4. In case of illness or other emergency circumstance s in which an employee cannot finish his/her assigned duty, the employee on Duty Phone assignment shall contact the section /division Superintendent/Manager, who has the responsibility to assign an employee to provide coverage for the duty. Where feasible, the section/division Manager will contact the next person on the Duty Phone list.
F. Duty Phone Compensation
Duty Phone compensation will be paid on the basis of a seven- day Duty Phone assignment.
1. Two (2) hours at the employee’s regular hourly rate of pay per day , Monday through Thursday, and four (4) hours at the employee’s regular hourly rate of pay on Friday, Saturday, Sunday, and City-recognized holidays when City Hall is closed, per seven-day period assigned to Duty Phone status.
2. Duty Phone compensation will be paid on the first full pay period following the end of a tour of Duty Phone duty.
3. In the event of a substitution for Duty Phone assignment, the employee substituting will be compensated on an hour-for-hour basis for the Duty Phone period served. The employee who was unable to complete the entire week of assignment will have his/her Duty Phone compensation prorated.
G. Procedural Requirements
1. Duty Phone
a. The employee assigned to Duty Phone shall be provided with a City-issued Duty Phone, and the employee is expected to keep the Duty Phone charged and with him/her at all times during their Duty Phone assignment. b. The Duty Phone is designated as the after -hours phone that will initially answer all after-hours calls.
c. Each respective section/division is designated as an after-hours emergency phone that will answer all after-hours calls.
d. All employees assigned to Duty Phone will respond to all callouts in an appropriate City uniform and equipped with proper safety equipment. If additional personnel are needed for the callout incident, the employee assigned to the Duty Phone shall be responsible for contacting appropriate additional personnel.
e. The employee assigned to the Duty Phone should record each call received as hours worked. If the call necessitates a return to the work site, then the compensation procedures for callback will supersede this provision.
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f. The employee assigned to Duty Phone is also responsible for contacting appropriate management employees, in his/her discretion. Each respective section/division Superintendent/Manager may impose additional procedures that are not inconsistent with these procedures, such as designating situations in which notification to a manager is mandatory. g. An employee assigned to Duty Phone shall be free to utilize his/her time as desired, but must refrain from activities which might impair the employee’s ability to perform assigned duties, including, but not limited to, drinking alcohol.
2. Utility Maintenance Duty Phone
a. If additional personnel are needed for the callout incident, the employee assigned to Utility Maintenance Duty Phone shall be responsible for contacting appropriate additional personnel.
In the event the employee assigned to the Utility Maintenance Duty Phone needs assistance with a callback, he/she shall call the employee next on the duty phone schedule.
In the event of a sanitary sewer overflow (SSO) incident , all Utility Maintenance staff shall be called to respond by the employee on Utility Maintenance Duty Phone.
H. Vehicle Availability
1. The City will provide a fully equipped vehicle for use by Duty Phone personnel; the Duty Phone assignee will ensure that the vehicle is fully equipped for possible standby calls at the conclusion of the normal work assignment. The Duty Phone duty employee will be allowed a reasonable period of time to ensure that the Duty Phone vehicle is fully equipped for Duty Phone duty.
2. Designation and Usage of City Vehicles for Duty Phone:
a. There is a designated vehicle for the employee assigned to the Duty Phone to use while on the Duty Phone assignment.
b. Duty Phone vehicles will be designated with a “24-Hour Response Vehicle” designation at all times while the vehicle is being used in a Duty Phone or Standby status.
c. City Vehicle usage will be consistent with existing City of Palmdale vehicle use requirements.
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d. Duty Phone personnel may use the vehicle for personal use and will notify their manager thereof; non-City personnel are not authorized to use or ride as a passenger in the City vehicle.
e. Personal items or equipment may only be transported in the City Vehicle if they do not hinder the effective use of the vehicle and its equipment for Duty Phone responses.
I. Duty Phon/Callback Premium Pay
1. All employees may be called back to work. When additional personnel are needed, the employee(s) assigned to an appropriate standby list shall be the first to be called back. Other employees should be called back only if the standby employee(s) do not possess the technical abilities needed to respond to the callback, or if additional resources are required. An employee not on standby is not obligated to return to work, except in an emergency situation. No employee should return to work if he/she is under the influence.
2. When an employee is released from work following a normal shift, leaves the work site, and is called to return to duty, the employee shall receive a minimum premium time/pay that is equal to two hours of the employee’s base hourly rate or the actual time worked at the rate of one and one-half (1 1/2) times the hours worked, whichever is greater. When subsequent callouts occur within the initial two-hour callback period, the callbacks shall be considered part of the original callback for minimum compensation purposes. Employees will be paid for all hours worked.
3. Callback compensation will be paid portal -to-portal for each applicable individual callback instance. Callback hours shall be counted as “hours worked”.
4. When required to respond to a trouble call through telephone action, personnel will be compensated for telephone time in fifteen-minute increments at the rate of one and one- half (1 1/2) times the hours worked. Telephone response will be documented on a Duty Phone trouble-call report.
Section II.6 Certification and License Stipend
A. Eligibility: Upon the completion of the probationary period, an employee will be eligible to receive a stipend under this Section 2.06 if the following requirements are met:
1. The employee is in a full-time position represented by the Union.
2. The employee holds one or more of the approved licenses/certifications that are specific to the employee’s section (Streets, Parks, Fleet, etc.) in Exhibit B:
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3. The above license/certification is not a minimum qualification or requirement of the employee’s position. A license/certification that is only “preferred” for the employee’s position meets the eligibility requirements of this Section.
4. A license/certification that has a license/certification that has levels (e.g., Collection System Maintenance Grades 1 – 4), only the highest level of license/certification would meet the eligibility requirement of this section.
5. The City benefits from the employee holding the license/certification, as determined by the Superintendent, approved by the Public Works Director and acknowledged by the Human Resources Director . Employees are not automatically eligible for the stipend by possessing a license or certification listed in Exhibit B.
6. The employee’s eligibility for a stipend under this section is determined based on the employee’s current position. If the employee begins a new position, his/her eligibility for a stipend will be reevaluated based on the minimum qualifications for the new position.
7. The City will not commit to fund all costs associated with obtaining and renewing certifications. Funding would be dependent on budget availability and the Director’s or designee’s approval.
8. Employer-sponsored licenses or certifications will be evaluated annually as part of the employee’s performance evaluation. This review is intended to support ongoing collaboration and ensure that licenses, certifications, and related stipends continue to align with employee performance, operational needs, available funding, and other organizational priorities. As part of this process, adjustments may be considered when appropriate.
9. Additional certifications that benefit the City may be added to Section 2 with the approval of the Director of Public Works, Maintenance Services Manager, and the Human Resources Director.
B. Stipend: If the employee meets all of the above requirements, he/she may receive the following stipends, which will be reported to CalPERS according to required guidelines:
1. $40/month if an employee holds one of the above- listed licenses/ certifications
2. $60/month if an employee holds two of the above- listed licenses/ certifications
3. $80/month if an employee holds three of the above- listed licenses/ certifications, subject to approval by the Department Director.
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4. $100/month if an employee holds four or more of the above-listed licenses/ certifications, subject to approval by the Department Director.
Eligibility for a stipend under this Section 2.06 shall not be affected by participation in the tuition reimbursement policy set forth in the Administrative Policy: Tuition Assistance Program.
Section II.7 Bilingual Pay
The City and Union have agreed that special compensation shall be given to certain employees with specific bilingual skills. Upon completion of the probationary period, all full-time employees are eligible for bilingual pay in accordance with this Section.
An employee certified by the City as bilingual in an approved non- English language and who provides bilingual service as needed in the performance of work may receive bilingual pay per the Bilingual Assessment and Pay Program (HR-8) policy. To be certified as bilingual, an employee must pass a proficiency test in that language as determined by the City. The Human Resources Department will schedule a proficiency test within six (6) months following receipt of a written request by an eligible employee. Bilingual pay will be paid out in the first complete pay period following certification by the City. The City may establish an evaluation process for certifying bilingual pay and may require that employees recertify for bilingual pay every five (5) years.
ARTICLE III:SUPPLEMENTAL BENEFITS
Section III.1 Health Insurance Programs
Health care is provided to full-time employees, including probationary employees.
Employee coverage is effective on the first of the month following 30 days of active employment.
A. Medical Insurance
Below are the monthly rates for 2026:
Anthem
HRA
Plan Monthly City Paid Employee
Paid HRA Wellness
Credit
EE Only $577.67 $554.73 $22.94 $1,000
Annually
$1,200
Annually
EE +1 $1,355.38 $1,301.54 $53.84 $2,000
Annually
$1,500
Annually
Family $1,676.83 $1,610.23 $66.60 $2,000
Annually N/A
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PPO
Plan
Monthly
Total City Paid Employee
Paid
EE Only $785.06 $703.88 $81.18
EE +1 $1,728.66 $1,560.00 $168.66
Family $2,091.57 $1,758.50 $333.07
Kaiser
Kaiser
HMO
Monthly
Total City Paid Employee
Paid
EE Only $902.76 $623.94 $278.82
EE +1 $1,805.52 $1,247.88 $557.64
Family $2,347.18 $1,522.24 $824.94
Kaiser
HRA
Premium City Paid Employee
Paid
HRA
EE Only $632.19 $505.83 $126.36 $1,000
annually
EE +1 $1,264.38 $1,061.66 $202.72 $2,000
annually
Family $1,643.69 $1,275.16 $368.53 $2,000
annually
The employee contribution to health care premiums will be deducted from the employee’s paycheck bi-monthly (50% on the first paycheck of the month, the remaining 50% on the second paycheck).
B. Opt-Out Benefit
Employees who waive health coverage and provide proof of coverage receive $50 monthly. Employees who opt out of health coverage must provide proof of coverage during each open enrollment period.
C. Dental and Vision Insurance
The City will provide dental and vision insurance at no cost to the employee. The employee will be required to contribute $26 per month toward the cost of dependent(s) through a payroll deduction.
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D. HRA Plans
Employees enrolled in the City HRA plan or the Kaiser HRA plan receive the following City-paid contributions:
• employee only: $1,000 annually in the HRA account
• employee + 1: $2,000 annually in the HRA account
• family: $2,000 annually in the HRA account
The funds in the HRA account roll over each year with the following maximum limits:
• employee only: $4,000
• employee + 1: $8,000
• family: $12,000
If an employee opts out of the HRA plan during open enrollment or for any other reason, their HRA account balance is forfeited and does not roll over for future use.
E. City HRA Wellness Credit Plan
Depending on the unit members’ enrollment status, eligible employees enrolled in the City HRA Wellness plan also receive the following City-paid contributions:
• employee only: $100 monthly
• employee + 1: $125 monthly
The Wellness Credit is a “use it or lose it” plan, and the money must be used within the calendar year; otherwise, it reverts to the City.
Funds in the unit member’s HRA Account and/or Wellness Credit account may be used for any eligible expenses.
F. Future Discussion of Cost Containment
On or after June 1st of each year, upon giving thirty (30) days’ notice, either party may request discussions to review premium rates and options for cost containment.
The City and the Union agree to work jointly to identify and recommend potential cost - saving measures to reduce future premium increases. It is understood that the City has sole authority to determine the benefits to be provided.
Members will be charged the same future increases or decreases in health insurance costs as the general employees.
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G. Wellness Incentive Reimbursement
The City will reimburse eligible full-time employees for actual costs incurred towards any of the following wellness expenses, up to a total combined maximum of five hundred dollars ($500) per fiscal year:
• Fees for gym membership, sports registration, and physical fitness classes; • Exercise tools and equipment (e.g., weights, treadmill); • Fees towards mental health courses and workshops (e.g., meditation, stress management);
• Other physical health or mental wellness activities or products which may be reasonably approved by the City ’s Human Resources Department in its sole discretion.
Requests for reimbursements, along with supporting receipts and documentation, must be submitted by the employee to the Human Resources Department within sixty (60) days of incurring the expense. Requests that are submitted late or with insufficient documentation may be denied.
Section III.2 Retirement
A. Summary of Benefits and Employee Contribution
The City offers a defined retirement benefit plan through the California Public Employees’ Retirement System (CalPERS). An employee may be eligible for one of three benefit tiers pursuant to the City’s contract with CalPERS. Information provided here is a summary of the benefits that are fully set forth in the City’s contract with CalPERS, and in the case of a conflict, the contract with CalPERS will control.
Tier 1
Hired on or before
4/10/11
Tier 2
Hired between
4/11/11 and 12/31/12
Tier 3
Hired on or after
1/1/13
Formula 2.7% @ age 55 2% @ age 60 2% @ age 62
Current Employee Contribution 8% 7% 7.75%
Note: All full-time employees are enrolled in either a New or a Classic member plan, as determined by CalPERS. Percentages are subject to change as determined by CalPERS.
Employee Retirement Contribution:
Employees hired on or before April 10, 2011
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The total Employee Contribution is currently 8% and is paid entirely by the employee. The employee does not receive any Employer-Paid Member Contribution (EPMC).
Employees hired between April 11, 2011, and December 31, 2012 The total Employee Contribution is currently 7% and is paid entirely by the employee. The employee does not receive any EPMC.
Employees hired on or after January 1, 2013
The total Employee Contribution is currently 7.75% and is paid entirely by the employee.
The employee does not receive any EPMC.
B. Optional Benefits
The City agrees to continue providing the additional optional benefits through CalPERS:
Tier 1
Hired on or before
4/10/11
Tier 2
Hired between 4/11/11
and 12/31/12
Tier 3
Hired on or after
1/1/13
Credit For Unused Sick
Leave
Yes Yes Yes
Final Compensation 12 months 12 months 36 months
Military Service Yes Yes Yes
2 Years Additional
Service Credit
Yes Yes Yes
3rd Level 1959
Survivors Benefits
Yes Yes Yes
Section III.3 Deferred Compensation
Employees may participate in the City's deferred compensation plan. Participation is voluntary and subject to the plan's rules.
Effective July 1, 2026, the City will match employee contributions up to a maximum City contribution of two hundred dollars ($200) per month.
Section III.4 Boot/Uniform Allowance
Employees are required to wear uniforms and safety work boots. The City will provide an annual allowance of $300 for work boots and $200 for pants, and will purchase City brand shirts.
The City will provide pants and shirts as part of the laundry service to bargaining unit members in the F leet section, Utility section, designated vac -con operators , and IPM Specialists. The City shall provide laundering services for these uniforms. These employees will not be eligible for the pants allowance.
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All Fleet section, designated vac-con operators, and IPM Specialists will receive 5 shirts and 5 pairs of pan ts each year as part of the laundry service, except Utility section employees, who will receive 11 shirts and 11 pairs of pants. All other employee uniforms not part of the laundry service will receive 5 new uniform shirts purchased by the City and issued to employees each year.
The City is a member of the California Employees’ Retirement System (CalPERS). All full-time employees are enrolled in either a New Member or a Classic plan as determined by CalPERS. As with all stipends or additional compensation, uniform allowances may be reportable to CalPERS in accordance with the required guidelines (e.g., as special compensation for CalPERS Classic Members ; per Section 2 CCR 571). Uniform allowance payments shall be made through payroll and disbursed evenly per pay period.
The City will adjust the costs reported to Cal PERS if there are any changes during the course of this agreement, subject to the meet and confer process.
Section III.5 Training and Development
Attendance at professional meetings, seminars , and conferences concerned with the promotion of municipal interest and the advancement of professional capabilities will be paid by the City when:
• The employee has successfully completed probation.
• The appropriate authority has granted specific approval. • Adequate funds are available in the current year’s operating budget. • Receipts are provided as specified within the Travel and Meeting Expense Policy (Administrative Instruction 79).
Section III.6 Long-Term Disability Insurance
The City agrees to maintain a long-term disability insurance plan for full-time employees at no cost to the employee. The maximum monthly benefit is 60% of salary up to $6,000 per month. The City reserves its right to determine the provider of long- term disability insurance.
Section III.7 Short-Term Disability Insurance
The City agrees to maintain a short-term disability insurance plan for full-time employees at no cost to the employee. The City reserves its right to determine the provider of the short-term disability insurance and the benefits provided by the insurance, provided there is no cost to the employee.
Section III.8 Term Life Insurance
The City shall provide and pay the full monthly premium for a term life insurance plan for full-time employees covered herein in an amount equal to $50,000. Employees may
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purchase additional insurance at their own cost, provided the carrier permits it . The City reserves the right to determine the provider of life insurance coverage.
Section III.9 Tool Allowance
The City will provide Maintenance Specialists who perform mechanic duties and who are required to provide some of their own tools with an annual tool allowance of $500. This allowance will be paid out evenly in each pay period. This allowance is not reportable to CalPERS.
Section III.10 Take Home Vehicle
No employee shall be permitted to take home a City vehicle unless the employee is assigned to Standby pursuant to Section 2.05, or unless the employee has been specifically authorized by the employee’s supervisor to take a City vehicle home because service to the City necessitates the employee having a City vehicle, such as in the case of severe weather.
ARTICLE IV:LEAVES OF ABSENCE
Section IV.1 Holidays
Pursuant to Section 10- 1 of the Human Resources Rules & Regulations, the following holidays shall be observed by the City with respect to all employees of the City:
1. New Year's Day
2. Martin Luther King Jr. Day
3. Presidents’ Day
4. Farmworkers Day (floating holiday)
5. Memorial Day
6. Juneteenth
7. Independence Day
8. Labor Day
9. Columbus Day (floating holiday)
10. Veterans Day
11. Thanksgiving Day
12. Day after Thanksgiving
13. Christmas Eve
14. Christmas Day
15. New Year’s Eve
The dates on which each of the foregoing holidays is observed shall be determined by the City.
If any of the foregoing holidays fall on a Saturday or Sunday, the preceding Friday or the following Monday shall be observed as a holiday.
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All holidays will be paid in accordance with employees’ regular work schedules . An employee on unpaid leave is not eligible for holiday pay.
An employee must work their regularly scheduled shift immediately before and immediately after that holiday or be on a pre-approved absence in order to receive holiday pay. Emergencies will be treated on a case- by-case basis and approved by Human Resources for consistency. A new employee whose first working day is the day after a holiday shall not receive holiday pay. An employee who is separating from employment and whose last day is an observed holiday shall not receive holiday pay.
An employee eligible for floating holidays may use accumulated floating holidays at any time during employment upon department head approval. The City will keep a record of floating holiday use, accrual , and accumulation. If an employee terminates his or her employment with the City and has accumulated floating holidays, he or she shall be paid for the accumulated floating holidays. For eligible employees, a floating holiday shall be equivalent to the num ber of hours an employee is regularly scheduled to work during a workday.
All full-time employees hired on or before June 30, 2026, shall have a 680- hour cap on floating holiday accruals.
Individuals who become full-time employees on or after July 1, 2026, shall have a 340- hour cap on floating holiday accruals.
In addition to receiving their base rate of pay, an employee who is scheduled to work on a City holiday (other than floating holidays) shall receive 1.5 hours of holiday pay for every hour worked on a City observed holiday, in accordance with Section 2.04 Compensatory Time Off (CTO).
Effective July 1, 2026, an additional day off may be used during the month of the employee’s birth. This is a use-it-or-lose-it benefit and cannot be accrued/banked.
Section IV.2 Annual Vacation Leave Accrual
All full-time employees hired on or before August 1, 2012, shall be entitled to paid vacation leave as follows:
Accrual Rate
at beginning of benefited
status
80 hours per year earned at a rate of
3.07 hours per pay period
at beginning of 5th year of
employment
120 hours per year earned at a rate
of 4.61 hours per pay period
at beginning of 10th year of
employment
160 hours per year earned at a rate
of 6.15 hours per pay period
Individuals who become full-time employees after August 1, 2012 shall be entitled to paid vacation leave as follows:
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Accrual Rate
at beginning of benefited
status
80 hours per year earned at a rate of
3.07 hours per pay period
at beginning of 5th year of
employment
100 hours per year earned at a rate
of 3.84 hours per pay period
at beginning of 10th year of
employment
120 hours per year earned at a rate
of 4.61 hours per pay period
Vacation leave will accrue on a pay period basis based on hours worked or when an employee is in paid status. Regardless of an employee’s hire date, the accrual will begin on the date the employee becomes full -time. Employees are not eligible to use vacati on leave until it has been accrued. Vacation leave may be accumulated up to a maximum of 240 hours.
Once this maximum amount is accumulated, the employee will cease accruing any additional paid vacation. An employee resumes accruing vacation after taking a vacation and thereby reducing the amount accumulated below the maximum.
An employee may take vacation leave with the prior approval of the employee’s department director or the department director’s designee, provided due regard is given to the employee’s wishes and the department’s needs. The City may deny or postpone an employee’s vacation request based on the City’s business needs . The vacation requests will not be unreasonably denied.
If an employee has accrued vacation leave in their bank, it must be used. Employees cannot voluntarily go into an unpaid status.
Terminated employees shall be paid all accrued vacation leave.
If there is a holiday during vacation or other time off with pay, an employee will receive holiday pay, and such time will not be charged to the employee’s vacation or other paid time off.
Vacation benefits are not earned during the unpaid portion of a leave of absence, except as otherwise required by state or federal law.
Section IV.3 Accrued Leave Buy Back
Four times each fiscal year, as of the first pay period in March, May, September, and November, a full-time employee who has a combined total of at least 280 hours in their vacation, compensatory time, and floating holiday accrued banks may convert 20 or more hours of accrued leave (excluding sick leave) to cash. In no event can an employee use this conversion to reduce his or her combined accrued leave balance (excluding sick leave) below 240 hours.
In addition to four times each fiscal year, a full-time employee may also request to convert accrued leave in the event of a personal or family medical emergency, or a new home purchase. An employee must provide sufficient documentation verifying such a need.
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Section IV.4 Sick Leave
Sick leave shall be used by an employee who is incapacitated by illness, injury, or public health requirements. Sick leave shall be used when an employee takes time off from work for a doctor’s appointment. In addition, an employee may use sick leave for the following reasons:
1. Diagnosis, care, or treatment of an existing health condition of the employee or his or her family member. For the purposes of paid sick leave, family member includes the unit member’s spouse/registered domestic partner and the parent, stepparent, child, grandparent, grandchild, sibling, or guardian of the employee, or of the employee’s spouse/registered domestic partner. It also includes any other relative residing with the employee;
2. Preventative care for the employee or the employee’s family member;
3. Other purposes authorized by Labor Code Section 246.5 (leave for victims of domestic violence, sexual assault, or stalking).
When the need for sick leave is foreseeable, an employee must personally give their supervisor as much advance notice as possible. When the need for sick leave is not foreseeable, and except as otherwise required by law, an employee must personally give their supervisor notice of the need to take sick leave immediately, and unless impossible, such notice shall be given before the start of the employee’s scheduled work day and prior to the start of each additional work day thereafter that the employee is absent. If the employee is unable to notify his or her supervisor, the employee must notify his or her department head. In addition, all absences shall be reported in accordance with departmental rules.
If an employee is absent for four (4) or more days (40 hours) due to illness, injury , or public health requirement, a doctor’s release certifying the employee’s ability to return to work is required. For absences of less than 4 days in those circumstances where excessive use of sick leave is taking place, the City reserves the right to request verification for any absence due to illness or disability from a licensed health care provider. Failure to furnish a health care provider’s verification when requested or required to do so may result in discipline, up to and including termination.
Sick leave shall be used to care for immediate family members and others as required by law when members of the employee’s immediate family are sick and require the immediate attention of the employee including taking them to doctor appointments , jury duty or to appear in court to comply with a subpoena or court order as a witness in a judicial proceeding and if the employee or a family member is a victim of a qualifying act of violence.
Full-Time employees earn paid sick leave based on hours worked or hours paid (e.g., when an employee is on paid leave). Employees earn sick leave at the rate of eight (8) hours per month. Paid sick leave is not earned (i.e., does not accrue) during unpaid leaves
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of absence, except as otherwise required by state or federal law. Employees hired on or before August 1, 2012, may accumulate sick leave without a limit. Individuals who become full-time employees on or after August 2, 2012, may accumulate a maximum of 800 hours of sick leave.
Employees are not eligible to use sick leave until it has been accrued. Sick leave may be used in increments of fifteen minutes only unless smaller increments are permitted by law. Sick leave must be reported on the appropriate forms.
If an employee has accrued sick leave in their bank, it must be used. Employees cannot voluntarily go into an unpaid status.
An employee who returns to work for the City within one year of separation of service will be credited with up to 24 hours of sick leave. If the employee separated with less than 24 hours of accrued sick leave, he/she will be credited with the hours he/she had accrued at the time of separation.
For Unbenefited Part -Time Employees only. Unbenefited part -time employees shall accrue sick leave hours at an accrual rate of 1 hour of sick leave for every 20 hours worked for use each calendar year. An employee may use accrued sick leave beginning on the 90
th day of employment. Up to 80 hours of unused sick leave hours shall carry over to the next calendar year, but only 40 hours of sick leave shall be used each calendar year.
Section IV.5 Sick Leave Buy Back
Accumulated sick leave is not paid to employees upon termination of employment.
An employee who has not used more than forty (40) hours of sick leave during the twelve months immediately preceding the last day of the last pay period in September of each year may be entitled to convert a portion of accumulated sick leave to an equal am ount of vacation time or pay, based on the following formulas:
SICK LEAVE HOURS USED MAXIMUM CONVERTIBLE HOURS
24 or less 32
More than 24, but not more than 40 24
In order to be entitled to convert sick leave to vacation time or pay, an employee must have accumulated more than 192 hours of sick leave (more than 2 years’ accrual) before the conversion, and the employee’s sick leave accumulation must be at least 192 hours after the conversion.
An employee whose employment with the City terminates or is terminated before the last day of the last pay period in September is not eligible to convert sick leave, including on a prorated basis.
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Section IV.6 Jury Duty
Full-Time employees who have received a summons for jury duty during their normal working hours shall be deemed on duty and shall receive their regular pay for up to a maximum of ten (10) calendar days of jury service. An employee who volunteers for jury duty or serves on a grand jury will not be paid by the City for that time.
If an employee is required to serve on jury duty, the employee must notify his or her supervisor of the need for time off as soon as the court notice or summons is received.
An employee must present a verification from the court clerk stating that they served on jury duty to qualify for pay. Employees will be expected to report or return to work for the remainder of their work schedule on any day they are dismissed from jury duty.
Employees scheduled to work a night shift are not required to report or return to work on a day they report for jury duty. Employees working the night shift should contact Human Resources for specific assistance in coordinating jury duty with their schedule.
Because the furlough is not part of the normal working hours, employees are not paid for jury duty during the furlough.
Section IV.7 Bereavement Leave
Bereavement leave may be granted when the employee’s absence from work is necessitated by the death of a member of the employee’s Immediate Family.
Employees are eligible for up to five (5) days of unpaid bereavement leave. The City shall provide eligible Full-Time employees up to three (3) days of regular pay for bereavement.
An employee may request additional time off, which will then come from the employee’s accumulated leave bank.
ARTICLE V: EMPLOYER/EMPLOYEE RELATIONS
Section V.1 Dues Deductions
A. Union Dues Collection
Effective May 1, 2015, the Finance Division shall deduct Union Dues from all employees to the extent permitted by law.
The Union will maintain records of employee authorizations for dues deductions. The Union will provide the City with information regarding the amount of dues deductions and the list of Union employees who have affirmatively consented to or authorized dues deductions. The City shall not request the Union to provide a copy of any member employee’s authorization unless a dispute arises about the existence or terms of the authorization. To the extent required by the Government Code, or otherwise required by law, the City will rely on the information provided by the Union in processing dues deductions for Union employees. The Union is responsible for providing the City with timely information regarding changes to member employees’ dues deductions.
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No deduction of dues shall be made during any pay period in which an employee’s earnings, after all other deductions are made, are insufficient to cover the full amount of the dues or service fee. When an employee is in a non-pay status for an entire pay period, no deduction will be made to cover the pay period from future earnings. In the case of an employee who is in a non- pay status during less than an entire pay period and whose earnings, after all other deductions are made, are insufficient to cover th e full amount of the dues or service fee, no deduction shall be made from future earnings to cover the pay period.
B. New Hire Notification
All newly hired employees in classifications represented by the Union shall be informed by Human Resources, at the time of hire, that their classification is represented by the Teamsters. The employee shall be provided a copy of the Memorandum of Understanding.
Within seven business days of each new hire of an employee in a classification represented by the Union, the City shall notify the Union, providing the Union with the employee’s name, classification, wage rate, and date of hire. As set forth in Section
5.06 of this Agreement, the Union may request a meeting with new hires at a time and place mutually agreed upon by the Department Director and the Union.
C. Indemnification
The Union shall indemnify, defend, and hold the City harmless from any liability arising in any forum, whether judicial, administrative, or otherwise, from any claims, demands, or other action relating to the City’s compliance with any obligations imposed under this Agreement, including, but not limited to, deduction of membership dues and the Union’s use of monies collected under these provisions. The City reserves the right to select and direct legal counsel in the case of any challenge in any forum relating to the City’s compliance with this Agreement, and the Union agrees to pay any attorney, arbitrator, or court fees related thereto, as well as the reasonable costs of preparation time by City management.
D. Reasonable Notice
Reasonable written notice, as defined in Section 3504.5, California Government Code, shall be given on all matters requiring such notice under said Section. The Union agrees to notify the City in writing of all individuals authorized to receive notice on behalf of the Union and to update the City immediately upon any change.
Section V.2 Bargaining Unit Lists
Once a year, on request from the Union, the City shall give to the Union one (1) copy of the list of employees in the bargaining unit together with their most current addresses as they appear on the records of the City. The Union shall retain such informat ion in a confidential manner, and only the business representative will receive the information,
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and disclose it only to those officials of the Union whose duties require them to have access to such information.
Section V.3 Union Business
The Union shall have an aggregate total of 120 hours of leave with pay per fiscal year available to its stewards for attending seminars or conferences relevant to employee- employer relations, grievance representation, and other Union business.
Hours not used at the end of any fiscal year may not be used in the next fiscal year and are lost to the Union.
The Union shall provide reasonable advanced written notice to the Maintenance Deputy Director, or designee, specifying the dates and hours of leave requested and the personnel involved. Such leave shall not be unreasonably denied. The leave described in this section does not include the time granted to Union representatives to meet and confer with City representatives on matters related to wages, hours, and other terms and conditions of employment. Meet and confer time shall be compensated on a straight-time basis. Meetings outside of regular scheduled working hours shall not be compensated.
Section V.4 Grievance Procedure
A grievance shall be defined as a controversy, as defined herein, between the City and the Union or an employee or employees covered by this MOU and/or Human Resources Rules & Regulations. Such controversy must pertain to any matter involving the interpretation or application of any provision of this MOU and/or Human Resources Rules & Regulations. This section does not apply to reviews of evaluation and matters of discipline.
There shall be an earnest effort on the part of both parties to settle grievances promptly through the steps listed below:
A. Step One (Informal):
An employee’s grievance must be submitted to the first line supervisor or management representative immediately in charge of the aggrieved employee within fifteen (15) business days after the event giving rise to the grievance, or fifteen (15) calendar day s after the date that he/she should have been reasonably expected to have had knowledge of the grievance. The supervisor or management representative will give an answer to the employee by the end of the tenth (10) calendar days following the presentation of the grievance, and the giving of such answer will terminate Step 1.
B. Step Two:
If the grievance is not settled at Step 1, the employee may elect to proceed to Step 2 by reducing the grievance to writing. The written grievance shall fully state the facts surrounding the grievance and detail the specific provision of this MOU and/or Human
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Resources Rules & Regulations alleged to have been violated, signed and dated by the employee and presented to the department head or his/her designee within ten (10) calendar days after termination of Step 1. The employee shall also present a copy of the grievance to the Human Resources Director. A meeting with the employee, shop steward, and department head or his/her designee will be arranged at a mutually agreeable location and time to review and discuss the grievance. Such a meeting will take place within ten (10) calendar days from the date the grievance is received by the department head or his/her designee. The department head or his/her designee may invite other members of management, including, but not limited to, Human Resources, to attend the meeting. The department head or his/her designee will provide a written reply by the end of the fifth (5) calendar day following the meeting, and the issuance of such reply will terminate Step 2.
C. Step Three:
If the grievance is not settled at Step 2, the grievant may elect to proceed to Step 3 of the grievance procedure. The grievant shall have five (5) calendar days to submit a written appeal to the City Manager. If the Union and the City have mutually agreed that a grievant can waive the requirements of Step 1 and/or 2, the grievant is required to also submit all information that is required under Step 2. If the grievant has already completed Step 2 and submitted all required information, then the grievant is only required to submit the request for appeal in writing.
The grievant or his/her Union representative and the City Manager or the appropriate management representative shall, within five (5) calendar days after the appeal from Step 2, arrange a meeting to be held at a mutually agreeable location and time to review and discuss the grievance. Such a meeting will take place within ten (10) calendar days from the date the grievance is referred to Step 3. A decision shall be rendered within ten (10) calendar days from the date of such meeting. The City Manager’s decision is final and binding.
The time limits for filing a written formal grievance shall be strictly construed, but may be extended by mutual agreement evidenced in writing and signed by a duly authorized representative of the City and the grieving party. Failure of the grieving party to comply with any of the time limits set forth hereunder shall constitute a waiver and bar further processing of the grievance. Failure of the City to comply with the time limits set forth in this Section shall automatically move the grievance to the nex t level of the Grievance Procedure. The grieving party may request the assistance of a Union representative in presenting a grievance at any level of review or may represent him/herself.
Section V.5 Discipline and Disciplinary Action
A. Applicability
This section does not apply to any temporary, probationary, or part -time unbenefited employees, who are at-will employees.
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B. Definition
Types of discipline include the following: suspension, involuntary demotion, reduction in pay, or dismissal. For the purposes of this section, written or verbal reprimands, counseling memos, performance improvement plans, performance evaluations, voluntary demotions, or transfers are not classified as discipline.
C. General Provisions
Employees shall only be subject to disciplinary action for legitimate reasons. Employees are expected to meet certain standards regarding their personal conduct and job performance. Failure to meet such standards shall be grounds for appropriate disciplinary action, commensurate with the seriousness of the offense, and shall take into consideration the employee’s personnel file. Progressive discipline will be used; however, this does not preclude the City from taking disciplinary action, up to and including termination, for an incident for which there is no prior documentation , provided the disciplinary action is warranted and based on just cause.
Disciplinary actions should be documented in the employee’s official personnel file.
Performance deficiencies documented in the employee’s performance evaluation as “unsatisfactory” may be grounds for disciplinary action if the employee fails to correct those performance deficiencies within the time period designated by his/her supervisor.
To the extent possible, performance deficiencies or other causes for discipline will be documented in the employee’s personnel file.
Upon receipt of written authorization from the employee, the City will provide the Union with all written notices of discipline given to employees represented by the Union. The written notice of discipline will also inform the employee that he/she has the right to consult with the Union regarding the disciplinary action being taken.
D. Administrative Leave
The Department Director may, in consultation with the Human Resources Director , verbally or in writing, temporarily assign an employee to administrative leave with pay. In the event of a verbal notice, the Department Director, in consultation with the Human Resources Director, will confirm the action by giving the employee written notice. The employee will be advised of all restrictions to which he/she is subject during the period of administrative leave. If and when the employee returns to duty, the City w ill provide the employee with written notice of the date he/she should return to duty, a copy of which will be retained in the employee’s permanent personnel file.
This action may be taken at any time and for such length of time as the appointing authority deems necessary or appropriate under the circumstances. The appointing authority may place an employee on administrative leave for any legitimate reason, as determined by the Department Director, in consultation with the Human Resources Director. Such reasons include, but are not limited to: (1) protecting the safety or health
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of an employee or of employees; (2) preventing disruption of or damage to City programs or operations; (3) investigating alleged misconduct, including alleged harassment, by an employee; (4) investigating an employee’s job performance; and (5) protecting t he best interests of the City. Administrative leave is not subject to appeal.
E. Disciplinary Procedures
The following procedures shall be taken prior to the dismissal, suspension, involuntary demotion, or reduction in pay of any employee for disciplinary reasons.
1. Written Notice of Intent to Discipline (“Skelly Notice”) When the Department Director, in consultation with the Human Resources D irector, determines that an employee has committed an act or omission that justifies discipline, the Department Director or his/her designee shall provide the employee with written notice of the proposed disciplinary action. Such notice shall include:
• A statement which clearly defines the intent to take action, the proposed action to be taken, and the proposed effective beginning and ending time of the intended action.
• A statement of the specific grounds and particular facts upon which the proposed disciplinary action will be taken.
• A copy of all written materials, reports, or documents upon which the intended action is based.
• A statement that the employee will be afforded the right to respond to the Notice of Intent, either verbally, in writing, or both , within three business days upon receipt of the intended disciplinary action, to the designated Skelly Officer.
• If personally delivered, the employee’s signature on the Notice of Intent will acknowledge receipt of said notice by the employee. If the employee refuses to sign, it will be noted as such on the Notice of Intent. The signature on the Notice of Intent will acknowledge that the employee received the Notice of Intent.
2. Employee Response/Pre-Disciplinary (“Skelly”) Conference Within three business days after the employee has been served with the Notice of Proposed Discipline, the employee will have the right to respond, verbally or in writing, at the employee’s option, to request a Skelly Hearing. If, within the three business days response period, the employee does not provide a written or verbal response, the proposed action of the City will be considered conclusive and will take effect as set forth in the Notice of Proposed Discipline . Prior to the expiration of the three business days,
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the response date may be adjusted by mutual agreement, but unreasonable delay will not be tolerated.
The employee has the right to have a representative of his or her own choosing at the Conference.
The employee’s response will be fully considered before the City issues any final disciplinary action notice.
Should the Skelly Officer determine that the employee’s response warrants further investigation, the Skelly Officer may delay the implementation or modification of the proposed disciplinary action until such time as the further investigation is completed. In the event the investigation produces facts warranting more severe disciplinary action than originally proposed, the Skelly Officer will re- implement the Written Notice of Intent to Discipline procedures above.
3. Written Notice of Final Disciplinary Action
The Skelly Officer has the authority, after considering the employee’s response and any additional investigation, to modify, revoke, or impose the proposed disciplinary action. a. If the Skelly Officer decides to modify the proposed action, the Human Resources Director will notify the employee by issuing a revised Notice of Intent (for more severe disciplinary action than originally proposed) or a Notice of Imposition (for less severe disciplinary action than originally proposed). The Notice of Intent and Notice of Imposition will also include the effective date of any disciplinary action issued. The decision of the Skelly Officer is final and shall be imposed, unless the City a ppeals the decision to binding arbitration .
Should the City initiate an appeal, t he Skelly Officer’s decision will be stayed, pending the final resolution of the arbitration process. b. If the Skelly Officer decides to revoke the disciplinary action, the Human Resources Director will advise the employee in writing, and the Notice of Imposition will be discarded, and no record will be made in the employee’s personnel file. The decision of the Skelly Officer is final and shall be imposed , unless the City appeals the decision to binding arbitration. Should the City initiate an appeal, the Skelly Officer’s decision will be stayed, pending the final resolution of the arbitration process.
c. If the Skelly Officer decides to implement the discipline as originally proposed in the Notice of Intent, the Human Resources Director will notify the employee in writing by providing him/her with a Notice of Imposition. The Notice of Imposition will also include the effective date of any disciplinary action issued.
The decision of the Skelly Officer is final and shall be imposed.
The employee will be advised in writing of any appeal rights and/or City-initiated appeal, and the matter will be submitted to binding arbitration, if applicable.
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The Notice of Imposition or other final decision of the Skelly Officer will be delivered to the affected employee personally or sent to the employee by either overnight mail and/or certified or registered mail, return receipt requested, at the employee’s last known address. If personally delivered, the employee’s signature on the Notice of Imposition or other final decision will acknowledge receipt of the notice. If the employee refuses to sign, it will be noted as such on the Notice of Imposition or other final decision . The signature documentation on the Notice of Imposition or other final decision will acknowledge that the employee received the Notice of Imposition or other final decision.
4. Appeal Procedures – Major Discipline
There are two appeal procedures for major disciplinary appeals – one for appeals filed by the Union and one for appeals filed by the employee. Regardless of which appeal procedure is selected, the employee and/or the Union have ten (10) calendar days from receipt of the Notice of Imposition to file an appeal. The ten (10) calendar days run concurrently. An employee will be deemed to have waived his/her right to an appeal, and the imposed discipline shall be considered conclusive if the employee or the Union does not file a request for appeal within the required ten (10) calendar day period, unless good cause for the failure can be shown.
a. Major Discipline Appeal Procedures – Appeal Filed by Union Any full-time or benefited part-time employee in the classified service shall have the right to appeal any “major discipline” in accordance with these procedures. For purposes of this section, “major discipline” includes dismissal, suspension of three (3) days or more, reduction in pay, or involuntary demotion. The appeal process shall not be applicable to probationary employees. The appeal process shall not be applicable to any action not defined as “major discipline”.
The Union may elect to appeal any major discipline on behalf of any represented employee at its own discretion. If the Union elects to appeal on behalf of an employee, the matter will be submitted to binding arbitration. After the Union files a timely appeal on behalf of the employee, an arbitration appeal hearing shall be established as follows:
i. Within ten (10) calendar days after the receipt of the Notice of Imposition, the Union shall file a written request for binding arbitration through the Human Resources Division to the City Manager or designee.
The City and Union will equally share (i.e., 50/50) the arbitration-related expenses, including court reporting and/or transcription services. Each party will be responsible for their own attorney fees, expert witness(es), and staff time.
ii. The City shall request a list of five (5) arbitrators registered with the American Arbitration Association, California State Conciliation Service, or some other agreed-upon source within ten (10) calendar days of the employee’s request. The employee may delete/strike two (2) names
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from the list. The City will then select the arbitrator from the remaining names on the list.
iii. The selected arbitrator shall serve as the hearing officer. iv. The parties will meet and confer with the arbitrator to establish necessary procedural matters, which could include, but are not limited to, proper evidence and witnesses, pre- and post-hearing briefing, items within the scope of appeal, and scheduling.
v. All time limits specified in the procedure may be waived by mutual written agreement.
vi. At the conclusion of the hearing, the arbitrator will submit his/her findings to the City, Union, and the employee. The opinion shall set forth findings of fact and conclusions. The decision of the Arbitrator will become final and binding on the parties unless the City, the Union , or the employee elects to pursue judicial review under CCP §1094.5. All back pay awards related to suspension, involuntary demotions , and discharges shall include interest as set by Civil Code §§ 3287 et. seq.
b. Major Discipline Appeal Procedures – Appeal Filed by Employee If the Union does not elect to appeal and does not file a timely written binding arbitration request on behalf of the employee, the employee may still individually request an appeal hearing pursuant to Section 15 – Post Disciplinary Appeal Procedures of the City’s Human Resources Rules & Regulations. Binding arbitration shall not be available to individual employees who appeal discipline without Union representation.
An employee wishing to appeal any disciplinary action under the City’s Human Resources Rules & Regulations shall have ten (10) calendar days after receipt of the Notice of Imposition to submit a written and signed request for an appeal hearing. The employee’s appeal request must be addressed to the City Manager and submitted to the Human Resources Division. The Human Resources Department shall date-stamp the employee’s appeal to verify its timeliness.
5. Appeal Procedures – Minor Discipline
Any full-time or benefitted part-time employee in the classified service shall have the right to appeal any “minor discipline” in accordance with these procedures. For purposes of this section, “minor discipline” includes a suspension of less than three days. The appeal process shall not apply to probationary employees.
An employee wishing to appeal minor discipline may, within ten (10) calendar days from receiving notice of the Notice of Imposition, request and be granted an interview with the City Manager or his/her designee in order to discuss the appeal.
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The City Manager or designee will respond or schedule a meeting within fifteen (15) calendar days. The City Manager or designee shall render his/her judgment as soon after the conclusion of the hearing as possible and in no event later than thirty (30) cal endar days after conducting the hearing. His/her decision shall set forth which charges, if any, are sustained and the reasons therefore. The opinion shall set forth findings of fact and conclusions. The City Manager’s decision shall be final and binding.
The time limits for the appeal of minor discipline shall be strictly construed, but may be extended by mutual agreement evidenced in writing and signed by a duly authorized representative of the City and the employee. Failure of the appealing party to comply with any of the time limits set forth herein shall constitute a waiver and shall bar further appeal of the discipline. The employee may r equest assistance from a Union representative in appealing discipline at any level of review, or may represent him/herself.
Section V.6 Notification of New Hires and Union Meeting with New Employees It is hereby agreed that the Human Resources Department shall provide the Teamsters designee with the name of each permanent employee whose job title entitles him/her to Teamsters representation as soon as is practicable after hire or transfer.
One steward shall be provided up to 30 minutes per month to meet with any new employees hired into represented positions. The new employee(s) will also be permitted to attend this meeting without any loss of compensation.
Section V.7 Use of City Facilities
Except as specifically identified in Section 5.04 Union Business, all Union business will be conducted by employees and Union representatives outside of established work hours.
Nothing herein shall be construed to prevent a Union representative or an employee from contacting the Human Resources Director or other management representatives regarding personnel-related matters during work hours. The authorized Union Business Agent shall be given access to work locations during working hours , provided that prior to visiting any work location, the Union representative shall: Obtain authorization for the visit from the Human Resources Director or designee. In the event the requested tim e and/or location of such visit by the Union Business Agent is denied because it would interfere with the operations of the department, the Human Resources Director or designee shall consult with the Union Business Agent regarding availability and set an alternative time and/or location for such visit within seventy-two (72) hours of the request.
The Union may schedule meetings in City facilities at times when those facilities are not in use by submitting a written request to the Human Resources Director or designee, which shall include the date, time, and number of people expected. Approval will be granted in the same manner as for other organizations.
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The Union shall maintain proper order during any meeting held at a City facility and ensure that the space is left in a clean and orderly condition. The City reserves the right to revoke permission to use City facilities for meetings if the Union fails to maintain order during a meeting or if facilities are not left in a clean and orderly condition.
Section V.8 Bulletin Boards
The Union shall have access to City bulletin boards located in the Maintenance Yard for the purpose of posting the following types of notices (these are examples only and not intended to be a complete list):
(1) Notice of recreational and social affairs sponsored by the Union; (2) Notice of Union meetings;
(3) Notice of Union elections;
(4) Reports from Union committees;
(5) Rulings on Union policies; and
(6) Union newsletters.
All posted material must be legibly signed or initialed and dated by the Union President or designated representative. The Union will not post information that is defamatory, derogatory, or obscene, subject to the immediate removal of the right to post for a period not to exceed ninety (90) days. In the event that unauthorized material is posted, it shall be promptly removed by the Union or its representative upon notification by the City. The City reserves the right to remove material that contains defamatory statements before providing notification to the Union; if such action is taken , the City shall notify the Union as soon as possible.
Section V.9 Use of E-Mail and Computers
The Union recognizes that HR Rules and Regulations Section 19 Workplace Searches and Inspections and Administrative Policy #83 Technology Use Policy regulate the use of, and that the City has the right to access and inspect City computers, including but not limited to viewing any messages sent or received through the City’s e-mail system or any temporary or permanent files stored on the City’s electronic systems and/or equipment.
The Union is reminded that communications sent via the City’s e- mail system or documents maintained on any City -provided electronic storage or devices are not confidential and can be viewed by the City.
The City and the Union agree that the Union may be permitted to use City e- mail for the purposes described in this section. Notices which may be sent through the City’s e- mail system are limited to those types of notices which may be posted on bulletin boards, as described above. No notice or announcement that contains defamatory statements about the City, including any City Department, any City official, or any City employee(s) shall be sent through the City’s e-mail system. The City reserves the right to refuse to allow notices to be sent through the City’s e- mail system that interfere with the Department’s operational needs, workflow, or mission.
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Any violation of this section shall entitle the City to immediately cancel the provisions of this section and revoke the Union’s privilege to use the City’s e- mail system pursuant to this section. It is expected that once the Union is aware of any such violations, it would be afforded the opportunity to rectify the situation.
Section V.10 Use of Vehicle Telematics
The Union recognizes that Administrative Policy #85, Telematics Policy, regulates the use of, and that the City has the right to equip vehicles with active or passive telematic systems, including, but not limited to, installing forward- facing-only cameras in the City vehicle fleet to enhance safe, sustainable, and efficient operations. Telematics shall be used to determine vehicle speeds, location, routes, usage, idling frequency, and onboard diagnostic information. Telematics and its data shall also be used for the administration and management of City vehicles, including their safe and efficient operation, and to assist in assessing and responding to complaints or claims against the City.
The City’s intent in using telematics data is to improve safety and efficiency. Unless the City has a reasonable belief that a City vehicle operator may be engaging in unsafe vehicle operation, the specific operator’s vehicle telematics will not be regularly monitored.
Section V.11 Voluntary Commercial Driver’s License Program This section does not apply to employees whose position requires a Commercial Driver’s License (CDL). Upon the completion of the employee’s full-time probationary period, the City may, at its discretion, sponsor a limited number of employees for the attainment and maintenance of a California Commercial Driver’s License (CDL), including payment for required vehicle training, Department of Motor Vehicles (DMV) licensing fees, and required medical certifications and renewals.
Participation in the CDL Program is voluntary. However, employees who accept City-sponsored CDL training, DMV testing/licensing, and CDL medical examinations agree to remain employed by the City for a minimum of twenty-four (24) months from the date of initial licensure or program completion, whichever is later. During this 24- month period, the employee may be assigned CDL -related duties as needed, regardless of job description. Employees participating in the program will be required to sign a Voluntary Commercial Driver’s License Program Agreement.
Upon execution of the voluntary CDL program agreement and issuance of the CDL certification/license, employees are eligible to request a stipend (Refer to Section II.07 – Certification and License Stipend). If a new employee already has a CDL at the time of hire, they will be eligible to request a stipend and will not be subject to the 24- month period. Failure to obtain or hold the CDL certification/license for 24 months would result in a prorated repayment due to breach of their CDL program agreement.
In the event an employee voluntarily separates from City service or surrenders their CDL prior to completion of any applicable service commitment period, the employee shall
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reimburse the City for the costs of training, DMV testing/ licensing, and medical examinations on a prorated basis. The repayment obligation shall be reduced proportionally based on the length of service completed within the applicable commitment period.
Repayment shall not be required in cases of layoff, City -initiated reassignment, documented medical inability to perform CDL- required duties, or other circumstances beyond the employee’s control as determined by the City.
All CDL employees shall comply with all applicable federal, state, and City Administrative Instruction Policies No. 97 – Vehicle Use, No. 71 – Accident, and No. 88 – Drug & Alcohol Prohibition, regarding driver eligibility and reporting obligations.
Employees must notify the City of any citation, accident, license restriction, suspension, revocation, or other action affecting their driving privileges within 48 hours of occurrence or notification, consistent with City Administrative Policy No. 97 – Vehicle Use.
Failure to comply with reporting requirements may result in disciplinary action, up to and including termination, and may affect eligibility to participate in the CDL voluntary program.
This provision is intended to reinforce existing policy requirements and does not limit the City’s authority to establish, modify, and enforce reasonable rules and regulations related to driver safety, licensing, and operational needs.
Section V.12 Joint Labor Management Committee
The Union and the City agree to establish the following Joint Labor -Management Committees (“JLMC”). By mutual agreement, the parties may merge these specified JLMCs. The parties may establish ground rules specific to each JLMC, as necessary.
A. Maintenance Organization: Either party may request a JLMC to discuss a re- organization and/or re-alignment of the Public Works Maintenance Division and/or Parks & Recreation Aquatics Division.
B. Callback Procedures: Either party may request a JLMC to discuss the establishment of an “Extreme Weather Conditions Task Force,” discussed in Section 2.05.
C. Workweek Definition: The City may request a JLMC to revise the definition of “workweek” set forth in Section 1.11 in order to more accurately document the workweek(s) to which employees are assigned.
D. Human Resources Rules & Regulations and Related Policies: Either party may request a JLMC to discuss proposed changes within the scope of representation to the City’s Human Resources Rules & Regulations and/or policies related to the Human Resources Rules & Regulations.
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E. Maintenance Policy Manual : Either party may request a JLMC to discuss proposed changes within the scope of representation to the City’s Maintenance Policy Manual.
F. Training Issues and Requirements: Either party may request a JLMC to discuss matters within the scope of representation related to employee training.
G. Use of Cellular Phones: Either party may request a JLMC to discuss matters within the scope of representation related to employee use of cellular phones, including, but not limited to, use of personal cellular phones to conduct City business.
H. Health Insurance: Either party may request a JLMC to discuss matters within the scope of representation related to health insurance, which can include, but is not limited to, the consideration of “Teamsters Medical”, the establishment of a “cafeteria plan”, and/or the Cit y and employee contributions to health insurance plans.
I. Retiree Medical: Either party may request a JLMC to discuss the possibility of establishing a Health Savings Account.
J. Lateral Transfers: Either party may request a JLMC to discuss matters within the scope of representation related to lateral transfers between bargaining unit positions upon passing probation within the Public Works Maintenance Division Sections (Streets, CPP, Facilities, Fleet, Landscape, Parks, Traffic Signals, Utility, and Parks & Recreation Aquatics).
Standing JLMC: The parties agree to establish a standing JLMC to discuss issues of mutual concern and to encourage an open dialogue between employees and management. This standing JLMC would meet at least quarterly upon either party’s request. The parties acknowledge that the issues of mutual concern to be included in this standing JLMC may be outside the scope of representation. The agreement of the City to discuss an issue outside the scope of representation should in no way be construed or considered to be a waiver of any management rights. When a party wishes to convene the standing JLMC, it should request it in writing and identify the topics it wishes to discuss. The responding party may also request that additional topics be included. A mutually agreed time and location will be set. It is the intent of the parties that this standing JLMC be limited to City staff only. However, either party may request that a non-employee be brought in if the non-employee is necessary to discuss an item. The other party must be advised in advance of the intent to bring a non- employee and must agree to the attendance of the non-employee.
SIGNATURES FOLLOW ON NEXT PAGE
Agreement No. A-9903
IN WITNESS WHEREOF, the parties hereto have caused this Memorandum of Understanding to be executed this ____day of______________ 2026.
CITY OF PALMDALE
Dated: ____________________
__________________________
Salvador Mendez, City Manager
__________________________
Sara Gallagher, Asst. City Manager
__________________________
Yvette Barrios, Human Resources
Director
__________________________
Eric Ohlsen, Mayor
__________________________
Date
Attest:
_________________________
Rochelle Scott
City Clerk
APPROVED AS TO FORM:
________________________
Alexandra Severino, City Attorney
CALIFORNIA TEAMSTERS LOCAL 986
Dated: ___________________
_________________________
Michael Grijalva, Teamsters Local 986
Union Representative, Chief Negotiator
_________________________
Evan Armstrong, Chief Steward
_________________________
Michael Johnson, Steward
_________________________
Jose Otero, Steward
______________________
Warren Phillips, Steward
_________________________
Albert Gonzalez, Steward
_________________________
Andrew Ulrich, Steward
Agreement No. A-9903
EXHIBIT A
TEAMSTERS LOCAL 986
EMPLOYEE GROUP
LIST OF REPRESENTED CLASSIFICATION & PAY PLANS
POSITIONS FY 2026-27
As of June 29, 2026
Resolution CC: 2026-031
June 02, 2026
PART-TIME TITLE
RANGE #
HOURLY
RANGE
Maintenance Helper 14 $19.17 - $22.20
MONTHLY
FULL-TIME TITLE RANGE # RANGE
Custodian I 22 $4,452.93 - $5,683.60
Maintenance Worker I 23 $4,678.27 - $5,966.13
Custodian II 24 $4,908.80 - $6,266.00
Maintenance Worker II 25 $5,154.93 - $6,579.73
Operator I 27 $5,683.60 - $7,255.73
Operator II 29 $6,266.00 - $7,997.60
Lead Custodian 30 $6,579.73 - $8,399.73
Maintenance Leadworker 30 $6,579.73 - $8,399.73
Maintenance Specialist 30 $6,579.73 - $8,399.73
Inspector I 31 $6,907.33 - $8,819.20
Operator Sr 31 $6,907.33 - $8,819.20
Traffic Sig Tech I 31 $6,907.33 - $8,819.20
Inspector II 33 $7,618.00 - $9,542.00
Senior Maintenance Specialist 33 $7,618.00 - $9,542.00
Traffic Sig Tech II 33 $7,618.00 - $9,542.00
Welder 33 $7,618.00 - $9,542.00
Inspector Sr 35 $8,399.73 - $10,517.87
Senior Traffic Sig Tech 35 $8,399.73 - $10,517.87
Agreement No. A-9903
EXHIBIT A (Continued)
TEAMSTERS LOCAL 986
EMPLOYEE GROUP
LIST OF REPRESENTED PAY PLANS
Agreement No. A-9903
EXHIBIT A (Continued)
TEAMSTERS LOCAL 986
EMPLOYEE GROUP
LIST OF REPRESENTED PAY PLANS
Agreement No. A-9903
EXHIBIT B
TEAMSTERS LOCAL 986
EMPLOYEE GROUP
LIST OF LICENSES AND CERTIFICATIONS
Agreement No. A-9903
EXHIBIT B (Continued)
TEAMSTERS LOCAL 986
EMPLOYEE GROUP
LIST OF LICENSES AND CERTIFICATIONS
Agreement No. A-9903
EXHIBIT B (Continued)
TEAMSTERS LOCAL 986
EMPLOYEE GROUP
LIST OF LICENSES AND CERTIFICATIONS
City Council Staff Report
DATE: JULY 7, 2026
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: HUMAN RESOURCES DEPARTMENT
DISTRICT: ALL
SUBJECT: ADOPT RESOLUTION NO. CC 2026 -037, A RESOLUTION OF THE
CITY COUNCIL OF THE CITY OF PALMDALE ESTABLISHING
DEPUTY DIRECTORS / DIRECTORS / EXECUTIVE EMPLOYEES’
COMPENSATION, BENEFITS, AND OTHER TERMS AND
CONDITIONS OF EMPLOYMENT, SUPERSEDING RESOLUTION
NO. CC 2023-037; AND ADOPT RESOLUTION NO. CC 2026-038, A
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALMDALE
ESTABLISHING A MEDICAL BENEFIT PARTICIPATION PROGRAM
FOR ACTIVE COUNCILMEMBERS PURSUANT TO GOVERNMENT
CODE 53208
RECOMMENDATION
Staff recommend that the City Council:
1. Adopt Resolution No. CC 2026 ‑037, a Resolution of the City Council of the City of Palmdale establishing the Compensation, Benefits, and Other Terms and Conditions of Employment for Deputy Directors, Directors, and Executive Employees, superseding Resolution CC 2023‑037; and,
2. Adopt Resolution No. CC 2026 ‑038, a Resolution of the City Council of the City of Palmdale establishing a medical benefit program for active Councilmembers pursuant to Government Code Section 53208.
BACKGROUND
On November 15, 2023, the City Council adopted Resolution No. CC 2023 -037 to consolidate and standardize the compensation, benefits, and terms and conditions of employment for the City’s executive -level employees. Prior to the adoption of the Resolution, Directors and Executive employees were employed pursuant to individualized employment agreements. Resolution No. CC 2023 -037 established a unified employment framework intended to provide consistency, transparency, and administrative efficiency while preserving existing compensation and benefit provisions.
Report to Mayor and City Council
Re: Adopt Reso. Nos. CC 2026-037 and CC 2026-038
July 7, 2026
Since the adoption of the Resolution, the City’s organizational structure and operational needs have continued to evolve. As part of this review, the City evaluated executive - level classifications and determined that Deputy Directors serve in significant leadership and management capacities that warrant inclusion within the executive employment framework established by Resolution No. CC 2023-037.
Additionally, the City currently provides executive employ ees access to an executive - level physical examination program administered through UCLA medical facilities or another provider approved by the City Manager . T he City has identified the need to formally authorize active City Councilmembers to participate in these programs, consistent with California Government Code Section 53208, which permits elected officials to participate in certain agency benefit programs when authorized by the legislative body.
DISCUSSION
Resolution No. CC 2026-037 updates and supersedes Resolution No. CC 2023-037 by expanding the classifications covered under the City’s unified executive employment framework to include Deputy Directors, in addition to Directors and Executive Management employees. The Resolution establishes compensation, benefits, and other terms and conditions of employment applicable to these classifications and affirms the City Manager’s authority, consistent with the Palmdale Municipal Code, to administer personnel matters relating to executive employees.
The inclusion of Deputy Directors recognizes the significant operational, administrative, and leadership responsibilities assigned to these positions, including departmental oversight, policy implementation, continuity of operations, and organizational management support.
Resolution No. CC 2026 -038 establishes a medical physical examination benefit program for active City Councilmembers pursuant to Government Code Section 53208.
Under the program, Councilmembers may participate in the same executive -level physical examination currently made available to designated executive employees through UCLA medical facilities or an equivalent provider approved by the City Manager.
The Councilmember benefit is limited solely to the physical examination itself and does not include any additional health, retirement, or deferred compensation benefits. The program is structured as a discretionary wellness benefit and is not connected to CalPERS, PARS, or any other retirement -related program or post -employment health benefit. Participation in the program does not create vested rights, and the City Council retains the authority to amend, suspend, or terminate the program at any time.
The City Manager or designee will administer the program and establish procedures for scheduling, provider coordination, and related administrative processes, consistent with existing executive physical examination practices.
Report to Mayor and City Council
Re: Adopt Reso. Nos. CC 2026-037 and CC 2026-038
July 7, 2026
FISCAL IMPACT
$0; Adoption of this Resolution does not create an immediate fiscal impact. Any future adjustments to compensation or benefits that carry financial implications will be incorporated into the City’s budget process and presented to the City Council for consideration and approval as required.
STRATEGIC PLAN
Goal IV: Maintain a desirable community where everyone wants to live, work, and play.
C. Invest in staff and other human resource strategies to attract and retain a highly qualified, diverse, and creative workforce.
Prepared by: Yvette Barrios, Director of Human Resources Certified as to availability of Funds: Janelle Samson, Deputy City Manager Approved by: Salvador Mendez, City Manager
Approved as to form: Alexandra Severino, City Attorney
ATTACHMENTS
Reso. No. CC 2026-037
Reso. No. CC 2026-038
CITY COUNCIL
CITY OF PALMDALE, CALIFORNIA
RESOLUTION NO. CC 2026-037
ADOPT RESOLUTION NO. CC 2026-037, A RESOLUTION OF THE CITY
COUNCIL OF THE CITY OF PALMDALE, ESTABLISHING DEPUTY
DIRECTORS / DIRECTORS / EXECUTIVE EMPLOYEES’
COMPENSATION, BENEFITS, AND OTHER TERMS AND CONDITIONS
OF EMPLOYMENT, SUPERSEDING RESOLUTION NO. CC 2023-037
WHEREAS, the City of Palmdale (“City”) employed its Directors and Executive management staff by individual employment agreements; and
WHEREAS, the City of Palmdale consolidated and terminated all of the existing Employment Agreements held by incumbents terminated on November 19, 2023, and established the terms and conditions of employment by a unified Compensation Program Resolution No. CC 2023-037 that continued the existing terms and conditions of the individual Employment Agreements and thereafter established the compensation programs for all future Directors and Executive Employees; and WHEREAS, the City Manager determined that a more effective oversight, fairness, and consistency of administration of the Directors and Executive Management staff would be accomplished through the adoption of a unified Compensation Program Resolution No. CC 2023 -037 and, therefore recommended that the City Council adopted Resolution No. CC 2023-037 memorializing the compensation, benefits, and other terms and conditions of employment for all Directors and Executive Management employees; and
WHEREAS, the City Manager has determined to amend and replace Resolution No. CC 2023-037 and, therefore, recommends adding all current and future Deputy Directors to the revised unified Compensation Program Resolution No. CC 2026-037.
NOW THEREFORE, BE IT RESOLVED, THE CITY COUNCIL OF THE CITY OF
PALMDALE DOES HEREBY FIND, DETERMINE, RESOLVE AND ORDER AS FOLLOWS:
SECTION 1. City Manager Authority. In accordance with the City of Palmdale Municipal Code §2.04(B)(C) and(D), the City Manager is the administrative head of the City government and responsible for the efficient administration of all City affairs including, without limitation, directing department heads, transfer employees from one department to another, consolidate or combine offices, position, departments or units, appoint, remove, exercise control over and supervise departments and City employees, with the exception of the City Attorney and the City Treasurer.
SECTION 2. Pay Increase. The City Manager has the discretion to authorize pay increases within the approved steps of the Classification and Pay Plan.
SECTION 3. Classifications Covered. The following Deputy Directors, Directors, Resolution No. CC 2026-037
and Executive Management classifications shall be covered under the provisions of this Resolution:
• Assistant City Manager
• Deputy City Manager
• Director
• Director of Public Works
• Deputy Director
All Employees in the above-listed positions shall be employed by the City in accordance with the terms and conditions provided herein.
SECTION 4. Salary Schedule. All classifications covered by this Resolution shall be paid in accordance with the City’s existing “Classification and Pay Plan” as may be adopted and modified from time to time by the City Council.
SECTION 5. CalPERS Retirement. The City is a member of the California Employees' Retirement System (CalPERS). All full -time employees are enrolled in either a New Member or a Classic plan as determined by CalPERS.
SECTION 6. Employment Status. All employees covered by this Resolution shal l serve at the pleasure of the City Manager and may be terminated at any time, with or without cause, and without any right to a pre- or post-termination hearing. In the event an employee is terminated without cause, the City shall pay to the employee severance in an amount not to exceed six (6) month's salary , less applicable deductions . As a condition to receiving severance under this Section, the employee would be required to execute a severance and release agreement wherein the employee would agree to resign and release any and all claims, including civil and administrative claims, in exchange for the severance pay. Employees terminated for cause or who voluntarily resign from their positions are not entitled to severance benefits. Upon termination of employment either with or witho ut cause, the employee shall be paid for accrued but unused vacation, floating holiday, and administrative leave, but not for accrued sick leave in accordance with state law or the City's Human Resources Rules & Regulations.
SECTION 7. Deferred Compensation. All employees covered under this Resolution shall be eligible to enroll in the City's Deferred Compensation Plan. The Plan types, along with the terms and conditions of participation in the Plan , are subject to modification by the City Council as required under applicable federal and California law. The City shall annually contribute : 1) Deputy Directors -- Two thousand five hundred dollars ( $2,500); and Directors and Executive Staff -- Five thousand dollars ($5,000) to participating employees, such amounts to be equally contributed per pay period to each pay period established by the City.
SECTION 8. Auto Allowance. The following classifications shall be eligible for an auto allowance: 1) Deputy City Manager -- $ 200/month; 2) Director -- $ 200/month; 3) Assistant City Manager -- $ 400/month; and 4) Deputy Director -- $ 150/month.
Resolution No. CC 2026-037
SECTION 9. UCLA Physical. All employees covered by this Resolution shall be entitled to one executive physical every other fiscal year at the UCLA medical facilities.
SECTION 10. Cost of Living Adjustments (COLA). The City Council may, from time to time, adopt by Resolution COLA adjustments and/or adjustments to the Classification and Pay Plan for those employees covered under this Resolution.
Employees covered by this Resolution shall receive a COLA when the City Council approves a COLA for General Employees.
SECTION 11. Accrued Leave. Employees covered under this Resolution shall accrue the following leaves:
a. Vacation: Employees shall accrue vacation leave at the rate of 6.15 hours per pay period (160 hours annually), such pay periods as established by the City Council.
b. Sick Leave: Employees shall accrue sick leave at the rate of 3.7 hours per pay period (96 hours annually), such pay periods as established by the City Council.
c. Administrative Leave: Employees shall accrue administrative leave at the rate of 3.7 hours per pay period (96 hours annually), such pay period as established by the City Council.
SECTION 12. Medical, Dental, and Vision Insurance. All classifications covered by this Resolution shall continue to receive the same Medical, Dental , and Vision insurance as General Employees and may be modified from time to time.
SECTION 13. Long Term Disability Insurance. The City will continue to contribute one hundred percent (100%) of the premium for Long Term Disability Insurance, the same as General Employees, and may be modified from time to time.
SECTION 14. Life Insurance. The City will continue to contribute one hundred percent (100%) of the premium for a term life policy of $50,000, the same as General Employees, and may be modified from time to time.
SECTION 15. Professional Development. The City agrees to budget and pay for professional dues, subscriptions, trainings, and other associated costs, such as travel, room, and board, on behalf of the Employee , which are reasonably necessary for professional growth as solely determined by the City Manager.
SECTION 16. Technology/Cell Phone Allowance. The City shall provide the employee with a City-issued cell phone for the conduct of City business only, paid for by the City. In the alternative, the employee may elect to receive a cell phone allowance in accordance with the City's Administrative Policy A-4.
SECTION 17. Existing Employment Agreements. The City Council shall continue to Resolution No. CC 2026-037
recognize and comply with the terms of the Employment Agreements of the City Manager and City Attorney. The City Manager and City Attorney positions are not covered under the provisions of this Resolution and may enter into separate Employment Agreements with the City Council.
SECTION 18. Effective Date. The effective date of this resolution shall be July 1, 2026.
SECTION 19. Passed and Adopted. The City Clerk of the City of Palmdale shall certify the passage and adoption of this resolution, and its approval by the City Council shall cause the same to be listed in the records of the City.
PASSED, APPROVED and ADOPTED this 7th day of July, 2026.
________________________________
Eric Ohlsen, Mayor
APPROVED AS TO FORM: ATTEST:
___________________________ _________________________________ Alexandra Severino Rochelle Scott, City Clerk
City Attorney
I, Rochelle Scott, City Clerk of the City of Palmdale, California, do hereby certify that the foregoing resolution was duly passed, approved, and adopted by the City Council of the City of Palmdale at a regular meeting of said Council held on the 7th day of July 2026 by the following roll call vote:
AYES:
NOES:___________________________________________________________
ABSTAIN:______________________ABSENT:___________________________
Date:
Rochelle Scott, City Clerk
CITY COUNCIL
CITY OF PALMDALE, CALIFORNIA
RESOLUTION NO. CC 2026-038
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALMDALE
ESTABLISHING A MEDICAL BENEFIT PARTICIPATION PROGRAM FOR ACTIVE COUNCILMEMBERS PURSUANT TO GOVERNMENT CODE SECTION 53208
WHEREAS, Palmdale (the “City”) maintains a health and welfare benefits program for its officers and employees pursuant to applicable law, including California Government Code Section 53201 and California Government Code Section 53208;
WHEREAS, members of the City Council are “officers” within the meaning of Government Code Sections 53201 and 53208;
WHEREAS, Government Code Section 53208 authorizes local agencies to permit officers to part icipate in the agency’s health and welfare benefit programs on terms established by the legislative body;
WHEREAS, the City Council finds that providing Councilmembers access to health benefits serves a legitimate public purpose by supporting the recruitment and retention of qualified elected officials, promoting continuity in governance, and aligning with common public-sector practices;
WHEREAS, the City Council further finds that requiring Councilmembers to pay all premiums in alignment with its officers and employees upon eligibility is fiscally responsible and consistent with industry standards;
WHEREAS, the City Council has considered the structure of the City’s retirement systems and notes that Councilmembers may participate in different retirement programs, including California Public Employees' Retirement System and alternative plans such as Public Agency Retirement Services, and finds that the health & welfare benefits participation program established herein is independent of, and does not modify or confer rights under, any retirement system;
WHEREAS, the City Council intends that this program be administered in compliance with applicable state and federal law governing public agency benefit programs, including applicable non -discrimination requirements, and recognizes that governmental plans are generally exempt from the Employee Retirement Income Security Act of 1974 (“ERISA”);
WHEREAS, the City Council further finds that participation shall include eligible dependents, and that elig ible dependents may continue coverage under COBRA in the event of termination of the elected term or Councilmember’s death, Resolution No. CC 2026-038
in compliance with applicable state and federal law governing public agency benefit programs; and
WHEREAS, the City Council further finds that all active Councilmembers as of July 1, 2026, shall be eligible to participate in the executive-level UCLA Physical program, which would entitle Councilmembers to one physical every other fiscal year at the UCLA medical facilities contracted by the City.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Palmdale as follows:
SECTION 1. Recitals. The City Council hereby specifically finds that all of the facts set forth in the Recitals are true and correct and constitute the finding of the City Council in this matter.
SECTION 2. Authority and Purpose. This Resolution is adopted pursuant to Government Code Sections 53201 and 53208 and is intended to establish a n executive-level physical benefit participation program for eligible Councilmembers, consistent with applicable law governing health and welfare benefit programs of elected officials. The City does not participate in the Public Employees ’ Medical and Hospital Care Act ( “PEMHCA)”, and the health participation program established by this Resolution is administered independently of CalPERS health benefits.
SECTION 3 . Eligibility. A member of the City Council shall be eligible to participate in the City ’s health benefits program upon eligibility as defined in the City’s health and welfare plan;
SECTION 4. Eligible Dependents. A Councilmember may enroll eligible dependents as defined by the City’s health and welfare plan. If a Councilmember’s elected term ends or death, eligible dependents may continue coverage under COBRA in accordance with plan rules and applicable law.
SECTION 5. Premiums and Cost Responsibility. A Councilmember shall pay all premiums in alignment with its officers' and employees' premium costs as defined in the health and welfare premium rates document, upon eligibility. Failure to timely pay required premiums shall result in termination of coverage.
SECTION 6 . Non-Discrimination and Legal Compliance. This program is a governmental plan within the meaning of 29 U.S.C. §1002(32) and is exempt from Title I of the Employee Retirement Income Security Act of 1974. The City shall administer this program in accordance with applicable nondiscrimination laws, including Government Code Section 11135 and Section 1557 of the Affordable Care Act. The City intends that eligibility criteria and administration of the program Resolution No. CC 2026-038
be applied uniformly and in a manner that does not unlawfully discriminate based on any protected classification.
SECTION 7. No Vested Rights. Participation in the health and welfare benefits program constitutes a limited privilege and does not guarantee or create any vested right to continued participation or any specific level of benefits. Participation does not create a contractual or vested right under California Constitution Article I, Section 9. The City Council expressly rese rves the right to amend, modify, or terminate this program, in whole or in part, at any time, with or without notice, to the extent permitted by law.
SECTION 8. Relationship to Retirement Systems. Participation in this program is independent of any retirement system, including but not limited to California Public Employees' Retirement System and Public Agency Retirement Services, and shall not create or modify any rights, obligations, or benefits under such systems. Nothing in this Resolution shall b e interpreted to create eligibility for CalPERS-administered health benefits, and the program established herein is separate from and unrelated to PEMHCA.
SECTION 9. Administration. The City Manager, or designee, is authorized to adopt administrative rules and procedures necessary to implement this Resolution.
In the event of any conflict between this Resolution and the terms of the City ’s applicable health and welfare plan documents or insurance contracts, the terms of the applicable plan documents shall control.
SECTION 10 . Executive-Level Physical for Active Councilmembers. All individuals who are active Councilmembers as of July 1, 2026, shall be entitled to one (1) executive‑level physical every other fiscal year. The physical shall be performed at UCLA medical facilities or another equivalent provider approved by the City Manager. The City Manager, or designee, shall establish administrative procedures.
SECTION 11. Passed and Adopted. The City Clerk of the City of Palmdale shall certify the passage and adoption of this resolution, and its approval by the City Council shall cause the same to be listed in the records of the City. /
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Resolution No. CC 2026-038
PASSED, APPROVED, and ADOPTED this 7th day of July 2026.
_________________________________
Eric Ohlsen
Mayor
APPROVED AS TO FORM:
ATTEST:
___________________________ _________________________________ Alexandra M. Severino Rochelle Scott
City Attorney City Clerk
I, Rochelle Scott, City Clerk of the City of Palmdale, California, do hereby certify th at the foregoing resolution was duly passed, approved, and adopted by the City Council of the City of Palmdale at a regular meeting of said Council held on the 7th day of July, 2026 by the following roll call vote:
AYES:
NOES:________________________________________________________________
ABSTAIN:______________________ABSENT:________________________________
Date:
Rochelle Scott, City Clerk
City Council Staff Report
DATE: JULY 7, 2026
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: CITY MANAGER DEPARTMENT
CITY CLERK DIVISION
DISTRICT: ALL
SUBJECT: ADOPT RESOLUTION NO. CC 2026 -041, A RESOLUTION OF THE
CITY COUNCIL OF THE CITY OF PALMDALE ADOPTING THE
DISRUPTION OF REMOTE ACCESS TECHNOLOGY DURING
PUBLIC MEETINGS POLICY
RECOMMENDATION
Staff recommend that the City Council:
1. Adopt Resolution No. CC 2026 -041, a Resolution of the City Council of the City of Palmdale adopting the Disruption of Remote Access Technology During Public Meetings Policy.
BACKGROUND
On October 3, 2025, Governor Newsom signed Senate Bill 707 (SB 707) into law, amending the Brown Act to diversify and increase public engagement during local government meetings of legislative bodies. Among the new requirements under SB 707, all qualified legislative bodies must now offer hybrid meetings (via a two -way phone or video platform).
In addition, SB 707 requires the City to formally adopt, on or before July 1, 2026, a policy that outlines the procedures for recessing and reconvening a meeting in the event of a disruption and the efforts the City Council and staff shall make to attempt to restor e the service.
DISCUSSION
Staff prepared the policy to comply with the new State requirement. The policy mirrors the meeting disruption guidelines already outlined in SB 707, which require the legislative body to recess and attempt to restore service for at least one hour. If service cannot be restored within one hour, the leg islative public body must conduct a roll -call vote Report to Mayor and City Council
Re: Adopt Reso. No. CC 2026-041
July 7, 2026
confirming that good-faith efforts were made and that the public interest in continuing the meeting outweighs the need for remote access. (Cal. Gov. Code § 54953.4(b)(1).)
FISCAL IMPACT
$0; There is no fiscal impact associated with this item.
STRATEGIC PLAN
Goal II: Ensure long-term fiscal health of the City and maintain funding for services.
C. Involve and expand engagement to enhance public oversight and transparency.
Prepared by: Alexandra Severino, City Attorney
Certified as to availability of Funds: Janelle Samson, Deputy City Manager Approved by: Salvador Mendez, City Manager
Approved as to form: Alexandra Severino, City Attorney
ATTACHMENTS
Reso. No. CC 2026-041
Policy for Disruption of Remote Access Technology During Public Meetings
CITY COUNCIL
CITY OF PALMDALE, CALIFORNIA
RESOLUTION NO. CC 2026-041
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALMDALE
ADOPTING THE DISRUPTION OF REMOTE ACCESS TECHNOLOGY
DURING PUBLIC MEETINGS POLICY
WHEREAS, the Ralph M. Brown Act (Government Code § 54950 et seq.) establishes requirements for open and public meetings of local legislative bodies; and
WHEREAS, Senate Bill 707 (SB 707, 2025) amended the Brown Act to update teleconferencing and accessibility requirements, including provisions rel ated to remote participation in public meetings; and
WHEREAS, Government Code § 54953.4(b)(1)(A) requires eligible legislative bodies, on or before July 1, 2026, to adopt at a noticed public meeting in open session, and not on the consent calendar, a pol icy addressing disruption of telephonic or internet service during meetings; and
WHEREAS, the required policy must address procedures for recessing and reconvening a meeting in the event of a disruption and the efforts the legislative body will make to attempt to restore service; and
WHEREAS, Government Code § 54953.4 further requires that, in the event of a disruption preventing members of the public from observing or participating in the meeting through a two -way telephonic or audiovisual platform, t he legislative body shall recess the open session for at least one hour and make a good faith effort to restore service, and may not reconvene open session; and
WHEREAS, if telephonic or internet service has not been restored upon reconvening, the legislative body must make findings by roll call vote that good faith efforts to restore service have been made and that the public interest in continuing the meeting outweighs the public interest in remote public access; and
WHEREAS, adoption of a technology disruption policy is required to ensure compliance with state law and to promote transparency and continuity of public meetings; and
WHEREAS, the proposed City Council policy addressing disruption of telephonic or internet service during City Council meetings has been prepared in accordance with Government Code § 54953.4 and is attached hereto as Exhibit 1; and
Resolution No. CC 2026-041
WHEREAS, the activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act (CEQA) State Guidelines; the refore, pursuant to State Guidelines Section 15060(c)(3), no environmental review is required; and
NOW THEREFORE, BE IT RESOLVED, THE CITY COUNCIL OF THE CITY OF
PALMDALE DOES HEREBY FIND, DETERMINE, RESOLVE AND ORDER AS FOLLOWS:
SECTION 1. the City Co uncil of the City of Palmdale, that it adopts the City Council policy entitled “Disruption of Remote Access Technology During Public Meetings,” in the form presented, with such minor modifications as may be r equired or approved by the City Attorney.
SECTION 2. The City Clerk shall certify the adoption of this resolution.
PASSED, APPROVED and ADOPTED this 7th day of July, 2026.
_________________________________
Eric Ohlsen, Mayor
APPROVED AS TO FORM: ATTEST:
___________________________ _________________________________ Alexandra Severino Rochelle Scott, City Clerk
City Attorney
I, Rochelle Scott, City Clerk of the City of Palmdale, California, do hereby certify that the foregoing resolution was duly passed, approved, and adopted by the City Council of the City of Palmdale at a regular meeting of said Council held on the 7th day of July, 2026, by the following roll call vote:
AYES:
NOES:___________________________________________________________
ABSTAIN:______________________ABSENT:___________________________
Date:
Rochelle Scott, City Clerk
Exhibit 1
Resolution No. CC 2026-041
Disruption of Remote Access Technology During Public Meetings Policy
1 PURPOSE
The purpose of this Policy is to establish procedures for the City of Palmdale City Council, Boards, Commissions, Committees, and other legislative bodies subject to the Ralph M.
Brown Act (“Legislative Bodies”) to address disruptions in telephonic, internet, or audiovisual services that prevent members of the public from remotely attending, observing, or participating in public meetings.
This Policy is adopted in compliance w ith Senate Bill 707 (2025), codified in California Government Code section 54953.4, and is intended to promote transparency, public access, continuity of government operations, and compliance with the Brown Act.
POLICY & PROCEDURES
The City of Palmdale is committed to ensuring public access to open meetings through reliable remote participation technology whenever remote access is offered or required by law. In the event of a disruption affecting remote access services, the City shall make good faith ef forts to restore such services while balancing the need for continuity of government operations and public participation.
SCOPE
This Policy applies to all meetings of City Legislative Bodies where remote access participation or observation is provided through telephonic, internet-based, or audiovisual communication platforms.
This Policy applies to:
Regular meetings
Special meetings
Adjourned meetings
Study sessions
Public hearings
Hybrid meetings conducted in-person with remote participation options This Policy does not apply to purely in -person meetings where no remote access is offered.
Exhibit 1
Resolution No. CC 2026-041
Disruption of Remote Access Technology During Public Meetings Policy
5. DEFINITIONS
5.1 Disruption
“Disruption” means any interruption, degradation, outage, or failure of telephonic, internet, streaming, audiovisual, or related technology that materially prevents members of the public from attending, observing, or participating remotely in a public meeting.
5.2 Remote Access Services
“Remote Access Services” means any two -way telephonic, internet -based, audiovisual, web cast, or video conferencing technology used by the City of Palmdale to provide remote public access to meetings.
5.3 Good Faith Efforts
“Good Faith Efforts” means reasonable and timely attempts by City staff or contractors to diagnose, mitigate, repair, replace, or restore disrupted remote access services.
5.4 Legislative Body
“Legislative Body” shall have the same meaning as set forth in Government Code section 54952.
6. RESPONSIBILITIES
6.1 City Clerk
The City Clerk or designee shall:
Monitor meeting access systems during meetings
Announce disruptions to the public
Coordinate procedural compliance with the Brown Act
Document disruption events and actions taken
Ensure meeting minutes reflect disruptions and findings
6.2 Information Technology Department
The Information Technology Department or designated support personnel shall:
Exhibit 1
Resolution No. CC 2026-041
Disruption of Remote Access Technology During Public Meetings Policy
Monitor meeting access systems during meetings
Provide technical support during meetings
Attempt restoration of disrupted services
Maintain backup communication methods when feasible
Document technical restoration efforts
6.3 Presiding Officer
The Mayor, Chairperson, or Presiding Officer shall:
Determine when a disruption materially impacts remote access Announce recesses or procedural actions
Reconvene meetings consistent with this Policy and the Brown Act Call for required roll call votes
7. PROCEDURES DURING A SERVICE DISRUPTION
7.1 Identification of Disruption
Upon becoming aware of a disruption to remote access services, the Presiding Officer or City Clerk shall promptly announce the disruption during the meeting, if feasible.
7.2 Immediate Actions
The Legislative Body may:
1. Temporarily recess the open session meeting;
2. Continue into closed session if authorized under the Brown Act; or
3. Pause discussion until technical assessment is completed.
7.3 Technical Response
City staff shall immediately begin good faith efforts to restore services, including but not limited to:
Exhibit 1
Resolution No. CC 2026-041
Disruption of Remote Access Technology During Public Meetings Policy
Restarting or troubleshooting meeting software
Rebooting audiovisual equipment
Re-establishing internet connectivity
Switching to backup internet or communication systems Utilizing alternative conferencing platforms
Contacting service providers or technical vendors
7.4 Minimum Recess Period
Unless service is restored sooner, the meeting shall remain in recess for a minimum of one (1) hour from the time the disruption was identified.
The Presiding Officer may extend the recess if restoration efforts a re actively underway and continuation is reasonably anticipated.
8. RECONVENING THE MEETING
8.1 Restoration of Service
If remote access services are restored before or during the recess period, the Legislative Body may reconvene and continue the meeting.
8.2 Failure to Restore Service
If remote access services are not restored after one hour, the Legislative Body may:
1. Adjourn the meeting to a future date and time; or
2. Continue the meeting upon adoption of a finding by roll call vote.
8.3 Required Finding
Prior to continuing a meeting without restored remote access services, the Legislative Body shall adopt the following or substantially similar finding:
“The City of Palmdale has made good faith efforts to restore telephonic or internet service in accordance with its adopted Technology Disruption Policy, Exhibit 1
Resolution No. CC 2026-041
Disruption of Remote Access Technology During Public Meetings Policy
and the public interest in continuing the meeting outweighs the public interest in remote public access.”
Approval of this finding shall require a majority vote of the members present.
9. PUBLIC COMMUNICATION
When feasible, the City shall provide updates regarding service disruptions through available communication channels, which may include:
City website notices
Meeting platform notifications
Social media postings
Public address announcements
Email notifications, if applicable
10. RECORDKEEPING
The City Clerk shall ensure the meeting minutes include:
The time and nature of the disruption
Actions taken in response
Technical restoration efforts
The duration of any recess
Any motions or findings adopted
The time the meeting reconvened or adjourned
Supporting technical documentation may be retained in accordance with the City’s records retention schedule.
11. ACCESSIBILITY
The City shall continue to make reasonable efforts to ensure accessibility during meetings, including compliance with the Americans with Disabilities Act (ADA) and applicable accessibility standards for remote participation technology.
Exhibit 1
Resolution No. CC 2026-041
Disruption of Remote Access Technology During Public Meetings Policy
12. TRAINING
The City Clerk’s Office and Information Technology Department shall provide periodic training to relevant staff and Legislative Body support personnel regarding:
Brown Act compliance
Meeting technology operations
Disruption response procedures
Backup communication methods
Successor Agency
Staff Report
DATE: JULY 7, 2026
TO: HONORABLE CHAIR AND DIRECTORS
FROM: OPERATIONS DEPARTMENT
FINANCE DIVISION
DISTRICT: ALL
SUBJECT: ADOPT RESOLUTION NO. SA 2026-006, A RESOLUTION OF THE
SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF PALMDALE APPROVING THE FORM OF
THE PRELIMINARY OFFICIAL STATEMENT AND THE CONTINUING
DISCLOSURE CERTIFICATE RELATING TO THE 2026 TAX
ALLOCATION REFUNDING BONDS AND AUTHORIZING CERTAIN
OTHER ACTIONS IN CONNECTION THEREWITH
RECOMMENDATION
Staff recommend that the Board of Directors of the Successor Agency to the Community Redevelopment Agency of the City of Palmdale:
1. Adopt Resolution No. SA 2026-006, a Resolution of the Successor Agency to the Community Redevelopment Agency of the City of Palmdale approving the form of the Preliminary Official Statement relating to the 2026 Tax Allocation Refunding Bonds;
2. Approve the form of the Continuing Disclosure Certificate relating to the 2026 Tax Allocation Refunding Bonds;
3. Authorize the distribution of the Preliminary Official Statement to prospective purchasers of the Bonds; and,
4. Authorize the preparation, execution, and delivery of the Final Official State ment and related documents necessary to complete the financing.
BACKGROUND
On May 5, 2026, the Board of Directors of the Successor Agency to the Community Redevelopment Agency of the City of Palmdale (Successor Agency) adopted Resolution No. SA 2026 -004 authorizing the issuance of Tax Allocation Refunding Bonds for the Report to Chair and Directors of the Successor Agency
Re: Adopt Reso. No. SA 2026-006
purpose of refunding the Agency’s outstanding 2016 Subordinate Tax Allocation Refunding Bonds to generate debt service savings.
Subsequent to the Successor Agency’s approval on May 5, 2026, the Los Angeles County Fifth Supervisorial District Consolidated Oversight Board (County Oversight Board) also approved the refunding and use of unspent proceeds at its meeting on June 11, 2026. The County Oversight Board action is now subject to approval by the Department of Finance (DOF), which confirmed receipt of notification on June 18, 2026.
Pursuant to Section 34177.5(f) of the Health and Safety Code, the DOF has up to 60 days from confirmation of receipt to review the County Oversight Board’s action. That process is expected to conclude no later than late August 2026.
Following approval of the financing authorization by the County Oversight Board, the Agency’s financing team prepared the Preliminary Official Statement and Continuing Disclosure Certificate in connection with the proposed financing necessary to market the Refunding Bonds to prospective investors. The purpose of this action is to approve these items.
On April 26, 2016 and Ju ne 23, 2016, the Successor Agency issued two series of Tax Allocation Refunding Bonds consisting of (i) $31,490,000 Subordinate Tax Allocation Refunding Bonds, Series A, and (ii) $41,645,000 Subordinate Tax Allocation Refunding Bonds, Series B, for a combi ned original principal amount of $73,135,000.
Approximately $38,080,000 of the 2016 Bonds remains outstanding.
The proposed Refunding Bonds would refund the outstanding 2016 Bonds and refinance them in a manner expected to generate ongoing debt service savings for the Agency and affected taxing entities, in compliance with AB 1484. Based on current market conditions, aggregate savings are estimated to be approximately $2.3 million over the life of the Refunding Bonds.
DISCUSSION
Preliminary Official Statement (POS)
The POS serves as the principal disclosure document for prospective purchasers of the proposed Refunding Bonds. The POS provides information regarding the Successor Agency, the pledged revenues securing the Bonds, the refunding plan, debt service requirements, risk factors, and other information material to investors. Approval of the POS will allow the underwriter to distribute the document to potential investors in advance of pricing the Bonds.
Continuing Disclosure Certificate
The Continuing Disclosure Certificate establishes the Successor Agency's ongoing disclosure obligations following issuance of the Bonds. These obligations include the annual filing of financial and operating information and the reporting of certain materia l events, in accordance with Securities and Exchange Commission Rule 15c2-12.
Report to Chair and Directors of the Successor Agency
Re: Adopt Reso. No. SA 2026-006
Upon approval of the attached documents, the financing team will be able to proceed with marketing and pricing of the Bonds, subject to final approval from DOF and prevailing market conditions.
FISCAL IMPACT
There is no direct fiscal impact associated with approval of the Preliminary Official Statement and Continuing Disclosure Certificate. There are no net costs associated with the issuance of the Refunding Bonds, and staff time and financing costs will be reimbursed from bond proceeds.
It is currently estimated that issuing Refunding Bonds will result in ongoing debt service savings in an aggregate amount of $2.3 million, or the equivalent of just under $2.0 million in present value savings to the RPTTF, which the City will share via an increase to the annual distribution of residual amounts in the RPTTF.
STRATEGIC PLAN
Goal II: Ensure long-term fiscal health of the City and maintain funding for services.
B. Manage resources, costs, and liabilities to ensure the City’s long-term fiscal health.
Prepared by: Janelle Samson, Deputy City Manager
Certified as to availability of Funds: Janelle Samson, Deputy City Manager Approved by: Salvador Mendez, Executive Director
Approved as to form: Alexandra Severino, General Counsel
ATTACHMENTS
Reso. No. SA 2026-006
Preliminary Official Statement
Continuing Disclosure Certificate
SUCCESSOR AGENCY
TO THE COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF PALMDALE
CALIFORNIA
RESOLUTION NO. SA 2026-006
A RESOLUTION OF THE SUCCESSOR AGENCY TO THE COMMUNITY
REDEVELOPMENT AGENCY OF THE CITY OF PALMDALE APPROVING
THE FORM OF THE PRELIMINARY OFFICIAL STATEMENT AND THE
CONTINUING DISCLOSURE CERTIFICATE RELATING TO TAX
ALLOCATION REFUNDING BONDS AND AUTHORIZING CERTAIN
OTHER ACTIONS IN CONNECTION THEREWITH
WHEREAS, the Successor Agency to the Community Redevelopment Agency of the City of Palmdale ( Successor Agency) approved the issuance of its tax allocation refunding bonds (2026 Bonds) by Resolution No. SA 2026-004 (Bond Resolution), at its meeting on May 5, 2026, for the purpose of achieving debt service savings; and
WHEREAS, the Los Angeles County Fourth Supervisorial District Consolidated Oversight Board approved the issuance of the 2026 Bonds by its Resolution No. 26-3149 at its meeting on June 11, 2026; and
WHEREAS, the Successor Agency wishes at this time to approve the form of a Preliminary Official Statement and form of the Continuing Disclosure Certificate , each relating to the 2026 Bonds;
NOW THEREFORE, BE IT RESOLVED, THE SUCCESSOR AGENCY TO THE COMMUNITY
REDEVELOPMENT AGENCY OF THE CITY OF PALMDALE DOES HEREBY FIND, DETERMINE, RESOLVE AND ORDER AS FOLLOWS:
SECTION 1. The form of the Preliminary Official Statement relating to the 2026 Bonds (Preliminary Official Statement) presented herewith is hereby approved. Each of the Chair of the Board, the Vice Chair of the Board, the Executive Director of the Successor Agency, the Deputy Executive Director of the Successor Agency and the Chief Finance Officer of the S uccessor Agency, and their respective written designees (each an Authorized Officer and collectively, the Authorized Officers), are, and each of them is, hereby authorized and directed, for and in the name of the Successor Agency, to sign a certificate pursuant to Rule 15c2 -12 promulgated under the Securities Exchange Act of 1934 relating to the Preliminary Official Statement (Deemed Final Certificate). The Authorized Officers are each hereby authorized to deliver the Preliminary Official Statement to Raymond James & Associates, Inc., as underwriter of the 2026 Bonds (Underwriter), in the form presented at this meeting with such changes, insertions and omissions as may be recommended by Best Best & Krieger LLP (Bond and Disclosure Counsel), and approved by the Authorized Officer executing the same, said approval being conclusively evidenced by the delivery of a Deemed Final Certificate.
SECTION 2. The Authorized Officers are each hereby further authorized and directed to execute, approve and deliver the fin al Official Statement in the form of the Preliminary Official Statement, with such changes, insertions and omissions as may be approved by Bond and Disclosure Counsel, and approved by the Authorized Officer Resolution No. SA 2026-006
executing the same, said execution being conclusive evidence of such approval. The Underwriter is hereby authorized to distribute the Preliminary Official Statement to prospective purchasers of the 2026 Bonds and is directed to deliver copies of any final Official Statement to all actual purchasers of the 2026 Bonds.
SECTION 3. The form of the Continuing Disclosure Certificate relating to the 2026 Bonds (Continuing Disclosure Certificate) presented herewith is hereby approved. The Authorized Officers are each hereby authorized and directed to exe cute and deliver the Continuing Disclosure Certificate in the form presented at this meeting with such changes, insertions, and omissions as may be recommended by Bond and Disclosure Counsel and approved by the Authorized Officer executing the same, said execution being conclusive evidence of such approval.
SECTION 4. Each of the Authorized Officers and other appropriate officers of the Successor Agency, acting alone, is authorized and directed, jointly and severally, to do any and all things and to execu te and deliver any and all documents and contracts that they may deem necessary or advisable in order to carry out, give effect to, and comply with the terms and intent of this resolution and the Bond Resolution.
SECTION 5. This Resolution shall take effect immediately upon its adoption.
SECTION 6. The Secretary shall certify as to the adoption of this Resolution.
PASSED, APPROVED and ADOPTED this 7th day of July, 2026.
_________________________________
Eric Ohlsen, Chair
APPROVED AS TO FORM: ATTEST:
___________________________ _________________________________ Alexandra Severino Rochelle Scott,
General Counsel Agency Secretary
I, Rochelle Scott, Agency Secretary of the Successor Agency to the Community Redevelopment Agency of the City of Palmdale, California, do hereby certify that the foregoing resolution was duly passed, approved, and adopted by the Successor Agency at a regular meeting of said Agency held on the 7th day of July, 2026, by the following roll call vote:
AYES: __
NOES:_____________________________________________________________
ABSTAIN:______________________ABSENT:_____________________________
Date: ____________________________ ______ Rochelle Scott, Agency Secretary
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PRELIMINARY OFFICIAL STATEMENT DATED _____________, 2026 NEW ISSUE – BOOK-ENTRY RATINGS
INSURED RATING: S&P: “____”
UNDERLYING RATING: S&P: “____”
(See “CONCLUDING INFORMATION - Ratings on the Bonds” herein.) In the opinion of Best Best & Krieger LLP , Riverside, California (“Bond Counsel”), subject, however, to certain qualifications described in this Official Statement, under existing statutes, regulations, rulings and judicial decisions, and assuming certain representations and compliance with certain covenants and requirements described herein, the interest on the Bonds is excluded from gross income for federal income tax purposes, and interest on the Bonds is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals and corporations; however, interest on the Bonds is taken into account in determining the annual a djusted financial statement income of certain corporations for the purpose of computing the alternative minimum tax imposed on certain corporations. In the further opinion of Bond Counsel, interest on the Bonds is exempt from California personal income tax . See “TAX MATTERS” herein.
LOS ANGELES COUNTY STATE OF CALIFORNIA
$________
SUCCESSOR AGENCY TO THE COMMUNITY
REDEVELOPMENT AGENCY OF THE CITY OF PALMDALE
TAX ALLOCATION REFUNDING BONDS, 2026 SERIES A
Dated: Date of Delivery Due: September 1 as Shown on the inside cover page The cover page contains certain information for quick reference only. It is not a summary of the issue. Potential investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. See “RISK FACTORS” herein for a discussion of special risk factors that should be considered in evaluating the investment quality of the Bonds.
Proceeds from the sale of the Successor Agency to the Community Redevelopment Agency of the City of Palmdale Tax Allocation Refunding Bonds, 2026 Series A (the “Bonds”) will be used to refinance certain outstanding obligations of the Successor Agency to the Community Redevelopment Agency of the City of Palmdale (the “Successor Agency”).
The Bonds will be issued under an Indenture of Trust dated as of _________ 1, 2026 (the “Indenture”), by and between the Successor Agency and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). The Bonds are special obligations of the Successor Agency and are payable solely from and secured by a pledge of certain tax increment revenues of the Former Agency’s Redevelopment Project No. 1 and Merged Redevelopment Project Area (the “Combined Project Areas”) on a basis subordinate to certain other obligations of the former Community Redevelopment Agency of the City of Palmdale (the “Former Agency”), and by a pledge of amounts in certain funds and accounts established under the Indenture (see “SECURITY FOR THE BONDS” and “RISK FACTORS”).
Interest on the Bonds is payable semiannually on each March 1 and September 1, commencing ____________, until maturity (see “THE BONDS - General Provisions” herein). The Bonds are not subject to redemption prior to maturity.
The Bonds do not constitute a debt or liability of the City of Palmdale, the County of Los Angeles, the State of California or of any political subdivision thereof, other than the Successor Agency. The Successor Agency shall only be obligated to pay the principal of the Bonds, or the interest thereon, from the funds described herein, and neither the faith and credit nor the taxing power of the City of Palmdale, the County of Los Angeles, the State of California or any of its political subdivisions is pledged to the payment of the principal of or the interest on the Bonds. The Successor Agency has no taxing power.
The scheduled payment of principal of and interest with respect to the Bonds when due will be guaranteed under an insurance policy to be issued concurrently with the delivery of the Bonds by ________________. See “MUNICIPAL BOND INSURANCE” and “ APPENDIX H - SPECIMEN MUNICIPAL BOND INSURANCE POLICY.”
[INSURER LOGO]
The Bonds are being offered when, as and if issued, subject to the approval as to their legality by Best Best & Krieger LLP, Riverside, California, as Bond Counsel. Certain legal matters will also be passed on for the Successor Agency by Best Best & Krieger LLP, Riverside, California, as Disclosure Counsel, and by Alexandra Mae Severino, the City Attorney in her capacity as general counsel to the Successor Agency. Certain legal matters will be passed on for the Underwriter by its counsel, Stradling Yocca Carlson & Rauth LLP, Newport Beach, California. It is anticipated that the Bonds will be available for delivery through the facilities of The Depository Trust Company on or about __________, 2026 (see “APPENDIX G - THE BOOK-ENTRY SYSTEM” herein). [UNDERWRITER LOGO]
The date of the Official Statement is _________, 2026.
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$_________
SUCCESSOR AGENCY TO THE COMMUNITY
REDEVELOPMENT AGENCY OF THE CITY OF PALMDALE
TAX ALLOCATION REFUNDING BONDS, 2026 SERIES A
MATURITY SCHEDULE
Maturity Date Principal Interest CUSIP®†
September 1 Amount Rate Yield Price (69672F)
† CUSIP® is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by S&P Capital IQ on behalf of the American Bankers Association. CUSIP numbers have been assigned by an independent company not affiliated with the Successor Agency, the Municipal Advisor or the Underwriter and are included solely for the convenience of the holders of the Bonds. None of the Successor Agency, the Municipal Advisor or the Underwriter is responsible for the selection or use of these CUSIP numbers, and no representation is made as to their correctness on the Bonds or as indicated above. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of such maturity or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Bonds.
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GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT
No Offering May Be Made Except by this Official Statement. No dealer, broker, salesperson or other person has been authorized to give any information or to make any representations with respect to the Bonds other than as contained in this Official Statement, and if given or made, such other information or representation must not be relied upon as having been authorized.
No Unlawful Offers or Solicitations. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy in any state in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation.
Effective Date. This Official Statement speaks only as of its date and the information and expression s of opinion contained in this Official Statement are subject to change without notice. Neither the delivery of this Official Statement nor any sale of the Bonds will, under any circumstances, create any implication that there has been no change in the affairs of the Successor Agency or the Combined Project Areas since the date of this Official Statement.
Use of this Official Statement. This Official Statement is submitted in connection with the sale of the Bonds referred to in this Official Statement and may not be reproduced or used, in whole or in part, for any other purpose. This Official Statement is not a contract with the purchasers of the Bonds.
Preparation of this Official Statement. The information contained in this Official Statement has been obtained from sources that are believed to be reliable, but the information is not guaranteed as to accuracy or completeness. The information and expressions of opinions herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Successor Agency since the date hereof. All summaries of the Bonds, the Indenture and other documents, are ma de subject to the provisions of such documents and do not purport to be complete statements of any or all of such provisions. Reference is hereby made to such documents on file with the Successor Agency for further information. See “INTRODUCTION - Summary Not Definitive.” The Underwriter has provided the following sentence for inclusion in this Official Statement: The Underwriter ha s reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.
Stabilization of and Changes to Offering Prices. The Underwriter may overallot or take other steps that stabilize or maintain the market price of the Bonds at level s above that which might otherwise prevail in the open market. If commenced, the Underwriter may discontinue such market stabilization at any time. The Underwr iter may offer and sell the Bonds to certain dealers, dealer banks and banks acting as agent at prices lower than the public offering prices stated on the inside cover page of this Official Statement, and those public offering prices may be changed from ti me to time by the Underwriter.
Bonds are Exempt from Securities Laws Registration. The Bonds have not been registered under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, in reliance upon exemptions for the issuance and sale of municipal securities provided under Section 3(a)(2) of the Securities Act of 1933 and Section 3(a)(12) of the Securities Exchange Act of 1934.
Estimates and Projections. Certain statements included or incorporated by reference in this Official Statement constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,” “budget” or other similar words.
THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTA TIONS CONTAINED IN SU CH
FORWARD LOOKING STA TEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND
OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS
DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD -LOOKING STA TEMENTS. THE
SUCCESSOR AGENCY DOES NOT PLAN TO ISSUE ANY UPDA TES OR REVISIONS TO THOSE FORWARD-
LOOKING STA TEMENTS IF OR WHEN ITS EXPECTA TIONS, OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH SUCH STA TEMENTS ARE BASED OCCUR.
Website. The City of Palmdale maintains an Internet website, but the information on the website is not incorporated in this Official Statement.
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SUCCESSOR AGENCY TO THE
COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF PALMDALE
PALMDALE, CALIFORNIA
SUCCESSOR AGENCY BOARD
Eric Ohlsen, Chair
Austin Bishop, Vice Chair
Richard J. Loa, Director
Laura Bettencourt, Director
Andrea Alarcon, Director
______________________________________________
CITY STAFF
Sal Mendez, City Manager
Janelle Samson, Deputy City Manager
Alexandra Mae Severino, City Attorney
Rochelle Scott, City Clerk
__________________________________________
PROFESSIONAL SERVICES
Bond Counsel and Disclosure Counsel
Best Best & Krieger LLP
Riverside, California
Municipal Advisor
Kosmont Financial Services
Manhattan Beach, California
Fiscal Consultant
HdL Coren & Cone
Diamond Bar, California
Trustee and Escrow Bank
U.S. Bank Trust Company, National Association
Los Angeles, California
Verification Agent
____________
____________
32021.00004\45004592.2
TABLE OF CONTENTS
INTRODUCTION ...................................................... 1 The Successor Agency and the Former Agency ......... 1
The City ..................................................................... 2 Authority and Purpose ............................................... 2 Tax Allocation Financing Under the Dissolution
Act........................................................................... 2 The Project Areas ....................................................... 3 Security for the Bonds ............................................... 4 Municipal Bond Insurance and Reserve Account
Insurance Policy ...................................................... 4 Legal Matters ............................................................. 5 Professional Services ................................................. 5 Offering of the Bonds ................................................ 5 Summary Not Definitive ............................................ 5 THE BONDS ............................................................... 6 General Provisions ..................................................... 6 Redemption ................................................................ 6 Scheduled Debt Service on the Bonds ....................... 7 THE FINANCING PLAN .......................................... 8 The Refunding Plan ................................................... 8 Estimated Sources and Uses of Funds ....................... 9 SECURITY FOR THE BONDS .............................. 10 Tax Allocation Financing ......................................... 10 Pledged Tax Revenues ............................................. 10 Redevelopment Property Tax Trust Fund ................ 11 Recognized Obligation Payment Schedules ............ 13 Pledge of Pledged Tax Revenues ............................. 16 Redevelopment Obligation Retirement Fund;
Deposit of Pledged Tax Revenues ......................... 16 Deposit of Amounts by Trustee ............................... 17 Reserve Account ...................................................... 19 No Additional Debt Other Than Refunding Bonds .. 20
MUNICIPAL BOND INSURANCE ........................ 20
THE SUCCESSOR AGENCY ................................. 20 Government Organization ........................................ 20 Successor Agency Powers ....................................... 21 Redevelopment Plans ............................................... 22 Plan Limitations ....................................................... 22 THE PROJECT AREAS .......................................... 22 Description of the Project Areas .............................. 22 Assessed Valuations and Pledged Tax Revenues ..... 24
Major Taxpayers ...................................................... 26 Assessment Appeals ................................................. 27 FINANCIAL INFORMATION ............................... 27 Successor Agency Accounting Records and
Financial Statements ............................................. 27 Property Taxation in California ............................... 28 Outstanding Indebtedness ........................................ 30 Flow of Funds .......................................................... 30 Projected Pledged Tax Revenues and Debt
Service Coverage .................................................. 31 RISK FACTORS ...................................................... 32 Factors Which May Affect Pledged Tax Revenues.. 32
Major Taxpayers and Concentration of Ownership . 35
Real Estate and General Economic Risks ................ 36 Recognized Obligation Payment Schedule .............. 36 Loss of Tax Exemption ............................................ 37 IRS Audit of Tax-Exempt Bond Issues .................... 38 Risks Related to Insured Bonds and the Reserve
Account Insurance Policy ..................................... 38 Secondary Market .................................................... 39 TAX MATTERS ....................................................... 39 LEGAL MATTERS .................................................. 40 Enforceability of Remedies ..................................... 40 Approval of Legal Proceedings ............................... 41 No Litigation ........................................................... 41 CONCLUDING INFORMATION .......................... 41
Ratings on the Bonds ............................................... 41 The Municipal Advisor ............................................ 41 Continuing Disclosure ............................................. 42 Underwriting ........................................................... 42 References ............................................................... 42 Execution ................................................................. 42
APPENDIX A - SUMMARY OF CERTAIN
PROVISIONS OF THE INDENTURE
APPENDIX B - CITY OF PALMDALE
INFORMATION STATEMENT
APPENDIX C - FISCAL CONSULTANT’S REPORT
APPENDIX D - AUDITED FINANCIAL
STATEMENTS FOR THE FISCAL YEAR ENDED
JUNE 30, 2025
APPENDIX E - FORM OF CONTINUING
DISCLOSURE CERTIFICATE
APPENDIX F - PROPOSED FORM OF BOND
COUNSEL OPINION
APPENDIX G - THE BOOK-ENTRY SYSTEM
APPENDIX H - SPECIMEN MUNICIPAL BOND
INSURANCE POLICY
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1 OFFICIAL STATEMENT
$___________
SUCCESSOR AGENCY TO THE COMMUNITY
REDEVELOPMENT AGENCY OF THE CITY OF PALMDALE
TAX ALLOCATION REFUNDING BONDS, 2026 SERIES A
This Official Statement, which includes the cover page , inside cover page and appendices (the “Official Statement”), is provided to furnish certain information concerning the sale of the Successor Agency to the Community Redevelopment Agency of the City of Palmdale Tax Allocation Refunding Bonds, 2026 Series A (the “Bonds”).
INTRODUCTION
This Introduction contains only a brief description of this issue and does not purport to be complete. The Introduction is subject in all respects to more complete information in the entire Official Statement and the offering of the Bonds to potential investors is made only by means of the entire Official Statement and the documents summarized herein. Potential investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision with respect to the Bonds (see “RISK F ACTORS” herein). For definitions of certain capitalized terms used herein and not otherwise defined, and the terms relating to the Bonds, see the summary included in “APPENDIX A - SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE” herein.
The Successor Agency and the Former Agency
The Community Redevelopment Agency of the City of Palmdale (the “Former Agency”) was established in 1972 by the City Council (the “City Council”) of the City of Palmdale (the “City”) pursuant to the Community Redevelopment Law (the “Redevelopment Law ”), constituting Part 1 of Division 24 (commencing with Section 33000) of the Health and Safety Code of the State of California (the “State”).
On June 29, 2011, Assembly Bill No. 26 (“AB X1 26”) was enacted as Chapter 5, Statutes of 2011, together with a companion bill, Assembly Bill No. 27 (“AB X1 27”). A lawsuit was brought in the California Supreme Court, California Redevelopment Association, et al. v. Matosantos, et al. , 53 Cal. 4 th 231 (Cal. 2011), challenging the constitutionality of AB X1 26 and AB X1 27. In its December 29, 2011 decision, the California Supreme Court largely upheld AB X1 26, invalidated AB X1 27, and held that AB X1 26 may be severed from AB X1 27 and enforced independently. As a result of AB X1 26 and the decision of the California Supreme Court in the California Redevelopment Association case, as of February 1, 2012, all redevelopment agencies in the State were dissolved, incl uding the Former Agency, and successor agencies were designated as successor entities to the former redevelopment agencies to expeditiously wind down the affairs of the former redevelopment agencies.
The primary provisions enacted by AB X1 26 relating to t he dissolution and wind down of former redevelopment agency affairs are Parts 1.8 (commencing with Section 34161) and 1.85 (commencing with Section 34170) of Division 24 of the Health and Safety Code of the State, as amended on June 27, 2012 by Assembly Bill No. 1484 (“AB 1484”), enacted as Chapter 26, Statutes of 2012, and as further amended on September 22, 2015 by Senate Bill No. 107 (“SB 107”) enacted as Chapter 325, Statutes of 2015. The provisions of Part 1.85 as amended by AB 1484 and SB 107 are referred to in this Official Statement as the “Dissolution Act.” The Redevelopment Law, as amended by the Dissolution Act, is sometimes referred to herein as the “Law.”
32021.00004\45004592.2
2 Pursuant to Section 34173 of the Dissolution Act, the City Council serves as the governing board of the successor agency to the Former Agency. Since the February 1, 2012 dissolution of the Former Agency, the City has served as the Successor Agency to the Community Redevelopment Agency of the City of Palmdale (the “Successor Agency”). The Successor Agency is governed by a five -member board consisting of the Mayor and the members of the City Council. The City Manager acts as the Successor Agency’s Executive Director (see “THE SUCCESSOR AGENCY” herein).
Section 34173(g) of the Dissolution Ac t expressly affirms that the Successor Agency is a separate public entity from the City, that the two entities shall not merge, and that the liabilities of the Successor Agency will not be transferred to the City nor will the assets of the Successor Agency become assets of the City (see “THE SUCCESSOR AGENCY” herein).
The City
The City was incorporated as a general law city on August 24, 1962. It became a charter city in November 2009. The City encompasses approximately 104 square miles in an area of northern Los Angeles County known as the Antelope Valley. The City is located approximately 60 miles north of downtown Los Angeles.
Neighboring communities include Santa Clarita and Lancaster. See “APPENDIX B - CITY OF PALMDALE INFORMA TION STA TEMENT.”
Authority and Purpose
The Bonds are being issued pursuant to the Constitution and laws of the State, including Article 11 (commencing with Section 53580) of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State (the “Refunding Law”), the Law and an Indenture of Trust dated as of ________ 1, 2026 (the “Indenture”) each by and between the Successor Agency and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”).
The Bonds are being issued to refinance the following obligations of the Successor Agency:
Subordinate Tax Allocation Refunding Bonds, 2016 Series A (the “2016A Bonds ”), currently outstanding in the aggregate principal amount of $_________; and Subordinate Tax Allocation Refunding Bonds, 2016 Series B (the “2016B Bonds ”), currently outstanding in the aggregate principal amount of $___________.
The 2016A Bonds and the 2016B Bonds are sometimes collectively referred to herein as the “Refunded Bonds.” See “THE FINANCING PLAN” herein.
The Bonds will be payable on a basis subordinate to the Former Agency’s outstanding 2002 Subordinate Lien Tax Allocation Bonds (Merged Redevelopment Project Areas) (the “2002 Bonds”), with a maturity value of $___________, which 2002 Bonds mature on December 1, 2032. The 2002 Bonds are sometimes referred to herein as “Senior Indebtedness.”
Tax Allocation Financing Under the Dissolution Act
Prior to the enactment of AB X1 26, the Redevelopment Law authorized the financing of redevelopment projects through the use of tax increment revenues. This method provided that the taxable valuation of the property within a redevelopment project area on the property tax roll last equalized prior to the effective date of the ordinance which adopted the redevelopment plan became the base year valuation. Assuming the taxable valuation never drops below the base year level, the Taxing Agencies, as defined herein, thereafter received that portion of the taxes produced by applying then current tax rates to the base year valuation, and the redevelopment agency was allocated the remaining portion produced by applying then 32021.00004\45004592.2
3 current tax rates to the increase in valuation over the base year. Such incremental pledged tax revenues allocated to a redevelopment agency were authorized to be pledged to the payment of agency obligations.
Under the Dissolution Act, moneys will be deposited from time to time in a Redevelopment Property Tax Trust Fund (the “Redevelopment Property Tax Trust Fund” or “RPTTF”) held by a county auditor-controller with respect to a successor agency, which are equivalent to the tax increment revenues that were formerly allocated under the Redevelopment Law to the redevelopment agency and formerly authorized under the Redevelopment Law to be used for the financing of redeve lopment projects using current assessed values on the last equalized roll on August 20 each year . See “SECURITY FOR THE BONDS - Tax Allocation Financing” herein for additional information.
The Dissolution Act authorizes refunding bonds, including the Bonds, to be secured by a pledge of moneys deposited from time to time in the Redevelopment Property Tax Trust Fund. Pledged Tax Revenues, as defined herein, pledged to pay the Bonds consist of a portion of the amounts deposited from time to time in the Redevelopment Property Tax Trust Fund established pursuant to and as provided in the Dissolution Act (see “Security for the Bonds” below).
The Dissolution Act provides that any bonds authorized thereunder to b e issued by the Successor Agency will be considered indebtedness incurred by the Former Agency, with the same legal effect as if the bonds had been issued prior to the effective date of AB X1 26, in full conformity with the applicable provision of the Redevelopment Law that existed prior to that date, and will be included in the Successor Agency’s Recognized Obligation Payment Schedule s (each a “Recognized Obligation Payment Schedule ”) (see “APPENDIX A - SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE - Definitions” and “SECURITY FOR THE BONDS - Recognized Obligation Payment Schedules”).
The Project Areas
Project Area No. 1
Redevelopment Project Area No. 1 (“Project Area No. 1”) was created in 1975, and was amended in 1981 to add additional area. Project Area No. 1, as amended, encompasses 920 acres.
Merged Project Area
The Merged Redevelopment Project Area (the “Merged Project Area”) was created in 1994. The merger combined the Former Agency’s Project Area No. 2, Project Area No. 3 and Project Area No. 4, as described below, creating a project with a combined 7,468 acres.
The Redevelopment Plan for Redevelopment Project Area No. 2 (“Project Area No. 2”) was adopted by the City Council in 1978. Project Area No. 2 encompasses 1,400 acres. The Redevelopmen t Plan for Redevelopment Project Area No. 3 (“Project Area No. 3”) was adopted by the City Council in 1983. Project Area No. 3 encompasses 1,153 acres. The Redevelopment Plan for Redevelopment Project Area No. 4 (“Project Area No. 4”) was also adopted by the City Council in 1983. Project Area No. 4 encompasses 4,915 acres. In May 2011, the City Council amended the Redevelopment Plan for the Merged Project Area, adding 7,787 acres to the Merged Project Area (the “Expansion Area”).
Project Area No. 1 and the Merged Project Area are collectively referred to herein as the “Combined Project Areas,” an individual redevelopment project is referred to herein as a “Redevelopment Project” or when referring to more than one individual redevelopment project, “Redeve lopment Projects,” and the Redevelopment Plans for all the individual redevelopment projects comprising the Combined Project Areas are referred to herein as the “Redevelopment Plans.”
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4 Security for the Bonds
For the security of the Bonds, the Successor Agency grants a pledge of and lien on all of the Pledged Ta x Revenues on a parity with any future Parity Debt, as defined herein and in the Indenture (see “SECURITY FOR THE BONDS - No Additional Debt Other Than Refunding Bonds ”). “Pledged Tax Revenues ” are defined under the Indenture as the moneys deposited from time to time in the Redevelopment Property Tax Trust Fund established pursuant to subdivision (c) of Section 34172 of the Law, as provided in Section 34183 of the Law, excluding (a) Statutory Pass-Through Amounts, as defined below, (b) Negotiated Pass- Through Amounts, as defined below and (c) the portion of such funds needed to pay the Senior Indebtedness. If, and to the extent, that the provisions of Section 34172 of the Law or Section 34183 of the Law are invalidated by a final judicial decision, then Pledged Tax Revenues will include all tax revenues allocated to the payment of indebtedness of the Successor Agency pursuant to Section 33670 of the Law or such other section as may be in effect at the time providing for the allocation of tax increment revenues to the Successor Agency in accordance with Article XVI, Section 16 of the California Constitution, subject in any event to the prior use thereof, each Fiscal Year, to pay the Senior Indebtedness. “Statutory Pass-Through Amounts” means amounts payable pursuant to Sections 33607.5 or 33607.7 of the Law and “Negotiated Pass -Through Amounts ” means amounts payable under the Pass -Through Agreements entered into pursuant Sections 33401 and 33676 of the Law, to the extent not subordinated to payment of the Bonds . See “FINANCIAL INFORMATION - Property Taxation in California ” and “APPENDIX C - FISCAL CONSULTANT’S REPORT” for additional information regarding the Negotiated Pass-Through Amounts and the Statutory Pass-Through Amounts applicable to the Successor Agency and the revenues derived from the Combined Project Areas.
By definition, under the Dissolution Act, Pledged Tax Revenues exclude County administrative costs allowed under Section 34182 of the Law and Section 95.3 of the California Revenue and Taxation Code.
Taxes levied on the property within the Combined Project Areas on that portion of the taxable valuation over and above the taxable valuation of the base year property tax roll of the applicable Redevelopment Project, will be deposited in the Redevelopment Property Tax Trust Fund for transfer by the County Auditor- Controller to the Successor Agency’s Redevelopment Obligation Retirement Fund , as defined herein, on January 2 and June 1 of each year to the extent required for payments listed in the Successor Agency’s Recognized Obligation Payment Schedule in accordance with the requirements of the Dissolution Act.
Moneys transferred by the County Auditor-Controller to the Successor Agency will be deposited into the Successor Agency’s Redevelopment Obligation Retirement Fund and will be transferred by the Successor Agency to the Trustee for deposit in the Debt Service Fund established under the Indenture. See “SECURITY FOR THE BONDS - Recognized Obligation Payment Schedules” herein.
The Bonds are special obligations of the Successor Agency. The Bonds do not constitute a debt or liability of the City, the County, the State or of any political subdivision thereof, other than the Successor Agency. The Successor Agency shall only be obligated to pay the principal of the Bonds, or the interest thereon, from the funds described herein, and neither the faith and credit nor the taxing power of the City, the County, the State or any of its politi cal subdivisions is pledged to the payment of the principal of or the interest on the Bonds. The Successor Agency has no taxing power.
Municipal Bond Insurance and Reserve Account Insurance Policy Concurrently with the issuance of the Bonds, ______________ (the “Bond Insurer”) will issue its Municipal Bond Insurance Policy (the “Policy”) for the Bonds . The Policy guarantees the scheduled payment of principal of and interest on the Bonds when due as set forth in the form of the Policy included as “APPENDIX H - SPECIMEN MUNICIPAL BOND INSURANCE POLICY.” 32021.00004\45004592.2
5 In order to further secure the payment of the principal of and interest on the Bonds, a Reserve Account has been established by the Indenture. The Reserve Account will be funded by the purchase of a Debt Service Reserve Fund Surety Bond (the “Reserve Account Insurance Policy”) issued by the Bond Insurer in an amount equal to the Reserve Requirement as defined in the Indenture. The Reserve Policy secures only the Bonds and would not secure any future Parity Debt. See “SECURITY FOR THE BONDS - Reserve Account.” Legal Matters
The legal proceedings in connection with the issuance of the Bonds are subject to the approving opinion of Best Best & Krieger LLP , Riverside, California , as Bond Counsel. Such opinion, and certain tax consequences incident to the ownership of the Bonds, including certain exceptions to the tax treatment of interest on the Bonds, are described more fully under the heading “TAX MA TTERS” herein. Certain legal matters will also be passed on for the Successor Agency by Best Best & Krieger LLP, Riverside, California, as Disclosure Counsel and by Alexandra Mae Severino , as City Attorney. Certain legal matters will be passed on for the Underwriter by its counsel, Stradling Yocca Carlson & Rauth LLP, Newport Beach , California.
Professional Services
U.S. Bank Trust Company, National Association will act as Trustee for the Bonds.
Kosmont Financial Services, Manhattan Beach, California (the “Municipal Advisor”) advised the Successor Agency as to the financial structure and certain other financial matters relating to the Bonds.
HdL Coren & Cone, Diamond Bar, California (the “Fiscal Consultant”) prepared the Fiscal Consultant ’s Report included in “APPENDIX C.”
Fees payable to Bond Counsel, Disclosure Counsel, Underwriter’s Counsel and the Municipal Advisor are contingent upon the sale and delivery of the Bonds.
Offering of the Bonds
Authority for Issuance. The Bonds are to be issued and secured pursuant to the Indenture, as authorized by Resolution No. SA 2026-004 of the Successor Agency adopted on May 5, 2026, the Refunding Law and the Law. The Successor Agency to the Community Redevelopment Agency of the City of Palmdale Oversight Board (the “Oversight Board”) approved the action taken by the Successor Agency to refinance the Refunded Bonds on ________, 2026. The State Department of Finance approved the Oversight Board action by letter dated ________, 2026.
Offering and Delivery of the Bonds. The Bonds are being sold to Raymond James & Associates, Inc. (the “Underwriter”). The Bonds are offered, when, as and if issued, subject to the approval as to their legality by Best Best & Krieger LLP, Riverside, California, as Bond Counsel. It is anticipated that the Bonds, in book-entry form, will be available for delivery through the facilities of The Depository Trust Company on or about ___________, 2026.
Summary Not Definitive
The summaries and references contained herein with respect to the Indenture, the Bonds and other statutes and documents do not purport to be comprehensive or definitive and are qualified by reference to each such document or statute, and references to the Bonds are qualified in their entirety by reference to the form thereof included in the Indenture. Copies of these documents may be obtained after delivery of the Bonds from the Successor Agency at 38300 Sierra Highway, Palmdale, California 93550. 32021.00004\45004592.2
6 THE BONDS
General Provisions
Repayment of the Bonds. Interest on the Bonds is payable at the rates per annum set forth on the inside cover page hereof. Interest on the Bonds will be computed on the basis of a year consisting of 360 days and twelve 30-day months.
The Bonds shall be issued in fully registered form without coupons in denominations of $5,000 or any integral multiple thereof and will be dated as of the date of delivery (the “Closing Date”).
Interest on the Bonds will be payable on each March 1 and September 1, commencing _______ 1, 20___ (each an “Interest Payment Date”) and thereafter from the Interest Payment Date next preceding the date of authentication thereof, unless (a) it is authenticated after the 15th calendar day of the month preceding an Interest Payment Date (a “Record Date”) and on or before the following Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (b) unless it is authenticated on or before __________ 15, 20___, in which event it shall bear interest from the Closing Date; provided, however, that if, as of the date of authentication of any Bond, interest thereon is in default, such Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon.
Book-Entry System. The Depository Trust Company (“DTC”) will act as securities depository for the Bonds. The 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.
Interest on and principal of the Bonds will be payable when due by wire of the Trustee to DTC which will in turn remit such interest and principal to DTC Participants, which will in turn remit such interest and principal to Beneficial Owners of the Bonds (see “APPENDIX G - THE BOOK-ENTRY SYSTEM” herein).
As long as DTC is the registered owner of the Bonds and DTC’s book-entry method is used for the Bonds, the Trustee will send any notices to Bond Owners only to DTC.
DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the Successor Agency or the Trustee. Under such circumstances, if a successor securities depository is not obtained, Bonds are required to be printed and delivered as described in the Indenture. The Successor Agency may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, the Bonds will be printed and delivered as described in the Indenture.
Transfer or Exchange of Bonds. So long as the Bonds are in the book-entry system of DTC as described above, the rules of DTC will apply for the transfer and exchange of Bonds.
No Redemption
The Bonds are not subject to redemption prior to their respective stated maturities. 32021.00004\45004592.2
7 Scheduled Debt Service on the Bonds
The following is the scheduled semi-annual and annual Debt Service on the Bonds.
Payment Date
Principal
Interest
Semi-Annual
Debt Service
Annual
Debt Service
Total
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8 THE FINANCING PLAN
The Refunding Plan
Redemption of Prior Bonds. On the Closing Date, a portion of the proceeds of the Bonds will be transferred to the Trustee as escrow bank (“Escrow Bank”) for deposit pursuant to separate Refunding Instructions for each series of the Refunded Bonds, each dated as of ________ 1, 2026 (the “Refunding Instructions”) between the Successor Agency and the Escrow Bank.
The amount deposited under the Refunding Instructions, together with other available moneys, will be held uninvested, or invested in certain federal securities and irrevocably pledged for the payment of the Refunded Bonds as follows:
the $________ outstanding 2006A Bonds will be redeemed in full on __________, at a redemption price equal to 100% of the principal amount of the 2006A Bonds to be redeemed together with accrued interest thereon to the date fixed for redemption, without premium, and the $ _________ outstanding 2006B Bonds will be redeemed in full on ____________, at a redemption price equal to 100% of the principal amount of the 200 6B Bonds to be redeemed together with accrued interest thereon to the date fixed for redemption, without premium.
Amounts so deposited under the Refunding Instructions will be pledged to the redemption price of the Refunded Bonds on their respective redemption dates, and the sufficiency of the amounts deposited under the Refunding Instructions for s uch purpose will be verified by the Verification Agent as described below. The lien of the Refunded Bonds on any of the Pledged Tax Revenues will be discharged, terminated and of no further force and effect upon the deposit with the Escrow Bank of the amounts required pursuant to the Refunding Instructions.
Neither the funds deposited in the escrow funds for the Refunded Bonds nor the interest on any invested funds held in the escrow funds will be available for the payment of debt service on the Bonds.
Verifications of Mathematical Computations. _____________ (the “Verification Agent”) will verify from the information provided to them the mathematical accuracy as of the date of the closing on the Bonds of the computations contained in the provided schedules to determine that the cash and investments, together with investment earnings thereon, listed in the schedules prepared by the Municipal Advisor, to be held in escrow, will be sufficient to pay, when due, the principal, redemption premium and interest requirements of the Refunded Bonds.
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9 Estimated Sources and Uses of Funds
Under the provisions of the Indenture, the Trustee will receive the proceeds from the sale of the Bonds and other available funds and will apply them as shown below.
Sources of Funds
Par Amount of Bonds
Net Original Issue Premium
Debt Service Funds for the Refunded Bonds
Reserve Funds for the Refunded Bonds
Total Source of Funds
Uses of Funds
Transfer to Escrow Bank
Underwriter’s Discount
Costs of Issuance Fund (1)
Total Use of Funds
______________________________
(1) Costs of issuance include fees and expenses of Bond Counsel, the Municipal Advisor, Disclosure Counsel , Verification Agent, Trustee and Escrow Bank, costs of printing the Official Statement, rating fees, premiums for the Policy and the Reserve Account Insurance Policy and other costs of issuance of the Bonds. 32021.00004\45004592.2
10 SECURITY FOR THE BONDS
Tax Allocation Financing
Prior to the enactment of the Dissolution Act, the Redevelopment Law authorized the financing of redevelopment projects through the use of tax increment revenues. First, the assessed valuation of the taxable property in a project area, as last equalized prior to adoption of the redevelopment plan, was established and became the base roll. Thereafter, except for any period during which the assessed valuation drops below the base year level, the Taxing Agencies, on behalf of which taxes are levied on property within the project area, receive the taxes produced by the levy of the then current tax rate upon the base roll. Taxes collected upon any increase in the assessed valuation of the taxable property in a project area over the levy upon the base roll could be pledged by a redevelopment agency to the repayment of any indebtedness incurred in financing the redevelopment project. Redevelopment agencies themselves had no authority to levy taxes on property.
The Dissolution Act now requires the County Auditor-Controller to determine the amount of property taxes that would have been allocated to the Former Agency had the Former Agency not been dissolved using current assessed values on the last equalized roll on August 20, and to deposit that amount in the Redevelopment Property Tax Trust Fund for the Successor Agency established and held by the County Auditor-Controller pursuant to the Dissolution Act. Such funds, or portions thereof distributed to the Successor Agency, are deposited by the Successor Agency in its Recognized Obligation Retirement Fund (the “Recognized Obligation Retirement Fund”). The Dissolution Act provides that any bonds authorized thereunder to be issued by the Successor Agency will be considered indebtedness incurred by the dissolved Agency, with the same legal effect as if the bonds had been issued prior to effective date of AB X1 26, in full conformity with the applicable provision of the Redevelopment Law that existed prior to that date, and will be included in the Successor Agency’s Recognized Obligation Payment Schedules (see “Recognized Obligation Payment Schedules” herein).
The Dissolution Act authorizes refunding bonds, including the Bonds, to be secured by a pledge of moneys deposited from time to time in a Redevelopment Property Tax Trust Fund held by a county auditor - controller with respect to a successor agency, which are equivalent to the tax increment revenues that were formerly allocated under the Redevelopment Law to the redevelopment agency and formerly authorized under the Redevelopment Law to be used for the financing of redevelopment projects, less amounts deducted pursuant to Section 34183(a) of the Dissolution Act for permitted administrative costs of the county auditor-controller and, unless subordinated to the Bonds, payments made under Sections 33401, 33676, 33607.5 and 33607.7 (among others) of the Redevelopment Law.
Successor agencies have no power to levy property taxes but must receive an allocation of taxes as described above. See “RISK FACTORS.”
Pledged Tax Revenues
As provided in the respective Redevelopment Plans for the Combined Project Areas and pursuant to Article 6 of Chapter 6 of the Redevelopment Law, and Section 16 of Article XVI of the Constitution of the State, taxes levied upon taxable property in the Redevelopment Projects each year by or for the benefit of the State, for cities, counties, districts or other public corporations (collectively, the “Taxing Agencies”) for fiscal years beginning after the effective date of the ordinance approving the respective Redevelopment Plans, will be divided as follows:
(a) To Taxing Agencies: That portion of the taxes which would be produced by the rate upon which the tax is levied each year by or for each of the Taxing Agencies upon the total sum of the assessed value of the taxable property in the respective Redevelopment Pr oject as shown upon the assessment roll used in connection with the taxation of such property by such Taxing Agency last 32021.00004\45004592.2
11 equalized prior to the effective date of the ordinance adopting the Redevelopment Plan, or the respective effective dates of ordinances approving amendments to the Redevelopment Plan that added territory, as applicable (each, a “base year valuation ”), will be allocated to, and when collected will be paid into, the funds of the respective Taxing Agencies as taxes by or for the Taxing Agencies on all other property are paid; and
(b) To the Former Agency/Successor Agency: Except for that portion of the taxes in excess of the amount identified in (a) above which are attributable to a tax rate levied by a Taxing Agency for the purpose of producing revenues in an amount sufficient to make annual repayments of the principal of and the interest on, any bonded indebtedness approved by the voters of the Taxing Agency on or after January 1, 1989 for the acquisition or im provement of real property, which portion shall be allocated to, and when collected shall be paid into, the fund of that Taxing Agency, that portion of the levied taxes each year in excess of such amount, when collected will be paid into a special fund of the Former Agency/Successor Agency.
Section 34183 of the Dissolution Act effectively eliminate d the January 1, 1989 date from the paragraph above. Additionally, effective September 22, 2015, debt service override revenues approved by the voters for the purpose of supporting pension programs, capital projects, or programs related to the State Water Project, that are not pledged to or needed for debt service on successor agency obligations are allocated and paid to the entity that levies the override and w ill not be deposited into the Redeve lopment Property Tax Trust Fund. Further, also effective September 22, 2015, Redevelopment Plan limits relating to the amount of taxes that could be paid to the Former Agency/Successor Agency and the time that such taxes could be paid was eliminated for the purpose of paying debt service on bonds of the Former Agency or the Successor Agency.
Pledged Tax Revenues generated as set forth under ( b) above and allocated to the Successor Agency constitute Tax Increment Revenues, as that term is used herein.
Pledged Tax Revenues. For the security of the Bonds, the Successor Agency grants a pledge of and lien on all of the Pledged Tax Revenues. “Pledged Tax Revenues” are defined under the Indenture as the moneys deposited from time to time in the Redevelopment Property Tax Trust Fund established pursuant to subdivision (c) of Section 34172 of the Law, as provided in Section 34183 of the Law, e xcluding (a) Statutory Pass-Through Amounts, (b) Negotiated Pass-Through Amounts to the extent not subordinated to the Bonds and (c) the portion of such funds needed to pay the Senior Indebtedness. If, and to the extent, that the provisions of Section 341 72 of the Law or Section 34183 of the Law are invalidated by a final judicial decision, then Pledged Tax Revenues will include all tax revenues allocated to the payment of indebtedness of the Successor Agency pursuant to Section 33670 of the Law or such other section as may be in effect at the time providing for the allocation of tax increment revenues to the Successor Agency in accordance with Article XVI, Section 16 of the California Constitution, subject in any event to the prior use thereof, each Fiscal Year, to pay the Senior Indebtedness.
By definition, under the Dissolution Act, Pledged Tax Revenues exclude County administrative costs allowed under Section 34182 of the Law and Section 95.3 of the California Revenue and Taxation Code.
See “APPENDIX C - FISCAL CONSULTANT’S REPORT” herein.
Redevelopment Property Tax Trust Fund
Deposits to the Redevelopment Property Tax Trust Fund. Section 34172 of the Dissolution Act provides that, for purposes of Section 16 of Article XVI of the State Constitution, the Redevelopment Property Tax Trust Fund shall be deemed to be a special fund of the Successor Agency to pay the debt service on indebtedness incurred by the Former Agency or the Successor Agency to finance or refinance the redevelopment projects of the Former Agency.
32021.00004\45004592.2
12 Disbursements from the Redevelopment Property Tax Trust Fund. The Redevelopment Law authorized redevelopment agencies to make payments to Taxing Agencies to alleviate any financial burden or detriments to such Taxing Agencies caused by a redevelopment project. The Former Agency entered into a number of agreements with the Taxing Agencies for this purpose. Additionally, Se ctions 33607.5 and 33607.7 of the Redevelopment Law required mandatory tax sharing applicable to redevelopment projects adopted on or after June 1, 1994 or amended after January 1, 1994 in a manner specified in such section. Because the Redevelopment Plans for certain of the Redevelopment Projects were amended after June 1, 1994, and the Expansion Area was created after June 1, 1994, the Successor Agency is obligated to pay certain Statutory Pass-Through Amounts. See “APPENDIX C - FISCAL CONSULTANT’S REPORT” herein.
Typically, under the Redevelopment Property Tax Trust Fund distribution provisions of the Dissolution Act, a county auditor-controller is to distribute funds for each six-month period in the following order specified in Section 34183 of the Dissolution Act:
(i) first, subject to certain adjustments (as described below) for subordinations to the extent permitted under the Dissolution Act (if any, as described in “APPENDIX C - FISCAL CONSULTANT’S REPORT”) and no later than each January 2 and June 1, to each local taxing agency and school entity, to the extent applicable, amounts required for pass-through payments such entity would have received under provisions of the Redevelopment Law, as those provisions read on January 1, 2011, including negotiated pass-through agreements and statutory pass-through obligations; (ii) second, on each January 2 and June 1, to the successor agency for payments listed in its Recognized Obligation Payment Schedule, with debt service payments (and amounts required to replenish the related reserve funds, if any) scheduled to be made for tax allocation bonds having the highest priority over payments scheduled for other debts and obligations listed on the Recognized Obligation Payment Schedule;
(iii) third, on each January 2 and June 1, to the successor agency for the administrative cost allowance, as defined in the Dissolution Act; and
(iv) fourth, on each January 2 and June 1, to taxing entities any moneys remaining in the Redevelopment Property Tax Trust Fund after the payments and transfers authorized by clauses (i) through (iii), in an amount proportionate to such taxing entity ’s share of property tax revenues in the tax rate area in that fiscal year (without giving effect to any pass-through obligations that were established under the Redevelopment Law).
The Dissolution Act requires county auditor-controllers to distribute from the Redevelopment Property Tax Trust Fund amounts required to be distributed under any Pass-Through Agreements and the Statutory Pass- Through Amounts to the Taxing Agencies on each January 2 and June 1 before amounts are distributed by the County Auditor-Controller from the Redevelopment Property Tax Trust Fund to the Successor Agency’s Redevelopment Obligation Retirement Fund, unless: (i) pass-through payment obligations have been made subordinate to debt service payments for the bonded indebtedness of the Former Agency, as succeeded to by the Successor Agency; (ii) the Successor Agency has reported, no later than the December 1 and May 1 preceding the applicable January 2 or June 1 distribution date, that the total amount available to the Successor Agency from the Redevelopment Property Tax Trust Fund allocation to the Successor Agency’s Redevelopment Obligation Retirement Fund, from other funds transferred from the Former Agency and from funds that have or will become available through asset sales and all redevelopment operations is insufficient to fund the Successor Agency’s enforceable obligations, pass-through payments and the Former Agency’s administrative co st allowance for the applicable Recognized Obligation Payment Schedule period; and (iii) the State Controller has concurred with the Successor Agency that there are insufficient funds for such purposes.
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13 If the requirements set forth in clauses (i) through (iii) of the foregoing paragraph have been met, the Dissolution Act provides for certain modifications in the distributions otherwise calculated to be distributed on the applicable January 2 or June 1 property tax distribution date (as adjusted for weekends and holidays).
To provide for calculated shortages to be paid to the Successor Agency for enforceable obligations, the amount of the deficiency will first be deducted from the residual amount otherwise calculated to be distributed to the taxing entities under the Dissolution Act after payment of the Successor Agency ’s enforceable obligations, pass-through payments and the Successor Agency’s administrative cost allowance.
If such residual amount is exhausted, the amount of the remaining deficiency will be deducted from amounts available for distribution to the Successor Agency for administrative costs for the applicable Recognized Obligation Payment Schedule period in order to fund the enforceable obligations. Finally, funds required for servicing bond d ebt may be deducted from the amounts to be distributed under subordinated Pass- Through Agreements, in order to be paid to the Successor Agency for enforceable obligations, but only after the amounts described in the previous two sentences have been exhausted.
The Dissolution Act provides for a procedure by which the Successor Agency may make statutory pass - through payments subordinate to the Bonds. The Successor Agency has not undertaken any procedures to obtain such subordination of the Statutory Pass-Through Amounts and, therefore, Statutory Pass-Through Amounts due to all Taxing Agencies are senior to the Bonds. Additionally, as described in “APPENDIX C - FISCAL CONSULTANT’S REPORT” under the caption “Tax Sharing Agreements and Other Obligations,” payment of certain Negotiated Pass-Through Amounts is subordinate to the payment of the Bonds.
Recognized Obligation Payment Schedules
Enforceable Obligations. The Dissolution Act requires successor agencies to prepare and approve, and submit to the suc cessor agency’s oversight board and the State Department of Finance for approval, a Recognized Obligation Payment Schedule pursuant to which enforceable obligations (as defined in the Dissolution Act) of the successor agency are listed, together with the source of funds to be used to pay for each enforceable obligation. As defined in the Dissolution Act, “enforceable obligation” includes bonds, including the required debt service, reserve set-asides, and any other payments required under the indenture or similar documents governing the issuance of the outstanding bonds of the former redevelopment agency, as well as other obligations such as loans, judgments or settlements against the former redevelopment agency, any legally binding and enforceable agreement that is not otherwise void as violating the debt limit or public policy, contracts necessary for the administration or operation of the successor agency, and amounts borrowed from the Low and Moderate Income Housing Fund and from the city. A reserve may be included on the Recognized Obligation Payment Schedule and held by the successor agency when required by the bond indenture or when the next property tax allocation will be insufficient to pay all obligations due under the provisions of the bond for the next payment due in the following six -month period (see “APPENDIX A - SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE - Covenants of the Successor Agency”). The Successor Agency has covenanted to request such reserves as described below.
Under the Dissolution Act, the categories of sources of payments for enforceable obligations listed on a Recognized Obligation Payment Schedule are the following: (i) the Low and Moderate Income Housing Fund, (ii) bond proceeds, (iii) reserve balances, (iv) administrative cost allowance, (v) the Redevelopment Property Tax Trust Fund (but only to the extent no other funding source is available or when payment from property tax revenues is required by an enforceable obligation or otherwise required under the Dissolution Act), or (vi) other revenue sources (including rents, concessions, asset sale proceeds, interest earnings, and any other revenues derived from the former redevelopment agency, as approved by the oversight board).
Other than amounts deposited in the Redevelopment Property Tax Trust Fund allocable to the Combined Project Areas and amounts held in funds and accounts under the Indenture, the Successor Agency does not expect to have any other funds available to pay the Bonds. 32021.00004\45004592.2
14 The Dissolution Act pr ovides that only those payments listed in the Recognized Obligation Payment Schedule may be made by the Successor Agency from the funds specified in the Recognized Obligation Payment Schedule.
Required Approvals. As provided in SB 107, the Recognized Obligation Payment Schedule, with respect to each Fiscal Year, and segregated into each six-month period beginning July 1 and January 1, must be submitted by the Successor Agency, after approval by the Oversight Board, the County Auditor-Controller, the State Department of Finance, and the State Controller by each February 1. For information regarding procedures under the Dissolution Act relating to late Recognized Obligation Payment Schedules and implications thereof on the Bonds, see “RISK FACTORS - Recognized Obligation Payment Schedule.” Commencing on September 22, 2015, successor agencies that have received a Finding of Completion and the concurrence of the Department of Finance as to the items that qualify for payment, among other conditions, may at their option, file a “Last and Final ” Recognized Obligation Payment Schedule. If approved by the Department of Finance, the Last and Final Recognized Obligation Payment Schedule will be binding on all parties, and the Successor Agency will no longer submit a Recognized Obligation Payment Schedule to the Department of Finance or the Oversight Board. The County Auditor-Controller will remit the authorized funds to the Successor Agency in accordance with the approved Last and Final Recognized Obligation Payment Schedule until each remaining enforceable obligation has been fully paid. A Last and Final Recognized Obligation Payment Schedule may only be amended twice, and only with approval of the Department of Finance and the County Auditor-Controller. The Successor Agency currently has no plans to file a Last and Final Recognized Obligation Payment Schedule and has covenanted in the Indenture to not do so without the consent of the Bond Insurer.
Determination of Available Funding. In connection with the allocation and distribution by the County Auditor-Controller of property tax revenues deposited in the Redevelopment Property Tax Trust Fund, under the Dissolution Act the County Auditor -Controller must prepare estimates of the amo unts of (i) property tax to be allocated and distributed, and (ii) the amounts of pass -through payments to be made in the upcoming six-month period, and provide those estimates to the entities receiving the distributions and the State Department of Finance no later than April 1 and October 1 of each year, as applicable.
If, after receiving such estimate from the County Auditor-Controller, the Successor Agency determines and reports, no later than December 1 or May 1, as applicable, that the total amount available to the Successor Agency from the Redevelopment Property Tax Trust Fund allocation to the Successor Agency ’s Redevelopment Obligation Retirement Fund, from other funds transferred from the Former Agency, and from funds that have or will become availa ble through asset sales and all redevelopment operations, is insufficient to fund the payment of pass -through obligations, of the Successor Agency ’s enforceable obligations listed on the Recognized Obligation Payment Schedule, and of the Successor Agency ’s administrative cost allowance, the County Auditor-Controller must notify the State Controller and the State Department of Finance no later than 10 days from the date of the Successor Agency ’s notification. If the State Controller concurs that there are i nsufficient funds to pay required debt service, the Dissolution Act provides for certain adjustments to be made to the estimated distributions, as described in more detail under “Redevelopment Property Tax Trust Fund” above.
Debt Service. In the Indenture, the Successor Agency covenants to comply with all of the requirements of the Dissolution Act, including taking all actions required under the Dissolution Act to prepare and file Recognized Obligation Payment Schedules for each Fiscal Year so as to enable the County Auditor - Controller to distribute from the Redevelopment Property Tax Trust Fund for deposit in the Redevelopment Obligation Retirement Fund all amounts as shall be required to enable the Successor Agency to pay timely principal of, and interest on, the Bonds , all Outstanding Parity Debt and the 2002 Bonds coming due in such Bond Year, including any amounts due and owing to the Bond Insurer in respect of the Reserve Account Insurance Policy, or required to replenish the Reserve Account, and the respective reserve accounts established for the 2002 Bonds or any Parity Debt.
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15 Pursuant to the Indenture, without limiting the generality of the foregoing covenant, the Successor Agency will take all actions required under the Dissolution Act to file a Recognized Obligation Payment Schedule by February 1 in each year, commencing February 1, 20 27, in accordance with Section 34177 of the Redevelopment Law. For the semiannual period ending each June 30, the Recognized Obligation Payment Schedule which includes such period shall request the payment to the Successor Agency of an amount of Pledged Tax Revenues which is at least equal to the following:
(a) 100% of the amount of principal and accreted value of the 2002 Bonds coming due and payable on the next succeeding December 1,
(b) 100% of the amount of interest on the Bonds and all Outstanding Parity Debt coming due and payable on the next succeeding March 1,
(c) 75% of the amount of principal and interest on the Bonds and all Outstanding Parity Debt coming due and payable on the next succeeding September 1, (d) any amount then required to replenish the full amount of the Reserve Requirement for the for the Bonds in the Reserve Account, and to replenish the amount in any reserve account established for all outstanding 2002 Bonds or Parity Debt, and (e) any amount then required to make payments due to the Bond Insurer in respect of the Policy or the Reserve Account Insurance Policy.
For the semiannual period ending each December 31, the Recognized Obligation Payment Schedule which includes such period shall request the payment to the Successor Agency of an amount of Pledged Tax Revenues which is at least equal to the following:
(a) the remaining principal and interest due on the Bonds and all Outstanding Parity Debt coming due and payable on the next succeeding September 1, and not received or reserved in the period ending June 30, and
(b) reserves and amounts due to any bond insurer as described under (d) and (e) above.
The foregoing actions will include, without limitation, placing on the periodic Recognized Obligation Payment Schedule for approval by the Oversight Board and the Department of Finance, to the extent required, the amounts to be held by the Successor Agency as a reserve for the timely payment of principal of and interest on the Bonds, all Outstanding Parity Debt and the 2002 Bonds coming due in the succeeding Fiscal Year. See “Recognized Obligation Payment Schedules” above and “RISK FACTORS - Recognized Obligation Payment Schedule.”
The Successor Agency further agrees (a) to the extent permitted by law, to amend any Recognized Obligation Payment Schedule filing for any period during which amounts owed to the Bond Insurer either with respect to the Bond Insurance Po licy or the Reserve Account Insurance Policy are not included on such Recognized Obligation Payment Schedule filing, and (b) not to submit a Last and Final Recognized Obligation Payment Schedule under the Dissolution Act without the prior written consent of the Bond Insurer.
The Successor Agency has no power to levy and collect taxes, and various factors beyond its control could affect the amount of Pledged Tax Revenues available in any six -month period (or otherwise) to pay the principal of and interest on the Bonds. See “RISK FACTORS.” 32021.00004\45004592.2
16 Pledge of Pledged Tax Revenues
Except as otherwise provided in the Indenture, the Bonds and any additional Parity Debt will be equally secured by a pledge and lien on all of the Pledged Tax Revenues excluding the Pledged Tax Revenues distributed on January 2 in each Bond Year not required for debt service on the Bonds and any additional Parity Debt on March 1 of such year, but including all Pledged Tax Revenues distributed on January 2 in each Bond Year to be reserved for 75% of the September 1 payment of principal and interest on the Bonds and any additional Parity Debt in such Bond Year, and by a first and exclusive pledge and lien upon all of the moneys in the Redevelopment Obligation Retirement Fund without preference or priority for series, issue, number, dated date, sale date, date of execution or date of delivery; provided, however, that so long as any of the 2002 Bonds remain outstanding, the Successor Agency shall first use the amounts deposited to the Redevelopment Obligation Retirement Fund as required to satisfy its scheduled o bligations with respect to such outstanding 2002 Bonds. The Bonds (exclusive of any Parity Debt) are also secured by an exclusive pledge of, security interest in and lien on amounts in the Reserve Account. Except for the Pledged Tax Revenues and such mone ys, no funds or properties of the Successor Agency will be pledged to, or otherwise liable for, the payment of principal of or interest or redemption premium (if any) on the Bonds.
The Pledged Tax Revenues are pledged to the payment of principal of and int erest on the Bonds pursuant to the Indenture until the Bonds have been paid, or until moneys have been set -aside irrevocably for that purpose. The Trustee will covenant to exercise such rights and remedies as may be necessary to enforce the payment of the Pledged Tax Revenues when due under the Indenture, and otherwise to protect the interests of the Bondholders in the event of default by the Successor Agency, subject to the provisions of the Indenture.
The Bonds are special obligations of the Successor Agency. The Bonds do not constitute a debt or liability of the City, the County, the State or of any political subdivision thereof, other than the Successor Agency. The Successor Agency shall only be obligated to pay the principal of the Bonds, or the in terest thereon, from the funds described herein, and neither the faith and credit nor the taxing power of the City, the County, the State or any of its political subdivisions is pledged to the payment of the principal of or the interest on the Bonds. The Successor Agency has no taxing power.
The State Legislature has amended the Dissolution Act several times. The Successor Agency expects, but cannot guarantee, that the processes for funding of enforceable obligations prescribed by any new legislative chan ge in the Dissolution Act will not interfere with its administering of the Pledged Tax Revenues in accordance with the Indenture and receiving adequate Pledged Tax Revenues for the timely payment of principal of and interest on the Bonds when due.
Redevelopment Obligation Retirement Fund; Deposit of Pledged Tax Revenues The Successor Agency will deposit all of the Pledged Tax Revenues (including for this purpose amounts described in clause (c) of the definition thereof in the Indenture) received in any Bond Year in the Redevelopment Obligation Retirement Fund promptly upon receipt thereof by the Successor Agency.
Amounts in the Redevelopment Obligation Retirement Fund, after deductions for amounts due on any outstanding 2002 Bonds, shall be promptly transfer red (a) to the Debt Service Fund established and held by the Trustee under the Indenture until such time during such Bond Year as the amounts so transferred to the Debt Service Fund under the Indenture equal the aggregate amounts required to be deposited i nto the Interest Account, the Principal Account and the Reserve Account in such Bond Year pursuant to the Indenture, but excluding the Pledged Tax Revenues distributed on January 2 in each Bond Year not required for debt service on the Bonds on March 1 of such year, but including all Pledged Tax Revenues distributed on January 2 in each Bond Year to be reserved for 75% of the September 1 principal and interest on the Bonds payable in such Bond Year pursuant to the Indenture (see “Recognized Obligation Payme nt 32021.00004\45004592.2
17 Schedules - Debt Service ” above); and (b) for deposit in such Bond Year in the funds and accounts established with respect to Parity Debt, as provided in any Supplemental Indenture.
In the event that the amount of Pledged Tax Revenues (available after payment of debt service on the 2002 Bonds) is not sufficient to pay the Bonds and any Parity Debt outstanding, any such insufficiency shall be allocated among the Bonds and any Parity Debt on a pro rata basis (based on the amount of debt service coming due during any such period of insufficiency).
Any Pledged Tax Revenues received each January 2 and June 1 during a Bond Year and held in the Redevelopment Obligation Retirement Fund, to the extent remaining after payment of amounts due on any 2002 Bonds, and m aking the foregoing transfers to the Debt Service Fund in the applicable semi -annual period and in respect of any Parity Debt in such Bond Year, will be released from the pledge and lien under the Indenture which secures the Bonds and any Parity Debt and may be applied for any lawful purposes of the Successor Agency, including but not limited to administrative costs of the Successor Agency.
Deposit of Amounts by Trustee
Moneys in the Debt Service Fund will be transferred by the Trustee in the following amou nts at the following times, for deposit by the Trustee in the following respective accounts within the Debt Service Fund, in the following order of priority:
Interest Account. On or before the fifth Business Day preceding each Interest Payment Date, to the extent there are moneys available, the Trustee will transfer funds from the Debt Service Fund for deposit in the Interest Account an amount which, when added to the amount contained in the Interest Account on that date, will be equal to the aggregate amo unt of the interest becoming due and payable on the Outstanding Bonds and Parity Debt on such Interest Payment Date or date of redemption of the Bonds. No such transfer and deposit need be made to the Interest Account if the amount contained therein is at least equal to the interest to become due on the next succeeding Interest Payment Date upo n all of the Outstanding Bonds and Parity Debt or date of redemption of the Bonds of the interest coming due on the Bonds to be redeemed. Subject to the Indenture, all moneys in the Interest Account will be used and withdrawn by the Trustee solely for the purpose of paying the interest on the Bonds and Parity Debt as it becomes due and payable (including accrued interest on any Bonds and Parity Debt redeemed prior to maturity pursuant to the Indenture).
Principal Account. On or before the fifth Business Day preceding each September 1, commencing with the Interest Payment Date occurring on September 1, 20____, to the extent there are moneys available, the Trustee will transfer funds from the Debt Service Fund for deposit in the Principal Account an amount equal to three-quarters of the principal payments becoming due and payable on Outstanding Bonds and Parity Debt on the next September 1, to the extent monies on deposit in the Debt Service Fund are available therefor. No such transfer and deposit need be made to the Principal Account if the amount contained therein is at least equal to the principal payments to become due on the next September 1 on all Outstanding Bonds and Parity Debt. Subject to the Indenture, all moneys in the Principal Account will be used and withdrawn by the Trustee solely for the purpose of paying the principal payments of the Bonds and Parity Debt as it becomes due and payable.
Reserve Account.
(i) In lieu of a cash deposit to the Reserve Account, the Reserve Account Insurance Policy (see “Reserve Account” below) will be delivered to the Trustee on the Closing Date, and will be held by the Trustee for the credit of the Reserve Account solely for the benefit of the Bonds (and not for the benefit of any Parity Debt).
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18 If, on the third Business Day prior to any Interest Payment Date, the moneys available in the Interest Account and the Principal Account do not equal the amount of the principal and interest on the Bonds (not including any Parity Debt) then coming due and payable, the Trustee will first apply any moneys available in the Reserve Account to make delinquent amounts with respect to the Bonds (not including any Parity Debt) by transf erring the amount necessary for this purpose to the Interest Account and the Principal Account, and then will (subject to the Indenture) draw on the Reserve Account Insurance Policy to the extent an insufficiency still exists and apply amounts received from such draw to make delinquent amounts on the Bonds (and not on any Parity Debt) by transferring the amount necessary for this purpose to the Interest Account and the Principal Account. To the extent there is cash or investments on deposit in the Reserve Account, such cash or investments will be applied first before there is any draw on the Reserve Account Insurance Policy or any other credit facility credited to the Reserve Account in lieu of cash (a “Credit Facility ”). Payment of any Reserve Account Ins urance Policy Costs will be made prior to replenishment of any such cash amounts.
Draws on all Credit Facilities (including the Reserve Account Insurance Policy) on which there is available coverage will be made on a pro rata basis (calculated by reference to the coverage then available thereunder) after applying all available cash and investments in the Reserve Account. Payment of amounts owed by the Successor Agency under the Financial Guaranty Agreement as necessary to reimburse any draw on the Reserve Account Insurance Policy and reimbursement of amounts with respect to other Credit Facilities will be made on a pro rata basis prior to replenishment of any cash drawn from the Reserve Account.
The Trustee will ascertain the necessity for a claim upon the Reserve Account Insurance Policy, and provide notice to the Bond Insurer in accordance with the terms of the Reserve Account Insurance Policy at least three (3) Business Days prior to each date upon which interest or principal is due with respect to the Bonds issued on the Closing Date.
The Successor Agency has no obligation to replace the Reserve Account Insurance Policy or to fund the Reserve Account with cash if, at any time the Bonds are outstanding, amounts are unavailable under the Reserve Account Insurance Policy.
(ii) The Successor Agency agrees to repay any draws under the Reserve Account Insurance Policy and pay all related reasonable expenses incurred by the Bond Insurer as provided in the Financial Guaranty Agreement. The Successor Agency agrees under the Indenture to amend its then current Recognized Obligation Payment Schedule in order to include any amount owed by it under the Financial Guaranty Agreement not so included on such Recognized Obligation Payment Schedule. To the extent that such repayment and payment cannot be made in full within the current Recognized Obligation Payment Schedule period, the Successor Agency will include the payment and repayment on the next available Recognized Obligation Payment Schedule and on successive Recogn ized Obligation Payment Schedules until such amounts so owed have been paid in full.
The obligation of the Successor Agency to pay amount owed by it under the Financial Guaranty Agreement will be secured by a valid lien on the Pledged Tax Revenues, the Red evelopment Obligation Retirement Fund and all moneys in the Debt Service Fund, subject only to the priority of payment provisions set forth in the Indenture.
(iii) Draws under the Reserve Account Insurance Policy or on any funds in the Reserve Account may only be used to make payments on the Bonds.
(iv) The Indenture shall not be discharged until all amounts due and owing to the Bond Insurer under the Financial Guaranty Agreement or any other document between the Successor Agency and the Bond Insurer shall have been paid in full. The Successors Agency’s obligation to pay such amounts shall expressly survive the payment in full of the Bonds.
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19 (v) The Reserve Account Insurance Policy will expire on the earlier of the date the Bonds are no longer outstanding and the final maturity date of the Bonds.
Reserve Account
A Reserve Account has been established under the Indenture to be held by the Trustee to further secure the timely payment of principal of and interest on the Bonds. The Successor Agency must maintain an aggregate balance in the Reserve Account equal the least of (a) Maximum Annual Debt Service for the then current or every subsequent Bond Year, (b) 125% of average Annual Debt Service for the then current or every subsequent Bond Year, and (c) 10% of the original principal amount of the Bonds (the “Reserve Requirement”). In the event that the Successor Agency fai ls to deposit with the Trustee the full amount required by the Indenture to pay principal and interest due on the Bonds when due on any date, the Trustee will withdraw from the Reserve Account the difference between the amount required to be on deposit and the amount available on such date.
The Reserve Account established for the Bonds secures only the Bonds and not any other Parity Debt that may be issued under the Indenture (see “No Additional Debt Other Than Refunding Bonds” below).
The 2002 Bonds have a reserve account which is currently funded with cash . Such amounts are not available to pay the Bonds.
Reserve Account Insurance Policy. The Indenture provides that in lieu of a cash deposit, the Successor Agency may satisfy all or a portion of the Reserve Requirement by means of a Reserve Account Insurance Policy (“Reserve Account Insurance Policy”) (see “APPENDIX A - SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE - Definitions” herein).
Concurrently with the issuance of the Bonds, the Bond Insurer will issue the Reserve Account Insurance Policy with respect to the Bonds. The Reserve Account Insurance Policy provides that upon notice from the Trustee to the Bond Insurer to the effect that insufficient amounts are on deposit in the Debt Service Fund to pay the principal of (at maturity or pursuant to mandatory redemption requirements) and interest on the Bonds, the Bond Insurer will promptly deposit with the Trustee an amount sufficient to pay the principal of and interest on the Bonds or the availab le amount of Reserve Account Insurance Policy, whichever is less. Upon the later of: (i) three (3) days after receipt by the Bond Insurer of a Demand for Payment in the form attached to the Reserve Account Insurance Policy, duly executed by the Trustee; or (ii) the payment date of the Bonds as specified in the Demand for Payment presented by the Trustee to the Bond Insurer, the Bond Insurer will make a deposit of funds in an account with U.S. Bank Trust National Association, in New York, New York, or its successor, sufficient for the payment to the Trustee, of amounts which are then due to the Trustee (as specified in the Demand for Payment) subject to the Surety Bond Coverage of $_________.
The available amount of the Reserve Account Insurance Policy is t he initial face amount of the Reserve Account Insurance Policy less the amount of any previous deposits by the Bond Insurer with the Trustee which have not been reimbursed by the Successor Agency.
The Reserve Account Insurance Policy is held by the Trustee in the Reserve Account and is provided as an alternative to the Successor Agency depositing therein funds equal to the Reserve Requirement for the Bonds.
In the event the Bond Insurer were to become insolvent, any claims arising under a policy of financia l guaranty insurance are excluded from coverage by the California Insurance Guaranty Association, established pursuant to Article 14.2 (commencing with Section 1063) of Chapter 1 of Part 2 of Division 1 of the California Insurance Code.
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20 See “RISK FACTORS - Risks Related to Insured Bonds and the Reserve Account Insurance Policy” herein.
No Additional Debt Other Than Refunding Bonds
In addition to the Bonds, the Successor Agency may issue additional bonds payable from Pledged Tax Revenues on a parity with the Bonds (“Parity Debt”) to refund all or any portion of the Bonds, previously issued Parity Debt or the 2002 Bonds, in each case in such principal amount as will be determined by the Successor Agency, pursuant to a separate or Supplemen tal Indenture adopted or entered into by the Successor Agency and Trustee if (a) the Successor Agency is in compliance with all covenants set forth in the Indenture, and (b) the Parity Debt is in compliance with the requirements of Section 34177.5(a)(1) of the Dissolution Act.
The documents providing for the issuance of Parity Debt under the Indenture shall provide that:
(a) Interest on the Parity Debt is payable on March 1 and September 1 in each year of the term thereof, except the first twelve month period, during which interest may be payable on any date; (b) The principal of the Parity Debt is payable on September 1 in any year in which principal is payable; (c) The trustee for the Parity Debt is the same entity which performs the duties of Trustee for the Bonds; and
(d) A reserve account shall be established for the Parity Debt in an amount equal to the least of 10% of the par amount of the Parity Debt , maximum annual debt service on the Parity Debt, or 125% of average annual debt service on the Parity Debt, and which may be funded in cash or in the form of a surety bond or other credit facility issued by a financial institution having a rating at least equal to the rating then applicable to the Bonds, provided that such reserve account shall only secure the repayment of the Parity Debt and shall not secure the Bonds or any other issue of Parity Debt.
MUNICIPAL BOND INSURANCE
The following information has been furnished by ___________ (“________” or the “Bond Insurer”) for use in this Official Statement.
[TO COME]
THE SUCCESSOR AGENCY
Government Organization
The Former Agency was established by the City Council in 1972 pursuant to the Redevelopment Law. On June 29, 2011, AB X1 26 was enacted, together with a companion bill, AB X1 27. A lawsuit was brought in the California Supreme Court, California Redevelopment Association, et al. v. Matosantos, et al., 53 Cal. 4th 231 (Cal. Dec. 29, 2011), challenging the constitutionality of AB X1 26 and AB X1 27. In its December 29, 2011 decision, the California Supreme Court largely upheld AB X1 26, invalidated AB X1 27, and held that AB X1 26 may be severed from AB X1 27 and enforced independently. As a result of AB X1 26 and 32021.00004\45004592.2
21 the decision of the California Supreme Court in the California Redevelopment Association case, as of February 1, 2012, all redevelopment agencies in the State were dissolved, including the Former Agency, and successor agencies were designated as successor entities to the former redevelopment agencies to expeditiously wind down the affairs of the former redevelopment agencies.
Pursuant to Section 34173 of the Dissolution Act, the City Council serves as the governing board of the successor agency to the Former Agency and thus, since the February 1, 2012 dissolution of the Former Agency, the City has acted in such capacity . The Successor Agency is governed by a five -member board which consists of the Mayor and the members of the City Council. The Mayor serves as the presiding officer of the Successor Agency.
Section 34173(g) of the Dissolution Act, added by AB 1484, expressly affirms that the Successor Agency is a separate public entity from the City, that the two entities shall not merge, and that the liabilities of the Former Agency will not be transferred to the City nor will the assets of the Former Agency become assets of the City.
The City performs certain general administrative functions for the Successor Agency. The City Manager serves as the Successor Agency’s Executive Director , the City Clerk serves as the Successor Agency secretary and the City Finance Manager/City Treasurer serves as the Successor Agency treasurer. The costs of such functions, as well as additional services performed by City staff are allocated annually to the Successor Agency, within certain limitations established by the Dissolution Act . Such reimbursement is subordinate to payment on any outstanding bonds of the Successor Agency.
Successor Agency Powers
All powers of the Successor Agency are vested in its members, who are the elected Mayor and members of the City Council. Pursuant to the Dissolution Act, the Successor Agency is a separate public body from the City and succeeds to the organizational status of the Former Agency but without any legal authority to participate in redevelopment activities, except to complete any work related to an approved enforceable obligation. The Successor Agency is tasked with expeditiously winding down the affairs of the Former Agency, pursuant to the procedures and provisions of the Dissolution Act. Under the Dissolution Act, many Successor Agency actions are subject to approval by the Over sight Board, as well as review by the State Department of Finance. California has strict laws regarding public meetings (known as the Ralph M. Brown Act) which generally make all Successor Agency and Oversight Board meetings open to the public in similar manner as City Council meetings.
Section 34179.5 of the Dissolution Act established a due diligence review process for determining the unobligated balances that redevelopment agencies had available as of June 30, 2012 to remit to their respective county auditor-controllers for distribution to affected Taxing Agencies within project areas of the former redevelopment agencies. The Successor Agency has remitted to the County Auditor-Controller all of the unobligated balances as determined by the State Departm ent Finance. On December 16, 2015, the Successor Agency received its Finding of Completion from the State Department of Finance. Receipt of the Finding of Completion allows the Successor Agency to do several things, among them, developing a plan for the disposition of any properties held by the Successor Agency and spending proceeds of bonds issued prior to December 31, 2010, all requiring approval of the Oversight Board.
After receiving the finding of completion, each successor agency is required to subm it a Long Range Property Management Plan (a “Long Range Property Management Plan ”) detailing what it intends to do with its inventory of properties. Successor agencies are not required to immediately dispose of their properties but are limited in terms of what they can do with the retained properties. Permissible uses include: sale of the property, use of the property to fulfill an enforceable obligation, retention of the property for future redevelopment, and retention of the property for governmental use. These plans must be filed by successor agencies with the State Department of Finance within six months of receiving a finding of 32021.00004\45004592.2
22 completion. The State Department of Finance approved the Successor Agency ’s Long Range Property Management Plan on December 16, 2015.
Redevelopment Plans
Project Area No. 1 was approved by Ordinance No. 265 adopted by the City Council on June 25, 1975, and was amended in 1981 by Ordinance No. 396 adopted by the City Council on February 12, 1981.
The Merged Project Area was created on March 24, 1994 by the adoption by the City Council of Ordinance Nos. 1042, 1043 and 1044. The merger combined the Former Agency’s Project Area No. 2, Project Area No. 3 and Project Area No. 4, as described below.
The Redevelopment Plan for Project Area No. 2 was approved by Ordinance No. 337 adopted by the City Council on July 25, 1978. The Redevelopment Plan for Project Area No. 3 was approved by Ordinance No. 491 adopted by the City Council on March 10, 1983. The Redevelopment Plan for Project Area No. 4 was approved by Ordinance No. 515 adopted by the City Council on November 10, 1983. On May 4, 2011, the City Council adopted Ordinance No. 1418 amending the Merged Project Area Redevelopment Plan , adding 7,787 acres, known as the Expansion Area, to the Merged Project Area.
Plan Limitations
In accordance with the Redevelopment Law, redevelopment plans were required to include certain limits on the financing of redevelopment projects. These limits could include a time limit on the life of the redevelopment plan, a time limit to incur debt, a time limit on the receipt of Tax Increment Revenues and the repayment of debt, and a limit on the amount of bonded indebtedness outstanding at any time. SB 107 clarifies that the former tax increment limits in redevelopment plans no longer apply for purposes of paying approved enforceable obligations such as the Bonds and the 2002 Bonds.
THE PROJECT AREAS
Description of the Project Areas
Project Area No. 1
Redevelopment Project Area No. 1 (“Project Area No. 1”) was created in 1975, and was amended in 1981 to add additional area. Project Area No. 1, as amended, encompasses 920 acres.
Merged Project Area
The Merged Redevelopment Project Area (the “Merged Project Area”) was created in 1994. The merger combined Project Area No. 2, Project Area No. 3 and Proj ect Area No. 4, as described below, creating a project with a combined 7,468 acres.
The Redevelopment Plan for Redevelopment Project Area No. 2 (“Project Area No. 2”) was adopted by the City Council in 1978. Project Area No. 2 encompasses 1,400 acres. The Redevelopment Plan for Redevelopment Project Area No. 3 (“Project Area No. 3”) was adopted by the City Council in 1983. Project Area No. 3 encompasses 1,153 acres. The Redevelopment Plan for Redevelopment Project Area No. 4 (“Project Area No. 4”) was also adopted by the City Council in 1983. Project Area No. 4 encompasses 4,915 acres. In May 2011, the City Council amended the Redevelopment Plan for the Merged Project Area, adding 7,787 acres to the Merged Project Area.
Project Area No. 1 and the Merged Project Area are collectively referred to herein as the “Combined Project Areas,” an individual redevelopment project is referred to herein as a “Redevelopment Project” or when 32021.00004\45004592.2
23 referring to more than one individual redevelopment project, “Redevelopm ent Projects,” and the Redevelopment Plans for all the individual redevelopment projects comprising the Combined Project Areas are referred to herein as the “Redevelopment Plans.”
The table below shows the land use in the Combined Project Areas.
Category No. Parcels Taxable Value % of Value
Residential 16,280 $5,083,623,000 56.44%
Commercial 577 1,519,201,670 16.87
Industrial 163 748,743,905 8.31
Vacant 1,570 354,051,237 3.93
Irrigated 1 36,904 0.00
Recreational 10 40,316,468 0.45
Govt. Owned 1 0 0.00
Institutional 50 329,326,397 3.66
Dry Farm 4 2,987,779 0.03
Exempt 546 0 0.00
Subtotal 19,202 $8,078,287,360 89.68%
SBE Nonunitary 223,752 0.00
Cross Reference 174,601,063 1.94
Unsecured 754,715,056 8.38
Subtotal 929,539,871 10.32
Total 19,202 $9,007,827,231 100.00%
________________________________
Source: Fiscal Consultant.
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24 Assessed Valuations and Pledged Tax Revenues
Historical assessed value and Tax Increment Revenues are shown in the tables below. The County of Los Angeles does not participate in the Teeter Plan, which would guarantee 100% of tax collections to the Successor Agency. As a result, the Successor Agency bears the risk of delinquent tax payments, although the Successor Agency does receive all interest and penalties levied and collected due to delinquencies.
TABLE NO. 1
COMBINED PROJECT AREAS
HISTORICAL ASSESSED VALUATIONS (1)
Fiscal Year Assessed Value Base Year Value Incremental Value 2016/17 $5,491,080,062 $839,711,042 $4,651,369,020
2017/18 5,813,283,521 839,108,190 4,974,175,331
2018/19 6,151,524,055 839,085,701 5,312,438,354
2019/20 6,553,578,564 838,932,004 5,714,646,560
2020/21 6,986,716,379 838,071,248 6,148,645,131
2021/22 7,104,646,000 838,175,234 6,266,470,766
2022/23 7,714,494,226 838,162,665 6,876,331,561
2023/24 8,144,958,319 838,901,090 7,306,057,229
2024/25 8,493,625,900 838,270,970 7,655,354,930
2025/26 9,007,827,231 838,299,082 8,169,528,149
______________________________
(1) Includes secured and unsecured valuation; exclusive of homeowner’s exemptions. All other exemptions have been deducted.
Source: Los Angeles County Auditor-Controller, compiled by the Fiscal Consultant.
TABLE NO. 2
REDEVELOPMENT PROPERTY TAX TRUST FUND DEPOSITS
2022/23 2023/24 2024/25
January RPTTF Deposit $32,459,668 $31,924,228 $33,556,981 June RPTTF Deposit 41,075,672 38,436,422 43,903,583 Gross RPTTF Deposits 73,535,340 70,360,649 77,460,564 County Administrative Fees (1,115,709) (1,177,130) (1,276,321) Tax Sharing (1) (34,987,468) (33,859,172) (37,657,681) RPTTF Available $37,432,163 $35,324,348 $38,526,562
______________________________________
(1) Includes subordinate Negotiated Pass-Through Amounts.
Source: Los Angeles County Auditor-Controller, compiled by the Municipal Advisor.
32021.00004\45004592.2
25 The estimated deposit to the Redevelopment Property Tax Trust Fund for 20 25/26, based on the 20 25/26 assessed value, is calculated as follows:
(000’s Omitted)
Incremental Assessed Value $8,169,528
Tax Rate 1.00%
Tax Increment Revenues $ 81,695
Unitary Revenues 918
Total Deposit to RPTTF $ 82,613
County Administrative Fees (1,045)
Tax Sharing (1) (37,997)
Available RPTTF $ 43,571
Subordinate Tax Sharing (1) (5,222)
Net RPTTF $ 38,349
______________________________
(1) Certain Negotiated Pass -Through Amounts are subordinate to payment of the former Agency and Successor Agency debt, but are withheld by the County and paid to the Successor Agency only to the extent required under the provisions of the Dissolution Act.
Source: Fiscal Consultant.
32021.00004\45004592.2
26 Major Taxpayers
The top ten taxpayers for the Combined Project Areas in the current Fiscal Year are set forth in the below table.
TABLE NO. 3
COMBINED PROJECT AREAS
TEN LARGEST TAXPAYERS
% of Total % of Total
Assessed Assessed Incremental
Taxpayer Value Value Value Primary Land Use
Lockhead Martin Corporation(1) $974,859,587 10.82 11.93 Aerospace Manufacturing Lancaster Hospital Corporation(1) 278,867,030 3.10 3.41 Lancaster Regional Hospital Mershop Antelope LLC(1) 158,919,353 1.76 1.95 Antelope Valley Mall Parcels Northrop Grumman Systems Corp. 84,209,391 0.93 1.03 Aerospace Manufacturing Allegra Palmdale LLC(1) 63,354,117 0.70 0.78 Amazon Hub Facility Walmart Real Estate Business Trust 61,633,532 0.68 0.75 Walmart and Sam’s Club Stores Antelope Valley Shop LLC(1) 36,516,324 0.41 0.45 Antelope Valley Mall Parcels Universal Health Services of Palmdale(1) 36,488,537 0.41 0.45 Palmdale Regional Med. Center W2005 Fargo Hotels Realty LP(1) 34,757,739 0.39 0.43 Courtyard and Residence Inn Hotels SIFI Networks Palmdale LLC 28,509,401 0.32 0.35 Fiber Optic Communications Total $1,758,115,011 19.52 21.52
______________________________________
(1) Appeal pending for current and/or prior years. See “Assessment Appeals” below.
Source: Fiscal Consultant.
.
32021.00004\45004592.2
27 Assessment Appeals
There were a total 415 pending appeals filed in the last 5 years by property owners in the Combined Project Areas. Appeals have been filed with respect to several of the largest property owners included in Table No.
3. Some appeals have been filed for multiple years for the same property. A summary of all pending appeals is shown below.
TABLE NO. 4
COMBINED PROJECT AREAS
PENDING APPEALS
Total
Total No. of Appeals 415
No. of Resolved Appeals 267
No. of Successful Appeals 233
Average Reduction on Successful
Appeals
[_____]%
No. of Pending Appeals 148
Total Value under Appeal $1,467,770,741
Estimated No. of Appeals Allowed 239
Estimated Reduction in Value on
Pending Appeals
$446,489,337
___________________________
Source: Fiscal Consultant.
The Successor Agency cannot predict the outcome of any pending appeals.
The projected Pledged Tax Revenues have been reduced for an average appeal value reduction based on average number of appeals granted historically. Reductions in revenue for refunds resulting from successful appeals or current or prior year appeals have not been incorporated into the projections. The success rate of appeals, reductions granted and refunds may vary from historical averages.
FINANCIAL INFORMATION
Successor Agency Accounting Records and Financial Statements The activities of the Successor Agency are reported as a fiduciary trust fund as part of the City ’s basic financial statements, which is in accordance with guidance issued by the State Department of Finance on September 19, 2012 and available on its website relating to redevelopment dissolution (www.dof.ca.gov/redevelopment) under the category of “Common RDA Dissolution Questions and Answers,” interpreting Section 34177(n) of the California Health and Safety Code concerning certain successor agency postaudit obligations. The Successor Agency does not prepare separate financi al statements. The State Department of Finance ’s website is not in any way incorporated into this Official Statement, and the Successor Agency cannot take any responsibility for, nor make any representation whatsoever as to, the continued accuracy of the Internet address or the accuracy, completeness, or timeliness of information posted there. In addition, from time to time, the State Department of Finance changes its guidance without notice.
32021.00004\45004592.2
28 The City’s financial statements for the Fiscal Year ended June 30, 20[25], attached hereto as “APPENDIX D” have been audited by Eide Bailly LLP, Rancho Cucamonga, California.
The City’s audited financial statements are public documents and are included within this Official Statement without the prior approval of the auditor. Eide Bailly LLP has not been engaged to perform, and has not performed, since the date of its report included herein, any procedures on the financial statements addressed in that report. Eide Bailly LLP also has not performed any procedures relating to this Official Statement.
Property Taxation in California
Manner in Which Property Valuations and Assessments are Determined (Article XIIIA). On June 6, 1978, California voters approved an amendment (commonly known as both Proposition 13 and the Jarvis- Gann Initiative) to the State Constitution which imposes certain limitations on taxes that may be levied against real property. This amendment, which added Article XIIIA to the State Constitution, among other things, defines full cash value of propert y to mean “the county assessor ’s valuation of real property as shown on the 1975/76 tax bill under ‘full cash value,’ or, thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 19 75 assessment.” This full cash value may be adjusted annually to reflect inflation at a rate not to exceed 2% per year, or any reduction in the consumer price index or comparable local data, or any reduction in the event of declining property value caused by substantial damage, destruction or other factors. The amendment further limits the amount of any ad valorem tax on real property to 1% of the full cash value of that property, except that additional taxes may be levied to pay debt service on indebtedn ess approved by the voters prior to July 1, 1978 and on any bonded indebtedness for the acquisition or improvement of real property which is approved after July 1, 1978 by two-thirds of the votes cast by voters voting on such indebtedness. However, pursuant to an amendment to the State Constitution, redevelopment agencies were prohibited from receiving any of the tax increment revenue attributable to tax rates levied to finance bonds approved by the voters on or after January 1, 1989 for the acquisition or improvement of real property. Moreover, Section 34183 of the Dissolution Act effectively eliminates the January 1, 1989 date from such prohibitions and SB 107 further states that pre -1989 tax override rates are no longer distributed to successor agencies except in limited circumstances (see “SECURITY FOR THE BONDS - Pledged Tax Revenues,” “Property Tax Rate” below and “RISK FACTORS - Factors Which May Affect Pledged Tax Revenues - Reduction in Inflationary Rate”).
In the general election held November 4, 1986, voters in the State approved two measures, Propositions 58 and 60, which further amend the terms “purchase” and “change of ownership,” for purposes of determining full cash value of property under Article XIIIA, to not include the purchase or transfer of (1) real property between spouses and (2) the principal residence and the first $1,000,000 of other property between parents and children. Proposition 60 amends Article XIIIA to permit the Legislature to allow persons over age 55 who sell their residence and buy or build another of equal or lesser value within two years in the same county (or in certain cases, another county), to transfer the old residence ’s assessed value to the new residence.
Proposition 8 Adjustments. Proposition 8, approved in 1978, provides for the assessment of real property at the lesser of its originally determined (base year) full cash value compounded annually by the inflation factor, or its full cash value as of the lien date, taking into account reductions in value due to damage, destruction, obsolescenc e or other factors causing a decli ne in market value. Reductions based on Proposition 8 do not establish new base year values, and the property may be reassessed as of the following lien date up to the lower of the then -current fair market value or the fa ctored base year value. The State Board of Equalization has approved this reassessment formula and such formula has been used by county assessors statewide, and such methodology has been upheld by the California courts.
Unsecured and Secured Property. In California, property which is subject to ad valorem taxes is classified as “secured” or “unsecured.” The secured classification includes property on which any property 32021.00004\45004592.2
29 tax levied by a county becomes a lien on that property. A tax levied on unsecured property does not become a lien against the taxed unsecured property, but may become a lien on certain other property owned by the taxpayer. Every tax which becomes a lien on secured property, arising pursuant to State law, has priority over all other liens on the secured property, regardless of the time of the creation of the other liens.
Property in the Combined Project Areas is assessed by the Los Angeles County Assessor except for public utility property which is assessed by the State Board of Equalization.
The valuation of secured property is determined as of January 1 each year for taxes owed with respect to the succeeding Fiscal Year. The tax rate is equalized during the following September of each year, at which time the tax rate is determined. Secured and unsecured property is entered on separate parts of the assessment roll maintained by the county assessor. The method of collecting delinquent taxes is substantially different for the two classifications of property.
Property taxes on the secured roll are due in two installments, on November 1 and February 1 of the fiscal year. If unpaid, such taxes become delinquent on December 10 and April 10, respectiv ely, and a 10% penalty attaches to any delinquent payment in addition to a $20 cost on the second installment. On July 1 of each fiscal year any property which is delinquent will become defaulted. Such property may thereafter be redeemed by payment of the delinquent taxes and the delinquency penalty, plus a redemption penalty of l½% per month to the time of redemption, together with any other charges permitted by law. If taxes are unpaid for a period of five years or more, the property is subject to sale by the County Tax Collector. The exclusive means of enforcing the payment of delinquent taxes with respect to property on the secured roll is the sale of the property securing the taxes for the amount of taxes which are delinquent.
Property taxes on the unsecured roll become delinquent, if unpaid on August 31. A 10% penalty attaches to delinquent taxes on property on the unsecured roll, and an additional penalty of l½% per month begins to accrue on November 1 of the fiscal year. The County has four ways of collecting delinquent unsecured personal property taxes: (1) a civil action against the taxpayer; (2) filing a certificate in the office of the County Clerk specifying certain facts in order to obtain a judgment lien on certain property of the taxpayer; (3) filing a certificate of delinquency for record in the County Recorder ’s Office, in order to obtain a lien on certain property of the taxpayer; and (4) seizure and sale of personal property, improvements or possessory interests belonging or assessed to the assessee.
Supplemental Assessments. Legislation adopted in 1984 (Section 75, et seq. of the Revenue and Taxation Code of the State of California) provides for the supplemental assessment and taxation of property at its full cash value as of the date of a change of ownership or the date of completion of new construction (the “Supplemental Assessments”). To determine the amount of the Supplemental Assessment the County Auditor applies the current year’s tax rate to the supplemental assessment roll and computes the amount of taxes that would be due for the full year. The taxes due are then adjusted by a proration factor to reflect the portion of the tax year remaining as determined by the date on which the change in ownership occurred or the new construction was completed. Supplemental Assessments become a lien against the real property on the date of the change of ownership or completion of new construction.
Unitary Property. Commencing in the 1988/89 Fiscal Year, the Revenue and Taxation Code of the State of California changed the method of allocating property tax revenues derived from state assessed utility properties. It provides for the distribution of state assessed values to tax rate areas by a county -wide mathematical formula rather than assig nment of state assessed value according to the location of those values in individual tax rate areas.
Commencing with the 1988/89 Fiscal Year, each county has established one county-wide tax rate area. The assessed value of all unitary property in the county has been assigned to this tax rate area and one tax rate is levied against all such property (“Unitary Revenues”). 32021.00004\45004592.2
30 The property tax revenue derived from the assessed value assigned to the county-wide tax rate area shall be allocated as follows: (1) each jurisdiction will be allocated up to 2% of the increase in Unitary Revenues on a pro rata basis county-wide; and (2) any decrease in Unitary Revenues or increases less than 2%, or any increase in Unitary Revenues above 2% will be allocated among jurisdi ctions in the same proportion of each jurisdiction’s Unitary Revenues received in the prior year to the total Unitary Revenues county-wide.
Legislation adopted in 2006 (SB 1317, Chapter 872) provides that, commencing with Fiscal Year 2007/08, certain property related to new electrical facilities shall be allocated entirely to the county in which such property is located and property tax revenues derived from such property shall be allocated to such county and certain Taxing Agencies with such county. Unitary tax revenues for Fiscal Year 20 25/26 are $917,563. The Fiscal Consultant’s projections of future Pledged Tax Revenues assume this amount remains constant.
Property Tax Rate. The difference between the $1.00 general tax levy provided under Article XIIIA tax rate and those actually levied (referred to as the “tax override rate”) represents the tax levied by overlapping entities to pay debt service on bonded indebtedness approved by the voters.
Section 34183 of the Dissolution Act effectively eliminated the tax override rate from the calculation of tax increment revenues with respect to tax override rates authorized by voters for the purpose of repaying bonded indebtedness for the acquisition or improvement of real property. Future Tax Increment Revenues have been projected by the Fiscal Consultant by applying a tax rate of $1.00 per $100 of taxable value general levy to incremental taxable values.
Outstanding Indebtedness
After refinancing the Refunded Bonds with the proceeds of the Bonds , the 2002 Bonds will remain outstanding with a lien on the funds deposited into the Redevelopment Obligation Retirement Fund senior to the Bonds.
The 2002 Bonds are capital appreciation bonds and the accreted value is payable at maturity on each December 1, through and including December 1, 2032 . The remaining maturity value of the 2002 Bon ds is $__________.
The Successor Agency has other enforceable obligations payable from amounts deposited in the Redevelopment Obligation Retirement Fund on a basis subordinate to the 2002 Bonds and the Bonds.
Flow of Funds
Under the Indenture, in the Recognized Obligation Payment Schedule period beginning January 2 of each year, the Successor Agency is required to request funding of the principal and interest due on the 2002 Bonds on December 1 (that is, their accreted value), interest on the Bonds due on March 1 and 75% of the principal and interest due on the Bonds due on September 1. Other enforceable obligations may be paid in such Recognized Obligation Payment Schedule period to the extent those amounts are transferred to the trustee for the Bonds and reserved for such debt service.
In the Recognized Obligation Payment Schedule perio d beginning July 1 of each year, the Indenture also requires the Successor Agency to request funding of the remaining unfunded principal and interest payable on the Bonds on September 1 of such year. Other enforceable obligations may be paid in such Recognized Obligation Payment Schedule period to the extent those amounts are transferred to the Trustee and reserved for such debt service.
32021.00004\45004592.2
31 Projected Pledged Tax Revenues and Debt Service Coverage Receipt of projected Tax Revenues shown in Table No. 5 in the amounts and at the times projected by the Successor Agency depends on the realization of certain assumptions relating to the Tax Increment Revenues. The Successor Agency has retained HdL Coren & Cone, Diamond Bar, California to provide projections of taxable valuation and Pledged Tax Revenues in the Combined Project Areas. The Successor Agency believes the assumptions (set forth in “APPENDIX C - FISCAL CONSULTANT’S REPORT”) upon which the projections are based are reasonable; however, some assumpt ions may not materialize and unanticipated events and circumstances may occur (see “RISK FACTORS”). Therefore, the actual Pledged Tax Revenues received during the forecast period may vary from the projections and the variations may be material, affecting the Successor Agency’s ability to timely pay principal of and interest on the Bonds.
Table No. 5 shows the projected debt service coverage for the Bonds, when combined with the 2002 Bonds.
TABLE NO. 5
PROJECTED TAX REVENUES AND DEBT SERVICE COVERAGE
Bond 2002 Bonds
Year Tax Bonds Debt Total Debt Service
September
1 Revenues (1) Debt Service Service Debt Service (2) Coverage
__________________________________________
Source:
(1) Fiscal Consultant. Based on the tax year, not adjusted for RPTTF distribution. See “SECURITY FOR THE BONDS - Redevelopment Property Tax Trust Fund - Deposits to the Redevelopment Property Tax Trust Fund.” (2) Municipal Advisor.
32021.00004\45004592.2
32 RISK FACTORS
The purchase of the Bonds involves investment risk. If a risk factor materializes to a sufficient degree, it could delay or prevent payment of principal of and/or interest on the Bonds. Such risk factors include, but are not limited to, the following matters and should be considered, along with other information in this Official Statement, by potential investors.
Factors Which May Affect Pledged Tax Revenues
The ability of the Successor Agency to pay principal of and interest on the Bonds depends on the timely receipt of Pledged Tax Revenues as projected herein (see “FINANCIAL INFORMATION - Projected Pledged Tax Revenues and Debt Service Coverage” herein). Projections of Pledged Tax Revenues are based on the underlying assumptions relating to Tax Increment Revenues of the Combined Project Areas. Pledged Tax Revenues allocated to the Successor Agency (which constitute the ultimate source of payment of principal of and interest on the Bonds, as discussed herein) are determined by the amount of incremental valuation of taxable property in the Combined Project Areas, taxed at a rate of $1.00 per $100 of assessed value (1%) and the percentage of taxes collected in the Combined Project Areas, adjusted to reflect prior claims on the Tax Increment Revenues. A number of factors which may affect Tax Increment Revenues, and consequently, Pledged Tax Revenues, are outlined below.
Reductions in Assessed Value. Tax Increment Revenues allocated to the Redevelopment Property Tax Trust Fund are determined by the amount of incremental taxable value in the Combined Project Areas taxed at a rate of $1.00 per $100 of assessed value (1%) . The reduction of taxable values of property in the Combined Project Areas caused by economic factors beyond the Successor Agency’s control, such as relocation out of a Redevelopment Project by one or more major property owners, sale of property to a non- profit corporation exempt from property taxation, or the complete or partial destruction of such property caused by, among other eventualities, earthquake or other natural disaster, could cause a reduction in the Pledged Tax Revenues that provide for the repayment of and secure the Bonds. Such reduction of Pledged Tax Revenues could have an adverse effect on the Successor Agency’s ability to make timely payments of principal of and interest on the Bonds.
Article XIIIA. Pursuant to the California voter initi ative process, on June 6, 1978, California voters approved Proposition 13 which added Article XIIIA to the California Constitution. This amendment imposed certain limitations on taxes that may be levied against real property to 1% of the full cash value of the property, adjusted annually for inflation at a rate not exceeding 2% annually. Full cash value is determined as of the 1975/76 assessment year, upon change in ownership (acquisition) or when newly constructed (see “FINANCIAL INFORMA TION - Property Taxation in California” herein for a more complete discussion of Article XIIIA). Article XIIIA has subsequently been amended to permit reduction of the “full cash value” base in the event of declining property values caused by substantial 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 other special circumstances.
Reduction in Inflationary Rate. The annual inflationary adjustment, while limited to 2%, is determined annually and may not exceed the percentage change in the California Consumer Price Index (CCPI).
Because the Revenue and Taxation Code does not distinguish between positive and negative changes in the CCPI used for purposes of the inflation factor, there was a decrease of 0.237% in 2009/10 – applied to the 2010/11 tax roll – reflecting the actual change in the CCPI, as reported by the State Department of Finance.
For each fiscal year since Article XIIIA has become effective (the 1978/79 fiscal year), the annual increase for inflation has been at least 2% except in eleven fiscal years as shown below:
32021.00004\45004592.2
33 Tax Roll Percentage
1981/82 1.000%
1995/96 1.190
1996/97 1.110
1998/99 1.853
2004/05 1.867
2010/11 (0.237)
2011/12 0.753
2014/15 0.454
2015/16 1.998
2016/17 1.525
2021/22 1.036
Proposition 8 Adjustments. Proposition 8, approved in 1978, provides for the assessment of real property at the lesser of its originally determined (base year) full cash value compounded annually by the inflation factor, or its full cash value as of the lien date, taking into acco unt reductions in value due to damage, destruction, obsolescence or other factors causing a decline in market value. Reductions based on Proposition 8 do not establish new base year values, and the property may be reassessed as of the following lien date up to the lower of the then -current fair market value or the factored base year value. The State Board of Equalization has approved this reassessment formula and such formula has been used by county assessors statewide. This methodology has been approved by the Fourth District Court of Appeals in a case in which the California Supreme Court declined further review. See “FINANCIAL INFORMATION - Property Taxation in California - Proposition 8 Adjustments” herein.
If Proposition 8 adjustments are made by the County Assessor in future years because of declines in the fair market value of properties caused by the lack of real estate development in the area generally, Pledged Tax Revenues may be adversely affected and as a possible consequence may have an adver se effect on the Successor Agency’s ability to pay debt service on the Bonds.
Assessment Appeals. Assessment appeals may be filed by property owners seeking a reduction in the assessed value of their property. After the property owner files an appeal, the County’s Appeals Board will hear the appeal and make a determination as to whether or not there should be a reduction in assessed value for a particular property and the amount of the reduction, if any. To the extent that any reductions are made to the assessed valuation of such properties with appeals currently pending, or appeals subsequently filed, Tax Increment Revenues, and correspondingly, Pledged Tax Revenues will be reduced. Such reductions may have an adverse effect on the Successor Agency’s ability to pay debt service on the Bonds. As of May 1, 2026, there were 148 pending appeals filed within the last five years by property owners within the Combined Project Areas relating to $1.47 billion of current year or prior years ’ assessed value (see “THE PROJECT AREAS - Assessment Appeals” herein). To the extent these appeals are resolved in favor of the property owner, Pledged Tax Revenues will be reduced.
Earthquake, Flood and Other Risks. Any natural disaster or other physical calamity, including earthquake, may have the effect of reducing Tax Increment Revenues through reduction in the aggregate assessed valuation within the boundaries of the Combined Project Areas.
Seismic Activity. According to the Seismic Safety Element of the City ’s General Plan, the City is located in a seismically active region and the property in the Combined Project Areas could be impacted by a major earthquake originating from the numerous faults in the area. Seismic hazards encompass both potential surface rupture, ground shaking and may give rise to localized flooding if surface rupture is sustained in the Palmdale or Littlerock reservoirs or the California Aqueduct. These hazards could result in damage to 32021.00004\45004592.2
34 the property within the Combined Project Areas. Approximately 480 acres of the Merged Project Area in the southern area of the City are within the inundation area of the Palmdale reservoir.
The San Andreas Fault is located immediately south of the City. The major fault traces for the San Andreas Fault located in the City are the Cemetery Fault, the Nadeau Fault and the Littlerock Fault. Other faults of concern are the Sierra Madre -San Fernando, Garlock, Owens Valley and White Wolf Faults , located between 20 and 60 miles from the City, although other faults exist in the area.
Fire Hazards. Risk of wildfire is not a significant hazard within the boundaries of the Combined Project Areas due to the urbanized nature of the immediate area.
Flooding. Rainfall in the Antelope Valley is relatively sparse due to its location on the leeward side of the Sierra Pelona and San Gabriel Mountains. Only a small section in the southwest of the City features south- facing slopes of the Sierra Pelona Mountains. Except in years of El Nino weather patterns, the average annual rainfall i s 5.15 inches in Palmdale and approximately 20 inches in the mountains. However, throughout most of the year, very little surface runoff from the upper watersheds ever reaches the City.
Sheetwash occurs along major drainages and adjoining areas on scattered sites. Areas with flood hazards are the natural drainage channels of Amargosa Creek, Anaverde Creek, Little Rock Wash, and Big Rock Wash. Flat plains and natural depressions are also subject to possible flooding.
The amount and frequency of rai n is variable, and although flood waters may be diverted, the lack of a completed regional drainage system will continue to result in local flooding problems. The City has an adopted Drainage Master Plan. It will take approximately 20 years to complete construction of the entire system. The plan addresses storm water runoff from higher slopes and existing and future developments.
The City has adopted its Natural Hazards Mitigation Plan. This plan includes a hazard analysis for earthquake, flood, landslide and fire risk and is required to comply with FEMA requirements for disaster relief funding.
The occurrence of any natural or man -made disaster or hazard may significantly reduce Tax Increment Revenues received by the Successor Agency and may adversely i mpact the Successor Agency’s ability to pay debt service on the Bonds.
Hazardous Substances. An additional environmental condition that may result in the reduction in the assessed value of parcels would be the discovery of a hazardous substance that would limit the beneficial use of a property within the Combined Project Areas. 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 owner (or operator) may be required to remedy a hazardous substance condition of property whether or not the owner (or operator) has anything to do with creating or handling the hazardous substance. The effect, therefore, should any of the property within the Combined Project Areas be affected by a hazardous substance would be to reduce the marketability and value of the property, perhaps by an amount in excess of the costs of remedying the condition. The Successor Agency can give no assurance that future development will not be limited by these conditions.
Development Risks. The Successor Agency’s collection of Pledged Tax Revenues is directly affected by the economic strength of the Combined Project Areas. Potential development within the Combined Project Areas will be subject to all the risks generally associated with real estate development projects, including unexpected delays, disruptions and changes. Real estate development operations may be adversely affected by changes in general economic conditions, fluctuations in real estate market and interest rates, unexpected increases in development costs and other similar factors. Further, real estate development operations within the Combined Project Areas could be adversely affected by future gove rnmental policies, including governmental policies to restrict or control development. If projected development in the Combined Project 32021.00004\45004592.2
35 Areas is delayed or halted, the economy of the Combined Project Areas could be affected, causing a reduction in Pledged Tax Revenues available to pay debt service on the Bonds , however, no new development is assumed to be added to the 2025/26 tax roll as a result of new development for the purposes of the Fiscal Consultant’s projection of Pledged Tax Revenues.
Certain Bankruptcy Risks. The enforceability of the rights and remedies of the Owners of the Bonds and the obligations of the Successor Agency may become subject to the following: the federal bankruptcy code and applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the enforcement of creditors’ rights generally, now or hereafter in effect; usual equitable 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; and the reasonable and necessary exercise, in certain exceptional situations, of the police power inherent in the sovereignty of the State of California and its governmental bod ies in the interest of servicing 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 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.
Limited Obligations. The Successor Agency has no power to levy and collect property taxes, and any property tax limitation, legislative measure, voter initiative or provision of additional sources of income to Taxing Agencies having the effect of reducing the property tax rate must necessarily reduce the amount of Tax Increment Revenues, and consequently, Pledged Tax Revenues that would otherwise be available to pay the principal of, and interest on the Bonds.
Interpretation of and Future Changes in the Law; Voter Initiatives. The Redevelopment Law and the Dissolution Act are complex bodies of law and their application to t he Successor Agency , the Redevelopment Plan and the Combined Project Areas may be subject to different interpretations by the Successor Agency, the Department of Finance, the County Auditor-Controller, Taxing Agencies and other interested parties, including with respect to Pass-Through Agreements and Statutory Tax Sharing Amounts and enforceable obligations. Since the effectiveness of the Dissolution Act, the State Department of Finance and various successor agencies have from time to time disagreed about the interpretation of different language contained in the Dissolution Act, as well as whether or not the State Department of Finance has exceeded its authority in rejecting items from Recognized Obligation Payment Sch edules submitted by successor agencies, as evidenced by numerous lawsuits. While the Successor Agency has covenanted in the Indenture to preserve and protect the security of the Bonds and the rights of the Bondholders (see “APPENDIX A - SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE - Covenants of the Successor Agency”), any such action taken by the Successor Agency could incur substantial time and cost that may have a detrimental effect on the Successor Agency’s ability to timely pay debt service on the B onds.
Moreover, the Successor Agency cannot guarantee the outcome of any such action taken by the Successor Agency to preserve and protect the security of the Bonds and the rights of the Bondholders.
In addition to the existing limitations on Tax Increment Revenues described in this Official Statement under “FINANCIAL INFORMA TION - Property Taxation in California ,” the California electorate or Legislature could adopt future limitations with the effect of reducing Tax Increment Revenues payable to the Successor Agency.
Major Taxpayers and Concentration of Ownership
The risk of reduction in assessed value as a result of the factors described above may generally increase where the assessed value within a Redevelopment Project is concentrated among a relatively few number of property owners. Ownership of property in Project Area No. 1 is highly concentrated, with the top ten taxpayers accounting for 19.52% of the 2025/26 assessed valuation, of which the largest property owner accounts for 12% of assessed value . See “THE PROJECT AREAS - Major Taxpayers. ” Significant reductions in the assessed values of the other principal taxpayers, could, by itself or in combination with 32021.00004\45004592.2
36 other factors, have a material adverse effect on the Tax Increment Revenues payable to the Successor Agency from the individual component areas of the Combined Project Areas, and therefore, the Successor Agency’s ability to make timely principal and interest payments with respect to the Bonds.
Real Estate and General Economic Risks
Tax Increment Revenues as presented herein as available for payment of any indebtedness of the Successor Agency are based upon the latest actual assessed values for the 2025/26 Fiscal Year. Redevelopment of real property within the Combined Project Areas by the City, as well as private development in the Combined Project Areas , may be adversely affected by changes in general economic conditions, fluctuations in the real estate markets and interest rates, unexpected increases in development costs, changes in or new gov ernmental policies including governmental policies to restrict or control certain kinds of development and by other similar factors. If development and redevelopment activities in the Combined Project Areas encounter significant obstacles of the kind desc ribed herein or other impediments, the economy of the area in and around the Combined Project Areas could be adversely affected, causing reduced taxable valuation of property in the Combined Project Areas, a reduction of the Tax Increment Revenues and a consequent reduction in Pledged Tax Revenues available to repay the Bonds. Due to the decline in the general economy of the region, owners of property within the Combined Project Areas may be less able or less willing to make timely payments of property taxes, causing a delay or reduction of Tax Increment Revenues and consequently a reduction in Pledged Tax Revenues available to repay the Bonds.
Global Health Emergencies
A pandemic, epidemic or outbreak of an infectious disease can have significant adverse health and financial impacts on global and local economies. For example, beginning in 2020, the COVID 19 pandemic negatively affected economic activity throughout the world, including the United States and the State of California. The initial impacts of stay-at home orders globally were unprecedented, with commerce, travel, asset values and financial markets experiencing disruptions worldwide. While the declarations of COVID 19 as a public health emergency have been lifted, future pandemics and other widespread public health emergencies can and do arise from time to time. The Successor Agency cannot predict whether another national or localized outbreak of highly contagious or epidemic disease in the future could negatively impact the assessed values within the Combined Project Areas and accordingly Pledged Tax Revenues.
Cybersecurity
The City, like many other public and private entities, relies on a large and complex technology environment to conduct its operations. As a recipient and provider of personal, private, or sensitive information, the City is subject to cyber threats including, but not limited to: hacking, malware, social engineering, and other attacks on its computer systems and sensitive digita l networks. In the past five years, the City has not suffered any material cybersecurity attacks. [The City carries a cyber -liability insurance policy to cover certain financial losses that may result from data breaches and cyberattacks.] No assurance can be given that the City’s efforts to manage cyber threats and attacks will be successful in all cases, or that any such attack will not materially impact the operations or finances of the City, or the administration of the Bonds. The City is also reliant on other entities and service providers in connection with the administration of the Bonds. No assurance can be given that the City and these other entities will not be affected by cyber threats and attacks in a manner that may affect the owners of the Bonds.
Recognized Obligation Payment Schedule
The Dissolution Act provides that only those payments listed in the Recognized Obligation Payment Schedule may be made by the Successor Agency from the funds specified in the Recognized Obligation 32021.00004\45004592.2
37 Payment Schedule. The Dissolution Act requires successor agencies to prepare and approve, and submit to the successor agency’s oversight board and the State Department of Finance for approval, a Recognized Obligation Payment Schedule pursuant to which enforceable obligations (as defined in the Dissolution Act) of the successor agency are listed, together with the source of funds to be used to pay for each enforceable obligation. Pledged Tax Revenues will not be distributed from the Redevelopment Property Tax Trust Fund by the County Auditor-Controller to the Successor Agency’s Redevelopment Obligation Retirement Fund without a duly approved and effective Recognized Obligation Payment Schedule obtained in sufficient time prior to the January 2 or June 1 distribution dates, as applicable. See “SECURITY FOR THE BONDS - Recognized Obligation Payment Schedule s.” In the event the Successor Agency were to fail to file a Recognized Obligation Payment Schedule with respect to any six-month period, the availability of Pledged Tax Revenues to the Successor Agency could be adversely affected for such period.
The Successor Agency has covenanted to take all actions required under the Dissolution Act to include scheduled debt service on the Bonds as well as any amoun t required under the Indenture to replenish the subaccounts within the Reserve Account of the Debt Service Fund, in Recognized Obligation Payment Schedules for each six -month period of a Fiscal Year and to enable the County Auditor -Controller to distribute from the Redevelopment Property Tax Trust Fund to the Successor Agency’s Redevelopment Obligation Retirement Fund on each January 2 and June 1 amounts required for the Successor Agency to pay principal of, and interest on, the Bonds coming due in the respective six-month period of a Fiscal Year, including listing a reserve on the Recognized Obligation Payment Schedule to the e xtent required by the Indenture or when the next property tax allocation is projected to be insufficient to pay all obligations due under the provisions of the Bonds for the next payment due in the following six -month period (see “APPENDIX A - SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE - Covenants of the Successor Agency”).
The Dissolution Act also contains certain penalties in the event the Successor Agency does not timely submit a Recognized Obligation Payment Schedule for a Fiscal Year. Specifically, a Recognized Obligation Payment Schedule must be submitted by the Successor Agency, after approval by the Oversight Board, the County Auditor-Controller, the State Department of Finance, and the State Controller no later than February 1 of each year . If the Successor Agency does not submit an Oversight Board -approved Recognized Obligation Payment Schedule by such deadlines, the City will be subject to a civil penalty equal to $10,000 per day for every day the schedule is not submitted to the State Department of Finance. Additionally, the Successor Agency’s administrative cost allowance is reduced by 25% if th e Successor Agency does not submit an Oversight Board-approved Recognized Obligation Payment Schedule by the 10th day after the February 1 deadline with respect to a Recognized Obligation Payment Schedule for the subsequent annual period.
The Successor Agency has submitted all Recognized Obligation Payment Schedules, duly approved by the Oversight Board, in a timely manner.
Loss of Tax Exemption
As discussed under the caption “TAX MA TTERS” herein, interest on the Bonds could become includable in gross income for purposes of federal income taxation retroactive to the date the Bonds were executed and delivered as a result of future acts or omissions of the Successor Agency in violation of its covenants contained in the Indenture. Should such an event of taxab ility occur, the Bonds are not subject to special redemption or any increase in interest rate and will remain outstanding until maturity.
In addition, Congress has considered in the past, is currently considering and may consider in the future, legislative proposals, including some that carry retroactive effective dates, that, if enacted, would alter or eliminate the exclusion from gross income for federal income tax purposes of interest on municipal bonds, such as the Bonds. Prospective purchasers of the Bonds should consult their own tax advisors regarding any pending or proposed federal tax legislation. The Successor Agency can provide no assurance that 32021.00004\45004592.2
38 federal tax law will not change while the Bonds are outstanding or that any such changes will not adversely affect the exclusion of the interest on the Bonds from gross income for federal income tax purposes. If the exclusion of the interest on the Bonds from gross income for federal income tax purposes were amended or eliminated, it is likely that the market price for the Bonds would be adversely impacted.
IRS Audit of Tax-Exempt Bond Issues
The Internal Revenue Service has initiated an expanded program for the auditing of tax-exempt bond issues, including both random and targeted audits. It is possible that the Bonds will be selected for audit by the Internal Revenue Service. It is also possible that the market value of the Bonds might be affected as a result of such an audit of the Bonds (or by an audit of similar bonds).
Risks Related to Insured Bonds and the Reserve Account Insurance Policy If the Successor Agency fails to provide funds to make payment of the principal of and interest with respect to the Insured Bonds when the same shall become due, any owner of such Insured Bonds shall have a claim on the Policy for such payments.
Purchasers of the Insured Bonds should also note that, while the Policy will insure payment of the principal amount (but not any premium) paid to any owner of the Insured Bonds in connection with the mandatory or optional prepayment of any Insured Bond which is recovered from such owner as a voidable preference under applicable bankruptcy law, such amounts will be repaid by the Bond Insurer to the Owner only at the times and in the amounts as would have been due absent such prepayment unless the Bond Insurer chooses to pay such amount at an earlier date or dates.
So long as the Insured Bonds are Outstanding and the Bond Insurer performs its obligations under the Policy, the Bond Insurer shall be deemed to be the sole holder of the Bonds insured by it for the purpose of exercising any voting right or privilege or giving any consent of direction or taking any other action that the Owners of such Bonds are entitled to take pursuant to the Indenture pertaining to defaults and remedies, and the duties and obligations of the Trustee.
If the Bond Insurer is unable to make payments of principal of and interest on the Insured Bonds as such payments become due, the Insured Bonds are payable solely from moneys received by the Trustee pursuant to the Indenture. If the Bond Insurer is required to pay principal of or interest with respect to the Insured Bonds, no representation or assurance is given or can be made that such event will not adversely affect the market price for or marketability of the Insured Bonds.
The long-term rating on the Insured Bonds is dependent, in part, on the claims paying ability or financial strength ratings, as applicable, of the Bond Insurer ’s current claims paying ability or financial strength ratings are predic ated upon a number of factors which could change over time and could result in downgrading of the ratings on the Bonds insured by National. Such a downgrade could adversely affect the market price for, and marketability of, the Insured Bonds. National is not contractually bound to maintain its present claims paying ability or financial strength ratings in the future. See “CONCLUDING INFORMA TION - Ratings on the Bonds” herein.
Deterioration in the financial condition of the provider of the Reserve Account Insurance Policy or a failure to honor a draw by any provider under its Reserve Account Insurance Policy could occur. The Successor Agency is not required under the Indenture to replace the Reserve Account Insurance Policy with cash or a replacement inst rument in the event the ratings of its provider decline or are withdrawn. Further, t he Successor Agency has no obligation to replace the Reserve Account Insurance Policy or to fund the Reserve Account with cash if, at any time the Bonds are outstanding, am ounts are unavailable under the Reserve Account Insurance Policy.
32021.00004\45004592.2
39 Secondary Market
There can be no guarantee that there will be a secondary market for the Bonds or, if a secondary market exists, that such Bonds can be sold for any particular price. Occas ionally, because of general market conditions or because of adverse history or economic prospects connected with a particular issue, secondary marketing practices in connection with a particular issue are suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon then prevailing circumstances. Such prices could be substantially different from the original purchase price.
TAX MATTERS
In the opinion of Best Best & Krieger LLP, Riverside, California, subject, however, to certain qualifications described in this Official Statement, under existing statutes, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and compliance with certain covenants, the interest on the Bonds is excluded from gross income for federal income tax purposes, and interest on the Bonds is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals and corporations; however, interest on the Bonds is taken into account in determining the annual adjusted financial statement income of certain corporations for the purpose of computing the alternative minimum tax imposed on certain corporations. In the further opinion of Bond Counsel, interest on the Bonds is exempt from California personal income tax.
The opinions set forth in the preceding paragraph are subject to the condition that the Successor Agency comply with all requirements of the Internal Revenue Code of 1986, as amended (“Tax Code”) that must be satisfied subsequent to the issuance of the Bonds. The Successor Agency has made certain representations and covenanted to comply with each such requirement. Inaccuracy of these representations or failure to comply with these covenants may result in interest on the Bonds being included in gross income for federal income tax purposes, possibly from the date of original issuance of the Bonds. The opinion of Bond Counsel assumes the accuracy of these representations and compliance with these covenants. Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken), or events occurring (or not occurring), or any other matters coming to Bond Counsel ’s attention after the date of issuance of the Bonds may adversely affect the value of, or the tax status of interest on, the Bonds.
Accordingly, the opinion of Bond Counsel is not intended to, and may not, be relied upon in connection with any such actions, events, or matters.
If the initial offering price to the public (excluding bond houses and brokers) at which a Bond is sold is less than the amount payable at maturity thereof, then such difference constitutes “original issue discount” for purposes of federal income taxes and State of California personal income taxes. If the initial offering price to the public (excluding bond houses and brokers) at which a Bond is sold is greater than the amount payable at maturity thereof, then such difference constitutes “original issue premium ” for purposes of feder al income taxes and State of California personal income taxes. De minimis original issue discount and original issue premium is disregarded.
Under the Tax Code, original issue discount is treated as interest excluded from federal gross income and exempt from State of California personal income taxes to the extent properly allocable to each owner thereof subject to the limitations described in the first paragraph of this section. The original issue discount accrues over the term to maturity of the Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight -line interpolations between compounding dates). The amount of original issue discount accruing during each period is added to the adjusted basis of such Bonds to determine taxable gain upon disposition (including sale, prepayment, or payment on maturity) of such Bond. The Tax Code contains certain provisions relating to the accrual of original issue discount in the case of purchasers of the Bonds who pur chase the Bonds after the initial offering of a substantial amount of such maturity.
Owners of such Bonds should consult their own tax advisors with respect to the tax consequences of ownership of Bonds with original issue discount, including the treatment of purchasers who do not purchase 32021.00004\45004592.2
40 in the original offering, the allowance of a deduction for any loss on a sale or other disposition, and the treatment of accrued original issue discount on such Bonds under federal individual alternative minimum taxes.
Under the Tax Code, original issue premium is amortized on an annual basis over the term of the Bond (said term being the shorter of the bond ’s maturity date or its call date). The amount of original issue premium amortized each year reduces the adjusted basis of the owner of the Bond for purposes of determining taxable gain or loss upon disposition. The amount of original issue premium on a Bond is amortized each year over the term to maturity of the Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight -line interpolations between compounding dates). Amortized Bond premium is not deductible for federal income tax purposes. Owners of premium Bonds, including purchasers who do not purchase in the original offering, should consult their own tax advisors with respect to State of California personal income tax and federal income tax consequences of owning such Bonds.
Current and future legislative proposals, if enacted into law, clarification of the Tax Code, or court decisions may cause interest with respect to the Bonds to be subject, directly or indirectly, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent beneficial owners from realizing the full current benefit of the tax status of such interest. The introduction or enactment of any such legislative proposals, clarification of the Tax Code, or court decisions may also affect the market price for, or marketability of, the Bonds. Prospective purchasers of the Bonds should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel expresses no opinion.
The opinion of Bond Counsel is based on current legal a uthority, covers certain matters not directly addressed by such authorities, and represents Bond Counsel ’s judgment as to the proper treatment of the Bonds for federal income tax purposes. It is not binding on the Internal Revenue Service (“IRS”) or the courts. Furthermore, Bond Counsel cannot give and has not given any opinion or assurance about the future activities of the Successor Agency or about the effect of future changes in the Tax Code, the applicable regulations, the interpretation thereof or th e enforcement thereof by the IRS. The Successor Agency has covenanted, however, to comply with the requirements of the Tax Code.
A copy of the proposed form of opinion of Bond Counsel is attached hereto as APPENDIX F.
Owners of the Bonds should also be aware that the ownership or disposition of, or the accrual or receipt of interest on, the Bonds may have federal or state tax consequences other than as described above. Bond Counsel expresses no opinion regarding any federal or state tax consequences aris ing with respect to the Bonds other than as expressly described above.
The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of such opinion, and Bond Counsel has expressed no opinion with respect to any proposed legislation or as to the tax treatment of interest on the Bonds, or as to the consequences of owning or receiving interest on the Bonds, as of any future date.
Prospective purchasers of the Bonds should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel expresses no opinion.
LEGAL MATTERS
Enforceability of Remedies
The remedies available to the Trustee and the Owners of the Bonds upon an event of default under the Indenture or any other document described herein are in many respects dependent upon regulatory and judicial actions which are often subject to discretion and delay. Under existing law and judicial decisions, 32021.00004\45004592.2
41 the remedies provided for under such documents may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the Bonds will be qualified to the extent that the enforceability of certain legal rights related to the Bonds and the Indenture are subject to limitations imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally and by equitable remedies and proceedings generally.
Approval of Legal Proceedings
Best Best & Krieger LLP, Riverside, California, as Bond Counsel, will render an opinion which states that the Indenture is a valid and binding obligation of the Successor Agency and enforceable in accordance with its terms. The legal opinion of Bond Counsel will be subject to the effect of bankruptcy, insolvency, moratorium and other similar laws affecting creditors ’ rights and to the exercise of judicial discretion in accordance with general principles of equity. See “APPENDIX F” for the proposed form of Bond Counsel’s opinion.
Certain legal matters will be passed on for the Successor Agency by Alexandra Mae Severino , the City Attorney, acting as general counsel to the Successo r Agency. Best Best & Krieger LLP, Riverside, California, will also pass on certain legal matters for the Successor Agency as Disclosure Counsel. Certain legal matters will be passed on for the Underwriter by its counsel, Stradling Yocca Carlson & Rauth LLP, Newport Beach, California. Fees payable to Bond Counsel, Disclosure Counsel and Underwriter’s Counsel are contingent upon the sale and delivery of the Bonds.
No Litigation
There is no action, suit or proceeding known to the Successor Agency to be pending and notice of which has been served upon and received by the Successor Agency, or threatened, restraining or enjoining the execution or delivery of the Bonds or the Indenture or in any way contesting or affecting the validity of the foregoing or any proceedings of the Successor Agency taken with respect to any of the foregoing.
CONCLUDING INFORMATION
Ratings on the Bonds
In connection with the issuance and delivery of the Bonds, S&P Global Ratings (“S&P”) has assigned its underlying municipal rating of “_____” to the 2026 Bonds. S&P is also expected to assign the Bonds the rating of “_____” based upon the delivery of the Policy by the Bond Insurer at the time of issuance of the Bonds. See the caption “BOND INSURANCE.” There is no assurance that the c redit ratings given to the Bonds will be maintained for any period of time or that the ratings may not be lowered or withdrawn entirely by S&P if, in the judgment of S&P, circumstances so warrant. Any downward revision or withdrawal of either of such rati ngs may have an adverse effect on the market price of the Bonds. Such ratings reflect only the views of S&P and an explanation of the significance of such ratings may be obtained from S&P.
Generally, rating agencies base their ratings on information and materials furnished to them (which may include information and material from the Former Agency which is not included in this Official Statement) and on investigations, studies and assumptions by the rating agencies.
The Municipal Advisor
Kosmont Financial Services, Manhattan Beach, California, has served as municipal advisor (“Municipal Advisor”) to the Former Agency in connection with the Bonds. The Municipal Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or to assume responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement. The Municipal 32021.00004\45004592.2
42 Advisor is an independent advisory firm and is not engaged in the business of underwriting, t rading or distributing municipal or other public securities.
Continuing Disclosure
The Successor Agency will covenant to provide certain annual financial information (the “Annual Reports”) and notices of the occurrence of certain enumerated events in accor dance with Rule 15c2 -12 of the Securities Exchange Act of 1934 as amended (the “Rule”) by not later than March 31 in each year. NBS will act as Dissemination Agent. The specific nature of the information to be contained in the Annual Report or the notice s of listed events and certain other terms of the continuing disclosure obligation are found in the form of the Successor Agency’s Disclosure Certificate attached in “APPENDIX E - FORM OF CONTINUING DISCLOSURE CERTIFICA TE.”
Other than as described herein, the Former Agency and the Successor Agency have complied, in all material respects, with their undertaking, to provide continuing disclosure under the Federal securities laws in the preceding five years.
[DESCRIBE ANY FAILURES TO COMPLY]
Underwriting
The Bonds were sold to Raymond James & Associates, Inc. (the “Underwriter”), who is offering the Bonds at the prices set forth on the inside cover page hereof. The initial offering prices may be changed from time to time and concessions from the offering prices may be allowed to dealers, banks and others.
The Underwriter has purchased the Bonds at a price equal to $ __________, which amount represents the principal amount of the Bonds plus a net original issue premium of $ ___________, less an Underwriter’s discount of $__________. The Underwriter will pay certain of its expenses relating to the offering from the Underwriter’s discount.
References
All statements in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. This Official Statement is not to be construed as a contract or agreement between the Successor Agency and the purchasers or Owners of any of the Bonds.
Execution
The execution and delivery of this Offi cial Statement by the Executive Director of the Successor Agency has been duly authorized by the Successor Agency.
SUCCESSOR AGENCY TO THE
COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF
PALMDALE
By:
Executive Director
32021.00004\45004592.2
A-1
APPENDIX A
SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE
[TO BE PROVIDED BY BOND COUNSEL]
32021.00004\45004592.2
B-1
APPENDIX B
CITY OF PALMDALE INFORMATION STATEMENT
The following information concerning the City of Palmdale is presented as general background data. The Bonds are payable solely from Pledged Tax Revenues as described in the Official Statement. The Bonds are not an obligation of the City, and the taxing power of the City is not pledged to the payment of the Bonds.
General Information
The City is located in northern Los Angeles County, in an area known as the Antelope Valley, approximately 62 miles north of downtown Los Angeles. It encompasses approximately 104 square miles. The southern portion of the Antelope Valley is significantly urbanized and focused around the City and its neighboring community, the City of Lancaster. Nearly half of the Antelope Valley’s population live in these two cities and are connected to the metropolitan employment center of the Los Angeles Basin via the Antelope Valley Freeway (State Highway 14) and Interstate 5. Access to the Inland Empire from Palmdale is via State Highway 18.
In 1933, the United States government establi shed Muroc Air Base six miles north of Lancaster in Kern County, now known as Edwards Air Force Base. They also bought Palmdale Airport in 1952 and established an aerospace development and testing facility called United States Air Force Plant 42. One year later, in 1953, Lockheed established a facility at the airport. After this point in time, the aerospace industry took over as the primary local source of employment, where it has remained ever since. Today the City is even referred to as the “Aerospace Capital of America” because of its rich heritage in being the home of many of the aircraft used in the United States military. 32021.00004\45004592.2
B-2
Population
Table No. B-1 summarizes population growth between 20 22 and 2026 for the City of Palmdale and Los Angeles County.
TABLE NO. B-1
CHANGE IN POPULATION
CITY OF PALMDALE AND LOS ANGELES COUNTY
2022 – 2026
PALMDALE LOS ANGELES COUNTY
January 1 Percentage Percentage
Year Population Change Population Change
2022 166,444
2023 166,308 -0.082% 9,864,220 0.026%
2024 166,333 0.015% 9,882,296 0.183%
2025 166,554 0.133% 9,900,914 0.188%
2026 166,118 -0.262% 9,837,286 0.643%
% Change Between 2022 - 2026 -0.196% -0.247%
__________________________________
Source: State of California, Department of Finance, “E-4 Population Estimates for Cities, Counties and the State, 2022-2026, with 2020 Census Benchmark” Sacramento, California, June 2026.
Per Capita Personal Income
Per capita personal income information for the City of Palmdale, Los Angeles County, the Sta te of California and the United States are summarized in the following table.
TABLE NO. B-2
PER CAPITA PERSONAL INCOME
CITY OF PALMDALE, LOS ANGELES COUNTY,
CALIFORNIA AND UNITED STATES (1)
2019-2023
Year City of Palmdale Los Angeles County State of California United States 2019 $22,962 $62,591 $64,219 $53,683
2020 22,718 67,904 70,090 56,514
2021 22,299 73,343 77,113 59,365
2022 25,155 74,378 77,230 57,104
2023 28,022 78,302 81,231 58,088
__________________________________
(1) For Los Angeles County, State of California and United States, per capita personal income was computed using Census Bureau midyear population estimates. Estimates for 201 9-2023 reflect county population estimates available as of May 2026.
Note: All dollar estimates are in current dollars (not adjusted for inflation).
Source: U.S. Department of Commerce, Bureau of Economic Analysis, City of Palmdale Comprehensive Annual Financial Report.
32021.00004\45004592.2
B-3
Employment
As of December 2025, the civilian labor force for the City was approximately 72,400 of whom 65,800 were employed. Civilian labor force, employment and unemployment statistics for the City, County, the State and the nation, for the years 2021 through 2025 are shown in the following table:
TABLE NO. B-3
CITY OF PALMDALE
CIVILIAN LABOR FORCE, EMPLOYMENT AND UNEMPLOYMENT
ANNUAL A VERAGES
Civilian Unemployment
Year Labor Force Employment Unemployment Rate
2021
City of Palmdale 73,800 65,800 8,000 10.8%
Los Angeles County 5,019,900 4,569,800 450,100 9.0%
California 19,013,800 17,619,300 1,394,500 7.3%
United States1 161,200,000 152,600,000 8,600,000 5.3%
2022
City of Palmdale 73,200 68,600 4,600 6.3%
Los Angeles County 5,036,800 4,786,000 250,800 5.0%
California 19,267,400 18,441,400 716,000 3.7%
United States 164,300,000 153,300,000 11,000,000 6.6%
2023
City of Palmdale 73,000 68,700 4,300 5.9%
Los Angeles County 5,064,700 4,808,300 256,500 5.1%
California 19,514,600 18,593,600 921,000 4.7%
United States 166,900,000 161,900,000 5,000,000 3.0%
2024
City of Palmdale 74,100 68,900 5,200 7.0%
Los Angeles County 5,106,400 4,812,40 294,000 5.8%
California 18,692,800 18,650,700 1,042,200 5.3%
United States 168,900,000 161,900,000 7,000,000 4.1%
2025
City of Palmdale 72,400 68,000 4,400 6.1%
Los Angeles County 5,098,800 4,810,600 288,200 5.7%
California 19,823,800 18,738,500 1,085,300 5.5%
United States 170,500,000 163,200,000 7,300,000 4.2%
__________________________________
Source: California State Employment Development Department. 1For United States, U.S. Bureau of Labor Statistics
32021.00004\45004592.2
B-4
Industry
The City is located in the Los Angeles-Long Beach-Glendale Metropolitan Division. As of December 2025, six dominant job categories constituted approximately 70% of the non-farm work force. They are health care and social assistance (28%), professional and business services (21.0%), government (11.0%), leisure and hospitality (9%), Retail Trade (8.0%) and manufacturing (6.0%). The number of wage and salary workers by industry for each of the years 2021 through 2025 in the Metropolitan Division is presented in Table No. B-4 below.
TABLE NO. B-4
LOS ANGELES-LONG BEACH-GLENDALE METROPOLITAN DIVISION
WAGE AND SALARY WORKERS BY INDUSTRY (1)
2021 - 2025
(in Thousands)
Industry 2021 2022 2023 2024 2025
Government 560.2 570.0 583.1 601.7 603.2
Other Services 135.7 153.0 157.4 159.0 158.0
Leisure and Hospitality 434.2 512.4 534.1 537.5 533.1
Private Education and Health Services 843.9 870.6 919.0 967.0 1,007.1 Health Care and Social Assistance 718.6 739.5 779.9 820.0 858.4 Professional and Business Services 631.3 667.4 657.2 657.4 660.2 Financial Activities 213.2 215.7 210.5 207.7 203.4
Information 208.8 234.9 193.1 189.6 177.0
Transportation, Warehousing and Utilities 215.2 223.6 217.9 218.5 216.5 Service Providing 3,841.3 4,057.4 4,077.2 4,131.9 4,141.2 Retail Trade 396.1 405.5 404.8 398.8 393.6
Wholesale Trade 202.6 204.4 200.1 194.8 189.2
Manufacturing 313.1 321.7 318.4 312.6 303.3
Nondurable Goods 127.1 132.2 128.3 124.9 121.5
Durable Goods 186.0 189.5 190.2 187.8 181.8
Goods Producing 463.8 4,747.0 471.3 465.9 451.4
Construction 149.0 151.3 151.2 151.6 146.5
Mining and Logging 1.6 1.7 1.7 1.7 1.7 Total Nonfarm 4,305.1 4,532.1 4,548.5 4,597.8 4,592.7
Farm 4.6 4.8 4.7 4.7 4.2
Total (all industries) 4,309.7 4,536.9 4,553.2 4,602.5 4,596.9 __________________________________
(1) Annually, as of December.
Note: The unemployment rate is calculated using unrounded data. Data may not add due to rounding.
Source: State of California Employment Development Department, Labor Market Information Division, “Industry Employment & Labor Force - March 2025 Benchmark, revised. 32021.00004\45004592.2
B-5
The largest employers operating in the Antelope Valley and their respective number of employees as of June 2024 are as follows:
TABLE NO. B-5
CITY OF PALMDALE
LARGEST EMPLOYERS
Name of Company Employment (1) Type of Business/Service Northrop Grumman Corp. 8,680 Aerospace/Aviation
Lockheed Martin 4,597 Aerospace/Aviation
Palmdale Regional Medical Center 1,081 Healthcare/Healing Wal-Mart Supercenters (3 stores) 942 Retail
Target Stores (2 Stores + Optical) 452 Retail
Keller Williams Realty Antelope Valley 399 Realtor Services Vallarta Supermarket (3 Stores) 370 Grocery/Retail
Allied Universal Security Services 295 Security Services The Home Depot (2 Stores) 283 Construction/Retail
Lowe’s Home Centers (2 Stores) 257 Home Improvement/Retail _________________________________
Source: City of Palmdale Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2024 .
Commercial Activity
The following table summarizes the volume of retail sales and taxable transactions for the City of Palmdale for 2021 through 2025 (the most recent year for which statistics are available from the California Department of Tax and Fee Administration for the full year).
TABLE NO. B-6
CITY OF PALMDALE
TOTAL TAXABLE TRANSACTIONS
(in $ Thousands)
2021-2025
Retail and Retail and Total Taxable
Food Services Food Services Transactions Issued Sales Year ($000’s) % Change Permits ($000’s) % Change Permits 2021 2,027,552 - 2,573 2,233,318 3,845
2022 2,057,371 1.5% 2,556 2,304,831 3.2% 3,849
2023 2,033,984 -1.1% 2,348 2,033,984 -12% 3,549
2024 1,941,162 -4.8% 2,354 2,217,856 9.0% 3,583
2025 1,925,017 -.08% 2,343 2,181,902 -1.6 3,580
_________________________________
Source: California Department of Tax and Fee Administration, “Taxable Sales in California.” Updated April 6, 2026. 32021.00004\45004592.2
B-6
Taxable transactions by type of business for the City of Palmdale for 2021 through 2025 are summarized in Table No. B-7.
TABLE NO. B-7
CITY OF PALMDALE
TAXABLE TRANSACTIONS BY TYPE OF BUSINESS
(in $ Thousands)
2021-2025
2021 2022 2023 2024 2025
Retail and Food Services
Clothing and Clothing
Accessories Stores $ 176,968 $ 161,436 $ 157,643 $ 162,109 $ 167,609 General Merchandise Stores 393,250 407,405 402,591 385,751 383,453 Food and Beverage Stores 102,320 109,009 110,078 109,120 129,155 Food Services and Drinking Places 317,784 332,983 349,119 359,865 362,240 Home Furnishings and Appliance Stores 116,487 103,170 90,737 85,058 87,214 Building Materials and Garden
Equipment and Supplies 178,988 166,537 168,139 163,614 162,036 Motor Vehicle and Parts Dealers 338,659 342,329 338,611 285,282 287,901 Gasoline Stations 265,140 297,458 285,387 269,425 232,973 Other Retail Group 137,955
89,332
137,044 131,680 120,938 112,435
Total Retail and Food Services 2,027,552 2,057,371 2,033,984 1,941,162 1,925,017 All Other Outlets 205,766 247,460 262,030 276,694 256,885 Total All Outlets $2,233,318 $2,304,831 $2,296,014 $2,217,856 $2,181,902 _________________________________
Note: Detail may not compute to total due to rounding.
Source: California Department of Tax and Fee Administration , “Taxable Sales in California ..” Updated April 6, 2026.
32021.00004\45004592.2
B-7
Building Activity
Table No. B-8 summarizes building activity valuations for the City for the five -year period from 2020/21 through 2024/25.
TABLE NO. B-8
CITY OF PALMDALE
BUILDING ACTIVITY AND V ALUATION
2020/11 – 2024/25
Commercial Residential
Number of Construction Number of Construction
Fiscal Year Units (1) Value (1) Units (2) Value (2)
2020/21
2021/22
2022/23
2023/24
2024/25
_________________________________
(1) Represents new commercial buildings.
(2) Represents new dwelling units.
Source: City of Palmdale, Building & Safety Department.
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C-1
APPENDIX C
FISCAL CONSULTANT’S REPORT
32021.00004\45004592.2
D-1
APPENDIX D
AUDITED FINANCIAL STATEMENTS FOR THE FISCAL
YEAR ENDED JUNE 30, 20[25]
32021.00004\45004592.2
E-1
APPENDIX E
FORM OF CONTINUING DISCLOSURE CERTIFICATE
32021.00004\45004592.2
F-1
APPENDIX F
PROPOSED FORM OF BOND COUNSEL OPINION
[TO BE PROVIDED BY BOND COUNSEL]
32021.00004\45004592.2
G-1
APPENDIX G
THE BOOK-ENTRY SYSTEM
The following description of the Depository Trust Company ( “DTC”), the procedures and record keeping with respect to beneficial ownership interests in the Bonds, payment of principal, interest and other payments on the Bonds to DTC Participants or Beneficial Owners, confirmation and transfer of beneficial ownership interest in the Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC. Accordingly, no representations can be made concerning these matters and neither the DTC Participants nor the Beneficial Owners should rely on the foregoing information with respect to such matters, but should instead confirm the same with DTC or the DTC Participants, as the case may be.
Neither the issuer of the Bonds (the “Issuer”) nor the trustee, fiscal agent or paying agent appointed with respect to the Bonds (the “Agent”) take any responsibility for the information contained in this Appendix.
No assurances can be given that DTC, DTC Participants or Indirect Participants will distribute to the Beneficial Owners (a) payments of interest, principal or premium, if any, with respect to the Bonds, (b) certificates representing ownership interest in or other confirmation or ownership interest in the Bonds, or (c) redemption or other notices sent to DTC or Cede & Co., its nominee, as the registered owner of the Bonds, or that they will so do on a timely basis, or that DTC, DTC Participants or DTC Indirect Participants will act in the manner described in this Appendix. The current “Rules” applicable to DTC are on file with the Securities and Exchange Commission and the current “Procedures” of DTC to be followed in dealing with DTC Participants are on file with DTC.
1. The Depository Trust Company (“DTC”), New York, NY , will act as securities depository for the securities (the “Securities”). The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC ’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate will be issued for each issue of the Securities, each in the aggregate principal amount of such issue, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue.
2. DTC, the world ’s largest securities depository, is a limited -purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC ’s participants (“Direct Participants”) deposit with DTC.
DTC also facilitates the post -trade settlement among Direc t Participants of sales and other securities transactions in deposited securities, through electronic computerized book -entry transfers and pledges between Direct Participants ’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly -owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( “Indirect Participants”). DTC has a Standard & Poor’s rating of 32021.00004\45004592.2
G-2
AA+. 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. The information contained on such Internet site is not incorporated herein by reference.
3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC ’s records. The ownership interest of each actual purchaser of each Security ( “Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership intere sts in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued.
4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC ’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership.
DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC ’s records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.
5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indir ect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Securities may wish to take certain steps to augment the tra nsmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nomin ee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.
6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC ’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.
7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures.
Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).
8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants ’ accounts upon D TC’s receipt of funds and corresponding detail information from Issuer or Agent, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or 32021.00004\45004592.2
G-3
registered in “street name,” and will be the responsibility of such Participant and not of DTC, Agent, or Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of Issuer or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
9. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to Issuer or Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered.
10. Issuer may decide to discontinue use of the system of book -entry transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC.
11. The information in this section conc erning DTC and DTC ’s book-entry system has been obtained from sources that Issuer believes to be reliable, but Issuer takes no responsibility for the accuracy thereof.
32021.00004\45004592.2
H-1
APPENDIX H
SPECIMEN MUNICIPAL BOND INSURANCE POLICY
32021.00004\45123384.1
1 CONTINUING DISCLOSURE CERTIFICATE
This Continuing Disclosure Certificate (the “Disclosure Certificate”) is executed and delivered by the Successor Agency to the Community Redevelopment Agency of the City of Palmdale (the “Agency”) in connection with the issuance and delivery of $__________ Tax Allocation Refunding Bonds, 2026 Series A (the “Bonds”). The Bonds are being issued pursuant to an Indenture of Trust, dated as of ________ 1, 2026 (the “Indenture”), by and between the Agency and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). The Agency covenants and agrees as follows:
Section 1. Purpose of the Disclosure Certificate . This Disclosure Certificate is be ing executed and delivered by the Agency for the benefit of the Holders and Beneficial Owners of the Bonds and in order to assist the Participating Underwriters in complying with the Rule.
Section 2. Definitions. In addition to the definitions set forth a bove and in the Indenture, which apply to any capitalized term used in this Disclosure Certificate, unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:
“Annual Report” shall mean any Annual Report pr ovided by the Agency pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. “Beneficial Owner” shall mean any person who 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 intermediaries).
“Dissemination Agent” shall mean _____________ or any successor Dissemination Agent designated in writing by the Agency and that has filed with the Agency a written acceptance of such designation.
“Financial Obligation” means a (i) debt obligation, (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation, or (iii) guarantee of (i) or (ii). The term Financial Obligation shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with Rule 15c2-12. “Fiscal Year” shall mean the 12-month period beginning on July 1 and ending on the next following June 30, unless and until changed by the Agency.
“Holder” shall mean either the registered owner of any Bond, or, if the Bonds are registered in the name of DTC or another recognized depository, any Beneficial Owner or a pplicable participant in its depository system.
“Listed Events” shall mean any of the events listed in Section 5(a) of this Disclosure Certificate. “MSRB” shall mean the Municipal Securities Rulemaking Board. “Official Statement” shall mean the final Offic ial Statement dated _______, 2026, relating to the Bonds.
“Participating Underwriters” shall mean, Raymond James & Associates, Inc. , and any other original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds.
32021.00004\45123384.1
2 “Rule” shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time.
Section 3. Provision of Annual Reports.
(a) The Agency shall, or shall cause the Dissemination Agent to, not later than nine (9) months after the end of the Agency’s Fiscal Year (i.e., currently, not later than April 1 of each year), commencing with the report for the 2025-26 Fiscal Year, provide to MSRB an Annual Report that is consistent with the requirements of Section 4 of this Disclosure Certificate. Not later than fifteen (15) calendar days prior to each such Annual Report Date, the Agency shall provide its Annual Report to the Dissemination Agent, if such Dissemination Agent is a different entity than the Agency. The Annual Report must be submitted in an electronic format as prescribed by MSRB, accompanied by such identifying information as is prescribed by MSRB, and may include by reference other info rmation as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the Agency may be submitted separately from the balance of the Annual Report, and later than the date required above for the filing of the Annual Report if such audited financial statements are not available by such date. If the Agency’s Fiscal Year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(c). The Agency shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished hereunder. The Dissemination Agent may conclusively rely upon such certification of the Agency and shall have no duty or obligation to review such Annual Report.
(b) Not later than 15 Business Days prior to the date required in subsection (a), the Agency shall provide the Annual Report to the Dissemination Agent (if other than the Agency). If the Agency is unable to provide to MSRB an Annual Report by the date required in subsection (a), the Agency shall send to MSRB a notice in substantially the form attached hereto as Exhibit A. Such notice must be submitted in an electronic format as prescribed by MSRB, accompanied by such identifying information as prescribed by MSRB.
(c) The Dissemination Agent shall:
(i) provide any Annual Report received by it to the MSRB by the date required in subsection (a);
(ii) if the Dissemination Agent is other than the Agency, file a report with the Agency certifying that the Annual Report has been provided to MSRB pursuant to this Disclosure Certificate, and stating the date the Annual Report was so provided; and (iii) if the Dissemination Agent is other than the Agency, take any other actions mutually agreed upon between the Dissemination Agent and the Agency.
Section 4. Content of Annual Reports . The Annual Report shall contain or incorporate by reference the following:
(a) The audited financial statements of the Agency for the prior Fiscal Year. If the Agency’s audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements of the Agency in a format similar to the audited financial statements, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available. Audited financial statements shall be prepared in accordance with generally accepted accounting principles as prescribed for governmental units by the Governmental Accounting Standards Board; provided, however, that the Agency may from time to time, if 32021.00004\45123384.1
3 required by federal or state legal requirements, modify the basis upon which it s financial statements are prepared. In the event that the Agency shall modify the basis upon which its financial statements are prepared, the Agency shall provide a notice of such modification to MSRB, including a reference to the specific federal or sta te law or regulation specifically describing the legal requirements for the change in accounting basis.
(b) The following information for the Fiscal Year to which the Annual Report relates, which information may be provided by its inclusion in the audited financial statements of the Agency for the prior Fiscal Year described in subsection (a) above:
(i) The principal amount of Bonds outstanding.
(ii) Information contained in the following tables in the Official Statement:
[TO COME]
(c) In addition to any o f the information expressly required to be provided under paragraphs (a) and (b) of this Section, the Agency shall provide such further information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading.
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 Agency or related public entities, that are available to the public on MSRB’s Internet web site or filed with the Securities and Exchange Commission. The Agency shall clearly identify each such other document so included by reference.
Section 5. Reporting of Significant Events.
(a) Pursuant to the provisions of this Se ction 5, the Agency shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds:
(i) principal and interest payment delinquencies;
(ii) non-payment related defaults, if material;
(iii) unscheduled dra ws on any reserve fund for the Bond s reflecting financial difficulties;
(iv) unscheduled draws on any credit enhancements securing the Bond s reflecting financial difficulties;
(v) substitution of any credit or liquidity providers, or their failure to perform; (vi) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701 -TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds;
(vii) modifications to the rights of Owners of the Bonds, if material; (viii) Bond calls, if material, and tender offers for the Bonds; 32021.00004\45123384.1
4 (ix) defeasances;
(x) any release, substitution, or sale of property securing repayment of the Bonds, if material;
(xi) rating changes;
(xii) any bankruptcy, insolvency, receivership, or similar event of the Agency [this Listed Event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the Agency 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 jurisdict ion over substantially all of the assets or business of the Agency , or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Agency;
(xiii) the consummation of a merger, consolidation, or acquisition involving the Agency or the sale of all or substantially all of the assets of the Agency, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and (xiv) appointment of a successor or additional trustee or the change of name of a trustee, if material.
(xv) i ncurrence of a Financial Obligation of the Agency , if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the Agency, any of which affect security holders, if material; (xvi) d efault, event of acce leration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the Agency , any of which reflect financial difficulties.
(b) Upon and after the occurrence of a Listed Event listed under subsection (a )(ii), (a)(vii), (a)(viii), (a)(x), (a)(xiii), or (a)(xiv) above, the Agency shall as soon as possible determine if such event would be material under applicable federal securities laws. If the Agency determines that knowledge of the occurrence of such Listed Event would be material under applicable federal securities laws, the Agency shall promptly notify the Dissemination Agent, if different from the Agency, in writing. Such notice shall instruct the Dissemination Agent to report the occurrence pursuant to subsection (d) below. (c) Upon and after the occurrence of any Listed Event (other than a Listed Event listed under subsection (a)(ii), (a)(vii), (a)(viii), (a)(x), (a)(xiii), or (a)(xiv) above), the Agency shall promptly notify the Dissemination Agent, if different from the Agency, in writing. Such notice shall instruct the Dissemination Agent to report the occurrence pursuant to subsection (d) below. (d) The Agency or the Dissemination Agent, if the Dissemination Agent has been instructed by the Agency to report the occurrence of a Listed Event, shall file a notice of such occurrence with MSRB, not in excess of ten (10) business days after the occurrence of such Listed Event. Such notice must be submitted in an electronic format as prescribed by MSRB, accompanied by such identifying information as prescribed by MSRB.
32021.00004\45123384.1
5 (e) The Agency hereby agrees that the undertaking set forth in this Disclosure Certificate is the responsibility of the Agency and that the Dissemination Agent shall not be responsible for determining whether the Agency ’s instructions to the Dissemination Agent under this Section 5 comply with the requirements of the Rule.
Section 6. Termination of Reporting Obligation . The obligations of the Agency and the Dissemination Agent under thi s 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 Agency shall give notice of such termination in the same manner as for a Listed Event under Section 5(c).
Section 7. Dissemination Agent. The Agency may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations und er this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent.
The Dissemination Agent may resign by providing thirty days written notice to the Agency . The Dissemination Agent shall not be responsible for the content of any report or notice prepared by the Agency.
The Dissemination Agent shall have no duty to prepare any information report nor shall the Dissemination Agent be responsible for filing any report not provided to it by the Agency in a timely manner and in a form suitable for filing.
Section 8. Amendment; Waiver . Notwithstanding any other provision of this Disclosure Certificate, the Agency may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of Section 3(a), 4, or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal (including a change in law (including rules or regulations) or in interpretations thereof), or a change in the identity, nature, or status of the Agency or the type of business conducted thereby; (b) the undertakings herein, as proposed to be ame nded or waived, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the primary offering of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and
(c) the proposed amendment or waiver either (i) is approved by Holders of the Bonds in the manner provided in the Indenture for amendments to the Indenture with the consent of Holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Holders or Beneficial Owners of the Bonds.
If the annual financial information or operating data to be provided in the Annual Report is amended pursuant to the provisions hereof, the first annual financial information filed pursuant hereto containing the amended operating data or financial information shall explain, in narrative form, the reasons for the amendment and the impact of the change in the type of operating data or financi al information being provided.
In the event of any amendment or waiver of a provision of this Disclosure Certificate, the Agency shall describe such amendment or waiver in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or, in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Agency. If an amendment is made to the undertaking specifying the accounting principles to be followed in preparing financial statements, the annual financial information for the year in which the 32021.00004\45123384.1
6 change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles.
The comparison shall include a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounti ng principles on the presentation of the financial information, in order to provide information to investors to enable them to evaluate the ability of the Agency to meet its obligations. To the extent reasonably feasible, the comparison shall be quantitative. A notice of the change in the accounting principles shall be sent to MSRB.
Section 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Agency from disseminating any other information, using the means of d issemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the Agency chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the Agency shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.
Section 10. Default. In the event of a failure of the Agency to comply with any provision of this Disclosure Certificate, any Holder or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Agency to comply with its obligations under this Disclosure Certificate. A defau lt 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 Agency to comply with this Disclosure Certificate shall be an action to compel performance.
Section 11. Duties, Immunities, and Liabilities of Dissemination Agent . The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate and the Agency agrees to indemnify and save the Dissemination Agent, and its officers, directors, employees, and agents, harmless against any losses, expenses, and liabilities that it may incur arising out of or in the exercise or performance of its duties hereunder, in cluding the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The obligations of the Agency under this Section shall surv ive resignation or removal of the Dissemination Agent and payment of the Bonds. The Dissemination Agent shall not be responsible in any manner for the format or content of any notice or Annual Report prepared by the Agency pursuant to this Disclosure Certificate. The Agency shall pay the reasonable fees and expenses of the Dissemination Agent for its duties hereunder.
Section 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Agency, the Dissemination Agent, the Participating Underwriters, and Holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity.
Date: __________, 2026
SUCCESSOR AGENCY TO THE
COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF PALMDALE
By:
Authorized Officer
32021.00004\45123384.1
9 EXHIBIT A
NOTICE TO MSRB OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: Successor Agency to the Community Redevelopment Agency of the City of Palmdale Name of Bond Issue: Successor Agency to the Community Redevelopment Agency of the City of Palmdale Tax Allocation Refunding Bonds, 2026 Series A
Date of Issuance: ___________, 2026
NOTICE IS HEREBY GIV EN that the Successor Agency to the Community Redevelopment Agency of the City of Palmdale (the “Agency”), has not provided an Annual Report with respect to the above-named Bonds as required by Section 3 of the Continuing Disclosure Certi ficate executed by the Agency on _________, 202 6. The Agency anticipates that the Annual Report will be filed by _________________.
Dated:
SUCCESSOR AGENCY TO THE
COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF PALMDALE
By:
Authorized Officer
KOSMONT FINANCIAL SERVICES | 1
El Segundo, CA
TEL: 424-297-1070 | URL: www.kosmontfinancial.com
PROPOSED REFUNDING OF
2016 TAX ALLOCATION BONDS
JULY 7, 2026
SUCCESSOR AGENCY TO THE
COMMUNITY REDEVELOPMENT AGENCY OF THE
CITY OF PALMDALE
KOSMONT FINANCIAL SERVICES | 2
*Estimated as of the date hereof; subject to change
EXECUTIVE SUMMARY
The Successor Agency to the Community Redevelopment Agency of the City of Palmdale (“Successor Agency”) has approximately $38 million of 2016 TABs outstanding that are currently eligible to be refinanced
Refinancing at current market rates would result in estimated debt service savings of approximately $2.3 million* over the life of the bonds which will be shared by the City of Palmdale (City) and the Successor Agency’s Affected Taxing Entities Savings are generated by lower debt service requirements paid from the Redevelopment Property Tax Trust Fund (RPTTF)
The Successor Agency Successor Agency's Oversight Board have approved the refinancing; the CA Department of Finance is presently reviewing the authorizations T o prepare the bonds for sale, certain additional documents need the Succor Agency’s approval KOSMONT FINANCIAL SERVICES | 3
PROCESS FOR ISSUING REFUNDING TABS
Successor Agency authorized 2026 Refunding Tax Allocation Bonds Authorized on May 5
Oversight Board approved Successor Agency’s actions Approved on June 11, 2026
All Successor Agency and Oversight Board action must be approved by CA Dept. of Finance
DOF has 60 days to approve; no later than August 17
Financing T eam returns to the Successor Agency with additional documents for approval - tonight
T onight’s authorizations conclude necessary approvals for the Successor Agency to sell Refunding Bonds
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*Estimated as of the date hereof; subject to change
DEBT SERVICE SAVINGS POTENTIAL
Net Savings: ~$2.3 million*
Debt Service
Date
Prior Debt
Service Prior Receipts
Prior Net Cash
Flow
Refunding Debt
Service Savings
9/1/2026 5,857,950$ 5,857,950$
9/1/2027 6,874,150$ 6,874,150$ 6,589,622$ 284,528$ 9/1/2028 4,970,400$ 4,970,400$ 4,681,250$ 289,150$ 9/1/2029 4,928,650$ 4,928,650$ 4,647,000$ 281,650$ 9/1/2030 4,929,900$ 4,929,900$ 4,646,000$ 283,900$ 9/1/2031 4,731,650$ 4,731,650$ 4,446,250$ 285,400$ 9/1/2032 4,728,400$ 4,728,400$ 4,442,250$ 286,150$ 9/1/2033 4,770,400$ 4,770,400$ 4,489,250$ 281,150$ 9/1/2034 4,158,000$ 4,158,000$ 3,869,250$ 288,750$ Total 45,949,500$ 5,857,950$ 40,091,550$ 37,810,872$ 2,280,678$ KOSMONT FINANCIAL SERVICES | 5
DOCUMENTS FOR BOARD APPROVAL
Resolution authorizes and approves:
Preliminary Official Statement and its distribution to the Underwriter Continuing Disclosure Certificate
Authorizes Officers of the Successor Agency to take actions as needed to execute the bond issue Preliminary Official Statement (“POS”)
Primary “disclosure” document for investors enabling them to make an informed investment decision Contains descriptions of the City and Project Areas such as historical Tax Increment data; demographic information; descriptions of legal authority for issuing the Bonds; and other important information related to the issuance of the proposed securities Continuing Disclosure Certificate
Sets forth the Successor Agency’s agreement to provide current financial information to bond investors as required by SEC regulations
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NEXT STEPS AND ESTIMATED TIMELINE
Consideration of the Resolution by Successor Agency Board – May 5 Consideration by the OB – June 11th
DOF Approval
Submitted June 18; must respond within 60 days (by August 17) Prepare Preliminary Official Statement, obtain a bond rating, and seek insurance qualification
In processes
Return to the Successor Agency after OB approval - tonight Sell and Close Bonds: Late July to Late August, depending on DOF KOSMONT FINANCIAL SERVICES | 7
THANK YOU – ANY QUESTIONS?
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Kosmont Transactions Services, Inc. dba Kosmont Financial Services (KFS) is an Independent Registered Municipal Advi sor with the SEC and the MSRB. KFS does not provide accounting, tax or legal advice. Informa tion included in this presentation is provided for discussion purposes only. Such informa tion reflects KFS’ views as of the date hereof (unless otherwise noted) and is subject to change without notice. Any terms and conditions discussed herein are preliminary until confirmed in a definitive written agreement..
City Council Staff Report
DATE: JULY 7, 2026
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: CITY ATTORNEY’S OFFICE
DISTRICT: ALL
SUBJECT: ADOPT RESOLUTION NO. CC 2026 -047, A RESOLUTION O F THE
CITY COUNCIL OF THE CITY OF PALMDALE CALLING AN
ELECTION AND PLACING A COUNCIL-PROPOSED ORDINANCE
MEASURE ON THE NOVEMBER 3, 2026 ELECTION REGARDING
THE ESTABLISHMENT OF A DIRECTLY ELECTED MAYOR
BEGINNING WITH THE NOVEMBER 2028 GENERAL MUNICIPAL
ELECTION
RECOMMENDATION
Staff recommended that the City Council:
1. Adopt Resolution No. CC 2026-047, a Resolution of the City Council of the City of Palmdale calling an election and placing a Council ‑proposed ordinance measure on the November 3, 2026 el ection regarding the establishment of a directly elected mayor beginning with the November 2028 general municipal election and that said ballot presents the following question to the voters:
“Shall the ordinance establishing the office of Mayor as an at ‑large, elected position beginning with the November 2028 general municipal election be adopted?”; and,
2. Approve budget appropriations of $450,000 from the general fund to the elections account for FY 2026-27 to cover the estimated ballot measure cost of $436,000, plus any additional costs that may be incurred throughout the election requirements process.
BACKGROUND
Palmdale currently operates under a council ‑manager form of government with five district‑elected councilmembers. The Mayor is selected annually by the City Council from among its members and serves a one‑year term.
In jurisdictions with a directly elected mayor, the Mayor is chosen by the voters citywide, serves a fixed term, and holds office independently of the City Council. Establishing such an office typically requires adoption of an ordinance defining the Mayor’s powers, duties, term length, and relationship to the City Council.
Report to Honorable Mayor and City Council
Re: Reso. No. CC 2026-047
July 7, 2026