking or trust powers of the Trustee that has not been obtained is required for the authentication and delivery of the Bonds or

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the consummation by the Trustee of its obligations under the Trustee Documents; and
(E) to the knowledge of the Trustee, there is no action, suit, proceeding, inquiry or investigation at law or in equity before or by any court or public body pending or, to the best of such counsel’s knowledge, threatened against or affecting the Trustee, which would materially adversely impact the Trustee’s ability to complete the transactions contemplated by the Trustee Documents.
(xvi) an opinion of counsel to the Escrow Bank, addressed to the Underwriter and the Authority, dated the date of the Closing, to the effect that:
(A) the Escrow Bank is a national banking association duly organized and validly existing under the laws of the United States of America, having full corporate power to undertake the trust created under the Escrow Agreement; and
(B) the Escrow Agreement has each been duly authorized, executed and delivered by the Escrow Bank and, assuming due authorization, execution and delivery by the Authority, the Escrow Agreement constitutes the valid, legal and binding obligation of the Escrow Bank enforceable in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors’ rights generally and by the application of equitable principles, if equitable remedies are sought.
(xvii) a certificate, dated the date of Closing, signed by a duly authorized officer of the Escrow Bank satisfactory in form and substance to the Underwriter, to the effect that:
(A) the Escrow Bank is duly organized and existing as a national banking association under the laws of the United States of America, having the full corporate power and authority to enter into and perform its duties under the Escrow Agreement;
(B) the Escrow Bank is duly authorized to enter into the Escrow Agreement and has duly executed and delivered the Escrow Agreement, and assuming due authorization and execution by the Authority, the Escrow Agreement is legal, valid and binding upon the Escrow Bank and enforceable against such party in accordance with its terms;
(C) to the knowledge of the Escrow Bank, no consent, approval, authorization or other action by any governmental or regulatory authority having jurisdiction over the banking or trust powers of the Escrow Bank that has not been obtained is required for the consummation by the Escrow Bank of its obligations under the Escrow Agreement; and

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(D) to the knowledge of the Escrow Bank, there is no action, suit, proceeding, inquiry or investigation at law or in equity before or by any court or public body pending or, to the best of such counsel’s knowledge, threatened against or affecting the Trustee, which would materially adversely impact the Escrow Bank’s ability to complete the transactions contemplated by the Escrow Agreement.
(xviii) the preliminary and final forms required to be delivered to the California Debt and Investment Advisory Commission pursuant to Section 53583 of the Government Code of the State of California and Section 8855(i) and (j) of the Government Code;
(xix) a copy of the executed Blanket Issuer Letter of Representations by and between the Authority and DTC relating to the book-entry system; (xx) the tax certificate, duly executed by the Authority and the City in form and substance to the reasonable satisfaction of Bond Counsel, the Underwriter and Best Best & Krieger LLP (“Underwriter’s Counsel”);
(xxi) a title policy in form and substance acceptable to Bond Counsel, the Underwriter and Underwriter’s Counsel;
(xxii) an opinion of Underwriter’s Counsel in form and substance acceptable to the Underwriter;
(xxiii) a Rule 15c2-12 certificate, dated the date of the Preliminary Official Statement, of the City;
(xxiv) a Rule 15c2-12 certificate, dated the date of the Preliminary Official Statement, of the Authority;
(xxv) certified copies of the Joint Exercise of Powers Agreement establishing the Authority, and all amendments thereto, and related certificates issued by the Secretary of State of the State;
(xxvi) a copy of the Municipal Bond Insurance Policy, together with an opinion of counsel to the Municipal Bond Insurer, addressed to the Authority, the City and the Underwriter and a certificate of the Municipal Bond Insurer, each in form and substance acceptable to the Authority, the City, the Underwriter, Bond Counsel, Disclosure Counsel and Underwriter’s Counsel; and
(xxvii) such additional legal opinions, Bonds, proceedings, instruments or other documents as the Underwriter or Underwriter’s Counsel may reasonably request.

Section 9. Changes in Official Statement. Within 90 days after the Closing or within 25 days following the “end of the underwriting period” (as defined in Rule 15c2-12), whichever occurs first, if any event relating to or affecting the Bonds, the Trustee, the City or the Authority shall occur as a result of which it is necessary, in the reasonable 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

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Authority 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 City and the Authority shall cooperate with the Underwriter in the filing by the Underwriter of such amendment or supplement to the Official Statement with the MSRB. The Underwriter acknowledges that the “end of the underwriting period” will be the date of Closing unless the Underwriter otherwise notifies the City in writing that it still owns some or all of the Bonds.

Section 10. Expenses. (a) Whether or not the Underwriter accepts delivery of and pays for the Bonds as set forth herein, it shall be under no obligation to pay, and the Authority shall pay, or cause the City to pay, out of the proceeds of the Bonds or any other legally available funds of the City or the Authority, all expenses incidental to the performance of the Authority’s obligations hereunder, including but not limited to the cost of printing and delivering the Legal Documents to the Underwriter; the costs of printing and shipping and electronic distribution of the Preliminary Official Statement and the Official Statement in reasonable quantities; the fees and disbursements of the Authority, the Trustee and its counsel, Bond Counsel, Authority Counsel, Municipal Advisor, the City Attorney, accountants, engineers, appraisers, economic consultants and any other experts or consultants retained by the City or the Authority in connection with the issuance and sale of the Bonds; rating agency fees; advertising expenses; and any other expenses not specifically enumerated in paragraph (b) of this Section incurred in connection with the issuance and sale of the Bonds. The Authority shall pay, or cause the City to pay out of the proceeds of the Bonds, for any expenses incurred by the Underwriter on behalf of the City’s or the Authority’s employees and representatives which are incidental to implementing this Purchase Agreement, including, but not limited to, meals, transportation, and lodging of those employees and representatives.
(b) Whether or not the Bonds are delivered to the Underwriter as set forth herein, the Authority shall be under no obligation to pay, and the Underwriter shall be responsible for and pay (which may be included as an expense component of the Underwriter’s discount), MSRB, CUSIP Bureau and CDIAC fees and expenses to qualify the Bonds for sale under any “blue sky” laws; and all other expenses incurred by the Underwriter in connection with its public offering and distribution of the Bonds not specifically enumerated in paragraph (a) of this Section, including the cost of preparing this Purchase Agreement and other Underwriter documents, travel expenses and the fees and disbursements of Underwriter’s Counsel.

Section 11. Notices. 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 Cabrera Capital Markets LLC 915 Wilshire Boulevard, Los Angeles, CA 90017, Attention: Ben Cardenas. Any notice or communication to be given the Authority under this Purchase Agreement may be given by delivering the same in writing 1600 West Beverly Boulevard, Montebello, CA 90640, Attention: Executive Director. Any notice or communication to be given the City under this Purchase Agreement may be given by delivering the same in writing to the City of Montebello, 1600 West Beverly Boulevard, Montebello, CA 90640, Attention: City Manager. All notices or communications hereunder by any party shall be given and served upon each other party.

Section 12. Parties in Interest. This Purchase Agreement is made solely for the benefit of the Authority, the City 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 Authority and the City in this Purchase Agreement shall remain

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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 for the Bonds.

Section 13. 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.

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S-1
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Section 14. Governing Law. This Purchase Agreement shall be governed by and construed in accordance with the laws of the State.

CABRERA CAPITAL MARKETS
LLC

By:

Authorized Signatory

Accepted:

MONTEBELLO PUBLIC FINANCING AUTHORITY

By:

Authorized Signatory

Time of Execution: ____:____

Accepted:

CITY OF MONTEBELLO

By:

Authorized Signatory

Time of Execution: ____:____

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4937-1990-4693v1/200907-0004 A-1

EXHIBIT A

MATURITY SCHEDULE

Maturity Date
(June 1)
Principal
Amount
Interest
Rate Yield Price
10% Test
Used
Hold-the-
Offering
Price Rule
Used

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EXHIBIT B

$_________

MONTEBELLO PUBLIC FINANCING AUTHORITY
LEASE REVENUE REFUNDING BONDS, 2026 SERIES A
(MONTEBELLO HOME2 SUITES BY HILTON HOTEL PROJECT)

ISSUE PRICE CERTIFICATE

The undersigned, on behalf of Cabrera Capital Markets LLC (the “Underwriter”), hereby certifies as set forth below with respect to the sale and issuance of the above-captioned obligations (the “Bonds”).

1. Sale of the Bonds. As of the date of this Certificate, for each Maturity of the Bonds, the first price at which a Substantial Amount of such Maturity of the Bonds was sold to the Public is the respective price listed in Schedule A.

2. Reserved.

3. Defined Terms.

(a) Issuer means Montebello Public Financing Authority. (b) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities.
(c) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than a Regulatory Underwriter or a related party to a Regulatory Underwriter. The term “related party” for purposes of this Certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (f) Regulatory Underwriter means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds 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 Bonds 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 Bonds to the Public). (g) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is _________, 2026. (h) Substantial Amount means ten percent.

The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax and Nonarbitrage Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Stradling Yocca Carlson & Rauth LLP in connection with rendering its opinion that the interest on the Bonds 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 Bonds.

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CABRERA CAPITAL MARKETS LLC

By:________________________________
Authorized Signatory

Dated: [ISSUE DATE]

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EXHIBIT C

FORM OF DISCLOSURE COUNSEL OPINION

_____________, 2026

Montebello Public Financing Authority
Montebello, CA

City of Montebello
Montebello, CA

Cabrera Capital Markets LLC
Los Angeles, CA

Re: $____________ Montebello Public Financing Authority Lease Revenue Refunding Bonds, 2026 Series A (Montebello Home2 Suites by Hilton Hotel Project)

Ladies and Gentlemen:

We have acted as disclosure counsel to the Montebello Public Financing Authority (the “Authority”) and the City of Montebello (the “City”) in connection with the issuance by the Authority of $___________ aggregate principal amount of the bonds of the Authority designated the “Montebello Public Financing Authority Lease Revenue Refunding Bonds, 2026 Series A (Montebello Home2 Suites by Hilton Hotel Project)” (the “Bonds”), pursuant to the provisions of Article 4 (commencing with section 6584) of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Law”), an Indenture, dated as of _________ 1, 2026 (the “Indenture”), by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee, and a resolution of the governing body of the Authority adopted on __________, 2026. The Bonds are secured by Revenues being (i) all payments to the Trustee (as assignee of the Authority) pursuant to a Lease Agreement, dated as of _________ 1, 2026 (the “Lease”), by and between the Authority and the City, the components of which are described in the Indenture, to be paid by the City; and (ii) all amounts held in certain funds and accounts created under the Indenture, together with earnings thereon.

This letter is being delivered by us in our capacity as disclosure counsel to the Authority and the City and not as counsel to any other addressee hereof. Capitalized terms used in this letter and not otherwise defined herein have the meanings given to them in the Indenture.

In connection with this letter, we have reviewed the Indenture, the Preliminary Official Statement, dated ___________, 2026 (the “Preliminary Official Statement”) and the Official Statement, dated ____________, 2026 (the “Official Statement”), which describe the Bonds, the Indenture, the Lease, and such other records, opinions and documents, and we have made such investigations of law, as we have deemed appropriate as a basis for the conclusions hereinafter expressed. In arriving at the conclusions expressed below, we are not expressing any opinion or view on, and with your permission are assuming, the validity, accuracy and sufficiency of the records, documents, certificates and opinions referred to above (including the accuracy of all factual matters represented and legal conclusions contained therein, including (without limitation) representations and legal conclusions regarding the due authorization, issuance, delivery, validity and enforceability of the Bonds and the exclusion of interest with respect thereto from

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gross income for federal income tax purposes). We have assumed that all records, documents, certificates and opinions that we have reviewed, and the signatures thereto, are genuine.

Based on and subject to the foregoing, and in reliance thereon, we advise that the Bonds are exempt from registration pursuant to the Securities Act of 1933, as amended, and that the Indenture is exempt from qualification under the Trust Indenture Act of 1939, as amended.

We are not passing upon and do not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Preliminary Official Statement and the Official Statement and make no representation that we have independently verified the accuracy, completeness or fairness of any such statements. However, in our capacity as disclosure counsel to the Authority and the City, we have reviewed certain documents as described above and have participated in conferences during which the contents of the Preliminary Official Statement and the Official Statement and related matters were discussed. Based on our review of documents and our participation in the above-mentioned conferences, and with the assumptions described in the second preceding paragraph, we advise you that, during the course of our assistance in the preparation of the Preliminary Official Statement and the Official Statement, no facts have come to the attention of the attorneys in our firm rendering legal services in connection with such representation that caused us to believe that the Preliminary Official Statement and the Official Statement, as of their respective dates and as of the date of this letter contained or contains any untrue statement of a material fact or omitted or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (except that we express no opinion or belief with respect to: (i) the expressions of opinion, the assumptions, the projections, the financial statements or other financial, numerical, economic, demographic or statistical data contained in the Preliminary Official Statement and the Official Statement, (ii) any CUSIP numbers or information relating thereto contained in the Preliminary Official Statement and the Official Statement, (iii) any information contained in the appendices to the Preliminary Official Statement and the Official Statement, (iv) any information with respect to the Depository Trust Company and its book entry system for the Bonds contained or incorporated in the Preliminary Official Statement and the Official Statement, (v) any information incorporated by reference into the Preliminary Official Statement and the Official Statement, (vi) information with respect to the rating on the Bonds and the rating agency referenced in the Preliminary Official Statement and the Official Statement, and (vii) compliance by the City with its obligations to provide notices of the events described in Part (b)(5)(i)(C) of Rule 15c2-12 of the United States Securities and Exchange Commission, as amended (the “Rule”) or to file annual reports described in Part (b)(5)(i)(A) of the Rule, which compliance we have not reviewed pursuant to your direction).

During the period from the dates of the Preliminary Official Statement and the Official Statement to the date of this letter, except for our review of the certificates and opinions regarding the Preliminary Official Statement and the Official Statement delivered on the date hereof, we have not undertaken any procedures or taken any actions which were intended or likely to elicit information concerning the accuracy, completeness or fairness of any of the statements contained in the Preliminary Official Statement and the Official Statement. We also advise you that the preceding paragraph is not an opinion but, rather, in the nature of negative observations based on certain limited activities performed by specific lawyers in our firm in our role as disclosure counsel to the Authority and the City. The scope of those activities performed by us for purposes of delivering this letter were inherently limited and do not purport to encompass all activities necessary for compliance with applicable securities laws. In addition, the performance of those activities by us required our reliance upon third-party representations, warranties, certifications and opinions, including and primarily, representations, warranties and certifications made by the Authority and the City, and are otherwise subject to the conditions set forth herein.

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This letter is furnished by us solely for your benefit and may not be relied upon by any other person or entity. We disclaim any obligation to supplement this letter to reflect any facts or circumstances that may hereafter come to our attention or any changes in the law that may hereafter occur, and our engagement with respect to this matter has terminated as of the date hereof.

Very truly yours,

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EXHIBIT D

FORM OF SUPPLEMENTAL OPINION

___________, 2026
Cabrera Capital Markets LLC
Los Angeles, CA

Re: Montebello Public Financing Authority Lease Revenue Refunding Bonds, 2026 Series A (Montebello Home2 Suites by Hilton Hotel Project)
Ladies and Gentlemen:

We have examined certified copies of proceedings taken for the sale and issuance of the above- referenced bonds (the “Bonds”), and we have rendered our opinion to the Montebello Public Financing Authority (the “Authority”) this day regarding the validity and enforceability of the Bonds (the “Approving Opinion”). The Bonds are being issued pursuant to an Indenture, dated as of _________ 1, 2026 (the “Indenture”), by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee. You may rely upon our Approving Opinion as if it were addressed to you.

Capitalized terms used herein and not otherwise defined shall have the meaning given to such terms in the Bond Purchase Agreement, dated __________, 2026 (the “Purchase Agreement”), among the Authority, the City and Cabrera Capital Markets LLC (the “Underwriter”).

We have assumed, but not independently verified, that the signatures on all documents, letters, certificates and instructions which we have examined are genuine, that all documents submitted to us are authentic and were duly and properly executed by the parties thereto and that all representations made in the documents that we have reviewed are true and accurate.

We express no opinion herein with respect to any indemnification, contribution, choice of law, choice of forum, penalty or waiver provisions contained in the Bonds, the Indenture, the Ground Lease, the Lease Agreement, the Assignment, or the Purchase Agreement, nor do we express any opinion with respect to the state or quality of title to any of the real or personal property described in the Ground Lease, the Lease Agreement, the Assignment, or the Indenture, or the accuracy or sufficiency of the description of any such property contained therein.

Based upon the foregoing and such other information and documents as we consider necessary to render this opinion, we are of the opinion that:

1. The Purchase Agreement has been duly authorized, executed and delivered by the Authority and the City and is a valid and binding agreement of the Authority and the City. The

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4937-1990-4693v1/200907-0004 D-2
Continuing Disclosure Certificate has been duly authorized, executed and delivered by the City and is a valid and binding agreement of the City

2. The statements on the cover of the Official Statement and in the Official Statement under the captions “INTRODUCTION,” “THE SERIES 2026A BONDS,” “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2026A BONDS” and “TAX MATTERS” and in “APPENDIX B – SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS” and “APPENDIX D – PROPOSED FORM OF BOND COUNSEL OPINION,” excluding any material that may be treated as included under such captions and appendices by any cross reference, insofar as such statements expressly summarize certain provisions of the Indenture, the Lease Agreement, the Ground Lease, the Assignment, and the final opinion of Bond Counsel concerning certain tax matters relating to the Bonds, are accurate in all material respects as of the date of Closing.

3. The Bonds are exempt from registration pursuant to the Securities Act of 1933, as amended, and the Indenture is exempt from qualification as an indenture pursuant to the Trust Indenture Act of 1939, as amended.

The opinions expressed herein are based upon our analysis and interpretation of existing laws, regulations, rulings and judicial decisions and cover certain matters not directly addressed by such authorities. This opinion is limited to matters governed by the laws of the State of California and federal securities laws, and we assume no responsibility with respect to the applicability or the effect of the laws of any other jurisdiction.

We call attention to the fact that the rights and obligations under the Legal Documents are subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or transfer and other similar laws affecting creditors’ rights, to the application of equitable principles if equitable remedies are sought, to the exercise of judicial discretion in appropriate cases and to limitations on legal remedies against public agencies in the State of California.

We express no opinion herein regarding any tax consequences with respect to the Bonds. No opinion is expressed herein with respect to the compliance with, or applicability of, any “blue sky” laws of any state as they relate to the offer or sale of the Bonds.

We call attention to the fact that the foregoing opinions may be affected by actions taken (or not taken) or events occurring (or not occurring) after the date hereof. We have not undertaken to determine, or to inform any person, whether such actions or events are taken (or not taken) or occur (or do not occur).

This opinion is furnished by us to you and is solely for your benefit, and may not be used, circulated, quoted or otherwise referred to or relied upon by others without our prior written consent.

This letter is not intended to be, and may not be, relied upon by the owners of the Bonds or any beneficial ownership interest therein. You have acknowledged that no attorney-client relationship exists between us and you with respect to any matters related to the Bonds.

Our engagement with respect to the Bonds has concluded with their delivery, and we disclaim any obligation to update this opinion or other matters discussed in the Official Statement.

Respectfully submitted,

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PRELIMINARY OFFICIAL STATEMENT DATED __________ 2026
NEW ISSUE—BOOK-ENTRY ONLY UNDERLYING RATING: S&P: “____” INSURED RATING: S&P “____”
(See “RATINGS” herein)
In the opinion of Stradling Yocca Carlson & Rauth LLP, Bond Counsel, under existing statutes, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and compliance with certain covenants and requirements described in this Official Statement, interest (and original issue discount) on the Series 2026A Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals.

In the further opinion of Bond Counsel, interest (and original issue discount) on the Series 2026A Bonds is exempt from State of California personal income tax. See the caption “TAX MATTERS” herein with respect to tax consequences relating to the Series 2026A Bonds, including with respect to the alternative minimum tax imposed on certain large corporations. $_______*

MONTEBELLO PUBLIC FINANCING AUTHORITY
LEASE REVENUE REFUNDING BONDS, 2026 SERIES A
(MONTEBELLO HOME2 SUITES BY HILTON HOTEL PROJECT)
Dated: Date of Delivery Due: June 1, as shown on inside cover The Montebello Public Financing Authority Lease Revenue Refunding Bonds, 2026 Series A (Montebello Home2 Suites by Hilton Hotel Project) are payable from Base Rental Payments to be made by the City of Montebello for the right to use certain real property pursuant to a Lease Agreement, dated as of ______ 1, 2026, by and between the City, as lessee, and the Montebello Public Financing Authority, as lessor. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2026A BONDS.” The Series 2026A Bonds are being issued to provide funds to (i) refund the outstanding Montebello Public Financing Authority Lease Revenue Bonds, 2016 Series A (Montebello Home2 Suites by Hilton Hotel Project), and (ii) pay the costs incurred in connection with the issuance of the Series 2026A Bonds [including the premium for a municipal bond insurance policy insuring the Insured Bonds (defined below)]. See “PLAN OF REFUNDING.” The City has covenanted under the Lease Agreement to make all Base Rental Payments provided for therein, to include all such payments as a separate line item in its annual budgets, and to make all the necessary annual appropriations for such Base Rental Payments. The City’s obligation to make Base Rental Payments is subject to abatement during any period in which, by reason of material damage to, or destruction or condemnation of, the Property, or any defects in title to the Property, there is substantial interference with the City’s right to use and occupy any portion of the Property. See “RISK FACTORS— Abatements.”
The Series 2026A Bonds are being issued in fully registered book-entry only form, initially registered in the name of Cede & Co., as nominee of The Depository Trust Company (DTC), Jersey City, New Jersey. Interest on the Series 2026A Bonds is payable semiannually on June 1 and December 1 of each year, commencing December 1, 2026. Purchasers will not receive certificates representing their interest in the Series 2026A Bonds. Individual purchases will be in principal amounts of $5,000 or integral multiples thereof. Principal of and interest and premium, if any, on the Series 2026A Bonds will be paid by The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”) to DTC for subsequent disbursement to DTC Participants who are obligated to remit such payments to the Beneficial Owners of the Series 2026A Bonds. See “THE SERIES 2026A BONDS—Book-Entry Only System” herein.

The Series 2026A Bonds will be issued pursuant to an Indenture, dated as of ______ 1, 2026 (the “Indenture”) by and among the City, the Authority and the Trustee. The Series 2026A Bonds and any Additional Bonds issued pursuant to the Indenture are collectively referred to as the “Bonds.”
[The Series 2026A Bonds are subject to optional, extraordinary and mandatory sinking fund redemption prior to maturity. See “THE SERIES 2026A BONDS—Redemption.” The Authority is not funding a debt service reserve fund for the Series 2026A Bonds.] [The scheduled payment of principal of and interest on the Series 2026A Bonds maturing on June 1 of the years 20__ through 20__, inclusive (collectively, the “Insured Bonds”), when due will be guaranteed under a municipal bond insurance policy to be issued concurrently with the delivery of the Insured Bonds by ________ (“the “Insurer”). ] [INSURER’S LOGO]
The Series 2026A Bonds are special obligations of the Authority, payable solely from Base Rental Payments and the other assets pledged therefor under the Indenture. Neither the faith and credit nor the taxing power of the Authority, the City or the State of California, or any political subdivision thereof, is pledged to the payment of the Series 2026A Bonds.

The obligation of the City to make the Base Rental Payments does not constitute a debt of the City or the State of California or of any political subdivision thereof within the meaning of any constitutional or statutory debt limit or restriction, and does not constitute an obligation for which the City or the State of California is obligated to levy or pledge any form of taxation or for which the City or the State of California has levied or pledged any form of taxation. The Authority has no power to tax.

THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A SUMMARY OF THIS ISSUE. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION.

The Series 2026A Bonds will be offered when, as and if issued and received by the Underwriter, subject to the approval as to their validity by Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, Bond Counsel. Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, is also acting as Disclosure Counsel to the City and the Authority. Certain legal matters will be passed upon for the City and the Authority by the City Attorney of the City of Montebello, and for the Underwriter by Best, Best & Krieger LLP, Los Angeles, California. It is anticipated that the Series 2026A Bonds in definitive form will be available for delivery to DTC in Jersey City, New Jersey on or about ______ , 2026.

CABRERA CAPITAL MARKETS LLC
Dated: ______, 2026

* Preliminary, subject to change.

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

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MATURITY SCHEDULE
$_______*

MONTEBELLO PUBLIC FINANCING AUTHORITY
LEASE REVENUE REFUNDING BONDS, 2026 SERIES A
Base CUSIP†: ________
Maturity Date
(June 1) Principal Amount Interest Rate Yield Price CUSIP† 2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046

$______ ___% Term Bonds due June 1, 20__ Yield: _.___% Price: _____ CUSIP†

$_______ _ % Term Bonds due June 1, 20__ Yield: _.___% Price: _____ CUSIP†

* Preliminary, subject to change.

C Yield calculated to the first optional redemption date of June 1, 20__, at par. † CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by FactSet Research Systems Inc. Copyright© 2026 CUSIP Global Services. All rights reserved. CUSIP® data herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. CUSIP® numbers are provided for convenience of reference only.

None of the Underwriter, the Authority or the City, or their agents or counsel, assume responsibility for the accuracy of such numbers.

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No dealer, broker, salesperson or other person has been authorized by the City or the Authority to give any information or to make any representations in connection with the offer or sale of the Series 2026A Bonds other than those contained herein and, if given or made, such other information or representations must not be relied upon as having been authorized by the City or the Authority. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Series 2026A Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale.

This Official Statement is not to be construed as a contract with the purchasers or Owners of the Series 2026A Bonds.

Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of fact.

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

This Official Statement and the information contained herein are subject to completion or amendment without notice and neither delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City or the Authority or any other parties described herein since the date hereof.

These securities may not be sold nor may an offer to buy be accepted prior to the time the Official Statement is delivered in final form. This Official Statement is being submitted in connection with the sale of the Series 2026A Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose, unless authorized in writing by the City. All summaries of documents and laws are made subject to the provisions thereof and do not purport to be complete statements of any or all such provisions.

Certain statements included or incorporated by reference in this Official Statement constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended.

Such statements are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,” “project,” “budget,” “intend” or similar words. Such forward-looking statements include, but are not limited to, certain statements contained in the information under the captions “THE CITY OF MONTEBELLO,” “CITY FINANCIAL INFORMATION” and “RISK FACTORS.”

THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH

FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND

OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS

DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE CITY DOES

NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THE FORWARD-LOOKING STATEMENTS SET FORTH IN THIS OFFICIAL STATEMENT. IN EVALUATING SUCH STATEMENTS, POTENTIAL INVESTORS SHOULD

SPECIFICALLY CONSIDER THE VARIOUS FACTORS WHICH COULD CAUSE ACTUAL EVENTS OR RESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED BY SUCH FORWARD-LOOKING STATEMENTS.

IN CONNECTION WITH THE OFFERING OF THE SERIES 2026A BONDS, THE UNDERWRITER MAY

OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2026A BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE UNDERWRITER MAY OFFER AND SELL THE SERIES 2026A BONDS TO CERTAIN DEALERS AND DEALER

BANKS AND BANKS ACTING AS AGENT AND OTHERS AT PRICES LOWER THAN THE PUBLIC OFFERING

PRICE STATED ON THE COVER PAGE HEREOF AND SAID PUBLIC OFFERING PRICE MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITER.

THE SERIES 2026A BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS

AMENDED, IN RELIANCE UPON AN EXEMPTION CONTAINED IN SUCH ACT AND HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE.

The City maintains a website; however, information presented there is not a part of this Official Statement and should not be relied upon in making an investment decision with respect to the Series 2026A Bonds.

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[_______. (“the “Insurer”) makes no representation regarding the Series 2026A Bonds or the advisability of investing in the Series 2026A Bonds. In addition, the Insurer has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding the Insurer supplied by the Insurer and presented under the caption “BOND INSURANCE” and in Appendix G—“SPECIMEN MUNICIPAL BOND INSURANCE POLICY.”]

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4926-2960-1196v12/200907-0004

CITY OF MONTEBELLO

LOS ANGELES COUNTY, CALIFORNIA

MONTEBELLO PUBLIC FINANCING AUTHORITY

GOVERNING BOARD AND CITY COUNCIL OF THE CITY OF MONTEBELLO Georgina Tamayo, Mayor
Danielle Romero, Mayor Pro Tem
Scarlet Peralta, Council Member
Ric Alonzo, Council Member
Salvador Melendez, Council Member

_____________

AUTHORITY OFFICIALS / CITY
Raul Alvarez, City Manager
David Matanga, Treasurer
Michael Solorza, Director of Finance
Christopher Jimenez, City Clerk
_______, City Attorney

_____________

BOND COUNSEL AND DISCLOSURE COUNSEL
Stradling Yocca Carlson & Rauth LLP
Newport Beach, California
_____________

MUNICIPAL ADVISOR
Urban Futures, Inc.

Walnut Creek, California
_____________

TRUSTEE
The Bank of New York Mellon Trust Company, N.A.

Los Angeles, California
_____________

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TABLE OF CONTENTS
Page
4926-2960-1196v12/200907-0004 i
INTRODUCTION ..........................................................................................................................................................1 Bond Insurance ...........................................................................................................................................................3 PLAN OF REFUNDING ................................................................................................................................................3 THE SERIES 2026A BONDS ........................................................................................................................................3 General ........................................................................................................................................................................3 Registration, Transfers and Exchanges .......................................................................................................................4 Redemption .................................................................................................................................................................4 Book-Entry Only System ............................................................................................................................................6 SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2026A BONDS ...................................................7 Pledge of Revenues .....................................................................................................................................................7 Base Rental Payments .................................................................................................................................................7 Additional Rental Payments .......................................................................................................................................8 Abatement ...................................................................................................................................................................8 Substitution or Release of the Property ......................................................................................................................9 Action on Default .....................................................................................................................................................10 No Reserve Fund ......................................................................................................................................................10 Additional Bonds ......................................................................................................................................................10 Insurance ...................................................................................................................................................................11 SOURCES AND USES OF FUNDS ............................................................................................................................12 BASE RENTAL PAYMENT SCHEDULE .................................................................................................................13 THE PROPERTY .........................................................................................................................................................14 [BOND INSURANCE] .................................................................................................................................................14 THE AUTHORITY ......................................................................................................................................................14 THE CITY OF MONTEBELLO ..................................................................................................................................14 General ......................................................................................................................................................................14 City Council ..............................................................................................................................................................14 City Management ......................................................................................................................................................15 Employee Relations ..................................................................................................................................................16 Risk Management .....................................................................................................................................................17 CITY FINANCIAL INFORMATION ..........................................................................................................................17 Financial Statements .................................................................................................................................................17 Accounting and Financial Reporting ........................................................................................................................17 Financial Policies ......................................................................................................................................................19 State Audit ................................................................................................................................................................20 Single Audit Report Findings of Material Deficiencies ...........................................................................................22 Budget Procedure, Current Budget and Historical Budget Information ...................................................................22 Comparative Change in Fund Balance of the City General Fund ............................................................................26 Comparative General Fund Balance Sheets of the City ...........................................................................................28 Tax Revenues By Source ..........................................................................................................................................29 Sales Taxes ...............................................................................................................................................................29 Property Taxes ..........................................................................................................................................................30 Charges for Services .................................................................................................................................................33 Other Revenue Sources .............................................................................................................................................33 Impact of Enterprise Operations on the City’s General Fund ..................................................................................34 Historical Results of the Home2 Suites Enterprise Fund .........................................................................................36 Debt Obligations .......................................................................................................................................................40 Retirement System ....................................................................................................................................................40 Other Post-Employment Benefits .............................................................................................................................46 RISK FACTORS ..........................................................................................................................................................47 General Considerations – Security for the Series 2026A Bonds ..............................................................................47

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4926-2960-1196v12/200907-0004 ii
Abatements ...............................................................................................................................................................48 No Reserve Fund ......................................................................................................................................................48 Effect of Economy on Revenues ..............................................................................................................................48 Impact of Enterprise Operations on the City’s General Fund ..................................................................................49 Natural Disasters .......................................................................................................................................................49 Hazardous Substances ..............................................................................................................................................52 Other Financial Matters ............................................................................................................................................52 Substitution, Addition and Removal of Property; Additional Bonds .......................................................................52 Limited Recourse on Default; No Acceleration of Base Rental ...............................................................................53 Limitations on Remedies Available; Bankruptcy .....................................................................................................54 Possible Insufficiency of Insurance Proceeds ...........................................................................................................55 Loss of Tax Exemption .............................................................................................................................................55 No Liability of Authority to the Owners ..................................................................................................................55 Dependence on State for Certain Revenues ..............................................................................................................55 Cybersecurity ............................................................................................................................................................56 [Risks Associated with Bond Insurance ...................................................................................................................56 CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS ......................57 Article XIIIA of the State Constitution ....................................................................................................................57 Legislation Implementing Article XIIIA ..................................................................................................................57 Article XIIIB of the State Constitution .....................................................................................................................57 Articles XIIIC and XIIID of the State Constitution ..................................................................................................58 Proposition 62 ...........................................................................................................................................................59 Proposition 1A ..........................................................................................................................................................59 Proposition 22 ...........................................................................................................................................................60 Proposition 26 ...........................................................................................................................................................60 Possible Future Initiatives .........................................................................................................................................61 TAX MATTERS ...........................................................................................................................................................61 CERTAIN LEGAL MATTERS ...................................................................................................................................63 ABSENCE OF LITIGATION ......................................................................................................................................63 UNDERWRITING .......................................................................................................................................................63 RATINGS .....................................................................................................................................................................64 MUNICIPAL ADVISOR .............................................................................................................................................64 CONTINUING DISCLOSURE ....................................................................................................................................64 FINANCIAL STATEMENTS OF THE CITY .............................................................................................................65 MISCELLANEOUS .....................................................................................................................................................65

APPENDIX A ECONOMIC AND DEMOGRAPHIC INFORMATION REGARDING THE CITY OF MONTEBELLO .........................................................................................................................A-1 APPENDIX B SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS ...................................................B-1

APPENDIX C AUDITED FINANCIAL STATEMENTS OF THE CITY FOR THE YEAR ENDED JUNE 30, 2025 ...........................................................................................................................C-1 APPENDIX D PROPOSED FORM OF BOND COUNSEL OPINION ............................................................D-1 APPENDIX E FORM OF CONTINUING DISCLOSURE CERTIFICATE .....................................................E-1 APPENDIX F BOOK-ENTRY ONLY SYSTEM .............................................................................................F-1 [APPENDIX G SPECIMEN MUNICIPAL BOND INSURANCE POLICY ....................................................G-1]

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CITY OF MONTEBELLO

LOCATION MAP

[TO COME]

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4926-2960-1196v12/200907-0004 1

OFFICIAL STATEMENT
$_______*

MONTEBELLO PUBLIC FINANCING AUTHORITY
LEASE REVENUE REFUNDING BONDS, 2026 SERIES A
(MONTEBELLO HOME2 SUITES BY HILTON HOTEL PROJECT)

INTRODUCTION
This Official Statement (which includes the cover page and the appendices hereto) (the “Official Statement”) provides certain information concerning the sale and delivery of $_______ * aggregate principal amount of Montebello Public Financing Authority Lease Revenue Refunding Bonds, 2026 Series A (Montebello Home2 Suites by Hilton Hotel Project) (the “Series 2026A Bonds”).

The net proceeds of the sale of the Series 2026A Bonds will be used to (i) refund the outstanding Montebello Public Financing Authority Lease Revenue Bonds, 2016 Series A (Montebello Home2 Suites by Hilton Hotel Project) (the “2016 Bonds”) and (ii) pay the costs incurred in connection with the issuance of the Series 2026A Bonds, [including the premium for a Municipal Bond Insurance Policy (the “Policy”) insuring the Series 2026A Bonds maturing on June 1 of the years 20__ through 20__, inclusive (collectively, the “Insured Bonds”), to be issued by the Insurer concurrently with the issuance of the Series 2026A Bonds.] The Series 2026A Bonds are equally and ratably payable from base rental payments (the “Base Rental Payments”) to be made by the City of Montebello (the “City”) for the right to use certain real property (collectively, the “Property” and described further under the caption “THE PROPERTY”) pursuant to a Lease Agreement, dated as of ______ 1, 2026 (the “Lease Agreement”), between the City, as lessee, and the Montebello Public Financing Authority (the “Authority”), as lessor.

The Series 2026A Bonds will be issued pursuant to an Indenture, dated as of ______ 1, 2026 (the “Indenture”), by and among the Authority, the City and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”). Pursuant to the Indenture, the Authority may issue additional bonds (the “Additional Bonds”) payable from the Base Rental Payments on a parity with the Series 2026A Bonds (the Series 2026A Bonds and any such Additional Bonds being collectively referred to as the “Bonds”). See the caption “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2026A BONDS—Additional Bonds.”
Pursuant to a Ground Lease, dated as of ______ 1, 2026 (the “Ground Lease”), by and between the City and the Authority, the City has leased the Property to the Authority. The Authority has subleased the Property to the City under the Lease Agreement. The Lease Agreement obligates the City to make Base Rental Payments to the Authority.

The Trustee and the Authority have entered into an Assignment Agreement, dated as of ______ 1, 2026, pursuant to which the Authority has assigned to the Trustee for the benefit of the Bond Owners substantially all of the Authority’s right, title and interest in and to the Ground Lease and the Lease Agreement, including its right to receive the Base Rental Payments due under the Lease Agreement and to enforce any remedies in the event of a default by the City.

The Property leased under the Ground Lease and the Lease Agreement will consist of the Home2 Suites Hotel facility (defined below) owned by the City. See the caption “THE PROPERTY.” The City has the right to substitute or release all or a portion of the Property subject to certain conditions precedent. See “SECURITY

* Preliminary, subject to change.

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4926-2960-1196v12/200907-0004 2
AND SOURCES OF PAYMENT FOR THE SERIES 2026A BONDSSubstitution, Addition and Removal of Property.”
The City will covenant under the Lease Agreement to take such action as may be necessary to include all Rental Payments, which are comprised of Base Rental Payments and Additional Rental Payments (which include taxes and assessments affecting the Property, administrative costs of the Authority relating to the Property, fees and expenses of the Trustee and other amounts payable under the Lease Agreement), due under the Lease Agreement as a separate line item in its annual budgets and to make the necessary annual appropriations therefor, subject to abatement as described herein.

Base Rental Payments are subject to complete or partial abatement in the event and to the extent that there is substantial interference with the City’s right to use and occupy the Property or any portion thereof. See “RISK FACTORS—Abatements.” Abatement of Base Rental Payments under the Lease Agreement, to the extent that payment is not made from alternative sources as set forth below, would result in all Bond Owners receiving less than the full amount of principal of and interest on the Series 2026A Bonds. To the extent that proceeds of insurance are available or moneys are available in certain funds and accounts pledged as security for the Series 2026A Bonds, Base Rental Payments (or a portion thereof) may be made during periods of abatement.

THE SERIES 2026A BONDS ARE SPECIAL OBLIGATIONS OF THE AUTHORITY, PAYABLE

SOLELY FROM BASE RENTAL PAYMENTS AND THE OTHER ASSETS PLEDGED THEREFOR UNDER THE INDENTURE. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE AUTHORITY, THE CITY OR THE STATE OF CALIFORNIA (THE “STATE”), OR ANY POLITICAL SUBDIVISION THEREOF, IS PLEDGED TO THE PAYMENT OF THE SERIES 2026A BONDS. THE AUTHORITY HAS NO TAXING POWER.

THE OBLIGATION OF THE CITY TO MAKE THE BASE RENTAL PAYMENTS DOES NOT

CONSTITUTE A DEBT OF THE CITY, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF

WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMIT OR

RESTRICTION, AND DOES NOT CONSTITUTE AN OBLIGATION FOR WHICH THE CITY OR THE

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

The Authority is not funding a debt service reserve fund for the Series 2026A Bonds.

The City has agreed to provide, or cause to be provided, to the Municipal Securities Rulemaking Board for purposes of Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission (“Rule 15c2-12”) certain annual financial information and operating data and, in a timely manner, notice of certain listed events.

These covenants have been made in order to assist the Underwriter in complying with Rule 15c2-12. See “CONTINUING DISCLOSURE” herein for a description of the City’s compliance with its prior continuing disclosure undertakings pursuant to Rule 15c2-12 and APPENDIX—E “FORM OF CONTINUING DISCLOSURE CERTIFICATE” for a description of the specific nature of the annual report and notices of listed events and the terms of the disclosure undertaking pursuant to which such reports are to be made.

The Bank of New York Mellon Trust Company, N.A., Los Angeles, California, will act as Trustee with respect to the Series 2026A Bonds. The Series 2026A Bonds will be issued subject to the approval as to their legality by Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, Bond Counsel. Certain legal matters will be passed upon for the City and the Authority by the City Attorney of the City of Montebello and by Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, Disclosure Counsel. Certain legal matters will be passed upon for the Underwriter by Best, Best & Krieger LLP, Los Angeles, California. The City’s financial statements for the fiscal year ended June 30, 2025 included as Appendix C hereto have been audited by the Pun Group, LLP, Santa Ana, California (the “Auditor”). See APPENDIX C—“AUDITED FINANCIAL STATEMENTS OF THE CITY FOR THE FISCAL YEAR ENDED JUNE 30, 2025” herein. The City’s

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financial statements are public documents and are included within this Official Statement without the prior approval of the Auditor. Accordingly, the Auditor has not performed any post-audit review of the financial condition of the City and also has not performed any procedures relating to this Official Statement.

Certain events could affect the ability of the City to make the Base Rental Payments when due. See “RISK FACTORS” for a discussion of certain factors that should be considered, in addition to other matters set forth herein, in evaluating an investment in the Series 2026A Bonds.

The presentation of information, including tables of receipt of revenues, is intended to show recent historical information and, except for a budget discussion for the Fiscal Year 2026-27 budget is not intended to indicate future or continuing trends in the financial position or other affairs of the City. No representation is made that past experience, as it might be shown by such financial and other information, will necessarily continue or be repeated in the future. See the captions “THE CITY OF MONTEBELLO” and “CITY FINANCIAL INFORMATION” for financial and operating information related to the City.

The summaries or references to the Indenture, the Lease Agreement, the Ground Lease, the Assignment Agreement and other documents, agreements and statutes referred to herein, and the description of the Series 2026A Bonds included in this Official Statement, do not purport to be comprehensive or definitive, and such summaries, references and descriptions are qualified in their entireties by reference to each such document or statute. All capitalized terms used in this Official Statement (unless otherwise defined herein) which are defined in the Indenture or the Lease Agreement shall have the meanings set forth therein. See APPENDIX B— “SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS.”
Bond Insurance
The scheduled payment of principal of and interest on the Insured Bonds (consisting of the Series 2026A Bonds maturing on June 1, 20___ through 20__, inclusive) when due will be guaranteed under the Policy to be issued by the Insurer concurrently with the delivery of the Insured Bonds. See the caption “BOND INSURANCE.”
The Series 2026A Bonds maturing on June 1 of the years 20__ through 20__, inclusive, are not insured under the Policy.

PLAN OF REFUNDING
The Series 2026A Bonds are being sold to provide for the current refunding of the 2016 Bonds.

Proceeds from the sale of the Series 2026A Bonds will be deposited in an escrow fund (the “Escrow Fund”) to be established by The Bank of New York Mellon Trust Company, N.A., as escrow bank and trustee for the 2016 Bonds (the “Escrow Bank”), pursuant to an escrow agreement (the “Escrow Agreement”) by and between the Authority and the Escrow Bank. Amounts on deposit in the Escrow Fund will be [held uninvested in cash] and will be applied by the Escrow Bank pursuant to the Escrow Agreement and the indenture for the 2016 Bonds, for the sole benefit of the holders of the 2016 Bonds. Amounts on deposit in the Escrow Fund will not serve as security or be available for payment of principal of or interest or premium, if any, on the Series 2026A Bonds.

The Authority plans to pay or redeem all of the $______ remaining outstanding principal amount of the 2016 Bonds on _____ , 2026 at a prepayment price equal to the principal amount of the 2016 Bonds, plus accrued interest to the redemption date, without premium.

THE SERIES 2026A BONDS
General
The Series 2026A Bonds shall be issued in fully registered form without coupons in denominations of $5,000 or any integral multiple thereof. The Series 2026A Bonds will be dated as of and bear interest (calculated

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on the basis of a 360-day year comprised of twelve 30-day months) from the dated date thereof at the rates set forth on the inside cover page hereof. Interest on the Series 2026A Bonds will be paid semiannually on June 1 and December 1 (each, an “Interest Payment Date”) of each year, commencing December 1, 2026.

Interest on the Series 2026A Bonds will be payable from the Interest Payment Date next preceding the date of authentication thereof (a “Record Date”) unless (i) a Series 2026A Bond is authenticated on or before an Interest Payment Date and after the close of business on the preceding Record Date, in which event it will bear interest from such Interest Payment Date, (ii) a Series 2026A Bond is authenticated on or before the first Record Date, in which event interest thereon will be payable from the dated date thereof, or (iii) interest on any Series 2026A Bond is in default as of the date of authentication thereof, in which event interest thereon will be payable from the date to which interest has been paid in full, payable on each Interest Payment Date. Interest will be paid in lawful money of the United States on each Interest Payment Date to the Persons in whose names the ownership of the Series 2026A Bonds is registered on the Registration Books at the close of business on the immediately preceding Record Date, except as provided below. Interest will be paid by check of the Trustee mailed by first class mail, postage prepaid, on each Interest Payment Date to the Series 2026A Bond Owners at their respective addresses shown on the Registration Books as of the close of business on the preceding Record Date.

The principal and premium, if any, of the Series 2026A Bonds will be payable in lawful money of the United States of America upon presentation and surrender thereof upon maturity or earlier redemption at the Office of the Trustee. The Series 2026A Bonds will be subject to redemption as set forth herein.

Registration, Transfers and Exchanges
The Series 2026A Bonds will be issued as fully registered bonds, registered in the name of Cede & Co. as nominee of DTC, and will be available to actual purchasers of the Series 2026A Bonds (the “Beneficial Owners”) in the denominations set forth above, under the book-entry system maintained by DTC, only through brokers and dealers who are or act through DTC Participants (as defined in Appendix F) as described herein.

Beneficial Owners will not be entitled to receive physical delivery of the Series 2026A Bonds. See “THE SERIES 2026A BONDS—Book-Entry Only System.”
Redemption*
Extraordinary Redemption from Net Proceeds. The Series 2026A Bonds are subject to redemption, in whole or in part, on any date, in denominations of $5,000 or any integral multiple thereof, from and to the extent of any Net Insurance Proceeds received with respect to all or a portion of the Property, deposited by the Trustee in the Redemption Fund pursuant to the Indenture, at a Redemption Price equal to the principal amount of the Series 2026A Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium.

Optional Redemption of Series 2026A Bonds. The Series 2026A Bonds maturing on or after June 1, 20__, are subject to optional redemption, in whole or in part, on any date on or after June 1, 20__, in denominations of $5,000 or any integral multiple thereof, from and to the extent of prepaid Base Rental Payments paid pursuant to the Lease, at a Redemption Price equal to the principal amount of the Series 2026A Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium.

Mandatory Sinking Fund Redemption. The Series 2026A Bonds with stated maturities on June 1, 20__ are subject to mandatory sinking fund redemption in part (by lot) on each June 1 on and after June 1, 20_, in integral multiples of $5,000 at a Redemption Price equal to the principal amount thereof plus accrued interest to the date fixed for redemption, without premium, in accordance with the following schedule:

* Preliminary, subject to change.

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Redemption Date
(June 1)
Principal
Amount
$

(Maturity)

The Series 2026A Bonds with stated maturities on June 1, 20__ are subject to mandatory sinking fund redemption in part (by lot) on each June 1 on and after June 1, 20__, in integral multiples of $5,000 at a Redemption Price equal to the principal amount thereof plus accrued interest to the date fixed for redemption, without premium, in accordance with the following schedule:

Redemption Date
(June 1)
Principal
Amount

(Maturity)

In the event of a partial optional redemption or extraordinary mandatory redemption of any of the Term Bonds, the City will provide the Trustee with a revised mandatory sinking fund schedule giving effect to the redemption so completed.

Selection of Bonds for Redemption. Whenever provision is made in the Indenture for the redemption of less than all of the Series 2026A Bonds, the Trustee shall select the Series 2026A Bonds to be redeemed from all Bonds not previously called for redemption with respect to any redemption of Series 2026A Bonds of a Series, among maturities of Series 2026A Bonds of such Series as directed in a Written Request of the Authority, and pro rata among Bonds of the same Series with the same maturity. For purposes of such selection, all Bonds will be deemed to be comprised of separate $5,000 denominations and such separate denominations will be treated as separate Series 2026A Bonds which may be separately redeemed.

Notice of Redemption. The Trustee on behalf and at the expense of the Authority shall mail (by first class mail) notice of any redemption to the respective Owners of any Bonds designated for redemption at their respective addresses appearing on the Registration Books, to the Securities Depositories and to one or more Information Services, at least 20 but not more than 60 days prior to the date fixed for redemption. Such notice shall state the date of the notice, the redemption date, the redemption place and the Redemption Price and shall designate the CUSIP numbers, the Bond numbers and the maturity or maturities (except in the event of redemption of all of the Series 2026A Bonds of such maturity or maturities in whole) of the Series 2026A Bonds to be redeemed, and shall require that such Bonds be then surrendered at the principal corporate trust office of the Trustee for redemption at the Redemption Price, giving notice also that further interest on such Bonds will not accrue from and after the date fixed for redemption. Such notice may state that such redemption is conditioned upon sufficient funds being on deposit on the redemption date to redeem the Series 2026A Bonds so called for redemption. Such notice of redemption may also state that no representation is made as to the accuracy or correctness of the CUSIP numbers printed therein or on the Series 2026A Bonds. Neither the failure to receive any notice so mailed, nor any defect in such notice, shall affect the validity of the proceedings for the redemption of the Series 2026A Bonds or the cessation of accrual of interest thereon from and after the date fixed for redemption.

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Partial Redemption of Bonds. Upon surrender of any Series 2026A Bonds redeemed in part only, the Authority will execute and the Trustee will authenticate and deliver to the Owner thereof, at the expense of the Authority, a new Bond or Bonds of the same Series in authorized denominations equal in aggregate principal amount representing the unredeemed portion of the Series 2026A Bonds surrendered.

Effect of Notice of Redemption. Notice having been mailed as aforesaid, and moneys for the Redemption Price, and the interest to the applicable date fixed for redemption, having been set aside in the Redemption Fund, the Series 2026A Bonds will become due and payable on said date, and, upon presentation and surrender thereof at the principal corporate trust office of the Trustee, said Series 2026A Bonds will be paid at the Redemption Price thereof, together with interest accrued and unpaid to said date.

If, on said date fixed for redemption, moneys for the Redemption Price of all the Series 2026A Bonds to be redeemed, together with interest to said date, will be held by the Trustee so as to be available therefor on such date, and, if notice of redemption thereof has been mailed as aforesaid and not canceled, then, from and after said date, interest on said Bonds will cease to accrue and become payable. All moneys held by or on behalf of the Trustee for the redemption of Bonds will be held in trust for the account of the Owners of the Series 2026A Bonds so to be redeemed without liability to such Owners for interest thereon. All Bonds paid at maturity or redeemed prior to maturity pursuant to the provisions of the Indenture will be canceled upon surrender thereof and destroyed.

Book-Entry Only System
General. DTC will act as securities depository for the Series 2026A Bonds. The Series 2026A Bonds will be issued as fully-registered bonds registered in the name of Cede & Co. (DTC’s partnership nominee). One fully-registered Series 2026A Bond will be issued for each maturity of the Series 2026A Bonds, each in the initial aggregate principal amount of such maturity, and will be deposited with DTC. See APPENDIX F— “BOOK-ENTRY ONLY SYSTEM.”
Transfer and Exchange of Bonds. The following provisions regarding the exchange and transfer of the Series 2026A Bonds apply only during any period in which the Series 2026A Bonds are not subject to DTC’s book-entry system. While the Series 2026A Bonds are subject to DTC’s book-entry system, their exchange and transfer will be effected through DTC and the Participants and will be subject to the procedures, rules and requirements established by DTC.

Any Bond may, in accordance with its terms, be transferred upon the books required to be kept by the Trustee pursuant to the provisions of the Indenture by the Person in whose name it is registered, in person or by his or her duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a written instrument of transfer, duly executed in a form acceptable to the Trustee. Whenever any Bond or Bonds will be surrendered for transfer, the Authority will execute and the Trustee will authenticate and will deliver a new Bond or Bonds of the same Series in a like aggregate principal amount, in any Authorized Denomination.

The Trustee will require the Bond Owner requesting such transfer to pay any tax or other governmental charge required to be paid with respect to such transfer.

The Series 2026A Bonds may be exchanged at the principal corporate trust office of the Trustee for a like aggregate principal amount of Bonds of the same Series of other authorized denominations. The Trustee will require the payment by the Bond Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange.

The Trustee is not obligated to make any transfer or exchange of Bonds of a Series during the period established by the Trustee for the selection of Bonds of such Series for redemption, or with respect to any Bonds of such Series selected for redemption.

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SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2026A BONDS Pledge of Revenues
The Series 2026A Bonds are equally and ratably payable from and secured by Base Rental Payments and certain amounts on deposit in certain funds and accounts established under the Indenture. Base Rental Payments will be paid by the City from any and all legally available funds. See the captions “THE CITY OF MONTEBELLO,” “CITY FINANCIAL INFORMATION” and “RISK FACTORS” for a description of such available funds and the potential risks associated with the availability of such funds to make Base Rental Payments. The City has covenanted in the Lease Agreement to take such action as may be necessary to include all Base Rental Payments and Additional Rental Payments due under the Lease Agreement as a separate line item in its annual budgets and to make the necessary annual appropriations therefor.

The Authority, pursuant to the Assignment Agreement, will assign to the Trustee for the benefit of the Owners of the Series 2026A Bonds all of the Authority’s right, title and interest in and to the Ground Lease and the Lease Agreement, including, without limitation, its right to receive Base Rental Payments to be paid by the City under and pursuant to the Lease Agreement; provided that, the Authority will retain the rights to indemnification and to payment of reimbursement of its reasonable costs and expenses under the Lease Agreement. The City will pay Base Rental Payments directly to the Trustee, as assignee of the Authority. See “—Base Rental Payments” below. Pursuant to the Indenture, the Authority may issue Additional Bonds payable from the Base Rental Payments on a parity with the Series 2026A Bonds, subject to certain conditions precedent.

See the caption “—Additional Bonds.”
Subject only to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth in the Indenture, all of the Base Rental Payments and any other amounts (including proceeds of the sale of the Series 2026A Bonds) held in the Base Rental Payment Fund, the Interest Fund, the Principal Fund and the Redemption Fund are pledged by the Authority pursuant to the Indenture to secure the payment of the principal of, premium, if any, and interest on the Series 2026A Bonds in accordance with their terms, the provisions of the Indenture and the Act. Said pledge constitutes a first lien on such assets.

THE SERIES 2026A BONDS ARE SPECIAL OBLIGATIONS OF THE AUTHORITY, PAYABLE

SOLELY FROM BASE RENTAL PAYMENTS AND THE OTHER ASSETS PLEDGED THEREFOR UNDER THE INDENTURE. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE

AUTHORITY, THE CITY OR THE STATE, OR ANY POLITICAL SUBDIVISION THEREOF, IS PLEDGED TO THE PAYMENT OF THE SERIES 2026A BONDS. THE AUTHORITY HAS NO TAXING POWER.

Base Rental Payments
Rental Payments (collectively, the Base Rental Payments and the Additional Rental Payments) will be paid by the City to the Authority for and in consideration of the right to use and occupy the Property and in consideration of the continued right to the quiet use and enjoyment thereof during each Rental Period for which such Rental Payments are to be paid. Each Base Rental Payment will be deposited with the Trustee no later than the third Business Day preceding each Interest Payment Date (the “Base Rental Deposit Date”) on which such Base Rental Payment is due. All Base Rental Payments will be paid directly by the City to the Trustee, and if received by the Authority at any time will be transferred by the Authority to the Trustee within one Business Day after the receipt thereof. All Base Rental Payments received by the Trustee will be deposited by the Trustee in the Base Rental Payment Fund.

Pursuant to the Indenture, on the Business Day immediately preceding each Interest Payment Date and on the Business Day immediately preceding each June 1, the Trustee will transfer amounts in the Base Rental Payment Fund as are necessary to the Interest Fund and the Principal Fund to provide for the payment of the interest on and principal of the Series 2026A Bonds.

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Scheduled Base Rental Payments relating to the Series 2026A Bonds are set forth below under the caption “BASE RENTAL PAYMENT SCHEDULE.”

THE OBLIGATION OF THE CITY TO MAKE THE BASE RENTAL PAYMENTS DOES NOT

CONSTITUTE A DEBT OF THE CITY, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF

WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMIT OR

RESTRICTION, AND DOES NOT CONSTITUTE AN OBLIGATION FOR WHICH THE CITY OR THE

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

Additional Rental Payments
For the right to use and occupy the Property, the Lease Agreement requires the City to pay, as Additional Rental payments thereunder, in addition to the Base Rental Payments, such amounts as shall be required for the payment of the following:
(i) All taxes and assessments of any type or nature charged to the Authority or the City or affecting the Property or the respective interests or estates of the Authority or the City therein. (ii) All reasonable administrative costs of the Authority relating to the Property, salaries, wages, fees and expenses, compensation and indemnification of the Trustee payable by the Authority under the Indenture, fees of auditors, accountants, attorneys or engineers, and all other necessary and reasonable administrative costs of the Authority or charges required to be paid by it in order to maintain its existence or to comply with the terms of the Indenture or the Lease Agreement or to defend the Authority and its members, officers, agents and employees.
(iii) Insurance premiums for all insurance required pursuant to the Lease Agreement. (iv) Any amounts with respect to the Lease Agreement or the Bonds required to be rebated to the federal government in accordance with section 148(f) of the Internal Revenue Code of 1986. (v) All other payments required to be paid by the City under the provisions of the Lease Agreement or the Indenture.

Amounts constituting Additional Rental Payments payable under the Lease Agreement will be paid by the City directly to the person or persons to whom such amounts are payable. The City will pay all such amounts when due or at such later time as such amounts may be paid without penalty or, in any other case, within 60 days after notice in writing from the Trustee to the City stating the amount of Additional Rental Payments then due and payable and the purpose thereof.

Abatement
Base Rental Payments and Additional Rental Payments are paid by the City in each Rental Period for and in consideration of the right to use and occupy the Property. Except as otherwise specifically provided in the Lease Agreement, during any period in which, by reason of material damage to, or destruction or condemnation of, the Property, or any defect in title to the Property, there is substantial interference with the City’s right to use and occupy any portion of the Property, Rental Payments are subject to abatement proportionately, and the City waives the benefits of Civil Code Sections 1932(1), 1932(2) and 1933(4) and any and all other rights to terminate the Lease Agreement by virtue of any such interference, and the Lease Agreement will continue in full force and effect. The amount of such abatement will be agreed upon by the City and the Authority; provided, however, that the Rental Payments due for any Rental Period may not exceed the annual fair rental value of that portion of the Property available for use and occupancy by the City during such Rental Period. Any such abatement will continue for the period commencing with the date of interference

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resulting from such damage, destruction, condemnation or title defect and, with respect to damage to or destruction of the Property, ending with the substantial completion of the work of repair or replacement of the Property, or the portion thereof so damaged or destroyed; and the term of the Lease Agreement will be extended as provided in the Lease Agreement, except that the term will in no event be extended ten years beyond the stated termination date of the Lease Agreement. The Trustee cannot terminate the Lease Agreement in the event of such substantial interference. Abatement of Base Rental Payments and Additional Rental Payments is not an event of default under the Lease Agreement and does not permit the Trustee to take any action or avail itself of any remedy against the City. See APPENDIX B—“SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS—THE LEASE AGREEMENT—Rental Payments—Rental Abatement.” Notwithstanding the foregoing, to the extent that moneys are available for the payment of Rental Payments due under the Lease Agreement in any of the funds and accounts established under the Indenture (including as a result of the availability of insurance proceeds or amounts in certain funds and accounts pledged to the Series 2026A Bonds), such Rental Payments will not be abated as provided above but, rather, will be payable by the City as a special obligation payable solely from said funds and accounts.

The Lease Agreement provides that if the Bonds have not been fully paid or defeased by the final maturity thereof, or if the Rental Payments remain due and payable or have been abated at any time and for any reason, then the term of the Lease Agreement will be extended until the date upon which (i) all Bonds are fully paid or defeased, or (ii) the Indenture is discharged by its terms and all Rental Payments are paid in full, up to an additional ten years beyond the final maturity of the Bonds.

Substitution or Release of the Property
The Authority and the City may amend the Lease Agreement to substitute alternate real property for any portion of the Property or to release a portion of the Property from the Lease Agreement, upon compliance with all of the conditions set forth in the Lease Agreement and described below. After a substitution or release, the portion of the Property for which the substitution or release has been effected will be released from the leasehold encumbrance of the Lease Agreement.

The Lease Agreement provides that there will be no reduction in or abatement of the Base Rental Payments due from the City thereunder as a result of such substitution or release. Any such substitution or release is subject to the following specific conditions precedent:
(a) the City finds (as set forth in a certificate delivered by the City to the Trustee) that the Property, as constituted after such substitution or release: (i) has an annual fair rental value at least equal to the maximum annual Base Rental Payments payable by the City in any Rental Period, and (ii) has a useful life in excess of the final maturity of any Outstanding Bonds.
(b) the City obtains or causes to be obtained a CLTA or ALTA title insurance policy or policies with respect to any substituted property in an amount at least equal to the aggregate principal amount of any Outstanding Bonds, of the type and with the endorsements described in the Lease Agreement; (c) the City provides the Trustee with an Opinion of Counsel to the effect that such substitution or release will not, in and of itself, cause the interest on the Bonds to be included in gross income for federal income tax purposes;
(d) the City, the Authority and the Trustee execute, and the City causes to be recorded with the Los Angeles County Clerk-Recorder, any document necessary to reconvey to the City the portion of the Property being released and to include any substituted real property in the description of the Property contained in the Lease Agreement and in the Ground Lease;

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(e) the City shall have provided notice of such substitution to each rating agency then rating the Bonds;
(f) no event of default has occurred and is continuing under the Lease Agreement; (g) the City gives, or causes to be given, any notice of the occurrence of such substitution required to be given pursuant to the Continuing Disclosure Certificate; (h) the City certifies to the Trustee that the City has a current need for the substituted real property; and
(i) the City certifies to the Trustee that any substitution will not cause the City to violate any of its covenants, representations and warranties made in the Lease Agreement.

See APPENDIX B—“SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS—THE LEASE AGREEMENT—No Consequential Damages; Use of Property; Substitution or Release.” Action on Default
Should the City default under the Lease Agreement, the Trustee, as assignee of the Authority under the Lease Agreement, may terminate the Lease Agreement and recover certain damages from the City, or may retain the Lease Agreement and hold the City liable for all Base Rental Payments thereunder on an annual basis, and will have the right to re-enter and re-let the Property. In the event such re-letting occurs, the City would be liable for any resulting deficiency in Base Rental Payments. Base Rental Payments may not be accelerated upon a default under the Lease Agreement. See “RISK FACTORS—Limited Recourse on Default; No Acceleration of Base Rental.”
For purposes of certain actions of Bond Owners under the Indenture and the Lease Agreement, such as certain consents and amendments and the direction of remedies following default, Owners of the Series 2026A Bonds do not act alone and may not control such matters to the extent such matters are not supported by the requisite number of the Owners of all Series 2026A Bonds and Additional Bonds, if any.

For a description of the events of default and permitted remedies of the Trustee (as assignee of the Authority) contained in the Lease Agreement and the Indenture, see APPENDIX B—“SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS—THE LEASE AGREEMENT—Defaults and Remedies” and “—THE INDENTURE—Default and Limitations of Liability.”
No Reserve Fund
The Authority has not funded a debt service reserve fund for the Series 2026A Bonds.

Additional Bonds
Pursuant to the Indenture, the Authority may issue Additional Bonds payable from the Base Rental Payments on parity with the Series 2026A Bonds upon satisfaction of certain conditions, including, but not limited to, the following:
(a) The issuance of such Additional Bonds has been authorized under and pursuant to the Indenture and provided for by a Supplemental Indenture;
(b) The Authority and the City are in compliance with all agreements, conditions, covenants and terms contained in the Indenture, the Lease Agreement and the Ground Lease required to be observed or performed by each of them;

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(c) The Ground Lease has been amended, to the extent necessary, and the Lease Agreement has been amended so as to increase the Base Rental Payments payable by the City thereunder by an aggregate amount equal to the principal of and interest on such Additional Bonds, payable at such times and in such manner as may be necessary to provide for the timely payment of the principal of and interest on such Additional Bonds; provided, however, that no such amendment is permitted to be made such that the sum of Base Rental Payments, including any increase in the Base Rental Payments as a result of such amendment, plus Additional Rental Payments, in any Rental Period is in excess of the annual fair rental value of the Property after taking into account the use of the proceeds of any Additional Bonds issued in connection therewith.

See APPENDIX B—“SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS—THE INDENTURE—Issuance of Bonds; Application of Proceeds.”
Insurance
The Lease Agreement requires the City to maintain or cause to be maintained fire, lightning and special extended coverage insurance (which includes coverage for vandalism and malicious mischief, but need not include coverage for earthquake damage) on all improvements constituting any part of the Property in an amount equal to the greater of 100% of the replacement cost of such improvements or 100% of the outstanding principal amount of the Series 2026A Bonds. All insurance required to be maintained pursuant to the Lease Agreement may be subject to a deductible in an amount not to exceed $500,000.

The Lease Agreement requires the City to maintain rental interruption insurance to cover the Authority’s loss, total or partial, of Base Rental Payments resulting from the loss, total or partial, of the use of any part of the Property as a result of any of the hazards covered by the casualty insurance described in the preceding paragraph, in an amount sufficient at all times to pay an amount not less than the product of two times the maximum amount of Base Rental Payments scheduled to be paid during any Rental Period.

The City is also required to maintain or cause to be maintained, throughout the term of the Lease Agreement, a standard commercial general liability insurance policy or policies in protection of the City, the Authority and their respective members, officers, agents and employees, and worker’s compensation insurance as described in APPENDIX B—“SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS—THE LEASE AGREEMENT—Insurance.”
The City’s obligation to maintain the insurance described above (including rental interruption insurance) may be satisfied by self-insurance, provided such self-insurance complies with the requirements of the Lease Agreement.

The City is required under the Lease Agreement to provide, at its own expense, one or more CLTA or ALTA title insurance policies for the Property, in the aggregate amount of not less than the initial aggregate principal amount of the Series 2026A Bonds (and the initial aggregate principal amount of Additional Bonds issued after the Closing Date), insuring the fee interest of the City in the Property, the Authority’s leasehold estate in the Property under the Ground Lease, and the City’s subleasehold estate in the Property under the Lease Agreement, subject only to Permitted Encumbrances, and providing that all proceeds thereunder are payable to the Trustee for the benefit of the Owners.

See APPENDIX B—“SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS—THE LEASE AGREEMENT—Insurance.”

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SOURCES AND USES OF FUNDS
The sources and uses of funds with respect to the Series 2026A Bonds are shown below.

Sources
Principal Amount of Series 2026A Bonds $
Original Issue Premium
Funds on Hand(1)
Total Sources $

Uses
Escrow Fund $
Costs of Issuance (2)
Total Uses $

(1) Moneys on deposit in the [Debt Service Fund and Reserve Fund] held under the 2016 Bonds indenture. (2) Includes legal, municipal advisory, rating agency, printing fees, underwriter’s discount, and other miscellaneous costs of issuance.

BASE RENTAL PAYMENT SCHEDULE
Following is the annual schedule of Base Rental Payments due with respect to the Series 2026A Bonds, assuming no redemption prior to maturity:

Bond Year
(Ending June 1) Principal Interest Total
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046

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THE PROPERTY
The Property consists of an approximately 137,000 square feet in an eight story building consisting of of 203 guestrooms in various configurations, including king rooms, double rooms, and one-bedroom suites (the “Hotel”). The Hotel is branded as Homes2Suites by Hilton and is located at 988 Via San Clemente, Montebello, California. Construction of the Hotel Began in 2016 and was completed in 2018. The Property also includes a conference room and a boardroom to accommodate small functions and business meetings.

The Property features a kitchen and dining area for a complimentary continental breakfast. Other facilities and amenities at the Property include a fitness center, a business center, an indoor/outdoor pool area, laundry facilities, and wireless high-speed internet access throughout the property. Self-parking is available to guests and visitors of the hotel on surface parking lots. The Insured value of the Property is $74,552,937. [BOND INSURANCE]

THE AUTHORITY
The Authority is a joint exercise of powers entity organized and existing under and by virtue of the Joint Powers Act. The City and the Community Redevelopment Agency of the City of Montebello formed the Authority by the execution of a joint exercise of powers agreement on September 2, 1997. In July 2014, the Parking Authority of the City of Montebello replaced the Successor Agency to the Former Redevelopment Agency (as successor to the Community Redevelopment Agency of the City of Montebello) as a member of the Authority. Pursuant to the Joint Powers Act, the Authority is authorized to issue lease revenue bonds to provide funds to acquire or construct public capital improvements, such revenue bonds to be repaid from the lease payments for such improvements, such as the lease payments described herein. The members of the City Council of the City comprise the Authority’s Board of Directors.

THE CITY OF MONTEBELLO
General
The City is situated in the eastern portion of the County and was incorporated as a general law city in 1920. The City encompasses 8.4 square miles and is located 9 miles east of downtown Los Angeles. The City has access to three freeways: the San Gabriel River Freeway (Interstate Highway 605) to the east, the Santa Ana Freeway (Interstate 5) to the south and the Pomona Freeway (State Highway 60) to the north. The City includes light industry, residential areas and commercial centers. The City is bordered to the north by the cities of Monterey Park and Rosemead, to the east by the city of Pico Rivera and to the west by the city of Commerce.

Other surrounding cities include the cities of Bell Gardens, Whittier, South El Monte and Los Angeles. The population of the City was estimated to be 62,994 as of January 1, 2026. For additional economic and demographic information regarding the City, see APPENDIX A  “ECONOMIC AND DEMOGRAPHIC INFORMATION REGARDING THE CITY OF MONTEBELLO.”
City Council
The City operates under the Council-Manager form of government. The five City Council members are elected on staggered four-year terms. The Mayor and the Mayor Pro Tem are selected by the City Council to serve one-year terms. The City Clerk and City Treasurer are also elected to four-year terms. The City Manager and City Attorney are appointed by the City Council.

The members of the City Council and the current expiration dates of their respective terms are set forth in the table below.

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CITY OF MONTEBELLO
City Council
Name District Term Expires
Georgina Tamayo, Mayor District 1 December 2026
Danielle Romero, Mayor Pro Tem District 4 December 2026 Scarlet Peralta, Councilmember District 2 December 2028 Ric Alonzo, Councilmember District 5 December 2026
Salvador Melendez, Councilmember District 3 December 2026

Source: City of Montebello.

The following map shows the locations of the five council member districts within the City.

CITY OF MONTEBELLO

COUNCIL MEMBER DISTRICT MAP
(Effective beginning November 8, 2022)

Source: City of Montebello.

City Management
City Manager. The City Manager is responsible for enforcing municipal laws, directing the daily operations of the City, and preparing and observing the municipal budget. The City Manager is the City’s chief executive officer and is responsible for planning, organizing and directing all administrative activities. The City Manager and Assistant City Manager, in concert with department Directors, work to develop all personnel, continually evaluate the organizational structure of the City, implement programs to improve the community, and direct employee relations and personnel management. The City Manager makes recommendations to the City Council on program alternatives and ensures that programs adopted by the City Council are implemented.

The department performs a wide variety of administrative procedures and special projects.

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The City’s current City Manager is Raul Alvarez. Mr. Alvarez began serving as City Manager of the City in November 2023. Mr. Alvarez holds a Bachelor’s degree in Political Science from UCLA, a Master’s in Public Administration from California State University, Long Beach, and an Executive Education Certificate in Social Innovation from the University of Southern California. Mr. Alvarez brings more than 15 years of experience in state and local government, having previously served as Assistant City Manager for the cities of Huntington Park and Lynwood, District Director and Senior Advisor to California State Assembly Speaker Anthony Rendon, and as a Deputy for Los Angeles County Supervisor Gloria Molina.

City Treasurer. The City Treasurer (the “City Treasurer”) is an elected official who serves a four-year term. The City Treasurer is responsible for ensuring that the City’s funds are invested in a manner consistent with the City's Investment Policy and to achieve maximum safety, liquidity and yield. The City Treasurer’s investment activities are coordinated with the City’s Director of Finance to assure the ability of the City to meet its obligations.

Currently, the City Treasurer is David Matanga. Mr. Matanga previously worked as a Senior Tax Compliance Representative for the Employment Development Department of the State of California. He also brings more than 20 years of experience as a union activist, holding various leadership roles with SEIU 1000 and the Los Angeles County Federation of Labor, and participating in local and statewide political campaigns.

Director of Finance. The Director of Finance is appointed by the City Manager and is responsible for financial services of the City. The Director of Finance oversees a staff of twenty employees. Together, the department coordinates the development of the annual budget, preparation of the Annual Comprehensive Finance Report (ACFR), Single Audit, related audits and financial statements, oversees purchasing, processes accounts payable and payroll, performs general ledger fund accounting and reporting, and fulfills grant requirements and reporting.

The City’s current Director of Finance is Michael Solorza. Mr. Solorza has over 25 years of public service experience working with various public agencies at all levels of government, including more than a decade in executive roles and 21 years in municipal finance. He currently leads the City’s Finance Department, overseeing approximately twenty employees across accounting, cashiering, payroll, purchasing, budgeting, treasury, and accounts payable. His areas of expertise include budget, development and forecasting, financial audits, and treasury management. Under his direction, the Finance Department earned the Government Finance Officers Association’s (GFOA) Distinguished Budget Presentation Award and the California Municipal Treasurers Association’s Investment Policy Certification Award. Mr. Solorza holds degrees from the University of California, Irvine and the University of Wisconsin–Madison.

Employee Relations
As of May 14, 2026, the City had 600 full-time authorized positions, of which 532 were filled. The City also employed 172 part-time employees as of that date. In accordance with the provisions of California Government Code Section 3500, the City participates in labor negotiations with its employee associations. The result of the negotiations processes is memorialized in memoranda of understanding (each an “MOU”) reached between the City and the City employee associations. The table below lists the City’s ten employee associations and the approximate membership as of May 14, 2026, as well as the unrepresented executive employees:

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Unit/Affiliation
Contract
Expiration Date
Number of
Members(1)
Montebello City Employees’ Association (MCEA) June 30, 2028 93 Montebello Executive Management Association (MEMA) June 30, 2028 10 Montebello Fire Management Association (MFMA) June 30, 2028 8 Montebello Firefighters Association (MFA) June 30, 2028 55 Montebello Management Professional Association (MMPA) June 30, 2028 37 Montebello Mid-Management Association (MMMA) June 30, 2028 37 Montebello Police Management Association (MPMA) June 30, 2026 10 Montebello Police Officers Association (MPOA) June 30, 2027 65 Montebello Supervisors’ Association (MSA) June 30, 2028 28 International Association of Sheet Metal, Air, Rail, and Transportation Workers – Transportation Division (SMART-TD) June 30, 2028 172
Total

(1) Represents filled positions as of May 14, 2026.

Source: City of Montebello.

Risk Management
The City is partially self-insured for general liability and workers’ compensation claims. The City pays up to $1 million per occurrence for general liability claims and has excess insurance up to $10 million per occurrence. For workers’ compensation, the City provides self-insurance up to a $1,000,000 retention level and has acquired excess insurance coverage of $5 million for each claim. The City also purchases commercial insurance for other risks of loss, including property loss and vehicle physical damage. The City also purchases cyber, crime, and pollution insurance. There have been no significant changes in insurance coverage as compared to last year.

At June 30, 2025, the value of the estimated liability for claims payable, discounted at a 2% rate, was $31,804,163, based on an actuarial study. The liability includes an estimate for incurred, but not reported (IBNR), losses and is based on past experience, modified for current trends and information.

For additional information about the City’s historic claims payable, see APPENDIX C—ANNUAL COMPREHENSIVE FINANCIAL REPORT OF THE CITY FOR THE FISCAL YEAR ENDED JUNE 30, 2025”, Note 8. For more information with respect to the insurance requirements under the Lease Agreement, see the caption “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2026A BONDS—Insurance” in this Official Statement.

CITY FINANCIAL INFORMATION
Financial Statements
The City’s accounting policies conform to generally accepted accounting principles. The audited financial statements also conform to the principles and standards for public financial reporting established by the Governmental Accounting Standards Board. See the caption “FINANCIAL STATEMENTS OF THE CITY.”
Accounting and Financial Reporting
The underlying accounting system of the City is organized and operated on the basis of separate funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in

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individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.

Government-Wide Financial Statements. The government-wide financial statements are reported using the “economic resources” measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Under the economic resources measurement focus, all assets and deferred outflows of resources and liabilities and deferred inflows of resources (whether current or noncurrent) are included in the Statement of Net Position. Operating statements present increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows.

The Statement of Net Position and the Statement of Activities report information about the reporting government as a whole, except for its fiduciary activities. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government (including its blended component units) is reported separately from discretely presented component units for which the primary government is financially accountable. The City has no discretely presented component units. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are payments in-lieu of taxes where the amounts are reasonably equivalent in value to the interfund services provided and other charges between the government's enterprise activities and various functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned.

The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include: 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported as general revenues.

Certain eliminations have been made in regards to interfund activities, payables and receivables. All internal balances in the Statement of Net Position have been eliminated except those representing balances between the governmental activities and the business-type activities, which are presented as internal balances and eliminated in the total primary government column. In the Statement of Activities, internal service fund transactions have been eliminated; however, those transactions between governmental and business-type activities have not been eliminated. The following interfund activities have been eliminated:
• Due from and to other funds
• Advances to and from other funds
• Transfers in and out
Nonexchange transactions, in which the City gives (or receives) value without directly receiving (or giving) equal value in exchange include property taxes, grants, entitlements, and donations. Revenues from grants, entitlements, and donations are recognized in the fiscal year in which all the eligibility requirements have been satisfied.

When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, then unrestricted resources as they are needed. See Note 1B in APPENDIX C— “AUDITED FINANCIAL STATEMENTS OF THE CITY FOR THE FISCAL YEAR ENDED JUNE 30, 2025”

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Financial Policies
General. The City Council has adopted a comprehensive set of financial management policies to provide for the prudent investment of City funds and management of debt. The City’s practice is to incur debt only after deliberation over the effect of such debt on the City’s General Fund and other resources of the City, and in those circumstances where the use of debt would be appropriate to the scale and economic life of the asset being financed and the accumulation or availability of reserves to fund the capital requirement. A summary of certain of these City Council policies is set forth below.

Reserve Policies. The City Council adopted General Fund reserve policies to provide guidance on maintaining reasonable levels of reserves in the City’s General Fund in accordance with Governmental Accounting Standards Board (GASB) Statement No. 54. The City’s current General Fund reserve policy was first adopted in June, 2020, and has been updated and adopted annually as part of the City’s budget process. The City’s General Fund reserve policy provides a comprehensive protocol on what is legally deemed the unrestricted (or spendable) portion of the General Fund balance, and the order in which the classifications are spent. The unrestricted portion of the fund balance is comprised of the General Fund’s resources classified as “Committed,” “Assigned,” or “Unassigned.”
Under the reserve policy, as General Fund balances increase, the City is required to designate excess fund balance for specific purposes through “committed” or “assigned” classifications, as described below. The City's reserve policy functions as a waterfall, with increases in General Fund balance flowing first to required reserve levels and then to additional committed and assigned reserves for designated purposes. Amounts remaining after these allocations are maintained as unassigned fund balance. The City’s current General Fund reserve policies establish in the following order of priority:
• a Commitment for Economic Uncertainties equal to an amount calculated as twenty-five percent (25%) of the General Fund’s annual operating revenues,
• a Commitment for Unfunded Liabilities equal to an amount calculated as five percent (5%) of the General Fund’s annual operating revenues,
• an assignment for equipment and/or technology replacement and upgrade needs will be made that is equal to five (5%) of the General Fund’s annual operating revenues, • an assignment will be made that is equal to five percent (5%) of the General Fund’s annual operating revenues for the purposes of providing funding for any unfunded, unprogrammed or otherwise un- planned capital improvement projects that required a General Fund funding component, • an assignment will be made that is equal to $1,000,000 for the purpose of providing funding for deferred maintenance on the City’s building assets (i.e., City Hall, community centers), sports fields and other related infrastructure items,
• an assignment will be made that is equal to $500,000 and is intended to meet the City’s “self-insured retention” for various insurance needs, and
• an assignment will be made equal to $1,000,000 to fund economic development sustainability efforts within the City of Montebello.

As of June 30, 2025, the City had approximately $16 million in its Commitment for Economic Uncertainties fund which represented approximately 21% of that years General Fund operating revenue and had not funded any of the other funds established under the reserve policy. When either Committed or Assigned funds are utilized for their specific, intended purposes, or the levels fall below the policy levels as described and

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set forth herein, the City Council will develop a reserve replenishment plan to return the various reserves to their policy levels.

Debt Management Policy. In accordance with Section 8855(i) of the California Government Code the City adopted a debt management policy on August 6, 2016, to establish conditions for the use of debt; to ensure that debt capacity and affordability are adequately considered; to minimize the City’s interest and issuance costs; to maintain the highest possible credit rating; to provide complete financial disclosure and reporting; and to maintain financial flexibility for the City.

Investment Policy. The investment of funds of the City (except pension and retirement funds) is made in accordance with the City’s Investment Policy, most recently approved on June 28, 2025 (the “Investment Policy”), and Section 53601 et seq. of the California Government Code. The Investment Policy is subject to revision at any time and is reviewed at least annually to ensure compliance with the stated objectives of safety, liquidity, yield, and current laws and financial trends. All amounts held under the Indenture are invested at the direction of the City in Investment Securities, as defined in the Indenture, and are subject to certain limitations contained therein.

At April 30, 2026, the City had an investment portfolio with a market value of $_44,550965_____.

The following table presents a summary of the City’s investment portfolio as of such dates.

TABLE 1

CITY OF MONTEBELLO

SUMMARY OF INVESTMENTS
(AS OF APRIL 30, 2026) (1)
Market Value
Investment Type
As of
April 30, 2026(2)
Local Agency Investment Fund $44,550,965

(1) Investments measured at fair value.
(2) Unaudited.

Source: City of Montebello.

For additional information with respect to the City’s cash and investments, see Note 2 see APPENDIX C—“AUDITED FINANCIAL STATEMENTS OF THE CITY FOR THE FISCAL YEAR ENDED JUNE 30, 2025”.

State Audit
In October of 2017, the City received a letter from the California State Auditor (the “State Auditor”) under the “High-Risk Local Government Agency Audit Program,” authorized under Section 8546.10 of the Government Code of the State. The Local High-Risk Agency Audit Program authorizes the State Auditor to use publicly available financial information to identify and audit local government agencies that are at high risk for potential waste, fraud, abuse, or mismanagement, or that have major challenges associated with their economy, efficiency, or effectiveness. Local agencies identified by the State Auditor as “high-risk” because of their audit must submit a corrective action plan and must then provide written updates every six months regarding its progress. Once satisfactory corrective action has been taken the State Auditor will remove the “high-risk”

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designation. So long as an agency retains the “high-risk” designation, Government Code requires follow up audits every three years
The State Auditor released its initial audit report 2018-802 (the “2018 State Audit Report”) on December 11, 2018. In releasing the 2018 State Audit Report, the State Auditor concluded that the City was a high‑risk city because of its significant financial and organizational risks.

In its initial response to the 2018 State Audit Report, the City largely agreed with the State Auditor’s conclusions. Since the publication of the 2018 State Audit Report the City has put into place numerous new procedures and policies directly aimed at responding to the audit reports’ various recommendations, including updating its purchasing and procurement policies and other administrative policies and implementing training for the City Staff.
2021 Follow-Up Report. On October 14, 2021 the State Auditor published report No. 2021-807 (the “2021 State Audit Report Update”) addressing the City’s efforts to respond to the issues raised in the original 2018 State Audit Report. Government Code requires a “follow-up audit” every three years so long as an agency retains the “high-risk” designation. The State Auditor acknowledged improvements in several operational areas, including updates to competitive bidding requirements, efforts to address retirement system costs, and improvements to golf course operations. The Sate Auditor continued to express concerns regarding procurement practices, compliance with competitive bidding and public notice requirements, and petty cash and credit card policies. In its September 27, 2021 response letter, the City disagreed with certain facts, assumptions, and conclusions in the 2021 State Audit Report Update and highlighted improvements to the City’s General Fund health, the issuance of pension obligation bonds to reduce unfunded pension liabilities, oversight of City-owned hotels, and the adoption of updated financial policies. 2024 Follow-Up Report. On December 19, 2024 the State Auditor released report No. 2024-801 (the “2024 State Audit Report Update”) regarding the City’s actions to address the findings in the 2021 State Audit Report Update. The State Auditor retained the City’s high-risk designation, noting that the City continues to rely on one-time revenues. The State Auditor reported that the City’s financial position improved in recent years; however, much of the improvement was a result of one-time funding sources, including the sale of the City’s water system for $16.2 million. The State Auditor also noted that the City’s General Fund expenditures exceeded revenues in two of the prior three fiscal years, resulting in a cumulative deficit despite certain one-time adjustments and exclusions.
2025 Corrective Action Plan. The City responded to the 2024 State Audit Report Update in January 2025 (the “2025 Corrective Action Plan”). The 2025 Corrective Action Plan stated that the City has developed a three-year financial forecast that project revenues and expenditures and is updated with new inputs throughout the fiscal year. The City was also reviewing major projects affecting the General Fund to reduce costs where feasible while continuing economic development efforts to increase sales tax and property tax revenues. The 2025 Corrective Action Plan acknowledges that the City’s budget concerns will require several years to fully address but the City was making gradual progress through revenue growth and ongoing expenditure management.

Staff have been in regular contact with State Auditor staff since publication of the “2024 State Audit Report Update” and have submitted several updates to its initial 2025 Corrective Action Plan. There remains only one item outstanding as noted in the 2024 State Audit Report Update. All other risk areas have been fully or partially addressed. The updates to the 2025 Corrective Action Plan, and communications from the State Auditor, indicate the two “partially addressed” high-risk areas are not “fully addressed,” leaving only one high risk area as “pending.” Staff recently (April, 2026) reached out to the State Auditor, providing them with the June 30, 2025 ACFR and asking for an update on their review of progress in remedying the one outstanding item from the 2024 State Audit Report Update. As of the publication of this document, the State Auditor has not replied.

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The City is actively seeking confirmation from the State Auditor that it has met all measures necessary to remove the “high risk” designation. The City’s General Fund revenues have increased steadily over the past six years, and General Fund reserves have improved over that same time period. In addition, the City has a healthy cash balance, showing steady growth in pooled cash in the last five years. Annual budgets, beginning in Fiscal Year 2020-21, have been routinely adopted with surpluses. The City also updated and created policies governing procurement, petty cash, credit cards, and gifts of public funds.

The City remains committed to implementing recommendations from the 2018 State Audit Report, the 2021 State Audit Report Update, and the 2024 State Audit Report Update to satisfy the State Auditor,, and formally remove the City from the State Auditor’s high-risk category. City staff will continue to study and implement improvements to its organizational management and internal controls to that effect.

The 2018 State Audit Report, the 2021 State Audit Report Update, the 2024 State Audit Update and the 2025 Corrective Action Plan, together with the City’s letters in response thereto, can be found on the State Auditor’s website. The progress reports and other information presented on the City’s website are not incorporated by reference as part of this Official Statement.

Any failure of the City to meet its financial obligations could have a material adverse impact on the value of the Series 2026A Bonds. See also “RISK FACTORS—Limitations on Remedies Available; Bankruptcy.”
Single Audit Report Findings of Material Deficiencies
2024 Single Audit and Independent Auditor’s Reports. In 2024, the City’s Auditor reported a material weakness related to deficit net position in various funds. The finding cited a net deficit of $32,152,998 in the Self-Insurance Internal Service Fund, $3,349,508 in the Golf Course Enterprise Fund, and $378,700 in the Capital Improvements Capital Projects Fund. Furthermore, six governmental funds, including the General Fund, had expenditures exceeding appropriations.

The Auditor also reported a material weakness related to internal controls over financial reporting and bank reconciliations. The Auditor identified cash variances of $87,744 for the Hilton Garden Inn Enterprise Fund and $177,612 for the Home2 Suites Enterprise Fund. The Auditor also found that bank reconciliations for September 2023, October 2023, January 2024, and May 2024 were not completed within the City’s required 30- day timeframe.

2024 Management Letter. In a letter to the City dated September 2, 2025 (the “Management Letter”), the Auditor described two issues related to the City’s capital assets and employer contribution rate for pension.

The Auditor found that the City overstated its capital assets by approximately $15.5 million because an asset removed from its accounting system in 2018 remained on a manually maintained capital asset schedule and continued to be reported in the financial statements until corrected in Fiscal Year 2023-24. The Auditor also found that the City used an outdated Fiscal Year 2021-22 pension contribution rate in its payroll system instead of the Fiscal Year 2023-24 rate, resulting in internal reporting and reconciliation discrepancies, although the correct amounts were ultimately paid to CalPERS.

Budget Procedure, Current Budget and Historical Budget Information Budget Procedure. The City Council adopts an annual budget with appropriations for all City funds prior to the beginning of the fiscal year, which begins on July 1 of each year. The City Council has the legal authority to amend the budget at any time during the fiscal year. The City maintains budgetary controls to ensure compliance with legal provisions embodied in the appropriated budget approved by the City Council. The level of budgetary control (that is, the level at which expenditures cannot legally exceed the appropriated amount) for the City’s operating budget is at the fund level. For the operating budget, the City Manager has the authority to

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move appropriations between accounts (without dollar limitation) within a budget program and within the same fund. All other appropriation changes require the approval of the City Council.

Fiscal Year 2026-27 Adopted Budget. The City’s annual operating budget for the 2026-27 period (the “2026-27 Budget”) was approved by the City Council on June 10, 2026. The 2026-27 Budget projects General Fund revenues and other sources in Fiscal Year 2026-27 to be approximately $92.90 million. The 2026-27 Budget projects General Fund expenditures to be approximately $92.75 million, leaving a projected surplus of $155,100.

The City’s two primary General Fund revenue sources are sales taxes and property taxes which collectively account for approximately 52.7% of the City’s General Fund revenues in the 2026-27 Budget. The 2026-27 Budget projected that property taxes, which has historically been the most stable of the major revenue sources, has grown with a 6.4% increase in Assessed Value, resulting in an additional of approximately $1.18 million in revenue. Sales tax overall is projected to increase by approximately $500,000 when compared to the Fiscal Year 2026-27 budget.

Capital Improvement Program. The City’s proposed Fiscal Year 2026-27 Budget includes the City’s Capital Improvement Program (the “CIP”), which consists of long-range (five year) capital projects approved by the City Council. Capital funds account for major construction, improvements, and repair projects.

For Fiscal Year 2026-27, the total CIP proposed budget is approximately $31.05 million. This amount consists of approximately $12.31 million in new appropriations, $12.14 million in carryover appropriations for projects started in prior Fiscal Years, and $6.6 million in maintenance and operations expenditures. The proposed CIP utilize funding from Metro Local Return Funds (i.e., Proposition A, Proposition C, Measure M and Measure R), State of California Gas Tax and Senate Bill 1/Road Maintenance and Rehabilitation Account (SB1RMRA) funding, Los Angeles County Parks Measure A funds and other State and Federal grant funds.

Historical and Preliminary Budget Information. Table 2 presents the adopted and final General Fund budgets and the audited results for Fiscal Years 2023-24 and 2024-25. Table 3 presents the adopted General Fund budget for Fiscal Years 2024-25 and 2025-26 with budgeted expenditures broken down by type and by department. The General Fund budget figures shown in Table 2 and Table 3 below do not reflect the application of GAAP and therefore differs in certain respects to the audited General Fund Statement of Revenues, Expenditures and Change in Fund Balance shown in Table 4 below.

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TABLE 2

CITY OF MONTEBELLO

GENERAL FUND BUDGETS TO ACTUAL COMPARISONS (ON A BUDGETARY BASIS) Fiscal Year Ended June 30, 2024 Fiscal Year Ended June 30, 2025

Adopted
Budget
Final
Budget
Audited
Actuals
Adopted
Budget
Final
Budget
Audited
Actuals

REVENUES
Taxes $ 45,377,800 $ 45,377,800 $ 47,148,373 $ 47,670,000 $ 47,670,000 $ 47,791,052 Intergovernmental 15,000 15,000 4,856,358 15,000 15,000 1,042,336 Licenses and permits 7,241,000 7,241,000 7,544,339 7,163,000 7,163,000 9,724,788 Fines and forfeitures 2,952,000 2,952,000 3,034,338 3,145,000 3,145,000 2,884,302 Use of money and property 350,000 350,000 1,626,354 520,000 520,000 1,939,861 Charges for services 8,857,100 8,857,100 9,099,161 9,251,600 9,251,600 11,209,402 Other revenues 725,500 692,000 718,651 498,500 498,500 1,797,653 Total Revenues $ 65,518,400 $ 65,484,900 $ 74,027,574 $ 68,263,100 $ 68,263,100 $ 76,389,394

EXPENDITURES
Current:

General government $ 7,714,350 $ 8,305,482 $ 10,965,916 $ 7,817,300 $ 6,631,023 $ 6,768,296 Public safety 35,068,850 38,403,626 41,360,617 38,611,500 43,301,476 48,292,218 Public works 16,668,600 17,368,488 16,620,706 15,202,200 16,591,122 15,824,123 Parks and recreation 3,414,350 3,457,040 3,785,328 4,732,700 5,308,175 5,312,622 Housing and community development 2,739,200 3,263,710 3,126,335 3,467,700 4,423,202 5,470,664 Capital outlay 2,873,600 3,964,345 11,513,920 3,833,600 5,009,167 5,510,115 Interfund charges
Debt service – Principal 558,500 576,461 715,750 992,800 992,800 643,065 Debt service – Interest 152,200 152,000 370,566 741,600 742,600 901,163 Total Expenditures $ 69,189,450 $ 75,491,152 $ 88,459,138 $ 75,400,400 $ 82,999,565 $ 88,722,266

REVENUES OVER EXPENDITURES $ (3,671,050) $ (10,006,252) $ (14,431,564) $ (7,137,300) $ (14,736,465) $ (12,332,872)

OTHER FINANCING SOURCES/(USES)
Other Revenues
Transfers in 4,300,000 6,300,000 6,666,044 7,700,000 7,800,000 5,629,175 Transfers out - (839,000) (856,748) - - (581,814)
Issuance of Debt - - 11,911,265 - - 28,428
Total Other Financing Sources $ 4,300,000 $ 5,461,000 $ 17,720,561 $ 7,700,000 $ 7,800,000 $ 5,075,789

NET CHANGE IN FUND BALANCES $ 628,950 $ (4,545,252) $ 3,288,997 $ 562,700 $ (6,936,465) $ (7,257,083)

FUND BALANCES – BEGINNING OF YEAR 28,467,886 31,756,883 FUND BALANCES – END OF YEAR 31,756,883 24,449,800
.

Source: City of Montebello Audited Financial Statements for Fiscal Years 2022-23 through 2023-24 and Adopted Budgets for 2021-23 and 2023-25.

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TABLE 3

CITY OF MONTEBELLO
ADOPTED FISCAL YEAR 2025-26 AND FISCAL YEAR 2026-27 BUDGETS (BUDGETARY BASIS)
2025-26
Adopted Budget
2026-27
Adopted Budget

REVENUES
Sales Tax $ 28,600,000 $ 29,100,000
Property Tax 18,635,200 19,818,800
Other Taxes 665,000 655,000
Franchise Taxes 3,599,000 4,123,500
Licenses and Permits 9,435,000 12,435,000
Fines and Forfeitures 3,425,000 3,400,000
Investment Income 530,000 851,000
Intergovernmental 65,000 90,000
Charges for Services 8,826,700 10,707,500
Other Revenue 5,282,600 5,400,500
Transfer in (Non-Operating) 5,383,600 6,325,000
Totals $ 84,447,100 $ 92,906,300

EXPENDITURES BY

DEPARTMENT

Regular Salaries $ 26,664,400 $ 29,724,600
Part-time Salaries 2,127,800 2,766,800
Overtime 5,072,900 5,297,00
Benefits 8,187,000 8,408,900
Special Pays 4,905,400 6,133,600
Retirement 6,006,300 7,166,800
Supplies 2,712,400 3,079,800
Equipment 1,157,600 1,181,100
Contract Services 17,786,800 19,483,900
Utilities-Fuel 3,498,300 4,012,300
Vehicle Maintenance 780,400 789,600
Miscellaneous 1,655,800 1,731,300
Transfers - -
Debt Service - Rent - Notes 2,554,100 2,757,500
Miscellaneous Other 75,000 95,000
Capital 368,200 123,000
Totals $ 83,552,400 $ 92,751,200

EXPENDITURES BY CATEGORY
Administration / Elected $ 2,861,200 $ 3,231,900
Community Development 4,809,800 5,351,100
Finance 3,158,600 3,362,600
Fire 19,367,900 22,137,100
Human Resources 1,534,900 1,812,100
Parks & Recreation 5,926,100 9,162,900
Police 25,199,400 27,041,000
Public Works 16,272,400 15,743,500
Information Technology 1,231,200 1,554,500
Non-Departmental 3,190,900 3,354,500
Totals $ 83,552,400 $ 92,751,200

Source: City of Montebello Adopted Budget Fiscal Year 2024-25.

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Comparative Change in Fund Balance of the City General Fund The table below presents the City’s audited General Fund Statement of Revenues, Expenditures and Change in Fund Balances for Fiscal Years 2020-21 through 2024-25 TABLE 4

CITY OF MONTEBELLO

GENERAL FUND STATEMENT OF

REVENUES, EXPENDITURES AND CHANGE IN FUND BALANCES
2020-21 2021-22 2022-23 2023-24 2024-25

REVENUES
Taxes(1) $ - $ 42,505,700 $ 45,340,242 $ 47,148,373 $ 47,791,052 Sales Taxes(2) 22,270,247 - - - -
Intergovernmental 1,096,273 6,311,326 4,629,569 4,856,358 1,042,336 Property Taxes(2) 13,714,565 - - - -
Other Taxes(2) 476,959 - - - -
Franchise Taxes(4) 2,316,250 - - - -
Licenses and Permits 5,769,474 7,806,258 8,643,908 7,544,339 9,724,788 Fines and Forfeitures 2,312,454 2,512,256 3,405,033 3,034,338 2,884,302 Investment Income 77,455 - - - -
Charges for Services 6,317,440 8,077,509 9,338,312 9,099,161 11,209,402 Use of Money and Property - (869,471) 215,049 1,626,354 1,939,861 Other Revenue 1,762,641 560,220 506,686 718,651 1,797,653 Total Revenues 56,113,758 66,903,798 72,078,799 74,027,574 76,389,394

EXPENDITURES
Current:

General Government 8,335,363 7,508,181 10,267,283 10,965,916 6,768,296(5) Public Safety 32,641,866 33,255,910 36,007,849 41,360,617 48,292,218(6) Public Works 10,635,745 11,882,266 16,196,891 16,620,706 15,824,123 Parks and Recreation 4,360,265 4,711,686 3,232,621 3,785,328 5,312,622 Housing and Community Development 1,752,077 2,370,064 2,725,759 3,126,335 5,470,664

Capital Outlay 9,014,007 2,073,997 7,301,667 11,513,920 5,510,115

Debt Service:

Principal Retirement 656,625 1,254,815 709,045 715,750 643,065 Interest and Fiscal Charges - 397,418 151,873 370,566 901,163 Interfund Charges (536,079) - - - -
Total Expenditures 66,859,869 63,454,337 76,592,988 88,459,138 88,722,266

Excess (Deficiency) of Revenues Over
Expenditures
(10,746,111) 3,449,461 (4,514,189) (14,431,564) (12,332,872)

Other Financing Sources (Uses)
Transfers In(3) 3,570,002 3,637,348 20,608,439 6,666,044 5,629,175 Transfers Out(4) (471,300) - (3,613,179) (856,748) (581,814) Issuance of Debt 5,785,000 - - 11,911,265 28,428
Proceeds from Sale of Assets - 44,300 1,270,561 - -

Net Other Financing Sources (Uses) 8,883,702 3,681,648 18,265,821 17,720,561 5,075,789

Net Change in Fund Balances (1,862,409) 7,131,109 13,751,632 3,288,997 (7,257,083)

Fund Balances, Beginning of Year $ 9,447,554 $ 7,585,145 $ 14,716,254 $ 28,467,886 $ 31,756,883

Fund Balances, End of Year $ 7,585,145 $ 14,716,254 $ 28,467,886 $ 31,756,883 $ 24,499,800

(1) Beginning in Fiscal Year 2021-22, the City combined Property Taxes, Other Taxes and Franchise Taxes into one Taxes category for financial reporting purposes.
[Footnotes continue on to the next page]

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(2) Prior to Fiscal Year 2021-22, Sales Taxes, Property Taxes, Other Taxes and Franchise Taxes were reported separately. Beginning in Fiscal Year 2021-22, such revenues were consolidated into one Taxes category and are no longer presented as separate line items. (3) Transfers-In to the General Fund are to pay annual retirement expenses to CalPERS for the City’s defined retirement program, to pay for street expenditures, excess revenue from the two hotels, and a one-time payment after the sale of water operations. The sale of the City’s water system to San Gabriel Valley Water Company in February 2023 resulted in a one-time influx of revenue of $16,236,927. (4) Transfers-Out from the General Fund include (i) $471,300 in Fiscal Year 2020-21, to the Golf Course Enterprise Fund, as defined below (ii) $3,613,179 in Fiscal Year 2022-23 and $838,873 in Fiscal Year 2023-24 to the Information Technology Fund for citywide information technology infrastructure expenses, and (iii) $581,814 in Fiscal Year 2024-25 to the Golf Course Enterprise Fund to record a portion of the Topgolf, as defined below, lease payment due to accounting treatment of the underlying receivable. (5) General Government expenditures decreased from Fiscal Year 2023-24 to Fiscal Year 2024-25 due to an approval of a new MOU, as defined above, for the Fire Management Association.
(6) Public Safety expenditures increased from Fiscal Year 2023-24 to Fiscal Year 2024-25 due to second year increases in MOU with the Montebello Police Officers Association.

Source: The City of Montebello and the City of Montebello Audited Financial Statements for Fiscal Years 2020-21 through 2024-25.

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Comparative General Fund Balance Sheets of the City
The table below presents the City’s audited General Fund Balance Sheets for Fiscal Years 2020-21 through 2024-25.

TABLE 5

CITY OF MONTEBELLO

GENERAL FUND BALANCE SHEETS

FIVE YEAR COMPARISON
2020-21 2021-22 2022-23 2023-24 2024-25
ASSETS
Cash and investments(1) $ 9,349,552 $ 19,131,893 $ 18,308,963 $ 1,620,788 $ 7,560,740 Restricted cash and investments 1,921,304 - - - -
Accounts receivable 2,349,066 2,042,338 17,982,215 2,971,371 3,376,945 Interest receivable 41,022 112,522 590,724 849,797 766,065 Taxes receivable 5,174,071 4,949,073 5,220,922 4,894,867 5,156,227 Due from other funds(2) 8,622,169 5,555,019 1,994,764 24,669,588 13,512,741 Due from Successor Agency - - - - 11,875
Due from Agency Fund 9,467 - - - -
Due from governments - 34,737 83,012 88,212 333,721
Lease receivable(3) - - 73,953,814 73,953,814 72,615,382 Advances to other funds - 3,159,680 2,300,000 2,300,000 - Prepaid items 106,416 195,722 229,240 362,602 512,022
Property held for resale 682,538 682,538 682,538 682,538 682,538 Restricted assets:

Cash and investments held by fiscal agent - 374,594 - - - Cash in escrow - - - 9,384,448 6,523,683
Total Assets $ 28,255,605 $ 36,238,116 $ 121,346,192 $ 121,778,025 $ 111,051,939

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND FUND BALANCES

Liabilities:

Accounts payable and accrued liabilities $ 3,490,270 $ 2,912,815 $ 2,272,631 $ 2,277,847 $ 1,573,353 Due to Agency Fund 865 - - - -
Due to other funds(4) 1,475,000 1,475,000 4,221,972 6,533,903 7,096,220 Due to other governments - 7,381 3,146 5,817 19,818
Unearned revenues(5) 15,704,325 17,126,666 12,426,743 7,249,761 5,613,375 Total liabilities 20,670,460 21,521,862 18,924,492 16,067,328 14,302,766 Deferred Inflows of Resources:

Unavailable revenues - - - - -
Lease related(6) - - 73,953,814 73,953,814 72,249,373 Total deferred inflows of resources - - 73,953,814 73,953,814 72,249,373 Fund Balances:

Nonspendable 788,954 4,037,940 3,211,778 3,345,140 1,194,560 Restricted - 374,594 - 9,384,448 6,523,683
Committed - 459,491 21,624,037 18,000,000 16,000,000
Assigned - - 3,604,006 - -
Capital projects 1,921,304 - - - -
Unassigned (deficit) 4,874,887 9,844,229 28,065 1,027,295 781,557 Total fund balances 7,585,145 14,716,254 28,467,886 31,756,883 24,499,800 Total liabilities, deferred inflows of resources,
and fund balances $ 28,255,605 $ 36,238,116 $ 121,346,192 $ 121,778,025 $ 111,051,939

(1) The change between Fiscal Years 2020-21 and 2021-22 is mainly due to the receipt of $8.3 million ARPA Fund, and the change from Fiscal Year 2022-23 to Fiscal Year 2023-24 the General Fund’s cash covered for the Golf Course Improvement deficit. (2) The change between the three Fiscal Years are due to how much General Fund is covering for other fund’s cash deficit. (3) The General Fund receives lease revenues from the 2022 Topgolf lease agreement. Such revenues are subsequently transferred to the Golf Course Enterprise Fund to support the debt service obligations on the 2022A Lease Revenue Bonds. (4) Receivable of the General Fund from the Golf Course Enterprise Fund to fund operating deficit. (5) Advanced receipt of ARPA fund, recognized revenue every year which lowers the unearned revenue. (6) The General Fund receives lease revenues from the TopGolf lease agreement, for which the related lease receivable is recorded in the General Fund. Such revenues are subsequently transferred to the Golf Course Enterprise Fund to support its debt service obligations.

Source: City of Montebello Audited Financial Statements for Fiscal Years 2020-21 through 2024-25.

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Tax Revenues By Source
The City derives its General Fund tax revenues from a variety of sources including ad valorem property taxes, sales and use taxes, cannabis taxes, transient occupancy taxes, and franchise taxes. The City’s total General Fund tax revenues by source for the six most recent Fiscal Years are set forth below.

TABLE 6

CITY OF MONTEBELLO

GENERAL FUND TAX REVENUES BY SOURCE
Revenue Category 2020-21 2021-22 2022-23 2023-24 2024-25 Projected
2025-26(1)
Sales taxes $ 22,270,247 $ 25,378,979 $ 26,351,605 $ 25,658,377 $ 26,378,884 $ 28,525,000 Property taxes 13,714,565 14,195,128 15,324,568 17,373,671 17,507,562 19,444,200 Other taxes 476,959 631,085 650,178 666,485 606,912 797,000 Franchise taxes 2,316,250 2,300,508 3,013,891 3,449,842 3,297,694 3,817,900 Total taxes $ 38,778,021 $ 42,505,700 $ 45,340,242 $ 47,148,375 $ 47,791,052 $ 52,584,100 (1) Based on estimated revenues through April 30, 2026.

Source: City of Montebello.

Sales Taxes
General. During Fiscal Year 2024-25, sales tax receipts of approximately $26.4 million provided the largest tax revenue source for the City, contributing approximately 30.4% of total General Fund revenues.

General Fund sales tax revenues of approximately $28.5 million are estimated to be received during Fiscal Year 2025-26 and approximately $29.1 million are budgeted for Fiscal Year 2026-27. A sales tax is imposed on retail sales or consumption of personal property. The basic sales tax rate is established by the State Legislature, and local overrides may be approved by voters. The current total sales tax rate in the City is 10.5%, which includes the 7.25% sales tax rate established by the State Legislature.

Over 1,700 sales tax generating businesses operate in the City. During the second quarter of Fiscal Year 2025-26 (further quarter sales tax data representing the months of October – December, 2025), the top 25 businesses in the City generated approximately 62% of the City’s total sales tax revenues. The City’s sales tax base is diverse and comprised of the following categories: Fuel and Service Stations, Building and Construction, Restaurants and Hotels, Autos and Transportation, Food and Drugs, Business and Industry, General Consumer Goods, and State and County Pools.

The table below sets forth the top twenty-five sales tax producers as of December 31, 2025 (fourth quarter sales tax data for October – December 2025) in alphabetical order.

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TABLE 7

CITY OF MONTEBELLO
TOP 25 SALES TAX PRODUCERS
(AS OF JUNE 30, 2025)
Albertsons Landsberg Orora
Bath & Body Works Macy’s
Best Buy Marshalls
BJ’s Restaurant & Brewhouse New Flyer of America
Carvana Pemex
Chevrolet of Montebello Pottorff
Chevron Quiet Cannon
Contractors’ Warehouse Ross
CVS Pharmacy Tesla
Ford of Montebello Topgolf
Foundation Building Materials Toro Aire
Inland Kenworth Victoria’s Secret
JC Penny

Source: City of Montebello.

Property Taxes
During Fiscal Year 2024-25, property tax receipts of approximately $17.5 million provided the second largest tax revenue source of the City, contributing approximately 20.2% of total Government Activities revenues. Property tax revenues of approximately $19.4 million are estimated to be received during Fiscal Year 2025-26 and approximately $20 million are projected for Fiscal Year 2026-27.

Many years ago, the Statewide Department of Motor Vehicle license fees (“VLF”) were reduced by approximately two-thirds. However, the State continued to remit to cities and counties the same amount that those local agencies would have received if the VLF had not been reduced, known as the “VLF backfill.” The State VLF backfill was phased out, and as of Fiscal Year 2011-12, all of the VLF is now received through an in- lieu payment from State property tax revenues referred to as “property taxes in lieu of VLF.” The City received approximately $9 million in “property tax in-lieu of VLF” revenue for Fiscal Year 2024-25 and is projected to receive $9.7 million for Fiscal Year 2025-26 and $9.1 million in Fiscal Year 2026-27.

In California, property which is subject to ad valorem taxes is classified as “secured” or “unsecured.” The secured classification includes property on which any property tax levied by a county becomes a lien on that property. A tax levied on unsecured property does not become a lien against the taxed unsecured property, but may become a lien on certain other property owned by the taxpayer. Every tax which becomes a lien on secured property has priority over all other liens, arising pursuant to State Law, on the secured property, regardless of the time of the creation of other liens. The valuation of property is determined as of January 1 each year, and installments of taxes levied upon secured property are due November 1 and February 1 and become delinquent on the following December 10 and April 10, respectively. Taxes on unsecured property are due July 1, and become delinquent August 31.

Secured and unsecured properties are entered separately on the assessment roll maintained by the county assessor. The method of collecting delinquent taxes is substantially different for the two classifications of property. The exclusive means of enforcing the payment of delinquent taxes with respect to property on the secured roll is the sale of the property securing the taxes of the State for the amount of taxes that are delinquent.

The taxing authority has four methods of collecting unsecured personal property taxes: (1) a civil action against the taxpayer; (2) filing a certificate in the office of the county clerk specifying certain facts in order to obtain a judgment lien on certain property of the taxpayer; (3) filing a certificate of delinquency for record in the County

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Recorder’s Office in order to obtain a lien on certain property of the taxpayer, and (4) seizure and sale of personal property, improvement or possessory interest belonging or taxable to the assessee.

A ten percent penalty is added to delinquent taxes which have been levied with respect to property on the secured roll. In addition, beginning on July 1 following a delinquency, interest begins accruing at the rate of 1 1/2% per month on the amount delinquent. Such property may thereafter be redeemed by the payment of the delinquent taxes and the ten percent penalty, plus interest at the rate of 1 1/2% per month to the time of redemption. If taxes are unpaid for a period of five years or more, the property is deeded to the State and then is subject to sale by the county tax collector. A ten percent penalty also applies to the delinquent taxes or property on the unsecured roll, and further, an additional penalty of 1 1/2% per month accrues with respect to such taxes beginning on the varying dates related to the tax billing date.

Legislation enacted in 1984 (Section 75 et seq. of the Revenue and Taxation Code of the State of California), provides for the supplemental assignment and taxation of property as of the occurrence of a change in ownership or completion of new construction. Previously, statutes enabled the assessment of such changes only as of the next tax lien date following the change and thus delayed the realization of increased property taxes from the new assessment for up to 14 months. Collection of taxes based on supplemental assessments occurs throughout the year. Taxes due are prorated according to the amount of time remaining in the tax year, with the exception of tax bills dated January 1 through May 31, which are calculated on the basis of the remainder of the current Fiscal Year and the full 12 months of the next Fiscal Year.

In the past, the State Legislature has shifted property taxes from cities, counties and special districts to the Educational Revenue Augmentation Fund (ERAF). However, the California Constitution has been amended to protect cities and other local agencies from legislative reductions and reallocations of local property tax revenues, with some exceptions. See “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS—Proposition 1A” and “—Proposition 22” for a description of certain limitations on the State’s authority over local government revenue sources.

The table below sets forth the secured assessed valuations for property in the City for the Fiscal Years 2015-16 through 2025-26.

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TABLE 8

CITY OF MONTEBELLO

ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY FISCAL YEARS 2020-21 THROUGH 2025-26
(000s)
Fiscal Year
Ending June 30 Secured(1) Unsecured
Less:

Exemptions
Total Taxable
Assessed Value
Redeveloped
Incremental
Value(2)

Total
2021 $ 4,529,900 $ 90,240 $ 118,765 $ 4,501,375 $ 2,212,166 $ 6,713,541 2022 4,691,478 90,364 120,075 4,661,767 2,370,632 7,032,399 2023 4,965,422 120,738 157,959 4,928,201 2,321,075 7,249,276 2024 5,214,070 130,404 196,335 5,148,139 2,606,384 7,754,523 2025 5,508,184 141,335 168,184 5,481,334 2,696,286 8,177,621 2026 5,765,720 155,781 244,012 5,677,489 3,073,168 8,750,656

(1) Includes utility assessed valuation.
(2) Net of exemptions.

Source: City of Montebello Annual Comprehensive Financial Report for Fiscal Year 2024-25.

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The 10 largest property taxpayers in the City for Fiscal Years 2024-25 based on secured assessed valuation and the percentage of the City’s total assessed value attributable to each are shown in the below table.

The information in the following table has been obtained from third-party sources and is included for general information purposes only. Neither the City nor the Underwriter has verified the information in the following table and neither guarantees the accuracy of such information.

TABLE 9

CITY OF MONTEBELLO

LARGEST SECURED PROPERTY OWNERS BY TOTAL ASSESSED VALUATION FISCAL YEAR 2024-25
Property Owner
Total Assessed
Valuation
% of
Total

1. Metro Heights Montebello LLC $ 152,254,955 1.83%

2. Bimbo Bakeries Usa Inc. 91,320,206 1.10

3. Bridge Group Investments II LLC 86,732,940 1.04

4. Brixmor Montebello Plaza LP 84,264,569 1.01

5. Pace Jon D 82,111,450 0.99

6. Montebello Edens LLC 75,504,480 0.91

7. Lennar Homes of California LLC 70,515,254 0.85

8. KK 3A CORP 54,247,097 0.65

9. Somerset Apartments LLC 51,598,955 0.62

10. COMREF So Ca Industrial 49,578,555 0.60
TOTAL TOP 10 TAXPAYERS $ 645,873,506 7.78%
TOTAL CITY TAXABLE VALUE $ 8,306,869,935 100.00%

Source: City of Montebello Annual Comprehensive Financial Report for Fiscal Year 2024-25.

Charges for Services
During Fiscal Year 2024-25, charges for services of approximately $8.5 million contributed approximately 9.8% of total General Fund revenues. General Fund revenues from charges for services of approximately $12 million are estimated to be received during Fiscal Year 2025-26 and approximately $10.7 million are budgeted for Fiscal Year 2026-27. The City collects charges for services for various development fees, use of City facilities, park and recreation fees, public works services, and public safety services, among others.

Other Revenue Sources
Other Taxes and Charges. The City receives other General Fund revenues from other taxes and charges, including, but not limited to, franchise taxes, fines and forfeitures, and license and permits. Revenues for Fiscal Year 2024-25 were approximately $3.3 million for franchise taxes, $2.9 million for fines and forfeitures, and $11.9 million for license and permits, respectively. For Fiscal Year 2025-26, the projected amounts are: $3.8 million for franchise fees, $3.4 million for fines and forfeitures, and $12.3 million for licenses and permits. The Fiscal Year 2026-27 budget anticipates $3.9 million in franchise fees, $3.4 million in fines and forfeitures and $12.4 million in licenses and permits.

Intergovernmental. The City receives other General Fund revenue from other government agencies, principally from the County, State and Federal governments. These revenues include monies called subventions, as well as grants for specific projects, and reimbursements related to State mandated activities or disaster/emergency declarations. These revenues can fluctuate from year-to-year for on-going programs and activities.

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Investment Earnings. Revenues from investment earnings consist of interest earnings on City investment of idle cash (i.e., pooled cash interest). For Fiscal Year 2024-25, this source of revenue was $620,000, with $851,000 projected for Fiscal Year 2025-26 and $851,000 budgeted for Fiscal Year 2026-27.

Other. Other sources of General Fund revenue for the City include reimbursements for special events, recovery from damage to City properties, donations, sale of City assets, administrative charges and other miscellaneous revenue sources. These revenues can be inconsistent from year-to-year or are generally one-time in nature.

Impact of Enterprise Operations on the City’s General Fund The City maintains several enterprise funds, through which it accounts for the operation of two hotels, the Montebello Golf Course, as defined below, and Montebello Bus Lines (i.e., Transit Fund). Annual lease revenue payments made by Topgolf in consideration of being granted a lease on a portion of the Golf Course property upon which it is built is recorded as Transfer In revenue to the Golf Course Enterprise Fund.

Hilton Garden Inn. The City owns the Hilton Garden Inn (the “Hilton Garden Inn”) and utilizes a third-party management company to operate it on a daily basis. Hilton Garden Inn operations and occupancy have improved since the COVID-19 pandemic impacted Fiscal Year 2020-21. Typically, daily occupancy is in the mid- to low-eighty percent range, with annual operating revenue covering all expenses, including debt service.

The City financed the construction of the Hilton Garden Inn through the issuance by the Montebello Public Finance Authority of the Authority’s Lease Revenue Bonds, 2019 Series A (Hilton Garden Inn Project) (the “HGI Bonds”). The City’s General Fund is the primary source of security for the HGI Bonds. Should net revenues generated by the Hilton Garden Inn be insufficient to make debt service payments on the HGI Bonds, then the General Fund would make the payments. However, the City has not previously and does not anticipate needing to make transfers from its General Fund to pay debt service on the HGI Bonds. Even during the COVID-19 pandemic, when occupancy essentially dropped to zero at HGI, the hotel generated sufficient revenues to make annual debt service payments. The HGI Bonds are secured by a cash-funded debt service reserve fund. The maximum annual debt service on the HGI Bonds is $1,013,000.

Home2 Suites. The Montebello Home2 Suites Hotel (the “Home2 Suites Hotel” and also referred to herein as the “Hotel”) is also owned by the City and operated by a third party management company. The Home2 Suites Hotel typically operates with occupancy rates of at least 90%. Operating revenues have historically been more than sufficient to pay for all operating expenses of the Home2 Suites Hotel as well as annual debt service payments on the 2016 Bonds, and the City anticipates that net operating income generated by the Home2 Suites Hotel, after payment of Home2 Suites Hotel operating expenses, will be sufficient to pay annual debt service on the Series 2026A Bonds.

However, the City will be obligated to pay Base Rental Payments from any available source of funds, including the City’s General Fund, if net revenues generated by the Home2 Suites Hotel are insufficient to make debt service payments on the Series 2026A Bonds.

A feature of the bond indentures for both hotels allows for excess revenue – once all other operating, debt service and management fee expenses are made – to be transferred to the General Fund. Over the last several fiscal years, Home2 Suites has operated with sufficient excess revenue to allow for transfers to the General Fund. Per accounting treatment, these transfers of revenue are recognized as either Transfer Out or Administrative expenses (see Table 12 below). Therefore, in years when the excess revenue was transferred to the General Fund (i.e., Fiscal Year 2024-25), operating expenses appear elevated when compared to prior years. However, all operating, debt service and other required expenses have been paid prior to that transaction being made.

Montebello Golf Course and Quiet Cannon Event Center. The City also owns the Montebello Golf Course (the “Golf Course”) and the adjacent Quiet Cannon Event Center (the “Event Center”). The City records revenues from the Golf Course and the Event Center in the Golf Course Enterprise Fund (the “Golf Course Enterprise Fund”) Revenues in the Golf Course Enterprise Fund include Golf Course green fees, driving range fees, cart rental revenue, special event revenue, and rent and concession revenue from the Event Center. Expenses in the Golf Course Enterprise Fund include costs associated with the management of the course by a third party company, maintenance and related

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landscape expenses, labor costs, debt service on the Montebello Public Financing Authority Lease Revenue Refunding Bonds, 2014 Series A (the “Series 2014A Bonds”), which will be fully paid off in Fiscal Year 2028-29. The Golf Course Enterprise Fund is also responsible for paying debt service on the Montebello Public Financing Authority Lease Revenue Bonds, Series 2022A (the “Series 2022A Bonds”), which the Authority issued in 2022 to finance improvements to the Golf Course as described below.

In 2022, the City issued the Series 2022A Bonds to finance a renovation and reconfiguration of the Montebello Golf Course (the “Golf Course Project”). The Golf Course Project included the reduction of the overall size of the Golf Course to allow for the construction of the Topgolf facility (described below) on a portion of the former Montebello Golf Course, and a reconfiguration of the Montebello Golf Course from an 18 hole course to a 9 hole course, adding a 6 hole “short course” as well as lights to allow for extending play into the evening. The completion of the recent renovation of the Golf Course and the development and opening of the new Topgolf in the City is intended to have a positive impact on the operating results of the Golf Course Enterprise Fund. The Golf Course fully reopened in April 2024. In connection with reopening the Golf Course, the City Council updated the green fee schedule, allowing the company that manages the Golf Course to offer green fee pricing consistent with peak playing times.

Historically, the Golf Course Enterprise Fund operated at a deficit. From Fiscal Year 2016-17 to Fiscal Year 2021-22, the year before the Golf Course was closed for the Golf Course Project, the City made transfers from the General Fund of approximately $840,000 in Fiscal Year 2016-17 and $960,000 in Fiscal Year 2017-18, declining to approximately $470,000 in Fiscal Years 2019-20 and 2021-22.

The proposed Fiscal Year 2026-27 Golf Course budget includes expenditures of $4,017,700 specifically for golf operations – third party golf management and landscape, staff salaries and benefits, utilities, and debt service on the Series 2014A Bonds and Series 2022A Bonds issues. There is an additional $94,900 budgeted for Event Center utilities and landscape expenses, bringing the total proposed expenditure budget in the Golf Course Enterprise Fund to $4,112,600. Approximately $3,024,500 in Golf Course revenue and $550,000 in [Event Center] revenue is projected for Fiscal Year 2026-27, for a total of $3,574,500 in Golf Course Enterprise Fund revenue. The City anticipates the Golf Course revenue will improve in Fiscal Year 2026-27, with increased revenues generated from driving range and night golf operations when compared to prior years. The total revenue will also include the amount by which annual Topgolf sublease payments exceed annual debt service on the Series 2022B Bonds (defined below).

Top Golf Project and the Series 2022B Bonds. The Montebello Public Financing Authority Lease Revenue Bonds Series 2022B (Topgolf Project) (Federally Taxable) (the “Series 2022B Bonds”) were issued in the original aggregate principal amount of $55,965,000. The proceeds of the Series 2022B Bonds were used to finance a portion of the costs of a driving range entertainment venue and other improvements (the “Topgolf Project”), which was developed by and is currently operated by Topgolf USA MB, LLC (“Topgolf Montebello”) on property that was previously part of the Montebello Golf Course, as described above. The sublease agreement between the City and Topgolf requires Topgolf to make the annual debt service payment on the Series 2022B Bonds. Topgolf is required to deposit the debt service amounts 60 days prior to the due date of each Interest and Principal and Interest amount (i.e., May and November). These sublease payments are guaranteed by Topgolf International, Inc. Under the sublease agreement, Topgolf also makes an additional base rental payment (approximately $1.05 million per year in the first five years and increasing every five years thereafter) which the City intends to apply to make payments on the Series 2022A Bonds.

For additional detail and discussion of the impacts of certain of the City’s enterprise operations on its General Fund, see “RISK FACTORS – Impact of Enterprise Operations on the City’s General Fund.”

TABLE 10

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CITY OF MONTEBELLO

GENERAL FUND TRANSFERS TO GOLF COURSE ENTERPRISE FUND
Fiscal Year
Ending
June 30,
Transfer Out From
General Fund to
Golf Course Enterprise Fund
Transfers Out from Other
City Funds to Golf Course
Enterprise Fund
2016 -- $214,627
2017 $841,900 21,458
2018 963,320 250,539
2019 641,850 112,323
2020 751,000 90,976
2021 471,300 31,979(1)
2022 471,300 6,627(1)
2023(1) -- --
2024(1) -- --
2025(2) 581,814 2,157,070
2026(3) __-- _--_

(1) The Golf Course was under construction.
(2) Transfer for Fiscal Year 2024-25 from the General Fund to the Golf Course Enterprise Fund was made to fund the debt service payment on the Series 2022A Bonds. [Transfer for Fiscal Year 2024-25 from the Home2 Suites Enterprise Fund was to reimburse amounts paid towards the golf course renovation project and clubhouse construction, which amounts were applied to repay an interfund loan from the General Fund to the Golf Course Enterprise Fund.] (3) Estimated.

Source: City of Montebello Fiscal Years 2015-16 through 2024-25 Annual Comprehensive Financial Reports. City of Montebello for Fiscal Year 2025-26 estimate.

Historical Results of the Home2 Suites Enterprise Fund
The City anticipates that it will use moneys generated by the Home2 Suites Hotel to pay the Lease Payments securing the Series 2026A Bonds. The following table shows the statement of revenues and expenditures for the Home2 Suites Fund. for Fiscal Years 2021 through 2025.

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TABLE 11
CITY OF MONTEBELLO – HOME2 SUITES

STATEMENT OF REVENUES AND EXPENSES
Fiscal Year
2020-21
Fiscal Year
2021-22
Fiscal Year
2022-23
Fiscal Year
2023-24
Fiscal Year
2024-25

OPERATING REVENUES
Charges for Services $ 8,289,474 $ 11,968,958 $ 12,981,636 $ 12,673,429 $ 13,363,310 Other revenues 68,372 81,384 57,583 27,111 54,162 Total Operating Revenues $ 8,357,846 $ 12,050,342 $ 13,039,219 $ 12,700,540 $ 13,417,472

OPERATING EXPENSES
Salaries and benefits $ 1,397,784 $ 1,769,105 $ 2,198,350 $ 2,572,808 $ 2,505,583 Material and Supplies 218,364 -- - 307,718 316,362
Food and Beverages 165,715 548,968 1,030,478 986,652 969,383 Repairs and maintenance -- 15 1,967 325 478
Utilities 248,817 310,714 374,564 371,915 381,917
Insurance claims and premiums 93,136 94,568 96,000 96,000 319,585 Contractual services 706,577 951,532 1,190,609 1,285,454 1,406,614 Franchise fees 359,916 537,571 578,364 565,483 594,416
Depreciation 1,227,096 1,227,097 1,227,096 1,227,096 1,227,096 Administrative expense(1) 1,715,012 2,007,223 2,166,190 1,123,038 3,675,037 Other Expenses 19,925 7,832 21,654 753,199 686,212 Total operating expenses $ 5,612,342 $ 7,454,625 $ 8,885,272 $ 9,289,688 $ 12,082,683

Operating income (loss) $ 2,745,504 $ 4,595,717 $ 4,153,947 $ 3,410,852 $ 1,334,789

NONOPERATING REVENUES (EXPENSES)
Interest income $ 2,957 $ 12,142 $ 391,925 $ 648,594 $ 541,490 Interest and fiscal charges(2) (2,380,698) (2,327,489) (2,271,760) (2,213,260) (2,151,760) Total operating expenses $ (2,377,741) (2,315,347) (1,879,835) (1,564,666) (1,610,270) Income (loss) before capital grants $ 367,763 $ 2,280,370 $ 2,274,112 $ 1,846,186 $ (275,481)

(1) Administrative Expenses accounts for the quarterly cost allocation plan amount charged to various enterprise and special revenue funds to offset overhead of General Fund support functions (i.e., accounting, accounts payable, etc.). In addition, as described in the paragraphs above, a feature of the bond indentures for both hotels allows for excess revenue after payment of operating expenses, debt service and management fee to be transferred to the General Fund. In each year since Fiscal Year ______, Home2 Suites has operated with sufficient excess revenue to allow excess revenues in the Home2 Suites Fund to be transferred to the General Fund. The year-over-year increase in Fiscal Year 2024-25 is from a one-time sweep of $2.0 million. (2) Debt service on 2016 Bonds. [Please provide year.] Source: City of Montebello Fiscal Years 2020-21 through 2024-25 Annual Comprehensive Financial Reports.

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Montebello City CouncilJune 24, 2026

Montebello City Council
June 24, 2026