Agenda packet — Ontario City Council, May 5, 2026 (part 4 of 4)

Additionally, the City has a robust capital improvement program which will be funded from a combination of pay -as-you-go and additional lease revenue bonds and is discussed below. See, “CITY FINANCIAL INFORMATION – Capital Improvement Program,” herein.

Capital Improvement Program
The City is undertaking a series of significant public infrastructure projects designed to enhance public amenities and support regional growth. These projects include the Ontario Sports Empire, Ontario Grand Park, and the Toyota Arena, among others. For Fiscal Years 2025-26 through 2029-30, plus outer years, the City has approved approximately $2.88 billion in capital improvements.

A major component of this program is the Ontario Sports Empire, which includes land acquisition and construction for the new stadium, sports fields and parking facilities, and associated public infrastructure. The total estimated investment for this project over the current and following five fiscal years is $1.01 billion.

Additionally, the City is investing heavily in civic center enhancement and fire station construction, with projected costs exceeding $300 million during the same period. Other key infrastructure investments include park and playground improvements, public infrastructure upgrades, downtown revitalization efforts, and the renovation and expansion of museum and library facilities.

The City plans to finance these improvements through a combination of public financing and pay -as- you-go funding.

Estimated Direct and Overlapping Bonded Debt . The estimated direct and overlapping bonded debt of the City as of June 30, 2025 is set forth in Table 8. The information in Table 8 has been derived from data assembled and reported to the City by California Municipal Statistics, Inc. None of the City, the Authority or the Underwriter ha ve independently verified the information in Table 8 and the City, the Authority and the Underwriter do not guarantee its accuracy.
606

35 TABLE 8

CITY OF ONTARIO
ESTIMATED DIRECT AND OVERLAPPING BONDED DEBT AS OF JUNE 30, 2025 City Assessed Valuation
Redevelopment Agency Incremental Valuation
Total Assessed Valuation
$ 34,132,856
9,681,681
Percentage
Est. Share of
Overlapping
Debt
$ 43,814,537*
Outstanding
Debt
6/30/2025 Applicable 6/30/2025
Overlapping Debt Repaid with Property Taxes:

Metropolitan Water District $ 17,155,000 1.060% $ 181,843 Chaffey Community College District 440,580,000 24.931% 109,841,000 Chino Valley Unified School District 753,707,971 8.699% 65,565,056 Chaffey Union High School District 640,477,530 44.194% 283,052,640 Ontario-Montclair School District 123,330,015 70.605% 87,077,157 Mountain View School District School Facilities Improvement District No. 1 4,369,676 99.503% 4,347,959
Mountain View School District School Facilities Improvement District No. 2 78,489,793 99.035% 77,732,366
Mountain View School District CFD No. 1997-1 233,000 100.000% 233,000 Ontario Community Facilities District No. 13 2,785,000 100.000% 2,785,000 Ontario Community Facilities District No. 24 13,515,000 100.000% 13,515,000 Ontario Community Facilities District No. 25 7,755,000 100.000% 7,755,000 Ontario Community Facilities District No. 26 8,035,000 100.000% 8,035,000 Ontario Community Facilities District No. 28 7,740,000 100.000% 7,740,000 Ontario Community Facilities District No. 30 12,280,000 100.000% 12,280,000 Ontario Community Facilities District No. 31 4,340,000 100.000% 4,340,000 Ontario Community Facilities District No. 33 5,560,000 100.000% 5,560,000 Ontario Community Facilities District No. 34 6,945,000 100.000% 6,945,000 Ontario Community Facilities District No. 35 11,225,000 100.000% 11,225,000 Ontario Community Facilities District No. 38 9,505,000 100.000% 9,505,000 Ontario Community Facilities District No. 39 4,600,000 100.000% 4,600,000 Ontario Community Facilities District No. 40 5,870,000 100.000% 5,870,000 Ontario Community Facilities District No. 41 13,175,000 100.000% 13,175,000 Ontario Community Facilities District No. 42 6,860,000 100.000% 6,860,000 Ontario Community Facilities District No. 43 14,665,000 100.000% 14,665,000 Ontario Community Facilities District No. 45 8,350,000 100.000% 8,350,000 Ontario Community Facilities District No. 46 6,730,000 100.000% 6,730,000 Ontario Community Facilities District No. 53 20,630,000 100.000% 20,630,000 Ontario Community Facilities District No. 54 5,930,000 100.000% 5,930,000 Ontario Community Facilities District No. 55 9,165,000 100.000% 9,165,000 Ontario Community Facilities District No. 56 19,215,000 100.000% 19,215,000 Ontario Community Facilities District No. 57 12,580,000 100.000% 12,580,000 Ontario Community Facilities District No. 64 27,860,000 100.000% 27,860,000 Ontario Community Facilities District No. 66 10,345,000 100.000% 10,345,000 Total overlapping debt repaid with property taxes $2,314,002,985 $883,691,021 Direct and Overlapping General Fund Debt:

San Bernardino County General Fund Obligations 100,765,000 12.625% 12,721,581 San Bernardino County Flood Control District GF Obligation 37,295,000 12.625% 4,708,494 Chaffey Community College District Certificates of Participation 21,770,000 24.931% 5,427,479 Cucamonga School District Certificate of Participation 904,000 50.634% 457,731 City of Ontario General Fund Obligations 434,740,000 100.000% 434,740,000 City of Ontario Pension Obligation Bonds 211,155,000 100.000% 211,155,000 City of Ontario General Fund Obligations-Unamortized
Bond Premium and Discount 21,034,152 21,034,152
Loans Payable 167,556,860 167,556,860
West Valley Vector Control District Certificate of Participation 1,296,291 35.053% 454,389 Total direct/overlapping general fund debt 996,516,303 858,255,686 Overlapping Tax Increment Debt (Successor Agency): $ 3,605,600 100.00% 3,605,600 Total overlapping debt 911,066,295
City direct debt 834,486,012
Total direct and overlapping debt $1,745,552,307

Source: California Municipal Statistics, Inc.

Retirement Contributions
Accounting and financial reporting by state and local government employers for defined benefit pension plans is governed by GASB Statement No. 68 (“GASB 68”). GASB 68 includes the following components:
(i) unfunded pension liabilities are included on the employer’s balance sheet; (ii) pension expense incorporates 607

36 rapid recognition of actuarial experience and investment returns and is not based on the employer’s actual contribution amounts; (iii) lower actuarial discount rates are required to be used for underfunded plans in certain cases for purposes of the financi al statements; (iv) closed amortization periods for unfunded liabilities are required to be used for certain purposes of the financial statements; and (v) the difference between expected and actual investment returns will be recognized over a closed five -year smoothing period. GASB 68 affects the City’s accounting and reporting requirements, but it does not change the City’s pension plan funding obligations.

The City participates in three plans to fund pension benefits for employees: (i) a Police Safety Plan for police personnel; (ii) a Fire Safety Plan for fire department personnel; and (iii) a Miscellaneous Plan for all other eligible personnel. The City’s pension plans are administered by CalPERS. CalPERS administers agent multiple-employer public employee defined benefit pension plans for all of the City’s full-time and certain part- time employees. CalPERS provides retirement, disability and death benefits to plan members and beneficiaries and acts as a common investment and administrative agent for participating public entities within the State, including the City. CalPERS plan benefit provisions and all other requirements are established by State statute and the City Council.

City employees are subject to different benefit levels based on their hire date. The plans ’ provisions and benefits in effect at June 30, 2025 are summarized as follows:
608

37 CITY OF ONTARIO
CALPERS PENSION PLANS – SUMMARY OF BENEFIT PROVISIONS
Police Safety Plan

Employees Hired
Before July 1, 2012
Employees Hired
between July 1, 2012
and December 31, 2012
Employees Hired after
December 31, 2012 (Not
Previously CalPERS
members)
Benefit Formula 3.0% @ age 50 3.0% @ age 55 2.7% @ age 57 Benefit Vesting 5 years of service 5 years of service 5 years of service Benefit Payments Monthly for life Monthly for life Monthly for life Minimum Retirement
Age
50 50 50
Monthly Benefits as % of
Eligible Compensation
3% 2.4% - 3% 2% - 2.7%
Employee Normal Cost 9.00%(1) 9.00%(1) 13.25%(1)
Employer Normal Cost
Rate

22.90% 22.90% 22.90%
Fire Safety Plan

19.55% 19.55% 19.55%
Miscellaneous Plan

Employees Hired on or before
December 31, 2012
Employees Hired after December 31,
2012 (Not Previously CalPERS
members)
Benefit Formula 2.5% @ age 55 2.0% @ age 62
Benefit Vesting 5 years of service 5 years of service
Benefit Payments Monthly for life Monthly for life
Minimum Retirement
Age
50 52
Monthly Benefits as % of
Eligible Compensation
2% - 2.5% 1% - 2.5%
Employee Normal Cost 8.00%(1) 7.25%(1)
Employer Normal Cost
Rate

10.44% 10.44%

(1) Employees are required to make the full employee contribution themselves. The City does not make any portion of the employee contribution.

Source: City.
609

38 Contributions to the City’s pension plans consist of contributions from plan participants (i.e., employees) and contributions by the City.

City employees who were hired after December 31, 2012 and who were not previously CalPERS members receive benefits based on a 2.7% at age 57 formula (for Police Safety Plan and Fire Safety Plan employees) or a 2.0% at age 62 formula (for Miscellaneous Plan employees). Such employees are required to make the full amount of required employee contributions themselves under the California Public Employees’ Pension Reform Act of 2013 (“AB 340”), which was signed by the State Governor on September 12, 2012. AB 340 established a new pension tier for such employees. Benefits for such participants are calculated on the highest average annual compensation over a consecutive 36 -month period. Employees are required to pay at least 50% of the total normal cost rate. AB 340 also capped pensionable income as noted below. Amounts are set annually, subject to Consumer Price Index increases, and retroactive benefits increases are prohibited, as are contribution holidays and purchases of additional non-qualified service credit.

CITY OF ONTARIO
PENSIONABLE INCOME CAPS FOR CALENDAR YEAR 2025
(AB 340 AND NON-AB 340 EMPLOYEES)

Employees Hired On or Before
December 31, 2012
(Non-AB 340 Employees)
Employees Hired After
December 31, 2012
(AB 340 Employees)
Maximum Pensionable Income $350,000 $186,096
Maximum Pensionable Income if
also Participating in Social Security N/A 155,081

Source: CalPERS.

Additional employee contributions, limits on pensionable compensation and higher retirement ages for new members as a result of the passage of AB 340 are expected to reduce the City’s unfunded pension lability and potentially reduce City contribution levels in the long term.

The City is also required to contribute the actuarially determined remaining amounts necessary to fund benefits for its members. Employer contribution rates for all public employers are determined on an annual basis by the CalPERS actuary and are effective on the July 1 following notice of a change in the rate. Total plan contributions are determined through the CalPERS annual a ctuarial valuation process. The total minimum required employer contribution is the sum of: (i) the plan’s employer normal cost rate, which funds pension benefits for current employees for the upcoming Fiscal Year (expressed as a percentage of payroll); plus (ii) the employer unfunded accrued liability contribution amount, which funds pension benefits that were previously earned by current and former employees (billed monthly).

For Fiscal Year 2024-25, required employer normal cost rates as a percentage of payroll were 22.90% for Police Safety Plan employees, 19.55% for Fire Safety Plan employees and 10.44% for Miscellaneous Plan employees. For Fiscal Year 2025-26, required employer normal cost rates as a percentage of payroll are 22.82% for Police Safety Plan employees, 19.94% for Fire Safety Plan employees and 10.09% for Miscellaneous Plan employees.

For Fiscal Year 2024-25, the total required employer payment of the unfunded accrued liability for the City’s Police Safety Plan was $1,936,800. For Fiscal Year 2025-26, the total required employer payment of the unfunded accrued liability for the City’s Police Safety Plan is $3,058,059, reflecting the City’s issuance of the 2020 Bonds, the proceeds of which were applied to pay down a portion of the unfunded accrued liability of $139,203,264. See the caption “—Other Indebtedness—General-Fund Supported Debt—2020 Bonds.” For Fiscal Year 2024-25, the total required employer payment of the unfunded accrued liability for the City’s Fire Safety Plan was $1,228,001. For Fiscal Year 2025 -26, the total required employer payment of the unfunded accrued liability for the City’s Fi re Safety Plan is $2,370,845, reflecting the City’s issuance of the 610

39 2020 Bonds, the proceeds of which were applied to pay down a portion of the unfunded accrued liability of $94,180,092. See the caption “—Other Indebtedness—General-Fund Supported Debt—2020 Bonds.” For Fiscal Year 2024-25, the total required employer payment of the unfunded accrued liability for the City’s Miscellaneous Plan was $1,470,627. For Fiscal Year 2025 -26, the total required employer payment of the unfunded accrued liability for the City’s Miscellaneous Plan is $2,799,398, reflecting the City’s application of available cash balances to pay down a portion of the unfunded accrued liability of $102,069,092.

Beginning in Fiscal Year 2017-18, CalPERS began collecting employer contributions toward a pension plan’s unfunded liability as dollar amounts instead of the prior method of a percentage of payroll. According to CalPERS, this change was intended to address potential funding issues that could arise from a declining payroll or a reduction in the number of active members in the plan. Funding the unfunded liability as a percentage of payroll could lead to underfunding of pension plans. Due to stakeholder fee dback regarding internal needs for total contributions expressed as an estimated percentage of payroll, the CalPERS reports include such results in the contribution projection for informational purposes only. Contributions toward a pension plan’s unfunded liability will continue to be collected as set dollar amounts.

The City’s required contributions to CalPERS fluctuate each year and, as noted, include a normal cost component and a component equal to an amortized amount of the unfunded liability. Many assumptions are used to estimate the ultimate liability of pensions a nd the contributions that will be required to meet those obligations. The CalPERS Board of Administration has adjusted and may in the future further adjust certain assumptions used in the CalPERS actuarial valuations, which adjustments may increase the City’s required contributions to CalPERS in future years. Accordingly, the City cannot provide any assurances that the City’s required contributions to CalPERS in future years will not significantly increase (or otherwise vary) from any past or current p rojected levels of contributions. CalPERS earnings reports for Fiscal Years 2011-12 through 2022-23 report investment gains of approximately 1.0%, 12.5%, 18.4%, 2.4%, 0.6%, 11.2%, 8.6%, 6.7%, 4.7%,

21.3%, -6.1% and 5.8%, respectively. Future earnings performance may increase or decrease future contribution rates for plan participants, including the City.

On December 21, 2016, the CalPERS Board of Administration (the “Board”) voted to lower its discount rate from 7.50% to 7.00% over a three period. For public agencies such as the City, the new discount rate took effect July 1, 2017. Lowering the discount rate means that employers which contract with CalPERS to administer their pension plans will see increases in their normal costs and unfunded actuarial liabilities. Active members hired after January 1, 2013 will also see their contribution rates rise under AB 340. The reduction of the discount rate will result in average employer rate increases of approximately 1% to 3% of normal cost as a percentage of payroll for most retirement plans such as the City’s plans. Additionally, many employers will see a 30% to 40% increase in their current unfunded accrued liability payments (relative to the unfunded accrued liability payments projected in the June 30, 2015 valuation report) for pension plans. These payments are made to amortize unfunded liabilities over 20 years to bring pension funds to a fully funded status over the long-term.

The announcement on July 12, 2021 that CalPERS achieved a n investment return of 21.3% for the period from July 1, 2020 through June 30, 2021 caused the Board to lower CalPERS’ discount rate from 7.00% to 6.80% on November 15, 2021 in accordance with a risk mitigation policy that was adopted in 2015, which calls for the discount rate to be lowered if returns exceed the then-current discount rate by two or more percentage points. The investment returns in 2023, 2024 and 2025 would have triggered further cuts to the discount rate.

Under the current provisions of the risk mitigation policy, the Board has no plans to lower the current 6.80% discount rate.

Portions of the above disclosures are primarily derived from information that has been produced by CalPERS, its independent accountants and its actuaries. The City has not independently verified such information and neither makes any representations nor e xpresses any opinion as to the accuracy of the information that has been provided by CalPERS.

The annual comprehensive financial reports of CalPERS are available on CalPERS’ Internet website at www.calpers.ca.gov. The CalPERS website also contains CalPERS’ most recent actuarial valuation reports and other information that concerns benefits and other matters. The textual reference to such Internet website 611

40 is provided for convenience only. None of the information on such Internet website is incorporated by reference herein. The City cannot guarantee the accuracy of such information. Actuarial assessments are “forward-looking” statements that reflect the ju dgment of the fiduciaries of the pension plans, and are based upon a variety of assumptions, one or more of which may not materialize or be changed in the future.

The June 30, 2023, valuation was rolled forward to determine the June 30, 2024 total pension liability, based on the following actuarial methods and assumptions:

CITY OF ONTARIO

ACTUARIAL ASSUMPTIONS FOR CALPERS PENSION PLAN
Actuarial Cost Method Entry Age Normal Cost Method in accordance with the requirements of GASB 68
Asset Valuation Method Market Value of Assets
Actuarial Assumptions:

Discount Rate 6.90%
Inflation 2.30%
Salary Increases Varies by entry age and service
Investment Rate of Return 6.90% net of pension plan investment and administrative expenses; includes projected inflation rate of 2.30%
Mortality Rate Table(1) Derived using CalPERS’ membership data for all funds

(1) The mortality table used was developed based on CalPERS-specific data from a 2021 actuarial experience study for the period from 1997-2015.

Source: City.

Changes in the net pension liability for the City’s pension plans in the most recent Fiscal Year for which information is available were as follows:

CITY OF ONTARIO

CHANGES IN CALPERS PENSION PLANS NET PENSION LIABILITY
Police Safety Plan
June 30, 2023 June 30, 2024
Present Value of Benefits $671,911,214 $736,636,686
Entry Age Accrued Liability 545,512,302 587,491,154
Market Value of Assets 479,898,062 514,546,664
Unfunded Accrued Liability $65,614,240 $72,944,490
Funded Ratio 88.0% 87.6%

Fire Safety Plan
June 30, 2023 June 30, 2024
Present Value of Benefits $483,846,676 $529,009,762
Entry Age Accrued Liability 392,782,632 418,735,594
Market Value of Assets 342,226,523 365,081,820
Unfunded Accrued Liability $50,556,109 $53,653,774
Funded Ratio 87.1% 87.2%
612

41 Miscellaneous Plan
June 30, 2023 June 30, 2024
Present Value of Benefits $610,083,322 $669,248,330
Entry Age Accrued Liability 505,029,913 540,266,437
Market Value of Assets 449,133,287 479,946,056
Unfunded Accrued Liability $55,896,626 $60,320,381
Funded Ratio 88.9% 88.8%

Source: City.

The table below presents the net pension liability of the City ’s pension plans, calculated using the discount rate applicable to Fiscal Year 2023-24 (6.90%), as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage point lower ( 5.90%) or 1 percentage point higher (7.90%) than the Fiscal Year 2023-24 rate:

CITY OF ONTARIO

SENSITIVITY OF THE CALPERS PENSION PLANS NET PENSION LIABILITY

TO CHANGES IN THE DISCOUNT RATE
Plan’s Net Pension
Liability/(Asset)
Discount Rate – 1%
(5.90%)
Applicable Discount
Rate (6.90%)
Discount Rate + 1%
(7.90%)
Police Safety Plan $126,891,371 $47,084,646 ($17,921,723) Fire Safety Plan 91,866,234 37,637,806 ($6,917,259)
Miscellaneous Plan 109,017,707 38,506,090 (19,464,348)

Source: City.

For additional information relating to the City’s pension plans, see Note 10 to the City’s audited financial statements set forth in Appendix C.

Other Post-Employment Benefits
The City provides post-employment health care benefits to qualified retired employees. Employees are eligible for such benefits in accordance with applicable MOUs with employee bargaining units. The City administers a single-employer defined benefit post-employment healthcare plan (the “OPEB Plan”). A menu of benefit provisions, as well as other requirements, are established by state statutes within the Public Employees’ Retirement Law. The City selects optional benefit provisions from the benefit menu by contract with CalPERS and adopts those benefits through local ordinance.

At June 30, 2024 (the census date), the following employees were covered by the benefit terms:

Category Count
Active employees 1,286
Inactive employees or beneficiaries currently receiving benefit payments 713 Inactive employees entitled to but not yet receiving benefit payment 240

Source: City.

The City funds benefits under the OPEB Plan based on an Actuarially Determined Contribution (the “ADC”). For the year ended June 30, 2024, the City’s ADC contribution rate was 0.91% of covered employee payroll. Employees do not contribute to the plan, but may pay the difference between the benefit that they receive and monthly premiums for that benefit.
613

42 GASB has issued two pronouncements, known as GASB 74 and GASB 75, related to funding and accounting for the OPEB Plan. Under these pronouncements, OPEB Plan benefits are intended to be accounted for in a manner that is similar to the accounting treatment of pensions under GASB 68. See the caption “ — Retirement Contributions.” Under GASB 74 and 75, unfunded OPEB Plan benefits will be recognized on the City’s financial statements and the City is required to use the Entry Age actuarial cost method when calculating OPEB Plan liabilities. In addition, a 20 -year municipal bond rate is used to discount unfunded OPEB Plan payments and the long-term rate of return on plan investments is used to discount benefits that are projected to be paid by plan assets.

The City retained a consultant (the “Actuarial Consultant”) to calculate the City’s post -employment benefits funding status. In a report dated August 20, 2025 (the “Report”), the Actuarial Consultant concluded that the City’s Net OPEB liability is $15,681,657 with the measurement date of June 30, 2024. The City is not required to fund the amortization of the unfunded actuarial liability. Prior to Fiscal Year 2019 -20, the City’s policy was to pay for OPEB Plan costs as they are incurred. In Fiscal Year 2019-20, the City Council approved the establishment of an irrevocable trust to fund OPEB Plan benefits (the “OPEB Trust”) with the California Employers’ Retiree Benefit Trust, an agent multiple -employer plan that is administered by CalPERS, and approved and authorized an agreement with CalPERS to administer the OPEB Trust on its behalf. As of June 30, 2024, the City held $182,342,812 in the OPEB Trust. Based on the most recent actuarial valuation, the actuarial unfunded liability of the OPEB Plan was esti mated to be approximately $15,681,657 using a methodology that is compliant with GASB 75. For Fiscal Year 2023-24, the City also paid $7,695,646 in post- employment health care benefits.

Changes in the total liability for the City’s OPEB Benefit plan for Fiscal Year 2024-25 were as follows.

CITY OF ONTARIO

CHANGES IN OPEB PLAN LIABILITY
Increase / (Decrease)

Total
OPEB Plan Liability
Plan Fiduciary
Net Position
Net OPEB Plan
Liability / (Asset)
Balance at June 30, 2024 (June 30,
2023 measurement date) $189,927,802 $164,683,608 $25,244,194 Net Changes in fiscal year 8,096,667 17,659,204 (9,562,537) Balance at June 30, 2025 (June 30,
2024 measurement date)
$198,024,469 $182,342,812 $15,681,657

Source: City.

The following table presents the net liability of the OPEB Plan, calculated using the current discount rate, for the measurement period June 30, 2024 (6.25%), as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage point lower (5 .25%) or 1 percentage point higher (7.25%) than the current rate:

CITY OF ONTARIO

SENSITIVITY OF THE OPEB PLAN TOTAL LIABILITY

TO CHANGES IN THE DISCOUNT RATE

Discount Rate –
1% (5.25%)
Current Discount
Rate (6.25%)
Discount Rate +
1% (7.25%)
Plan’s Total Liability/(Asset) $43,722,570 $15,681,657 $(7,195,369)

Source: City.

Future changes in funding policies and assumptions, including those related to assumed rates of investment return and healthcare cost inflation, could trigger increases in the City’s annual required OPEB Plan 614

43 contributions, and such increases could be material to the finances of the City. No assurance can be provided that such expenses will not increase significantly in the future. The City does not expect that any increased funding of OPEB Plan benefits will have a material adverse effect on the ability of the City to pay the 2026 Bonds.

For additional information relating to the City’s OPEB Plan, see Note 11 to the City’s audited financial statements set forth in Appendix C.

City Investment Policy
The City invests its funds in accordance with the City’s investment policy (the “Investment Policy”), which was most recently reviewed and revised by the City Council on December 2, 2025. The Investment Policy (a) describes the policies and procedures to be utilized in the City’s investment management system; (b) establishes guidelines for the prudent investment of the City’s funds, and (c) lists and describes suitable investments. The goals of the City’s I nvestment Policy and investment management function are compliance with law, enhancement of the economic status of the City and protection of the City’s funds by limiting credit and market risks.

In accordance with Section 53600 et seq. of the California Government Code, idle cash management and investment transactions are the responsibility of the City Treasurer. Eligible investments are generally limited to the Local Agency Investment Fund which is operated by the California State Treasurer, local agency bonds, United States Treasury bills, notes and bonds, obligations issued by United States Government agencies, FDIC insured or negotiable certificates of deposit, repurchase agreements, banker’s acceptances, and commercial paper rated in the highest ranking and issued by certain domestic corporation s among other considerations. Funds are invested in the following order of priority:
• Safety of Principal;
• Liquidity; and
• Return on Investment.

The City Treasurer is required to provide a quarterly report to the City Manager and the City Council showing the type of investment, date of maturity, amount invested, current market value, rate of interest, and other such information as may be required by the City Council.

A summary of the City’s investments as of June 30, 2025 is set forth in the below table. The total investment portfolio as of June 30, 2025, was $928,186,967.

CITY OF ONTARIO
SUMMARY OF INVESTMENTS(1)
Investment Maturity
Investment Type
6 Months
to 1 Year 1 to 3 Years 3 to 5 Years Total
United States Treasury Obligations $89,529,350 $ 92,052,520 $60,327,650 $241,909,520 Federal Agency Obligations 86,701,480 36,674,875 19,934,700 143,311,055 Medium Term Corporate Notes 22,739,366 28,615,092 40,064,100 91,418,558 Asset-Backed Securities - - 24,423,051 24,423,051
Supranational 9,766,200 4,988,950 5,004,700 19,759,850
California Asset Management Program 16,958,617 - - 16,958,617 Local Agency Investment Fund 35,431,176 - - 35,431,176 Subtotals $261,126,189 $162,331,437 $149,754,201 $573,211,827 Investment with Fiscal Agents:

Money Market Funds 349,865,380 - - 349,865,380 Totals $610,991,569 $162,331,437 $149,754,201 $923,077,207 ____________________
(1) Totals may not add due to rounding.

Source: City.
615

44 For additional information relating to the City’s investments, see Note 2 to the City’s audited financial statements set forth in Appendix C.

City Insurance
The City is exposed to various risks of loss related to torts, theft of, damage to and destruction of assets, errors and omissions, injuries to employees and natural disasters. The City has established self-insurance funds to finance uninsured risks of lo ss up to a maximum of $750,000 for each workers’ compensation claim and $1,000,000 for each general liability claim. For workers’ compensation claims in excess of amounts provided by its internal fund, the City maintains coverage from a private carrier for claims up to the statutory requirements.

For general liability claims in excess of amounts provided by its internal fund, the City maintains coverage from the Authority for California Cities Excess Liability (“ACCEL”). ACCEL maintains a shared risk pool for claims up to $4,000,000, with private carriers covering amounts in excess thereof. City is self -insured for unemployment liability claims. The City will pay all claims based on the individual reimbursement account method, as provided by the State of California. Claims have not exceeded the City’s insurance coverage in any of the last three years.

The City purchases all-risk, replacement cost value property insurance coverage through ACCEL up to a maximum amount of $500,000,000, including a $750,000 sublimit for unscheduled assets. Certain portions of the Water System, including pipeline s that are located more than 1,000 feet from City -owned above-ground infrastructure, are not covered by the City’s property insurance except for the $750,000 sublimit that is described in the previous sentence . In addition, the City does not maintain insurance cover age for earthquake damage.

See the caption “CERTAIN RISKS TO BONDHOLDERS—Natural Disasters.” The City has not paid or settled any claims that exceeded its insurance coverage in the past three years.

See Appendix B under the caption “COVENANTS OF THE CITY —Insurance” for a description of insurance coverages that are required to be maintained while the 2026 Bonds are outstanding.

Economic Development in the City
The City has established itself as a premier destination for corporate expansion into the Western United States, supported by a diverse and growing economic base. Home to more than 14,000 businesses, the City benefits from a strategic location and an extensive transportation network. Ontario International Airport continues to be a major driver of economic activity, offering both commercial and cargo services. The City is also connected to three major highway s-Interstate 10, Interstate 15, and State Route 60-providing seamless access to regional and national markets. Additionally, two major rail lines further enhance the City’s logistical capabilities, while the City’s proximity to the Ports of Los Angeles and Long Beach facilitates international trade.

These advantages have attracted significant investment and development, leading to a growing tax base and increasing property values. Several major residential, commercial, and industrial projects currently underway will further bolster the City’s economi c strength by increasing property tax revenues and sales tax collections.

Ontario Ranch. Ontario Ranch is located in the southern portion of the City near the western boundary of the County. Ontario Ranch spans 13.5 square miles and is the largest master-planned community in Southern California. The area covers 8,200 acres of the former 1 4,000-acre San Bernardino Agricultural Preserve, historically used for dairy and cattle farming by Dutch, French Basque, Portuguese, and Mexican families. In 1999, the preserve was divided, with portions incorporated into Chino, Chino Hills, and Ontario. Ontario Ranch, continues the legacy of innovative land development that was initiated with the original Model Colony of Ontario established in 1882 by the Chaffey Brothers, including water rights distribution with land purchases, the grand boulevard (Euclid Avenue), and Chaffey College (1885).

While much of Ontario Ranch remains undeveloped, construction of numerous planned communities on the east side are either completed or in progress. At full buildout, Ontario Ranch is expected to include 616

45 approximately 6 9,000 residential units, approximately 12 million square feet of commercial and office development, and approximately 31 million square feet of industrial space. Ontario Ranch will also feature ten new schools and over 400 acres of public parkland.

Currently, Ontario Ranch has a population of approximately 30,000 with 2,150 employed in the area.

Population growth is accelerating at an annual rate of 11.26%, and the community has been consistently ranked as California’s top -selling master-planned community by John Burns Research and Consulting. The future Ontario Sports Empire will further enhance Ontario Ranch’s status as a premier residential and recreational destination.

Ontario Sports Empire. Currently under construction and expected to be completed in 2026, the Ontario Sports Empire is a 200-acre sports and entertainment complex designed to attract 1.2 million visitors annually.

The facility will be home to the new Los Angeles Dodgers single -A team, the Ontario Tower Buzzers . The development will feature a 6,000-seat Professional Baseball stadium, a vibrant stadium village with restaurants, entertainment venues, and a hotel, as well as professional -quality soccer, baseball, and softball fields.

Additionally, the complex will include a state-of-the-art youth sports training facility. This project is anticipated to generate substantial tax revenue and create more than 600 full-time jobs. Its completion will further solidify Ontario’s position as a regional center for sports and entertainment. 2026 Special Election. In a special election held on March 24, 2026, the voters in the City voted on two initiatives, Measure V and Measure W, initiated by the national labor union, Unite Here, regarding the hospitality industry, including hotels. The ballot measures would, among other things, require the City to set a minimum wage for hotel workers in the City up to $30 per hour by 2030 and limit daily housekeeping workloads, subject to City oversight. The other measure would overturn the City Council’s approval of a planned hotel at the Ontario Convention Center and require voter approval on future hotel and event center projects, including those similar to facilities planned within and near the 2026 Project. Neither Measure V nor Measure W were approved at the special election.

Ontario Grand Park. Ontario Grand Park, an integral part of Ontario Ranch, will span approximately 340 acres and extend over 3.7 miles, serving as a major recreational and open space asset for the City. Phase 1, covering approximately 130 acres in the eastern portion of Ontario Ranch, is currently under construction and is expected to be completed by 2030. Once fully developed, the park will provide a variety of public a menities, enhancing the quality of life for Ontario residents and visitors alike.

Toyota Arena. The City is significantly upgrading the Toyota Arena and its surrounding entertainment district to enhance its role as a major sports and entertainment hub. Planned improvements include a new plaza with 26,000 square feet of commercial, office, and retail space, as well as the development of approximately 384 multi-family residential units. The plaza will also feature outdoor entertainment areas, concession kiosks, and dedicated public gathering spaces. These enhancements will increase visi tor engagement and generate long - term economic benefits for the City.

Ontario International Airport Redevelopment . Between 1994 to 2011, the City acquired multiple residential properties that were adversely impacted by noise from Ontario International Airport operations. The City has since initiated efforts to redevelop these properties with land uses that align with Ontario International Airport’s long -term growth strategy. As part of this initiative, the Ontario International Airport Authority (“Airport Authority”) has received 226 parcels under its noise land program, with plans to sell these properties for commercial and industrial development in Fiscal Year 2026-27. This effort is expected to drive business activity, support regional economic growth, and further establish the City as a leading logistics hub.

Manufacturing and Distribution. With 120 million square feet of industrial space and over 240 logistics establishments, the City remains a key player in global trade and distribution. The City continues to attract major industrial investments, creating job opportunities and expanding economic base. The HUB at Ontario International Airport is a logistics complex that a private developer is building on 215 acres ONT owns just east of the airport. When complete, the complex will include nine warehouses totalin g 4.3 million square feet of logistics space that will support goods movement, generate revenue and create jobs for the region. 617

46 Ontario Ranch recently welcomed the world’s largest Amazon fulfillment center, a 4.5 million-square- foot facility capable of processing up to 50 million items for local, national, and global distribution. The facility is expected to create 2,000 new jobs, reinforcing the City’s status as a critical logistics and distribution hub in the Western United States.

Ontario International Airport. The OIAA continues to expand services and investment in ONT. The Southern California gateway reported 7,084,864 passengers in 2024, 10.2% more than 2023 and 27% more than pre-pandemic 2019, making it the fastest growing among medium - and large-size airports i n California. The 2024 count also represents a 67% increase since 2016, when ONT was transferred to local control from the City of Los Angeles. OIAA will upgrade and expand the TSA security area for a faster and smoother travel experience and is repaving and adding underground infrastructure improvements to Airport Drive in front of ONT to accommodate continued growth of the airport.

THE AUTHORITY
The Authority was organized pursuant to the provisions of Articles 1 through 4 of Chapter 5 of Division 7 of Title 1 of the State Government Code and that certain Joint Exercise of Powers Agreement, dated as of June 1, 2013, by and between the City and the Housing Authority. The Authority has no financial liability to the Owners of the 2026 Bonds with respect to the payment of Base Rental Payments by the City or with respect to the performance by the City of the other agreements and covenants that the City is required to perform.

CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS There are a number of provisions of the State Constitution that limit the ability of the City to raise and expend tax revenues.

Article XIIIA of the State Constitution
On June 6, 1978, State voters approved an amendment (commonly known as both Proposition 13 and the Jarvis-Gann Initiative) to the State Constitution. The amendment, which added Article XIIIA to the State Constitution, among other things affects the valuation of real property for the purpose of taxation in that it defines the full cash property value to mean “the county assessor’s valuation of real property as shown on the 1975/76 tax bill under ‘full cash value,’ or thereafter, the appraised value of real property newly constructed, or when a change in ownership has occurred after the 1975 assessment.” The full cash value may be adjusted annually to reflect inflation at a rate not to exceed 2% per year, or a reduction in the consumer price index or compara ble local data at a rate not to exceed 2% per year, or reduced in the event of declining property value caused by damage, destruction or other factors including a general economic downturn. The amendment further limits the amount of any ad valorem tax on real property to 1% of the full cash value, except that additional taxes may be levied to pay debt service on indebtedness approved by the voters prior to December 1, 1978, and bonded indebtedness for the acquisition or improvement of real property approved on or after December 1, 1978 by two- thirds of the votes cast by the voters voting on the proposition (55% in the case of certain school facilities).

Property taxes that are subject to Proposition 13 are a significant source of the City’s General Fund re venues.

See the caption “CITY FINANCIAL INFORMATION.”
Legislation enacted by the State Legislature to implement Article XIIIA provides that all taxable property is shown at full assessed value as described above. Tax rates for voter approved bonded indebtedness are also applied to 100% of assessed value.

Future assessed valuation growth allowed under Article XIIIA ( for new co nstruction, change of ownership or 2% annual value growth) is allocated on the basis of “situs” among the jurisdictions that serve the tax rate area within which the growth occurs. Local agencies and school districts share the growth of “base” revenue from the tax rate area. Each year’s growth allocation becomes part of each agency’s allocation the following year. Article XIIIA effectively prohibits the levying of any other ad valorem property tax above the 1% limit except for taxes to support indebtedness approved by the voters as described above. 618

47 Article XIIIA has subsequently been amended to permit reduction of the “full cash value” base in the event of declining property values caused by damage, destruction or other factors, and to provide that there would be no increase in the “full cash value” base in the event of reconstruction of property damaged or destroyed in a disaster and in certain other limited circumstances.

Article XIIIB of the State Constitution
At the Statewide special election on November 6, 1979, the voters approved an initiative entitled “Limitation on Government Appropriations,” which added Article XIIIB to the State Constitution. Under Article XIIIB, State and local government entities have an annual “appropriations limit” which limits the ability to spend certain money which are called “appropriations subject to limitation” (consisting of tax revenues and investment proceeds thereof, certain State subventions and regulatory license fees, user charges and user fees to the extent that the proceeds thereof exceed the costs of providing such services, together called “proceeds of taxes,” and certain other funds) in an amount higher than the “appropriations limit.” Article XIIIB does not affect the appropriation of moneys which are excluded from the definition of “appropriations limit,” including debt service on indebtedness existing or authorized as of October 1, 1979, or bonded indebtedness subsequently approved by the voters. In general terms , the “appropriations limit” is to be based on certain 1978 -79 expenditures and is to be adjusted annually to reflect changes in the consumer price index, population and services provided by these entities. Among other provisions of Article XIIIB, if those entities’ revenues in any year exceed the amounts permitted to be spent, the excess would have to be returned by revising tax rates or fee schedules over the subsequent two years.

To the best of the City’s knowledge, t he City’s appropriations have never exceeded the limitation on appropriations under Article XIIIB of the State Constitution.

Proposition 62
A statutory initiative (“Proposition 62”) was adopted by the voters of the State at the November 4, 1986 general election which: (a) requires that any tax for general governmental purposes imposed by local governmental entities be approved by resolution or ordinance adopted by two-thirds vote of the governmental agency’s legislative body and by a majority of the electorate of the governmental entity; (b) requires that any special tax (defined as taxes levied for other than general governmental purposes) imp osed by a local governmental entity be approved by a two -thirds vote of the voters within the jurisdiction; (c) restricts the use of revenues from a special tax to the purposes or for the service for which the special tax is imposed; (d) prohibits the imposition of ad valorem taxes on real property by local governmental entities except as permitted by Article XIIIA; (e) prohibits the imposition of transaction taxes and sales taxes on the sale of real property by local governmental entities; and (f) requires that any tax that is imposed by a local governmental entity on or after August 1, 1985 be ratified by a majority vote of the electorate within two years of the adoption of the initiative or be terminated by November 15, 1988. The requirements imposed by Proposition 62 were upheld by the State Supreme Court in Santa Clara County Local Transportation Authority v. Guardino, 11 Cal.4th 220 (1995).

Proposition 62 applies to the imposition of any taxes or the implementation of any tax increases after its enactment in 1986, but the requirements of Proposition 62 are largely subsumed by the requirements of Proposition 218 for the imposition of any taxes or the effecting of any tax increases after Novem ber 5, 1996.

See the caption “—Proposition 218” below.

Proposition 218
On November 5, 1996, State voters approved Proposition 218, an initiative measure entitled the “Right to Vote on Taxes Act.” Proposition 218 added Articles XIIIC and XIIID to the State Constitution, imposing certain vote requirements and other limitations on the imposition of new or increased taxes, assessments and property-related fees and charges. Proposition 218 states that all taxes imposed by local governments are deemed to be either general taxes or special taxes. Special purpose districts, including school districts, have no power to levy general taxes. No local government may impose, extend , or increase any general tax unless and until such tax is submitted to the electorate and approved by a majority vote. No local government may impose, 619

48 extend or increase any special tax unless and until such tax is submitted to the electorate and approved by a two- thirds vote.

Proposition 218 also provides that no tax, assessment, fee or charge may be assessed by any agency upon any parcel of property or upon any person as an incident of property ownership except: (a) the ad valorem property tax imposed pursuant to Articles XIII and XIIIA of the State Constitution; (b) any special tax receiving a two-thirds vote pursuant to the State Constitution; and (c) assessments, fees and charges for property -related services as provided in Proposition 218. Proposition 218 then goes on to add voter requirements for assessments and fees and charges imposed as an incident of property ownership, other than fees and charges for sewer, water, and refuse collection services. In addition, all assessments and fees and charges imposed as an incident of property ownership, including sew er, water and refuse collection services, are subjected to various additional procedures, such as hearings and stricter and more individualized benefit requirements and findings.

Proposition 218 also extended the initiative power to reducing or repealing any local taxes, assessments, fees and charges. This extension of the initiative power is not limited to taxes imposed on or after November 6, 1996, the effective date of Proposit ion 218, and could result in retroactive repeal or reduction in any existing taxes, assessments, fees and charges, subject to overriding federal constitutional principles relating to the impairments of contracts. Legislation implementing Proposition 218 provides that the initiative power provided for in Proposition 218 “shall not be construed to mean that any owner or beneficial owner of a municipal security, purchased before or after (the effective date of Proposition 218) assumes the risk of, or in any way consents to, any action by initiative measure that constitutes an impairment of contractual rights” protected by the United States Constitution. No assurance, however, can be given that the voters of the City will not, in the future, approve an initiat ive which reduces or repeals local taxes, assessments, fees or charges that currently are deposited into the City’s General Fund.

Although a portion of the City’s General Fund revenues are derived from general taxes purported to be governed by Proposition 218, as discussed under the caption “CITY FINANCIAL INFORMATION — Other Taxes,” all of such taxes were imposed in accordance with the requirements of Proposition 218. No assurance can be given that the voters of the City will not, in the future, approve an initiative or initiatives which reduce or repeal local taxes, assessments, fees or charges which support the City’s General Fund.

Unitary Property
Some amount of property tax revenue of the City is derived from utility property which is considered part of a utility system with components located in many taxing jurisdictions (“ unitary property”). Under the State Constitution, such property is assessed by the CDTFA as part of a “going concern” rather than as individual pieces of real or personal property. State-assessed unitary and certain other property is allocated to the counties by the CDTFA, taxed at special county -wide rates, and the tax revenue s distributed to taxing jurisdictions (including the City) according to a statutory formula that is generally based on the distribution of taxes in the prior year.

Proposition 22
On November 2, 2010, State voters approved Proposition 22, which eliminates the State’s ability to borrow or shift local revenues and certain State revenues that fund transportation programs. Proposition 22 restricts the State’s authority over a broad range of tax revenues, including property taxes allocated to cities (including the City), counties and special districts, the VLF, State excise taxes on gasoline and diesel fuel, the State sales tax on diesel fuel, and the former State sales tax on gasoline. It also makes a number of significant other changes, including restricting the State’s ability to use motor vehicle fuel tax revenues to pay debt service on voter-approved transportation bonds.

Proposition 26
On November 2, 2010, State voters approved Proposition 26. Proposition 26 amends Article XIIIC of the State Constitution to expand the definition of “tax” to include “any levy, charge, or exaction of any kind imposed by a local government” except the following: (a) a charge imposed for a specific benefit conferred or 620

49 privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege; (b) a charge imposed for a specific government se rvice or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product; (c) a charge imposed for the reasonable regulatory costs of a local government for issuing licenses and permits, performing investigations, inspections and audits, enforcing agricultural marketing orders and the administrative enforcement and adjudication thereof; (d) a charge imposed for entrance to or use of loc al government property, or the purchase, rental or lease of local government property; (e) a fine, penalty or other monetary charge imposed by the judicial branch of government or a local government as a result of a violation of law; (f) a charge imposed as a condition of property development; and (g) assessments and property-related fees imposed in accordance with the provisions of Article XIIID. Proposition 26 provides that the local government bears the burden of proving by a preponderance of the evidence that a levy, charge, or other exaction is not a tax, that the amount is no more than necessary to cover the reasonable costs of the governmental activity, and that the manner in which those costs are allocated to a payor bear a fair or reasonable rela tionship to the payor’s burdens on, or benefits received from, the governmental activity. The City does not believe that Proposition 26 will adversely affect its General Fund revenues.

Future Initiatives
Articles XIIIA and XIIIB and Propositions 62, 218, 22 and 26 were each adopted as measures that qualified for the ballot pursuant to the State’s initiative process. From time to time other initiative measures could be adopted, further affecting the City’s current revenues or its ability to raise and expend revenues.

RISK FACTORS
Prospective purchasers of the 2026 Bonds should consider carefully all possible factors that may affect the ability of the City to pay Base Rental Payments under the Lease Agreement. The 2026 Bonds may not be a suitable investment for all prospective purchasers.

The following factors, along with the other information in this Official Statement, should be considered by potential investors in evaluating the purchase of the 2026 Bonds. The following, however, does not purport to be an exhaustive listing of risks and other considerations which may be relevant to an investment in the 2026 Bonds and there can be no assurance that other risk factors will not become material in the future. In addition, the order in which the following factors are presented is not intende d to reflect the relative importance of any such risks.

General Considerations – Security for the 2026 Bonds
The 2026 Bonds are special obligations of the Authority, payable solely from Base Rental Payments.

Neither the faith and credit nor the taxing power of the Authority, the City, the State or any political subdivision thereof is pledged to the payment of the 2026 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 County, 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, the County or the State is obligated to levy or pledge any form of taxation or for which the City, the County or the State has levied or pledged any form of taxation.

Although the Lease Agreement does not create a pledge, lien , or encumbrance upon the funds of the City, the City is obligated under the Lease Agreement to pay the Base Rental Payments and Additional Rental Payments from any source of legally available funds, and the City has covenanted in the Lease Agreement to take such action as may be necessary to include all such Base Rental Payments and Additional Rental Payments due thereunder in its annual budgets, and to make necessary annual appropriations for all such Base Rental Payments and Additional Rental Payments, subject to abatement. The City is currently liable and may become liable on other obligations payable from general revenues. See the caption “CITY FINANCIAL INFORMATION—Other Indebtedness—General Fund-Supported Debt.” 621

50 The City has the capacity to enter into other obligations which may constitute additional charges against its revenues, including pension obligations and essential services. To the extent that additional obligations are incurred by the City, the funds available to make Base Rental Payments may be decreased. In the event that the City’s revenue sources are less than its total obligations, the City could choose to fund other activities before making Base Rental Payments. The same result could occur if, bec ause of State Constitutional limits on expenditures, the City is not permitted to appropriate and spend all of its available revenues. To the best of the City’s knowledge, however, the City’s appropriations have never exceeded the limitation on appropriations under Article XIIIB of the State Constitution. See the caption “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS—Article XIIIB of the State Constitution.” Abatement
In the event of substantial interference with the City’s right to use and occupy any portion of the Property by reason of damage to or destruction or condemnation of the Property, or any defects in title to the Property, the Base Rental Payments will be subject to abatement. See the caption “SECURITY AND SOURCES OF PAYMENT FOR THE 2026 BONDS—Abatement.” The amount of abatement will be such that the resulting payments of Base Rental Payments and Additional Rental Payments do not exceed the fair rental value for the use and possession of the remaining portions of the Property as to which the City has beneficial use and occupancy and as to which such damage or destruction or defect in title do not substantially interfere.

In the event that such portion of the Property, if damaged or destroyed by an insured casualty, could not be replaced during the period of time in which proceeds of the City’s rental interruption insurance will be available in lieu of the Base Rental Payments, plus the period in which funds are available from the funds and accounts established under the Indenture, or in the event that casualty insurance proceeds are insufficient to provide for complete repair or replacement of such portion of the Property or redemption of the 2026 Bonds, there could be insufficient funds to make payments to Owners in full.

It is not always possible to predict the circumstances under which abatement of rental may occur. In addition, there is no statute, case or other law specifying how such an abatement of rental should be measured.

For example, it is not clear whether fair rental value is established as of commencement of the lease or at the time of the abatement. If the latter, the value of the Property could be substantially higher or lower than its value at the time of the issuance of the 2026 Bonds. Abatement, therefo re, could have an uncertain and material adverse effect on the security for and payment of the 2026 Bonds.

If damage, destruction, title defect or eminent domain proceedings with respect to the Property results in abatement of the Base Rental Payments and if such abated Base Rental Payments, if any, together with moneys from rental interruption or use and occupancy insurance (in the event of any insured loss due to damage or destruction), and eminent domain proceeds, if any, are insufficient to make all payments of principal and interest with respect to the 2026 Bonds during the period that the Property is being replaced, repaired or reconstructed, then all or a portion of such payments of principal and interest may not be made. Under the Lease Agreement and the Indenture, no remedy is available to the 2026 Bond Owners for nonpayment under such circumstances.

Initiative and Referendum
The ability of the City to comply with its covenants under the Lease Agreement and to generate revenues that are sufficient to pay Base Rental Payments may be adversely affected by actions and events outside the control of the City, including without limitation actions taken (or not taken) by voters. Under the State Constitution, voters of the State have the ability to initiate legislation and require a public vote on legislation passed by the State Legislature through the powers of initiative and referend um, respectively. The Authority and the City are unable to predict whether any such initiatives might be submitted to or approved by the voters, the nature of such initiatives, or their potential impact on the City and its operations. See the caption “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS—Future Initiatives.” See also “PLAN OF FINANCE – 2026 Project.” 622

51 Insurance on the Property
Under the Lease Agreement, the City is required to maintain through the term of the Lease Agreement policies of insurance covering loss or damage to 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 2026 Bonds and covering title defects. Additionally, the City is required to maintain rental interruption insurance in the amount equal to two (2) years maximum annual Base Rental Payments. If the Property is damaged or destroyed, there can be no assurance that the insurance proceeds will be sufficient to repair or restore the Property, or to redeem or defease all of the then-Outstanding 2026 Bonds. In addition, neither the Authority nor the City can provide any assurance as to whether the provider of an insurance policy will pay under such policy. See the caption “SECURITY AND SOURCES OF PAYMENT FOR THE 2026 BONDS—Insurance” for a description of the insurance coverages that are required by the Lease Agreement. See the caption “THE CITY —Risk Management” for a description of the City’s current insurance coverages. Certain risks, such as earthquakes and floods, are not required to be cove red under the Lease Agreement unless available at reasonable rates and the City does not currently maintain such coverage.

Condemnation of the Property
If all of the Property (or portions thereof such that the remainder is not usable for the public purposes by the City) is taken permanently under the power of eminent domain or sold to a government threatening to exercise the power of eminent domain, the term of the Lease Agreement will cease as of the day possession is taken. If less than all of the Property is taken permanently, or if the Property or any part thereof is taken temporarily, under the power of eminent domain, and the remainder is usable for public purposes by the City at the time of such taking: (a) the Facilities Sublease will continue in full force and effect as to such remainder, and will not be terminated by virtue of such taking; and (b) there will be a partial abatement of Base Rental Payments as a result of the application of insurance proceeds of any eminent domain award to the prepayment of the Base Rental Payments, in an amount to be agreed upon by the City and the Authority such that the resulting Base Rental Payments represent fair consideration for the use and occupancy of the remaining usable portion of the Property.

If all or a portion of the Property were condemned, there can be no assurance that any such award or payment will be sufficient at the time to prepay or defease all of the then-Outstanding 2026 Bonds. If the award is less than the amounts remaining on such Outstanding 2026 Bonds, then the Owners will be paid less than the amounts remaining on such Outstanding 2026 Bonds.

Value of Property
In the event that the Trustee re-enters or re-lets the Property upon the occurrence of an Event of Default, there can be no assurance such actions will provide funds in an amount that is sufficient to pay the principal of and interest on the 2026 Bonds . The security under the Lease Agreement extends only to the Authority’s leasehold interest in the Property and is subject to the restrictions of the Lease Agreement and all other use restrictions applicable to the Property. The Property have not been appraised in connection with the issuance of the 2026 Bonds.

No Acceleration of Base Rental Payments
Nothing in the Lease Agreement permits the Authority or the Trustee to accelerate Base Rent al Payments. Although the Trustee is entitled to pursue all available remedies under the Indenture, there can be no assurance that sufficient funds will be available at the time to redeem or defease all of the then-Outstanding 2026 Bonds.

Certain Risks Associated with Sales Tax and Other Local Tax Revenues Sales and use tax revenues are consistently among the largest sources of General Fund revenues of the City. See the caption “CITY FINANCIAL INFORMATION.”
623

52 Sales and use tax revenues are based upon the gross receipts of retail sales of tangible goods and products by retailers with taxable transactions in the City, which could be impacted by a variety of factors. For example, in times of economic recession, the gross receipts of retailers often decline, and such a decline would cause the sales tax revenues received by the City to decline. An economic recession would also be expected to affect hotel occupancy within the City, and consequently, the City’s receipt of transient occupancy taxes. See the captions “CITY FINANCIAL INFORMATION.”
In addition, changes or amendments in the laws applicable to the City’s receipt of sales tax revenues or other local taxes, whether implemented by State legislative action or voter initiative, could have an adverse effect on sales tax revenues received by the City. See the caption “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS.”
Many categories of transactions are exempt from the Statewide sales tax, and additional categories could be added in the future. Currently, most sales of food products for human consumption are exempt; this exemption, however, does not apply to liquor or to restaurant meals. The rate of sales tax levied on taxable transactions in the City or the fee charged by the CDTFA for administering the City’s sales tax could also be changed.

Assessed Value of Taxable Property
Property taxes are consistently among the largest sources of General Fund revenues of the City. Natural and economic forces can affect the assessed value of taxable property within the City. The City is located in a seismically active region, and damage from an earthquake in or near the area could cause extensive damage to taxable property. Other natural or manmade disasters, such as flood, fire, wildfire, ongoing drought, toxic dumping, erosion, civil unrest or acts of terrorism, could cause a reduction in the assessed value of taxable property within the City. See the captions “—Natural Disasters” and “—Hazardous Substances.” In addition, e conomic and market forces, such as a downturn in the regional economy, could affect assessed values, particularly as these forces might reverberate in the residential housing and commercial property markets as has been experienced in the past . The total assessed value could also be reduced through the reclassification of taxable property to a class exempt from taxation, whether by ownership or use (such as exemptions for property owned by State and local agencies and property used for qualified educational, hospital, charitable or religious purposes).

Reductions in the market values of taxable property may cause property owners to appeal assessed values and may also be associated with an increase in delinquency rates for property taxes. Section 2(b) of Article XIIIA of the State Constitution and Sectio n 51 of the State Revenue and Taxation Code, which were adopted pursuant to Proposition 8 in 1978, require the County assessor to annually enroll either a property’s adjusted base year value (the “Proposition 13 Value”) or its current market value, whichever is less. When the current market value replaces the higher Proposition 13 Value on the assessor’s roll, such lower value is referred to as the “Proposition 8 Value.”
Although the annual increase for a Proposition 13 Value is limited to no more than 2%, the same restriction does not apply to a Proposition 8 Value. The Proposition 8 Value of a property is reviewed annually as of January 1; the current market value must be enrolled as long as the Proposition 8 Value falls below the Proposition 13 Value. Thus, any subsequent increase or decrease in market value is enrolled regardless of any percentage increase or decrease. Only when a current Proposition 8 Value exceeds the Proposition 13 Value attributable to a piece of property (adjusted for inflation) does a county assessor reinstate the Proposition 13 Value.

Decreases in the assessed value of taxable property within the City resulting from a natural disaster or other calamity, economic recession, reclassification by ownership or use or as a result of the implementation of Proposition 8 all may have an adverse impact on property tax collections by the City, and consequently, the General Fund revenues that are available to make Base Rental Payments. 624

53 Dependence on State for Certain Revenues
A number of the City’s revenues are collected and dispersed by the State (such as sales taxes and the VLF) or allocated in accordance with State law (most importantly, property taxes). Therefore, State budget decisions can have an impact on City finances. In the event of a material economic downturn in the State, there can be no assurance that any resulting revenue shortfalls to the State will not reduce revenues to local governments (including the City) or shift financial responsibility for programs to l ocal governments as part of the State’s efforts to address any such related State financial difficulties.

Although the State’s ability to undertake such revenue reductions or shifting has been limited by provisions of the State Constitution, as described under the caption “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS —Proposition 22,” declining revenues and fiscal difficulties that arose in the State commencing in 2009 led the State to undertake a number of budgeting strategies, which had subsequent impacts on local agencies within the State. These techniques included the issuance of IOUs in lieu of warrants (checks), the enactment of statutes deferring amounts owed to public schools until a later date in the fiscal year or even into the following fiscal year (known as statutory deferrals), trigger reductions, which were budget cutting me asures which were implemented or could have been implemented if certain State budgeting goals were not met and the dissolution of local redevelopment agencies in part to make available additional funding for local agencies.

Litigation
The City may be or become a party to litigation that has an impact on the General Fund. Although the City maintains certain insurance policies that provide liability coverage under certain circumstances and with respect to certain types of incidents (as discussed under the caption “THE CITY—Risk Management”), the City cannot predict what types of liabilities may arise in the future. See the caption “LITIGATION.” Natural Disasters
The occurrence of any natural disaster in the City, including, without limitation, fire, wildfire, windstorm, drought, earthquake, landslide, mudslide or flood, could have an adverse material impact on the economy within the City, its General Fund and the revenues available for the payment of Base Rental Payments.

The City is not required to do maintain earthquake insurance by the Lease Agreement unless such insurance is available at reasonable rates. See the captions “SECURITY AND SOURCES OF PAYMENT FOR THE 2026 BONDS—Insurance” and “THE CITY—Risk Management.”
Earthquakes are considered a threat to the City due to the highly active seismic region and the proximity of fault zones, which could influence the entire coastal portion of the State. There are also likely to be unmapped faults in or near the City. Seismically induced ground shaking has affected the City in the past and is expected to affect the City in the future.

An earthquake along one of the faults in the vicinity of the City, either known or unknown, could cause a number of casualties and extensive property damage. The effects of a n earthquake could be aggravated by aftershocks and secondary effects such as fires, landslides, dam failure, liquefaction, floods and other threats to public health, safety and welfare. The potential direct and indirect consequences of a major earthquake could easily exceed the resources of the City and would require a high level of self-help, coordination and cooperation.

In recent years, wildfires have caused extensive damage throughout the State. In some instances, entire neighborhoods have been destroyed. Several of the fires that occurred in recent years damaged or destroyed property in areas that were not previously considered to be at risk from such events. Some commentators believe that climate change will lead to even more frequent and more damaging wildfires in the future. Additionally, wildfires increase the risk of mudslides in areas that are surrounded by hillsides because, when wildfires scorch land, they destroy all vegetation on mountains and hillsides. As a result, when heavy rain falls in the winter, there is nothing to stop the rain from penetrating directly into the soil. In addition, waxy compounds i n plants and soil that are released during fires create a natural barrier in the soil that prevents rain water from seeping deep into the ground. The result is erosion, mudslides and excess water running off the hillsides often causing 625

54 flash flooding. In general, property damage due to wildfire or mudslides could result in a significant decrease property tax and other revenues received by the City.

The occurrence of natural disasters in the City could result in substantial damage to the City and the Property which, in turn, could substantially reduce General Fund revenues and affect the ability of the City to make Base Rental P ayments or cause an abatement in Base Rental Payments if the City is unable to use and occupy the Property. The City maintains liability insurance, rental interruption insurance and property casualty insurance for the Property. See the caption “THE CITY —Risk Management.” Howe ver, there can be no assurance that specific losses will be covered by insurance or, if covered, that claims will be paid in full by the applicable insurers.

Climate Change
The State has historically been susceptible to wildfires and hydrologic variability. As greenhouse gas emissions continue to accumulate in the atmosphere as a result of economic activity, climate change is expected to intensify, increasing the frequency, severity and timing of extreme weather events such as coastal storm surges, drought, wildfires, floods and heat waves, and raising sea levels . The future fiscal impact of climate change on the City is difficult to predict, but it could be significant and it could have a material adverse effect on the General Fund by requiring greater expenditures to counteract the effects of climate change or by changing the operations and activities of City residents and business establishments.

Loss of Tax Exemption
As discussed under the heading “TAX MATTERS,” the interest (and origi nal issue discount) on the 2026D Bonds could become includable in gross income for purposes of federal income taxation retroactive to the date of delivery of the 2026D Bonds, as a result of acts or omissions of the Authority or the City in violation of its covenants in the Indenture and the Lease Agreement. Should such an event of taxability occur, the 2026D Bonds would not be subject to a special redemption and would remain outstanding u ntil maturity or until redeemed under the redemption provisions contained in the Indenture.

Cybersecurity
Municipal agencies, like other business entities, face significant risks relating to the use and application of computer software and hardware.

The City employs a multi-layer cyber protection scheme that includes third party consultant assistance, next-generation firewalls, anti -virus software, anti -spam/malware software, intrusion detection/prevention, domain name system filtering services, dupli cate systems in a disaster recovery site and multiple copies of all information that is backed up. The City implements recommended strategies suggested by security vendors and makes internal system changes as needed. Over eight years ago, the City experienced a successful ransomware attack that affected a small number of files. The City was able to immediately isolate the issue and recover. The City has not experienced a successful attack against its network and servers since the above security measure have been put in place. There can be no assurance that a future attack or attempted attack would not result in the disruption of City operations. The City, however, expects that any such disruptions would be temporary in nature due to its backup/restore procedures and disaster recovery planning.

Hazardous Substances
A condition that may result in the reduction in the assessed value of property, and therefore property tax revenue available to pay Base Rental Payments, would be the discovery of a hazardous substance that would limit the beneficial use of taxable property within the City. In general, the owners and operators of a property may be required by law to remedy conditions of the property relating to releases or threatened releases of hazardous substances. The Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, sometimes referred to as “CERCLA” or the “Superfund Act,” is the most well -known and widely applicable of these laws, but State laws with regard to hazardous substances are also stringent and similar in effect. Under man y of these laws, the owner or operator may be required to remedy a hazardous substance 626

55 condition of property whether or not the owner or operator has anything to do with creating or handling the hazardous substance. The effect, therefore, should any of the property within the City be affected by a hazardous substance, could be to reduce the marketability and value of such property by the costs of remedying the condition, because the purchaser, upon becoming owner, will become obligated to remedy the condition just as is the seller.

The City and the Authority have not independently verified, but are not aware of, the presence of any hazardous substances on the Property. Hazardous substance liabilities may arise in the future with respect to any of the property in the City resulting from the existence, currently, of a substance presently classified as hazardous but which has not been released or the release of which is not presently threatened, or may arise in the future resulting from the existence, currently, on the parcel of a subst ance not presently classified as hazardous but which may in the future be so classified. Additionally, such liabilities may arise from the method of handling such substance. These possibilities could significantly affect the value of a parcel.

Additional City Obligations
The Base Rental Payments under the Lease Agreement are payable from funds that are lawfully available to the City. The City is currently liable for other obligations payable from general revenues of the City. The City has the authority to enter into other obligations that constitute additional claims on such general revenues, including Additional Bonds payable from a lease of the Property. To the extent that the City incurs additional obligations, the funds available to make Base Rental Payments may be decreased. See the captions “CITY FINANCIAL INFORMATION —Other Indebtedness —General Fund -Supported Obligations” and “SECURITY AND SOURCES OF PAYMENT FOR THE 2026 BONDS—Additional Bonds.” Remedies
Upon an Event of Default under the Indenture , the Trustee may exercise certain remedies under the Indenture and the Lease Agreement. In the event of a monetary default under the Indenture, the Trustee has the right to enter and take possession of the Property, and the Trustee may hold, operate and manage the Property and apply revenues therefrom toward payment of the 2026 Bonds. There can be no assurance that the Trustee will be able to realize from such actions an amount that is sufficient to pay the pri ncipal of and interest on the 2026 Bonds. In addition, the Trustee may incur significant operating costs in connection with the Property.

Limitation on Trustee’s Obligations under the Indenture The Trustee has no obligation to advance its own funds to pursue any remedies. As a consequence, the Trustee’s willingness and ability to pursue any of the remedies provided in the Indenture and the Lease Agreement may be dependent upon the availability of funds from an interested party. Additionally, the Trustee is not required to acquire possession of the Property if doing so subjects it to potential liability. There can be no assurance that the Trustee will be willing and able to perform its duties under the Indenture.

Release of Property; Additional Bonds
The Authority and the City may amend the Lease Agreement to substitute or release a portion of the Property upon compliance with all of the conditions set forth in the Lease Agreement. 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. Moreover, the City may issue Additional Bonds secured by Base Rental Payments which are increased above current levels. See the captions “SECURITY AND SOURCES OF PAYMENT FOR THE 2026 BONDS―Substitution, Release of, or Addition to the Property” and “SECURITY AND SOURCES OF PAYMENT FOR THE 2026 BONDS—Additional Bonds.” Although the Lease Agreement requires, among other things, that the Property, as constituted after such substitution or release, have an annual fair rental value at least equal to the maximum Base Rental Payments for the Property coming due in the then-current Fiscal Year or in any subsequent Fiscal Year, it does not require that the Property have an annual fair rental value equal to the annual fair rental value of the Property prior to the substitution release of any portion thereof. Thus, a portion of the Property could be replaced with less valuable 627

56 real property, or could be released altogether. Such a substitution or release could have an adverse impact on the security for the 2026 Bonds, particularly if an event requiring abatement of the Base Rental Payments were to occur subsequent to such substitution or release.

Upon the issuance of Additional Bonds, the Lease Agreement will be amended, to the extent necessary, so as to increase the Base Rent al Payments payable by the City thereunder by an aggregate amount that is sufficient to pay the principal of and interest on such Additional Bonds ; provided, however, that no such amendment may be made such that the sum of such Base Rental Payments, including any increase in Base Rental Payments as a result of such amendment, plus Additional Rental Payments, in any Fiscal Year 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 the caption “SECURITY AND SOURCES OF PAYMENT FOR THE 2026 BONDS—Additional Bonds” for a full description of the requirements that must be met in order for the City to deliver Additional Bonds.

Limitations on Enforceability
General. The enforcement of any remedies that are provided for in the Lease Agreement and the Indenture could prove both expensive and time consuming. The rights and remedies provided in the Lease Agreement and the Indenture may be limited by and are subject to: (i) the limitations on legal remedies against cities in the State, including State constitutional limits on expenditures and limitations on the enforcement of judgments against funds that are needed to serve the public welfare and interest; (ii) federal bankruptcy laws, as now or later enacted, as discussed in detail under the subcaption “ —Bankruptcy” below; (iii) applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the enforcement of creditors’ rights generally, now or later in effect; (iv) equity principles which may limit the specific enforcement under State law of certain remedies; (v) the exercise by the United States of America of the powers delegated to it by the federal Constitution; and (vi) the reasonable and necessary exercise, in certain exceptional situations, of the police powers that are inherent in the sovereignty of the State and its governmental bodies in the interest of serving a significant and legitimate public purpose. Bankruptcy proceedings, or the exercise of powers by the federal or State government, if initiated, could subject the Owners of the 2026 Bonds to judicial discretion and interpretation of their rights in bankruptcy or otherwise, and consequently may entail risks o f delay, limitation or modification of their rights.

The legal opinions that will be delivered concurrently with the issuance of the 2026 B onds will be qualified, as to the enforceabil ity of the 2026 Bonds, the Indenture, the Lease Agreement and other related documents, by bankruptcy, insolvency, reorganization, moratorium, arrangement, fraudulent conveyance and other laws relating to or affecting creditors’ rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases, and to the limitations on legal remedies against counties in the State.

Failure by the City to pay Base Rental Payments or failure to observe and perform any other terms, covenants or conditions of the Lease Agreement for a period of 30 days after written notice of such failure and request that it be remedied has been given to the C ity by the Trustee constitute Events of D efault under the Indenture and permit the Trustee or the Authority to pursue the remedies that are described in the Lease Agreement and Indenture. Upon an Event of Default , there is no right under any circums tances to accelerate Base Rental Payments or otherwise declare any Base Rental Payment that is not then in default to be immediately due and payable, nor do the Authority or the Trustee have any right to re -enter or re-let the affected Property, except to the limited extent that is described in the Lease Agreement, and only to the extent of the Authority’s leasehold interest under the Lease Agreement. Rather, if the City defaults on its obligation to pay Base Rent al Payments with respect to such Property, the Trustee must sue to recover Base Rent al Payments on an annual basis.

Alternatively, the Authority or the Trustee may terminate the Lease Agreement, retake possession of the Property and proceed against the City to recover damages pursuant to the Lease Agreement. Due to the specialized and limited nature of the Property (as discussed under the caption “THE PROPERTY”), it is unlikely that 2026 Bond Owners would be able to generate rental income that is sufficient to make all payments of principal of and interest on the 2026 Bonds when due. Moreover, the Trustee is not empowered to sell the fee interest in the Property (which is owned by the City) for the benefit of the Owners of the 2026 Bonds. Any suit 628

57 for money damages against the City would be subject to limitations on legal remedies against cities in the State, including a limitation on enforcement of judgments against funds needed to serve the public welfare and interest.

Bankruptcy. Enforceability of the rights and remedies of the Owners of the 2026 Bonds, and the obligations incurred by the City, may become subject to the provisions of Title 11 of the United States Code (the “Bankruptcy Code”) and applicable bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting the enforcement of creditors’ rights generally, now or later in effect, equity principles which may limit the specific enforcement under State law of certain remedies, the exercise by the United States of America of the powers delegated to it by the federal Constitution, the reasonable and necessary exercise, in certain exceptional situations, of the police powers inherent in the sovereignty of the State and its governmental bodies in the interest of serving a significant and legitimate public purpose and the limitations on remedies against cities in the State. Bankruptcy proceedings, or the exercise of powers by the federal or State government, if initiated, could subject the Owners of the 2026 Bonds to judicial discretion and interpretation of their rights in bankruptcy or otherwise, and consequently may entail risks of delay, limitation or modification of their rights. Under Chapter 9 of the Bankruptcy Code, which governs the bankruptcy proceedings of public agencies such as the City, involuntary petitions are not permitted. If the City were to file a petition under Chapter 9 of the Bankruptcy Code, the Owners of the 2026 Bonds, the Trustee and the Authority could be prohibited from taking any steps to enforce their rights under the Lease Agreement or from taking any steps to collect amounts due from the City under the Lease Agreement.

In particular, if the City were to become a debtor under the Bankruptcy Code, the City would be entitled to all of the protective provisions of the Bankruptcy Code as applicable in a Chapter 9 case. Among the adverse effects of such a bankruptcy might be: (i) the application of the automatic stay provisions of the Bankruptcy Code, which, until relief is granted, would prevent collection of payments from the City or the commencement of any judicial or other action for the purpose of recovering or collecting a claim against the City, and which could prevent the Trustee from making payments from funds in its possession; (ii) the avoidance of preferential transfers occurring during the relevant period prior to the filing of a bankruptcy petition; (iii) the exis tence of unsecured or secured debt which may have a priority of payment that is superior to that of Owners of the 2026 Bonds; and (iv) the possibility of the adoption of a plan (an “Adjustment Plan”) for the adjustment of the City’s various obligations over the objections of the Trustee or all of the Owners of the 2026 Bonds and without their consent, which Adjustment Plan may restructure, delay, compromise or reduce the amount of any claim of the Owners if the Bankruptcy Court finds that such Adjustment Plan is “fair and equitable” and in the best interests of creditors. The Adjustment Plans approved by the Bankruptcy Courts in connection with the bankruptcies of the cities of Vallejo, San Bernardino and Stockton resulted in significant reductions in the a mounts payable by the cities under lease revenue obligations that were substantially identical or similar to the 2026 Bonds. The City can provide no assurances about the outcome of the bankruptcy cases of other California municipalities or the nature of any Adjustment Plan if it were to file for bankruptcy.

In addition, the City could either reject the Lease Agreement or assume the Lease Agreement despite any provision of such documents that makes the bankruptcy or insolvency of the City an event of default thereunder. If the City rejects the Lease Agreement, the Trustee, on behalf of the Owners of the 2026 Bonds, would have a pre-petition unsecured claim that may be substantially limited in amount, and this claim would be treated in a manner under an Adjustment Plan over the objections of the Trustee or Owners of the 2026 Bonds.

Moreover, such rejection would terminate the Lease Agreement and the City’s obligations to make payments thereunder. The City may also be permitted to assign the Lease Agreement to a third party, regardless of the terms of the transaction documents.

Secondary Market
There can be no guarantee that there will be a secondary market for the 2026 Bonds, or, if a secondary market exists, that the 2026 Bonds can be sold for any particular price. Occasionally, because of general market conditions or because of adverse history or economic prospects connected with a particular issue, secondary marketing in connection with a particular issue is suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon the then prevailing circumstances. Such prices could be substantially different from the original purchase price. 629

58 In addition, the City has entered into a continuing disclosure undertaking in connection with the 2026 Bonds. Any material failure to comply with such undertaking in the future may adversely affect the liquidity of the affected 2026 Bonds and their market price in the secondary market.

Covenant to Budget and Appropriate
Under the Lease Agreement, the City has covenanted to take such actions as are necessary to include the Base Rental Payments and the estimated Additional Rental Payments in its annual budgets and to make the necessary annual appropriations for all such Base Rental Payments and Additional Rental Payments . Such covenant is deemed to be a duty imposed by law, and it is the duty of the public officials of the City to take such actions and do such things as are required by law in the performance of the official duty of such officials to enable such entity to carry out and perform such covenants. A court, however, in its discretion may decline to enforce such covenant. Upon execution and delivery of the 2026 Bonds, Bond Counsel will render its opinion (substantially in the form of Appendix D) to the effect that, subject to certain limitations and qualifications, the Lease Agreement constitutes a valid and binding obligation of the City.

Federal Funding
The federal government provides funding for several City programs. On January 20, 2025, President Trump issued a series of executive orders, which include ensuring that federal funds are used in a manner approved by the current administration. In response to and in an effort to carry out such orders, on January 27, 2025, the White House Office of Management and Budget (“OMB”) released its Memorandum M -25-13, Temporary Pause of Agency Grant, Loan, and Other Financial Assistance Programs (the “OMB Memorandum”).

The OMB Memorandum directed federal agencies to temporarily pause all activities related to obligation or disbursement of all federal financial assistance, and said temporary pause was to become effective at 5:00 p.m. on January 28, 2025. The OMB Memorandum caused mass confusion as to whether certain Federal funding and grants would be paused. On January 28, 2025, shortly before the OMB Memorandum became effective, a federal judge blocked the pause on federal funding. On January 29, 2025, OMB resci nded the OMB Memorandum.

Although the OMB Memorandum was rescinded, the executive orders are in effect and the matter is ongoing as spending reviews continue. On January 31, 2025, a federal judge issued a temporary restraining order prohibiting the admin istration from pausing, freezing, impeding, blocking, canceling, or terminating federal financial assistance obligations to the states. Responding to the petition of several state Attorneys General, on February 10, 2025, a federal judge issued an Enforcem ent Order clarifying the scope of temporary restraining order and ordering the Trump Administration to release federal funds and comply with the earlier order. The Trump Administration’s request to stay the temporary restraining order was denied. The City cannot predict any action to be taken in carrying out the executive orders, but anticipates that any termination in federal funding will not have a material impact on the City’s finances.

TAX MATTERS
2026C Bonds. In the opinion of Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, Bond Counsel (“Bond Counsel”), under existing statutes, regulations, rulings and judicial decisions, interest on the 2026C Bonds is not excluded from gross income for federal income tax purposes under Section 103 of the Code but interest (and original issue discount) on the 2026C Bonds is exempt from State of California personal income tax.

Except for certain exceptions, the difference between the issue price of a 2026C Bond (the first price at which a substantial amount of the 2026C Bonds of the same maturity is to be sold to the public) and the stated redemption price at maturity with respect to such 2026C Bond (to the extent the redemption price at maturity is greater than the issue price) constitutes original issue discount. Original issue discount accrues under a constant yield method. The amount of original issue discount deemed received by the Bond Owner of a 2026C Bond will increase the Bond Owner's basis in the 2026C Bond. Bond Owners of 2026C Bonds should consult their own tax advisors with respect to taking into account any original issue discount on the 2026C Bonds.

In the event of a legal defeasance of a 2026C Bond, such bond might be treated as retired and “reissued” for federal tax purposes as of the date of the defeasance, potentially resulting in recognition of taxable gain or 630

59 loss to the applicable Bond Ow ner of the 2026C Bond, generally equal to the difference between the amount deemed realized from the deemed redemption and reissuance of the Bond Owner’s adjusted tax basis in such bond.

The amount by which a Bond Owner’s original basis of a 2026C Bond for determining gain or loss on sale or exchange of the applicable 2026C Bond (generally, the purchase price) exceeds the amount payable on maturity (or on an earlier call date) constitutes amortizable bond premium, which the Bond Owner of a 2026C Bond may elect to amortize under Section 171 of the Code. Such amortizable bond premium reduces the Bond Owner’s basis in the applicable 2026C Bond (and the amount of taxable interest received). The basis reduction as a result of the amortization of bond premium may res ult in the Bond Owner of a 2026C Bond realizing a taxable gain whe n a 2026C Bond is sold by the Bond Owner for an amount equal to or less (under certain circumstances) than the original cost of the 2026C Bond to the Bond Owner. The Bond Owners of the 2 026C Bonds that have a basis in the 2026C Bonds that is greater than the principal amount of the 2026C Bonds should consult their own tax advisors with respect to whether or not they should elect to amortize such premium under Section 171 of the Code.

The federal tax and state personal income tax discussion set forth above with respect to the 2026C Bonds is included for general information only and may not be applicable depending upon a Bond Owner’s particular situation. The ownership and disposition of the 2026C Bonds and the accrual or receipt of interest with respect to the 2026C Bonds may otherwise affect the tax liability of certain persons. Bond Counsel expresses no opinion regarding any such tax consequences.

A copy of the proposed form of opinion of Bond Counsel with respect to the 2026C Bonds is attached hereto in Appendix D.
2026D Bonds. In the opinion of 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 herein, interest (and original issue discount) on the 2026D 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. However, it should be no ted that, with respect to applicable corporations as defined in Section 59(k) of the Internal Revenue Code of 1986, as amended (the “Code”), generally certain corporations with more than $1,000,000,000 of average annual adjusted financial statement income, interest (and original issue discount) with respect to the 2026 D Bonds might be taken into account in determining adjusted financial statement income for purposes of computing the alternative minimum tax imposed by Section 55 of the Code on such corporati ons. In the further opinion of Bond Counsel, interest (and original issue discount) on the 2026D Bonds is exempt from State of California personal income tax.

The excess of the stated redemption price at maturity of a 2026D Bond over the issue price of a 2026D Bond (the first price at which a substantial amount of the 2026D Bonds of the same maturity is to be sold to the public) constitutes original issue discount. Original issue discount accrues under a constant yield method, and original issue discount will accrue to a Bond Owner before receipt of cash attributable to such excludable income.

The amount of original issue discount deemed received by the Bond Owne r will increase the Bond Owner’s basis in the 2026D Bond. In the opinion of Bond Counsel, the amount of original issue discount that accrues to the Bond Owner of the 2026D Bond is excluded from the gross income of such owner for federal income tax purposes, and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals. In the further opinion of Bond Counsel, the respective amount of original issue discount that accrues to the Bond Owners is exempt from State of California personal income tax.

Bond Counsel’s opinion as to the exclusion from gross income for federal income tax purposes of interest (and original issue discount) on the 2026D Bonds is based upon certain representations of fact and certifications made by the Authority, the City and others and is subject to the condition that the Authority and the City comply with all requirements of the Code that must be satisfied subsequent to the issuance of the 2026D Bonds to assure that interest (and original issue discount) on the 2026D Bonds will not become includable in gross income for federal income tax purposes. Failure to comply with such requirements of the Code might cause interest (and original issue discount) on the 2026D Bonds to be included in gross income for federal income 631

60 tax purposes retroactive to the date of issuance of the 2026D Bonds. The Authority and the City have covenanted to comply with all such requirements.

The amount by which a Bond Owner’s original basis for determining loss on sale or exchange in the applicable 2026D Bond (generally, the purchase price) exceeds the amount payable on maturity (or on an earlier call date) constitutes amortizable bond premium, which must be amortized under Section 171 of the Code; such amortizable bond premium reduces the Bond Owner’s basis in the applicable 2026D Bond (and the amount of tax-exempt interest received with respect to the 2026 D Bonds), and is not deductible for federal income tax purposes. The basis reduction as a result of the amortization of bond premium may result in a 2 026D Bond Owner realizing a taxable gain when a 2026D Bond is sold by the Owner for an amount equal to or less (under certain circumstances) than the original cost of the 2026D Bond to the Owner. Purchasers of the 2026 Bonds should consult their own tax advisors as to the treatment, computation and collateral consequences of amortizable bond premium.

The IRS has initiated an expanded program for the auditing of tax-exempt bond issues, including both random and targeted audits. It is possible that the 2026D Bonds will be selected for audit by the IRS. It is also possible that the market value of the 2026D Bonds might be affected as a result of such an audit of the 2026D Bonds (or by an audit of similar municipal obligations). No assurance can be given that in the course of an audit, as a result of an audit, or otherwise, Congress or the IRS might not change the Code (or interpretation thereof) subsequent to the issuance of the 2026D Bonds to the extent that it adversely affects the exclusion from gross income of interest (and original issue discount) on the 2026D Bonds or their market value.

SUBSEQUENT TO THE ISSUANCE OF THE 2026d BONDS, THERE MIGHT BE FEDERAL,

STATE OR LOCAL STATUTORY CHANGES (OR JUDICIAL OR REGULATORY CHANGES TO OR

INTERPRETATIONS OF FEDERAL, STATE OR LOCAL LAW) THAT AFFECT THE FEDERAL, STATE OR LOCAL TAX TREATMENT OF THE 2026D BONDS, INCLUDING THE IMPOSITION OF

ADDITIONAL FEDERAL INCOME OR STATE TAXES ON OWNERS OF TAX -EXEMPT STATE OR LOCAL OBLIGATIONS, SUCH AS THE 202 6D BONDS. THESE CHANGES COULD ADVERSELY AFFECT THE MARKET VALUE OR LIQUIDITY OF THE 2026D BONDS. NO ASSURAN CE CAN BE GIVEN THAT SUBSEQU ENT TO THE ISSUANCE OF THE 2026D BONDS STATUTORY CHANGES

WILL NOT BE INTRODUCED OR ENACTED OR JUDICIAL OR REGULATORY INTERPRETATIONS WILL NOT OCCUR HAVING THE EFFECTS DESCRIBED ABOVE. BE FORE PURCHASING ANY OF THE 2026D BONDS, ALL POTENTIAL PURCHASERS SHOULD CONSULT THEIR TAX ADVISORS

REGARDING POSSIBLE STATUTORY CHANGES OR JUDICIAL OR REGULATORY CHANGES OR INTERPRETATIONS, AND THEIR COLLATERAL TAX CONSEQUENCES RELATING TO THE 2026D BONDS.

Bond Counsel’s opinions may be affected by actions taken (or not taken) or events occurring (or not occurring) after the date hereof. Bond Counsel has not undertaken to determine, or to inform any person, whether any such actions or events are taken or do occur. The Indenture and the Tax C ertificate relating to the 2026D Bonds permit certain actions to be taken or to be omitted if a favorable opinion of Bond Counsel is provided with respect thereto. Bond Counsel expresses no opinion as to the effect on the exclusion from gross income of interest (and original issue discount) for federal income tax pu rposes with respect to any 2026D Bond if any such action is taken or omitted based upon the advice of counsel other than Stradling Yocca Carlson & Rauth LLP.

Although Bond Counsel has rendered an opinion that interest (and original issue discount) on the 2026D Bonds is excluded from gross income for federal income tax purposes provided that the Authority and the City continue to comply with certain requirements of the Code, the ownership of the 2026D Bonds and the accrual or receipt of interest (and original issue discount) on the 2026D Bonds may otherwise affect the tax liability of certain persons. Bond Counsel expresses no opinion regarding any such tax consequences. Accordingly, before purchasing any of the 2026D Bonds, all potential purchasers should consult their tax advisors with respect to collateral tax consequences relating to the 2026D Bonds. 632

61 Should interest (and original issue discount) on the 2026D Bonds become includable in gross income for federa l income tax purposes, the 2026D Bonds are not subject to early redemption and will remain outstanding until maturity or until redeemed in accordance with the Indenture.

A copy of the proposed forms of opinions of Bond Counsel is set forth in Appendix D.

CERTAIN LEGAL MATTERS
The valid, legal and binding nature of the 2026 Bonds is subject to the approval of Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, acting as Bond Counsel. The form of such legal opinion is attached hereto as Appendix D, and such legal opinion will be attached to each 2026 Bond. Certain legal matters will be passed upon for the City by Best Best & Krieger LLP, Riverside, California, as Disclosure Counsel, and by Best Best & Krieger LLP, Ontario, California, the City Attorney, for the Underwriter by its counsel, Kutak Rock LLP, Irvine, California, and for the Trustee by its counsel.

From time to time Disclosure Counsel serves as counsel to the Underwriter with respect to transactions other than the issuance of the 2026 Bonds.

MUNICIPAL ADVISOR
The Authority has retained Urban Futures, Inc., Walnut Creek, California (the “Municipal Advisor”) as municipal advisor in connection with the sale of the 2026 Bonds. The Municipal Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or to assume any responsibility for the accuracy, completeness or fairness of the information contained herein.

The Municipal Advisor is an independent advisory firm and is not engaged in the business of underwriting, trading or distributing municipal or other public securities.

LITIGATION
At the time of issuance of the 2026 Bonds , the Authority and the City will deliver certificates substantially to the effect that there is no litigation then pending or threatened to restrain or enjoin the issuance of the 2026 Bonds or in any way contesting or affecting the validity of the 2026 Bonds, the Lease Agreement, any proceedings of the Authority or the City taken with respect to the delivery or sale of the 2026 Bonds, the pledge or application of any money or security provided for the payment of the 2026 Bonds, the existence or powers of the Authority or the City or the title of any officers of the Authority or the City to their respective positions, or the outcome of which could materially adversely affect the ability of the City to make the Base Rental Payments.

UNDERWRITING
The 2026 Bonds will be purchased by Samuel A. Ramirez & Co., Inc. (the “Underwriter”), pursuant to a purchase contract, dated the date hereof (the “Purchase Contract”), by and among the City, the Authority and the Underwriter. Under the Purchase Contract, the Underwriter has agreed to purchase all, but not less than all, of the 2026C Bonds for a purchase price of $________________ (representing the principal amount of the 2026C Bonds, less an Underwriter’s discount of $_____________, plus an original premium of $_____________) and all, but not less than all, of the 2026D Bonds for a purchase price of $________________ (representing t he principal amount of the 2026D Bonds, less an Underwriter ’s discount of $_____________, plus an original premium of $_____________). The Purchase Contrac t provides that the Underwriter will purchase all of the 2026 Bonds if any are purchased, the obligation to make such a purchase being subject to certain terms and conditions set forth in the Purchase Contract, the approval of certain legal matters by counsel and certain other conditions.

The initial public offering prices stated on the inside cover page of this Official Statement may be changed from time to time by the Underwriter. The Underwriter may offer and sell the 2026 Bonds to certain 633

62 dealers (including dealers depositing 2026 Bonds into investment trusts), dealer banks, banks acting as agents and others at prices lower than said public offering prices.

RATINGS
S&P has assigned the rating of “[__]” (stable outlook) and Fitch has assigned the rating of “[__]” (stable outlook) to the 2026 Bonds.

There is no assurance that any credit rating that is given to the 2026 Bonds will be maintained for any period of time or that a rating may not be qualified, downgraded, lowered or withdrawn entirely by S&P or Fitch if, in the judgment of S&P or Fitch, circumstances so warrant. Any such qualification, downgrade, lowering or withdrawal of a rating may have an adverse effect on the market price of the 2026 Bonds. The ratings reflect only the views of S&P or Fitch (which views and criteria could change at any time), and an explanation of the significance of such ratings may be obtained from S&P or Fitch, as applicable. Generally, a rating agency bases its ratings on the information and materials furnished to it (which may include information and material from the City that is not included in this Official Statement) and on investigations, studies and assumptions of its own.

The City has covenanted in a Continuing Disclosure Certificate to file notices of any rating changes on the 2026 Bonds with the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access system.

See the caption “CONTINUING DISCLOSURE” and Appendix E. Notwithstanding such covenant, information relating to rating changes on the 2026 Bonds may be publicly available from the rating agencies prior to the time that such information is provided to the City and prior to the date by which the City is obligated to file a notice of rating change. Purchasers of the 2026 Bonds are directed to the rating agencies and their respective websites and official media outlets for the most current ratings with respect to the 2026 Bonds after the initial issuance of the 2026 Bonds.

CONTINUING DISCLOSURE
The City has covenanted in a Continuing Disclosure Certificate, dated the date of issuance of the 2026 Bonds, for the benefit of the holders and Beneficial Owners of the 2026 Bonds, to provide certain financial information and operating data relating to the City by not later than April 1 following the end of the City’s Fiscal Year (currently its Fiscal Year ends on June 30) (the “Annual Report”), commencing on April 1, 2027 with the report for the Fiscal Year ending June 30, 2026, and to provide notices of the occurrence of certain enumerated events. The Annual Report and the notices of enumerated events will be filed by the City with EMMA, which is maintained on the Internet at http://emma.msrb.org/. The specific nature of the information to be contained in the Annual Report and the notices of enumerated events is set forth in Appendix E. These covenants have been made in order to assist the Underwriter in complying with subsection (b)(5) of Rule 15c2-12.

The City and its related governmental entities (the “ City Entities”) for whom City staff is responsible for undertaking compliance with continuing disclosure undertakings have previously entered into numerous disclosure undertakings under Rule 15c2-12 in connection with the issuance of long-term obligations. In order to ensure ongoing compliance with its continuing disclosure undertakings, the City has designated staff members within the Financial Services Agency with the responsibility of ensuring timely and complete filings. In addition, the City has retained an outside consultant to conduct periodic reviews of City compliance. The City’s debt management policy includes continuing disclosure compliance policies and procedures. See the caption “CITY FINANCIAL INFORMATION—General Economic Condition and Outlook of the City—Fiscal Policies—Debt Management Policy.”
Within the last five years, the City and the City Entities have not failed to timely comply with their respective prior continuing disclosure obligations under Rule 15c2-12 in all material respects except that certain information with respect to outstanding indebtedness of the City was not included in the Fiscal Year 2021 annual report for the Ontario Public Financing Authority 2017 Lease Revenue Refunding Bonds, the City of Ontario 2020 Taxable Pension Obligations Bonds and the Ontario Public Financing Aut hority 2021 Lease Revenue Refunding Bonds, Series A (Federally Taxable); the City’s Fiscal Years 2020-21, 2022-23, and 2023-24 audited financial statements were not available at the time of the filing of 2021, 2023 and 2024 respective annual reports, 634

63 but have since been posted and such information is included in the notes to the City’s Fiscal Year 2020-21, 2022- 23, and 2023-24 audited financial statements.

FINANCIAL INTERESTS
The fees being paid to the Underwriter, Bond Counsel, and counsel to the Underwriter are contingent upon the issuance and delivery of the 2026 Bonds.
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64 MISCELLANEOUS
The Authority and the City have approved and authorized the preparation, execution and distribution of this Official Statement. Any statements in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such, and are not representations of fact. This Official Statement is not to be construed as an agreement or contract among any of the City, the Authority and the purchasers or holders of any 2026 Bonds.

ONTARIO PUBLIC FINANCING AUTHORITY
By:

Executive Director

CITY OF ONTARIO
By:

City Manager

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APPENDIX A

DEMOGRAPHIC AND ECONOMIC INFORMATION
The following information is presented as general background data. The 2026 Bonds are payable solely from moneys of the City as described in the Official Statement. The taxing power of the City, the County, the State of California or any political subdivision thereof is not pledged to the payment of the 2026 Bonds.

Introduction
City of Ontario. The City is located in southwestern San Bernardino County (the “County”), approximately 35 miles east of Los Angeles near the intersection of Interstates 10 and 15 in the area of southern California known as the “Inland Empire.” The City is adjacent to the cities of Upland, Montclair, Chino and Rancho Cucamonga. The City had a population of approximately 184,404 as of January 1, 2025 and covers approximately 50 square miles. The City was incorporated in 1891 and is a general law city operating under a council/manager form of government.

The City is a full service city and provides police and fire protection, street construction and maintenance, parks and recreational programs, water and sewer utilities and arts, cultural and social programs .

The City also operates a municipal golf course, convention center and sports and entertainment arena (the Toyota Arena, which opened in 2008).

San Bernardino County. The County was established by an act of the State Legislature on April 26, 1853. Located in the southern portion of the State, the County covers 20,105 square miles, making it the largest county in the United States. The County has a population of over 2 million and extends from dense suburban development in the southwest portion of the County near the Los Angeles urban area to large expanses of desert and federally owned land in the eastern portion of the County, which stretches to the Nevada border.

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

CITY OF ONTARIO, SAN BERNARDINO COUNTY AND CALIFORNIA
Population
Year(1) City of Ontario County of San Bernardino State of California 2016 169,491 2,122,579 39,103,587
2017 172,858 2,139,520 39,352,398
2018 175,083 2,150,017 39,519,535
2019 178,606 2,165,876 39,605,361
2020(2) 175,297 2,181,654 39,538,223
2021 175,907 2,179,941 39,369,530
2022 178,591 2,183,077 39,179,680
2023 180,707 2,182,351 39,228,444
2024 182,875 2,200,351 39,420,663
2025 184,404 2,207,424 39,529,101
________________________
(1) As of January 1.
(2) As of April 1.

Source: State of California, Department of Finance, E-4 Population Estimates for Cities, Counties and State, 2015- 2019, with 2010 Benchmark; E-4 Population Estimates for Cities, Counties and State, 2020-2025, with 2020 Benchmark.
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Employment
The following table summarizes historical employment and unemployment for the County, the State of California and the United States for the last five calendar years.

SAN BERNARDINO COUNTY, CALIFORNIA AND UNITED STATES
Civilian Labor Force, Employment, and Unemployment
(Annual Averages)
Year and Area Labor Force Employment(2) Unemployment(3) Unemployment
Rate (%)
2021
City of Ontario 88,300 82,200 6,200 7.0%
San Bernardino County 989,400 915,500 73,900 7.4
State of California 18,954,600 17,564,900 1,389,700 7.3 United States 161,204,000 152,581,000 8,623,000 5.3

2022
City of Ontario 90,500 87,000 3,500 3.8
San Bernardino County 1,000,100 958,100 42,000 4.2
State of California 19,218,300 18,393,900 824,400 4.3
United States 164,287,000 158,291,000 5,996,000 3.6

2023
City of Ontario 92,700 88,800 3,900 4.2
San Bernardino County 1,014,800 967,900 46,800 4.6
State of California 19,471,000 18,551,800 919,200 4.7
United States 167,116,000 161,037,000 6,080,000 3.6

2024
City of Ontario 93,800 89,500 4,400 4.6
San Bernardino County 1,027,800 975,200 52,600 5.1
State of California 19,644,100 18,600,900 1,043,100 5.3 United States 168,547,000 161,661,000 6,886,000 4.1

2025(4)
City of Ontario 95,000 89,700 5,300 5.6
San Bernardino County 1,042,700 977,700 65,100 6.2
State of California 19,824,400 18,621,700 1,202,800 6.1 United States 170,342,000 163,106,000 7,236,000 4.2
______________________
Note: Data is not seasonally adjusted.
(1) Annual averages, unless otherwise specified.
(2) Includes persons involved in labor-management trade disputes. (3) The unemployment rate is computed from unrounded data; therefore, it may differ from rates computed from rounded figures in this table.
(4) As of July 2025.

Source: U.S. Department of Labor – Bureau of Labor Statistics, California Employment Development Department. March 2024 Benchmark.
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Major Industries in the City
The table below sets forth the ten largest employers in the City in Fiscal Year 2024-25.

CITY OF ONTARIO
Major Employers – Fiscal Year 2024-25
Employer Number of Employees(1)
United Parcel Service 5,000 - 9,999
Atlantic Solutions Group, Inc. 1,000 - 4,999
Ontario Montclair Elementary School 1,000 - 4,999
Workforce Personnel, Inc. 1,000 - 4,999
DAL Global Services, Inc. 1,000 - 4,999
City of Ontario 1,000 - 4,999
Employee Force Provider, Inc. 1,000 - 4,999
Kaiser Foundation Hospitals 1,000 - 4,999
Chaffey Union High School District 1,000 - 4,999
CRST Van Expedited, Inc. 1,000 - 4,999

(1) Per EDD, the Employment numbers are confidential and only the data for the range of numbers of employees are available.

Source: City’s Annual Comprehensive Fiscal Report for Fiscal Year ended June 30, 2025.

The following table sets out the largest employers in the County:

COUNTY OF SAN BERNARDINO

MAJOR EMPLOYERS
Fiscal Year 2024-25
Rank Name of Business
Approximate No. of San
Bernardino County
Employees(1) Type of Business
1 Loma Linda University Medical Center ≥10,000 Medical Center 2 San Bernardino County ≥10,000 Public Administration
3 Amazon ≥10,000 Electronic Commerce
4 Dignity Health Community Hospital of San Bernardino ≥10,000 Medical Center 5 Ontario International Airport 5,000-9,999 Airport
6 Bear Mountain 1,000-4,999 Ski Resort
7 Burlington Distribution Corp 1,000-4,999 Distribution 8 California State University, San Bernardino 1,000-4,999 Education 9 Environmental Systems Research Institute 1,000-4,999 Research 10 FedEx Ground 1,000-4,999 Postal
________________________
(1) Due to confidentiality of reporting number of employees, ranges have been provided.

Source: San Bernardino County Annual Comprehensive Financial Report for Fiscal Year ended June 30, 2025. 639

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Residents of the City find employment throughout the Riverside-San Bernardino-Ontario Labor Market Area. This labor market area, as defined for reporting purposes by the California Employment Development Department, has boundaries coterminous with those of Riverside and San Bernardino Counties. The following table sets forth certain employment data for the Riverside - San Bernardino-Ontario Metropolitan Statistical Area and the County for the period from 2021 through 2025.

RIVERSIDE-SAN BERNARDINO-ONTARIO METROPOLITAN STATISTICAL AREA

INDUSTRY EMPLOYMENT & LABOR FORCE - BY ANNUAL AVERAGE
2021 2022 2023 2024 2025(1)
Civilian Labor Force 2,120,600 2,148,700 2,171,500 2,209,100 2,240,900 Civilian Employment 1,964,300 2,058,400 2,068,800 2,093,800 2,098,500 Civilian Unemployment 156,300 90,200 102,700 115,300 142,400 Civilian Unemployment Rate 7.4% 4.2% 4.7% 5.2% 6.4%

Total Farm 13,700 13,800 13,200 13,700 13,000
Total Nonfarm 1,575,100 1,660,200 1,681,000 1,700,400 1,694,800 Total Private 1,333,100 1,410,200 1,420,700 1,430,200 1,426,800 Goods Producing 207,700 216,300 215,300 212,900 205,800 Mining & Logging 1,400 1,500 1,500 1,600 1,500
Construction 110,100 114,700 115,400 116,200 111,900
Manufacturing 96,100 100,000 98,500 95,200 92,400
Service Providing 1,367,400 1,443,900 1,465,700 1,487,500 1,489,000 Trade, Transportation & Utilities 443,200 464,900 457,900 456,400 450,400 Wholesale Trade 67,400 69,500 68,900 68,600 68,700
Retail Trade 177,000 181,000 183,000 182,600 180,500
Transportation, Warehousing & Utilities 198,800 214,400 206,000 205,200 201,200 Information 12,500 13,000 13,300 13,000 12,800
Financial Activities 45,200 46,000 44,900 44,100 42,700 Professional & Business Services 166,600 173,900 164,400 161,800 160,800 Private Education & Health Services 254,300 267,900 287,800 306,000 320,700 Leisure & Hospitality 160,200 180,900 187,600 185,300 182,700 Other Services 43,600 47,400 49,400 50,700 50,900
Government 242,000 250,000 260,200 270,200 268,000 Total, All Industries 1,588,800 1,674,000 1,694,100 1,714,100 1,707,800 ____________________________
(1) As of July 2025.

Note: Does not include proprietors, self -employed, unpaid volunteers or family workers, domestic workers in households and persons involved in labor-management trade disputes. Employment reported by place of work. Items may not add to total due to independent rounding. The “Total, All Industries” data is not directly comparable to the employment data found in this Appendix E.

Source: State of California, Employment Development Department, March 2024 Benchmark. 640

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The following tables show the personal income and per capita personal income for the City, County, State of California and United States from 2015 through 2025.

PERSONAL INCOME
City of Ontario, County of San Bernardino, State of California, and United States 2015-2025
Year
City of
Ontario
County of
San Bernardino California United States
2015 $3,224,189 $74,258,677 $2,097,049,575 $15,467,113,000 2016 3,159,733 77,453,102 2,191,138,011 15,884,741,000
2017 3,444,006 80,031,472 2,295,048,653 16,658,962,000
2018 3,474,794 83,514,331 2,411,055,136 17,514,402,000
2019 3,826,610 89,202,022 2,539,747,399 18,349,584,000
2020 4,114,067 99,003,275 2,770,488,779 19,613,059,000
2021 4,566,417 109,157,423 3,019,215,724 21,484,168,000 2022 4,392,483 108,075,879 3,021,645,501 22,144,814,000 2023 4,778,601 111,575,931 3,182,779,295 23,577,208,000 2024 5,351,829 119,551,968 3,400,237,317 24,897,613,000 2025 5,553,880 - (1) - (1) - (1)
_____________________________
Note: Dollars in Thousands.
(1) Data not yet available.

Source: U.S. Department of Commerce, Bureau of Economic Analysis and City of Ontario Annual Comprehensive Financial Report for Fiscal Year ended June 30, 2025.

PER CAPITA PERSONAL INCOME(1)
City of Ontario, County of San Bernardino, State of California, and United States 2015-2025
Year
City of
Ontario
County of
San Bernardino California United States
2015 $19,068 $35,176 $53,816 $48,062
2016 18,601 36,417 55,862 48,974
2017 19,761 37,305 58,214 51,006
2018 19,761 38,655 60,984 53,311
2019 21,129 41,078 64,219 55,567
2020 22,237 45,341 70,100 59,151
2021 24,682 49,824 77,134 64,692
2022 24,682 49,214 77,196 66,298
2023 26,687 50,698 81,196 70,002
2024 29,332 53,991 86,232 73,204
2025 30,118 - (2) - (2) - (2)
__________________________
(1) Per capita personal income is the total personal income divided by the total mid-year population estimates of the U.S.

Bureau of the Census. All dollar estimates are in current dollars (not adjusted for inflation). (2) Data not yet available.

Source: City of Ontario Annual Comprehensive Financial Report for Fiscal Year ended June 30, 2025 ; Bureau of Economic Analysis for County, State and U.S.
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Construction Activity
The following tables reflect building permit valuations for the City and the County for the five most recent calendar years for which information is available.

CITY OF ONTARIO
Building Permits and Valuation
(Dollars in Thousands)
2020 2021 2022 2023 2024
Permit Valuation:

New Single-family $ 101,990 $ 134,735 $133,332 $182,845 $ 36,582 New Multi-family 8,459 15,378 38,669 147,416 60,710
Res. Alterations/Additions 3,709 6,315 4,884 6,218 4,884 Total Residential 114,158 156,428 176,885 336,479 102,176 Total Nonresidential 125,537 516,481 371,120 421,377 514,186 Total All Building $ 239,695 $672,909 $548,005 $757,856 $616,362

New Dwelling Units:

Single Family 472 737 737 581 193
Multiple Family 74 22 40 369 399
Total 546 759 777 950 592

Note: Columns may not sum to totals due to independent rounding.

Source: Construction Industry Research Board: “Building Permit Summary.” Transportation
Because Ontario is a major hub for passengers and freight, the City is also served by several major freeways. Interstate 10 and the Pomona Freeway (State Route 60) run east-west through the City. Interstate 10 is north of the Ontario airport while the Po mona freeway is south of the airport. Interstate 15 runs in the north-south directions at the eastern side of the City. State Route 83, also known as Euclid Avenue, also runs in the north-south direction at the western side of the City.

The City maintains an Amtrak station which is served by the Sunset Limited and Texas Eagle lines.

Ontario also has a Metrolink station off of Haven Avenue. It connects Ontario with much of the Greater Los Angeles area, Orange County and the San Fernando Valley. Public bus transportation is provided by Omnitrans.

Rail service is provided by Burlington Northern Santa Fe and Union Pacific.

The Ontario International Airport is a medium-hub, full-service airport, which offers more than 90 daily flights to cities in the U.S., Mexico and Taiwan and is served by AeroMexico, Alaska Airlines, American Airlines, Avianca, China Airlines, Delta Air Lines, Frontier, JetBlue, Southwest Airlines, Starlux Airlines, United Airlines/United Express and Volaris. The airport’s service area includes a population of approximately

18.7 million in San Bernardino and Riverside counties, and portions of Orange and Los Angeles counties. The Ontario International Airport was previously operated by the Department of Airports of the City of Los Angeles (the “Department”). Following protracted litigation among the Department, the City of Ontario and the Ontario International Airport Authority, a joint powers authority was formed by the City of Ontario and the County of San Bernardino (the “Airport Authority ”). The Airport Authority assumed ownership and control of the management and operation of the Ontario International Airport on November 1, 2016.

With approximately 570,000 square feet and 28 passenger gate s within two terminals and one international terminal, Ontario International Airport is the Western States Regional Terminal for United Parcel 642

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Service, as well as facilities for Amazon and FedEx cargo shipments . In 202 4 approximately 7.1 million passengers used the airport and cargo shipments increased approximately 5.5% from the previous year.

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APPENDIX B

SUMMARY OF PRINCIPAL LEGAL DOCUMENTS
The following is a summary of certain definitions and provisions of the Lease Agreement and the Indenture which are not described elsewhere in the Official Statement. This summary does not purport to be comprehensive and reference should be made to the Lease Agreement and the Indenture for a full and complete statement of their provisions.
[TO COME FROM BOND COUNSEL]

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APPENDIX C

AUDITED FINANCIAL STATEMENTS

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APPENDIX D

FORM OF BOND COUNSEL OPINION
Upon the issuance of the 2026 Bonds, Bond Counsel, proposes to render its final approving opinion in substantially the following form:

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APPENDIX E

FORM OF CONTINUING DISCLOSURE CERTIFICATE
Upon issuance of the 2026 Bonds, the City proposes to enter into a Continuing Disclosure Certificate in substantially the following form:

This Continuing Disclosure Certificate (the “Disclosure Certificate”) is executed and delivered by the City of Ontario (the “ City”) in connection with the issuance by the Ontario Public Financing Authority (the “Authority”) of the Authority’s Lease Revenue Bonds, Series 2026C (Federally Taxable) and Lease Revenue Bonds, Series 2026D (Tax-Exempt) (together, the “Bonds”). The Bonds are being issued pursuant to that certain Indenture, dated as of [June] 1, 2026 (the “ Indenture”), by and among the City, the Authority and Zion’s Bancorporation, National Association., as trustee. The City covenants and agrees as follows:

1. Purpose of this Disclosure Certificate . This Disclosure Certificate is being executed and delivered by the City for the benefit of the Holders and Beneficial Owners of the Bonds and in order to assist the Participating Underwriter in complying with the Rule.

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

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

Beneficial Owner. The term “Beneficial Owner” means any person which: (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermed iaries); or (b) is treated as the owner of any Bonds for federal income tax purposes.

EMMA. The term “EMMA” means the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access System for municipal securities disclosures, maintained on the Internet at http://emma.msrb.org/.

Financial Obligation. The term “Financial Obligation” means a: (A) debt obligation; (B) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (C) guarantee of (A) or (B). The term “Financial Obligation” does not include municipal securities as to which a final official statement has been provided to the Municipal Securities Rulemaking Board consistent with the Rule.

Fiscal Year. The term “Fiscal Year” means the one-year period ending on the last day of June of each year.

Holder. The term “Holder” means a registered owner of the Bonds.

Listed Events. The term “Listed Events” means any of the events listed in Sections 5(a) and (b) of this Disclosure Certificate.

Official Statement. The term “Official Statement” means the Official Statement relating to the Bonds dated ______, 2026 delivered in connection with the issuance of the Bonds.

Participating Underwriter. The term “Participating Underwriter” means the original underwriter of the Bonds required to comply with the Rule in connection with offering of the Bonds. 647

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

3. Provision of Annual Reports.
(a) The City shall provide not later than each April 1 following the end of its Fiscal Year (commencing April 1, 2027 with the Annual Report for Fiscal Year 2025-26) to EMMA an Annual Report relating to the immediately preceding Fiscal Year which is consistent with the requirements of Section 4 of this Disclosure Certificate, which Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross -reference other information as provided in Section 4 of this Dis closure Certificate.
(b) If the City is unable to provide to EMMA an Annual Report by the date required in subsection (a), the City shall send to EMMA in a timely manner a notice in substantially the manner prescribed by the Municipal Securities Rulemaking Board.

4. Content of Annual Reports. The Annual Report shall contain or incorporate by reference the following:
(a) The audited financial statements of the City for the prior Fiscal Year, prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If such audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements in a format similar to the financial statements conta ined in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available.
(b) Principal amount of the Bonds outstanding.
(c) To the extent not already included in the City’s audited financial statements, an update of the information substantially in the form of the following tables or captions in the Official Statement for the Fiscal Year prior to the filing of such Annual Report:

1. Table 2 – General Fund Statement of Revenues, Expenditures and Changes in Fund Balance;

2. Table 3 – General Fund Balance Sheet;

3. Table 4 – Assessed Valuation History;

4. Table 5 – Property Tax Levies and Collections; and

5. Information under the caption “CITY FINANCIAL INFORMATION—Other Indebtedness—General Fund Supported Debt” (provided that such information may be located in the notes to the City’s audited financial statements).

Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the City or related public entities, which have been submitted to EMMA or the Securities and Exchange Commission; provided that if any document included by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board; and provided further that the City shall clearly identify each such document so included by reference. 648

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5. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 5, the City shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds in a timely manner not more than ten (10) Business Days after the event:

1. principal and interest payment delinquencies;

2. unscheduled draws on debt service reserves reflecting financial difficulties;

3. unscheduled draws on credit enhancements reflecting financial difficulties;

4. substitution of credit or liquidity providers, or their failure to perform;

5. issuance by the Internal Revenue Service of proposed or final determination of taxability or of a Notice of Proposed Issue (IRS Form 5701 TEB);

6. tender offers;

7. defeasances;

8. ratings changes;

9. bankruptcy, insolvency, receivership or similar proceedings; Note: For the purposes of the event identified in subparagraph (9), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the ob ligated person, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person; and

10. default, event of acceleration, termination event, modification of terms or other similar events under the terms of a Financial Obligation of the City, any of which reflect financial difficulties.
(b) Pursuant to the provisions of this Section 5, the City shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material:

1. unless described in Section 5(a)(5), other notices or determinations by the Internal Revenue Service with respect to the tax status of the Bonds or other events affecting the tax status of the Bonds;

2. modifications to the rights of Bondholders;

3. optional, unscheduled or contingent Bond calls;

4. release, substitution or sale of property securing repayment of the Bonds;

5. non-payment related defaults;
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6. the consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an act ion or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms;

7. appointment of a successor or additional trustee or the change of the name of a trustee; and

8. incurrence of a Financial Obligation of the City, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the City, any of which affect security holders.
(c) If the City determines that knowledge of the occurrence of a Listed Event under Section 5(b) would be material under applicable federal securities laws, the City shall file a notice of such occurrence with EMMA in a timely manner not more than ten (10) Business Days after the event.

6. Customarily Prepared and Public Information . Upon request, the City shall provide to any person financial information and operating data regarding the City which is customarily prepared by the City and is publicly available.

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

8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that, in the opinion of nationally recognized bond counsel, such amendment or waiver is permitted by the Rule.

9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the City chooses to include any information in any notice of occurrence of a Listed Event in addition to that which is specif ically required by this Disclosure Certificate, the City shall not thereby have any obligation under this Disclosure Certificate to update such information or include it in any future notice of occurrence of a Listed Event.

10. Default. In the event of a failure of the City to comply with any provision of this Disclosure Certificate, any Holders or Beneficial Owners of at least 50% aggregate principal amount of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Indenture, and the sole remedy under this Disclosure Certificate in the event of any failure of the City to comply with this Disclosure Certificate shall be an action to compel performance.

No Holder or Beneficial Owner of the Bonds may institute such action, suit or proceeding to compel performance unless they shall have first delivered to the City satisfactory written evidence of their status as such, and a written notice of and request to cure such failure, and the City shall have refused to comply therewith within a reasonable time.
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11. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Authority, the City, the Participating Underwriter and Holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity.

Dated: ________, 2026 CITY OF ONTARIO
By:

Its: City Manager
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APPENDIX F

BOOK-ENTRY ONLY SYSTEM
The information in this section concerning DTC and DTC’s book-entry only system has been obtained from sources that the Authority and the City believe to be reliable, but the Authority and the City take no responsibility for the completeness or accuracy thereof. The following description of the procedures and record keeping with respect to beneficial ownership interests in the 2026 Bonds, payment of principal, premium, if any, accreted value, if any, and interest on the 2026 Bonds to DTC Participants or Beneficial Owners, confirmation and transfers of beneficial ownership interests in the 2026 Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC.

The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the 2026 Bonds. The 2026 Bonds will be issued as fully -registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered 2026 Bond will be issued for each annual maturity of the 2026 Bonds, each in the aggregate principal amount of such annual maturity, and will be deposited with DTC.

DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corpor ation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934.

DTC holds and provides asset servicing for over 3.5 million issues of U .S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post -trade settlement among Direct Parti cipants of sales and other securities transactions in deposited securities, through electronic computerized book -entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirec t Participants”). DTC is rated AA+ by Standard & Poor’s. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.

Purchases of 2026 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the 2026 Bonds on DTC’s records. The ownership interest of each actual purchaser of each 2026 Bonds (“Beneficial Owner”) is in tur n to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the tran saction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the 2026 Bonds are to be accomplished by entries made o n the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive bonds representing their ownership interests in 2026 Bonds, except in the event that use of the book -entry system for the 2026 Bonds is discontinued.

To facilitate subsequent transfers, all 2026 Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of 2026 Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the 2026 Bonds; DTC’s records reflect only the identi ty of the Direct Participants to whose accounts such 2026 Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. 652

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

Beneficial Owners of 2026 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the 2026 Bonds, such as re demptions, tenders, defaults, and proposed amendments to the 2026 Bonds documents. For example, Beneficial Owners of 2026 Bonds may wish to ascertain that the nominee holding the 2026 Bonds for their benefit has agreed to obtain and transmit notices to Be neficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.

Redemption notices shall be sent to DTC. If less than all of the 2026 Bonds within a maturity are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to 2026 Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Authority as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts 2026 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Redemption proceeds, distributions, and dividend payments on the 2026 Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Authority or the Trustee, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instru ctions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Trustee or the Authority, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Authority or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

A 2026 Bond Owner shall give notice to elect to have its 2026 Bonds purchased or tendered, through its Participant, to the Trustee, and sh all effect delivery of such 2026 Bond by causing the Direct Participant to transfer the Participant’s interest in the 2026 Bonds, on DTC’s records, to the Trustee. The requirement for physical delivery of 2026 Bond in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the 2 026 Bond are transferred by Direct Pa rticipants on DTC’s records and followed by a bo ok- entry credit of tendered 2026 Bond to the Trustee’s DTC account.

DTC may discontinue providing its services as depository with respect to the 2026 Bonds at any time by giving reasonable notice to the Authority or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, physical certificates are required to be printed and delivered.

The Authority may decide to discontinue use of the system of book -entry only transfers through DTC (or a successor securities depository). In that event, 2026 Bonds will be printed and delivered to DTC.

THE TRUSTEE, AS LONG AS A BOOK -ENTRY ONLY SYSTEM IS USED FOR THE 2026 Bonds, WILL SEND ANY NOTICE OF REDEMPTION OR OTHER NOTICES TO OWNERS ONLY TO DTC. ANY

FAILURE OF DTC TO ADVISE ANY DTC PARTICIPANT, OR OF ANY DTC PARTICIPANT TO NOTIFY

ANY BENEFICIAL OW NER, OF ANY NOTICE AND ITS CONTENT OR EFFECT WILL NOT AFFECT THE VALIDITY OF SUFFICIENCY OF THE PROCEEDINGS RELATING TO THE REDEMPTION OF THE 2026 Bonds CALLED FOR REDEMPTION OR OF ANY OTHER ACTION PREMISED ON SUCH NOTICE. 653

Ontario City CouncilMay 5, 2026

Ontario City Council
May 5, 2026