11.A PSF Bond Documents Attachment 3 - Attachment 9 2024-05-07

Stradling Yocca Carlson & Rauth
Draft dated 04/25/24
4863-7628-5866v7/024328-0006
RECORDING REQUESTED BY:

City of Pismo Beach
AND WHEN RECORDED MAIL TO:

Stradling Yocca Carlson & Rauth LLP
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660
Attn: Jonathan Guz, Esq.
[Space above for Recorder’s use.]
This document is recorded for the benefit of the City of Pismo Beach and recording is fee-exempt under § 27383 of the Government Code.

SECOND SUPPLEMENT TO LEASE AGREEMENT
By and between

CITY OF PISMO BEACH,
as Lessee
and

PISMO BEACH PUBLIC FINANCING AGENCY,
as Lessor
Dated as of June 1, 2024
Relating to
$____

PISMO BEACH PUBLIC FINANCING AGENCY
(San Luis Obispo County, California)
SERIES 2024A LEASE REVENUE BONDS
(Public Safety Facility Project)
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SECOND SUPPLEMENT TO LEASE AGREEMENT
This SECOND SUPPLEMENT TO LEASE AGREEMENT, dated as of June 1, 2024 (this “Second Supplement to Lease”), entered into by and between the PISMO BEACH PUBLIC FINANCING AGENCY, a joint exercise of powers authority duly organized and existing under the laws of the State of California, as lessor (the “Agency”), and the CITY OF PISMO BEACH, a municipal corporation and a general law city duly organized and existing under and by virtue of the Constitution and laws of the State of California, as lessee (the “City”), supplements and amends, in part, that certain Lease Agreement, dated as of June 1, 2017 (the “Original Lease”), a short form memorandum of which was recorded in the official records of the County of San Luis Obispo (the “County”) on June 7, 2017 as Document No. 2017024848, as supplemented and amended by that certain First Supplement to Lease Agreement, dated as of December 1, 2017 (the “First Supplement to Lease”), a short form memorandum of which was recorded in the official records of the County on December 28, 2017 as Document No. 2017059405, each by and between the City, as lessee, and the Agency, as lessor. The Original Lease as supplemented and amended by the First Supplement to Lease and this Second Supplement to Lease is referred to herein as the “Lease.”

RECITALS
A. Pursuant to the Government Code of the State of California, the City may enter into leases and agreements relating to real property to be used by the City.

B. The Agency is authorized pursuant to the laws of the State of California to provide financial assistance to the City by acquiring, constructing and financing various public facilities, land and equipment and the leasing of facilities, land and equipment for the use, benefit and enjoyment of the public.

C. The Agency entered into the Lease with the City for the purpose of leasing the real property (including all existing and future improvements thereon) described in Exhibit A to the City, as lessee thereunder.

D. The City and the Agency desire to enter into this Second Supplement to Lease Agreement in order to facilitate the issuance of those certain $_____ Pismo Beach Public Financing Agency Series 2024A Lease Revenue Bonds (Public Safety Facility Project) (the “2024 Bonds”), which shall be treated as Additional Bonds (as such term is defined in the below-defined Indenture), to finance the costs of the design and construction of a public safety facility and related improvements to be located within the City, and the City has agreed to lease the Leased Property (defined below) from the Agency.

E. The 2024 Bonds are being issued as Additional Bonds under that certain Indenture, dated as of June 1, 2017 (the “Original Indenture”), as supplemented and amended by that certain First Supplement to Indenture, dated as of December 1, 2017 (the “First Supplemental Indenture”), as further supplemented and amended by that certain Second Supplement to Indenture, dated as of June 1, 2024 (the “Second Supplemental Indenture” and together with the Original Indenture and the First Supplemental Indenture, the “Indenture”), each by and between Wilmington Trust, N.A., as trustee (the “Trustee”) and the Agency.

H. Pursuant to Section 23(d) of the Original Lease, the City and the Agency reserved the right to amend the Lease from time to time, including in connection with the issuance of Additional Bonds.

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I. To facilitate the issuance of the 2024 Bonds, the City and the Agency desire to amend the Lease as described herein.

J. The parties have determined that the amendments contained herein do not adversely affect the interests of the Owners of the 2017 Pier Bonds or the CREBs.

K. The Trustee and the Original Purchaser of the CREBs each have consented to this Second Supplement to Lease.

AGREEMENT
Section 1. Definitions. Unless the context otherwise requires, the capitalized terms used herein shall have the meanings specified in the Lease and the Indenture. “Additional Bonds” means the 2024 Bonds and any other Additional Bonds executed and delivered subsequent to the issuance of the 2024 Bonds. “Base Rental Payments” means, collectively, the Pier Project Rental Payments (as such term is defined in Section 2(b)), the CREB Rental Payments (as such term is defined in Section 2(c)) and the 2024 Rental Payments.
“City Hall Site” means the portion of the Leased Property identified as such on Appendix A hereto.
“CREBs” means the $4,061,917 Pismo Beach Public Financing Agency Series 2017B Lease Revenue Bonds (Federally Taxable New Clean Renewable Energy Bonds). “Release Property” means the portion of the Leased Property listed under the heading “Release Property” on Appendix A hereto.
“2017 Pier Bonds” means the $7,685,000 Pismo Beach Public Financing Authority Series 2017 Lease Revenue Bonds (Pismo Beach Municipal Pier Project). “2024 Rental Payments” means the basic lease payments that support the 2024 Bonds payable by the City pursuant to this Lease on the Lease Payment Dates and in the amounts as specified in Appendix B, consisting of a principal component and an interest component. “2024 Project” means the design and construction of a Public Safety Facility to be located within the City.
“2024 Project Site” means the portion of the Leased Property identified as such on Appendix A hereto.

For purposes of the covenants set forth in Section 18 of the Original Lease, the “Project” shall refer to the 2024 Project.

Section 2. Schedule of Base Rental Payments.
(a) The City agrees to make all of the Base Rental Payments described in the Lease, including this Second Supplement to Lease. The City and the Agency agree that such Base Council Agenda 05-07-2024
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Rental Payments meet the requirements of Section 3.05 of the Indenture and Section 3(c) of the Original Lease.
(b) Exhibit B to the Original Lease describes the Base Rental Payments that support the 2017 Pier Bonds (the “Pier Project Rental Payments”). (c) Appendix B to the First Supplement to Lease describes the portion of the Base Rental Payments that support the CREBs (the “CREB Rental Payments”). (d) Appendix B to this Second Supplement to Lease describes the 2024 Rental Payments.
(e) Appendix C to this Second Supplement to Lease sets forth the total Base Rental Payments (including the Pier Project Rental Payments, the CREB Rental Payments and the 2024 Rental Payments) due under the Lease.

Section 3. Optional Prepayment.
(a) Optional Prepayment of 2024 Rental Payments. The City may at its option prepay from any source of available moneys for redemption of the 2024 Bonds on any Business Day pursuant to Section 20.03 of the Indenture, all or any part (in an integral multiple of $5,000) of the principal component of the 2024 Rental Payments then unpaid, so that the aggregate annual amounts of principal component of the 2024 Rental Payments which shall be payable after such prepayment date shall be an integral multiple of $5,000, at a prepayment price equal to the sum of the principal component prepaid plus interest accrued with respect thereto to the date of prepayment, without premium.

Before making any prepayment pursuant to this Section, the City shall give written notice to the Agency and the Trustee specifying the date on which the prepayment will be made, which date shall not be less than forty-five (45) days from the date such notice is given unless the Trustee agrees to a shorter period.

The Agency and the City hereby agree that any prepayment in part under this Section and any redemption of the 2024 Bonds by the Agency pursuant to Section 20.03 of the Indenture shall be credited towards the City’s obligations hereunder at the option of the City in any manner determined in writing delivered to the Trustee by the City. A prepayment made pursuant to this Section shall not cause a defeasance of any 2024 Bonds unless the requirements of Section 9.03 of the Indenture are satisfied.

Section 4. Additional Leased Property. The Leased Property as shown in Exhibit A of the Original Lease, as supplemented and amended by the First Supplement to Lease, is hereby amended and supplemented by deleting said Exhibit A in its entirety and substituting the attached Exhibit A therefor.

Section 5. Release of Release Property Following the Completion of the 2024 Project. Without regard to the requirements of Section 7 of the Original Lease, the City may provide for release and deletion of the Release Property from the Leased Property such that the 2024 Project Site and the City Hall Project Site shall constitute the entire Leased Property, provided that the City Council Agenda 05-07-2024
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shall satisfy conditions (a), (b), and (c) below, compliance with each of which requirements is hereby declared to be a condition precedent to such release:
(i) The City shall file with the Agency and the Trustee a copy of a lease supplement which deletes the Release Property from the Lease (and, at the election of the City, from the Site Lease);
(ii) The City shall have delivered a Written Certificate of the City stating that the 2024 Project has been completed to the Trustee; and (iii) No Event of Default has occurred and is continuing.

Upon the satisfaction of all such conditions under this Section 4, the Lease shall thereupon end as to the Release Property and shall thereupon continue as to the 2024 Project Site and the City Hall Project Site, and the Release Property shall be released from the Lease and no longer form part of the Leased Property hereunder without further act or deed of the City, the Agency, or the Trustee, provided the Agency and the Trustee shall execute any such instruments evidencing such release as may be reasonably requested by the City from time to time. The City shall not be entitled to any reduction, diminution, extension or other modification of the Base Rental Payments whatsoever as a result of such deletion.

Section 6. References to Indenture. From and after the date of the issuance of the 2024 Bonds, all references in the Lease to “Indenture” shall refer to the Indenture as supplemented by the First Supplement to Indenture, dated as of December 1, 2017, and as further supplemented by the Second Supplement to Indenture, dated as of June 1, 2024, by and between the Agency and the Trustee, as further amended from time to time.

Section 7. Survival of Original Lease. Except as otherwise amended hereby, the Original Lease, as amended and supplemented by the First Supplement to Lease Agreement, shall remain in full force and effect.

Section 8. Counterparts. This Second Supplement to Lease Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

Section 9. Validity and Severability. If for any reason this Second Supplement to Lease Agreement shall be held by a court of competent jurisdiction to be void, voidable or unenforceable by the Agency or by the City, or if for any reason it is held by such a court that any of the covenants and conditions of the City hereunder, including the covenant to pay Base Rental Payments, is unenforceable for the full term hereof; then and in such event the Lease is and shall be deemed to be a Lease under which the Base Rental Payments are to be paid by the City annually in consideration of the right of the City to possess, occupy and use the Leased Property, and all of the terms, provisions and conditions of the Lease, except to the extent that such terms, provisions and conditions are contrary to or inconsistent with such holding, shall remain in full force and effect.

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IN WITNESS WHEREOF, the Agency has caused this Second Supplement to Lease Agreement to be executed in its name by its duly authorized officers, and the City has caused this Second Supplement to Lease Agreement to be executed in its name by its duly authorized officers, as of the date first above written.

PISMO BEACH PUBLIC FINANCING AGENCY,
as Lessor
By:

Treasurer
ATTEST:

Secretary
CITY OF PISMO BEACH, as Lessee
By:

Administrative Services Director
ATTEST:

City Clerk
CONSENTED TO BY:

WILMINGTON TRUST, N.A.,
as Trustee and Assignee
By:

Authorized Officer

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CERTIFICATE OF ACCEPTANCE
This is to certify that the interest in real property conveyed under the foregoing to the City of Pismo Beach, a municipal corporation, is hereby accepted by the undersigned officer or agent on behalf of the City Council of the City of Pismo Beach (the “City Council”), pursuant to authority conferred by resolution of the said City Council adopted on May 7, 2024, and the grantee consents to recordation thereof by its duly authorized officer.

Dated: _____, 2024 CITY OF PISMO BEACH
By:

Its: Administrative Services Director
ATTEST:

By:

Its: City Clerk

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

STATE OF CALIFORNIA )
) ss.

COUNTY OF _________________________ )

On ___________________ before me, ____________________________________, Notary Public,

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

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

WITNESS my hand and official seal

SIGNATURE OF NOTARY PUBLIC

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STATE OF CALIFORNIA )
) ss.

COUNTY OF _________________________ )

On ___________________ before me, ____________________________________, Notary Public,

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

WITNESS my hand and official seal

SIGNATURE OF NOTARY PUBLIC

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APPENDIX A

DESCRIPTION OF THE LEASED PROPERTY

ALL THAT CERTAIN REAL PROPERTY (ALONG WITH ALL IMPROVEMENTS, FIXTURES

AND FACILITIES AT ANY TIME SITUATED THEREON) SITUATED IN THE CITY OF

PISMO BEACH, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, AND ANY IMPROVEMENTS THERETO, DESCRIBED AS FOLLOWS:

THE FOLLOWING PARCELS SHALL COMPRISE THE 2024 PROJECT SITE:

PARCEL 1: APN 005-036-008

Lots 1, 2 and 3 in Block 1 of Pismo Heights No. 1, in the City of Pismo Beach, County of San Luis Obispo, State of California, according to the map thereof filed for record August 11, 1924, in Book 3,

Page 44 ends

PARCEL 2: APN 005-041-013 (portion)

That portion of Lot 9 of the subdivision of the Ranchos El Pismo and San Miguelito, in the City of Pismo Beach, County of San Luis Obispo, State of California, according to the map thereof filed for record in the office of the County Recorder of said County in Book A, Page 157 of Maps, described as follows:

COMMENCING, at a point on the Northeasterly line of the County Road leading from Pismo to Arroyo Grande, as it existed in August 1903, said point being the Southeasterly corner of that certain parcel of land conveyed to Harriett M. Fisher by Deed recorded in Book 70, Page 102 of Official Records;
Thence, along said Lot South 42-3/4° East, 40 feet to the Southwesterly corner of that certain parcel of land conveyed to C. S. Clark by Deed recorded in Book 69, Page 606 of Deeds; Thence, North 47-1/4° East along the Westerly line of said Clark Lot 210 feet; Thence, North 42-3/4° West, 40 feet to the Northeasterly corner of the Harriett M. Fisher Lot above mentioned;
Thence, South 47-1/4° West along the Easterly Line of said Fisher Lot 210 feet to the POINT OF BEGINNING.

PARCEL 3: APN 005-041-013 (portion)

BEGINNING, at a point on the Northerly line of the County Road leading from Pismo to Arroyo Grande, as it existed in August 1903, said point being the most Southerly corner of the School Lot; and running.

Thence, along said line of said road South 42-3/4° East, 60 feet; Thence, leaving said road and running North 47-1/4° East 210 feet; Council Agenda 05-07-2024
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Thence, North 42-3/4° West, 60 feet to the Easterly corner of said School Lot; Thence, South 47-3/4° West along the Easterly line of said School Lot, 210 feet to the POINT OF BEGINNING.

PARCEL 4: APN 005-041-013 (portion)
That portion of Lot 9 of the subdivision of the Ranchos El Pismo and San Miguelito, in the City of Pismo Beach, County of San Luis Obispo, State of California, according to the map thereof filed for record in the office of the County Recorder of said County in Book A, Page 157 of Maps, described as follows:

COMMENCING, at a post on the North line of the County Road from Pismo to Miles Station Marked VF No. 1, the same being the Westerly corner of a tract of land described in an agreement between John M. Price and Viola B. Fletcher dated June 24, 1887 and recorded in Book Y, Page 149 of Deeds;
Thence, running North 47-1/4° East, 208 feet 8-1/2 inches; Thence, South 42-3/4° East, 208 feet 8-1/2 inches;
Thence, South 47-1/4° West, 208 feet 8-1/4 inches to the north line of said road; Thence, along the same North 42-3/4° West, 208 feet 8-1/2 inches to the POINT OF BEGINNING.

PARCEL 5: APN 005-041-002
THAT PORTION OF LOT 9 OF THE SUBDIVISIONS OF THE RANCHO EL PISMO AND SAN

MIGUELITO, IN THE CITY OF PISMO BEACH, ACCORDING TO THE MAP THEREOF FILED FOR RECORD APRIL 30, 1886 IN BOOK A AT PAGE 157 OF MAPS, DESCRIBED AS FOLLOWS:

BEGINNING AT A POINT ON THE NORTHEASTERLY LINE OF THE COUNTY ROAD LEADING FROM PISMO TO ARROYO GRANDE AS IT EXISTED IN AUGUST 1903, SAID POINT BEING DISTANT, THEREON SOUTH 42°45’00” EAST 100 FEET FROM THE MOST SOUTHERLY CORNER OF THE SCHOOL LOT; THENCE ALONG THE LINE OF SAID ROAD, SOUTH 42°45’00” EAST 50 FEET; THENCE LEAVING SAID ROAD NORTH 47°15’00” EAST 210 FEET; THENCE NORTH 42°45’00” WEST 50 FEET; THENCE SOUTH 47°15’00” WEST 210 FEET TO THE POINT OF BEGINNING.

THE FOLLOWING PARCELS SHALL COMPRISE THE CITY HALL SITE:

PARCEL 6: APN 010-073-004

Parcel 2 of Parcel Map No. PB-AL-88-270, in the City of Pismo Beach, County of San Luis Obispo, State of California according to the map thereof recorded April 21, 1989 in Book 45, Page 12 of Parcel Maps, in the office of the County Recorder of said County.

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PARCEL 7: APN 010-073-002

Being a portion of all that real property situate in the City of Pismo Beach, County of San Luis Obispo, State of California, known as the 10.32 acre "Remainder" as shown on Parcel Map PB 85- 106 as recorded in Book 38 of Parcel Maps at Page 72 in the office of the County Recorder of said County, said parcel being more particularly described as follows:

COMMENCING, at the West corner of Parcel 1 as shown on said Parcel Map; Thence, along the West property line of said Parcel 1, North 30° 38' 53" East, 247.76 feet to the TRUE POINT OF BEGINNING, said point also being the North corner of said Parcel 1 and the West corner of the 10.32 acre "Remainder" of said Parcel Map; Thence, along the West property line of said "Remainder", North 30° 38' 53" East, 10.02 feet; Thence, leaving said West property line of said "Remainder", South 62° 59' 47' East, 250.99 feet; Thence, South 27° 00' 13" West, 10.00 feet to the East corner of said Parcel 1, said East corner being on the North property line of said Parcel 1;
Thence, along said North property line, North 62° 59' 47' West, 251.63 feet to the TRUE POINT OF BEGINNING.

EXCEPTING THEREFROM, the Westerly 18.53 feet.

THE FOLLOWING PARCELS SHALL COMPRISE THE RELEASE PROPERTY

PARCEL 8: APN 005-041-024 and 005-041-017

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF PISMO

BEACH, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:

All that portion of Lot 9 of Rancho El Pismo as said lot is shown on map by R.R. Harris, titled “Map of the Subdivisions of a Part of the Ranchos El Pismo and San Miguelito” filed for record in the office of the San Luis Obispo County Recorder at Page 157 in Book A of Maps and more particularly described as follows:

Beginning at the intersection of the Northeasterly prolongation of the Southerly line of Main Street with the Easterly line of Bello Avenue in the City of Pismo Beach, being also a point in Lot 9 of Rancho El Pismo; and continuing thence Northeasterly 382.50 feet along said Northeasterly prolongation of said Southerly line of said Main Street to a point, said point being in the Easterly boundary of the City of Pismo Beach as it now exists on this date, August 9, 1949; thence leaving said point and running South 42° 45’ East 713.65 feet along said Easterly boundary of said City of Pismo Beach to a point in the Westerly line of a road known as Edna Road; thence leaving said Easterly boundary of said City of Pismo Beach and running along said Westerly line of said Edna Road South 19° 45’ West 161.29 feet to a point; thence South 76° 00’ West 37.62 feet to a point; thence continuing along the Northeasterly line of Bello Avenue North 78° 00’ West 357.72 feet to a point; thence North 42° 45’ West 477.26 feet along said Easterly line of said Bello Avenue to the point of beginning.

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Together with:

Beginning at the point of intersection of the Northeasterly line of Bello Avenue in the City of Pismo Beach, County of San Luis Obispo, State of California, with the Northeasterly prolongation of the Northwesterly line of Main Street in the above said City; thence Northeasterly along said Northeasterly prolongation 25.00 feet to the true point of beginning; thence continuing Northeasterly along said prolongation 300.00 feet; thence at right angles to last said course, Northwesterly 125.00 feet; thence at right angles to last said course, Southwesterly 300.00 feet; thence Southeasterly 125.00 feet to the true point of beginning.

Excepting therefrom that portion conveyed to the Pismo School District in deed recorded August 12, 1952 in Book 669, Page 459 as Document No. 10034 of Official Records.

Also Excepting therefrom that portion conveyed to Pismo Beach Post 727, American Legion in deed recorded July 22, 1954 in Book 765, Page 173 as Document No. 8600 of Official Records.

PARCEL 9: APN 010-511-023
Lot 5 in Block 6 of Tract No. 192, Ocean View Estates No. 2, in the City of Pismo Beach, County of San Luis Obispo, State of California, according to Map recorded February 23, 1960 in Book 6, Page 40 of Maps, in the office of the County Recorder of said County.

Except therefrom that portion of Lot 5 granted to the State of California by deed recorded July 30, 1963 in Book 1253, Page 100 of Official Records.

PARCEL 10: APN 005-281-024 and 005-281-025
PARCEL "A" OF PARCEL MAP NO. PBAL 87-141, IN THE CITY OF PISMO BEACH,

COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO THE MAP THEREOF RECORDED FEBRUARY 29, 1988, IN BOOK 43, PAGE 9 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDERS OF SAID COUNTY.

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APPENDIX B
SCHEDULE OF 2024 RENTAL PAYMENTS
Lease
Payment
Date
Principal
Portion
Interest
Portion
Total 2024 Rental
Payment
Amount

Total

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APPENDIX C

SCHEDULE OF TOTAL BASE RENTAL PAYMENTS
Lease Payment
Date
CREB Rental
Payment
Pier Project Rental
Payment
2024 Rental
Payment
Total Base Rental
Payment
06/1/2018 $ 75,439.95 $ 135,131.25 $ $ 210,571.20
12/1/2018 210,826.96 270,131.25 480,958.21
06/1/2019 86,085.57 133,781.25 219,866.82
12/1/2019 223,392.18 268,781.25 492,173.43
06/1/2020 83,085.42 131,081.25 214,166.67
12/1/2020 226,392.33 276,081.25 502,473.58
06/1/2021 79,954.16 128,181.25 208,135.41
12/1/2021 229,523.58 278,181.25 507,704.83
06/1/2022 76,686.07 125,181.25 201,867.32
12/1/2022 232,791.67 280,181.25 512,972.92
06/1/2023 73,275.16 121,306.25 194,581.41
12/1/2023 236,202.58 281,306.25 517,508.83
06/1/2024 69,715.20 117,306.25 187,021.45
12/1/2024 239,762.54 287,306.25 527,068.79
06/1/2025 65,999.66 113,056.25 179,055.91
12/1/2025 243,478.07 293,056.25 536,534.32
06/1/2026 62,121.76 108,556.25 170,678.01
12/1/2026 247,355.98 298,556.25 545,912.23
06/1/2027 58,074.39 104,756.25 162,830.64
12/1/2027 251,403.34 299,756.25 551,159.59
06/1/2028 53,850.16 100,856.25 154,706.41
12/1/2028 255,627.59 305,856.25 561,483.84
06/1/2029 49,441.32 96,756.25 146,197.57
12/1/2029 260,036.42 306,756.25 566,792.67
06/1/2030 44,839.82 92,556.25 137,396.07
12/1/2030 264,637.93 312,556.25 577,194.18
06/1/2031 40,037.23 88,156.25 128,193.48
12/1/2031 269,440.52 318,156.25 587,596.77
06/1/2032 35,024.77 83,556.25 118,581.02
12/1/2032 274,452.98 323,556.25 598,009.23
06/1/2033 29,793.26 78,756.25 108,549.51
12/1/2033 279,684.48 328,756.25 608,440.73
06/1/2034 24,333.14 75,006.25 99,339.39
12/1/2034 285,144.61 330,006.25 615,150.86
06/1/2035 18,634.41 71,181.25 89,815.66
12/1/2035 290,843.34 331,181.25 622,024.59
06/1/2036 12,686.64 67,118.75 79,805.39
12/1/2036 296,791.10 337,118.75 633,909.85
06/1/2037 6,478.96 62,731.25 69,210.21
12/1/2037 302,998.79 342,731.25 645,730.04
06/1/2038 58,181.25 58,181.25
12/1/2038 348,181.25 348,181.25
06/1/2039 53,287.50 53,287.50
12/1/2039 353,287.50 353,287.50
06/1/2040 48,225.00 48,225.00
12/1/2040 358,225.00 358,225.00
06/1/2041 42,993.75 42,993.75
12/1/2041 362,993.75 362,993.75
06/1/2042 37,593.75 37,593.75
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Lease Payment
Date
CREB Rental
Payment
Pier Project Rental
Payment
2024 Rental
Payment
Total Base Rental
Payment
12/1/2042 367,593.75 367,593.75
06/1/2043 32,025.00 32,025.00
12/1/2043 372,025.00 372,025.00
06/1/2044 26,075.00 26,075.00
12/1/2044 381,075.00 381,075.00
06/1/2045 19,862.50 19,862.50
12/1/2045 384,862.50 384,862.50
06/1/2046 13,475.00 13,475.00
12/1/2046 393,475.00 393,475.00
06/1/2047 6,825.00 6,825.00
12/1/2047 396,825.00 396,825.00
Total $ 6,166,344.04 $ 12,162,112.50 $ $18,328,456.54 .

Council Agenda 05-07-2024
Attachment 3

11.A

Stradling Yocca Carlson & Rauth
Draft dated 04/25/24

4859-0835-8826v5/024328-0006
RECORDING REQUESTED BY:

City of Pismo Beach
AND WHEN RECORDED MAIL TO:

Stradling Yocca Carlson & Rauth LLP
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660
Attn: Jonathan Guz, Esq.

[Space above for Recorder’s use.]
This document is recorded for the benefit of the City
of Pismo Beach, and the recording is fee-exempt
under Section 27383 of the Government Code.

SECOND SUPPLEMENT TO SITE AND FACILITIES LEASE
By and between

CITY OF PISMO BEACH
and

PISMO BEACH PUBLIC FINANCING AGENCY
Dated as of June 1, 2024
Relating to
$____

PISMO BEACH PUBLIC FINANCING AGENCY
(San Luis Obispo County, California)
SERIES 2024A LEASE REVENUE BONDS
(Public Safety Facility Project)

Attachment 4

11.A

4859-0835-8826v5/024328-0006

SECOND SUPPLEMENT TO SITE AND FACILITIES LEASE
This Second Supplement to Site and Facilities Lease (the “Second Supplement to Site Lease”) is made and entered into as of June 1, 2024, by and between the CITY OF PISMO BEACH, a municipal corporation and a general law city duly organized and existing under and by virtue of the laws of the State, as lessor (the “City”), and the PISMO BEACH PUBLIC FINANCING AGENCY, a joint exercise of powers authority duly organized and existing under the laws of the State, as lessee (the “Agency”), and supplements and amends, in part, that certain Site and Facilities Lease between the City, as lessor, and the Agency, as lessee, dated as of June 1, 2017 and recorded in the official records of the County of San Luis Obispo (the “County”) on June 7, 2017, as Document No. 2017024847 (the “Original Site Lease”), as previously supplemented by that certain First Supplement to Site and Facilities Lease, dated as of December 1, 2017, and recorded in the official records of the County as Document No. 2017059404 (the “First Supplement to Site Lease” and, together with the Original Site Lease, the “Site Lease”).

RECITALS
A. The City has entered into the Site Lease with the Agency for the purpose of leasing to the Agency, as lessee thereunder, the real property (including all existing improvements thereon) described in Exhibit A thereto.

B. The City and the Agency desire to enter into this Second Supplement to Site Lease in order to facilitate the issuance of those certain $____ Pismo Beach Public Financing Agency Series 2024A Lease Revenue Bonds (Public Safety Facility Project) (the “2024 Bonds”).

C. The 2024 Bonds are being issued as Additional Bonds under the Indenture, dated as of June 1, 2017, as supplemented by the First Supplement to Indenture, dated as of December 1, 2017, as further supplemented by the Second Supplement to Indenture, dated as of June 1, 2024, (collectively, the “Indenture”), each by and between Wilmington Trust, N.A., as trustee, and the Agency, pursuant to which the Agency has previously issued the $7,685,000 Pismo Beach Public Financing Agency Series 2017 Lease Revenue Bonds (Pismo Beach Municipal Pier Project) (the “2017 Pier Bonds”) and the $4,061,917 Pismo Beach Public Financing Agency Series 2017B Lease Revenue Bonds (Federally Taxable New Clean Renewable Energy Bonds) (the “CREBs”).

D. Pursuant to Section 21 of the Original Site Lease, the City and the Agency reserved the right to amend the Original Site Lease.

E. Pursuant to Section 21 of the Original Site Lease and Section 23(d) of the Lease Agreement, dated as of June 1, 2017, as supplemented by that certain First Supplement to Lease Agreement, dated as of December 1, 2017, as further supplemented by that certain Second Supplement to Lease Agreement, dated as of June 1, 2024 (collectively, the “Lease”), each by and between the City, as lessee, and the Agency, as lessor, the City and the Agency reserved the right to amend the Site Lease and the Lease in connection with the issuance of Additional Bonds.

F. The parties hereto have agreed to amend the Site Lease as described herein, which amendments do not adversely affect the interests of the Owners of the 2017 Pier Bonds or the CREBs.

Attachment 4

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2 4859-0835-8826v5/024328-0006

AGREEMENT
SECTION 1. Definitions. Unless the context otherwise requires, the capitalized terms herein which are not defined herein shall have the meanings referenced in the Site Lease.

SECTION 2. Additional Rental. Section 3 of the Original Site Lease is amended, in part, by adding the following as the second sentence thereof: “The Agency also agrees to pay the Trustee, on the Closing Date of the 2024 Bonds, the proceeds of the 2024 Bonds, as additional advance rental for the use and right to possession of the Leased Property for the term of this Site Lease.” SECTION 3. References to Indenture. From and after the date of the issuance of the 2024 Bonds, all references in the Site Lease to “Indenture” shall refer to the Indenture as supplemented by the First Supplement to Indenture, dated as of December 1, 2017, and as further supplemented by the Second Supplement to Indenture, dated as of June 1, 2024, by and between the Agency and the Trustee, as further amended from time to time.

SECTION 4. Additional Leased Property. The Leased Property as shown in Exhibit A of the Site Lease is hereby amended and supplemented by deleting said Exhibit A in its entirety and substituting the attached Exhibit A therefor.

SECTION 5. No Other Amendments. Except as expressly set forth in Sections 2, 3 and 4 above, all other provisions of the Original Site Lease, as supplemented and amended by the First Supplement to Site Lease, remain in full force and effect.

SECTION 6. Counterparts. This Second Supplement to Site Lease may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

Attachment 4

11.A

S-1
4859-0835-8826v5/024328-0006
IN WITNESS WHEREOF, the parties have caused this Second Supplement to Site Lease to be executed by their duly authorized officers on the date and year first above written.

CITY OF PISMO BEACH, as Lessor
By:

Its: Administrative Services Director
ATTEST:

City Clerk

PISMO BEACH PUBLIC FINANCING AGENCY,
as Lessee
By:

Its: Treasurer
ATTEST:

Secretary
CONSENTED TO BY:

WILMINGTON TRUST, N.A.,
as Trustee and Assignee
By:

Authorized Officer

Attachment 4

11.A

4859-0835-8826v5/024328-0006

CERTIFICATE OF ACCEPTANCE
This is to certify that the interest in real property conveyed under the foregoing to the Pismo Beach Public Financing Agency (the “Agency”), a joint exercise of powers authority, is hereby accepted by the undersigned officer or agent on behalf of the Board of the Agency (the “Board”), pursuant to authority conferred by resolution of the said Board adopted on May 7, 2024, and the grantee consents to recordation thereof by its duly authorized officer.

Dated: June __, 2024 PISMO BEACH PUBLIC FINANCING AGENCY By:

Its: Treasurer

Attachment 4

11.A

4859-0835-8826v5/024328-0006

STATE OF CALIFORNIA )
) ss.

COUNTY OF _________________________ )

On ___________________ before me, ____________________________________, Notary Public,

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

WITNESS my hand and official seal

SIGNATURE OF NOTARY PUBLIC

Attachment 4

11.A

4859-0835-8826v5/024328-0006

STATE OF CALIFORNIA )
) ss.

COUNTY OF _________________________ )

On ___________________ before me, ____________________________________, Notary Public,

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

WITNESS my hand and official seal

SIGNATURE OF NOTARY PUBLIC

Attachment 4

11.A

A-1
4859-0835-8826v5/024328-0006

EXHIBIT A

DESCRIPTION OF THE LEASED PROPERTY

ALL THAT CERTAIN REAL PROPERTY (ALONG WITH ALL IMPROVEMENTS, FIXTURES

AND FACILITIES AT ANY TIME SITUATED THEREON) SITUATED IN THE CITY OF

PISMO BEACH, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, AND ANY IMPROVEMENTS THERETO, DESCRIBED AS FOLLOWS:

THE FOLLOWING PARCELS SHALL COMPRISE THE 2024 PROJECT SITE:

PARCEL 1: APN 005-036-008

Page 44 ends

PARCEL 2: APN 005-041-013 (portion)

PARCEL 3: APN 005-041-013 (portion)

Thence, along said line of said road South 42-3/4° East, 60 feet; Thence, leaving said road and running North 47-1/4° East 210 feet; Attachment 4

11.A

A-2
4859-0835-8826v5/024328-0006

Thence, North 42-3/4° West, 60 feet to the Easterly corner of said School Lot; Thence, South 47-3/4° West along the Easterly line of said School Lot, 210 feet to the POINT OF BEGINNING.

PARCEL 5: APN 005-041-002
THAT PORTION OF LOT 9 OF THE SUBDIVISIONS OF THE RANCHO EL PISMO AND SAN

MIGUELITO, IN THE CITY OF PISMO BEACH, ACCORDING TO THE MAP THEREOF FILED FOR RECORD APRIL 30, 1886 IN BOOK A AT PAGE 157 OF MAPS, DESCRIBED AS FOLLOWS:

THE FOLLOWING PARCELS SHALL COMPRISE THE CITY HALL SITE:

PARCEL 6: APN 010-073-004

Attachment 4

11.A

A-3
4859-0835-8826v5/024328-0006

PARCEL 7: APN 010-073-002

EXCEPTING THEREFROM, the Westerly 18.53 feet.

THE FOLLOWING PARCELS SHALL COMPRISE THE RELEASE PROPERTY

PARCEL 8: APN 005-041-024 and 005-041-017

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF PISMO

BEACH, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:

Attachment 4

11.A

A-4
4859-0835-8826v5/024328-0006
Together with:

Excepting therefrom that portion conveyed to the Pismo School District in deed recorded August 12, 1952 in Book 669, Page 459 as Document No. 10034 of Official Records.

Also Excepting therefrom that portion conveyed to Pismo Beach Post 727, American Legion in deed recorded July 22, 1954 in Book 765, Page 173 as Document No. 8600 of Official Records.

Except therefrom that portion of Lot 5 granted to the State of California by deed recorded July 30, 1963 in Book 1253, Page 100 of Official Records.

PARCEL 10: APN 005-281-024 and 005-281-025
PARCEL "A" OF PARCEL MAP NO. PBAL 87-141, IN THE CITY OF PISMO BEACH,

COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO THE MAP THEREOF RECORDED FEBRUARY 29, 1988, IN BOOK 43, PAGE 9 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDERS OF SAID COUNTY.

Attachment 4

11.A

Stradling Yocca Carlson & Rauth
Draft dated 04/25/24
4853-3937-5274v6/024328-0006

SECOND SUPPLEMENT TO INDENTURE
by and between

PISMO BEACH PUBLIC FINANCING AGENCY
and
WILMINGTON TRUST, N.A.,
as Trustee
Dated as of June 1, 2024
Relating to
$____

PISMO BEACH PUBLIC FINANCING AGENCY
(San Luis Obispo County, California)
SERIES 2024A LEASE REVENUE BONDS
(Public Safety Facility Project)
Council Agenda 05-07-2024
Attachment 5

11.A

TABLE OF CONTENTS

Page

4853-3937-5274v6/024328-0006

ARTICLE XVII

DEFINITIONS
Section 17.01 Revised Definitions ................................................................................................ 2

ARTICLE XVIII

ISSUANCE OF BONDS
Section 18.01 Authorization and Designation ............................................................................... 3 Section 18.02 Description of 2024 Bonds ..................................................................................... 3 Section 18.03 Form of 2024 Bonds ............................................................................................... 4 Section 18.04 Application of Proceeds and Other Amounts ......................................................... 4

ARTICLE XIX

ESTABLISHMENT OF FUNDS
Section 19.01 Establishment of 2024 Project Fund ....................................................................... 4 Section 19.02 Deposit of Moneys into the 2024 Project Fund ...................................................... 5 Section 19.03 2024 Costs of Issuance Fund .................................................................................. 5

ARTICLE XX

REDEMPTION
Section 20.01 Establishment of Redemption Fund ........................................................................ 5 Section 20.02 Extraordinary Redemption ...................................................................................... 5 Section 20.03 Optional Redemption .............................................................................................. 6 Section 20.04 Mandatory Sinking Account Redemption .............................................................. 6

ARTICLE XXI

BASE RENTAL PAYMENTS; LEASE REVENUE FUND
Section 21.01 Security Interest in Moneys and Funds .................................................................. 6 Section 21.02 Pledge of Base Rental Payments and Lease Proceeds ............................................ 7 Section 21.03 Application of Moneys ........................................................................................... 7 Section 21.04 No Reserve Account ............................................................................................... 7

ARTICLE XXII

MISCELLANEOUS
Section 22.01 Provisions of Original Indenture in Effect .............................................................. 7 Section 22.02 Partial Invalidity ..................................................................................................... 7 Section 22.03 Execution in Counterparts ...................................................................................... 7 Section 22.04 Governing Law ....................................................................................................... 7 Council Agenda 05-07-2024
Attachment 5

11.A

ii
4853-3937-5274v6/024328-0006
EXHIBIT A FORM OF 2024 BONDS ................................................................................... A-1 EXHIBIT B FORM OF WRITTEN PROJECT COST REQUISITION ................................. B-1

Council Agenda 05-07-2024
Attachment 5

11.A

4853-3937-5274v6/024328-0006

SECOND SUPPLEMENT TO INDENTURE
THIS SECOND SUPPLEMENT TO INDENTURE, dated as of June 1, 2024 (this “Second Supplemental Indenture”), by and between the Pismo Beach Public Financing Agency (the “Agency”) and Wilmington Trust, N.A., as trustee (the “Trustee”), governs the terms of the Agency’s Series 2024A Lease Revenue Bonds (Public Safety Facility Project), which are being issued as Additional Bonds in accordance with the Indenture, dated as of June 1, 2017, as supplemented by the First Supplement to Indenture, dated as of December 1, 2017 (collectively, the “Original Indenture” and together with this Second Supplemental Indenture, the “Indenture”), by and between the Agency and the Trustee, and supplements the Original Indenture.

RECITALS
A. Pursuant to the Original Indenture, the Agency has previously issued its Series 2017 Lease Revenue Bonds (Pismo Beach Municipal Pier Project) (the “2017 Pier Bonds”) in the aggregate principal amount of $7,685,000 and its Series 2017B Lease Revenue Bonds (Federally Taxable New Clean Renewable Energy Bonds) (the “CREBs” and, together with the 2017 Pier Bonds, the “Prior Bonds”) in the aggregate principal amount of $4,061,917.

B. In order to secure the payment of the Prior Bonds: (i) the City of Pismo Beach (the “City”) has leased to the Agency certain real property and improvements (the “Leased Property”) pursuant to a Site and Facilities Lease, dated as of June 1, 2017, as supplemented pursuant to a First Supplement to Site and Facilities Lease, dated as of December 1, 2017 (collectively, the “Original Site Lease”), each by and between the City and the Agency; and (ii) the Agency has subleased the Leased Property back to the City pursuant to a Lease Agreement, dated as of June 1, 2017, as supplemented pursuant to a First Supplement to Lease Agreement (together, the “Original Lease”), each by and between the Agency and the City, in consideration for the City’s payment of Base Rental Payments to the Agency.

C. The Agency is authorized to issue Additional Bonds under the Original Indenture.

D. The Agency has agreed to issue the Pismo Beach Public Financing Agency Series 2024A Lease Revenue Bonds (Public Safety Facility Project) (the “2024 Bonds”) in the aggregate principal amount of $____ as Additional Bonds.

E. The proceeds of the 2024 Bonds will be applied to finance the costs of the design and construction of a public safety facility and related improvements to be located within the City (the “2024 Project”).

F. In order to secure the payment of the 2024 Bonds, the City and the Agency desire to enter into: (i) a Second Supplement to Site and Facilities Lease, dated as of June 1, 2024 (the “Second Supplement to Site Lease” and, together with the Original Site Lease, the “Site Lease”), supplementing the Original Site Lease, in consideration for the Agency’s assistance in financing the 2024 Project; and (ii) a Second Supplement to Lease Agreement, dated as of June 1, 2024 (the “Second Supplement to Lease” and, together with the Original Lease, the “Lease”), supplementing the Original Lease, in consideration for the City’s payment of additional Base Rental Payments to the Agency.

Council Agenda 05-07-2024
Attachment 5

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2 4853-3937-5274v6/024328-0006
G. The Agency and the City have determined all requirements for the issuance of the 2024 Bonds as Additional Bonds under the terms of the Original Indenture have been satisfied.

NOW, THEREFORE, in order to establish the terms and conditions upon and subject to which the 2024 Bonds are to be issued, and in consideration of the promises and of the mutual covenants contained herein and of the purchase and acceptance of the 2024 Bonds by the Original Purchaser, and for other valuable consideration, the receipt of which is hereby acknowledged, the City does hereby covenant and agree, for the benefit of the Owners of the Prior Bonds, the 2024 Bonds and any Additional Bonds which may be issued from time to time, as follows:

ARTICLE XVII

DEFINITIONS
Section 17.01 Revised Definitions. All capitalized terms not otherwise defined herein shall have the meanings set forth in the Original Indenture. Terms defined both in the Original Indenture and below shall have the meanings set forth below.
“Assignment Agreement” means the Assignment Agreement, dated as of June 1, 2017, as amended by that certain First Supplement to Assignment Agreement, dated as of December 1, 2017, and as further amended by that certain Second Supplement to Assignment Agreement, dated as of June 1, 2024, each by and between the Trustee and the Agency, and any duly authorized and executed amendments thereto.
“Bonds” means, collectively, the 2017 Pier Bonds; provided however that for purposes of Section 1.05, subsections (a), (d), (e), (f), (g) and (h) of Section 2.03, Sections 2.05 through 2.10, Sections 3.05 through 3.06, Sections 4.01, 4.02, 4.04 through 4.06, Article V (except for Section 5.08), Article VI, Article VII, Article VIII, and Article IX of the Original Indenture and the other defined terms when referenced in such Sections, “Bonds” shall mean collectively, the Prior Bonds, the 2024 Bonds and any Additional Bonds; provided further that for purposes of Sections

2.11 through 2.14, Section 4.03, Section 5.08 of the Original Indenture and the other defined terms when referenced in such Sections, “Bonds” shall mean collectively, the 2017 Pier Bonds, the CREBs the 2024 Bonds and any Additional Bonds.
“Closing Date” means, with respect to the 2024 Bonds, June __, 2024. “Original Purchaser” means, with respect to the 2024 Bonds, BofA Securities, Inc., and its successors and assigns.
“2024 Bonds” means the $_____ aggregate principal amount of the Pismo Beach Public Financing Agency Series 2024A Lease Revenue Bonds (Public Safety Facility Project) to be executed and delivered as Additional Bonds pursuant to Section 3.05 of the Original Indenture. “2024 Costs of Issuance Fund” means the fund by that name established pursuant to Section 19.03.
“2024 Project” has the meaning that is set forth in the Recitals to this Second Supplemental Indenture.
“2024 Project Fund” means the fund by that name established pursuant to Section 19.01.

Council Agenda 05-07-2024
Attachment 5

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3 4853-3937-5274v6/024328-0006

ARTICLE XVIII

ISSUANCE OF BONDS
Section 18.01 Authorization and Designation. Under and pursuant to the Indenture, upon written request of the Agency Representative, the Trustee will execute and deliver to the Original Purchaser the 2024 Bonds in an aggregate principal amount of $_____ as Additional Bonds, and such 2024 Bonds shall be designated the “Pismo Beach Public Financing Agency, Series 2024A Lease Revenue Bonds (Public Safety Facility Project).”
Section 18.02 Description of 2024 Bonds. The 2024 Bonds shall be issued in fully registered form without coupons in Authorized Denominations. The 2024 Bonds shall be dated as of the Closing Date, shall be issued in the aggregate principal amount of $____, shall mature on December 1 of each year and shall bear interest (calculated on the basis of a 360-day year comprised of twelve 30-day months) at the rates per annum as follows:

Maturity Date
(December 1) Principal Amount Interest Rate

* Term Bond
Each 2024 Bond shall bear interest from the Interest Payment Date next preceding the date of authentication thereof, unless: (i) it is authenticated during the period from the day after the Record Date for an Interest Payment Date to and including such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date; or (ii) it is authenticated on or prior to the Record Date for the first Interest Payment Date, in which event it shall bear interest from the Closing Date; provided, however, that if, at the time of authentication of any 2024 Bond interest with respect to such 2024 Bond is in default, such 2024 Bond shall bear interest from the Interest Payment Date to which interest has been paid or made available for payment with respect to such 2024 Bond.

Council Agenda 05-07-2024
Attachment 5

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4 4853-3937-5274v6/024328-0006
Interest with respect to any 2024 Bond shall be payable in lawful money of the United States of America on each Interest Payment Date to the Owner thereof as of the close of business on the Record Date, such interest to be paid by check of the Trustee, mailed by first class mail no later than the Interest Payment Date to the Owner at his address as it appears, on such Record Date, on the Registration Books maintained by the Trustee; provided, however, that at the written request of the Owner of at least $1,000,000 in aggregate principal amount of Outstanding 2024 Bonds filed with the Trustee prior to any Record Date, interest on such 2024 Bonds shall be paid to such Owner on each succeeding Interest Payment Date (unless such request has been revoked in writing) by wire transfer of immediately available funds to an account in the United States designated in such written request.

Payments of default interest with respect to the 2024 Bonds shall be paid by check or draft to the registered Owners of the 2024 Bonds as of a special record date to be fixed by the Trustee, notice of which special record date shall be given to the registered Owners of the 2024 Bonds not less than ten days prior thereto. The principal of and premium, if any, on the 2024 Bonds are payable by check when due upon surrender thereof at the Trust Office in lawful money of the United States of America.

Section 18.03 Form of 2024 Bonds. The 2024 Bonds, the form of Trustee’s certificate of authentication, and the form of assignment to appear thereon, shall be substantially in the respective forms set forth in Exhibit A attached hereto and by this reference incorporated herein, with necessary or appropriate variations, omissions and insertions, as permitted or required by the Indenture.

Section 18.04 Application of Proceeds and Other Amounts. The proceeds from the sale of the 2024 Bonds in the amount of $______ (representing the principal amount of the 2024 Bonds of $_____, [plus][less] the [net] original issue [premium][discount] of $_____, less an underwriter’s discount of $____) shall be deposited with the Trustee as follows: (i) $____ to the 2024 Project Fund and (ii) $_____ to the 2024 Costs of Issuance Fund.

For record keeping purposes the Trustee may establish such funds and accounts as may be necessary to reflect such deposits.

ARTICLE XIX

ESTABLISHMENT OF FUNDS
Section 19.01 Establishment of 2024 Project Fund.
(a) The Trustee shall establish and maintain a separate fund designated the “2024 Project Fund.” On the Closing Date there shall be deposited in the 2024 Project Fund the amount specified in Section 18.04.
(b) The moneys in the 2024 Project Fund shall be used and withdrawn by the Trustee from time to time to pay the costs of the 2024 Project upon submission of a Written Request of the City stating: (i) the person to whom payment is to be made; (ii) the amount to be paid; (iii) the purpose for which the obligation was incurred; (iv) that such payment constitutes cost of the 2024 Project and is a proper charge against the 2024 Project Fund; and (v) that such amounts have not been the subject of a prior disbursement from the 2024 Project Fund, in each case together with a statement or invoice for each amount requested thereunder. The Trustee may conclusively rely on requisitions submitted in accordance with this Section 19.01 as complete authorization for the Council Agenda 05-07-2024
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5 4853-3937-5274v6/024328-0006
disbursements made pursuant thereto and shall not be responsible for any representations or certifications made therein.
(c) Upon the filing of a Written Certificate of the City stating that the 2024 Project has been completed and that all costs of the 2024 Project have been paid, the Trustee shall transfer and apply the amount, if any, remaining in the 2024 Project Fund to the Lease Revenue Fund to be used for the purposes thereof. Thereafter, the 2024 Project Fund shall be closed.

Section 19.02 Deposit of Moneys into the 2024 Project Fund. There shall be credited to the 2024 Project Fund the following amounts: (a) the proceeds of sale of the 2024 Bonds required to be deposited therein pursuant to Section 18.04; (b) all investment earnings on moneys held in the 2024 Project Fund, which shall remain in the 2024 Project Fund until expended for costs of the 2024 Project or otherwise transferred pursuant to Section 19.01(c) ; and (c) any other funds from time to time deposited with the Trustee to pay costs of the 2024 Project.

Section 19.03 2024 Costs of Issuance Fund. There is hereby established a fund to be held by the Trustee known as the “2024 Costs of Issuance Fund,” into which shall be deposited a portion of the proceeds of the sale of the 2024 Bonds pursuant to Section 18.04. The moneys in the 2024 Costs of Issuance Fund shall be used to pay Costs of Issuance attributable to the 2024 Bonds from time to time and shall be disbursed by the Trustee upon delivery to the Trustee of a requisition executed by a City or Agency Representative. Each such requisition shall: (a) identify the total amount of such costs to be paid pursuant to such requisition, including all items of cost in such detail as may be available to the City or Agency; and (b) state with respect to such disbursement: (i) the requisition number; (ii) the amount to be disbursed for payment of such costs; and (iii) that each item of cost identified therein has been properly incurred, and is a proper charge against the Costs of Issuance Fund and has not been the basis of any previous disbursement. The Trustee may conclusively rely on requisitions submitted in accordance with this Section 19.03 as complete authorization for the disbursements made pursuant thereto and shall not be responsible for any representations or certifications made therein.

On the date that is 180 days following the Closing Date or upon the earlier receipt by the Trustee of a Written Request of either the City or Agency certifying that all Costs of Issuance have been paid or provided for, the Trustee shall transfer any remaining amounts in the Costs of Issuance Fund to the Lease Revenue Fund, and the Trustee shall then close the Costs of Issuance Fund.

ARTICLE XX

REDEMPTION
Section 20.01 Establishment of Redemption Fund. The Trustee shall establish a 2024 account in the Redemption Fund, shall keep such account separate and apart from all other funds and accounts and moneys held by it and shall administer such account as herein provided. Moneys to be used for redemption of the 2024 Bonds shall be deposited into the 2024 Account of the Redemption Fund and used solely for the purpose of redeeming the applicable 2024 Bonds in advance of their maturity on the date designated for redemption and upon presentation and surrender of such 2024 Bonds to the Trustee.

Section 20.02 Extraordinary Redemption. The 2024 Bonds are subject to redemption prior to their respective maturity dates as provided in Section 2.03(a) of the Original Indenture.

Council Agenda 05-07-2024
Attachment 5

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6 4853-3937-5274v6/024328-0006
Section 20.03 Optional Redemption. The 2024 Bonds maturing on or before December 1, 20__, are not subject to optional redemption prior to their stated maturities. The 2024 Bonds maturing on or after December 1, 20__, are subject to redemption prior to their stated maturities, on any Business Day on or after December 1, 20__, as a whole or in part by such maturities as may be designated by the Agency to the Trustee at least forty-five (45) days prior to the redemption date, and by lot within any one maturity, from prepayments of Base Rental Payments made at the option of the City pursuant to the Lease, at a redemption price equal to the principal amount of the 2024 Bonds to be redeemed, without premium, plus accrued but unpaid interest to the redemption date.

Section 20.04 Mandatory Sinking Account Redemption. The 2024 Bonds maturing December 1, 20_ (the “20__ Term 2024 Bonds”) are subject to mandatory redemption, in part by lot, from sinking account payments on December 1 in each year as set forth in the following schedule, commencing December 1, 20__, and on December 1 in each year thereafter to and including December 1, 20__ at a redemption price equal to the principal amount of the 20__ Term 2024 Bonds to be redeemed, plus accrued but unpaid interest thereon to the date fixed for redemption, without premium.

Mandatory Redemption Date
(December 1)
Principal Amount to be
Redeemed
$

* Final Maturity
If some but not all of the 20__ Term 2024 Bonds have been redeemed pursuant to optional redemptions, the total amount of sinking account payments to be made subsequent to such redemption shall be reduced in an amount equal to the principal amount of the 20__ Term 2024 Bonds so redeemed by reducing each such future sinking account payment as shall be designated by the Agency pursuant to written notice filed by Agency with the Trustee, or in the absence of such direction, on a pro rata basis (as nearly as practicable) in denominations of $5,000, as shall be designated pursuant to written notice filed by Agency with the Trustee.

In the event of any reductions in the amount of sinking account payments due as a result of some but not all of the 2024 Bonds being redeemed pursuant to extraordinary or optional redemptions, the Agency shall provide the Trustee with a revised schedule reflecting such reductions.

The Agency is not required to provide prior notice of sinking account redemption pursuant to this Section 20.04.

ARTICLE XXI

BASE RENTAL PAYMENTS; LEASE REVENUE FUND
Section 21.01 Security Interest in Moneys and Funds. The Agency hereby grants to the Trustee for the benefit of the Owners of the 2024 Bonds a lien on and a security interest in all moneys in the funds or accounts held by the Trustee under the Indenture (excepting only the Rebate Fund and any moneys to be deposited into the Rebate Fund), including without limitation, the Lease Revenue Fund, the Redemption Fund and the Insurance and Condemnation Fund, and all such moneys shall be held by the Trustee in trust and applied to the respective purposes specified herein Council Agenda 05-07-2024
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7 4853-3937-5274v6/024328-0006
and in the Lease. Owners of the Prior Bonds, 2024 Bonds and any Additional Bonds shall have a co- equal lien on and a security interest in all moneys in such funds.

Section 21.02 Pledge of Base Rental Payments and Lease Proceeds. The Base Rental Payments are hereby irrevocably pledged to and shall be used for the punctual payment of the interest and principal represented by the 2024 Bonds on a coequal basis with the Prior Bonds. Any proceeds from the re-letting or any other disposition of the Leased Property pursuant to Section 11 of the Lease (the “Lease Proceeds”) are hereby irrevocably pledged equally to the Prior Bonds, the 2024 Bonds and any Additional Bonds. Except as permitted under Section 3.05 of the Original Indenture with respect to Additional Bonds, the Base Rental Payments and Lease Proceeds shall not be used for any other purpose while any of the Bonds remain Outstanding. This pledge shall constitute a first lien on the Base Rental Payments and Lease Proceeds in accordance with the terms hereof, subject to Section 8.03 of the Original Indenture and subject to Section 3.05 of the Original Indenture.

Section 21.03 Application of Moneys. Except as provided in this Section 21.03, all amounts in the Lease Revenue Fund shall be used and withdrawn by the Trustee solely for the purpose of paying the principal and interest with respect to the Prior Bonds and the 2024 Bonds as the same shall become due and payable, in accordance with the provisions of Article II and Article IV of the Original Indenture, subject to the requirement that certain investment earnings may be transferred to the Rebate Fund, as provided in Section 4.03 of the Original Indenture.

Section 21.04 No Reserve Account. No Reserve Account shall be established in connection with the 2024 Bonds.

ARTICLE XXII

MISCELLANEOUS
Section 22.01 Provisions of Original Indenture in Effect. Except as expressly modified herein, all of the provisions of the Original Indenture shall remain in full force and effect.

Section 22.02 Partial Invalidity. If any section, paragraph, sentence, clause or phrase of this Second Supplemental Indenture shall for any reason be held illegal, invalid or unenforceable, such holding shall not affect the validity of the remaining portions of this Second Supplemental Indenture. The City and the Agency hereby declare that it would have entered into this Second Supplemental Indenture and each and every other Section, paragraph, sentence, clause or phrase hereof and authorized the issuance of the 2024 Bonds pursuant thereto irrespective of the fact that any one or more Sections, paragraphs, sentences. Clauses, or phrases of this Second Supplemental Indenture may be held illegal, invalid or unenforceable.

Section 22.03 Execution in Counterparts. This Second Supplemental Indenture may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

Section 22.04 Governing Law. This Second Supplemental Indenture shall be construed and governed in accordance with the laws of the State applicable to contracts made and performed in such state.

Council Agenda 05-07-2024
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S-1
4853-3937-5274v6/024328-0006
IN WITNESS WHEREOF, the PISMO BEACH PUBLIC FINANCING AGENCY has caused this Second Supplemental Indenture to be signed by an Agency Representative, and Wilmington Trust, N.A., in token of its acceptance of the trust created hereunder and has caused this Second Supplemental Indenture to be signed in its corporate name by its officer identified below, all as of the day and year first above written.

WILMINGTON TRUST, N.A., as Trustee
By:

Its: Authorized Officer

PISMO BEACH PUBLIC FINANCING AGENCY
By:

Its: Treasurer
ATTEST:
__________________________________
Secretary

Council Agenda 05-07-2024
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A-1
4853-3937-5274v6/024328-0006

EXHIBIT A
FORM OF 2024 BONDS
NO. R-___ $_______

UNITED STATES OF AMERICA

STATE OF CALIFORNIA

$_________

PISMO BEACH PUBLIC FINANCING AGENCY
(San Luis Obispo County, California)
SERIES 2024A LEASE REVENUE BONDS
(Public Safety Facility Project)

INTEREST RATE MATURITY DATE DATED DATE CUSIP
___% December 1, 20__ June __, 2024

REGISTERED OWNER: CEDE & CO.

PRINCIPAL AMOUNT: _________ DOLLARS
The PISMO BEACH PUBLIC FINANCING AGENCY, a joint powers authority organized and existing under the laws of the Stale of California (the “Agency”), for value received, hereby promises to pay (but only out of Revenues, as such term is defined in the Indenture hereinafter referred to, and certain other moneys) to the Registered Owner identified above or registered assigns (the “Registered Owner”), on the Maturity Date identified above or any earlier redemption date, the Principal Amount identified above in lawful money of the United States of America; and to pay interest thereon at the Interest Rate identified above in like money from the Interest Payment Date (as such term is defined herein) next preceding the date of authentication of this Bond (unless this Bond is authenticated on or before an Interest Payment Date and after the fifteenth calendar day of the month preceding such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or unless this Bond is authenticated on or prior to [November 15, 2024], in which event it shall bear interest from the Dated Date identified above; provided, however, that if, at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest hereon has previously been paid or made available for payment), payable semiannually on June 1 and December 1 in each year, commencing [December 1, 2024] (each an “Interest Payment Date”) until payment of such Principal Amount in full. The Principal Amount hereof is payable by check upon presentation hereof upon maturity or earlier redemption at the principal corporate trust office (the “Trust Office”) of Wilmington Trust, N.A., as trustee (the “Trustee”), in Costa Mesa, California, or at such other office as the Trustee may designate. Interest hereon is payable by check of the Trustee mailed by first class mail on each Interest Payment Date to the Registered Owner hereof at the address of the Registered Owner as it appears on the registration books of the Trustee as of the first calendar day of the month of such Interest Payment Date (except that in the case of a Registered Owner of at least $1,000,000 in aggregate principal amount, such payment may, at such Registered Owner’s option, be made by wire Council Agenda 05-07-2024
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transfer of immediately available funds in accordance with written instructions provided by such Registered Owner prior to the fifteenth calendar day of the month preceding such Interest Payment Date).

This Bond is one of duly authorized issue of bonds of the Agency designated the “Pismo Beach Public Financing Agency Series 2024A Lease Revenue Bonds (Public Safety Facility Project)” (the “Bonds”), limited in principal amount to $____ secured by an Indenture, dated as of June 1, 2017 (the “Original Indenture”) as supplemented by that First Supplement to Indenture dated as of December 1, 2017 (the “First Supplemental Indenture”), and as further supplemented by that Second Supplement to Indenture as of June 1, 2024 (the “Second Supplemental Indenture” and together with the Original Indenture and the First Supplemental Indenture, the “Indenture”), each by and between the Trustee and the Agency. Reference is hereby made to the Indenture and all indentures supplemental thereto for a description of the rights thereunder of the owners of the Bonds, of the nature and extent of the Revenues (as such term is defined in the Indenture), of the rights, duties and immunities of the Trustee and of the rights and obligations of the Agency thereunder, and all of the terms of the Indenture are hereby incorporated herein and constitute a contract between the Agency and the Registered Owner hereof, and to all of the provisions of which Indenture the Registered Owner hereof, by acceptance hereof, assents and agrees.

The Bonds are authorized to be issued pursuant to the provisions of the Marks-Roos Local Bond Pooling Act of 1985, constituting Article 4, Chapter 5, Division 7, Title I of the Government Code of the State of California (the “Act”). The Bonds are special obligations of the Agency and, as and to the extent set forth in the Indenture, are payable solely from and secured by a first lien on and pledge of the Revenues as provided in the Indenture, on a parity with the Prior Bonds (as such term is defined in the Second Supplemental Indenture). All of the Bonds and the Prior Bonds are equally secured by a pledge of, and charge and lien upon, all of the Revenues, and the Revenues constitute a trust fund for the security and payment of the principal of and interest on the Bonds. Additional bonds payable from the Revenues may be issued which will rank equally as to security with the Bonds, but only subject to the terms and conditions set forth in the Indenture. The full faith and credit of the Agency are not pledged for the payment of the principal of or interest or premium (if any) on the Bonds. The Bonds are not secured by a legal or equitable pledge of, or charge, lien or encumbrance upon, any of the property of the Agency or any of its income or receipts, except the Revenues and such other moneys and securities as provided in the Indenture.

The Bonds have been issued to (i) finance the acquisition and construction of certain public capital improvements, and (ii) pay the costs of issuance associated with the issuance and sale of the Bonds.

The Agency has entered into a Lease Agreement, dated as of June 1, 2017, as supplemented and amended by that certain First Supplement to Lease Agreement dated as of December 1, 2017, and as further supplemented and amended by that certain Second Supplement to Lease Agreement dated as of June 1, 2024 (as so supplemented and amended, the “Lease”) with the City, under which the City is obligated to pay amounts which are anticipated to be sufficient to enable the Agency to pay the principal of and interest on the Bonds.

The Bonds are subject to redemption prior to their respective maturity dates, upon notice as hereinafter provided, as a whole on any date, from prepaid Base Rental Payments made by the City from funds received by the City due to a taking of the Leased Property (as such term is defined in the Indenture) or any portion thereof under the power of eminent domain or due to damage to or Council Agenda 05-07-2024
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destruction of the Leased Property or any portion thereof, under the circumstances and upon the conditions and terms prescribed in the Indenture and in the Lease, at a redemption price equal to the sum of the principal amount of the Bonds to be redeemed plus accrued interest thereon to the date fixed for redemption, without premium.

The Bonds maturing on or before December 1, 20__, are not subject to optional redemption prior to their stated maturities. The Bonds maturing on or after December 1, 20__, are subject to redemption prior to their stated maturities, on any Business Day on or after December 1, 20__, as a whole or in part by such maturities as may be designated by the Agency to the Trustee at least forty- five (45) days prior to the redemption date, and by lot within any one maturity, from prepayments of Base Rental Payments made at the option of the City pursuant to the Lease, at a redemption price equal to the principal amount of the Bonds to be redeemed, without premium, plus accrued but unpaid interest to the redemption date.

The Bonds maturing December 1, 20__ (the “20__ Term 2024 Bonds”) are subject to mandatory redemption, in part by lot, from sinking account payments in each year as set forth in the following schedule, commencing December 1, 2018, and on December 1 in each year thereafter to and including December 1, 20__ at a redemption price equal to the principal amount of the 20__ Term 2024 Bonds to be redeemed, plus accrued but unpaid interest thereon to the date fixed for redemption, without premium.

Mandatory Redemption Date
(December 1)
Principal Amount to be
Redeemed
$

* Final Maturity
The Trustee on behalf and at the expense of the Agency shall mail (by first class mail) notice of any redemption to the respective owners of any Bonds designated for redemption, at their respective addresses appearing on the registration books maintained by the Trustee, to the Securities Depositories and to one or more Information Services (as such terms are defined in the Indenture), at least 30 but not more than 60 days prior to the redemption; provided, however, that neither failure to receive any such notice so mailed nor any defect therein shall affect the validity of the proceedings for the redemption of such Bonds or the cessation of the accrual of interest thereon. Such notice shall state the date of the notice, the redemption date, the redemption place and the redemption price and shall designate the CUSIP numbers, the serial numbers of each maturity or maturities (except that if the event of redemption is of all of the Bonds of such maturity or maturities in whole, the Trustee shall designate such maturities or maturity in whole without referencing each individual number) of the Bonds to be redeemed, and shall require that such Bonds be then surrendered at the Trust Office of the Trustee for redemption at the redemption price, giving notice also that further interest on such Bonds will not accrue from and after the redemption date.

The Bonds may be issued in denominations of $5,000 or any integral multiple thereof.

Subject to the limitations and upon payment of the charges, if any, provided in the Indenture, this Bond may be exchanged at the Trust Office of the Trustee for a like aggregate principal amount, interest rate and maturity of fully registered Bonds of other authorized denominations.

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This Bond is transferable by the Registered Owner hereof, in person or by his attorney duly authorized in writing, at the Trust Office of the Trustee, but only in the manner, subject to the limitations and upon payment of the charges provided in the Indenture, and upon surrender and cancellation of this Bond. Upon such transfer a new fully registered Bond or Bonds, of authorized denomination or denominations, for the same aggregate principal amount and of the same maturity will be issued to the transferee in exchange herefor. The Agency and the Trustee may treat the Registered Owner hereof as the absolute owner hereof for all purposes, and the Agency and the Trustee shall not be affected by any notice to the contrary. The Trustee shall not be required to register the transfer or exchange of any Bond during the period in which the Trustee is selecting Bonds for redemption or any Bond selected for redemption.

The Indenture and the rights and obligations of the Agency and of the owners of the Bonds and of the Trustee may be modified or amended from time to time and at any time in the manner, to the extent, and upon the terms provided in the Indenture; provided that no such modification or amendment shall (a) extend the maturity of or reduce the interest rate on any Bond or otherwise alter or impair the obligation of the Agency to pay the principal, interest or premiums at the time and place and at the rate and in the currency provided therein of any Bond without the express written consent of the owner of such Bond, (b) reduce the percentage of Bonds required for the written consent to any such amendment or modification, or (c) without its written consent thereto, modify any of the rights or obligations of the Trustee, all as more fully set forth in the Indenture.

It is hereby certified that all things, conditions and acts required to exist, to have happened and to have been performed precedent to and in the issuance of this Bond do exist, have happened and have been performed in due time, form and manner as required by the Constitution and statutes of the State of California and by the Act and the amount of this Bond, together with all other indebtedness of the Agency, does not exceed any limit prescribed by the Constitution or statutes of the State of California or by the Act.

This Bond shall not be entitled to any benefit under the Indenture, or become valid or obligatory for any purpose, until the certificate of authentication hereon shall have been signed by the Trustee.

Unless this Bond is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the Agency or the Trustee for registration of transfer, exchange, or payment, and any Bond issued is registered in the name of Cede & Co. or in such other name as is request by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), any transfer, pledge, or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein.

IN WITNESS WHEREOF, the Pismo Beach Public Financing Agency has caused this Bond to be executed in its name and on its behalf with the facsimile signature of its Treasurer, and attested by the facsimile signature of its Secretary, all as of the Dated Date set forth above.

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A-5
4853-3937-5274v6/024328-0006

PISMO BEACH PUBLIC FINANCING AGENCY
By:

Its: Treasurer
ATTEST:
__________________________________
Secretary

FORM OF CERTIFICATE OF AUTHENTICATION
This is one of the Bonds described in the within-mentioned Indenture.

Authentication Date:

WILMINGTON TRUST, N.A., as Trustee
By:

Its: Authorized Officer
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[FORM OF ASSIGNMENT]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto

(print or typewrite name, address, including postal zip code, and social security or other identifying number of Transferee)
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints to transfer the within
Bond on the books kept for registration thereof, with full power of substitution in the premises.

Dated:

Signature Guaranteed

NOTICE: Signature(s) guarantee should be
made by a guarantor institution participating
in the Securities Transfer agents Medallion
Program or such other guarantee program
acceptable to the Trustee.

NOTICE: The signature to this assignment
must correspond with the name as it appears
upon the face of the within Bond in every
particular, without alteration or enlargement
or any change whatever.

Council Agenda 05-07-2024
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4853-3937-5274v6/024328-0006

EXHIBIT B

FORM OF WRITTEN PROJECT COST REQUISITION
Wilmington Trust, N.A., as Trustee
RE: Disbursement from the 2024 Project Fund pursuant to Section 19.01 of the Indenture, dated as of June 1, 2017, as supplemented by the First Supplement to Indenture, dated as of December 1, 2017, as further supplemented by the Second Supplement to Indenture as of June 1, 2024 (as supplemented the “Indenture”), by and between you, as trustee, and the Pismo Beach Public Financing Agency
REQUISITION NO. _____
You are hereby instructed to pay to the City of Pismo Beach, or to ________________________ the amount of $__________ as a cost of the 2024 Project from the 2024 Project Fund as provided in Section 19.01 of the Indenture. This cost has been properly incurred for the purpose paying costs of the 2024 Project, is a proper charge against the 2024 Project Fund and has not been the basis of any previous disbursements. An invoice related to this matter is attached.

The amount remaining in the 2024 Project Fund, together with other moneys available to the City and together with interest earnings on the 2024 Project Fund plus investment earnings on other funds that will be transferred into the 2024 Project Fund, will, after payment of the amount set forth in this requisition, be sufficient to pay all remaining costs of the 2024 Project as presently estimated.

Very truly yours,
_________________________________________
Agency Representative
Council Agenda 05-07-2024
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Stradling Yocca Carlson & Rauth
Draft dated 04/25/24
4869-4408-9770v4/024328-0006
RECORDING REQUESTED BY:

City of Pismo Beach
AND WHEN RECORDED MAIL TO:

Stradling Yocca Carlson & Rauth LLP
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660
Attn: Jonathan Guz, Esq.
[Space above for Recorder’s use.]
This document is recorded for the benefit of the City
of Pismo Beach, and the recording is fee-exempt
under Section 27383 of the Government Code.

SECOND SUPPLEMENT TO ASSIGNMENT AGREEMENT
By and between

PISMO BEACH PUBLIC FINANCING AGENCY
and
WILMINGTON TRUST, N.A.,
as Trustee
Dated as of June 1, 2024
Relating to
$____

PISMO BEACH PUBLIC FINANCING AGENCY
(San Luis Obispo County, California)
SERIES 2024A LEASE REVENUE BONDS
(Public Safety Facility Project)
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4869-4408-9770v4/024328-0006

SECOND SUPPLEMENT TO ASSIGNMENT AGREEMENT
This Second Supplement to Assignment Agreement, dated as of June 1, 2024 (the “Second Supplement to Assignment Agreement”), is made and entered into by and between the Pismo Beach Public Financing Agency, a joint exercise of powers authority duly organized and existing under the laws of the State of California (the “Agency”), as assignor, and Wilmington Trust, N.A., a state banking corporation organized and existing under the laws of the United States, as trustee (the “Trustee”), as assignee, and supplements that certain Assignment Agreement between the Agency and the Trustee, dated as of June 1, 2017 (the “Original Assignment Agreement”) and recorded in the official records of the County of San Luis Obispo (the “County”) on June 7, 2017 as Document No. 2017024849, and that certain First Supplement to Assignment Agreement, dated as of December 1, 2017 (the “First Supplement to Assignment Agreement”) and recorded in the official records of the County on December 28, 2017 as Document No. 2017059406 (collectively, the “Assignment Agreement”).

RECITALS
A. The Agency and the City of Pismo Beach (the “City”) have entered into that certain Site and Facilities Lease, dated as of June 1, 2017, recorded on June 7, 2017 in the official records of the County as Document No. 2017024847, as supplemented by that certain First Supplement to Site and Facilities Lease, dated as of December 1, 2017, recorded on December 28, 2017 in the official records of the County as Document No. 2017059404, and as further supplemented by that Second Supplement to Site and Facilities Lease dated as of June 1, 2024 and recorded concurrently herewith (collectively, the “Site Lease”), whereby the City has leased to the Agency certain real property, including the improvements thereon, as described in Exhibit A to Second Supplement to Site and Facilities Lease and in Exhibit A hereto (the “Property”).

B. The Agency and the City have entered into that certain Lease Agreement, dated as of June 1, 2017, a memorandum of which was recorded on June 7, 2017 in the official records of the County as Document No. 2017024848, as supplemented by that certain First Supplement to Lease Agreement, dated as of December 1, 2017, a memorandum of which was recorded on December 28, 2017 in the official records of the County as Document No. 2017059405, as further supplemented by that certain Second Supplement to Lease Agreement dated as of June 1, 2024 and recorded concurrently herewith (collectively, the “Lease”), whereby the Agency has subleased the Property back to the City.

C. The Agency has assigned to the Trustee absolutely, without recourse, all of its rights under the Site Lease pursuant to the Assignment Agreement.

D. The Agency has assigned to the Trustee absolutely, without recourse, all of its rights to receive the Base Rental Payments scheduled to be paid by the City under the Lease and certain of its other rights, title and interest under the Lease pursuant to the Assignment Agreement.

E. The Agency and the Trustee desire to enter into this Second Supplement to Assignment Agreement in order to facilitate the issuance of those certain $____ Pismo Beach Public Financing Agency Series 2024A Lease Revenue (Public Safety Facility Project) (the “2024 Bonds”).

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F. The 2024 Bonds are being issued as Additional Bonds under that certain Indenture, dated as of June 1, 2017, as supplemented by that certain First Supplement to Indenture, dated as of December 1, 2017 (together, the “Original Indenture”), as further supplemented by that certain Second Supplement to Indenture, dated as of June 1, 2024 (the “Second Supplemental Indenture”), each by and between the Trustee and the Agency. The Original Indenture as supplemented by the Second Supplemental Indenture shall be referred to herein as the “Indenture”.

AGREEMENT
Section 1. Definitions. Unless the context otherwise requires, the capitalized terms used herein shall have the meanings specified in the Lease and the Indenture.

Section 2. Issuance of 2024 Bonds. From and after the date of the issuance of the 2024 Bonds, the 2024 Bonds shall constitute Additional Bonds subject to the provisions of the Assignment Agreement, and all references in the Assignment Agreement to the “Indenture” shall refer to the Original Indenture as supplemented by the Second Supplemental Indenture and as further supplemented or amended from time to time.

Section 3. References to Indenture. From and after the date of the issuance of the 2024 Bonds, all references in the Assignment Agreement to “Indenture” shall refer to the Indenture as supplemented by the First Supplement to Indenture, dated as of December 1, 2017, and as further supplemented by the Second Supplement to Indenture, dated as of June 1, 2024, by and between the Agency and the Trustee, as further amended from time to time.

Section 4. Additional Leased Property. The Leased Property as shown in Exhibit A of the Original Assignment Agreement, as amended and supplemented by the First Supplement to Assignment Agreement, is hereby amended and supplemented by deleting said Exhibit A in its entirety and substituting the attached Exhibit A therefor.

Section 5. No Other Amendments. Except as expressly set forth in Sections 2, 3 and 4 above, all other provisions of the Assignment Agreement remain in full force and effect.

Section 6. Counterparts. This Second Supplement to Assignment Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

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IN WITNESS WHEREOF, the parties have executed this Second Supplement to Assignment Agreement by their officers thereunto duly authorized as of the day and year first written above.

PISMO BEACH PUBLIC FINANCING AGENCY
By:

Treasurer
ATTEST:

Secretary
WILMINGTON TRUST, N.A., as Trustee
By:

Authorized Officer

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4869-4408-9770v4/024328-0006

CONSENT
The City of Pismo Beach hereby consents to the foregoing.

CITY OF PISMO BEACH, as Lessee
By:

Administrative Services Director
ATTEST:

City Clerk
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4869-4408-9770v4/024328-0006

STATE OF CALIFORNIA )
) ss.

COUNTY OF _________________________ )

On ___________________ before me, ____________________________________, Notary Public,

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

WITNESS my hand and official seal

SIGNATURE OF NOTARY PUBLIC

Council Agenda 05-07-2024
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STATE OF CALIFORNIA )
) ss.

COUNTY OF _________________________ )

On ___________________ before me, ____________________________________, Notary Public,

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

WITNESS my hand and official seal

SIGNATURE OF NOTARY PUBLIC

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EXHIBIT A

LEGAL DESCRIPTION OF PROPERTY

ALL THAT CERTAIN REAL PROPERTY (ALONG WITH ALL IMPROVEMENTS, FIXTURES

AND FACILITIES AT ANY TIME SITUATED THEREON) SITUATED IN THE CITY OF

PISMO BEACH, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, AND ANY IMPROVEMENTS THERETO, DESCRIBED AS FOLLOWS:

THE FOLLOWING PARCELS SHALL COMPRISE THE 2024 PROJECT SITE:

PARCEL 1: APN 005-036-008

Page 44 ends

PARCEL 2: APN 005-041-013 (portion)

PARCEL 3: APN 005-041-013 (portion)

Thence, along said line of said road South 42-3/4° East, 60 feet; Thence, leaving said road and running North 47-1/4° East 210 feet; Council Agenda 05-07-2024
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Thence, North 42-3/4° West, 60 feet to the Easterly corner of said School Lot; Thence, South 47-3/4° West along the Easterly line of said School Lot, 210 feet to the POINT OF BEGINNING.

PARCEL 5: APN 005-041-002
THAT PORTION OF LOT 9 OF THE SUBDIVISIONS OF THE RANCHO EL PISMO AND SAN

MIGUELITO, IN THE CITY OF PISMO BEACH, ACCORDING TO THE MAP THEREOF FILED FOR RECORD APRIL 30, 1886 IN BOOK A AT PAGE 157 OF MAPS, DESCRIBED AS FOLLOWS:

THE FOLLOWING PARCELS SHALL COMPRISE THE CITY HALL SITE:

PARCEL 6: APN 010-073-004

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PARCEL 7: APN 010-073-002

EXCEPTING THEREFROM, the Westerly 18.53 feet.

THE FOLLOWING PARCELS SHALL COMPRISE THE RELEASE PROPERTY

PARCEL 8: APN 005-041-024 and 005-041-017

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF PISMO

BEACH, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:

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Together with:

Excepting therefrom that portion conveyed to the Pismo School District in deed recorded August 12, 1952 in Book 669, Page 459 as Document No. 10034 of Official Records.

Also Excepting therefrom that portion conveyed to Pismo Beach Post 727, American Legion in deed recorded July 22, 1954 in Book 765, Page 173 as Document No. 8600 of Official Records.

Except therefrom that portion of Lot 5 granted to the State of California by deed recorded July 30, 1963 in Book 1253, Page 100 of Official Records.

PARCEL 10: APN 005-281-024 and 005-281-025
PARCEL "A" OF PARCEL MAP NO. PBAL 87-141, IN THE CITY OF PISMO BEACH,

COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO THE MAP THEREOF RECORDED FEBRUARY 29, 1988, IN BOOK 43, PAGE 9 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDERS OF SAID COUNTY.

Council Agenda 05-07-2024
Attachment 6

11.A

Stradling Yocca Carlson & Rauth
Draft of 4/25/24

4889-0121-4130v6/024328-0006
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PRELIMINARY OFFICIAL STATEMENT, DATED ____________, 2024

NEW ISSUE—BOOK-ENTRY ONLY RATING: S&P: “___”
(See “RATING” herein)

In the opinion of Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, Bond Counsel, under existing statutes, regulations, rulings and judicial decisions, and assuming certain representations and compliance with certain covenants and requirements described in this Official Statement, interest (and original issue discount) on the Series 2024A Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals. In the further opinion of Bond Counsel, interest (and original issue discount) on the Series 2024A Bonds is exempt from State of California personal income taxes. See “TAX MATTERS” with respect to certain tax consequences relating to the Series 2024A Bonds, including with respect to the alternative minimum tax imposed on certain large corporations for tax years beginning after December 31, 2022.

$__________

PISMO BEACH PUBLIC FINANCING AGENCY
(San Luis Obispo County, California)
SERIES 2024A LEASE REVENUE BONDS
(Public Safety Facility Project)
Dated: Date of Delivery Due: December 1, as shown on inside cover The Pismo Beach Public Financing Agency (San Luis Obispo County, California) Series 2024A Lease Revenue Bonds (Public Safety Facility Project) (the “Series 2024A Bonds”) are payable from Revenues, consisting primarily of base rental payments (the “Base Rental Payments”) to be made by the City of Pismo Beach (the “City”) for the right to use certain real property and facilities thereon as described herein (the “Leased Property”) pursuant to a Lease Agreement, dated as of June 1, 2017, as supplemented and amended by the First Supplement to Lease Agreement, dated as of December 1, 2017, and by the Second Supplement to Lease Agreement, dated as of June 1, 2024 (together, the “Lease Agreement”), by and between the City, as lessee, and the Pismo Beach Public Financing Agency (the “Agency”), as lessor. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024A BONDS.” The Series 2024A Bonds are payable from the Revenues on a parity with the payments made by the City with respect to two series of lease revenue bonds previously issued by the Agency (the “Prior Bonds”) and any additional bonds issued under the Indenture (as defined below) in the future.

The Series 2024A Bonds are being issued to provide funds to (i) finance a portion of the costs of the design and construction of a public safety facility and related capital improvements to be located within the City, as described herein and (ii) pay the costs incurred in connection with the issuance of the Series 2024A Bonds. See “THE 2024 PROJECT.” The City has agreed under the Lease Agreement to make all Base Rental Payments provided for therein and has covenanted to include all such payments in its annual budgets, and to make all the necessary annual appropriations for such Base Rental Payments. The City’s obligation to make Base Rental Payments is subject to abatement during any period in which, by reason of any damage to, or destruction or condemnation of, the Leased Property, or any defects in title to the Leased Property, there is substantial interference with the City’s right to use and occupy any portion of the Leased Property. See “RISK FACTORS—Abatement.”
The Series 2024A Bonds are being issued in fully registered book-entry only form, initially registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). Interest on the Series 2024A Bonds is payable semiannually on June 1 and December 1 of each year, commencing [December 1, 2024]. Purchasers will not receive certificates representing their interest in the Series 2024A Bonds. Individual purchases of the Series 2024A Bonds may be made in principal amounts of $5,000 or integral multiples thereof. Principal of and interest and premium, if any, on the Series 2024A Bonds will be paid by Wilmington Trust, N.A., as trustee (the “Trustee”), to DTC for subsequent disbursement to DTC Participants who are obligated to remit such payments to the Beneficial Owners of the Series 2024A Bonds. See “THE SERIES 2024A BONDS—Book-Entry Only System” herein.

The Series 2024A Bonds will be issued pursuant to an Indenture, dated as of June 1, 2017, as supplemented by the First Supplement to Indenture, dated as of December 1, 2017, and the Second Supplement to Indenture, dated as of June 1, 2024 (together, the “Indenture”) each by and between the Agency and the Trustee. The Agency has not funded a debt service reserve fund for the Series 2024A Bonds.

See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024A BONDS.” The Series 2024A Bonds are subject to optional, extraordinary and mandatory sinking fund redemption prior to maturity. See “THE SERIES 2024A BONDS—Redemption.”
The Series 2024A Bonds are special obligations of the Agency, payable solely and secured by a first lien on and pledge of Revenues as provided in the Indenture. Neither the faith and credit nor the taxing power of the Agency, the City or the State of California (the “State”), or any political subdivision thereof, is pledged to the payment of the Series 2024A Bonds.

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

Preliminary, subject to change.

Council Agenda 05-07-2024
Attachment 7

11.A

4889-0121-4130v6/024328-0006
THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A SUMMARY OF THIS ISSUE. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION. CAPITALIZED BUT UNDEFINED TERMS USED ON THIS COVER HAVE THE DEFINITIONS ASCRIBED THERETO IN THIS OFFICIAL STATEMENT.

The Series 2024A Bonds will be offered when, as and if issued and received by the Underwriter, subject to the approval as to their validity by Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, Bond Counsel. Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, is also acting as Disclosure Counsel to the City. Certain legal matters will be passed upon for the City and the Agency by Richards Watson & Gershon, a Professional Corporation, as the City Attorney and Agency Counsel, and for the Underwriter by Hawkins Delafield & Wood LLP, and for the Trustee by its counsel. It is anticipated that the Series 2024A Bonds in definitive form will be available for delivery through the facilities of DTC on or about June __, 2024.

BofA Securities
Dated: ____, 2024

Council Agenda 05-07-2024
Attachment 7

11.A

4889-0121-4130v6/024328-0006
$__________

PISMO BEACH PUBLIC FINANCING AGENCY
(San Luis Obispo County, California)
SERIES 2024A LEASE REVENUE BONDS
(Public Safety Facility Project)

MATURITY SCHEDULE
BASE CUSIP†: 72433P
Maturity Date
(December 1) Principal Amount Interest Rate Yield Price CUSIP † $ %

[$_______ ____% Term Bonds due ___ 1, 20___ Yield: ____% Price: ___ CUSIP† ___] [$_______ ____% Term Bonds due ___ 1, 20___ Yield: ____% Price: ___ CUSIP† ___]

Preliminary, subject to change
† CUSIP® is a registered trademark of the American Bankers Association. CUSIP data herein are provided by CUSIP Global Services, managed by FactSet Research Systems Inc. on behalf of the American Bankers Association. CUSIP numbers have been assigned by an independent company not affiliated with the District or the Underwriter and are included solely for the convenience of the holders of the Series 2024A Bonds. None of the Agency, the City or the Underwriter or their agents or counsel assume responsibility for the accuracy of such numbers.

Council Agenda 05-07-2024
Attachment 7

11.A

4889-0121-4130v6/024328-0006
No dealer, broker, salesperson or other person has been authorized by the City or the Agency to give any information or to make any representations in connection with the offer or sale of the Series 2024A Bonds other than those contained herein and, if given or made, such other information or representations must not be relied upon as having been authorized by the City or the Agency. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Series 2024A Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale.

This Official Statement is not to be construed as a contract with the purchasers or Owners of the Series 2024A Bonds.

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

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

This Official Statement and the information contained herein are subject to completion or amendment without notice and neither delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City or the Agency or any other parties described herein since the date hereof. The Series 2024A Bonds may not be sold nor may an offer to buy be accepted prior to the time this Official Statement is delivered in final form. This Official Statement is being submitted in connection with the sale of the Series 2024A Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose, unless authorized in writing by the City. All summaries of documents and laws are made subject to the provisions thereof and do not purport to be complete statements of any or all such provisions.

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

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

THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH

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

OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS

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

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

SHOULD SPECIFICALLY CONSIDER THE VARIOUS FACTORS WHICH COULD CAUSE ACTUAL EVENTS OR

RESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED BY SUCH FORWARD-LOOKING STATEMENTS.

THE UNDERWRITER MAY OFFER AND SELL THE SERIES 2024A BONDS TO CERTAIN DEALERS

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

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

THE SERIES 2024A BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,

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

The City maintains a website. However, the information presented there is not part of this Official Statement and should not be relied upon in making an investment decision with respect to the Series 2024A Bonds.

References to web site addresses other than City’s website presented herein are for informational purposes only and may be in the form of a hyperlink solely for the reader’s convenience. Unless specified otherwise, such web sites and the information or links contained therein are not incorporated into, and are not part of, this final official statement for purposes of, and as that term is defined in, Rule 15c2-12 of the United States Securities and Exchange Commission.

Council Agenda 05-07-2024
Attachment 7

11.A

4889-0121-4130v6/024328-0006

CITY OF PISMO BEACH

COUNTY OF SAN LUIS OBISPO, CALIFORNIA

CITY COUNCIL AND

BOARD OF DIRECTORS OF THE

PISMO BEACH PUBLIC FINANCING AGENCY

Ed Waage, Mayor and Agency Chair
Mary Ann Reiss, Mayor Tempore and Agency Vice Chair
Marcia Guthrie, Council Member and Agency Director
Stacy Inman, Council Member and Agency Director
Scott Newton, Council Member and Agency Director
_____________

CITY OFFICIALS
Jorge Garcia, City Manager and Agency Executive Director Nadia Feeser, City Administrative Services Director and Agency Treasurer Benjamin A. Fine, Public Works Director/City Engineer
Eric Eldridge, Engineering Manager
Richards Watson & Gershon, a Professional Corporation, City Attorney and Agency Counsel Erica Inderlied, City Clerk and Agency Secretary
_____________

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

MUNICIPAL ADVISOR
Urban Futures, Inc.

Walnut Creek, California
_________________

TRUSTEE
Wilmington Trust, N.A.

Costa Mesa, California
_________________

Council Agenda 05-07-2024
Attachment 7

11.A

TABLE OF CONTENTS
Page
i
4889-0121-4130v6/024328-0006
INTRODUCTION ................................................................................................................................................ 1 General .............................................................................................................................................................. 1 Bondholders’ Risks ........................................................................................................................................... 3 Other Information in this Official Statement .................................................................................................... 3 THE SERIES 2024A BONDS .............................................................................................................................. 3 General .............................................................................................................................................................. 3 Registration, Transfers and Exchanges ............................................................................................................. 4 Redemption ....................................................................................................................................................... 4 Book-Entry Only System .................................................................................................................................. 6 SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024A BONDS .......................................... 7 Pledge of Revenues ........................................................................................................................................... 7 Base Rental Payments ....................................................................................................................................... 8 Additional Rental Payments ............................................................................................................................. 8 Abatement ......................................................................................................................................................... 8 Substitution or Release of Leased Property ...................................................................................................... 9 Action on Default............................................................................................................................................ 10 No Debt Service Reserve ................................................................................................................................ 11 Additional Bonds ............................................................................................................................................ 11 Insurance ......................................................................................................................................................... 13 SOURCES AND USES OF FUNDS .................................................................................................................. 14 DEBT SERVICE SCHEDULE........................................................................................................................... 15 THE 2024 PROJECT .......................................................................................................................................... 15 The 2024 Project ............................................................................................................................................. 15 Construction of the 2024 Project .................................................................................................................... 16 Plan of Finance ............................................................................................................................................... 16 THE LEASED PROPERTY ............................................................................................................................... 16 The 2024 Project Site ...................................................................................................................................... 18 THE AGENCY ................................................................................................................................................... 18 Organization and Membership ........................................................................................................................ 18 THE CITY .......................................................................................................................................................... 18 General ............................................................................................................................................................ 18 RISK FACTORS ................................................................................................................................................ 19 General Considerations – Security for the Series 2024A Bonds .................................................................... 19 Abatement ....................................................................................................................................................... 20 No Reserve Fund ............................................................................................................................................ 20 Effect of Economy on Revenues..................................................................................................................... 21 Natural Disasters and Climate Change ........................................................................................................... 21 Hazardous Substances ..................................................................................................................................... 23 Historical and Cultural Artifacts ..................................................................................................................... 24 Cybersecurity .................................................................................................................................................. 24 Other Financial Matters .................................................................................................................................. 24 Substitution and Release of Property; Additional Bonds ................................................................................ 25 Limited Recourse on Default; No Acceleration of Base Rental ..................................................................... 25 Limitations on Remedies Available; Bankruptcy ........................................................................................... 26 Possible Insufficiency of Insurance Proceeds ................................................................................................. 27 Loss of Tax Exemption ................................................................................................................................... 27 No Liability of Agency to the Owners ............................................................................................................ 27 Dependence on State for Certain Revenues .................................................................................................... 27 Council Agenda 05-07-2024
Attachment 7

11.A

ii
4889-0121-4130v6/024328-0006
CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS ............ 28 Article XIIIA of the State Constitution ........................................................................................................... 28 Legislation Implementing Article XIIIA ........................................................................................................ 29 Article XIIIB of the State Constitution ........................................................................................................... 29 Articles XIIIC and XIIID of the State Constitution ........................................................................................ 30 Proposition 62 ................................................................................................................................................. 31 Proposition 1A ................................................................................................................................................ 31 Proposition 22 ................................................................................................................................................. 32 Proposition 26 ................................................................................................................................................. 32 Possible Future Initiatives ............................................................................................................................... 32 TAX MATTERS................................................................................................................................................. 33 CERTAIN LEGAL MATTERS ......................................................................................................................... 35 ABSENCE OF LITIGATION ............................................................................................................................ 35 UNDERWRITING ............................................................................................................................................. 36 RATINGS ........................................................................................................................................................... 36 MUNICIPAL ADVISOR ................................................................................................................................... 37 CONTINUING DISCLOSURE .......................................................................................................................... 37 FINANCIAL STATEMENTS OF THE CITY ................................................................................................... 37 MISCELLANEOUS ........................................................................................................................................... 37

APPENDIX A THE CITY OF PISMO BEACH ........................................................................................ A-1 APPENDIX B SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS ........................................... B-1

APPENDIX C ANNUAL COMPREHENSIVE FINANCIAL REPORT OF THE CITY FOR THE FISCAL YEAR ENDED JUNE 30, 2023 .......................................................................... C-1 APPENDIX D PROPOSED FORM OF BOND COUNSEL OPINION .................................................... D-1 APPENDIX E FORM OF CONTINUING DISCLOSURE CERTIFICATE ............................................ E-1 APPENDIX F BOOK-ENTRY ONLY SYSTEM .....................................................................................F-1

Council Agenda 05-07-2024
Attachment 7

11.A

1 4889-0121-4130v6/024328-0006

OFFICIAL STATEMENT
$__________

PISMO BEACH PUBLIC FINANCING AGENCY
(San Luis Obispo County, California)
SERIES 2024A LEASE REVENUE BONDS
(Public Safety Facility Project)

INTRODUCTION
General
This Official Statement (which includes the cover page, inside cover page and the appendices hereto) (the “Official Statement”) provides certain information concerning the sale and delivery of $__________

aggregate principal amount of Pismo Beach Public Financing Agency (San Luis Obispo County, California) Series 2024A Lease Revenue Bonds (Public Safety Facility Project) (the “Series 2024A Bonds”).

The net proceeds of the sale of the Series 2024A Bonds will be used to (i) finance a portion of the costs of the design and construction of a public safety facility and related capital improvements to be located within the City of Pismo Beach (the “City”), as described herein, and (ii) pay the costs incurred in connection with the issuance of the Series 2024A Bonds. See “THE 2024 PROJECT” herein.

The Agency previously issued its Pismo Beach Public Financing Agency (San Luis Obispo County, California) Series 2017 Lease Revenue Bonds (Pismo Beach Municipal Pier Project) (the “Series 2017A Bonds”) and its Pismo Beach Public Financing Agency Series 2017B Lease Revenue Bonds (Federally Taxable New Clean Renewable Energy Bonds) (the “Series 2017B Bonds” and together with the Series 2017A, the “Prior Bonds”), which are currently outstanding in the aggregate principal amount of $9,725,626, pursuant to an Indenture, dated as of June 1, 2017, as supplemented by the First Supplement to Indenture, dated as of December 1, 2017 (together, the “Original Indenture”), each by and between the Agency and Wilmington Trust, N.A., as trustee (the “Trustee”). As described herein, the Series 2024A Bonds will be payable from Revenues, consisting primarily of Base Rental Payments (defined below), on a parity with the payments made by the City with respect to the Prior Bonds.

The Series 2024A Bonds will be issued pursuant to the Original Indenture, as supplemented by a Second Supplement to Indenture, dated as of June 1, 2024 (the “Second Supplement to Indenture” and, together with the Original Indenture, the “Indenture”), by and between the Agency and the Trustee. Pursuant to the Indenture, the Agency may issue additional bonds (the “Additional Bonds”) payable from the Base Rental Payments on a parity with the Prior Bonds and the Series 2024A Bonds (the Prior Bonds, the Series 2024A Bonds and any such Additional Bonds being collectively referred to herein as the “Bonds”), subject to the satisfaction of certain conditions precedent.

In connection with the issuance of the Prior Bonds, the Agency entered into a Site and Facilities Lease, dated as of June 1, 2017, as amended and supplemented by the First Supplement to Site and Facilities Lease, dated as of December 1, 2017 (together, the “Original Site Lease Agreement”), between the City, as lessor, and the Agency, as lessee, pursuant to which the City leased certain real property to the Agency. Upon the issuance of the Series 2024A Bonds, the Original Site Lease Agreement will be amended by a Second Supplement to Site and Facilities Lease, dated as of June 1, 2024 (the “Second Supplement to Site Lease” and together, with the Original Site Lease Agreement, the “Site Lease”), by and between the City, as lessor, and the Agency, as lessee. See “THE LEASED PROPERTY.”

Preliminary, subject to change

Council Agenda 05-07-2024
Attachment 7

11.A

2 4889-0121-4130v6/024328-0006
In connection with the issuance of the Prior Bonds, the Agency entered into a Lease Agreement, dated as of June 1, 2017, as amended and supplemented by the First Supplement to Lease Agreement, dated as of December 1, 2017 (together, the “Original Lease Agreement”), between the City, as lessee, and the Agency, as lessor. Upon the issuance of the Series 2024A Bonds, the Original Lease Agreement will be amended by a Second Supplement to Lease Agreement, dated as of June 1, 2024 (the “Second Supplement to Lease Agreement” and together, with the Original Lease Agreement, the “Lease Agreement”), by and between the City, as lessee, and the Agency, as lessor, to amend the amount of Base Rental Payments payable thereunder such that the amounts of the Base Rental Payments will be sufficient to pay debt service on the Prior Bonds and the Series 2024A Bonds when due. The Lease Agreement obligates the City to make Base Rental Payments to the Agency in consideration of the City’s use of the Leased Property. See “THE LEASED PROPERTY.”
In connection with the issuance of the Prior Bonds, the Trustee and the Agency executed and delivered an Assignment Agreement, dated as of June 1, 2017, as amended and supplemented by the First Supplement to Assignment Agreement, dated as of December 1, 2017 (together, the “Original Assignment Agreement”), pursuant to which the Agency assigned to the Trustee for the benefit of the Owners substantially all of the Agency’s rights, title and interest in the Site Lease and the Lease Agreement, including the assignment its rights to receive the Base Rental Payments due under the Lease Agreement. Upon the issuance of the Series 2024A Bonds, the Original Assignment Agreement will be amended by a Second Supplement to Assignment Agreement, dated as of June 1, 2024 (the “Second Supplement to Assignment Agreement” and together, with the Original Assignment Agreement, the “Assignment Agreement”), by and between the Agency and the Trustee.

The City has covenanted under the Lease Agreement to take such action as may be necessary to include all Base Rental Payments due under the Lease Agreement in its annual budget and to make the necessary annual appropriations for all such Base Rental Payments, subject to abatement as described herein.

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

The Series 2024A Bonds are special obligations of the Agency, payable solely and secured by a first lien on and pledge of Revenues as provided in the Indenture. Neither the faith and credit nor the taxing power of the Agency, the City or the State of California (the “State”), or any political subdivision thereof, is pledged to the payment of the Series 2024A Bonds.

The Agency is not funding a debt service reserve fund for the Series 2024A Bonds.

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

These covenants have been made in order to assist the Underwriter in complying with the Rule. See “CONTINUING DISCLOSURE” herein for a description of the specific nature of the annual report and Council Agenda 05-07-2024
Attachment 7

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notices of listed events and a summary description of the terms of the disclosure agreement pursuant to which such reports are to be made.

Wilmington Trust, N.A., Costa Mesa, California, will act as Trustee with respect to the Series 2024A Bonds. The Series 2024A Bonds will be issued subject to the approval as to their legality by Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, Bond Counsel. Certain legal matters will be passed upon for the City and the Agency by Richards Watson & Gershon, a Professional Corporation, as City Attorney and Counsel to the Agency and by Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, as Disclosure Counsel to the City. Certain legal matters will be passed upon for the Underwriter by Hawkins Delafield & Wood LLP. The City’s financial statements for the fiscal year ended June 30, 2023 included as Appendix C hereto have been audited by Badawi & Associates, CPAs, Berkeley, California (the “Auditor”).

See APPENDIX C—“ANNUAL COMPREHENSIVE FINANCIAL REPORT OF THE CITY FOR THE FISCAL YEAR ENDED JUNE 30, 2023” herein. The Auditor has not undertaken to update the audited financial statements of the City or its report or to take any action intended or likely to elicit information concerning the accuracy, completeness or fairness of the statements made in this Official Statement.

Bondholders’ Risks
Certain events could affect the ability of the City to make the Base Rental Payments when due. See “RISK FACTORS” for a discussion of certain factors that should be considered, in addition to other matters set forth herein, in evaluating an investment in the Series 2024A Bonds.

The presentation of information, including tables of receipt of revenues, is intended to show recent historical information and, except for a budget discussion for Fiscal Years 2023-25, is not intended to indicate future or continuing trends in the financial position or other affairs of the City. No representation is made that past experience, as it might be shown by such financial and other information, will necessarily continue or be repeated in the future. See APPENDIX A for financial and operating information related to the City.

Other Information in this Official Statement
The summaries or references to the Indenture, the Lease Agreement, the Site Lease and other documents, agreements and statutes referred to herein, and the description of the Series 2024A Bonds included in this Official Statement, do not purport to be comprehensive or definitive, and such summaries, references and descriptions are qualified in their entireties by reference to each such document or statute. All capitalized terms used in this Official Statement (unless otherwise defined herein) which are defined in the Indenture or the Lease Agreement shall have the meanings set forth therein, some of which are summarized in APPENDIX B—“SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS.”
THE SERIES 2024A BONDS
General
The Series 2024A Bonds will be issued as fully registered bonds in denominations of $5,000 or any integral multiple thereof and will be dated the date of delivery. The Series 2024A Bonds will mature in the amounts and on the dates, and bear interest at the rates per annum, set forth on the inside cover of this Official Statement.

Interest on the Series 2024A Bonds will be payable semiannually on June 1 and December 1 of each year (each, an “Interest Payment Date”), commencing on [December 1, 2024], by the Trustee on each Interest Payment Date to the person whose name appears in the registration books kept by the Trustee as the registered owner thereof as of the close of business on the fifteenth calendar day of the month immediately preceding an Interest Payment Date (a “Record Date”); provided, however, that payment of interest may be by wire transfer in immediately available funds to an account in the United States of America to any Owner of Series 2024A Council Agenda 05-07-2024
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Bonds in the aggregate principal amount of $1,000,000 or more. Interest on the Series 2024A Bonds shall be calculated based on a 360-day year consisting of twelve 30 days months.

Each Series 2024A Bond will bear interest from the Interest Payment Date next preceding the date of registration, unless (a) it is authenticated after 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) it is authenticated on or before [November 15, 2024], in which event it shall bear interest from the date of delivery; provided, however, that if, as of the date of authentication of any Series 2024A Bond, interest thereon is in default, such Series 2024A Bonds shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon.

Principal of and premium, if any, on the Series 2024A Bonds are payable upon presentation and surrender of the Series 2024A Bonds at the principal office of the Trustee.

Registration, Transfers and Exchanges
The Series 2024A Bonds will be issued as fully registered bonds, registered in the name of Cede & Co. as nominee of The Depository Trust Company (“DTC”), New York, New York, and will be available to actual purchasers of the Series 2024A Bonds (the “Beneficial Owners”) in the denominations set forth above, under the book-entry system maintained by DTC, only through brokers and dealers who are or act through DTC Participants (as defined in Appendix F) as described herein. Beneficial Owners will not be entitled to receive physical delivery of the Series 2024A Bonds. See “THE SERIES 2024A BONDS—Book-Entry Only System.”
Redemption*
Optional Redemption. The Series 2024A Bonds maturing on or after December 1, 20__, are subject to redemption prior to their stated maturities, on any Business Day, on or after December 1, 20__, as a whole or in part by such maturities as may be designated by the Agency to the Trustee, and by lot within any one maturity, from prepayments of Base Rental Payments made at the option of the City pursuant to the Lease Agreement, at a redemption price equal to the principal amount of the Series 2024A Bonds to be redeemed, without premium, plus accrued but unpaid interest to the redemption date.

Mandatory Sinking Account Redemption. The Series 2024A Bonds maturing on December 1, 20__ (the “20__ Term Bonds”) are subject to mandatory redemption, in part by lot, from sinking account payments in each year as set forth in the following schedule, commencing December 1, 20__, and on December 1 in each year thereafter to and including December 1, 20__, at a redemption price equal to the principal amount of the 20__ Term Bonds to be redeemed, plus accrued but unpaid interest thereon to the date fixed for redemption, without premium:

Redemption Date
(December 1)
Principal
Amount
$

* Final Maturity.

The Series 2024A Bonds maturing on December 1, 20__ (the “20__ Term Bonds”) are subject to mandatory redemption, in part by lot, from sinking account payments in each year as set forth in the following schedule, commencing December 1, 20__, and on December 1 in each year thereafter to and including

* Preliminary; subject to change.

Council Agenda 05-07-2024
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December 1, 20__, at a redemption price equal to the principal amount of the 20__ Term Bonds to be redeemed, plus accrued but unpaid interest thereon to the date fixed for redemption, without premium:

Redemption Date
(December 1)
Principal
Amount
$

* Final Maturity.

If some but not all of the Term Bonds have been redeemed pursuant to optional redemptions, the total amount of sinking account payments to be made subsequent to such redemption shall be reduced in an amount equal to the principal amount of the Term Bonds so redeemed by reducing each such future sinking account payment as shall be designated by the Agency pursuant to written notice filed by Agency with the Trustee, or in the absence of such direction, on a pro rata basis (as nearly as practicable) in denominations of $5,000, as shall be designated pursuant to written notice filed by Agency with the Trustee.

Extraordinary Redemption. The Series 2024A Bonds are subject to redemption prior to their respective maturity dates, as a whole, or in part on a pro rata basis, on any date from prepayments of Base Rental Payments made by the City pursuant to the Lease Agreement from funds received by the City due to a taking of the Leased Property or any portion thereof under the power of eminent domain or from insurance proceeds received by the City due to damage to or destruction of Leased Property or any portion thereof which are not applied to repair, rebuild or replace the Leased Property as provided in the Lease Agreement and the Indenture, at a redemption price equal to the sum of the principal of the Series 2024A Bonds to be redeemed plus interest accrued thereon to the date fixed for redemption, without premium.

Selection of Bonds for Redemption. If less than all of the Series 2024A Bonds are to be redeemed at any one time, the Trustee shall select the Series 2024A Bonds to be redeemed from all Series 2024A Bonds not previously called for redemption, by such maturities as the Agency shall designate (and by lot within any maturity). For purposes of any selection, the Series 2024A Bonds shall be deemed to be composed of $5,000 multiples of principal and any such multiple may be separately redeemed.

Notice of Redemption. The Trustee on behalf and at the expense of the Agency shall mail (by first class mail) notice of any redemption to the respective Owners of any Series 2024A Bonds designated for redemption to their respective addresses appearing on the Registration Books, to the Securities Depositories and to one or more Information Services, at least 30 but not more than 60 days prior to the date fixed for redemption; provided, however, that neither the failure to receive any such notice so mailed nor any defect therein shall affect the validity of the proceedings for the redemption of such Series 2024A Bonds or the cessation of the accrual of interest thereon.

With respect to any notice of optional redemption of the Series 2024A Bonds, such notice will state the date of the notice, the redemption date and the redemption price and shall designate the CUSIP numbers, the bond numbers and the maturity or maturities (except in the event of redemption of all of the Series 2024A Bonds of such maturity or maturities in whole) of the Series 2024A Bonds to be redeemed, and shall require that such Series 2024A Bonds be then surrendered at the principal corporate trust office of the Trustee for redemption at the redemption price, giving notice also that further interest on such Series 2024A Bonds will not accrue from and after the date fixed for redemption. Such notice shall further state, if so determined by the Agency, that such notice may be rescinded at any time prior to the redemption date.

Neither the Agency nor the Trustee shall have any responsibility for any defect in the CUSIP number that appears on any Series 2024A Bond or in any redemption notice with respect thereto, and any such Council Agenda 05-07-2024
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redemption notice may contain a statement to the effect that CUSIP numbers have been assigned by an independent service for convenience of reference and that, neither the Agency nor the Trustee shall be liable for any inaccuracy in such numbers.

Any notice of optional redemption of the Series 2024A Bonds may be conditional and/or rescinded by written notice given to the Trustee by the Agency and the Trustee shall provide notice of such recission as soon thereafter as practicable in the same manner, and to the same recipients, as notice of such redemption was given pursuant to the terms of the Indenture.

Partial Redemption of Bonds. Upon surrender of any Series 2024A Bonds redeemed in part only, the Agency shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Agency, a new Series 2024A Bond or Bonds of the same maturity date, of authorized denominations in the aggregate principal amount equal to the unredeemed portion of the Series 2024A Bond being redeemed.

Purchase in Lieu of Redemption. At any time prior to the selection of Series 2024A Bonds for redemption, the Trustee may, upon the written direction of the City, apply amounts held for redemption of the Series 2024A Bonds to the purchase of the Series 2024A Bonds at public or private sale, as and when and at such prices (including brokerage and other charges, but excluding accrued interest payable from the Interest Account) as the City may direct the Trustee, except that the purchase price (exclusive of accrued interest) may not exceed the redemption price of the Series 2024A Bonds; and provided further that in the case of optional redemption, in lieu of redemption at such next succeeding date of redemption, or in combination therewith, amounts for redemption may be used for payment of such Series 2024A Bonds to be redeemed in order of their due date as set forth in a request of the City.

Effect of Redemption. From and after the date fixed for redemption, if funds available for the payment of the principal of and interest (and premium, if any) on the Series 2024A Bonds so called for redemption shall have been duly provided, such Series 2024A Bonds so called shall cease to be entitled to any benefit under the Indenture other than the right to receive the payment of the redemption price, and no interest shall accrue thereon from and after the redemption date. All Series 2024A Bonds redeemed shall be canceled by the Trustee. All moneys held by or on behalf of the Trustee for the payment of principal and interest or premium on the Series 2024A Bonds whether at redemption or maturity, shall be held in trust for the account of the Owners thereof and the Trustee shall not be required to pay Owners any interest on, or be liable to Owners for any interest earned on, moneys so held.

Book-Entry Only System
General. DTC will act as securities depository for the Series 2024A Bonds. The Series 2024A Bonds will be issued as fully-registered bonds registered in the name of Cede & Co. (DTC’s partnership nominee).

One fully-registered Series 2024A Bond will be issued for each maturity of the Series 2024A Bonds, each in the initial aggregate principal amount of such maturity, and will be deposited with DTC. See APPENDIX F— “BOOK-ENTRY ONLY SYSTEM.”
Transfer and Exchange of Bonds. The following provisions regarding the exchange and transfer of the Series 2024A Bonds apply only during any period in which the Series 2024A Bonds are not subject to DTC’s book- entry system. While the Series 2024A Bonds are subject to DTC’s book-entry system, their exchange and transfer will be effected through DTC and the Participants and will be subject to the procedures, rules and requirements established by DTC.

Any Series 2024A Bond may, in accordance with its terms, be transferred upon the Registration Books required to be kept by the Trustee pursuant to the provisions of the Indenture by the person in whose name it is registered, in person or by his or her duly authorized attorney, upon presentation and surrender of such Series 2024A Bond for cancellation, accompanied by delivery of a written instrument of transfer in a form acceptable to the Trustee, duly executed. Whenever any Series 2024A Bond shall be surrendered for Council Agenda 05-07-2024
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transfer, the Agency shall execute and the Trustee shall thereupon authenticate and deliver to the transferee a new Series 2024A Bond or Bonds of like tenor, maturity and aggregate principal amount. The Trustee shall require the payment by the Owner requesting such transfer of any tax or other governmental charge required to be paid with respect to such transfer. The Trustee shall not be required to transfer (a) any Series 2024A Bond during the period established by the Trustee for the selection of Series 2024A Bonds for redemption or (b) any Series 2024A Bonds selected for redemption.

The Series 2024A Bonds may be exchanged at the Trust Office of the Trustee for the same aggregate principal amount of Series 2024A Bonds of the same tenor, interest rate, series designation and maturity and of authorized denominations. The Trustee shall require the payment by the Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. The Trustee shall not be required to exchange (a) any Series 2024A Bond during the period established by the Trustee for the selection of Series 2024A Bonds for redemption or (b) any Series 2024A Bonds selected for redemption.

SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024A BONDS Pledge of Revenues
The Series 2024A Bonds are solely payable from and secured by a first lien and pledge of the Revenues and a pledge of all of the moneys in the Interest Account and Principal Account, including all amounts derived from the investment of such moneys, on parity with the outstanding Prior Bonds. Under the Indenture, “Revenues” means (a) all Base Rental Payments payable by the City pursuant to the Lease Agreement (including prepayments), (b) any proceeds of Bonds originally deposited with the Trustee and all moneys and accounts established under the Indenture, (c) investment income with respect to any moneys held by the Trustee, and (d) any insurance proceeds or condemnation awards received by or payable to the Trustee relating to the Base Rental Payments, including rental interruption insurance. Base Rental Payments will be payable by the City from any and all legally available funds, however, the City expects that its General Fund will be the primary source of funds to make Base Rental Payments. See “RISK FACTORS” and APPENDIX A— “THE CITY OF PISMO BEACH” for a description of such available funds and the potential risks associated with the availability of such funds to make Base Rental Payments. The City covenants in the Lease Agreement to take such action as may be necessary to include all Base Rental Payments due under the Lease Agreement in its annual budgets and to make the necessary annual appropriations therefor.

The Agency, pursuant to the Assignment Agreement, has assigned to the Trustee for the benefit of the Owners all of the Agency’s right, title and interest in and to (but none of its obligations) the Lease Agreement and the Site Lease, including, without limitation, its right to receive Base Rental Payments to be paid by the City under and pursuant to the Lease Agreement; provided that, the Agency will retain the rights to indemnification, to give approvals and consents under the Lease Agreement, the Agency’s rights to the payment of Additional Rental Payments and the right to receive lease payments other than the Base Rental Payments. The City will pay Base Rental Payments directly to the Trustee, as assignee of the Agency. See “—Base Rental Payments” below. Pursuant to the Indenture, the Agency may issue Additional Bonds payable from the Base Rental Payments on a parity with the Prior Bonds and the Series 2024A Bonds. See APPENDIX B—“SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS—THE INDENTURE— ISSUANCE OF BONDS; APPLICATION OF PROCEEDS—Conditions for the Issuance of Additional Bonds” and “—Procedure for the Issuance of Additional Bonds.” The Series 2024A Bonds are special obligations of the Agency, payable solely and secured by a first lien on and pledge of Revenues as provided in the Indenture. Neither the faith and credit nor the taxing power of the Agency, the City or the State, or any political subdivision thereof, is pledged to the payment of the Series 2024A Bonds.

Council Agenda 05-07-2024
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Base Rental Payments
The Base Rental Payments and the Additional Rental Payments (as described below) will be paid by the City to the Agency for and in consideration of the right of the use and possession of, and the continued quiet use and enjoyment of, the Leased Property during each such period for which such rental is to be paid.

Each Base Rental Payment will be deposited with the Trustee no later than the 15th calendar day of the month next preceding each Interest Payment Date (the “Lease Payment Date”) on which such Base Rental Payment is due. All Base Rental Payments will be paid directly by the City to the Trustee. All Base Rental Payments received by the Trustee will be deposited by the Trustee in the Lease Revenue Fund.

Pursuant to the Indenture, on or before each Interest Payment Date, the Trustee will transfer amounts in the Lease Revenue Fund as are necessary to the Interest Account and the Principal Account to provide for the payment of the interest on and principal of the Prior Bonds and the Series 2024A Bonds.

The Base Rental Payments due under the Lease Agreement is calculated to be sufficient to pay the principal of and interest on the Prior Bonds and the Series 2024A Bonds. The debt service schedules for the Prior Bonds and the Series 2024A Bonds are set forth below under the heading “DEBT SERVICE SCHEDULE.”
The obligation of the City to make the Base Rental Payments does not constitute a debt of the City or the State or of any political subdivision thereof within the meaning of any constitutional or statutory debt limit or restriction, and does not constitute an obligation for which the City or the State is obligated to levy or pledge any form of taxation or for which the City or the State has levied or pledged any form of taxation. The Agency has no power to tax.

Additional Rental Payments
Under the Lease Agreement, the City is required to pay, as “Additional Rental Payments,” in addition to the Base Rental Payments, to the Trustee, as assignee of the Agency, such amounts in each year as shall be required for the payment of all costs and expenses (not otherwise paid for or provided for out of proceeds of the sale of any Bonds) incurred by the Agency or the Trustee in connection with the execution, performance or enforcement of the Lease Agreement or the assignment of the Lease Agreement, the Indenture or the Agency’s or the Trustee’s respective interests in the Leased Property, including, but not limited to, all fees, costs and expenses, all administrative costs of the Agency relating to the Leased Property (including, without limiting the generality of the foregoing, salaries and wages of employees, overhead, insurance premiums, taxes and assessments (if any), expenses, compensation and indemnification of the Trustee payable by the Agency under the Indenture), fees of auditors, accountants, attorneys or engineers, and all other reasonable and necessary administrative costs of the Agency or charges required to be paid by it to comply with the terms of the Bonds or of the Indenture.

Abatement
The Lease Agreement provides that the obligation of the City to pay Base Rental Payments and Additional Rental Payments shall be abated during any period in which by reason of any damage, destruction or condemnation there is substantial interference with the use and occupancy of the Leased Property or any portion thereof by the City. Such abatement will continue for the period commencing with the date of interference resulting from such damage, distribution, condemnation or title defect, and, with respect to damage to or destruction of the Leased Property, and ending with the substantial completion of the work of repair or replacement of the Leased Property, or the portion thereof so damaged or destroyed. In the event of abatement, the term of the Lease Agreement will be extended for a period of ten (10) years, if, on the final maturity date of the Bonds, the Bonds have not been fully discharged and such term shall terminate on the date when the Bonds have been fully discharged.

Council Agenda 05-07-2024
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To the extent that moneys are available for the payment of the Base Rental Payments in any of the funds and accounts established under the Indenture, such Base Rental Payments shall not be abated but shall be payable by the City as a special obligation payable solely from such funds and accounts.

Substitution or Release of Leased Property
General. Under the Lease, the City has the option, at any time and from time to time, to substitute other real property (the “Substitute Property”) for any portion of the Leased Property (the “Former Property”) or release any identifiable real property and/or improvements currently constituting the Leased Property (in such case, Substitute Property shall mean the Former Property less any released portion) upon satisfaction of all of the requirements set forth in the Lease Agreement, which include the following requirements:
a) No Event of Default under the Lease Agreement has occurred and is continuing; b) The City must file with the Agency and the Trustee, and cause to be recorded in the office of the San Luis Obispo County Recorder, sufficient memorialization of amendments to the Lease Agreement and the Site Lease which replaces each respective Exhibit A with a description of such Substitute Property which deletes therefrom the description of the Former Property; c) The City has obtained a California Land Title Association (“CLTA”) or American Land Title Association (“ALTA”) policy of title insurance insuring the City’s fee or leasehold estate under the Lease Agreement in the Substitute Property, and the Agency’s leasehold estate under the Site Lease in such Substitute Leased Property subject only to Permitted Encumbrances (as defined in the Lease Agreement), in an amount at least equal to the aggregate principal amount of the Outstanding Bonds provided, however, that this requirement shall not apply to Substitute Property that consists only of Former Property less any released portion; d) The City shall certify in writing to the Agency and to the Trustee that such Substitute Property serves an essential governmental function of the City, and constitutes property which the City is permitted to lease under the laws of the State of California; e) The substitution of the Substitute Property will not cause the City to violate any of its covenants, representations and warranties made under the Lease Agreement; f) The City has certified in writing to the Agency and the Trustee that the annual fair rental value of the Substitute Property after substitution or release will be at least equal to 100% of the maximum amount of the Base Rental Payments becoming due in the then current fiscal year or in any subsequent fiscal year, and that the useful economic life of the Substitute Property shall be at least equal to the maximum remaining term of the Lease Agreement; and g) The City shall furnish to the Trustee an opinion of Bond Counsel addressed to the Trustee, the City and the Agency to the effect that the substitution or release is permitted under the Lease Agreement and will not in and of itself (i) impair the validity and enforceability of the Lease Agreement or (ii) impair the exclusion of interest on the Bonds, and, if applicable, any Additional Bonds, from the gross income of the owners thereof for federal income tax purposes.

Upon the satisfaction of all conditions precedent to substitution set forth in the Lease Agreement, the Term of the Lease Agreement will thereupon end as to the Former Property and commence as to the Substitute Property, and all references to the Former Property will apply with full force and effect to the Substitute Property. The City will not be entitled to any reduction, diminution, extension or other modification of the Base Rental Payments whatsoever as a result of such substitution or release. The City and the Agency will execute, deliver and cause to be recorded all documents required to properly discharge the Lease Agreement Council Agenda 05-07-2024
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lien of record against the Former Property. See APPENDIX B—“SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS” herein.

Release of Release Property After Completion of 2024 Project. Without regard to the requirements of the Lease Agreement described above under the caption “—General,” the City may provide for release and deletion of the Release Property (as defined under the caption THE LEASED PROPERTY—The Leased Property”) from the Leased Property such that the 2024 Project Site and the City Hall constitute the entire Leased Property, provided that the City satisfies conditions (i) through (iii) described below:
(i) The City files with the Agency and the Trustee a copy of a lease supplement which deletes the Release Property from the Lease Agreement (and, at the election of the City, from the Site Lease); (ii) The City shall have delivered a Written Certificate of the City stating that the 2024 Project has been completed to the Trustee; and
(iii) no event of default has occurred and is continuing under the Lease Agreement.

Upon the satisfaction of all such conditions under the Lease Agreement, the Lease Agreement will end as to the Release Property and continue as to the 2024 Project Site and the City Hall, and the Release Property will be released from the Lease Agreement and no longer form part of the Leased Property thereunder without further act or deed of the City, the Agency, or the Trustee, provided the Agency and the Trustee execute any such instruments evidencing such release as may be reasonably requested by the City from time to time. The City will not be entitled to any reduction, diminution, extension or other modification of the Base Rental Payments whatsoever as a result of such deletion.

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

In the event of a default under the Lease Agreement there is no right under any circumstances to accelerate the Base Rental Payments or otherwise declare any Base Rental Payments not then in default to be immediately due and payable. There is no right under the Indenture to accelerate debt service payments on the Bonds in the event of a default under the Indenture or the Lease Agreement.

For a description of the events of default and permitted remedies of the Trustee (as assignee of the Agency) contained in the Lease Agreement and the Indenture, see APPENDIX B—“SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS—THE LEASE AGREEMENT—DEFAULTS AND REMEDIES” and “—THE INDENTURE—DEFAULT AND LIMITATIONS OF LIABILITY.”
Council Agenda 05-07-2024
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No Debt Service Reserve
Neither the City nor the Agency have undertaken to fund any debt service reserve to secure the payment of debt service on the Series 2024A Bonds.

Additional Bonds
The Agency has agreed pursuant to the Indenture that no additional bonds, notes or indebtedness shall be issued or incurred that are payable out of the Revenues in whole or in part, other than Additional Bonds as provided in the Indenture. However, the City may issue or incur other obligations payable from the City’s General Fund. See “BOND OWNERS’ RISKS — Additional Obligations of the City” herein.

The Agency and the Trustee may by execution of a Supplemental Indenture, without the consent of the Owners, provide for the issuance and delivery of Additional Bonds in one or more series. The Trustee may authenticate and deliver to or upon the Request of the Agency, such Additional Bonds, in an aggregate principal amount authorized by such Supplemental Indenture. The proceeds of such Additional Bonds may be used for any purpose, including for the purpose of refunding Outstanding Bonds. Such Additional Bonds may only be issued upon compliance by the Agency with the provisions of the Indenture, and subject to the following specific conditions, which are made conditions precedent to the issuance of any such Additional Bonds:
(a) Conditions for the Issuance of Additional Bonds. The Agency may at any time issue one or more Series of Additional Bonds payable from Revenues as provided in the Indenture on a parity with all other Bonds issued under the Indenture, but only subject to the following conditions, which are a condition precedent to the issuance of such Additional Bonds:
(1) neither the Agency nor the City shall be in default under the Indenture, the Lease Agreement or the Site Lease;
(2) the issuance of such Additional Bonds shall have been authorized under and pursuant to the Act and under and pursuant to the Indenture and shall have been provided for by a Supplemental Indenture which shall specify the following:
(i) the purposes for which such Additional Bonds are to be issued; provided, that the proceeds of the sale of such Additional Bonds shall be applied only for one or more of the following purposes: (A) providing funds to pay costs of City facilities (including capitalized interest), (B) providing funds to refund any Bonds issued under the Indenture or other obligations of the City, (C) providing funds to pay Costs of Issuance incurred in connection with the issuance of such Additional Bonds, and (D) providing funds to make any deposit to a reserve fund or account for such Additional Bonds; (ii) the principal amount and designation of such Series of Additional Bonds and the denomination or denominations of the Additional Bonds, which shall be Authorized Denominations;
(iii) that such Additional Bonds shall be payable as to interest on the Interest Payment Dates, except that the first installment of interest may be payable on either June 1 or December 1;
(iv) the date, the maturity date or dates and the dates on which mandatory sinking fund redemptions, if any, are to be made for such Additional Bonds; provided, that (A) the serial Bonds of such Series of Additional Bonds shall be payable as to principal annually on December 1 of each year in which principal falls due, and the term Bonds of such Council Agenda 05-07-2024
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Series of Additional Bonds shall have annual mandatory sinking fund redemptions on December 1, (B) all Additional Bonds of a Series of like maturity shall be identical in all respects, except as to number or denomination, and (C) serial maturities of serial Bonds or mandatory sinking fund redemptions for term Bonds, or any combination thereof, shall be established to provide for the redemption or payment of such Additional Bonds on or before their respective maturity dates;
(v) the redemption premiums and terms, if any, for such Additional Bonds; (vi) the form of such Additional Bonds; and
(vii) such other provisions that are appropriate or necessary and are not inconsistent with the provisions hereof; and
(3) upon the issuance of such Additional Bonds, the sum of Base Rental Payments, including any increase in the Base Rental Payments as a result of the issuance of such Additional Bonds, plus Additional Rental Payments, in any Rental Period shall not be in excess of the annual fair rental value of the Leased Property after taking into account the use of the proceeds of such Additional Bonds (evidence of the satisfaction of such condition shall be made by a Written Certificate of the City).
(b) Procedure for the Issuance of Additional Bonds. Whenever the Agency and the City shall determine to authorize the issuance of any Additional Bonds, the Agency, the City and the Trustee shall enter into a Supplemental Indenture satisfying the applicable conditions of the Indenture. Before such Additional Bonds shall be issued, the Agency and the City shall file or cause to be filed with the Trustee the following:
(1) an Opinion of Counsel setting forth (i) that counsel rendering such opinion has examined the Supplemental Indenture, the amendment to the Lease, if any, and the amendment to the Site Lease, if any, (ii) that the issuance of the Additional Bonds has been duly authorized by the Agency, (iii) that the execution and delivery of the Supplemental Indenture and, if any, the amendments to the Lease Agreement and the Site Lease have been duly authorized, executed and delivered by the Agency and the City, (iv) that upon execution and delivery of such Supplemental Indenture and any such amendments to the Lease Agreement and the Site Lease, the Indenture, as amended and supplemented by such Supplemental Indenture, and, if so amended, the Lease Agreement and the Site Lease, as amended by such amendments, will be valid and binding obligations of the Agency and the City, and (v) that the execution and delivery of the Supplemental Indenture and, if any, the amendments to the Lease Agreement and the Site Lease, in and of themselves, do not adversely affect the exclusion from gross income for federal income tax purposes of interest on Tax- Exempt Bonds;
(2) a Written Certificate of the Agency that the requirements of the applicable conditions of the Indenture have been met;
(3) a Written Certificate of the City that the requirements of the applicable conditions of the Indenture have been met, which shall include a certification as to the fair rental value of the Leased Property, after giving effect to any amendments to the Lease Agreement and the Site Lease entered into in connection with the issuance of the Additional Bonds and taking into account the use of proceeds of such Additional Bonds;
(4) certified copies of the resolutions of the Agency Board and the City Council of the City authorizing the execution and delivery of the Supplemental Indenture and, if any, the amendments to the Lease Agreement and the Site Lease;
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(5) executed counterparts or duly authenticated copies of the Supplemental Indenture and, if any, the amendments to the Lease Agreement and the Site Lease, with satisfactory evidence that any such amendments to the Lease Agreement and the Site Lease have been duly recorded in the appropriate records of the county in which the Leased Property is located; (6) certified copies of the policies of insurance required by the Lease Agreement or certificates thereof, which shall evidence that the amounts of the insurance required under the applicable provisions of the Lease Agreement have been increased, if applicable, to cover the amount of such Additional Bonds; and
(7) a CLTA or ALTA title insurance policy or other appropriate form of policy in the amount of the Additional Bonds of the type and with the endorsements described in the Lease Agreement.

Upon the delivery to the Trustee of the foregoing instruments and upon the Trustee’s being satisfied from an examination of said instruments that all of the documents required by the applicable provisions of the Indenture have been delivered, the Trustee shall authenticate such Additional Bonds, and shall deliver such Additional Bonds to, or upon the request of, the Agency. See “APPENDIX B—“SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS.” — THE INDENTURE — Additional Bonds” herein.

Insurance
General. The Lease Agreement requires the City to maintain insurance coverage on the Leased Property, so long as the Lease Agreement is outstanding, consisting of the types of insurance identified below.

Under the Lease Agreement, the City may self-insure for the coverages required under the captions “Fire and Extended Coverage Insurance,” “Workers’ Compensation,” and “Liability Insurance” below; provided that any such self-insurance method or plan of protection shall afford reasonable protection to the Agency and the Trustee, in light of all circumstances, giving consideration to cost, availability and similar plans or methods of protection adopted by cities in the State other than the City. The City is not required to maintain or cause to be maintained more insurance than is specifically required under the Lease Agreement, including earthquake and flood coverage for the Leased Property.

Fire and Extended Coverage Insurance. The City is to maintain insurance against loss or damage to any part of the Leased Property against all perils included within the classification of fire, lightning and all other risks covered by an extended coverage endorsement (which includes coverage for explosion, windstorm, riot, aircraft, vehicle damage, smoke, sprinkler damage, boiler explosion and such other hazards as are normally covered by such insurance, but such coverage need not include earthquake) to the full insurable value of the Leased Property, subject to a $100,000 loss deductible. Such insurance shall be in an amount equal to 100% of the replacement cost of the improvements on the Leased Property.

Rental Interruption or Use and Occupancy Insurance. The City must maintain rental interruption insurance to cover loss, total or partial, of the use of any part of the Leased Property, as a result of the hazards covered by the fire and extended coverage insurance described under “— Fire and Extended Coverage Insurance,” and the resulting loss of rental income to the Trustee, as assignee of the Agency, in an amount sufficient to pay the maximum remaining principal and interest portions of Base Rental Payments due under the Lease Agreement during a period equal to the greater of (i) two times Maximum Annual Debt Service, and (ii) the period certified by the City to be reasonably required to rebuild or reconstruct the Leased Property in the event of damage or destruction to the Leased Property.

Workers’ Compensation. The City is required to maintain workers’ compensation insurance in compliance with laws of the State to the extent applicable to the City.

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Liability Insurance. The City is required to maintain or cause to be maintained reasonable and customary general liability insurance, insuring against all direct or contingent liability for damages to bodily injury, death or property damage occasioned by reason of the use or operation of the Leased Property.

Title Insurance. The City is to obtain one or more CLTA or ALTA title insurance policies for the Leased Property, in an aggregate amount of not less than the aggregate principal amount of the Bonds. Said policy or policies shall insure (a) the fee interest of the City in the Leased Property, (b) the Agency’s ground leasehold estate in the Leased Property under the Site Lease and (c) the City’s leasehold estate under the Lease Agreement in the Leased Property, subject only to Permitted Encumbrances. All net proceeds received under said policy or policies shall be deposited with the Trustee and applied as provided in the Indenture. So long as any Bonds remain Outstanding, each policy of title insurance obtained pursuant to the Lease Agreement or required by the Lease Agreement shall provide that all proceeds under such policy or policies be payable to the Trustee for the benefit of the Owners.

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

SOURCES AND USES OF FUNDS
The sources and uses of funds with respect to the Series 2024A Bonds are shown below.

Sources
Principal Amount of Series 2024A Bonds $
Plus Original Issue Premium
Total Sources $

Uses
2024 Project Fund $
Underwriter’s Discount
Costs of Issuance(1)
Total Uses $

(1) Includes legal, municipal advisory, rating agency, printing fees and other miscellaneous costs of issuance.

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DEBT SERVICE SCHEDULE
Following is the annual schedule of debt service due with respect to the outstanding Prior Bonds and the Series 2024A Bonds:

Bond Year
(December 1)
Debt Service on
Outstanding
Prior Bonds
Series 2024A Bonds Aggregate Debt
Service
Principal Interest
Total Debt
Service
2024 $ 714,090.24 $ $ $
2025 715,590.23
2026 716,590.24
2027 713,990.23
2028 716,190.25
2029 712,990.24
2030 714,590.25
2031 715,790.25
2032 716,590.25
2033 716,990.24
2034 714,490.25
2035 711,840.25
2036 713,715.24
2037 714,940.25
2038 406,362.50
2039 406,575.00
2040 406,450.00
2041 405,987.50
2042 405,187.50
2043 404,050.00
2044 407,150.00
2045 404,725.00
2046 406,950.00
2047 403,650.00
2048
2049
2050
2051
2052
2053
2054
$ 14,065,475.91 $ $ $

THE 2024 PROJECT
The 2024 Project
The net proceeds of the sale of the Series 2024A Bonds will be used to (i) finance a portion of the costs of the design and construction of the 2024 Project (as hereinafter defined) and (ii) pay the costs incurred in connection with the issuance of the Series 2024A Bonds.

The 2024 Project consists of the design and construction of a public safety facility (the “PSF”) to be located on City-owned property located at 1000 Bello Street in the City. The PSF will consist of a new 19,027 Council Agenda 05-07-2024
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square foot police station and a new 13,898 square foot fire station, as well as a 1,534 square foot police detached vehicle storage building and related capital improvements (collectively the “2024 Project”).

The new PSF will replace the existing police station and a fire station (Station 64) located on the project site. The design of the PSF honors the site’s history by incorporating into the new design the façade of the City’s original elementary school, which is located on the current project site. The new PSF is expected to reduce fire response time by more than one minute, and will modernize the police station to meet the current and future needs of the City and its public safety professionals.

Construction of the 2024 Project
The City has entered into a Design-Build Contract, dated July 18, 2023 (the “Design-Build Contract”), with F&H Construction and LDA Architects for the design and construction of the 2024 Project. The Design- Build Contract has a guaranteed maximum price (“GMP”) of $42,366,450, inclusive of complete planning, design and engineering services, management services, complete permitted plan sets, construction services, project completion and building and system commission services, and turnover of a complete functional and legal operable project. Construction of the 2024 Project is expected to begin June 2024 and completion of construction is scheduled to occur in December 2025. The City expects the Design-Build Contract to reduce the amount of change orders due to architectural incongruities and to reduce the City’s risk exposure to potentially costly change orders by establishing a GMP.

In addition to the Design-Build Contract, the City hired Vanir Construction Management, Inc. to serve as the City’s Owner Representative and to provide construction management services with respect to the 2024 Project. Vanir Construction Management, Inc. has over 60 years of experience in the construction management industry.

A variety of factors outside the control of the City could cause completion of the 2024 Project to be delayed beyond December 2025. Until the 2024 Project is completed, the City will not be permitted to release the Release Property under the summary process described under the caption “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024A BONDS—Substitution or Release of the Property—Release of Release Property After Completion of 2024 Project” (although the City will be entitled to release or substitute the Leased Property at any time, subject to the conditions described under the caption “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024A BONDS—Substitution or Release of the Leased Property—General”). The City cannot provide any assurance other than as described above that the 2024 Project will be completed on time and within budget.

Plan of Finance
The City expects the total cost of the 2024 Project to be approximately $52,372,567, which includes resource migration costs (temporary movement of staff, equipment and facilities during construction) and pre- construction costs totaling $10,006,117, including a $3.0 million contingency, and design-build construction costs of $42,366,450. The City expects to finance approximately $41.1 million of such costs with proceeds of the Series 2024A Bonds and to pay approximately $11.3
million on a pay-as-you-go basis from a combination
of amounts from the City’s General Fund, General Fund Reserve and Parking Enterprise Fund.

THE LEASED PROPERTY
General. On the date of delivery of the Series 2024A Bonds, the Leased Property subject to the Lease Agreement and Site Lease will consist of the properties listed in the table below. The City has the right to substitute or release all or a portion of the Leased Property subject to certain conditions precedent. See

Preliminary, subject to change
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“SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024A BONDS—Substitution or Release of the Leased Property—General.” Furthermore, the City expects to release the Release Property (as described below) from the Site Lease and the Lease Agreement promptly upon completion of the 2024 Project. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024A BONDS—Substitution or Release of the Property—Release of Release Property After Completion of 2024 Project.” Leased Property. The Leased Property consists of the properties listed in the following table and described in more detail below. The properties listed under the subheading under “Release Property” in the following table shall constitute the “Release Property.” Property Description Location
Estimated
Value
2024 Project Site 1000 Bello St. $ 7,044,149(1)
City Hall 760 Mattie Rd. 12,805,867(2)
Release Property
Veterans Hall- Bello St. 780 Bello St. 8,065,500(3)
Fire Station 63 2555 Shell Beach Road 3,855,225(3)

Chumash Park 156 Ventana Drive 21,980,045(4)
Total $ 53,750,787

(1) Estimated value of 2024 Project Site reflects the land value. Estimated value of land determined by the City based on the purchase price of comparable properties.
(2) Estimated value includes land value. Estimated value of the structures determined by the City based on the insured value of the listed component of the Leased Property. Estimated value of the land determined by the City based on the purchase price of comparable properties.
(3) Estimated value includes land value. Estimated value determined by the City the based on a broker price opinion for the listed component of the Leased Property obtained by the City.

(4) Estimated value determined by the City based on the cost per acre of property located adjacent to the listed component of the Leased Property.

Source: The City.

The City’s City Hall (“City Hall”) is located at 760 Mattie Road and is comprised of a two story, 15,747-square foot building that was constructed in 1990, and a single story 4,718-square foot building that was constructed in 1990, both of which are built upon on land owned by the City. The City Hall buildings are made of concrete mat foundation, wood load bearing and shear walls, truss floor and roof systems. The building contains a sprinkler system. The site is fully landscaped and includes parking and lighting. The City Hall buildings and adjacent parking lot are located on an approximately sixty-six thousand square feet site.

City Hall houses the City Council Chambers and members’ offices, the offices of the City Manager, Administrative Services, Community Development, the Public Works Engineering Division, Tourism and Events, as well as other administration offices of the City. During the construction of the PSF, Police administration and dispatching services are temporarily located at City Hall.

The City’s Veterans Hall-Bello Street is located at 780 Bello Street in the City. Veterans Hall-Bello Street was built in 1951 and is comprised of a one-story story, 9,773-square foot building, which was built upon on land owned by the City. The Veterans Hall-Bello Street building is made of concrete mat and slab foundation, wood load bearing and shear walls, wood purlins roof frame type. The site is fully landscaped and includes parking. The Veterans Hall-Bello Street and adjacent parking are located on an approximate 2.5686 acreage site. The Veterans Hall-Bello Street is used for City special events, community events, and City government meetings and other purposes.

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The City’s Fire Station 63 is located at 2555 Shell Beach Road in the City. Fire Station 63 was built in 1965 and has a concrete mat and slab foundation and a sprinkler system. The building is used as the City’s second fire station and includes apparatus bays, balcony, call center, kitchen, fire personnel living quarters, and a standby generator. Fire Station 63 is located on an approximate 0.14 acreage site.

Chumash Park is a City-owned park of approximately 41.15 acres located on Ventana Drive off of James Way in the southern part of the City east of highway 101. This natural park includes wetlands, willows, oaks. The park also has two play areas, picnic tables, a basketball court and restrooms.

The 2024 Project Site
The 2024 Project Site consists of approximately 2.021 acres and is the current location of the Police Department, one of the City’s fire stations and a former elementary school structure. The 2024 Project Site is the future location of the 2024 Project, consisting of the PSF and related capital facilities. For more information regarding the 2024 Project Site and the 2024 Project, see the caption “THE 2024 PROJECT.” Prior to completion of the 2024 Project, the Base Rental Payments due under the Lease Agreement are sufficient to pay principal and interest on the Prior Bonds and the Series 2024A Bonds as the same becomes due and payable. Upon completion of the 2024 Project, the City is permitted by the Lease Agreement to delete and release the Release Property from the Lease Agreement; at that time, the 2024 Project Site, including the PSF and other capital improvements funded with proceeds of the Series 2024A Bonds, and City Hall will constitute the entire Leased Property under the Lease Agreement. The real properties and facilities constituting the Leased Property subsequent to release of the Release Property is sufficient to support payments of Base Rental Payments on the Prior Bonds and the Series 2024A Bonds as the same becomes due and payable.

THE AGENCY
Organization and Membership
The Pismo Beach Public Financing Agency is a joint exercise of powers authority duly organized and existing under and pursuant to that certain Joint Exercise of Powers Agreement, dated as of May 2, 2017, by and between the City and the Industrial Development Authority of the City of Pismo Beach, and under the provisions of Articles 1 through 4 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the California Government Code.

The Agency was formed for the purpose, among others, of assisting the City in the acquisition, construction and financing of public improvements that are of public benefit to the City. Under the provisions of the Marks-Roos Local Bond Pooling Act of 1985, the Agency has the power to purchase bonds issued by any local agency at public or negotiated sale and may sell such bonds to public or private purchasers at public or negotiated sale.

The Agency is governed by a five-member Board of Directors (the “Board”), which consists of the members of the City Council of the City. The Mayor and the Mayor Pro Tempore of the City serve as the Chair and Vice-Chair, respectively, the City Manager serves as the Executive Director, the City Clerk serves as the Secretary, and the City’s Administrative Services Director serves as the Treasurer of the Agency.

THE CITY
General
Location & Area Description. The City of Pismo Beach is located on the Central Coast of California along the ocean in San Luis Obispo County. The City is bordered by the Pacific Ocean, Arroyo Grande, Council Agenda 05-07-2024
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Grover Beach, Avila Beach, and County rural land. The City sits astride Highway 101 approximately eight miles south of the City of San Luis Obispo and about 200 miles north of Los Angeles. The City is a popular resort community, visited annually by a substantial number of tourists seeking to enjoy the area’s moderate climate, ocean views and sunsets, fine restaurants, and the relaxing atmosphere unique to coastal communities.

The City’s downtown core area and hotel areas are anchored by the City-owned Pier extending into the Pacific Ocean. As of January 1, 2023, the City had an estimated population of 7,865. For financial and demographic information regarding the City see APPENDIX A“THE CITY OF PISMO BEACH.” A copy of the financial statements of the City for the fiscal year ended June 30, 2023 is attached hereto as Appendix C which should be read in its entirety. See APPENDIX C—“ANNUAL COMPREHENSIVE FINANCIAL REPORT OF THE CITY FOR THE FISCAL YEAR ENDED JUNE 30, 2023.”
City Services. The City provides a full range of municipal services including fire and police protection, construction and maintenance of City streets, storm drains, bridges, and similar infrastructure type assets; park maintenance; community recreation activities and public facilities. In terms of business-type activities, the City provides water, wastewater, parking and pier services through the operation of its enterprises.

City Government. The City was incorporated in 1946, and is operated under a Council-City Manager structure of government. Policy making and legislative authority are vested in the City Council, which is responsible, among other matters, for passing resolutions and ordinances, adopting the City budget, appointing committees, and hiring the City Manager. The City Council is comprised of five members elected by the voters citywide, serving in staggered 4-year terms. The Mayor is elected to two year terms, and the Council is elected to four year staggered terms, with two members elected every two years. The City Council hires a City Manager to run the City’s day-to-day operations.

RISK FACTORS
The following factors, along with the other information in this Official Statement, should be considered by potential investors in evaluating the purchase of the Series 2024A Bonds. However, they do not purport to be an exhaustive listing of risks and other considerations which may be relevant to an investment in the Series 2024A Bonds. In addition, the order in which the following factors are presented is not intended to reflect the relative importance of any such risks.

General Considerations – Security for the Series 2024A Bonds The Series 2024A Bonds are special obligations of the Agency, payable solely from Revenues (consisting primarily of Base Rental Payments) and the other assets pledged under the Indenture. Neither the faith and credit nor the taxing power of the Agency, the City or the State, or any political subdivision thereof, is pledged to the payment of the Series 2024A Bonds. The Agency has no taxing power.

Although the Lease Agreement does not create a pledge, lien or encumbrance upon the funds of the City, the City is obligated under the Lease Agreement to pay the Base Rental Payments and Additional Rental Payments from any source of legally available funds and the City has covenanted in the Lease Agreement that it will take such action as may be necessary to include all Base Rental Payments due under the Lease Agreement in its annual budgets and to make necessary annual appropriations for all such Rental Payments, Council Agenda 05-07-2024
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subject to abatement. The City is currently liable and may become liable on other obligations payable from general revenues. See “CITY FINANCIAL INFORMATION—Indebtedness” in APPENDIX A hereto.

The City has the capacity to enter into other obligations which may constitute additional charges against its revenues. To the extent that additional obligations are incurred by the City, the funds available to make Base Rental Payments may be decreased. In the event the City’s revenue sources are less than its total obligations, the City could choose to fund other activities before making Base Rental Payments and other payments due under the Lease Agreement. The same result could occur if, because of California Constitutional limits on expenditures, the City is not permitted to appropriate and spend all of its available revenues. However, the City’s appropriations have never exceeded the limitation on appropriations under Article XIIIB of the State Constitution. See “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS—Article XIIIB of the State Constitution.” Abatement
In the event of substantial interference with the City’s right to use and occupy any portion of the Leased Property by reason of damage to, or destruction or condemnation of the Leased Property, or any defects in title to the Leased Property, Base Rental Payments will be subject to abatement. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024A BONDS—Abatement.” In the event that all or a portion of the Leased Property, if damaged or destroyed by an insured casualty, could not be replaced during the period of time in which proceeds of the City’s rental interruption insurance will be available in lieu of Base Rental Payments, plus the period for which funds are available from the funds and accounts established under the Indenture, or in the event that casualty insurance proceeds are insufficient to provide for complete repair or replacement of such portion of the Leased Property or redemption of the Series 2024A Bonds, there could be insufficient funds to make payments to Owners in full. The Agency has not funded a debt service reserve fund for the Series 2024A Bonds.

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

For example, it is not clear whether fair rental value is established as of commencement of the lease or at the time of the abatement. If the latter, it may be that the value of the Leased Property is substantially higher or lower than its value at the time of issuance of the Series 2024A Bonds. Abatement, therefore, could have an uncertain and material adverse effect on the security for and payment of the Series 2024A Bonds.

If damage, destruction, title defect or eminent domain proceedings with respect to the Leased Property results in abatement of the Base Rental Payments related to such Leased Property and if such abated Base Rental Payments, if any, together with moneys from rental interruption or use and occupancy insurance (in the event of any insured loss due to damage or destruction), and eminent domain proceeds, if any, are insufficient to make all payments of principal and interest with respect to the Series 2024A Bonds during the period that the Leased Property is being replaced, repaired or reconstructed, then all or a portion of such payments of principal and interest may not be made. Under the Lease Agreement and the Indenture, no remedy is available to the Series 2024A Bond Owners for nonpayment under such circumstances.

Any such abatement will continue for the period commencing with the date of interference resulting from such damage, destruction, condemnation or title defect and, with respect to damage to or destruction of the Leased Property, ending with the substantial completion of the work of repair or replacement of the Leased Property, or the portion thereof so damaged or destroyed; and the term of the Lease Agreement will be extended as provided in the Lease Agreement, up to a maximum of ten years beyond the stated termination date of the Lease Agreement.

No Reserve Fund
The Agency has not funded a debt service reserve fund for the Series 2024A Bonds.

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Effect of Economy on Revenues
The City relies heavily on transient occupancy (hotel) tax revenues, property tax and sales tax. These revenues can be negatively affected by economic downturns in various ways. Property taxes are directly linked to the assessed value of property in the City and an economic recession affecting real estate markets can cause a significant decline in the City’s property tax revenues. Similarly, a recession could cause a reduction in consumer spending and travel, which would have a material adverse impact on the City’s sales tax and transient occupancy tax revenues. The City can provide no assurance that economic factors affecting the City, the State, or the nation will not cause a reduction in the City’s General Fund tax revenues and a material adverse effect on the City’s ability to pay Base Rental Payments.

Natural Disasters and Climate Change
The occurrence of any natural disaster in the City, including, without limitation, fire, windstorm, drought, earthquake, landslide, mudslide, flood or a rise in sea levels as result of climate change, could have an adverse material impact on the economy within the City, its General Fund and the revenues available for the payment of Base Rental Payments.

Earthquakes. While there are no Alquist-Priolo Earthquake Zones within City limits, the City is exposed to seismic hazards from movement along regional faults. Alquist-Priolo earthquake fault zones are regulatory zones surrounding the surface traces of active faults in California. The Wilmar Avenue Fault is the only fault within City limits, and it terminates on the south end of the City. The Wilmer Fault is exposed in the sea cliff near the City and is considered potentially active but poses a moderate risk of fault rupture hazard to the Cities of Grover Beach and Arroyo Grande. An earthquake along a fault in the vicinity, either known or unknown, could cause a number of casualties and extensive property damage, including to the Leased Property. The effects of such an earthquake could be aggravated by aftershocks and secondary effects such as fires, landslides, liquefaction and other threats to public health, safety and welfare. The potential direct and indirect consequences of a major earthquake could exceed the resources of the City and could require a high level of self-help, coordination and cooperation. The City maintains earthquake coverage through its Property Insurance Program up to $200,000,000 per occurrence and in the annual aggregate for all covered locations, which includes the Leased Property.

Wildfires. The State is periodically subject to wildfires. When wildfires scorch land, they destroy all vegetation on mountains and hillsides. As a result, when heavy rain falls in the winter, there is nothing to stop the rain from penetrating directly into the soil. In addition, waxy compounds in plants and soil that are released during fires create a natural barrier in the soil that prevents rainwater from seeping deep into the ground. The result is erosion, mudslides, and excess water running off the hillsides often causing flash flooding. According to the Safety Element of the City’s General Plan, the City, like the greater County of San Luis Obispo area, is at risk of suffering substantial damage from fire events. Wildfires are most likely to start outside the City limits in open spaces. The City is bordered to the north and west with open space. Infrequent burns occur naturally in these open spaces, and significant wildfire events are a common occurrence in the Los Padres National Forest, approximately 20 miles east of the City limits. CAL FIRE has created data mapping “High Fire Hazard Severity Zones,” which outline areas with higher likelihood of exposure to fire, based on factors such as the nature of vegetation in the area. CAL FIRE designated the City as being at increased risk from wildfires and a priority community to work with to prepare and mitigate potential fire risk. The areas of greatest risk of fire hazards in the City are the northern portion of the City reaching into the foothills, northeast near Price Canyon and northwest toward Avila Beach. According to the CAL FIRE data mapping, approximately 26% of the City is in a Very High Fire Hazard Severity Zone. City limits east of U.S. Highway 101 and El Portal, the Heights and Price House Area are in the Very High Fire Hazard Severity Zone. The City has a Weed Abatement Program and a Hazard Reduction Program that helps to mitigate the risk of wildfire every year. The City participates in the California Joint Powers Insurance Authority all-risk program, which includes property insurance coverage for fire, including fire at the Leased Property. City Hall, which is a component of the Leased Property, is located in a Very High Fire Hazard Severity Zone.

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Flood Risk. The City is susceptible to various types of flood hazards, including riverine or fluvial flooding, coastal storm flooding, and flooding caused by dam failure. Coastal floods come from large waves in the Pacific Ocean and can be affected by storm surge. Coastal floods can be very dangerous when high waters combine with the destructive forces of waves. In low-lying coastal areas, storm surge and flooding can reach many miles from the shoreline, flowing up rivers and across flat land. Sea level rise is expected to increase the frequency and intensity of coastal flood hazards.

The City has two areas that are vulnerable to potential fluvial flood hazards: the Pismo Creek/Price Canyon and Meadow Creek/Pismo Marsh drainage ways. Much of the development along Pismo Creek, south of U.S. Highway 101, falls within a Federal Emergency Management Agency (“FEMA”) designated 100-year floodplain. With the aid of the U.S. Army Corps of Engineers, the City has made some alterations to the Pismo Creek channel to reduce flood hazard. Even with the alterations to the Pismo Creek channel, the City has identified the area of the City most prone to coastal flooding and fluvial flooding as being the area between the southern side of the downtown area and the southern boundary of the City, including the banks of Pismo Creek, Pismo Lake and the visitor facilities, mobile home communities and attractions between U.S. Highway 101 and the coastline. The majority of the Meadow Creek floodplain is within the City limits and is contained within the California Department of Fish and Wildlife Pismo Creek Ecological Preserve.

The City, along with the neighboring cities of Grover Beach and Arroyo Grande, is among the communities in the County at risk of a dam failure incident. The Lopez Dam, a high hazard earthen dam located upstream from the City, poses a great risk to the City if an incident was to occur. According to the County’s 2019 Multi-Jurisdictional Hazard Mitigation Plan, failure of the Lopez Dam would inundate areas within the southern portion of the City limits.

The City’s Safety Element of the General Plan identifies coastal storms, which include tidal flooding, storm surge and wave action, as an environmental risk to the City. The area near downtown and the pier is currently exposed to coastal erosion, wave run-up and flooding during extreme weather events. The City has requested FEMA disaster recovery funds for coastal storm damage for at least three storms since 1970. Like many coastal California cities, the City experienced heavy damages during the 1982-83 El Nino season. The 1982-83 El Nino season caused approximately $5.5 million in damages to the City, including collapsing the last 400 feet of the pier, significant bluff failures and structural losses along the downtown waterfront.

Concrete seawalls have lined areas near the pier since the 1970s and continue to be used today, in addition to steel sheet pile seawalls. Along the downtown area of the City, the sandy beach area that includes Pismo State Beach is also susceptible to erosion. This potentially impacts beach recreation and coastal access opportunities for many visitors of the City and Pismo State Beach.

Increased coastal flooding with sea level rise will affect development in the southeast portion of the City’s downtown area, with development first exposed to flooding during large storms and then eventually exposed to tidal flooding with greater amounts of sea level rise. Multiple pump and lift stations in the downtown area are already exposed to flooding hazards during extreme fluvial storm events. Tidal flooding is not expected to reach these pump stations until sea level rise exceeds 6.6 feet.

The City maintains flood coverage through its Property Insurance Program up to $200,000,000 in the annual aggregate for all covered locations, including the Leased Property.

Climate Change. Climate change caused by human activities may have adverse effects on the City.

Climate change can also result in more variable weather patterns throughout the State, which can lead to longer and more severe droughts as well as increased risk of flooding and a rise in sea levels. The City considers the potential effects of climate change in its planning.

Projections of the impacts of global climate change on the City are complex and depend on many factors that are outside the City’s control. The various scientific studies that forecast the amount and timing of adverse impacts of climate change are based on assumptions contained in such studies, but actual events may Council Agenda 05-07-2024
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vary materially. Also, the scientific understanding of climate change and its effects continues to evolve.

Accordingly, the City is unable to forecast with certainty when adverse impacts of climate change will occur or the extent of such impacts.

To better understand the future hazards and risks associated with sea level rise resulting from climate change, the City prepared a Sea Level Rise Vulnerability Assessment (City of Pismo Beach 2019) (the “Vulnerability Assessment”), consistent the California Coastal Commission’s adopted Sea Level Rise Policy Guidance. The Vulnerability Assessment used a range of sea level rise projections, based on multiple greenhouse gas emissions scenarios. The Vulnerability Assessment determined the upper bound of the likely range of the magnitude of sea level rise over the near-term (near-term refers to vulnerabilities projected over the next 30 years) to be 1.6 feet (the Vulnerability Assessment determined that there is a less than a 2% probability that sea level rise will exceed 1.6 feet by 2050). The impact on the City in the bluff would be a coastal squeeze, which would impact beaches, intertidal and subtidal habitats, and reduce the opportunity for access and recreation along pocket beaches. The impact on the downtown area is projected to be partial loss of sandy beach width. The impact on low-lying areas is projected to consist of coastal storms that result in the flooding of the RV resort and berm closure at the creek mouth that could increase the risk of fluvial hazards.

As part of its planning measures for the near term, the City identifies sea level rise hazard zones, updates its General Plan and Local Coastal Program Update to apply consistent planning and development policies throughout the City and incorporates sea level rise probability and coastal hazards into existing budgeting and planning processes. Under the long-term horizon (over 30 years), the Vulnerability Assessment identified an upper bound of the likely range of sea level rise to be a rise in the magnitude of 3.3 feet. At this magnitude of sea level rise, the projected impacts would be the loss of pocket beaches and associated resources in the bluffs and increased wave attacks along the toe of bluffs that could threaten development and infrastructure. The impact on downtown could be a loss of roughly half of Pismo State Beach and the pier being exposed to wave impacts during extreme weather events. In low-lying areas, beach profile migration could impact dunes and the Pismo Creek estuary, and there could be an increased risk of flooding of the RV resort and campground during extreme coastal events.

Specific measures undertaken by the City related to hazard risks and sea level rise resiliency include policies identified in the Safety Element (Policy S-1.2, Policy S-1.3, and Policy S-1.4), which would require coordination with stakeholder agencies, design of critical facilities to operate under hazardous conditions, including with climate change, and developing a better understanding of sea level rise and participate in coordination and collaboration to increase resiliency.

The occurrence of natural disasters in the City could result in substantial damage to the City and the Leased Property which, in turn, could substantially reduce General Fund revenues and affect the ability of the City to make Base Rental Payments or cause an abatement in Base Rental Payments. Reduced ability to pay Base Rental Payments could affect the payment of the principal of and interest on the Series 2024A Bonds.

The City maintains liability insurance and property casualty insurance for the Leased Property. See the caption APPENDIX A - “THE CITY OF PISMO BEACH—Risk Management.” However, there can be no assurance that specific losses will be covered by insurance or, if covered, that claims will be paid in full by the applicable insurers.

Hazardous Substances
The City knows of no existing hazardous substances which require remedial action on or near the Leased Property. However, it is possible such substances do currently or potentially exist and that the City is not aware of them.

Owners and operators of real property may be required by law to remedy conditions of the property relating to releases or threatened releases of hazardous substances. The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, sometimes referred to as “CERCLA” or the “Superfund Act,” is the most well-known and widely applicable of these laws, but California laws with regard to hazardous Council Agenda 05-07-2024
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substances are also stringent and similar. Under many of these laws, the owner (or operator) is obligated to remedy a hazardous substance whether or not the owner (or operator) has anything to do with creating or handling the hazardous substance. Further, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling it. All of these possibilities could significantly and adversely affect the operations and finances of the City, may result in the reduction in the assessed value of property, and therefor property tax revenue.

Historical and Cultural Artifacts
Protection of cultural resources is established in California Environmental Quality Act, the California Public Resources Code, and the California Health and Safety Code. The Central Coast area, including Pismo Beach, was the home of the Chumash people at the time of early explorations and settlements by Europeans.

Evidence of the culture and occupations by the Chumash may be found at numerous sites in the vicinity of the City. The City maintains an updated classified record of cultural resources used in the processing of development proposals. This includes identification of and protection of historical and cultural artifacts with relocation as applicable.

As part of the construction of the PSF building, an archaeological monitor will be on site during all ground disturbing activities. The cultural resources contract for monitoring services is coordinated by the City’s Public Works Department and the monitors will be present during the preconstruction meeting. In the event that historical or cultural artifacts are discovered on the 2024 Project Site during construction, the City plans to relocate such artifacts. The City does not believe that the discovery of such artifacts will have an impact on the current design of the 2024 Project, including the PSF; however, the discovery of historical or cultural artifacts on the 2024 Project Site could result in a delay in the completion of construction of the 2024 Project if the relocation of such artifacts impacts the current project schedule.

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 multiple cyber threats including, but not limited to, hacking, viruses, malware and other attacks on computer and other sensitive digital networks and systems. Entities or individuals may attempt to gain unauthorized access to the City’s digital systems for the purposes of misappropriating assets or information or causing operational disruption and damage. To date, the City has not experienced an attack on its computer operating systems which resulted in the theft of data, disruption of City services, or exposure of sensitive data or systems. Currently the City utilizes multi-layered cybersecurity defenses, annual cybersecurity training for all staff, multi-factor authentication for all users with administrative permissions, and multiple independent backup systems. The City is committed to investing in cybersecurity and it is one of the focuses of the City’s five-year Information Technology Master Plan. Over the next year as part of the plan, the City will be improving its cybersecurity defenses by requiring multi-factor authentication for all users, contracting with a virtual Security Operations Center vendor, and moving towards a zero-trust network design. However, no assurances can be given that the City’s efforts to manage cyber threats and attacks will be successful or that any such attack will not materially impact the operations or finances of the City. Additionally, the City carries cybersecurity insurance as part of its General Liability insurance cyber liability program.

Other Financial Matters
Due to weakness in the economy of the State and the United States, it is possible that the general revenues of the City will decline. Such financial matters may have a detrimental impact on the City’s General Fund, and, accordingly, may reduce the City’s ability to make Base Rental Payments. See “INFORMATION REGARDING THE CITY OF PISMO BEACH” in Appendix A.

Council Agenda 05-07-2024
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Substitution and Release of Property; Additional Bonds
The Agency and the City may amend the Lease Agreement to substitute alternate real property for any portion of or add additional real property to the Leased Property or to release a portion of the Leased Property from the Lease Agreement, upon compliance with all of the conditions set forth in the Lease Agreement. After a substitution or release, the portion of the Leased Property for which the substitution or release has been effected will be released from the leasehold encumbrance of the Lease Agreement. See “SECURITY AND 6285&(6 2) 3$<0(17 )25 7+( 6(5,(6 $ %21'6ʊ6XEVWLWXWLRQ $GGLWLRQ DQG 5HPRYDO RI Leased Property.” Moreover, the Agency may issue Additional Bonds secured by Base Rental Payments which are increased from current levels.

Although the Lease Agreement requires, among other things, that the Leased Property, as constituted after such substitution or release, have an annual fair rental value at least equal to the maximum Base Rental Payments payable by the City in any rental period, it does not require that such Leased Property have an annual fair rental value equal to the annual fair rental value of the Leased Property at the time of substitution or release. Thus, a portion of the Leased Property could be replaced with less valuable real property, or could be released altogether. Such a replacement or release could have an adverse impact on the security for the Series 2024A Bonds, particularly if an event requiring abatement of Base Rental Payments were to occur subsequent to such substitution or release. See APPENDIX B—“SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS—THE LEASE AGREEMENT—NO CONSEQUENTIAL DAMAGES; USE OF THE LEASED PROPERTY; SUBSTITUTION OR RELEASE—Substitution or Release of, or Addition to, the Leased Property.”
The Indenture requires, among other things, that upon the issuance of Additional Bonds, the Lease Agreement will be amended, to the extent necessary, so as to increase the Base Rental Payments payable by the City thereunder by an aggregate amount equal to the principal of and interest on such Additional Bonds; provided, however, that no such amendment will be made such that the sum of Base Rental Payments, including any increase in the Base Rental Payments as a result of such amendment, plus Additional Rental Payments, is in excess of the annual fair rental value of the Leased Property after taking into account the use of the proceeds of any Additional Bonds issued in connection therewith.

Limited Recourse on Default; No Acceleration of Base Rental Failure by the City to make Base Rental Payments or other payments required to be made under the Lease Agreement, or failure to observe and perform any other terms, covenants or conditions contained in the Lease Agreement or in the Indenture for a period of 30 days or such additional time as is reasonable required to correct any such default after notice by the Agency to the City, constitute events of default under the Lease Agreement and permit the Trustee or the Agency to pursue any and all remedies available. In the event of a default, notwithstanding anything in the Lease Agreement or in the Indenture to the contrary, there is no right under any circumstances to accelerate the Base Rental Payments or otherwise declare any Base Rental Payments not then in default to be immediately due and payable, nor do the Agency or the Trustee have any right to re-enter or re-let the Leased Property except as described in the Lease Agreement.

The enforcement of any remedies provided in the Lease Agreement and the Indenture could prove both expensive and time consuming. If the City defaults on its obligation to make Base Rental Payments with respect to the Leased Property, the Trustee, as assignee of the Agency, may retain the Lease Agreement and hold the City liable for all Base Rental Payments thereunder on an annual basis and enforce any other terms or provisions of the Lease Agreement to be kept or performed by the City.

Alternatively, the Agency or the Trustee may terminate the Lease Agreement, retake possession of the Leased Property and proceed against the City to recover damages pursuant to the Lease Agreement. Due to the specialized nature of the Leased Property or any property substituted therefor pursuant to the Lease Agreement and the restrictions on its use, no assurance can be given that the Trustee will be able to re-let the Leased Council Agenda 05-07-2024
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Property so as to provide rental income sufficient to make all payments of principal of, interest and premium, if any, on the Series 2024A Bonds when due, and the Trustee is not empowered to sell the Leased Property for the benefit of the Owners of the Series 2024A Bonds. Any suit for money damages would be subject to limitations on legal remedies against cities in California, including a limitation on enforcement of judgments against funds needed to serve the public welfare and interest. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024A BONDS” and APPENDIX B—“SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS—THE LEASE AGREEMENT—DEFAULTS AND REMEDIES.” Limitations on Remedies Available; Bankruptcy
The enforceability of the rights and remedies of the Owners and the obligations of the City 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 bodies in the interest of servicing a significant and legitimate public purpose.

Under Chapter 9 of the United States Bankruptcy Code (Title 11, United States Code) (the “Bankruptcy Code”), which governs bankruptcy proceedings of public entities such as the City, no involuntary bankruptcy petition may be filed against a public entity. However, upon satisfaction of certain prerequisite conditions, a voluntary bankruptcy petition may be filed by the City. The filing of a bankruptcy petition results in a stay against enforcement of remedies under agreements to which the bankrupt entity is a party. A bankruptcy filing by the City could thus limit remedies under the Lease Agreement. A bankruptcy debtor may choose to assume or reject executory contracts and leases, such as the Lease Agreement. In the event of rejection of a lease by debtor lessee, the leased property is returned to the lessor and the lessor has a claim for a limited amount of the resulting damages.

Under the Indenture, the Trustee holds a security interest in the Base Rental Payments for the benefit of the Owners of the Bonds, but such security interest arises only when the Base Rental Payments are actually received by the Trustee following payment by the City. The Leased Property is not subject to a security interest, mortgage or any other lien in favor of the Trustee for the benefit of Owners. In the event of a bankruptcy filed by the City and the subsequent rejection of the Lease Agreement by the City, the Agency would recover possession of the Leased Property and the Trustee, as assignee of the Agency, would have a claim for damages against the City. The Trustee’s claim would constitute a secured claim only to the extent of Revenues in the possession of the Trustee; the balance of such claim would be unsecured.

Bankruptcy proceedings would subject the Owners of the Series 2024A Bonds to judicial discretion and interpretation of their rights in bankruptcy or otherwise, and consequently entail risks of delay, limitation, or modification of their rights with respect to the Series 2024A Bonds. In a bankruptcy case, the amount recovered by Owners of the Series 2024A Bonds could be affected by whether the Lease Agreement is determined to be a “true lease” or a loan or other financing arrangement (a “financing lease”), and the Owners’ recovery could be reduced in either case. If the Lease Agreement is determined by the bankruptcy court to constitute a “true lease” (rather than a financing lease), the City could choose not to perform under the Lease Agreement by rejecting it and the claim of the Owners could be substantially limited pursuant to Section 365 of the Bankruptcy Code to a fraction of the scheduled amount of Base Rental Payments, and that reduced claim amount could be impaired as an unsecured claim under a plan of adjustment. If a bankruptcy court were to treat the Lease Agreement as a financing lease then, under a plan of adjustment, the priority, payment terms, collateral, payment dates, payment sources, covenants and other terms or provisions of the Lease Agreement and the Series 2024A Bonds may be altered. Such a plan could be confirmed even over the objections of the Trustee and the Owners, and without their consent. For example, the amount of the Base Rental Payments from the City might be substantially reduced because of the power of the bankruptcy court under the Council Agenda 05-07-2024
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Bankruptcy Code to adjust secured claims to the value of their collateral, which, as described above, could be limited to the Base Rental Payments held by the Trustee. In addition, there can be a substantial disparity in treatment based on the nature of the Leased Property. Whether the Lease Agreement is characterized by the bankruptcy court as a true lease or a financing lease, either scenario could result in the Owners not receiving the full amount of the principal and interest due on the Series 2024A Bonds.

The opinions of counsel, including Bond Counsel, delivered in connection with the issuance of the Series 2024A Bonds will be so qualified. Bankruptcy proceedings, or the exercising of powers by the federal or state government, if initiated, could subject the Owners 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.

Possible Insufficiency of Insurance Proceeds
The Lease Agreement obligates the City to keep in force various forms of insurance, subject to deductibles, for repair or replacement of the Leased Property in the event of damage, destruction or title defects, subject to certain exceptions. The Agency and the City make no representation as to the ability of any insurer to fulfill its obligations under any insurance policy obtained pursuant to the Lease Agreement, and no assurance can be given as to the adequacy of any such insurance to fund necessary repair or replacement or to pay principal of and interest on the Series 2024A Bonds when due. In addition, certain risks, such as earthquakes and floods, are not required to be insured under the Lease Agreement. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024A BONDS—Insurance.” The City currently carries earthquake and flood coverage on the Leased Property; however, there can be no assurance that the City will maintain such coverages in the future.

Loss of Tax Exemption
As discussed under the heading “TAX MATTERS,” the interest on the Series 2024A Bonds could become includable in gross income for purposes of federal income taxation retroactive to the date of delivery of the Series 2024A Bonds, as a result of acts or omissions of the Agency or the City in violation of their covenants in the Indenture and the Lease Agreement. Should such an event of taxability occur, the Series 2024A Bonds would not be subject to a special redemption and would remain Outstanding until maturity or until redeemed under the redemption provisions contained in the Indenture.

No Liability of Agency to the Owners
Except as expressly provided in the Indenture, the Agency will not have any obligation or liability to the Owners of the Series 2024A Bonds with respect to the payment when due of the Base Rental Payments by the City, or with respect to the performance by the City of other agreements and covenants required to be performed by it contained in the Lease Agreement or the Indenture, or with respect to the performance by the Trustee of any right or obligation required to be performed by it contained in the Indenture.

Dependence on State for Certain Revenues
On January 10, 2024, the Governor released his proposed State budget for fiscal year 2024-25 (the “Proposed 2024-25 State Budget”). The following is drawn from the Department of Finance (“DOF”) and Legislative Analyst’s Office (“LAO”) summaries of the Proposed 2024-25 State Budget. The Proposed 2024- 25 State Budget reports that the State is facing a budgetary shortfall in 2024 of approximately $37.9 billion.

The shortfall is rooted in two separate but related developments that have occurred over the past two fiscal years—a substantial decline in the stock market that drove down revenues and an unprecedented delay in critical income tax collections. The Proposed 2024-25 State Budget indicates that, typically, the bulk of cash data relating to the prior tax year is available by April, leading to a revised May budget informed by actual cash collections. In calendar year 2023, due to federal and state income tax deadline delays resulting from Council Agenda 05-07-2024
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several winter storms, the majority of the State’s revenues did not arrive until October and November. As a result, the corrections that would have been necessary to account for the decline in State revenues that would have normally come as part of last year’s May revision are instead being made in the Proposed 2024-25 State Budget.

The Proposed 2024-25 State Budget also includes multiyear projections of revenues and spending.

Under the administration’s projections, the State faces operating deficits in 2025-26 through 2027-28 of $37 billion, $30 billion and $28 billion, respectively. The LAO notes that although these deficits are smaller than the one projected for 2024-25, the State will have fewer options—such as one-time spending and draws on reserves—which could necessitate ongoing spending cuts or revenue increases.

The City cannot predict the extent of the budgetary problems the State may encounter in future fiscal years, and it is not clear what measures would be taken by the State to balance its budget, as required by law.

In addition, the City cannot predict the impact that State budgets will have on the City’s finances and operations or what actions will be taken in the future by the State Legislature and the Governor to deal with changing State revenues and expenditures. Current and future State budgets will be affected by international, national and State economic conditions and other factors over which the City has no control.

A number of the City’s revenues are collected and dispersed by the State (such as sales taxes) or allocated in accordance with State law (such as the allocation of property taxes by counties within the State).

Therefore, State budget decisions can have an impact on City finances. In the event of a material economic downturn in the State, there can be no assurance that any resulting revenue shortfalls to the State will not reduce revenues to local governments (including the City) or shift financial responsibility for programs to local governments as part of the State’s efforts to address any such related State financial difficulties.

CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS Principal of and interest on the Series 2024A Bonds are payable from Base Rental Payments made from the City’s General Fund. See the caption “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024A BONDS.” Articles XIIIA, XIIIB, XIIIC and XIIID of the State Constitution, Propositions 62, 111, 218, 1A and 22, and certain other provisions of law discussed below are included in this Official Statement to describe the potential effect of these Constitutional and statutory measures on the ability of the City to levy taxes and spend tax proceeds for operating and other purposes.

Article XIIIA of the State Constitution
On June 6, 1978, State voters approved Proposition 13, which added Article XIIIA to the State Constitution. Article XIIIA, as amended, limits the amount of any ad valorem tax on real property to 1% of the full cash value thereof, except that additional ad valorem taxes may be levied to pay debt service: (i) on indebtedness approved by the voters prior to December 1, 1978; (ii) on bonded indebtedness approved by a two-thirds vote on or after December 1, 1978, for the acquisition or improvement of real property; or (iii) bonded indebtedness incurred by a school district, community college district or county office of education for the construction, reconstruction, rehabilitation or replacement of school facilities, including the furnishing and equipping of school facilities or the acquisition or lease of real property for school facilities, approved by 55% of the voters voting on the proposition. Article XIIIA defines full cash value to mean “the county assessor’s valuation of real property as shown on the 1975-76 tax bill under “full cash value,” or thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment.” This full cash value may be increased at a rate not to exceed 2% per year to account for inflation.

Article XIIIA has subsequently been amended to permit reduction of the “full cash value” base in the event of declining property values caused by damage, destruction or other factors, including a general Council Agenda 05-07-2024
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economic downturn, 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 minor or technical ways.

Legislation Implementing Article XIIIA
Legislation has been enacted and amended a number of times since 1978 to implement Article XIIIA.

Under current law, local agencies are no longer permitted to levy directly any property tax (except to pay voter-approved indebtedness). The 1% property tax is automatically levied by counties and distributed according to a formula among taxing agencies.

Increases in assessed valuation resulting from reappraisals of property due to new construction, change in ownership or from the 2% annual adjustment are allocated among the various jurisdictions in the “taxing area” based upon their respective “situs.” Any such allocation made to a local agency continues as part of its allocation in future years.

All taxable property is shown at full cash value on the tax rolls. Consequently, the tax rate is expressed as $1 per $100 of taxable value. All taxable property value included in this Official Statement is shown at 100 percent of taxable value (unless noted differently) and all tax rates reflect the $1 per $100 of taxable value.

Article XIIIB of the State Constitution
In addition to the limits that Article XIIIA imposes on property taxes that may be collected by local governments, certain other revenues of the State and most local governments are subject to an annual “appropriations limit” imposed by Article XIIIB which effectively limits the amount of such revenues that such entities are permitted to spend. Article XIIIB, approved by the voters in June 1979, was modified substantially by Proposition 111 in 1990. The appropriations limit of each government entity applies to “proceeds of taxes,” which consist of tax revenues and the investment proceeds thereof, State subventions and certain other funds, including proceeds from regulatory licenses, user charges or other fees to the extent that such proceeds exceed “the cost reasonably borne by such entity in providing the regulation, product or service.” “Proceeds of taxes” excludes tax refunds and some benefit payments such as unemployment insurance. No limit is imposed on the appropriation of funds which are not “proceeds of taxes,” such as reasonable user charges or fees, and certain other non-tax funds. Article XIIIB also does not limit appropriation of local revenues to pay debt service on bonds existing or authorized as of October 1, 1979, or subsequently authorized by the voters, appropriations required to comply with mandates of courts or the federal government, appropriations for qualified capital outlay projects, and appropriation by the State of revenues derived from any increase in gasoline taxes and motor vehicle weight fees above January 1, 1990 levels. The appropriations limit may also be exceeded in case of emergency; however, the appropriations limit for the next three years following such emergency appropriation must be reduced to the extent by which it was exceeded, unless the emergency arises from civil disturbance or natural disaster declared by the Governor, and the expenditure is approved by two-thirds of the legislative body of the local government. If the aggregate “proceeds of taxes” for the preceding two-year period exceeds the aggregate limit, the excess must be returned to the agency’s taxpayers through tax rate or fee reductions over the following two years.

The State and each local government entity has its own appropriations limit. Each year, the limit is adjusted to allow for changes, if any, in the cost of living, the population of the jurisdiction, and any transfer to or from another government entity of financial responsibility for providing services. Proposition 111 requires that each local government’s actual appropriations be tested against its limit every two years.

The City’s appropriations have never exceeded the limitation on appropriations under Article XIIIB.

Council Agenda 05-07-2024
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Articles XIIIC and XIIID of the State Constitution
On November 5, 1996, State voters approved Proposition 218, known as the “Right to Vote on Taxes Act.” Proposition 218 adds Articles XIIIC and XIIID to the State Constitution and contains a number of interrelated provisions affecting the ability of the City to levy and collect both existing and future taxes, assessments and property-related fees and charges. The interpretation and application of Proposition 218 will ultimately be determined by the courts with respect to a number of the matters discussed below, and it is not possible at this time to predict with certainty the outcome of such determination.

Article XIIIC requires that all new local taxes be submitted to the electorate before they become effective. Taxes for general governmental purposes of the City require a majority vote, and taxes for specific purposes, even if deposited in the City’s General Fund, require a two-thirds vote. The voter approval requirements of Proposition 218 reduce the flexibility of the City to raise revenues for the General Fund, and no assurance can be given that the City will be able to impose, extend or increase such taxes in the future to meet increased expenditure needs.

Article XIIID also adds several provisions making it generally more difficult for local agencies to levy and maintain property-related fees, charges, and assessments for municipal services and programs, such as hearings and stricter and more individualized benefit requirements and findings. These provisions include, among other things: (i) a prohibition against assessments which exceed the reasonable cost of the proportional special benefit conferred on a parcel; (ii) a requirement that assessments must confer a “special benefit,” as defined in Article XIIID, over and above any general benefits conferred; (iii) a majority protest procedure for assessments which involves the mailing of notice and a ballot to the record owner of each affected parcel, a public hearing and the tabulation of ballots weighted according to the proportional financial obligation of the affected party; and (iv) a prohibition against fees and charges which are used for general governmental services, including police, fire or library services, where the service is available to the public at large in substantially the same manner as it is to property owners. If the City is unable to continue to collect revenues of this nature, the services and programs funded with these revenues would have to be curtailed and/or the City’s General Fund might have to be used to support them. The City is unable to predict whether or not in the future it will be able to continue all existing services and programs funded by fees, charges and assessments in light of Proposition 218 or, if these services and programs are continued, which amounts (if any) would be used from the City’s General Fund to continue to support such activities.

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

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

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

On September 28, 1995, the California Supreme Court, in the case of Santa Clara County Local Transportation Agency v. Guardino, upheld the constitutionality of Proposition 62. In this case, the court held that a countywide sales tax of one-half of one percent was a special tax that, under Section 53722 of the Government Code, required a two-thirds voter approval. Because the tax received an affirmative vote of only

54.1%, this special tax was found to be invalid. The decision did not address the question of whether or not it should be applied retroactively.

Following the California Supreme Court’s decision upholding Proposition 62, several actions were filed challenging taxes imposed by public agencies since the adoption of Proposition 62, which was passed in November 1986. On June 4, 2001, the California Supreme Court released its decision in one of these cases, Howard Jarvis Taxpayers Association v. City of La Habra, et al. In this case, the court held that a public agency’s continued imposition and collection of a tax is an ongoing violation, upon which the statute of limitations period begins anew with each collection. The court also held that, unless another statute or constitutional rule provided differently, the statute of limitations for challenges to taxes subject to Proposition 62 is three years. Accordingly, a challenge to a tax subject to Proposition 62 may only be made for those taxes received within three years of the date the action is brought.

The City has not experienced any substantive adverse financial impact as a result of the passage of Proposition 62.

Proposition 1A
Proposition 1A was approved by the voters at the November 2, 2004 election. Proposition 1A amended the State Constitution, among other things, to reduce the Legislature’s agency over local government revenue sources by placing restrictions on the State’s access to local governments’ property, sales, and vehicle license fee revenues as of November 3, 2004. Beginning with Fiscal Year 2008-09, the State may borrow up to eight percent of local property tax revenues, but only if the Governor proclaims such action is necessary due to a severe State fiscal hardship, and two–thirds of both houses of the Legislature approves the borrowing. The amount borrowed is required to be paid back within three years. The State also will not be able to borrow from local property tax revenues for more than two fiscal years within a period of 10 fiscal years. In addition, the State cannot reduce the local sales tax rate or restrict the Agency of local governments to impose or change the distribution of the statewide local sales tax.

Many of the provisions of Proposition 1A have been superseded by Proposition 22 enacted in November 2010 and described below.

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Proposition 22
On November 2, 2010, the voters of the State approved Proposition 22, known as “The Local Taxpayer, Public Safety, and Transportation Protection Act” (“Proposition 22”). Proposition 22, among other things, broadens the restrictions established by Proposition 1A. While Proposition 1A permits the State to appropriate or borrow local property tax revenues on a temporary basis during times of severe financial hardship, Proposition 22 amends Article XIII of the State Constitution to prohibit the State from appropriating or borrowing local property tax revenues under any circumstances. The State can no longer borrow local property tax revenues on a temporary basis even during times of severe financial hardship. Proposition 22 also prohibits the State from appropriating or borrowing proceeds derived from any tax levied by a local government solely for the local government’s purposes. Furthermore, Proposition 22 restricts the State’s ability to redirect redevelopment agency property tax revenues to school districts and other local governments and limits uses of certain other funds although this provision no longer has any meaningful impact given the statewide dissolution of redevelopment agencies. Proposition 22 is intended to stabilize local government revenue sources by restricting the State government’s control over local revenues. The City cannot predict whether Proposition 22 will have a beneficial effect on the City’s financial condition.

Proposition 26
On November 2, 2010, State voters also approved Proposition 26. Proposition 26 amends Article XIIIC of the State Constitution to expand the definition of “tax” to include “any levy, charge, or exaction of any kind imposed by a local government” except the following: (a) a charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege; (b) a charge imposed for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product; (c) a charge imposed for the reasonable regulatory costs to a local government for issuing licenses and permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and the administrative enforcement and adjudication thereof; (d) a charge imposed for entrance to or use of local government property, or the purchase, rental or lease of local government property; (e) a fine, penalty or other monetary charge imposed by the judicial branch of government or a local government as a result of a violation of law; (f) a charge imposed as a condition of property development; and (g) assessments and property-related fees imposed in accordance with the provisions of Article XIIID. Proposition 26 provides that the local government bears the burden of proving by a preponderance of the evidence that a levy, charge, or other exaction is not a tax, that the amount is no more than necessary to cover the reasonable costs of the governmental activity, and that the manner in which those costs are allocated to a payor bear a fair or reasonable relationship to the payor’s burdens on, or benefits received from, the governmental activity. The City does not believe that Proposition 26 will adversely affect its General Fund revenues.

Possible Future Initiatives
Articles XIIIA, XIIIB, XIIIC and XIIID and Propositions 218, 111, 62, 1A, 22 and 26 were each adopted as measures that qualified for the ballot pursuant to the State’s initiative process. From time to time other initiative measures could be adopted, further affecting revenues of the City or the City’s ability to expend revenues. The nature and impact of these measures cannot be anticipated by the City.

Initiative Measure Qualified for November 2024 Ballot – Taxpayer Protection and Government Accountability Act. A ballot initiative known as the “Taxpayer Protection and Government Accountability Act” (“Initiative 1935”) received the required number of signatures to appear on the November 5, 2024 Statewide ballot. If approved by a majority of voters casting a ballot at the November 5, 2024 Statewide election, Initiative 1935 would make numerous significant changes to Articles XIII, XIIIA, XIIIC and XIIID of the California Constitution to further limit the authority of local governments, and electors via the initiative Council Agenda 05-07-2024
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process, to adopt and impose taxes and fees. The full text of Initiative 1935 may be viewed at the website of the California Attorney General.

Among other things, Initiative 1935 would amend the definition of “tax” in Article XIIIC to include “every levy, charge, or exaction of any kind imposed by a local law that is not an exempt charge.” Initiative 1935 defines “exempt charge” to mean a “reasonable charge for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the actual costs [as opposed to the reasonable costs] of providing the service or product to the payor.” “Exempt charges” also encompass existing exceptions from the definition of “tax” added to Article XIIIC by Proposition 26, including property-related fees imposed in accordance with Article XIIID (see “—Articles XIIIC and XIIID of the California Constitution – Proposition 218,” above). “Actual costs” is defined as “the minimum amount necessary to reimburse the government for the cost of providing the service or product … less all other sources of revenue including, but not limited to taxes, other exempt charges, grants, and state or federal funds received to provide such service or product.” Initiative 1935 further provides that the local government adopting an exempt charge would bear the burden of proving by clear and convincing evidence (as opposed to a preponderance of the evidence) that: (a) a levy, charge or exaction is an exempt charge and not a tax; and (b) the amount of the exempt charge is reasonable and that the amount charged does not exceed the actual cost of providing the service or product to the payor. Initiative 1935 would also amend Article XIIIC to provide that no local law, whether proposed by the governing body or by an elector, may impose any special tax unless and until that tax is submitted to the electorate and approved by a two-thirds vote. The full definitions of the terms referenced above, along with the full text of Initiative 1935, may be viewed at the website of the California Attorney General.

Initiative 1935 is retroactive, and provides that any tax or exempt charge adopted after January 1, 2022 but prior to the effective date of Initiative 1935, which was not adopted in compliance with the requirements thereof, would be void 12 months after the effective date of Initiative 1935, unless the tax or exempt charge is reenacted in compliance with the provisions of Initiative 1935.

The City cannot predict whether Initiative 1935 will be approved at the November 5, 2024 Statewide election. If Initiative 1935 is approved, the City cannot provide any assurances that it will not have a material adverse effect on the City’s ability to adopt or increase rates, fees, and charges for the various services provided by the City.

TAX MATTERS
In the opinion of Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, Bond Counsel, under existing statutes, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and compliance with certain covenants and requirements described herein, interest (and original issue discount) on the Series 2024A Bonds is excluded from gross income for federal income tax purposes, and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals. However, it should be noted that for tax years beginning after December 31, 2022, with respect to applicable corporations as defined in Section 59(k) of the Internal Revenue Code of 1986, as amended (the “Code”), generally certain corporations with more than $1,000,000,000 of average annual adjusted financial statement income, interest (and original issue discount) with respect to the Series 2024A Bonds might be taken into account in determining adjusted financial statement income for purposes of computing the alternative minimum tax imposed by Section 55 of the Code on such corporations. In the further opinion of Bond Counsel, interest (and original issue discount) on the Series 2024A Bonds is exempt from State of California personal income tax.

The difference between the issue price of a Series 2024A Bond (the first price at which a substantial amount of the Series 2024A Bonds of a maturity is to be sold to the public) and the stated redemption price at maturity with respect to the Series 2024A Bond constitutes original issue discount. Original issue discount accrues under a constant yield method, and original issue discount will accrue to the Beneficial Owner of the Council Agenda 05-07-2024
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Series 2024A Bond before receipt of cash attributable to such excludable income. The amount of original issue discount deemed received by the Beneficial Owner of a Series 2024A Bond will increase the Beneficial Owner’s basis in the applicable Series 2024A Bond. In the opinion of Bond Counsel, the amount of original issue discount that accrues to the Beneficial Owner of a Series 2024A Bond is excluded from the gross income of such Beneficial Owner for federal income tax purposes, and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals. In the opinion of Bond Counsel, the amount of original issue discount that accrues to the Beneficial Owner of a Series 2024A Bond is exempt from State of California personal income tax.

Bond Counsel’s opinion as to the exclusion from gross income for federal income tax purposes of interest (and original issue discount) on the Series 2024A Bonds is based upon certain representations of fact and certifications made by the Agency, the City and others and is subject to the condition that the Agency and the City comply with all requirements of the Internal Revenue Code of 1986, as amended (the “Code”), that must be satisfied subsequent to the issuance of the Series 2024A Bonds to assure that interest (and original issue discount) on the Series 2024A Bonds will not become includable in gross income for federal income tax purposes. Failure to comply with such requirements of the Code might cause the interest (and original issue discount) on the Series 2024A Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Series 2024A Bonds. The Agency and the City will covenant to comply with all such requirements.

The amount by which a Beneficial Owner’s original basis for determining loss on sale or exchange in the applicable Series 2024A Bond (generally, the purchase price) exceeds the amount payable on maturity (or on an earlier call date) constitutes amortizable bond premium, which must be amortized under Section 171 of the Code; such amortizable bond premium reduces the Beneficial Owner’s basis in the applicable Series 2024A Bond (and the amount of tax-exempt interest received), and is not deductible for federal income tax purposes. The basis reduction as a result of the amortization of bond premium may result in a Beneficial Owner realizing a taxable gain when a Series 2024A Bond is sold by the Beneficial Owner for an amount equal to or less (under certain circumstances) than the original cost of the Series 2024A Bond to the Beneficial Owner. Purchasers of the Series 2024A Bonds should consult their own tax advisors as to the treatment, computation and collateral consequences of amortizable bond premium.

Bond Counsel’s opinions may be affected by actions taken (or not taken) or events occurring (or not occurring) after the date hereof. Bond Counsel has not undertaken to determine, or to inform any person, whether any such actions or events are taken or do occur. The Indenture, the Lease Agreement and the Tax Certificate relating to the Series 2024A Bonds permit certain actions to be taken or to be omitted if a favorable opinion of a bond counsel is provided with respect thereto. Bond Counsel expresses no opinion as to the effect on the exclusion from gross income for federal income tax purposes of interest (or original issue discount) on any Series 2024A Bond if any such action is taken or omitted based upon the advice of counsel other than Bond Counsel.

Although Bond Counsel will render an opinion that interest (and original issue discount) on the Series 2024A Bonds is excluded from gross income for federal income tax purposes provided that the Agency and the City continue to comply with certain requirements of the Code, the ownership of the Series 2024A Bonds and the accrual or receipt of interest (and original issue discount) with respect to the Series 2024A Bonds may otherwise affect the tax liability of certain persons. Bond Counsel expresses no opinion regarding any such tax consequences. Accordingly, before purchasing any of the Series 2024A Bonds, all potential purchasers should consult their tax advisors with respect to collateral tax consequences relating to the Series 2024A Bonds.

The Internal Revenue Service (the “IRS”) has initiated an expanded program for the auditing of tax- exempt bond issues, including both random and targeted audits. It is possible that the Series 2024A Bonds will be selected for audit by the IRS. It is also possible that the market value of the Series 2024A Bonds might be affected as a result of such an audit of the Series 2024A Bonds (or by an audit of similar bonds). No assurance can be given that in the course of an audit, as a result of an audit, or otherwise, Congress or the IRS might not Council Agenda 05-07-2024
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change the Code (or interpretation thereof) subsequent to the issuance of the Series 2024A Bonds to the extent that it adversely affects the exclusion from gross income of interest (and original issue discount) on the Series 2024A Bonds or their market value.

SUBSEQUENT TO THE ISSUANCE OF THE SERIES 2024A BONDS THERE MIGHT BE

FEDERAL, STATE, OR LOCAL STATUTORY CHANGES (OR JUDICIAL OR REGULATORY

CHANGES TO OR INTERPRETATIONS OF FEDERAL, STATE, OR LOCAL LAW) THAT AFFECT THE FEDERAL, STATE, OR LOCAL TAX TREATMENT OF THE SERIES 2024A BONDS INCLUDING THE

IMPOSITION OF ADDITIONAL FEDERAL INCOME OR STATE TAXES BEING IMPOSED ON OWNERS OF TAX-EXEMPT STATE OR LOCAL OBLIGATIONS, SUCH AS THE SERIES 2024A BONDS. THESE CHANGES COULD ADVERSELY AFFECT THE MARKET VALUE OR LIQUIDITY OF THE SERIES 2024A BONDS. NO ASSURANCE CAN BE GIVEN THAT SUBSEQUENT TO THE ISSUANCE OF THE SERIES 2024A BONDS STATUTORY CHANGES WILL NOT BE INTRODUCED

OR ENACTED OR JUDICIAL OR REGULATORY INTERPRETATIONS WILL NOT OCCUR HAVING THE EFFECTS DESCRIBED ABOVE. BEFORE PURCHASING ANY OF THE SERIES 2024A BONDS,

ALL POTENTIAL PURCHASERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING

POSSIBLE STATUTORY CHANGES OR JUDICIAL OR REGULATORY CHANGES OR

INTERPRETATIONS, AND THEIR COLLATERAL TAX CONSEQUENCES RELATING TO THE SERIES 2024A BONDS.

The form of Bond Counsel’s proposed opinion with respect to the Series 2024A Bonds is attached hereto in Appendix D.

CERTAIN LEGAL MATTERS
The validity of the Series 2024A Bonds and certain other legal matters are subject to the approving opinion of Stradling Yocca Carlson & Rauth LLP, Bond Counsel. Stradling Yocca Carlson & Rauth LLP, is also acting as Disclosure Counsel for the City. A complete copy of the proposed form of Bond Counsel opinion is contained in Appendix D hereto. Bond Counsel undertakes no responsibility for the accuracy, completeness or fairness of this Official Statement. Bond Counsel and Disclosure Counsel will receive compensation from the City contingent upon the sale and delivery of the Series 2024A Bonds. From time to time, Bond Counsel represents the Underwriter on matters unrelated to the Series 2024A Bonds. Certain legal matters will be passed upon for the Underwriter by Hawkins Delafield & Wood LLP. Counsel to the Underwriter will receive compensation contingent upon the issuance of the Series 2024A Bonds.

ABSENCE OF LITIGATION
To the best knowledge of the City and the Agency, there is no action, suit or proceeding pending or threatened either restraining or enjoining the execution or delivery of the Series 2024A Bonds, the Lease Agreement, the Site Lease or the Indenture, or in any way contesting or affecting the validity of the foregoing or any proceedings of the Agency or the City taken with respect to any of the foregoing.

There are a number of lawsuits and claims pending against the City. In the opinion of the City, such suits and claims as are presently pending will not have a material adverse effect on the ability of the City to make Base Rental Payments.

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UNDERWRITING
The Series 2024A Bonds are being purchased by BofA Securities, Inc. (the “Underwriter”). The Underwriter will purchase the Series 2024A Bonds from the Agency at an aggregate purchase price of $__________ (representing the principal amount of the Series 2024A Bonds, plus original issue premium of $_________ and less an Underwriter’s discount of $_________). The purchase agreement relating to the Series 2024A Bonds provides that the Underwriter will purchase all of the Series 2024A Bonds if any are purchased. The obligation to make such purchase is subject to certain terms and conditions set forth in such purchase agreement, the approval of certain legal matters by counsel and certain other conditions.

The initial offering prices that are stated on the inside front cover page of this Official Statement may be changed from time to time by the Underwriter. The Underwriter may offer and sell the Series 2024A Bonds to certain dealers (including dealers depositing Series 2024A Bonds into investment trusts), dealer banks, banks acting as agent and others at prices lower than said public offering prices.

BofA Securities, Inc. has entered into a distribution agreement with its affiliate Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”). As part of this arrangement, BofA Securities, Inc. may distribute securities to MLPF&S, which may in turn distribute such securities to investors through the financial advisor network of MLPF&S. As part of this arrangement, BofA Securities, Inc. may compensate MLPF&S as a dealer for their selling efforts with respect to the Bonds.

The Underwriter and its affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, advisory, investment management, principal investment, hedging, financing and brokerage services. The Underwriter and its affiliates have, from time to time, performed, and may in the future perform, various advisory and investment banking services for the Agency, for which they received or will receive customary fees and expenses.

In the ordinary course of their various business activities, the Underwriter and its affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (which may include bank loans and credit default swaps) for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve securities and instruments of the Agency.

The Underwriter and its affiliates may also communicate independent investment recommendations, market color or trading ideas and/or publish or express independent research views in respect of such assets, securities or instruments and may at any time hold, or recommend to clients that they should acquire, long and/or short positions in such assets, securities and instruments.

RATINGS
S&P Global Ratings, a Standard & Poor’s Financial Services LLC business (“S&P”) has assigned a rating of “___” to the Series 2024A Bonds. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. There is no assurance such ratings will continue for any given period of time or that such ratings will not be revised downward or withdrawn entirely by the rating agency, if in the judgment of such rating agency, circumstances so warrant.

Any such downward revision or withdrawal of the ratings may have an adverse effect on the market price of the Series 2024A Bonds. None of the Agency, the City or the Underwriter has undertaken any responsibility either to bring to the attention of the owners of the Series 2024A Bonds a proposed change in or withdrawal of the ratings or to oppose any such proposed revision or withdrawal.

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MUNICIPAL ADVISOR
Urban Futures, Inc., Walnut Creek, California (the “Municipal Advisor”), served as municipal advisor to the Agency and the City with respect to the sale of the Series 2024A Bonds. The Municipal Advisor will receive compensation contingent upon the sale and delivery of the Series 2024A Bonds. The Municipal Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or to assume any responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement.

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

CONTINUING DISCLOSURE
The City has covenanted for the benefit of the Owners of the Series 2024A Bonds to provide annually certain financial information and operating data relating to the Series 2024A Bonds and the City (the “Annual Report”), and to provide notices of the occurrence of certain enumerated events. For a complete listing of items of information which will be provided in each Annual Report and further description of the City’s undertaking with respect to the Annual Report and certain enumerated events, see APPENDIX E—“FORM OF CONTINUING DISCLOSURE CERTIFICATE.” The Annual Report is to be provided by the City not later than March 31 after the end of the City’s fiscal year (which currently ends on June 30), commencing with the report for fiscal year 2023-24.

Within the last five years, the City and its related entities have not failed to timely file all required information pursuant to its existing continuing disclosure undertakings pursuant to Rule 15c2-12.

FINANCIAL STATEMENTS OF THE CITY
Included herein as Appendix C is the Annual Comprehensive Financial Report of the City for the Fiscal Year ended June 30, 2023, together with the report thereon dated December 18, 2023 of Badawi & Associates, CPAs, Berkeley, California, (the “Auditor”). The Auditor has not undertaken to update the audited financial statements of the City or its report or to take any action intended or likely to elicit information concerning the accuracy, completeness or fairness of the statements made in this Official Statement, and no opinion is expressed by the Auditor with respect to any event subsequent to its report dated December 18, 2023.

MISCELLANEOUS
References are made herein to certain documents and reports which are brief summaries thereof which do not purport to be complete or definitive and reference is made to such documents and reports for full and complete statements of the contents thereof. Copies of the Indenture, the Lease Agreement, the Site Lease and other documents are available, upon request, and upon payment to the City of a charge for copying, mailing and handling, from the City Clerk at the City of Pismo Beach, 760 Mattie Road, Pismo Beach, California 93449.

Any 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 Agency or the City and the purchasers or Owners of any of the Series 2024A Bonds.

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The execution and delivery of this Official Statement have been duly authorized by the Agency and the City.

PISMO BEACH PUBLIC FINANCING AGENCY
By:

Treasurer

CITY OF PISMO BEACH
By:

City Manager

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APPENDIX A

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APPENDIX B

SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS
[TO COME FROM BOND COUNSEL]

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APPENDIX C

ANNUAL COMPREHENSIVE FINANCIAL REPORT
OF THE CITY FOR THE FISCAL YEAR ENDED JUNE 30, 2023

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APPENDIX D

PROPOSED FORM OF BOND COUNSEL OPINION
[Closing Date]
Pismo Beach Public Financing Agency
South San Francisco, California
Re: $__________ Pismo Beach Public Financing Agency (San Luis Obispo County, California) Series 2024A Lease Revenue Bonds (Public Safety Facility Project) Ladies and Gentlemen:

We have acted as bond counsel to the Pismo Beach Public Financing Agency (the “Agency”) in connection with the issuance by the Agency of $__________ Pismo Beach Public Financing Agency (San Luis Obispo County, California) Series 2024A Lease Revenue Bonds (Public Safety Facility Project) (the “Bonds”), pursuant to the provisions of Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Bond Law”), and pursuant to an Indenture, dated as of June 1, 2017, as supplemented by the First Supplement to Indenture, dated as of December 1, 2017 (together, the “Original Indenture”) and the Second Supplement to Indenture, dated as of June 1, 2024 (“the Second Supplement to Indenture” and together with the Original Indenture, the “Indenture”), each by and between the Agency and Wilmington Trust, N.A., as Trustee. The Bonds will be principally secured by lease payments to be made by the City pursuant to a Lease Agreement, dated as of June 1, 2017, as amended and supplemented by the First Supplement to Lease Agreement, dated as of December 1, 2017 (together, the “Original Lease Agreement”) and by the Second Supplement to Lease Agreement, dated as of June 1, 2024 (the “Second Supplement to Lease Agreement” and together with the Original Lease Agreement, the “Lease”), by and between the Agency and the City of Pismo Beach (the “City”). We have examined the law and such certified proceedings and other documents, agreements, opinions and matters as we deem necessary to render this opinion. This opinion is based on current statutory and constitutional law and published court decisions as of the date hereof.

Capitalized terms used herein and not otherwise defined shall have the meaning ascribed thereto in the Indenture.

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

We have assumed the genuineness of all documents and signatures presented to us, the authenticity of documents submitted as originals and the conformity to originals of documents submitted as copies. We have not undertaken to verify independently, and have assumed, the accuracy of the factual matters represented, warranted or certified in the documents, and of the legal conclusions contained in the opinions referred to in the preceding paragraphs of this opinion. Furthermore, we have assumed compliance with all covenants and agreements contained in the Indenture, the Lease and the Site Lease. We call attention to the fact that the rights and obligations under the Bonds, the Indenture, the Lease, the Site Lease and the Assignment Agreement may be limited by bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, by the application of equitable principles and the exercise of judicial discretion in appropriate cases and by the limitations on legal remedies against cities and public agencies in the State of California.

We express no opinion herein with respect to any indemnification, contribution, choice of law, choice of forum, penalty or waiver provisions contained in the Bonds, the Indenture, the Lease, the Site Lease or the Council Agenda 05-07-2024
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Assignment Agreement; nor do we express any opinion with respect to the state or quality of title to any of the real or personal property described in the Lease or the Site Lease, or the accuracy or sufficiency of the description contained therein, or the remedies available to enforce liens on, any such property contained therein.

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

1. The Agency is a joint exercise of powers agency duly organized and validly existing under the laws of the State of California with the full power to enter into the Indenture and the Lease, to perform the agreements on its part contained therein and to issue the Bonds.

2. The Second Supplement to Indenture and the Second Supplement to Lease Agreement have each been duly authorized, executed and delivered by the Agency and the Indenture and the Lease constitute the valid and binding obligations of the Agency enforceable against the Agency in accordance with their respective terms. The Indenture creates a valid pledge of the Revenues, subject to the provisions of the Indenture.

3. The Second Supplement to Lease Agreement has been duly authorized, executed and delivered by the City and the Lease constitutes the valid and binding obligations of the City enforceable against the City in accordance with their respective terms.

4. The Bonds have been duly and validly authorized by the Agency and are legal, valid and binding limited obligations of the Agency, enforceable in accordance with their terms and the terms of the Indenture. The Bonds are limited obligations of the Agency payable solely from the Revenues pledged under the Indenture as provided in the Indenture, but are not a debt of the City, the State of California or any other political subdivision thereof within the meaning of any constitutional or statutory limitation, and, neither the faith and credit nor the taxing power of the City, the State of California, or any of its political subdivisions is pledged for the payment thereof. The Agency has no taxing power.

5. Under existing statutes, regulations, rulings and judicial decisions, interest (and original issue discount) on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals; however, for tax years beginning after December 31, 2022, with respect to applicable corporations as defined in Section 59(k) of the Internal Revenue Code of 1986, as amended (the “Code”), interest (and original issue discount) with respect to the Series 2024A Bonds might be taken into account in determining adjusted financial statement income for purposes of computing the alternative minimum tax imposed on such corporations.

6. Interest (and original issue discount) on the Bonds is exempt from personal income taxes imposed in the State of California.

7. The difference between the issue price of a Bond (the first price at which a substantial amount of the Bonds of a maturity is to be sold to the public) and the stated redemption price at maturity with respect to such Bond constitutes original issue discount. Original issue discount accrues under a constant yield method, and original issue discount will accrue to a Bond Owner before receipt of cash attributable to such excludable income. The amount of original issue discount deemed received by a Bond Owner will increase the Bond Owner’s basis in the applicable Bond. Original issue discount that accrues to the Bond Owner is excluded from the gross income of such owner for federal income tax purposes, is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals (as described in paragraph 5 above) and is exempt from State of California personal income tax.

8. The amount by which a Bond Owner’s original basis for determining loss on sale or exchange in the applicable Bond (generally the purchase price) exceeds the amount payable on maturity (or on an earlier Council Agenda 05-07-2024
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call date) constitutes amortizable Bond premium which must be amortized under Section 171 of the Code; such amortizable Bond premium reduces the Bond Owner’s basis in the applicable Bond (and the amount of tax-exempt interest received), and is not deductible for federal income tax purposes. The basis reduction as a result of the amortization of Bond premium may result in a Bond Owner realizing a taxable gain when a Bond is sold by the Owner for an amount equal to or less (under certain circumstances) than the original cost of the Bond to the Owner.

The opinions expressed in paragraphs (5) and (7) above as to the exclusion from gross income for federal income tax purposes of interest (and original issue discount) on the Bonds are subject to the condition that the Agency and the City comply with all requirements of the Code, that must be satisfied subsequent to the issuance of the Bonds to assure that such interest (and original issue discount) will not become includable in gross income for federal income tax purposes. Failure to comply with such requirements of the Code might cause interest (and original issue discount) on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The Agency and the City have covenanted to comply with all such requirements. Except as set forth in paragraphs (5), (6), (7) and (8) above, we express no opinion as to any tax consequences related to the Bonds.

Certain requirements and procedures contained or referred to in the Indenture, the Lease and Tax Certificate may be changed, and certain actions may be taken, under the circumstances and subject to the terms and conditions set forth in the Indenture, the Lease and Tax Certificate, upon the advice or with the approving opinion of counsel nationally recognized in the area of tax-exempt obligations. We express no opinion as to the effect on the exclusion of interest on the Bonds from gross income for federal income tax purposes on and after the date on which any such change occurs or action is taken upon the advice or approval of counsel other than Stradling Yocca Carlson & Rauth LLP.

Our opinion is limited to matters governed by the laws of the State of California and federal law. We assume no responsibility with respect to the applicability or the effect of the laws of any other jurisdiction.

The opinions expressed herein are based upon an analysis of existing statutes, regulations, rulings and judicial decisions and cover certain matters not directly addressed by such authorities. We call attention to the fact that the foregoing opinions may be affected by actions taken (or not taken) or events occurring (or not occurring) after the date hereof. We have not undertaken to determine, or to inform any person, whether such actions or events are taken (or not taken) or do occur (or do not occur). Our engagement with respect to the Bonds terminates upon their issuance, and we disclaim any obligation to update the matters set forth herein.

We express no opinion herein as to the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Bonds, nor do we express any opinion with respect to the state or quality of title to any of the real or personal property described in the Indenture or the Lease, or the accuracy or sufficiency of the description of any such property contained therein. We expressly disclaim any duty to advise the Owners of the Bonds with respect to the matters contained in the Official Statement and any other offering material relating to the Bonds.

We have not made or undertaken to make an investigation of the state of title to any of the real property described in the Lease or of the accuracy or sufficiency of the description of such property contained therein, and we express no opinion with respect to such matters.

Respectfully submitted,

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APPENDIX E

FORM OF CONTINUING DISCLOSURE CERTIFICATE
[TO BE INSERTED BY DISCLOSURE COUNSEL]

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APPENDIX F

BOOK-ENTRY ONLY SYSTEM
The information in this section concerning DTC and DTC’s book-entry only system has been obtained from sources that the Agency believes to be reliable, but the Agency takes no responsibility for the completeness or accuracy thereof. The following description of the procedures and record keeping with respect to beneficial ownership interests in the Series 2024A Bonds, payment of principal, premium, if any, accreted value and interest on the Series 2024A Bonds to DTC Participants or Beneficial Owners, confirmation and transfers of beneficial ownership interests in the Series 2024A Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC.

1. The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the Series 2024A Bonds (the “Securities”). The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate will be issued for each maturity of the Securities in the aggregate principal amount of such maturity, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue.

2. DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has Standard & Poor’s highest rating: “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 and www.dtc.org .

3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC’s records. The ownership interest of each actual purchaser of each Security (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records.

Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued.

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 Council Agenda 05-07-2024
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authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit 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 a maturity are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed.

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 the Agency 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. Principal, redemption price and interest payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Agency or the Paying Agent, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Paying Agent, or the Agency, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, redemption price and interest payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Agency or the Paying 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. If applicable, a Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to tender/remarketing agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant’s interest in the Securities, on DTC’s records, to tender/remarketing agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC’s records and followed by a book-entry credit of tendered Securities to tender/remarketing agent’s DTC account.

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

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

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APPENDIX A

INFORMATION REGARDING THE CITY OF PISMO BEACH

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TABLE OF CONTENTS
Page
INFORMATION REGARDING THE CITY OF PISMO BEACH ................................................................. A-3 City Council .................................................................................................................................................. A-3 City Management .......................................................................................................................................... A-3 Employee and Employee Relations .............................................................................................................. A-5 Risk Management ......................................................................................................................................... A-5 CITY FINANCIAL INFORMATION .............................................................................................................. A-6 Accounting and Financial Reporting ............................................................................................................ A-6 City Blended Component Units and Discrete Component Units .................................................................. A-7 Financial Policies .......................................................................................................................................... A-7 Capital Improvement Program ...................................................................................................................... A-8 Parking Fund ................................................................................................................................................. A-9 Budget Procedure .......................................................................................................................................... A-9 Budget Information ..................................................................................................................................... A-10 Comparative Change in Fund Balance of the City General Fund ............................................................... A-12 Comparative General Fund Balance Sheets of the City .............................................................................. A-14 Major Revenues .......................................................................................................................................... A-16 Transient Occupancy Tax ........................................................................................................................... A-16 Property Taxes ............................................................................................................................................ A-17 Sales Taxes ................................................................................................................................................. A-19 Other Taxes ................................................................................................................................................. A-20 Licenses and Permits .................................................................................................................................. A-20 Charges for Services ................................................................................................................................... A-21 Miscellaneous Revenues ............................................................................................................................. A-21 Indebtedness ............................................................................................................................................... A-21 Investments ................................................................................................................................................. A-21 Retirement System ...................................................................................................................................... A-22 Other Post-Employment Benefits ............................................................................................................... A-32 ECONOMIC AND DEMOGRAPHIC INFORMATION .............................................................................. A-35 Population ................................................................................................................................................... A-35 Education .................................................................................................................................................... A-35 Building Activity ........................................................................................................................................ A-35 Personal Income .......................................................................................................................................... A-36 Employment ................................................................................................................................................ A-37 Industry ....................................................................................................................................................... A-39

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INFORMATION REGARDING THE CITY OF PISMO BEACH
City Council
The City is a general law city that is governed by a City Council/City Manager form of government.

The City was incorporated in 1946. Policy making and legislative authority are vested in the City Council, which is responsible, among other matters, for passing resolutions and ordinances, adopting the City budget, appointing committees, and hiring the City Manager. The City Council is comprised of five members elected by the voters citywide, serving in staggered four year terms. The Mayor is elected to two year terms, and the Council is elected to four year staggered terms, with two members elected every two years. The City Council hires a City Manager to run the City’s day-to-day operations. The members of the City Council and the expiration dates of their respective terms are as follows:

CITY OF PISMO BEACH
City Council
Name Term Expires
Ed Waage, Mayor December 2024
Mary Ann Reiss, Mayor Pro Tempore December 2026
Marcia Guthrie, Council Member December 2024
Stacy Inman, Council Member December 2026
Scott Newton, Council Member December 2024

City Management
A summary of certain City executive staff is described below.

City Manager. The City Manager is hired by the City Council to run the day-to-day operations of the City. The City Manager is responsible for providing coordination of and direction to the departments of the City and providing information to the City Council identifying community issues and needs. The City Manager also prepares reports and analysis to assist the City Council in making policy decisions and administers personnel, labor relations and risk management functions.

As the administrative head of the City Government, the City Manager is appointed by the City Council to enforce municipal laws, direct daily operations of the City and prepare and implement the municipal budget. The City Manager works with elected officials as they develop policies. The City Manager ensures that laws and policies approved by elected officials are equitably enforced throughout the City, while seeking feedback from residents and members of the business community to address and solve problems. The City Manager prepares the annual budget, submits the budget to elected officials for approval and implements it once approved. The City Manager supervises department heads, administrative personnel and other employees.

The City’s current City Manager is Mr. Jorge E. Garcia. Mr. Garcia began serving as City Manager of the City in October 2023. Prior to being appointed to serve as City Manager, Mr. Garcia served as the interim City Manager and had been serving as the Assistant City Manager, Management Services Director of the City since 2018. Mr. Garcia has over 15 years of government experience, having held a variety of management and staff positions with the communities of Santa Ana, Fountain Valley and Villa Park. Mr. Garcia holds a Bachelor of Arts in Political Science from Chapman University and a Master of Public Administration from California State University, Fullerton.

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Administrative Services Director. The Administrative Services Director is responsible for all financial-related activities that support municipal operations of the City. In addition, the Administrative Services Director oversees the City’s information technology services.

Ms. Nadia Feeser was hired in January 2012 as the City of Pismo Beach’s Administrative Services Director/City Treasurer. She has over 20 years of experience in state and local government finance positions.

Prior to serving as Administrative Services Director, she served six years with the City and County of San Francisco, most recently as the Chief Financial Officer for the San Francisco Planning Department. Prior to that, she was the Senior Administrative Analyst, Principal Administrative Analyst, and then Budget Manager in San Francisco Controller’s Office. Ms. Feeser has also held a Management and Budget analyst position in the Maricopa County Office of Management and Budget and a capital projects budget analyst position with the State of New York Division of the Budget. Ms. Feeser holds a Bachelor’s degree in business administration with a concentration in finance from Birmingham Southern College and a master’s degree in Public Administration with a concentration in public economics, finance, & local government management from the Rockefeller College of Public Policy, State University of New York at Albany.

City Treasurer. The City Treasurer is appointed by the City Council and is responsible for providing policy oversight and administering City investments in conformance with the City’s investment policy, annually updating the City’s investment policy, and providing monthly investment activity reports.

Additionally, the City Treasurer prepares and presents quarterly reports to the City Manager and the City Council. Ms. Nadia Feeser serves as the City Treasurer.

City Attorney. The City Attorney is a contract position and is responsible for drafting and reviewing ordinances, policies and contracts and prosecuting municipal code violations, among other responsibilities.

The current City Attorney is Mr. Dave Fleishman. Mr. Fleishman is an attorney with the law firm of Richards Watson Gershon, a Professional Corporation. Mr. Fleishman devotes a substantial portion of his practice to municipal law and labor and employment matters. Mr. Fleishman received his bachelor’s degree from the University of California, Berkley and his Juris Doctor from the University of Arizona, School of Law.

Public Works Director/City Engineer. The Public Works Director/City Engineer for the City is responsible for the management of the water system, maintenance and construction of all public infrastructure which includes parks, water and sewer infrastructure as well as streets and public buildings. The current Public Works Director/City Engineer is Mr. Benjamin A. Fine. Mr. Fine was hired by the City in November 2008 and promoted to the City’s Director of Public Works/City Engineer in January of 2013. Mr. Fine holds a master’s degrees in mechanical engineering and business administration as well as a bachelor’s degree in agricultural engineering. He is a licensed civil engineer in the State of California (the “State”) with over twenty years of private sector and municipal engineering and management experience. Mr. Fine serves as the City’s technical advisor for the Northern Cities Management Area Technical Group and Zone Three Technical Group which both help to manage the City’s water supply.

Engineering Manager. The Engineering Manager is charged with the execution of the maintenance and construction of all public infrastructure which includes parks, water and sewer infrastructure as well as streets and public buildings. The current Engineering Manager is Mr. Eric Eldridge. Mr. Eldridge was hired in July 2010 as the City’s Public Works Engineer for capital improvement projects and development review.

Since being hired by the City, Mr. Eldridge was promoted to Senior Engineer and is currently the Engineering Manager for the City. Mr. Eldridge holds a bachelor’s degree in environmental engineering from California Polytechnic State University, San Luis Obispo and is a licensed civil engineer in the State. Prior to joining the City, Mr. Eldridge has an additional 11 years of private sector engineering and project management experience in land development, hydrology, drainage, storm water management, construction management, contract management, budgeting, and project management. Mr. Eldridge will be overseeing the 2024 Project and has managed several other key City projects including the Chumash and Palisades Parks construction and landscape project, the Pier Rehabilitation and Pier Plaza project, and the Shell Beach Streetscape Project.

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Employee and Employee Relations
As of June 30, 2023, the City had approximately 100 full-time employees and approximately 40 part time employees. In accordance with the provisions of California Government Code Section 3500, the City participates in labor negotiations with its employee associations. The result of the negotiations processes is memorialized in memoranda of understanding (“MOU’s”) reached between the City and the City employee associations. The table below lists the City’s two employee associations and the approximate membership as of March 4, 2024, as well as the unrepresented employees. The City has not experienced a strike or work stoppage in the last ten years.

Unit/Affiliation
Contract
Expiration
Date
Number of
Members
Police Officers Association June 30, 2025 32
Service Employees International Union (SEIU), Local 620 June 30, 2025 40 Management and Non-Represented Employees(1) June 30, 2025 28 Part-Time Employees(1) June 30, 2025 40
Total 140

(1) Salaries and benefits memorialized by resolution.

Source: The City.

Risk Management
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters for which the City carries insurance. The City, due to the costs of available coverage, participated as a member in the Central Coast Cities Self-Insurance Fund (“CCCSIF”) through June 30, 2003 for general liability insurance and through June 30, 2004 for workers compensation insurance. Thereafter, the City joined the California Joint Powers Insurance Authority (“California JPIA”). The California JPIA provides general liability insurance to the City with a $50 million per occurrence and $50 million per year aggregate limit and workers compensation insurance with statutory benefits and $10 million employer’s liability coverage. The risk of loss is transferred to the California JPIA.

The City also participates in the California JPIA all-risk program, which includes property insurance coverage for earthquake, fire, and flood. The City maintains earthquake coverage through its Property Insurance Program up to $200,000,000 per occurrence and in the annual aggregate for all covered locations.

The City maintains flood coverage through its Property Insurance Program up to $200,000,000 in the annual aggregate for all covered locations. Additionally, the City carries cybersecurity insurance as part of its General Liability insurance cyber liability program.

The City is responsible for the payment of its respective claims that were outstanding with the CCCSIF at the time the City elected to insure with the California JPIA. The uninsured risk for these claims, referred to as tail-end claims, retained by the City was $200,000 per incident for workers’ compensation claims, $100,000 per incident for general liability claims and $10,000 per property damage claim. The CCCSIF periodically obtains actuarial studies and valuations of the tail-end claim liabilities, and the City reports such estimated amounts payable as claims in the statement of net position.

Liabilities of the City are reported in the statement of net position of the governmental activities when it is probable that a loss has occurred, and the amount of the loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported. The result of the process to estimate the claims liability is not an exact amount as it depends on many complex factors, such as inflation, changes in legal doctrines and damage awards. Accordingly, claims are reevaluated periodically to consider the effects of Council Agenda 05-07-2024
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inflation, recent claim settlements trends (including frequency and amount of pay-outs), and other economic and social factors.

The estimate of claims liability also includes amounts for incremental claim adjustment expenses related to specific claims and other claim adjustment expenses regardless of whether allocated to specific claims. Estimated recoveries, for example from salvage or subrogation, are another component of the claims liability estimate. Settlements have not exceeded coverage for each of the past three fiscal years.

For additional information with respect to the City’s risk management program, see Note 11.A to the City’s audited financial statements for Fiscal Year 2022-23 attached hereto as Appendix C.

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

The government-wide funds, proprietary funds, and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenues as soon as all eligibility requirements are imposed by the provider have been met.

Governmental funds (General Fund, Housing In-Lieu Fee Fund, Lodging Business Improvement Fund and Capital Projects Fund) are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. Debt service expenditures, as well as expenditures related to compensated absences and claims and judgements are recorded only when payment is due.

Those revenues susceptible to accrual are property taxes, sales taxes, transient occupancy taxes, franchise taxes, licenses and interest associated with the current fiscal period.

The City Council employs an independent certified public accountant, who, at such time or times as specified by the City Council, at least annually, and at such other times as they determine, examines the financial statements of the City in accordance with generally accepted auditing standards, including tests of the accounting records and other auditing procedures as such accountant considers necessary. As soon as practicable, after the end of the fiscal year, a final audit and report is submitted by the independent accountant to the City Council.

General Fund. The General Fund is the chief operating fund of the City and is used to account for all financial resources of the general government of the City not accounted for in another fund. The City expects to pay Base Rental Payments from amounts in the General Fund. Tables 1 through 9 below set forth certain historical and current fiscal year budget information for the General Fund. Information on the other governmental funds of the City as of June 30, 2023 is set forth in Appendix C.

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Housing In-Lieu Fund. The Housing In-Lieu Fund is a special revenue fund that accounts for affordable housing. The main revenue source is an in-lieu fee paid by developers at 5% of assessed valuation of building permits. None of the monies in the Housing In-Lieu Fund are available to make Base Rental Payments.

Lodging Business Improvement District Fund. The Lodging Business Improvement District Fund accounts for monies raised to promote City lodging businesses. None of the monies in the Lodging Business Improvement District Fund are available to make Base Rental Payments.

Capital Project Fund. The Capital Project Fund accounts for resources accumulated for the use in financing major capital improvement projects. None of the monies in the Capital Project Fund are available to make Base Rental Payments.

City Proprietary Funds. The City also maintains the following proprietary funds: (1) Water Fund, (2) Wastewater Fund, (3) Pier Fund and (4) Parking Fund. Other than the Parking Fund, none of the monies in any of the City’s proprietary funds are available to make Base Rental Payments. See “— Parking Fund” below.

City Blended Component Units and Discrete Component Units Under GASB guidelines, component units of a primary government (i.e. the City) generally include those that are legally separate entities but raise and hold economic resources for the direct benefit of the primary government. Blended component units, although separate legal entities are, in substance, part of the government’s operations. Their funds are treated similarly to funds of the primary government (other than the General Fund). Discrete component units do not meet the definition of a blended component unit as they do not share the same governing body and do not only provide services to the primary government unit. The City’s two blended component units: the Pismo Beach Public Financing Agency (the “Agency”) and the Pismo Beach Industrial Development Authority (the “Infrastructure Authority”). The Agency and the Infrastructure Authority were formed to provide a method of financing public improvements. A description of the Agency is also set forth under the caption “THE AGENCY” in the Official Statement.

Financial Policies
General. The City has adopted a comprehensive set of financial policies to serve as a guideline for financial matters as further described below.

Reserve Policies. The City has adopted a General Fund Reserve Policy (the “General Fund Reserve Policy”) which seeks to maintain a reserve level equal to 25% of the General Fund operating expenditure budget. The 25% level is based on the City’s dependence on the tourism industry, the large capital and cash flow intensive budget, potential major unanticipated costs and vulnerability if the State confiscates key revenues. The general fund reserve may be used at the discretion of the City Council to (i) temporarily fund recovery costs in the event of emergency or disaster, (ii) temporarily fund operating expenditures while expenditure reductions are implemented during a period of economic downturn, (iii) fund expenditures in the event of an actual or projected decrease in revenues, (iv) provide temporary cash flow in the event of a large capital and cash flow intensive budget item or (v) apply to finance opportunities that directly benefit the City.

At June 30, 2023, the general fund reserve policy was funded in the amount of $6,871,549 or approximately 25% of the Fiscal Year 2022-23 General Fund operating expenditure budget.

The City has also established and maintains a City Facility Reserve Fund (the “Facility Reserve Fund”) and has adopted a policy to maintain the Facility Reserve Fund in the amount of $500,000 for purposes of funding improvements to City buildings and facilities. Amounts on deposit in the Facility Reserve Fund are to be used in instances where other funds are not available and there is a need to fund improvements in excess Council Agenda 05-07-2024
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of $100,000 to protect the City from exposure to general liabilities associated with the use of City buildings and facilities. At June 30, 2023, the Facility Reserve Fund was funded in the amount of $500,000.

The City has adopted a Risk Management Reserve Policy (the “Risk Management Reserve Policy”), which requires that $50,000 from the General Fund unassigned balance be set aside each year, up to $250,000, to fund general liability and workers’ compensation costs over 10% of the adopted budget for risk management costs, legal costs, judgments or to avoid judgments over $100,000. The risk management reserve fund can be used to fund unanticipated risk management costs, upon City Council approval, and to fund actual costs that exceed 10% of the adopted budget for general liability and worker’s compensation costs. At June 30, 2023, the risk management reserve fund was funded in the amount of $250,000.

The City has also adopted a policy to maintain a contingency reserve of 1% of budgeted General Fund expenditures to be used for emergencies and other unanticipated expenditures at the direction of the City Council, provided that up to $50,000 of the reserve may be used at the direction of the City Manager.

Debt Management Policy. The City has adopted a debt management policy (the “Debt Management Policy”) in compliance with California Government Code Section 8855. The Debt Management Policy sets forth the framework for the issuance and use of debt to minimize the City’s debt service and cost of issuance; maintain access to cost effective borrowing; achieve the highest practical credit rating; ensure full and timely repayment of debt; maintain full and complete financial disclosure and reporting; ensure compliance with debt covenants and to ensure compliance with applicable State and federal law.

Investment Policy. The City invests its funds in accordance with the City’s Investment Policy, which is updated annually and was last adopted by the City Council on January 16, 2024 in accordance with Section 53600 et seq. of the State Government Code. Idle cash management and investment transactions are the responsibility of the City Treasurer. The Investment Policy sets forth the policies and procedures applicable to the investment of City funds and designates eligible investments. The Investment Policy’s stated overarching purpose is to (i) ensure that public funds are invested in such a manner as to comply with state and local laws; (ii) ensure prudent money management; (iii) provide for daily cash flow requirements; and (iv) meet the objectives of the Investment Policy (per California Government Code Section 53600.5) in the following order of priority:

1. Safety of Principal: Safety of principal is the foremost objective of the investment program.

Investments of the City shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. To attain this objective, the City will diversify its investments by investing funds among a variety of securities with independent returns.

2. Liquidity: The City’s investment portfolio will remain sufficiently liquid to enable the City to meet all operating requirements which might be reasonably anticipated.

3. Return on Investments: The City’s investment portfolio shall have the objective of attaining a comparative performance measurement or an acceptable rate of return throughout budgetary and economic cycles. These measurements should be commensurate with the City’s investment risk constraints identified in the Investment Policy and the cash flow characteristics of the portfolio.

Capital Improvement Program
The City’s adopted Fiscal Years 2023-25 Capital Improvement Plan (the “CIP”), which includes projects expected to be funded by the General Fund as well as other funds of the City, totals $16,487,610, including $14,874,110 in new capital improvement projects and $1,613,500 in scheduled replacement vehicle purchases and other previously approved ongoing capital projects. The projects include upgrades and/or new construction of general City facilities, public safety facilities, park improvements, water system projects and street and traffic projects. A summary of the projects that are budgeted to be paid, at least in part, from the Council Agenda 05-07-2024
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General Fund by City Goal category included in the adopted budget for Fiscal Years 2023-25 and the budgeted amounts for such projects are shown in the table below.

City Goal Description Budgeted Amount Primary Funding Source(s) Maintain a Focus on Public Safety $1,258,710 Various(1) Miscellaneous Projects 710,400 Various(2)

(1) To be funded with amounts budgeted from the General Fund and Capital Projects Fund. (2) To be funded with amounts budgeted from the General Fund, Capital Projects Fund, Technology Services Fund, the Water Fund and the Wastewater Fund.

Source: Fiscal Years 2023-24 and 2024-25 Adopted Budget.

Projects under the Maintain a Focus on Public Safety City Goal include investments in technology to enhance public safety. A portion of 2024 Project budget was included in previous fiscal years’ budgets and updated in Fiscal Year 2023-24 for a total of $52,367,567, including both pre-construction (permitting, plan check, staff migration, etc.) and construction costs of the 2024 Project. Because the 2024 Project was included in City budgets adopted in prior fiscal years, the 2024 Project is not reflected in the CIP table set forth above.

The City does not currently expect to finance any of the projects in the current CIP described in the above table with proceeds of obligations payable from the General Fund.

Parking Fund
As discussed under “Financial Reporting and Accounting” above, the City has established the Parking Fund as a proprietary fund of the City. The City deposits revenues received from parking kiosks and meters located in the City’s downtown core area and amounts received from parking citations into the Parking Fund.

Pursuant to the Municipal Code of the City, amounts on deposit in the Parking Fund can, among other things, be transferred to the General Fund to support parking functions and related public safety support of parking functions associated with and located within the 2024 Project. As of the date of this Official Statement, the City expects, on an annual basis during the first 20 years that the Series 2024A Bonds will be outstanding, to transfer a portion of the monies on deposit in the Parking Fund to the City’s General Fund to be applied to pay a portion of the Base Rental Payments. The City has not pledged the amounts on deposit in the Parking Fund to the payment of the Series 2024A Bonds or the Base Rental Payments. No assurance can be given that amounts on deposit in the Parking Fund will be available to transfer to the General Fund in any given year or that the City Council will budget and appropriate transfers from the Parking Fund to the General Fund for the purpose of paying a portion of the Base Rental Payments. The City expects that it will be able make the full amount of the Base Rental Payments without any transfers from the Parking Fund and will not be reliant upon transfers from the Parking Fund to make the Base Rental Payments.

Budget Procedure
Budget Process and Budgetary Control. The City operates on a fiscal year that begins on the first day of July of each year and ends on the thirtieth day of June the following year (the “Fiscal Year”). The City prepares a two-year balanced budget that incorporates the revenues and expenditures associated with providing services to the community, including capital investments to City infrastructure. The City’s biennial budget serves as the foundation for the City’s financial planning and control system. After a formal public outreach effort, Pismo Voice, to engage the community and solicit ideas and input through a variety of means and seeking employee input on City investments, the City Manager presents a proposed budget incorporating these engagement efforts to the City Council every two years. The Council holds public hearings on the proposed budget and then ultimately adopts a formal budget. The budget is adopted by fund, department, and object.

The City Manager and Administrative Services Department staff review the budget compared to actual revenues received and expenditures incurred and provide an analysis and report to the Council quarterly in a budget status report. Periodically, staff prepares mid-cycle budget adjustments for Council’s review and approval to provide minor adjustments to the two-year adopted budget.

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Long-Term Financial Planning. The City incorporates long-term financial planning into its budget process in several ways.
x First, the City has established a set of financial policies that were reviewed by the City Council and Executive Management Team in April 2023 during the development of the current two-year budget.

These policies establish goals for the allocation of public resources in the manner best suited to the efficient provision of services to citizens and visitors present within the City. Some of these policies call for maintaining adequate cash reserves and providing on-going maintenance of infrastructure and buildings, which are vital to sound fiscal management.
x Second, the City Council undertakes a strategic planning process to establish goals and priorities for the organization that take into account a long-term vision of the City and incorporates public input.

The City Council reviews and may modify its long-term vision statement every two years.

Additionally, the City Council seeks public input in developing the City’s goals to meet the City’s vision. The public input process includes a tri-fold flyer in all utility bills that directly asks for ideas about priorities, with prepaid postage for return mail to the City. In addition, the City receives feedback about priorities from social media and other online notifications such as Facebook, Next Door, Notify Me, online survey/Pismo Voice platform and feedback through the City’s website. The resulting goals are long-term goals that typically cannot be accomplished in one or two years. As such, City staff develop work plans to implement various stages of those goals and those items are incorporated into the budget.
x Third, the City maintains a five-year operating projection for the General Fund and the Water and Wastewater Enterprise Funds. The General Fund projection is updated quarterly and shared with Council annually.
x Fourth, the City maintains a ten-year long-range capital planning process that helps drive annual capital funding decisions as well as periodic bond issues for larger investments. The Capital Improvement Plan is approved biennially along with the two-year budget. x Finally, all GASB pronouncements are monitored and implemented into the City’s financial statements.

Budget Information
Historical and Current Budget Information. Set forth in Table 1 below are the final General Fund budgets for Fiscal Years 2021-22 and 2022-23, the audited actual results for Fiscal Years 2021-22 and 2022- 23, the revised budget for Fiscal Year 2023-24 and the revised budget for Fiscal Year 2024-25.

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TABLE 1

CITY OF PISMO BEACH

GENERAL FUND BUDGETS TO ACTUAL COMPARISONS

Final
Fiscal Year
2021-22
Budget
Fiscal Year
2021-22
Actual
Results
Final
Fiscal Year
2022-23
Budget
Fiscal Year
2022-23
Actual
Results
Revised
Fiscal Year
2023-24
Budget
Revised
Fiscal Year
2024-25
Budget

REVENUES
Property Taxes $ 6,326,148 $ 6,479,633 $ 7,015,830 $ 7,046,442 $ 7,009,000 $ 7,149,180 Sales Taxes 5,444,935 6,127,110 5,165,000 6,074,484 5,788,000 5,845,880 Transient Occupancy
Taxes
16,986,443 17,010,748 15,469,449 15,481,136 14,715,000 15,815,000 Other Taxes 919,344 1,147,530 919,895 1,260,652 1,080,560 1,096,602 Licenses and Permits 862,245 1,356,373 1,256,403 1,335,919 1,241,331 1,065,618 Fines and Forfeits 51,000 49,047 51,000 41,159 46,400 34,741 Subventions and Grants(1) 352,579 1,260,359 362,932 325,238 491,034 99,185 Investment Earnings 258,025 (533,521) 361,225 568,395 473,006 473,006 Rental Income 164,207 187,148 179,251 203,870 158,371 155,382 Charges for Services 426,500 628,025 769,680 877,156 899,300 917,822 Miscellaneous 1,441,281 1,792,234 1,394,999 1,514,745 2,258,669(2) 1,796,922(2) Total Revenues $33,232,707 $35,504,686 $32,945,664 $34,729,196 $34,160,671 $34,449,338

EXPENDITURES
General Government $ 8,280,413 $ 7,198,958 $ 8,067,530 $ 6,938,659 $ 9,491,426 $ 8,817,638 Public Safety 10,537,196 9,900,828 12,240,981 10,935,530 12,909,294 13,062,158 Highways and Streets 1,364,086 1,022,670 1,555,454 1,056,814 1,280,096 1,173,593 Community Services 2,413,980 2,365,609 2,556,688 2,300,122 3,034,000 2,849,186 Public Works 3,624,270 2,658,662 3,669,986 2,771,208 4,087,793 3,221,292 Capital Outlay 285,256 40,835 142,238 109,084 317,174 0 Total Expenditures $26,505,201 $23,187,562 $28,232,877 $24,111,417 $31,119,783 $29,123,867

Excess (Deficiency) of
Revenues Over (Under)
Expenditures
$ 6,727,506 $12,317,124 $ 4,712,787 $10,617,779 $ 3,040,888 $ 5,325,471

OTHER FINANCING

SOURCES (USES)

Transfers in $ 356,999 $ 246,850 $ 290,000 $ 290,000 $ 290,000 $ 290,000 Transfers out (25,345,510) (5,479,214) (23,214,189) (12,377,350) (24,155,605)(3) (3,946,508) Proceeds from long-term
debt
0 0 0 61,207 0 0
Total Other Financing
Sources (Uses)
($24,988,511) ($5,232,364) ($22,924,189) ($12,026,143) ($23,865,605) ($3,656,508)

Net Change in Fund
Balance
($18,261,005) $ 7,084,760 ($18,211,402) ($1,408,364) ($20,824,717) $ 1,668,963 Fund Balance, Beginning 30,527,697 30,527,697 37,612,457 37,612,457 36,204,093 15,379,376 Fund Balance, Ending $12,266,692 $37,612,457 $19,401,055 $36,204,093 $15,379,376 $17,048,339

(1) Includes State, federal and local grants. In Fiscal Year 2021-22, the City received COVID-19 pandemic related one-time funding, including $976,980 for the American Rescue Plan Act Coronavirus State and Local Recovery Funds program. The revised budget for Fiscal Year 2023-24 includes $107,316 of various recurring grants plus $383,718 of grants budgeted in a prior year, but were not yet received and, as a result, were carried forward to Fiscal Year 2024. The revised budget for Fiscal Year 2024-25.
(2) Increase in Fiscal Year 2023-24 reflects approximately $575,000 in revenues received from a legal settlement and a 20.9% increase in revenues from overhead cost recover. Fiscal Year 2024-25 reflects an increase of 9.0% in revenues from overhead cost recovery. (3) The majority of the amount included in the Transfers Out line item are for one-time capital improvement projects. The budgets for each Fiscal Year include the full amount of the respective capital improvement projects. For Fiscal Year 2023-24, the Transfers Out line item includes approximately $18.2 million of support for one- time capital improvement projects, including $8.7 million for the 2024 Project.

Source: City Annual Comprehensive Financial Reports for Fiscal Years 2021-22 and 2022-23; Revised biennial budget of the City for Fiscal Years 2023-24 and 2024-25.

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Fiscal Year 2023-25 Budget. The Fiscal Year 2023-25 biennial budget (the “2023-25 Adopted Budget”) was approved on June 6, 2023. The budget is updated periodically every six months to reflect necessary adjustments to the budget. In addition, the budget may be amended throughout the year through resolutions adopted by the City Council. Finally, staff may propose budget adjustments within a limited scope and amount.

The most recent comprehensive mid-year budget adjustments to the 2023-25 Adopted Budget were approved by the City Council on December 5, 2023. Since such date, the Council approved various resolutions appropriating funds to support various costs. In the resulting Fiscal Year 2023-25 revised budget (the “2023-25 Revised Budget”), the General Fund revenue projection for Fiscal Year 2023-24 was approximately $34.2 million, approximately $0.6 million (approximately (1.6%)) less than the Fiscal Year 2022-23 actual results.

This decrease is primarily due to the projected temporary reduction in Transient Occupancy Tax revenues as a result of the unusually rainy weather extending through April 2024. The General Fund revenue projection for Fiscal Year 2024-25 is approximately $34.4 million, approximately $0.3 million (approximately (0.8%)) less than the Fiscal Year 2022-23 actual results. The Fiscal Year 2024-25 budget in the 2023-25 Revised Budget includes a 0.8% growth assumption from the Fiscal Year 2023-24 Revised Budget. In preparing its biennial budget and subsequent adjustments, the City budgets revenues assuming the lowest potential growth rate for such revenues and budgets expenditures assuming the higher end of City estimates.

In the 2023-25 Revised Budget, General Fund operating expenditures were approximately $31.1 million for Fiscal Year 2023-24, approximately $7.0 million (approximately 29.7%) greater than the Fiscal Year 2022-23 actual results and approximately $29.1 million for Fiscal Year 2024-25, approximately $5.0 million (approximately 20.8%) greater than Fiscal Year 2022-23 actual results.

The main factors contributing to an increase in budgeted operating expenditures are the assumption of full City staffing levels, the incorporation of labor increases in the various MOUs for employee associations, updated benefit cost increases, funding a $1.4 million General Fund general contingency and Next Level funding opportunities, technology cost increases and merchant transaction fees, and general cost increases in various City operating contracts, such as janitorial services. Fiscal Year 2022-23 actual operating expenditures reflected several staff vacancies beyond historical attrition amounts.

Comparative Change in Fund Balance of the City General Fund The table below presents the City’s audited General Fund Statement of Revenues, Expenditures and Change in Fund Balance for Fiscal Years 2018-19 through 2022-23.

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TABLE 2

CITY OF PISMO BEACH GENERAL FUND STATEMENT OF
REVENUES, EXPENDITURES AND CHANGE IN FUND BALANCE(1)
2018-19 2019-20 2020-21 2021-22 2022-23

REVENUES
Property Taxes $ 5,619,424 $ 5,935,388 $ 6,220,595 $ 6,479,633 $ 7,046,442 Sales Taxes 4,815,640 4,537,068 5,408,109 6,127,110 6,074,484 Transient Occupancy Taxes(1) 10,498,160 9,395,523 14,209,579 17,010,748 15,481,136 Other Taxes 963,354 1,003,495 1,119,442 1,147,530 1,260,652 Licenses and Permits 1,042,359 839,257 1,136,857 1,356,373 1,335,919 Fines and Forfeits 68,545 49,165 46,662 49,047 41,159
Subventions and Grants(2) 111,321 977,188 1,254,169 1,260,359 325,238 Investment Earnings 655,411 774,791 210,641 (533,521) 568,395 Rental Income 188,518 185,524 154,872 187,148 203,870
Charges for Services 316,512 197,559 354,483 628,025 877,156 Miscellaneous 1,162,168 1,275,879 1,651,542 1,792,234 1,514,745 Total Revenues $ 25,441,412 $ 25,170,837 $ 31,766,951 $ 35,504,686 $ 34,729,196

EXPENDITURES
General Government $ 5,839,501 $ 5,914,193 $ 5,508,405 $ 7,198,958 $ 6,938,659 Public Safety 9,038,039 8,972,441 8,733,753 9,900,828 10,935,530 Highways and Streets 703,736 744,214 770,178 1,022,670 1,056,814 Community Services 1,485,259 1,445,898 1,872,822 2,365,609 2,300,122 Public Works 2,368,813 2,871,610 2,395,868 2,658,662 2,771,208 Capital Outlay 44,472 92,085 83,713 40,835 109,084 Total Expenditures $ 19,479,820 $ 20,040,441 $ 19,364,739 $ 23,187,562 $ 24,111,417

EXCESS (DEFICIENCY) OF REVENUES

OVER (UNDER) EXPENDITURES
$ 5,961,592 $ 5,130,396 $ 12,402,212 $ 12,317,124 $ 10,617,779

OTHER FINANCING SOURCES (USES)
Proceeds form Sales of Assets $ 2,500 -- -- -- -- Transfers in 429,462 $ 146,490 $ 140,000 $ 246,850 $ 290,000 Transfers out(3) (4,477,679) (8,200,745) (3,457,358) (5,479,214) (12,377,350) Proceeds from long-term debt 0 0 0 0 61,207
Total Other Financing Sources (Uses) $ (4,045,717) $ (8,054,255) $ (3,317,358) $ (5,232,364) $ (12,026,143)

Net Change in Fund Balances $ 1,915,875 $ (2,923,859) $ 9,084,854 $ 7,084,760 $ (1,408,364) Fund Balances (Deficits) - July 1 $ 22,450,827 $ 24,366,702 $ 21,442,843 $ 30,527,697 $ 37,612,457 Fund Balances (Deficits) - June 30 $ 24,366,702 $ 21,442,843 $ 30,527,697 $ 37,612,457 $ 36,204,093

(1) Increase in Fiscal Years 2020-21 and 2021-22 were due in part to increased tourism resulting from government measures implemented to mitigate the spread of COVID-19, such a limitations on indoor gatherings and masking requirements. In Fiscal Year 2020-21, a portion of the increase is attributable to the implementation of a 1% increase in the Transient Occupancy Tax that took effect on January 1, 2021. The City attributes the decrease in Fiscal Year 2022-23 to lifting of COVD-19-related travel restrictions and above-average rainfall in the region.
(2) Includes State, federal and local grants. Fiscal Year 2019-20 includes a one-time $813,336 payment from in compliance with California SB 1090 in the 2017-2018 regular session Pacific Gas & Electric Economic Mitigation funds and Essential Services Mitigation Funds to mitigate the impacts associated with the former pending closure of the PG&E Diablo Canyon nuclear power plant. Fiscal Years 2020-21 and 2021-22 include one-time payments of $976,980 for each year from the State for COVID-19 related Coronavirus Aid, Relief and Economic Security Act relief funds.
(3) In Fiscal Year 2022-23, transfers out included $0.43 million to the Agency for debt service, approximately $6.92 million to capital projects, approximately $0.13 million to Motor Vehicle Replacement Internal Service Fund and Information Technology Internal Fund, $0.10 million was transferred to the Wastewater Fund for the Internal Revenue Service subsidy relating to the Series 2017B Bonds and the remaining transfers went to the Pier Operation Fund.

Source: City Annual Comprehensive Financial Report for Fiscal Years 2018-19 through 2022-23.

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Fiscal Year 2019-20, Fiscal Year 2020-21 and Fiscal Year 2021-22. The City was able to rebound from the economic impacts of the COVID-19 pandemic at a faster pace than other neighboring communities due to visitors looking for a safe place to travel and enjoy outdoor activities accessible in the City, including WKHVDQG\EHDFK\HDUဨURXQGPLOGWHPSHUDWXUHVDQGYLVLWRU-serving amenities such as the Pismo Preserve and the new Pier Plaza. In addition, the City enjoys a stable source of visitors from the San Joaquin Valley, who visit the city largely during the summer to escape the extreme heat in the valley. Measures implemented by State, local and federal governments to mitigate the spread the COVID-19 global pandemic contributed to a faster than anticipated rebound for the City, as reduced international and air travel resulted in an increased interest in local travel destinations that were within driving distance and that provided outdoor activities. In Fiscal Year 2020-21, the City experienced an overall increase in General Fund revenues of approximately $6.6 million (approximately 26.2%) as compared to Fiscal Year 2019-20. Transient Occupancy Tax revenues saw an increase of approximately 51.2%, representing an increase of approximately $4.8 million over Fiscal Year 2019-20. Sales Tax Revenues increased in Fiscal Year 2020-21, as the City received approximately $5.4 million, an increase of $871,041 (approximately 19.2%) from Fiscal Year 2019-20. Revenues from Licenses and Permits and Subventions and Grants also increased over Fiscal Year 2019-20 amounts.

In Fiscal Year 2021-22, as the City experienced an overall increase in General Fund revenues of approximately $3.7 million (approximately 11.8%) as compared to Fiscal Year 2020-21. Transient Occupancy Tax revenues saw an increase of approximately 19.7%, representing an increase of approximately $2.8 million over Fiscal Year 2020-21. Sales Tax Revenues increased in Fiscal Year 2021-22, as the City received approximately $6.1 million, an increase of $719,001 (approximately 13.3%) from Fiscal Year 2020-21.

Fiscal Year 2022-23 and Fiscal Year 2023-24 to Date. In Fiscal Year 2022-23, the City experienced a decrease in General Fund revenues of approximately $775,490 (approximately 2.2%) as compared to Fiscal Year 2021-22. Transient Occupancy Tax revenues saw a decrease of approximately 9.0%, representing a decrease of approximately $1.5 million over Fiscal Year 2021-22. The City’s transient occupancy tax revenues decrease can be attributed to double-digit percentage declines in Transient Occupancy Tax revenues from December 2022 through March 2023 compared to the same months in the previous fiscal year. This was largely due to the atmospheric river that caused flooding in California, resulting in fewer visitors to the beach.

Additionally, the abundance of snow in the mountains served as an attractive alternative to visiting the beach.

The City has budgeted to receive Transient Occupancy Tax revenues of $14.7 million in Fiscal Year 2023-24 and, as of March 2024, projects Transient Occupancy Tax revenues of $14.8 million in Fiscal Year 2023-24.

Sales Tax Revenues slightly decreased in Fiscal Year 2022-23, as the City received approximately $6.1 million, a decrease of $52,626 (approximately 0.9%) from Fiscal Year 2021-22. The City has budgeted to receive Sales Tax Revenues of $5.8 million in Fiscal Year 2023-24 and, as of March 2024, projects Sales Tax Revenues of $6.0 million in Fiscal Year 2023-24.

Comparative General Fund Balance Sheets of the City
The table below presents the City’s audited General Fund Balance Sheets for Fiscal Years 2018-19 through 2022-23.

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TABLE 3

CITY OF PISMO BEACH

GENERAL FUND BALANCE SHEETS

FIVE YEAR COMPARISON
2018-19 2019-20 2020-21 2021-22 2022-23
ASSETS
Cash and Investments $ 23,990,478 $ 21,360,744 $ 28,354,453 $ 36,480,540 $36,736,109 Taxes Receivable 1,692,624 2,205,091 3,251,427 3,055,422 2,992,418 Accounts Receivable 200,429 182,250 1,206,940 1,252,320 238,502 Accrued Interest Receivable 45,569 16,985 3,488 13,798 20,192 Prepayments 1,155,945 11,021 44,906 50,324 68,932
Leases Receivable -- -- -- 626,692 496,574
Total Assets $ 27,085,045 $ 23,776,091 $ 32,861,214 $41,479,096 $40,552,727

LIABILITIES
Accounts Payable $ 1,468,125 $ 366,898 $ 485,307 $ 1,060,669 $ 1,207,338 Accrued Liabilities 709,432 1,194,801 937,636 1,214,020 1,600,527 Deposits 504,786 771,549 910,574 972,540 991,880 Total Liabilities $ 2,682,343 $ 2,333,248 $ 2,333,517 $ 3,247,229 $ 3,799,745

DEFERRED INFLOWS OF

RESOURCES

Deferred Inflows – Leases -- -- -- 619,410 483,941 Unavailable Revenue -- -- -- -- 64,948
Total deferred inflow of Resources 619,410 548,889

FUND BALANCES
Nonspendable $ 1,155,945 $ 11,021 $ 44,906 $ 50,324 $ 68,932 Restricted 0 0 0 0 0
Committed 14,332,834 6,816,529 6,684,881 1,030,911 957,733 Assigned 1,114,527 6,209,614 6,687,765 27,274,402 9,462,980 Unassigned 7,763,396 8,405,679 17,110,145 9,256,820 25,714,448 Total Fund Balances $ 24,366,702 $ 21,442,843 $ 30,527,697 $37,612,457 $ 36,204,093 Total Liabilities, Deferred Inflows of
Resources and Fund Balances $ 27,049,045 $ 23,776,091 $ 32,861,214 $41,479,096 $40,552,727

Source: City Annual Comprehensive Financial Report for Fiscal Years 2018-19 through 2022-23.

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Major Revenues
The City derives its General Fund revenues from a variety of sources including ad valorem property taxes, sales taxes, transient occupancy taxes, licenses, permits, other taxes, charges for services provided by the City and other miscellaneous revenues. The City’s audited total General Fund revenues for selected major revenue sources for Fiscal Years 2018-19 through 2022-23 are set forth below.

TABLE 4

CITY OF PISMO BEACH
SELECTED MAJOR REVENUE SOURCES(1)
Revenue Category 2018-19 2019-20 2020-21 2021-22 2022-23 Property Taxes $ 5,619,424 $ 5,935,388 $ 6,220,595 $ 6,479,633 $ 7,046,442 Sales Taxes 4,815,640 4,537,068 5,408,109 6,127,110 6,074,484 Transient Occupancy Taxes 10,498,160 9,395,523 14,209,579 17,010,748 15,481,136 Total $ 20,933,224 $ 19,867,979 $ 25,838,283 $ 29,617,491 $ 28,602,062

Source: City Annual Comprehensive Financial Report for Fiscal Years 2018-19 through 2022-23.

Transient Occupancy Taxes
Due to the City’s tourism sector, Transient Occupancy Tax revenues are the single largest source of revenue to the City’s General Fund. Transient Occupancy Tax revenues are generated by an 11% tax imposed on the gross rent charged to persons staying 30 consecutive days or less in a hotel, motel, inn or other lodging place within the City. As of June 30, 2023, the City estimates that it has 2,106 hotel rooms among 35 hotels and at least another 1,001 rooms among 150 short-term vacation rentals.

The City’s Transient Occupancy Tax was levied at a rate of 10% until December 31, 2020. In November 2020, voters within the City approved Measure “B-20” which increased the Transient Occupancy Tax by 1%, resulting in a Transient Occupancy Tax of 11%. The 11% Transient Occupancy Tax rate became effective on January 1, 2021. Pursuant to Measure B-20, Transient and Occupancy Tax revenues derived from the additional 1% increase in the Transient Occupancy Tax rate can be used for purposes relating to the City’s PSF, including paying the Base Rental Payments. All proceeds of the Transient Occupancy Tax levied and imposed are accounted for in the City’s General Fund, and may be used for any lawful purpose, as designated by the City Council. In Fiscal Year 2022-23, Transient Occupancy Tax receipts were approximately $15.5 million, making up approximately 44.6% of total General Fund revenues. The City has budgeted that it will receive approximately $14.72 million in Transient Occupancy Tax revenues for Fiscal Year 2023-24, providing approximately 43.1% of total General Fund revenues.

Transient Occupancy Tax revenues have historically represented a relatively stable source of revenues for the City’s General Fund. In recent years, Transient Occupancy Tax revenues experienced greater variability due, in part, to the spread of COVID-19 and the related measures implemented by State, local and federal governments to mitigate the outbreak of COVID-19 and its effects. Transient Occupancy Tax revenues decreased in Fiscal Year 2019-20 due to the impacts of the COVID-19 pandemic and resulting governmental measures, including stay at home mandates. The City, however, experienced a rebound in Transient Occupancy Tax revenues in Fiscal Year 2020-21, as tourism increased, as visitors sought locations that offered outdoor activities while the COVID-19 prevention measures were in place. The increase in visitors resulted in increased hotel room rates and higher occupancy. Transient Occupancy Tax revenues also benefit from the additional 1% that became effective on January 1, 2021. The City experienced a 51.2% growth in Transient Occupancy Tax revenues in Fiscal Year 2020-21 compared to Fiscal Year 2019-20 and another 19.7% growth in Fiscal Year 2021-22 compared to Fiscal Year 2020-21.

In Fiscal Year 2022-23, Transient Occupancy Tax revenues declined by 9.0% compared to Fiscal Year 2021-22. The City attributes the decline to the COVID-19-related travel restrictions having been lifted, Council Agenda 05-07-2024
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and unusually rainy weather experienced during the winter and early spring. The City is projecting that Fiscal Year 2023-24 will be an unusually rainy year, similar to Fiscal Year 2022-23, and has projected a 5.0% decline in Transient Occupancy Tax revenues from Fiscal Year 2022-23. The City currently projects increases Transient Occupancy Tax revenues in Fiscal Year 2024-25 with additional increases forecasted in future Fiscal Years.

The City works with the lodging properties in the City for targeted marketing efforts and provide new visitor serving amenities to continue to benefit the City and contribute to increasing Transient Occupancy Tax revenues.

Property Taxes
During Fiscal Year 2022-23, property tax receipts of approximately $7.0 million provided the second largest tax revenue source of the City, contributing approximately 20.3% of total General Fund revenues. The City has budgeted to receive approximately $7.0 million of General Fund property tax revenues in Fiscal Year 2023-24, and, as of March 2024, projects to receive approximately $7.1 million of General Fund property tax revenues in Fiscal Year 2023-24. Property Tax revenues have increased in the past three fiscal years by 4.8%,

4.2%, and 8.7%, in Fiscal Years 2020-21, 2021-22, and 2022-23, respectively.

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

Secured and unsecured properties are entered separately on the assessment roll maintained by the county assessor. The method of collecting delinquent taxes is substantially different for the two classifications of property. The exclusive means of enforcing the payment of delinquent taxes with respect to property on the secured roll is the sale of the property securing the taxes of the State for the amount of taxes that are delinquent. The taxing authority has four methods of collecting unsecured personal property taxes: (1) a civil action against the taxpayer; (2) filing a certificate in the office of the county clerk specifying certain facts in order to obtain a judgment lien on certain property of the taxpayer; (3) filing a certificate of delinquency for record in the County Recorder’s Office in order to obtain a lien on certain property of the taxpayer, and (4) seizure and sale of personal property, improvement or possessory interest belonging or taxable to the assessee.

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

Legislation enacted in 1984 (Section 75 et seq. of the Revenue and Taxation Code of the State of California), provides for the supplemental assignment and taxation of property as of the occurrence of a change in ownership or completion of new construction. Previously, statutes enabled the assessment of such changes only as of the next tax lien date following the change and thus delayed the realization of increased property Council Agenda 05-07-2024
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taxes from the new assessment for up to 14 months. Collection of taxes based on supplemental assessments occurs throughout the year. Taxes due are prorated according to the amount of time remaining in the tax year, with the exception of tax bills dated January 1 through May 31, which are calculated on the basis of the remainder of the current fiscal year and the full 12 months of the next fiscal year.

The table below sets forth the secured and unsecured assessed valuations for property in the City for Fiscal Years 2013-14 through 2022-23.

TABLE 5

CITY OF PISMO BEACH

ASSESSED VALUATION
FISCAL YEARS 2013-14 THROUGH 2022-2023
Fiscal Year Secured Unsecured Total
2013-14 $2,454,598,066 $39,650,287 $2,494,248,353
2014-15 2,561,759,932 38,783,155 2,600,543,087
2015-16 2,729,929,763 38,748,768 2,768,678,531
2016-17 2,938,652,372 39,556,096 2,978,208,468
2017-18 3,127,823,038 43,517,503 3,171,340,541
2018-19 3,304,138,748 43,836,530 3,347,975,278
2019-20 3,521,611,971 48,609,685 3,570,221,656
2020-21 3,721,356,583 51,791,595 3,773,148,178
2021-22 3,849,966,464 49,255,521 3,899,221,985
2022-23 4,157,787,755 56,203,866 4,213,991,621

Source: San Luis Obispo County Auditor-Controller.

The County operates under a statutory program entitled Alternate Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds (the “Teeter Plan”). Under the Teeter Plan, local taxing entities receive 100% of their tax levies net of delinquencies, but do not receive interest or penalties on delinquent taxes collected by the County. The City’s share of the ad valorem property tax levy is included in the County’s Teeter Plan. As a result, the City currently receives 100% of such levy and is not impacted by delinquencies in payment. However, the County may choose to discontinue the Teeter Plan at any time.

The ten largest property taxpayers in the City for Fiscal Year 2022-23 based on total assessed valuation, the land use and the percentage of the City’s total assessed value attributable to each are shown in the below table. The information in Table 6 has been obtained from third-party sources and is included for general information purposes only. The City has not verified the information in Table 6 and does not guarantee the accuracy of such information.

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TABLE 6

CITY OF PISMO BEACH

TEN PRINCIPAL TAXPAYERS

Property Owner
2023
Taxable
Assessed
Valuation(1) % of Total(2) Land Use

1. Vespera Pismo Beach Holdings $ 79,960 1.92% Hotel

2. Pismo Beach Mobile Park 50,455 1.21 Senior Citizen Residential Community 3 Prime Outlets 33,488 0.81 Shopping Center

4. Pismo Creek RV Resort Inc. 28,693 0.69 RV Park

5. Core Pismo LLC 27,412 0.66 Hotel

6. SCM Pismo Beach Hotel LLC 25,505 0.61 Hotel

7. Studio Inn and Suites LLC 21,788 0.52 Hotel

8. Spalding G Wathen Inc. 18,859 0.45 Medical Service

9. Core Cove LLC 17,701 0.43 Real Estate Development

10. Pismo Coast Plaza LLC 17,245 0.41 Shopping Center $ 321,106 7.72%

(1) Amounts truncated to the nearest thousand.
(2) 2022-23 Local Assessed Valuation (secured and unsecured): $4,213,991,621.

Source: City Annual Comprehensive Financial Report for Fiscal Year 2022-23.

To the extent completed construction in the City has not yet been reflected in the assessed valuation of property in the City, the value of such projects can be expected to increase the total assessed valuation of property in the City. Similarly, the planned and underway building activity, if completed as currently proposed, can be expected to increase the assessed valuation of property in the City and property tax revenues and/or other City revenues. However, no assurances can be given as to the completion thereof or any such increase.

Sales Taxes
During Fiscal Year 2022-23, sales tax receipts of approximately $6.1 million provided the third largest revenue source for the City, contributing approximately 17.5% of total General Fund revenues. The City has budgeted sales tax receipts to total approximately $5.8 million in Fiscal Year 2023-24, and, as of March 2024 projects that sales tax receipts will total approximately $6.0 million in Fiscal Year 2023-24. The City has budgeted sales tax receipts to total approximately $5.9 million in Fiscal Year 2024-25.

A sales tax is imposed on retail sales or consumption of personal property. The current total sales tax rate in the City is 7.75%. The basic sales tax rate is established by the State Legislature, and local overrides may be approved by voters. The voters in Pismo Beach approved Measure “C”, a .50% transaction sales and use tax on June 3, 2008 that became effective on October 1, 2008. The expiration date of tax collections for this measure was March 31, 2015. In November 2014, City voters approved Measure “I”, the 0.50% transaction sales and use tax, which expires on March 31, 2027. Voters approved Measure I at 71.22%. The City Council is considering extending and increasing the current 0.50% transaction sales and use tax that was approved by Measure I to provide additional funding for future infrastructure projects. The City is exploring whether to propose a ballot measure for inclusion on the ballot for the November 2024 election that would increase the transaction sales and use tax to 1.00%. If the matter is included on the November ballot and is approved by the voters, the increase in the transaction sales and use tax would become effective on April 1, 2025 and would remain in place until March 31, 2037. There can be no assurance that the City will determine to place a measure on the November 2024 ballot or, if a measure is placed on the ballot, that voters located in Council Agenda 05-07-2024
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the City will approve the ballot measure increasing and extending the current transaction sales and use tax if such measure is placed on the ballot for the November 2024 election.

All proceeds of the tax levied and imposed are accounted for in the City’s General Fund, and may be used for any lawful purpose, as designated by the City Council. Measure “I” generated approximately $2,033,346 in Sales Tax Revenues in Fiscal Year 2022-23.

The following Table 7 sets forth the Sales Tax Revenue Base Data, and corresponding Sales Tax revenues received by the City for Fiscal Years 2013-14 through 2022-23.

Table 7

CITY OF PISMO BEACH
FISCAL YEARS 2013-14 THROUGH 2022-23

SALES TAX REVENUE BASE DATA
Fiscal Year
Revenue Base
City-Wide
Retail Sales
Subject to Tax
Total Retail
Sales Tax Rate
City Direct Tax
Rate
City
Transaction
Tax Rate(1)
Sales Tax
Revenue
Recognized by
the City
2013-14 $268,253,800 8.00% 1.00% 0.50% $4,104,284
2014-15 275,456,400 8.00 1.00 0.50 4,497,958
2015-16 284,997,500 8.00 1.00 0.50 4,485,779
2016-17 288,353,100 7.75 1.00 0.50 4,433,756
2017-18 286,522,200 7.75 1.00 0.50 4,689,005
2018-19 319,725,000 7.75 1.00 0.50 4,815,640
2019-20 269,174,200 7.75 1.00 0.50 4,537,068
2020-21 358,766,100 7.75 1.00 0.50 5,408,111
2021-22 399,349,300 7.75 1.00 0.50 6,127,110
2022-23 394,220,500 7.75 1.00 0.50 6,074,484

Source: Revenue base information provided by HDL Sales Tax Allocation Summary report. Revenue information provided by the City.

Other Taxes
The City levies certain other taxes, the revenues from which flow into the General Fund. Franchise tax revenue consists of a tax on five franchise operations in the City: electric, gas, cable television, refuse, and Phillips 66 Pipeline. Business license tax revenues include gross receipts licenses, contractor licenses, rental unit licenses, and other business license tax revenues. Also included in other taxes is Property Transfer tax and Homeowners’ Tax Relief revenues. In Fiscal Year 2022-23, Other Tax receipts were approximately $1.3 million, providing approximately 3.6% of General Fund revenues. The City has budgeted approximately $1.1 million in franchise tax revenue for Fiscal Year 2023-24, providing approximately 3.2% of total General Fund revenues.

Licenses and Permits
The City collects fees for licenses and permits provided by the City, including, but not limited to, regulatory permits, conditional use permits, development permits, plan check and permitting, building permits and inspections, other planning, engineering, and building permitting fees and special event permit fees. In Fiscal Year 2022-23, the City collected approximately $1.3 million, providing approximately 3.8% of total General Fund revenues. The City has budgeted that it will collect approximately $1.2 million in Fiscal Year 2023-24, providing approximately 3.6% of total General Fund revenues.

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Charges for Services
In Fiscal Year 2022-23, charges for services of approximately $877,156 (approximately 2.5% of total General Fund revenues) were collected for services including charges for police dispatch services for the City of Grover Beach, recreational classes and events, junior lifeguard and childcare programs, fire, as well as police impound and other fees. Charges for services are currently budgeted at approximately $899,300 (approximately 2.6% of total General Fund revenues) in Fiscal Year 2023-24.

Miscellaneous Revenues
In Fiscal Year 2022-23, the City received other revenues of approximately $1.5 million (approximately 4.4% of General Fund revenues) and has budgeted approximately $2.3 million (approximately

6.6% of General Fund revenues) for Fiscal Year 2023-24. Other revenues primarily consist of revenue received from overhead charges to other City funds, Clean Renewable Energy Bonds Internal Revenue Service subsidy payments, City special event fee revenues, and other miscellaneous reimbursements and revenues.

Indebtedness
Long-Term Debt. The City’s long-term obligations payable from the General Fund currently consist of the Series 2017A Bonds, and the Series 2017B Bonds. As of March 1, 2024, the Series 2017A Bonds and the Series 2017B Bonds were outstanding in the principal amounts of $6,535,000 and $3,190,626, respectively.

The City has entered into loans obtained from the State Water Resources Control Board to finance improvements to the City’s wastewater system. Such loans and outstanding bonds are secured revenues of the wastewater system and are not payable from the General Fund.

See Note 5 to the City’s audited financial statements for Fiscal Year 2022-23 attached hereto as Appendix C for a description of the City’s outstanding indebtedness.

Short-Term Debt. The City currently has no short-term debt outstanding.

Investments
As discussed above, the City invests its funds in accordance with its Investment Policy. See “CITY FINANCIAL INFORMATION—Financial Policies—Investment Policy.” A summary of the City’s investments as of March 31, 2024 is shown in Table 8 below.

TABLE 8

CITY OF PISMO BEACH

INVESTMENT PORTFOLIO SUMMARY
As of March 31, 2024
Financial Instrument Book Value Market Value % of Portfolio (Book Value) Local Agency Investment Fund $20,033,457 $20,033,457 25% Negotiable Certificates of Deposit 16,085,363 15,721,050 20% Checking Account 13,782,202 13,782,202 17%
US Government Agency Obligations 13,750,000 12,863,095 17% US Treasury Issues 8,003,991 8,009,432 10% Corporate Bond 2,591,143 2,387,140 3%
Issues of Other California entities 1,965,035 1,855,404 2% Bond funds: Wilmington Trust 1,607 1,607 0%
OPEB Trust Account 5,500,858 5,500,858 7%
Total Value $81,713,656 $80,154,245 100%
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Source: The City.

Retirement System
This caption contains certain information relating to the California Public Employees Retirement System (“CalPERS”). The information is primarily derived from information produced by CalPERS, its independent accountants and actuaries. The City has not independently verified the information provided by CalPERS and makes no representations nor expresses any opinion as to the accuracy of the information provided by CalPERS.

The comprehensive annual financial reports of CalPERS are available on its Internet website at www.calpers.ca.gov . The CalPERS website also contains CalPERS’ most recent actuarial valuation reports and other information concerning benefits and other matters. Such information is not incorporated by reference herein. The City cannot guarantee the accuracy of such information. Actuarial assessments are “forward-looking” statements that reflect the judgment of the fiduciaries of the pension plans, and are based upon a variety of assumptions, one or more of which may not materialize or be changed in the future.

Actuarial assessments will change with the future experience of the pension plans.

Plan Description - All qualified permanent and probationary employees are eligible to participate in the Public Agency Cost-Sharing Multiple-Employer Defined Benefit Pension Plan (the “Plan”) administered by CalPERS. The Plan consists of individual rate plans (benefit tiers) within a safety risk pool (police and fire) and a miscellaneous risk pool (all other). Plan assets may be used to pay benefits for any employer rate plan of the safety and miscellaneous risk pools. Accordingly, rate plans within the safety or miscellaneous pools are not separate plans under GASB Statement No. 68. Individual employers may sponsor more than one rate plan in the miscellaneous or safety risk pools. The City sponsors eight rate plans (three miscellaneous and five safety). Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

Benefits Provided - CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non- duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost-of-living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.

While the City’s Safety and Miscellaneous plans are not closed to new entrants, the component option of Safety Fire Tier 1, Safety Police Tier 1, and Miscellaneous Tier 1 are closed to new entrants. Classic members, as defined by CalPERS, entering the City’s plans would enter the Tier 2 plans, and New Members, as defined by CalPERS, would enter the PEPRA plans.

The Plan’s provisions and benefits in effect at June 30, 2023, are summarized as follows:

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Safety - Fire
Tier 1 PEPRA
Hire Date
Prior to January 1,
2013
On or After
January 1, 2013
Benefit Formulas 2.0% at 50 2.7% at 57
Benefit Vesting Schedule 5 years Service 5 Years Service Benefit Payments Monthly for Life Monthly for Life
Retirement Age 50 - 55+ 50 - 55+
Monthly Benefits, as a % of Eligible Compensation 2.0% 2.0% to 2.7% Required Employee Contribution Rates 0% 0%
Required Employer Contribution Rates 0.00% 0.00%
Final Average Compensation Period 3-Year Average 3-Year Average Required Unfunded Accrued Liability Payment (UAL) $144,205 $2,662

Safety - Police
Tier 1 Tier 2 PEPRA
Hire Date
Prior to
January 1, 2013
On or After
December 17, 2012
On or After
January 1, 2013
Benefit Formulas 3% at 50 3.0% at 55 2.7% at 57
Benefit Vesting Schedule 5 Years Service 5 Years Service 5 Years Service Benefit Payments Monthly for Life Monthly for Life Monthly for Life Retirement Age 50 - 55+ 50 - 55+ 50 - 55+
Monthly Benefits, as a % of Eligible
Compensation 3.0% 3.0% 2.0% - 2.7%
Required Employee Contribution Rates 9% 9% 13.0%
Required Employer Contribution Rates 23.75% 20.64% 12.8% Employer Share Paid by Employee -3.0% -3.0% -0.5%
Final Average Compensation Period Single Highest Year 3-Year Average 3-Year Average Required Unfunded Accrued Liability Payment
(UAL) $589,350 $8,258 $25,641

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Miscellaneous
Tier 1 Tier 2 PEPRA
Hire Date
Prior to
January 1, 2013
On or After
December 17,
2012
On or After
January 1, 2013
Benefit Formulas 2.5% at 55 2.0% at 60 2.0% at 62
Benefit Vesting Schedule 5 Years Service 5 Years Service 5 Years Service Benefit Payments Monthly for Life Monthly for Life Monthly for Life Retirement Age 50 - 55+ 50 - 63+ 52 - 67+
Monthly Benefits, as a % of Eligible
Compensation 2.0%- 2.7% 1.0% - 2.0% 1.0% - 2.5%
Required Employee Contribution Rates 8% 7% 6.75%
Required Employer Contribution Rates 12.21% 8.63% 7.47% Excludes Employer Share Paid by Employee 0.00% -1.00% -1.75% Final Average Compensation Period Single Highest Year 3-Year Average 3-Year Average Required Unfunded Accrued Liability Payment
(UAL) $760,149 $30,994 $42,562

Contributions - Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for the Plan are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.

The City’s contributions to the Plan for the measurement period ended June 30, 2022 were as follows:

Miscellaneous Safety Total
Contributions - Employer $1,713,157 $1,606,985 $3,320,142

Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
As of June 30, 2023, the City reported net pension liabilities for its proportionate share of the net pension liability of the Plan as follows:

Miscellaneous Safety Total
Plan’s Proportionate Share of the Net Pension Liability $10,468,516 $9,804,230 $20,272,746

The City’s net pension liability for the Plan is measured as the proportionate share of the net pension liability of the Plan. The net pension liability of the Plan is measured as of June 30, 2022, and the total pension liability for the Plan used to calculate the net pension liability was determined by actuarial valuations as of June 30, 2021 rolled forward to June 30, 2022 using standard update procedures. The City’s proportion of the net pension liability was based on the City’s plan liability and asset-related information where available, and proportional allocations of individual plan amounts as of the valuation date where not available.

The City’s proportionate share of the net pension liability for the Plan as of the measurement dates June 30, 2021 and 2022 were as follows:

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Miscellaneous Safety Total
Proportion -June 30, 2021 0.20010% 0.12592% 0.17300%
Proportion -June 30, 2022 0.22372 0.14268 0.17551
Change - Increase/(Decrease) 0.02362% 0.01676% 0.00251%

For the year ended June 30, 2023, the City recognized pension expense of $2,719,812. At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Miscellaneous
Deferred Outflows
of Resources
Deferred Inflows
of Resources
Pension Contributions Made Subsequent to Measurement Date $ 1,307,761 $ - Changes in Assumptions 1,072,718 -
Differences Between Expected and Actual Experience 210,228 (140,802) Differences Between Projected and Actual Investment Earnings 1,917,554 - Difference Between Employer’s Contributions and Proportionate - - Share of Contributions - (215,533)
Change in Employer’s Proportion 115,255 (437,598)
Total $ 4,623,516 $ (793,933)

Safety
Deferred Outflows
of Resources
Deferred Inflows
of Resources
Pension Contributions Made Subsequent to Measurement Date $ 1,210,647 $ - Changes in Assumptions 988,563 -
Differences Between Expected and Actual Experience 405,761 (106,466) Differences Between Projected and Actual Investment Earnings 1,548,225 - Difference Between Employer’s Contributions and Proportionate Share of Contributions - (931,249)
Change in Employer’s Proportion 674,414 (22,982)
Total $ 4,827,610 $(1,060,697)

Total
Deferred Outflows
of Resources
Deferred Inflows
of Resources
Pension Contributions Made Subsequent to Measurement Date $ 2,518,408 $ - Changes in Assumptions 2,061,281 -
Differences Between Expected and Actual Experience 615,989 (247,268) Differences Between Projected and Actual Investment Earnings 3,465,779 - Difference Between Employer’s Contributions and Proportionate Share of Contributions - (1,146,782)
Change in Employer’s Proportion* 369,549 (40,460)
Total $ 9,031,006 $(1,434,510)

* Totals do not match individual pools due to the netting of deferrals each measurement period.

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Deferred outflows of resources of $2,518,408 were reported, relating to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending June 30, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Fiscal Year
Ending June 30,
Deferred Outflows (Inflows)
of Resources
2024 $ 1,206,782
2025 1,129,686
2026 624,343
2027 2,117,277

Actuarial Assumptions - The total pension liabilities in the June 30, 2023 actuarial valuations were determined using the following actuarial assumptions:

Valuation Date June 30, 2021
Measurement Date June 30, 2022
Actuarial Cost Method Entry-age Normal Cost Method
Actuarial Assumptions:

Discount Rate 6.90%
Inflation 2.30%
Salary Increase Varies by Entry Age and Service
Post Retirement Benefit Increase(1) See note
Mortality Rate Table Derived using CalPERS’ membership data for all funds

(1) Discount rate takes into account CalPERS overhead costs. (2) Contract COLA up to 2.30% until Purchasing Power Protection Allowance Floor on Purchasing Power applies.

The Mortality Rate Table used was developed based on CalPERS-specific data. The rates incorporate Generational Morality to capture ongoing mortality improvement using 80% of Scale MP 2020 published by the Society of Actuaries. For more details on this table, please refer to the 2021 experience study that can be found on the CalPERS website.

Discount Rate - The discount rate used to measure the total pension liability as of the measurement date of June 30, 2022 for the Plan was 6.90%, which differs from the discount rate used as of the measurement date of June 30, 2021, of 7.15%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability. A detailed report testing these projections can be obtained from the CalPERS website.

Long-term Expected Rate of Return - In determining the long-term expected rate of return, CalPERS took into account both long-term market return expectations as well as the expected pension fund cash flows.

Projected returns for all asset classes are estimated and, combined with risk estimates, are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projected portfolio return.

The expected real rates of return by asset class are as follows:

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Asset Class
Assumed Asset
Allocation Real Return(1,2)
Global Equity- cap-weighted 30.0% 4.5%
Global Equity- non-cap-weighted 12.0 3.8
Private Equity 13.0 7.28
Treasury 5.0 0.27
Mortgage-backed Securities 5.0 0.50
Investment Grade Corporates 10.0 1.56
High Yield 5.0 2.27
Emerging Market Debt 5.0 2.48
Private Debt 5.0 3.57
Real Assets 15.0 3.21
Leverage -5.0 -0.59
Total 100.0%

(1) An expected inflation of 2.3% used for this period. (2) Figures are based on the 2021-22 Asset Liability Management study.

Sensitivity of the Net Pension Liability to Changes in the Discount Rate - The following presents the City’s proportionate share of the net position liability for the Plan, calculated using the discount rate for the Plan, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is one percentage point lower or higher than the current rate:

Miscellaneous Safety Total
1% Decrease 5.90% 5.90% 5.90%
Net Pension Liability $16,439,047 $15,631,756 $32,070,803

Current Discount Rate 6.90% 6.90% 6.90%
Net Pension Liability $10,468,516 $ 9,804,230 $20,272,746

1% Increase 7.90% 7.90% 7.90%
Net Pension Liability $ 5,556,249 $ 5,041,545 $10,597,794

Pension Plan Fiduciary Net Position - Detailed information about the pension Plan’s fiduciary net position is available in the separately issued CalPERS financial reports.

Payable to the Pension Plan
At June 30, 2023, the City reported a payable of $0, for the outstanding amount of contributions to the pension plan for the year ended June 30, 2023.

Defined Contribution Pension Plan
The City contributes to one of two different defined contribution pension plans for its full-time employees in the various bargaining units. Employees may elect to enroll in either ICMA Retirement Corporation or CalPERS 457 Deferred Compensation Plan (“457 Plan”). Both plans are administered by the respective contracting plan agencies. Benefit terms, including contribution requirements, for the 457 Plan are established and may be amended by the City Council. The City is required to contribute a flat amount, to individual employee accounts for each participating employee. Contribution levels are as follows by employee bargaining unit:

Bargaining Unit City Annual Contribution
SEIU $1,500
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Bargaining Unit City Annual Contribution
POA $1,500
Supervisory/Technical and Mid-Management $7,000
Management Employees and City Manager $14,000
Council Members $12

Employees are permitted to make contributions up to applicable Internal Revenue Code limits. For the year ended June 30, 2023, employee contributions totaled $247,544, and the City recognized pension expense $346,016.

Employees are immediately vested in their own, and City, contributions and earnings on those contributions.

The City had no liability to the 457 Plan as of June 30, 2023.

Funded Status. The tables below are derived from the City of Pismo Beach Annual Valuation Reports with valuation dates as of June 30, 2022 and delivered in July 2023 and show the funded status of the Miscellaneous rate plans (Miscellaneous, Miscellaneous Second Tier and PEPRA Miscellaneous), Safety-Fire rate plans (Safety Fire and PEPRA Safety Fire) and Safety-Police rate plans (Safety Police, Safety Policy Second Tier and PEPRA) as of the valuation dates shown.

Miscellaneous Plan
Valuation
Date
Accrued
Liability
Share of Pool’s
Market Value of
Assets
Unfunded
Liability Funded Ratio
Annual
Covered
Payroll
06/30/2018 $ 34,903,068 $ 26,177,765 $ 8,725,303 75.0% $ 2,250,257 06/30/2019 35,960,455 26,825,238 9,135,217 74.6 1,990,635 06/30/2020 37,219,792 27,248,359 9,971,433 73.2 1,969,444 06/30/2021 39,076,864 32,365,451 6,711,413 82.8 1,742,316 06/30/2022 40,057,677 29,048,451 11,009,226 72.5 1,687,004

Source: CalPERs Miscellaneous Plan of the City of Pismo Beach Annual Valuation Report as of June 30, 2022.

Miscellaneous Second Tier Plan
Valuation
Date
Accrued
Liability
Share of Pool’s
Market Value of
Assets
Unfunded
Liability Funded Ratio
Annual
Covered
Payroll
06/30/2018 $ 583,324 $ 537,990 $ 45,334 92.2% $ 891,418 06/30/2019 877,078 808,786 68,292 92.2 1,152,354
06/30/2020 1,143,974 1,036,935 107,039 90.6 1,205,656
06/30/2021 1,490,580 1,571,104 (80,524) 105.4 1,063,063 06/30/2022 1,722,995 1,556,368 166,627 90.3 934,292

Source: CalPERs Miscellaneous Second Tier Plan of the City of Pismo Beach Annual Valuation Report as of June 30, 2022.

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PEPRA Miscellaneous Plan
Valuation
Date
Accrued
Liability
Share of Pool’s
Market Value of
Assets
Unfunded
Liability Funded Ratio
Annual
Covered
Payroll
06/30/2018 $ 744,348 $ 686,869 $ 57,479 92.3% $ 1,643,174 06/30/2019 968,225 875,932, 92,293 90.5 1,589,237
06/30/2020 1,302,356 1,160,591 141,765 89.1 1,866,585
06/30/2021 1,893,708 1,993,759 (100,051) 105.3 2,437,950 06/30/2022 2,417,102 2,157,827 259,275 89.3 2,816,315

Source: CalPERs PEPRA Miscellaneous Plan of the City of Pismo Beach Annual Valuation Report as of June 30, 2022.

Safety - Fire
Valuation
Date
Accrued
Liability
Share of Pool’s
Market Value of
Assets
Unfunded
Liability Funded Ratio
Annual
Covered
Payroll
06/30/2018 $ 4,553,004 $ 3,342,365 $ 1,210,639 73.4% $ 0 06/30/2019 4,622,892 3,352,827 1,270,065 72.5 0
06/30/2020 4,702,977 3,324,970 1,378,007 70.7 0
06/30/2021 5,008,457 4,066,623 941,834 81.2 0
06/30/2022 5,219,077 3,692,553 1,526,524 70.8 0

Source: CalPERs Safety Fire Plan of the City of Pismo Beach Annual Valuation Report as of June 30, 2022.

PEPRA Safety - Fire
Valuation
Date
Accrued
Liability
Share of Pool’s
Market Value of
Assets
Unfunded
Liability Funded Ratio
Annual
Covered
Payroll
06/30/2018 $ 47,199 $ 29,389 $ 7,810 79.0% $ 0
06/30/2019 47,761 38,228 9,533 80.0 0
06/30/2020 53,806 43,178 10,628 80.2 0
06/30/2021 68,823 66,408 2,415 96.5 0
06/30/2022 80,604 68,372 12,232 84.8 0

Source: CalPERs PEPRA Safety Fire Plan of the City of Pismo Beach Annual Valuation Report as of June 30, 2022.

Safety - Police
Valuation
Date
Accrued
Liability
Share of Pool’s
Market Value of
Assets
Unfunded
Liability Funded Ratio
Annual
Covered
Payroll
06/30/2018 $ 30,077,379 $ 22,735,218 $ 7,342,161 75.6% $ 1,230,000 06/30/2019 30,855,862 23,612,019 7,243,843 76.5 1,167,212 06/30/2020 31,708,757 23,722,509 7,986,248 74.8 1,049,006 06/30/2021 34,254,544 29,069,669 5,184,875 84.9 753,758 06/30/2022 34,647,376 25,665,038 8,982,338 74.1 640,098

Source: CalPERs Safety Police Plan of the City of Pismo Beach Annual Valuation Report as of June 30, 2022.

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Safety – Police Second Tier
Valuation
Date
Accrued
Liability
Share of Pool’s
Market Value of
Assets
Unfunded
Liability Funded Ratio
Annual
Covered
Payroll
06/30/2018 $ 329,197 $ 317,747 $ 11,450 96.5% $ 273,819 06/30/2019 438,212 416,138 22,074 95.0 223,911
06/30/2020 527,801 488,270 39,531 92.5 229,112
06/30/2021 673,897 711,737 (37,840) 105.6 430,411
06/30/2022 900,352 798,668 101,684 88.7 616,297

Source: CalPERs Safety Police Second Tier Plan of the City of Pismo Beach Annual Valuation Report as of June 30, 2022.

PEPRA Safety – Police
Valuation
Date
Accrued
Liability
Share of Pool’s
Market Value of
Assets
Unfunded
Liability Funded Ratio
Annual
Covered
Payroll
06/30/2018 $ 583,666 $ 527,054 $ 56,612 90.3% $ 837,834 06/30/2019 777,557 687,992 89,565 88.5 801,623
06/30/2020 884,327 757,928 126,399 85.7 886,809
06/30/2021 1,174,632 1,183,832 (9,200) 100.8 1,042,290
06/30/2022 1,561,761 1,337,079 224,682 85.6 1,153,526

Source: CalPERs PEPRA Safety Police Plan of the City of Pismo Beach Annual Valuation Report as of June 30, 2022.

AB 340, Public Employee Pension Reform Act of 2013 (PEPRA). On September 12, 2012, the California Governor signed Assembly Bill 340 (“AB 340”), which implemented pension reform in California.

Effective January 1, 2013, AB 340: (i) requires public retirement systems and their participating employers to share equally with employees the normal cost rate for such retirement systems; (ii) prohibits employers from paying employer-paid member contributions to such retirement systems for employees hired after January 1, 2013; (iii) establishes a compulsory maximum non-safety benefit formula of 2.5% at age 67; (iv) defines final compensation as the highest average annual pensionable compensation earned during a 36-month period; and (v) caps pensionable income at $110,100 ($132,120 for employees not enrolled in Social Security) subject to Consumer Price Index increases. Other provisions reduce the risk of the City incurring additional unfunded liabilities, including prohibiting retroactive benefits increases, generally prohibiting contribution holidays, and prohibiting purchases of additional non-qualified service credit.

Pursuant to AB 340, the City established new pension tiers: 2.7% at 57 for Sworn and 2.0% at 62 for Miscellaneous for employees hired on or after January 1, 2013 who were not previously CalPERS members.

CalPERS Plan Actuarial Methods. The staff actuaries at CalPERS prepare annually an actuarial valuation which is typically delivered in the time period from July through October of each year (thus, the actuarial valuation dated July 2022 covered CalPERS’ fiscal year ended June 30, 2021). The actuarial valuations express the City’s required contribution which the City must contribute in the fiscal year immediately following the fiscal year in which the actuarial valuation is prepared (thus, the City’s contribution requirement derived from the actuarial valuation as of June 30, 2021 and shown in the report delivered in July 2022 affects the City’s Fiscal Year 2023-24 required contribution). CalPERS rules require the City to implement the actuary’s recommended rates.

The CalPERS Chief Actuary considers various factors in determining the assumptions to be used in preparing the actuarial report. Demographic assumptions are based on a study of the actual history of retirement, rates of termination/separation of employment, years of life expectancy after retirement, disability, Council Agenda 05-07-2024
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and other factors. This experience study is generally done once every four years. The most recent experience study was completed in 2017 in connection with the preparation of actuarial recommendations by the CalPERS Chief Actuary as described below.

In December 2016, the CalPERS Board approved lowering the funding discount rate to be phased in over three years: for Fiscal Year 2018-19 to a rate of 7.375%; for Fiscal Year 2019-20 to a rate of 7.25%; and for Fiscal Year 2020-21 to a rate of 7.0%. The funding discount rate includes a 15 basis-point reduction for administrative expenses, and the remaining decrease is consistent with the change in the financial reporting discount rate. As noted above, there is an approximately fifteen-month lag between the time that CalPERS provides its annual actuarial valuation and the fiscal year in which the required contribution therein impacts the City.

On November 18, 2015, the CalPERS Board adopted a Funding Risk Mitigation Policy that seeks to reduce funding risk over time. It establishes a mechanism whereby CalPERS investment performance that significantly outperforms the discount rate triggers adjustments to the discount rate, expected investment return, and strategic asset allocation targets. Reducing the volatility of investment returns is expected to increase the long-term sustainability of CalPERS pension benefits for members. In February 2017, the CalPERS Board revised the Funding Risk Mitigation Policy. The revisions include suspension of the policy until Fiscal Year 2020-21, and a decrease of the required first excess investment return threshold from 4% to 2%.

On July 12, 2021, CalPERS reported a preliminary 21.3% net return on investment for the fiscal year ending June 30, 2021. The return exceeds the system’s actuarially assumed 7% rate of return for the fiscal year. Using a 7% discount rate and these preliminary fiscal year returns, the funded status of the overall Public Employees Retirement Fund was estimated at 82% on a preliminary basis.

Since the returns outperformed the discount rate, the Funding Risk Mitigation Policy described above was triggered. Approximately half of the excess return was used for rate relief and half of the excess return was used to lower the discount rate to 6.8%. CalPERS notes that for a given risk mitigation event, it is estimated that employer rates will decrease by about half of what they would have with no risk mitigation.

The Funding Risk Mitigation Policy requires staff to implement a new strategic asset allocation that will take effect on October 1 of the fiscal year immediately following the year the policy was triggered—in this case, 2020-21 is the trigger year. CalPERS completed its Asset Liability Management Process in November 2021 and this effort resulted in a new strategic asset allocation that keeps the discount rate at 6.8%, and incorporates a 5% leverage allocation. An implementation plan for the strategic asset allocation, including benchmarks, ranges, and timeline, is anticipated at a future CalPERS Board meeting.

The discount rate is lowered to 6.8% for all future years in accordance with thresholds established in the Funding Risk Mitigation Policy. The resulting impact to the required employer contribution rate changes are effective in Fiscal Year 2023-24 for public agencies. The discount rate reduction will be in effect until either the CalPERS Board makes the decision to change it, or another risk-mitigation event is triggered in a later year. Using this lower discount rate, CalPERS estimates on a preliminary basis the funded status of the overall Public Employees Retirement Fund at 80%.

On February 14, 2018, the CalPERS Board of Administration adopted revisions to its actuarial amortization policy. Major revisions that affect state plans were made to the amortization of investment gains and losses, as well as to actuarial surplus. For the amortization of investment gains and losses, the amortization period was reduced from 30 years to 20 years, and the 5-year direct smoothing process was removed from the end of the amortization period. Amortization of actuarial surplus was eliminated. These policy revisions will be applied to the amortization of investment gains and losses, and actuarial surplus, experienced on or after June 30, 2019. These revisions affect contributions starting in Fiscal Year 2020-21.

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Public Agency Retirement System Defined Contribution Plan. Eligible participants are required to contribute 4.3% of their base compensation into PARS. The City will contribute an amount equal to 3.2% of the base salary compensation. PARS participants have the right to 100% of their account balance upon their death, termination of employment, permanent and total disability, or upon attainment of normal retirement age of 59.5 under PARS. As of June 30, 2022, PARS had 729 active members and total PARS net assets were $2,588,749. For the year ended June 30, 2022, employer contributions were $174,602 and participant contributions were $231,337.

Other Post-Employment Benefits
Plan Description. The City administers the City’s Retired Employees Healthcare Plan (the “OPEB Plan”), a single employer defined benefit healthcare plan. The Plan provides medical insurance benefits to eligible retirees and their spouses. City resolutions and agreements assign the authority to establish and amend benefit provisions to the City. The City entered into an agreement with the CalPERS California Employers’ Retiree Benefit Trust (CERBT), an agent-multiple defined Healthcare Plan, to pre-fund the City’s OPEB liability. CERBT issues a publicly available financial report in aggregate with other CERBT participating employers. That report may be obtained by contacting PERS, 400 P Street, Sacramento, California 95814.

Funding Policy. The contribution requirements of plan members and the City are established by and may be amended by the City. The OPEB Plan members receiving benefits contributed to amounts of the total premiums.

Employees Covered. As of the June 30, 2022 measurement date, the following current and former employees were covered by the benefit terms under the OPEB Plan:

Active employees 108
Inactive employees or beneficiaries currently receiving benefits 43 Inactive employees entitled to, but not yet receiving benefits 37 Total 188

Contributions. The annual contribution is based on the actuarially determined contribution. For the measurement period ended June 30, 2022, the City made contributions of $234,000 to the trust, $228,606 cash benefit payments outside the trust, $60,000 in implicit subsidy benefit payments and $1,155 in administrative expenses.

Net OPEB Liability/(Asset). The City’s net OPEB liability was measured as of June 30, 2022 and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2021 based on the following actuarial methods and assumptions:

Actuarial Assumptions
Discount Rate 6.25%
Inflation 2.50%
Salary Increases 2.75%
Investment Rate of Return 6.25%
Mortality Improvement Mortality projected fully generational with Scale MP-2021 Mortality, Retirement, Disability, Termination CalPERS 1997-2015 Experience Study Healthcare Trend Rate Non-Medicare: 6.75% for 2022, decreasing to 3.75% in 2076 Medicare: 4.75-5.85% depending on supplemental plan for 2022, decreasing to 3,75% in 2076
PEMHCA: 4.00%

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The long-term expected rate of return on OPEB plan investments was determined using a building block method in which best-estimate ranges of expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.

Best estimates of arithmetic real rates of return for each major asset class included in the OPEB plan’s target asset are summarized in the following table:

Asset Class Target Allocation
Long-term Expected
Real Rate of Return
Global Equity 49.0% 4.56%
Fixed Income 23.0 1.56
TIPS 5.0 -0.08
REITS 20.0 4.06
Commodities 3.0 1.22
Total 100.0%

Discount Rate. The discount rate used to measure the total OPEB liability was 6.25 percent. The projection of cash flows used to determine the discount rate assumed that City contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB plan’s fiduciary net position was projected to be available to make all projected OPEB payments for current active and inactive employees and beneficiaries. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projects benefit payments to determine the total OPEB liability.

The changes in the Net OPEB Liability/(Asset) for the Plan are as follows:

Increase (Decrease)

Total OPEB
Liability
(a)
Plan Fiduciary
Net Position
(b)
Net OPEB
Liability/(Asset)
(c) = (a) - (b)
Balance at June 30, 2022 $ 4,578,946 $ 4,747,363 $ (168,417) (Measurement Date June 30, 2021)

Changes Recognized for the Measurement
Period:

Service Cost 153,244 153,244
Interest 286,743 286,743
Actual vs. Expected Experience - -
Changes in Assumptions - -
Contributions - Employer 523,761 (523,761)
Net Investment Income (665,758) 665,758
Benefit Payments (288,606) (288,606) -
Administration Expense (2,371) 2,371
Net Changes 151,381 (432,974) 584,355
Balance at June 30, 2023
(Measurement Date June 30, 2022) $ 4,730,327 $ 4,314,389 $ 415,938

Sensitivity of the Net OPEB Liability/(Asset) to Changes in the Discount Rate. The following presents the net OPEB Liability/(Asset) of the City if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2022:

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1% Decrease
(5.25%)
Current
Discount Rate
(6.25%)
1% Increase
(7.25%)
Net OPEB Liability/(Asset) 975,387 $415,938 $(50,827)

Sensitivity of the Net OPEB Liability/(Asset) to Changes in the Health Care Cost Trend Rates. The following presents the net OPEB Liability/(Asset) of the City if it were calculated using health care cost trend rates that are one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2022:
1% Decrease Current Trend 1% Increase
Net OPEB Liability/(Asset) $66,134 $415,938 $895,180

Recognition of Deferred Outflows and Deferred Inflows of Resources. Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB expense systematically over time.

Amounts are first recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expense.

The recognition period differs depending on the source of the gain or loss:

Net difference between projected and actual
earnings on OPEB plan investments 5 years
All other amounts
Expected average remaining service lifetime (EARSL)
(8.3 years for measurement date June 30, 2022)

OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB. For the fiscal year ended June 30, 2023, the City recognized OPEB expense of $143,038. As of the fiscal year ended June 30, 2023, the City reported deferred outflows and inflows of resources related to OPEB from the following services:

Deferred Outflows
of Resources
Deferred Inflows
of Resources
Differences between expected and actual experience $ - $ 265,752 Changes in assumptions 77,057 7,840
Net differences between projected and actual earnings on OPEB plan investments 354,052 -
OPEB Contributions subsequent to measurement date 529,521 - Total $ 960,630 $ 273,592

The $529,521 reported as deferred outflows of resources related to contributions subsequent to the June 30, 2022 measurement date will be recognized as a reduction in the Net OPEB liability in the year ending June 30, 2024. Other amounts reported as deferred outflows and inflows of resources related to OPEB will be recognized as expense (income) as follows:

Year Ended
June 30,
Deferred
Outflow/(Inflows)
of Resources
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Year Ended
June 30,
Deferred
Outflow/(Inflows)
of Resources
2024 $ 5,905
2025 4,026
2026 (17,385)
2027 143,664
2028 9,265
Thereafter 12,042

ECONOMIC AND DEMOGRAPHIC INFORMATION
Population
The City’s population as of January 1, 2023 was approximately 7,865. This represents a decrease of approximately 1.2% from January 1, 2022. The following table shows the population for the City, the County and the State of California from 2019 through 2023.

POPULATION
For Years 2019 through 2023
Year
(January 1)
City of
Pismo Beach
County of
San Luis Obispo
State of
California
2019 8,272 277,850 39,605,361
2020 8,191 276,818 39,648,938
2021 8,065 278,723 39,286,510
2022 7,958 279,751 39,078,674
2023 7,865 278,348 38,940,231

Source: State of California, Department of Finance, E-4 Population Estimates for Cities, Counties, and the State 2021-23 with 2020 Census Benchmark and E-4 Population Estimates for Cities, Counties, and the State, 2010-2020, with 2010 Census Benchmark, Sacramento, California, May 2022.

Education
K-12 public instruction in the City is provided by the Lucia Mar Unified School District.

Building Activity
Residential and nonresidential building activity for 2018 through 2022 for the City is shown in the following tables.

NEW HOUSING UNITS BUILDING PERMITS
Pismo Beach
For Years 2018 through 2022
2018 2019 2020 2021 2022
Single Family Units 11 23 23 16 16
Multifamily Units 2 0 0 2 0
Total Units 13 23 23 18 16

Source: Construction Industry Research Board and California Homebuilding Foundation.

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BUILDING PERMIT VALUATIONS
Pismo Beach
(Dollars in Thousands)
2018 2019 2020 2021 2022
Residential
New Single Family $ 5,359 $ 6,135 $ 9,143 $ 7,447 $ 7,509 New Multifamily 638 0 0 314 0
Res. Alt. & Adds 3,568 3,590 3,516 3,761 4,141 Total Residential $ 9,565 $ 9,725 $ 12,659 $ 11,522 $ 11,650

Nonresidential
New Commercial $ 0 $ 0 $ 0 $ 552 $ 15
New Industrial 8,638 0 0 0 0
New Other(1) 0 0 169 255 1,447
Alters. & Adds. 1,534 50 120 773 566
Total Non-Residential $ 10,172 $ 50 $ 289 $ 1,580 $ 2,028

Total All Building $ 19,737 $ 9,775 $ 12,948 $ 13,102 $ 13,678

(1) Includes non-housekeeping shelters, churches and religious buildings, hospitals and institutional buildings, schools and educational buildings, residential garages, public works and utilities buildings, other non-residential buildings and structures other than buildings.

Note: “Total All Building” is the sum of Residential and Nonresidential Building Permit Valuations. Totals may not add to sum because of independent rounding.

Source: Construction Industry Research Board and California Homebuilding Foundation.

Personal Income
Personal Income is the income that is received by all persons from all sources. It is calculated as the sum of wage and salary disbursements, supplements to wages and salaries, proprietors’ income with inventory valuation and capital consumption adjustments, rental income of persons with capital consumption adjustment, personal dividend income, personal interest income, and personal current transfer receipts, less contributions for government social insurance.

The personal income of an area is the income that is received by, or on behalf of, all the individuals who live in the area; therefore, the estimates of personal income are presented by the place of residence of the income recipients.

The following table summarizes per capita personal income for the City, the County, the State of California and the United States for the years 2012 through 2022. This measure of income is calculated as the personal income of the residents of the area divided by the resident population of the area.

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PER CAPITA PERSONAL INCOME(1)
City of Pismo Beach, County of San Luis Obispo, State of California, and United States For Years 2012 Through 2022
Year
City of
Pismo Beach
County of
San Luis Obispo California United States
2012 $44,456 $43,666 $47,794 $44,237
2013 40,940 44,771 48,076 44,401
2014 39,672 47,054 50,619 46,287
2015 35,852 49,914 53,817 48,060
2016 40,204 51,118 55,863 48,971
2017 45,820 53,626 58,214 51,004
2018 49,658 55,473 60,984 53,309
2019 59,977 58,963 64,174 55,547
2020 61,452 63,024 70,061 59,153
2021 62,144 68,717 76,991 64,430
2022 70,377 67,951 77,063 65,470

(1) Per capita personal income is the total personal income divided by the total mid-year population estimates of the U.S.

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

Source: U.S. Department of Commerce, Bureau of Economic Analysis and the City of Pismo Beach.

Employment
The civilian labor force in the City totaled 4,100 in January 2022, a 2.5% increase from 2021. For the past five years the unemployment rate in the City and the County has been below the State of California’s rate.

The following table summarizes the labor force, employment and unemployment figures from 2019 to 2023 for the City, the County, the State of California and the nation as a whole. Data for 2023 is not yet available.

The San Luis Obispo Paso Robles Arroyo Grande Metropolitan Statistical Area unemployment rate decreased from 5.3% in December 2021 to 3.0% in January 2022. According to a report released by State Employment Development Department, the City’s unemployment rate was 1.6% as of January 2023.

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LABOR FORCE, EMPLOYMENT AND UNEMPLOYMENT
Yearly Average for Years 2019 through 2023
Year and Area Labor Force Employment(1) Unemployment(2) Unemployment
Rate (%)(3)

2019
Pismo Beach 4,200 4,100 100 1.9%
San Luis Obispo County 139,900 135,900 4,100 2.9
State of California 19,385,300 18,859,600 795,700 4.1
United States 163,539,000 157,538,000 6,001,000 3.7

2020
Pismo Beach 3,800 3,600 200 4.6%
San Luis Obispo County 134,400 123,900 10,500 7.8
State of California 18,958,600 17,037,000 1,921,600 10.1 United States 160,742,000 147,795,000 12,947,000 8.1

2021
Pismo Beach 4,000 3,900 100 2.5%
San Luis Obispo County 135,400 128,200 7,200 5.3
State of California 18,956,600 17,568,700 1,387,800 7.3 United States 161,204,000 152,581,000 8,623,000 5.3

2022
Pismo Beach 4,100 4,000 100 1.4%
San Luis Obispo County 137,200 133,000 4,200 3.0
State of California 19,169,300 18,348,900 820,400 4.3
United States 263,973,000 158,291,000 5,996,000 3.6

2023
Pismo Beach 4,100 4,000 100 1.6%
San Luis Obispo County 136,300 131,600 4,700 3.5
State of California 19,308,300 18,388,300 920,000 4.8
United States 266,942,000 161,037,000 6,080,000 3.6

(1) Includes persons involved in labor-management trade disputes. (2) Includes all persons without jobs who are actively seeking work. (3) The unemployment rate is computed from unrounded data; therefore, it may differ from rates computed from rounded figures in this table.
(4) Not strictly comparable with data for prior years.

Note: Data is not seasonally adjusted.

Source: California Employment Development Department, based on March 2023 benchmark and U.S. Department of Labor, Bureau of Labor Statistics.

The table below summarizes employment by industry in the San Luis Obispo Paso Robles Arroyo Grande Metropolitan Statistical Area from 2019 to 2023. Professional Business Services and Trade, Transportation and Utilities are the largest employment sectors in the County.

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AVERAGE ANNUAL INDUSTRY EMPLOYMENT 2018-2022
San Luis Obispo Paso Robles Arroyo Grande MSA
(San Luis Obispo County)
2019 2020 2021 2022 2023
Total Farm 5,000 4,800 5,000 5,500 5,500
Total Nonfarm 119,700 109,600 114,300 118,000 118,900
Total, All Industries 124,700 114,400 119,300 123,500 124,400 Goods Producing 16,100 15,800 17,000 17,100 17,200
Mining, Logging and Construction 8,300 8,500 9,100 8,900 8,700 Manufacturing 7,800 7,300 7,900 8,200 8,500
Service Providing 103,600 93,800 97,300 101,000 101,700 Trade, Transportation and Utilities 20,800 19,100 19,700 20,000 19,900 Wholesale Trade 2,700 2,500 2,600 2,600 2,400
Retail Trade 14,000 12,900 13,500 13,700 13,500
Transportation, Warehousing and
Utilities
4,100 3,700 3,700 3,800 3,900
Information 1,200 1,100 1,200 1,300 1,200
Financial Activities 3,900 3,800 3,900 4,000 3,900
Professional and Business Services 11,200 10,500 11,000 11,100 11,200 Private Educational and Health Services 18,200 17,000 17,500 18,100 18,600 Leisure and Hospitality 19,800 15,400 17,400 19,500 20,000 Other Services 4,100 3,300 3,400 3,700 3,800
Government 24,500 23,500 23,200 23,400 23,200
Note: The “Total, All Industries” data is not directly comparable to the employment data found herein.

Source: State of California, Employment Development Department, Labor Market Information Division, San Luis Obispo Paso Robles Arroyo Grande MSA (San Luis Obispo County) Annual Average Labor Force and Industry Employment, March 2023 Benchmark.

Industry
The following tables list the largest private and public employers in the City:

MAJOR EMPLOYERS
Pismo Beach
2023
Rank Name of Business Employees Type of Business

1. Keller-Williams 107 Real Estate Agency

2. City of Pismo Beach 105 Government

3. California Fresh Market 100 Supermarket

4. Dolphin Bay Resort 100 Hospitality

5. US Postal Service 91 Government

6. Brad’s Restaurant 90 Restaurant

7. Sea Venture 80 Hospitality

8. Pelican Point Bar & Restaurant 75 Restaurant

9. Pismo Coast Village 71 RV Resort

10. New Life Church 67 Church
Source: City of Pismo Beach, Annual Comprehensive Financial Report, Fiscal Year Ending June 30, 2023.

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$[PAR]

PISMO BEACH PUBLIC FINANCING AGENCY
(San Luis Obispo County, California)
SERIES 2024A LEASE REVENUE BONDS
(Public Safety Facility Project)

PURCHASE AGREEMENT
[Sale Date]
City of Pismo Beach
760 Mattie Road
Pismo Beach, CA 93449
Pismo Beach Public Financing Agency
760 Mattie Road
Pismo Beach, CA 93449
BofA Securities, Inc. (the “Underwriter”) hereby offers to enter into this Purchase Agreement (the “Purchase Agreement”) with the Pismo Beach Public Financing Agency (the “Agency”) and the City of Pismo Beach (the “City”) for the purchase by the Underwriter of the Pismo Beach Public Financing Agency Series 2024A Lease Revenue Bonds (Public Safety Facility Project) (the “Bonds”). The Underwriter is making this offer subject to the acceptance by the City and the Agency at or before 7:00 P.M., California Time, on the date hereof. If the City and the Agency accept this Purchase Agreement, this Purchase Agreement shall be in full force and effect in accordance with its terms and shall bind the City, the Agency and the Underwriter. The Underwriter may withdraw this Purchase Agreement upon written notice delivered by the Underwriter to the City and the Agency at any time before the City and the Agency accept this Purchase Agreement. Terms used but not defined in this Purchase Agreement are defined in the Indenture (as defined below).

1. PURCHASE AND SALE.

Upon the terms and conditions and in reliance upon the representations, warranties and agreements herein set forth, the Underwriter hereby agrees to purchase from the Agency, and the Agency hereby agrees to sell and deliver to the Underwriter, all (but not less than all) of the Bonds, at the purchase price of $[Par], representing the aggregate principal amount of the Bonds less an Underwriter’s discount of $[Discount] plus original issue premium of $[Premium]. The Underwriter intends to make an initial public offering of the Bonds at the price or prices described in Schedule I hereto; provided, however, the Underwriter reserves the right to change such initial public offering prices as the Underwriter deems necessary or desirable, in its sole discretion, in connection with the marketing of the Bonds (but in all cases subject to the requirements of Section 4 hereof), and may offer and sell the Bonds to certain dealers, unit investment trusts and money market funds, certain of which may be sponsored or managed by the Underwriter at prices lower Council Agenda 05-07-2024
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than the public offering prices or yields greater than the yields set forth therein (but in all cases subject to the requirements of Section 4 hereof).

The City and the Agency acknowledge and agree that: (i) the Underwriter is not acting as a municipal advisor within the meaning of Section 15B of the Securities Exchange Act, as amended, (ii) the primary role of the Underwriter, as an underwriter, is to purchase securities, for resale to investors, in an arm’s length commercial transaction between the Agency, the City and the Underwriter and the Underwriter has financial and other interests that differ from those of the City and the Agency; (iii) the Underwriter is acting solely as a principal and is not acting as a municipal advisor, financial advisor or fiduciary to the City and the Agency and has not assumed any advisory or fiduciary responsibility to the City and the Agency with respect to the transaction contemplated hereby and the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriter has provided other services or is currently providing other services to the City and the Agency on other matters); (iv) the only obligations the Underwriter has to the City and the Agency with respect to the transaction contemplated hereby expressly are set forth in this Purchase Agreement; and (v) the City and the Agency have consulted their own financial and/or municipal, legal, accounting, tax and other advisors, as applicable, to the extent they have deemed appropriate.

2. DESCRIPTION AND PURPOSE OF THE BONDS.

The execution and delivery of the Second Supplement to Indenture, dated June 1, 2024 (the “Second Supplemental Indenture”), by and between the Agency and Wilmington Trust, N.A. (the “Trustee”), and the Bonds and certain actions relating thereto have been authorized by a resolution of the City Council of the City of Pismo Beach (the “City Council”) adopted on May 7, 2024 (the “City Resolution”), and a resolution of the Board of Directors of the Pismo Beach Public Financing Agency (the “Board of Directors”) adopted on May 7, 2024 (the “Agency Resolution” and, together with the City Resolution, the “Resolutions”). The Bonds shall be as described in, and shall be secured under and pursuant to that certain Indenture, dated as of June 1, 2017 by and between the Agency and the Trustee, as amended and supplemented by the First Supplement Indenture, dated as of December 1, 2017 (collectively, the “Original Indenture”) and as further amended and supplemented by the Second Supplemental Indenture (as so amended and supplemented, the “Indenture”). The Bonds shall mature in the years, bear interest, be purchased at the prices and be subject to redemption at the times and in the amounts, all as set forth in Schedule I attached hereto.

In connection with the issuance of the Bonds, the City will lease the Leased Property (as defined in the Official Statement) to the Agency pursuant to that certain Site and Facilities Lease, dated as of June 1, 2017 by and between the City and the Agency, as amended and supplemented by the First Supplement to Site and Facilities Lease, dated as of December 1, 2017 (collectively, the “Original Site Lease”), and as further amended and supplemented by the Second Supplement to Site and Facilities Lease, dated as of June 1, 2024 (the “Second Supplemental Site Lease”), by and between the City and the Agency (as so amended and supplemented, the “Site Lease”). The Agency will lease the Leased Property back to the City pursuant to that certain Lease Agreement, dated as of June 1, 2017, by and between the Agency and the City, as amended and supplemented by the First Supplement to Lease Agreement, dated as of December 1, 2017 (collectively, the “Original Lease”), and as further amended and supplemented by the Second Supplement to Lease Agreement, dated as of June 1, 2024 (the “Second Supplemental Lease Agreement”), by and Council Agenda 05-07-2024
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between the Agency and the City (as so amended and supplemented, the “Lease”). The Bonds each represent a direct, undivided fractional interest in Base Rental Payments (as defined in the Indenture) to be made by the City to the Agency pursuant to the Lease Agreement. Pursuant to that certain Assignment Agreement, dated as of June 1, 2017, by and between the Agency and the Trustee, as amended and supplemented by the First Supplement to Assignment Agreement, dated as of December 1, 2017 (collectively, the “Original Assignment Agreement”) and as further amended and supplemented by the Second Supplement to Assignment Agreement, dated as of June 1, 2024 (the “Second Supplemental Assignment Agreement”), by and between the Agency and the Trustee (as so amended and supplemented, the “Assignment Agreement”), the Agency will assign without recourse to the Trustee, for the benefit of the Owners of the Bonds, all of its rights under the Site Lease and certain of its rights under the Lease Agreement, including its right to receive Base Rental Payments due thereunder.

The Second Supplemental Indenture, the Second Supplemental Site Lease, the Second Supplemental Lease Agreement, the Second Supplemental Assignment Agreement, this Purchase Contract, and the Continuing Disclosure Certificate, dated [Closing Date] (the “Disclosure Certificate”), are referred to collectively herein as the “Legal Documents.” The Original Indenture, the Original Site Lease, the Original Lease and the Original Assignment Agreement are referred to collectively herein as the “Original Legal Documents.” The proceeds of the sale of the Bonds will be used to (i) provide financing for the costs of the design and construction of a public safety facility to be located within the City and (ii) pay certain costs of executing and delivering the Bonds.

3. DELIVERY OF THE OFFICIAL STATEMENT AND OTHER DOCUMENTS. (a) The City and the Agency have approved and delivered or caused to be delivered to the Underwriter the Preliminary Official Statement dated [POS Date], which, including the cover page and all appendices thereto, is herein referred to as the “Preliminary Official Statement.” It is acknowledged by the City and the Agency that the Underwriter may deliver the Preliminary Official Statement and a final Official Statement (as hereinafter defined) electronically over the internet. The City and the Agency deem the Preliminary Official Statement final as of its date and as of the date hereof for purposes of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934, as amended (“Rule 15c2-12”), except for any information which is permitted to be omitted therefrom in accordance with paragraph (b)(1) of Rule 15c2-12. (b) Within seven (7) business days from the date hereof, and in any event not later than two (2) business days before the Closing Date, the City and the Agency shall deliver to the Underwriter a final Official Statement relating to the Bonds dated the date hereof (such Official Statement, including the cover page, and all appendices attached thereto, together with all information previously permitted to have been omitted by Rule 15c2-12 and any amendments or supplements and statements incorporated by reference therein or attached thereto, as have been approved by the City, the Agency, Bond Counsel, and the Underwriter, is referred to herein as the “Official Statement”) in the “designated electronic format” (as defined in Rule G-32 of the Municipal Securities Rulemaking Board (the “MSRB”)), to enable the Underwriter to comply with the rules of the Securities and Exchange Commission (the “SEC”) and the MSRB. The Underwriter agrees to file a copy of the Official Statement, including any amendments or supplements thereto Council Agenda 05-07-2024
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prepared by the City and the Agency, with the MSRB on its Electronic Municipal Markets Access (“EMMA”) system. The Official Statement shall be executed by and on behalf of the Agency and the City by the respective authorized officer thereof. The Official Statement shall be in substantially the same form as the Preliminary Official Statement and, other than information previously permitted to have been omitted by Rule 15c2-12, the City and the Agency shall only make such other additions, deletions and revisions in the Official Statement which are approved by the Underwriter, such approval to not be unreasonably withheld. The City and the Agency hereby agree to deliver to the Underwriter an electronic copy of the Official Statement in a form that permits the Underwriter to satisfy its obligations under the rules and regulations of the MSRB and the SEC including in a word-searchable pdf format including any amendments thereto. The City and the Agency hereby ratify, confirm and consent to and approve the use and distribution by the Underwriter before the date hereof of the Preliminary Official Statement and hereby authorize and consent to the use by the Underwriter of the Official Statement and the Resolutions in connection with the public offering and sale of the Bonds. (c) In order to assist the Underwriter in complying with Rule 15c2-12, the Agency will undertake, pursuant to the Disclosure Certificate, to provide annual financial information and notices of the occurrence of specified events. A description of the Disclosure Certificate is set forth in, and a form of such agreement is attached as an appendix to, the Preliminary Official Statement and the Official Statement.

4. ESTABLISHMENT OF ISSUE PRICE.
(a) The Underwriter agrees to assist the Agency in establishing the issue price of the Bonds and shall execute and deliver to the Agency at Closing an “issue price” or similar certificate, substantially in the form attached hereto as Exhibit A, together with the supporting pricing wires or equivalent communications, with such modifications as may be deemed appropriate or necessary, in the reasonable judgment of the Underwriter, the Agency and Bond Counsel, to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds. All actions to be taken by the Agency under this section to establish the issue price of the Bonds may be taken on behalf of the Agency by the Agency’s municipal advisor identified herein and any notice or report to be provided to the Agency may be provided to the Agency’s municipal advisor.
(b) Except as otherwise set forth in Schedule A to Exhibit A attached hereto, the Agency represents that it will treat the first price at which 10% of each maturity of the Bonds (the “10% Test”) is sold to the public as the issue price of that maturity (if different interest rates apply within a maturity, each separate CUSIP number within that maturity will be subject to the 10% Test). If, as of the date hereof, the 10% Test has not been satisfied as to any maturity of the Bonds for which the Agency has elected to utilize the 10% Test, the Underwriter agrees to promptly report to the Agency the prices at which Bonds of that maturity or maturities have been sold by the Underwriter to the public. That reporting obligation shall continue until the earlier of the date upon which the 10% Test has been satisfied as to the Bonds of that maturity or maturities or the expiration of the period set forth in Section 4(c).
(c) The Underwriter confirms that it has offered the Bonds to the public on or before the date of this Purchase Agreement at the offering price or prices (the “initial offering price”), or Council Agenda 05-07-2024
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at the corresponding yield or yields, set forth in Schedule A to Exhibit A attached hereto, except as otherwise set forth therein. Schedule A to Exhibit A also sets forth, as of the date of this Purchase Agreement, the maturities, if any, of the Bonds for which the 10% Test has not been satisfied and for which the Agency and the Underwriter agree that the restrictions set forth in the next sentence shall apply (the “hold-the-offering-price rule”). So long as the hold-the-offering- price rule remains applicable to any maturity of the Bonds, the Underwriter will neither offer nor sell unsold Bonds of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following:
(i) the close of the fifth (5th) business day after the sale date; or (ii) the date on which the Underwriter has sold at least 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public.
(d) The Underwriter confirms that:
(i) any selling group agreement and each third-party distribution agreement (to which the Underwriter is a party) relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer who is a member of the selling group and each broker-dealer that is a party to such third-party distribution agreement, as applicable:
(A)(i) to report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter that the 10% Test has been satisfied as to the Bonds of that maturity and (ii) to comply with the hold-the- offering-price rule, if applicable, in each case if and for so long as directed by the Underwriter and as set forth in the related pricing wires, and (B) to promptly notify the Underwriter of any sales of Bonds that, to its knowledge, are made to a purchaser who is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below),
(C) to acknowledge that, unless otherwise advised by the dealer or broker- dealer, the Underwriter shall assume that each order submitted by the dealer or broker-dealer is a sale to the public.
(ii) any selling group agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer that is a party to a third-party distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require each broker-dealer that is a party to such third-party distribution agreement to (A) report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter or such dealer Council Agenda 05-07-2024
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that the 10% Test has been satisfied as to the Bonds of that maturity and (B) comply with the hold-the-offering-price rule, if applicable, in each case if and for so long as directed by the Underwriter or the dealer and as set forth in the related pricing wires.

The Agency acknowledges that, in making the representations set forth in this section, the Underwriter will rely on (i) in the event a selling group has been created in connection with the initial sale of the Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, as set forth in a selling group agreement and the related pricing wires, and (ii) in the event that a dealer who is a member of the selling group is a party to a third-party distribution agreement that was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker- dealer that is a party to such agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable, as set forth in the third-party distribution agreement and the related pricing wires. The Agency further acknowledges that the Underwriter shall not be liable for the failure of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a third-party distribution agreement, to comply with its corresponding agreement to comply with the requirements for establishing the issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds. (e) The Underwriter acknowledges that sales of any Bonds to any person that is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below) shall not constitute sales to the public for purposes of this section. Further, for purposes of this section:
(i) “public” means any person other than an underwriter or a related party to an underwriter,
(ii) “underwriter” means (A) any person that agrees pursuant to a written contract with the Agency (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a third-party distribution agreement participating in the initial sale of the Bonds to the public),
(iii) a purchaser of any of the Bonds is a “related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (i) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (ii) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a Council Agenda 05-07-2024
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corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other), and (iv) “sale date” means the date of execution of this Purchase Agreement by all parties.

5. REPRESENTATIONS OF THE CITY AND THE AGENCY.
(a) The City represents to and agrees with the Underwriter that:
(i) The City is duly organized and validly existing, with full legal right, power and authority to execute and deliver and sell the Bonds to the Underwriter pursuant to the Indenture and the City Resolution, and adopt, execute, deliver and perform its obligations, as the case may be, under the City Resolution, the Original Legal Documents and the Legal Documents to which it is a party, and to perform and consummate all obligations and transactions required or contemplated by each of the Original Legal Documents and the Legal Documents to which it is a party and the Official Statement. (ii) The City Resolution approving and authorizing the execution of the Legal Documents to which the City is a party, and the offering, issuance, and sale of the Bonds upon the terms set forth herein and in the Official Statement, was duly adopted at a meeting of the City Council called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and is in full force and effect and has not been amended or repealed.
(iii) The City Resolution conforms to the descriptions thereof contained in the Preliminary Official Statement and the Official Statement. (iv) The City has executed, adopted and delivered, or will execute, adopt and deliver, as the case may be, on or before the Closing Date, each of the Legal Documents to which it is a party. Each of the Legal Documents to which the City is a party constitutes, or will, as of the Closing Date, constitute, a legal, valid and binding obligation of the City enforceable in accordance with its terms, subject to any applicable bankruptcy, insolvency or other laws affecting creditors’ rights or remedies heretofore or hereafter enacted. Each of the Legal Documents to which the City is a party has been executed, adopted and delivered, or will be executed, adopted and delivered, as the case may be, on or before the Closing Date, by each respective signatory and is currently in full force and effect or, as of the Closing Date, will be in full force and effect.
(v) The City is not in breach of or default under any constitutional provision, law or administrative regulation of the State of California (the “State”) or of the United States or any agency or instrumentality of either, or of any other governmental agency, or any Material Judgment or Agreement (as defined below) which would have a material adverse impact on its ability to fulfill its obligations under the City Resolution, the Original Legal Documents or the Legal Documents to which it is a party, and no event has occurred and is continuing which with the passage of time or the giving of notice, or both, would constitute a default or event of default under any Material Judgment or Agreement which Council Agenda 05-07-2024
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would have a material adverse impact on its ability to fulfill its obligations under the City Resolution, the Original Legal Documents or the Legal Documents to which it is a party; and the adoption of the City Resolution, the issuance and sale of the Bonds and the execution and delivery of the Legal Documents to which the City is a party and compliance with and performance of the City’s obligations therein and herein will not in any material respect conflict with, violate or result in a breach of or constitute a default under, any such constitutional provision, law, administrative regulation or any Material Judgment or Agreement, nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon the Leased Property or the Base Rental Payments (except as described in or contemplated by the Original Legal Documents, the Legal Documents and the Official Statement) or under the terms of any such law, administrative regulation or Material Judgment or Agreement. As used in this paragraph, the term “Material Judgment or Agreement” means any judgment or decree or any loan agreement, indenture, bond, note, ordinance or resolution or any material agreement relating to the Leased Property or the Base Rental Payments (including, without limitation, the City Resolution and the Legal Documents).
(vi) All approvals, consents and orders of any governmental authority, board, agency, council, commission or other body having jurisdiction which would constitute a condition precedent to the performance by the City of its obligations hereunder and under the Original Legal Documents, the Legal Documents to which it is a party have been obtained; provided, that the City makes no representations as to any approvals, consents or other actions which may be necessary to qualify the Bonds for offer and sale under Blue Sky or other state securities laws or regulations.
(vii) Any certificates executed by any officer of the City and delivered to the Underwriter pursuant hereto or in connection herewith shall be deemed a representation and warranty of the City as to the accuracy of the statements therein made. (viii) Between the date hereof and the time of the closing on the Closing Date, the City shall not, without the prior written consent of the Underwriter, offer or issue in any material amount any bonds, notes or other obligations for borrowed money, or incur any material liabilities, direct or contingent, except in the course of normal business operations of the City or except for such borrowings as may be described in or contemplated by the Official Statement.
(ix) The audited financial statements of the City as of June 30, 2023 fairly represent the receipts, expenditures, assets, liabilities and cash balances of the City and, insofar as presented, other funds of the City as of the dates and for the periods therein set forth. Except as disclosed in the Official Statement or otherwise disclosed in writing to the Underwriter, there has not been any materially adverse change in the financial condition of the City or in its operations since June 30, 2023 and there has been no occurrence, circumstance or combination thereof which is reasonably expected to result in any such materially adverse change.

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(x) Except for information which is permitted to be omitted pursuant to Rule 15c2-12(b)(1), the Preliminary Official Statement (excluding therefrom information relating to The Depository Trust Company (“DTC”) and its book-entry system), as of its date and as of the date hereof was and is true and correct in all material respects and did not and does not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (xi) The Official Statement is, as of its date and at all times after the date of the Official Statement (excluding therefrom information relating to DTC and its book-entry system) up to and including the Closing Date will be, true and correct in all material respects and does not and will not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (xii) If the Official Statement is supplemented or amended, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended) at all times subsequent thereto up to and including that date that is 25 days from the “end of the underwriting period” (as defined in Rule 15c2-12), the Official Statement as so supplemented or amended will be true and correct in all material respects and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(xiii) If between the date hereof and the end of the underwriting period, any event shall occur which might or would cause the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the City shall notify the Underwriter thereof, and if, in the reasonable opinion of the Underwriter, such event requires the preparation and publication of a supplement or amendment to the Official Statement, the City shall cooperate with the Agency to promptly (and in any event before the Closing) prepare and furnish (at the expense of the City) an amendment of or supplement to the Official Statement in the designated electronic format presented by the MSRB and in form and substance reasonably satisfactory to the Underwriter.
(xiv) Except as described in the Preliminary Official Statement and Official Statement, no litigation, proceeding or official investigation of any governmental or judicial body is pending against the City or against any other party of which the City has notice or, to the knowledge of the City, threatened against the City: (i) seeking to restrain or enjoin the issuance or sale of any of the Bonds, or the payment of the Base Rental Payments as required under the Lease Agreement, (ii) in any way contesting or affecting any authority for the issuance of the Bonds or the validity or binding effect of any of the Legal Documents, (iii) which is in any way contesting the creation, existence, powers or jurisdiction of the City or the validity or effect of the City Resolution or any provision thereof or the application of the proceeds of the Bonds, (iv) contesting in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement Council Agenda 05-07-2024
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or any supplement or amendment thereto or (v) which, if adversely determined, could materially adversely affect the financial position or operating condition of the City or the transactions contemplated by the Preliminary Official Statement and Official Statement or any of the Original Legal Documents or the Legal Documents. The City shall advise the Underwriter promptly of the institution of any proceedings known to it by any governmental agency prohibiting or otherwise affecting the use of the Preliminary Official Statement or the Official Statement in connection with the offering, sale or distribution of the Bonds.
(xv) During the last five years, except as disclosed in the Preliminary Official Statement, the City has not failed to materially comply with any previous undertaking relating to continuing disclosure of information pursuant to Rule 15c2-12. (xvi) The City, to the best of its knowledge, has never been and is not in default in the payment of principal of, premium, if any, or interest on, or otherwise is not nor has it been in default with respect to, any bonds, notes, or other obligations which it has issued, assumed or guaranteed as to payment of principal, premium, if any, or interest. (xvii) The exceptions set forth in the preliminary title report with respect to the Leased Property, subject to permitted encumbrances, do not, and the exceptions set forth in the policy or policies of title insurance will not, materially impair the value of the Leased Property, the existing facilities thereon or the sites thereof, nor materially impair the City’s enjoyment of the same for any purposes for which they are, or may reasonably be expected to be, used.
(b) The Agency represents to and agrees with the Underwriter that:
(i) The Agency is, and will be on the Closing Date, a joint exercise of powers authority duly organized and validly existing and operating pursuant to Chapter 5, Division 7, Title 1 of the California Government Code, with full legal right, power and authority to adopt, execute, deliver and perform its obligations, as the case may be, under the Agency Resolution, the Original Legal Documents and the Legal Documents to which it is a party, and to perform and consummate all obligations and transactions required or contemplated by each of the Original Legal Documents and the Legal Documents to which it is a party and the Official Statement.
(ii) The Agency Resolution approving and authorizing the execution of the Legal Documents to which the Agency is a party, and the offering, issuance, and sale of the Bonds upon the terms set forth herein and in the Official Statement, were duly adopted at meetings of the Board of Directors called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and are in full force and effect and have not been amended or repealed. The Agency Resolution conform to the descriptions thereof contained in the Preliminary Official Statement and the Official Statement.

Council Agenda 05-07-2024
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(iii) The Agency Resolution and the Bonds conform to the descriptions thereof contained in the Preliminary Official Statement and the Official Statement and the Bonds, when duly executed and delivered and authenticated in accordance with the Indenture and the Agency Resolution and delivered to the Underwriter as provided herein, will be validly issued and outstanding obligations of the Agency.
(iv) The Agency has executed, adopted and delivered, or will execute, adopt and deliver, as the case may be, on or before the Closing Date, each of the Legal Documents to which it is a party. Each of the Legal Documents to which the Agency is a party constitutes, or will, as of the Closing Date, constitute, a legal, valid and binding obligation of the Agency enforceable in accordance with its terms, subject to any applicable bankruptcy, insolvency or other laws affecting creditors’ rights or remedies heretofore or hereafter enacted. Each of the Legal Documents to which the Agency is a party has been executed, adopted and delivered, or will be executed, adopted and delivered, as the case may be, on or before the Closing Date, by each respective signatory and is currently in full force and effect or, as of the Closing Date, will be in full force and effect. (v) The Agency is not in breach of or default under any constitutional provision, law or administrative regulation of the State or of the United States or any agency or instrumentality of either, or of any other governmental agency, or any Material Judgment or Agreement (as defined below) which would have a material adverse impact on its ability to fulfill its obligations under the Bonds, the Agency Resolution, the Original Legal Documents or the Legal Documents to which it is a party, and no event has occurred and is continuing which with the passage of time or the giving of notice, or both, would constitute a default or event of default under any Material Judgment or Agreement which would have a material adverse impact on its ability to fulfill its obligations under the Bonds, the Agency Resolution, the Original Legal Documents or the Legal Documents to which it is a party; and the adoption of the Agency Resolution, the issuance and sale of the Bonds and the execution and delivery of the Legal Documents to which the Agency is a party and compliance with and performance of the Agency’s obligations therein and herein will not in any material respect conflict with, violate or result in a breach of or constitute a default under, any such constitutional provision, law the Original Legal Documents, administrative regulation or any Material Judgment or Agreement, nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon the Base Rental Payments (except as described in or contemplated by the Legal Documents and the Official Statement) or under the terms of any such law, administrative regulation or Material Judgment or Agreement. As used in this paragraph, the term “Material Judgment or Agreement” means any judgment or decree or any loan agreement, indenture, bond, note, ordinance or resolution or any material agreement relating to the Leased Property or the Base Rental Payments (including, without limitation, the Agency Resolution and the Legal Documents).
(vi) All approvals, consents and orders of any governmental authority, board, agency, council, commission or other body having jurisdiction which would constitute a condition precedent to the performance by the Agency of its obligations hereunder and Council Agenda 05-07-2024
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under the Original Legal Documents, the Legal Documents to which it is a party have been obtained; provided, that the Agency makes no representations as to any approvals, consents or other actions which may be necessary to qualify the Bonds for offer and sale under Blue Sky or other state securities laws or regulations.
(vii) Any certificates executed by any officer of the Agency and delivered to the Underwriter pursuant hereto or in connection herewith shall be deemed a representation and warranty of the Agency as to the accuracy of the statements therein made. (viii) Except for information which is permitted to be omitted pursuant to Rule 15c2-12(b)(1), the Preliminary Official Statement (excluding therefrom information relating to DTC and its book-entry system), as of its date and as of the date hereof was and is true and correct in all material respects and did not and does not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(ix) The Official Statement is, as of its date and at all times after the date of the Official Statement (excluding therefrom information relating to DTC and its book-entry system) up to and including the Closing Date will be, true and correct in all material respects and does not and will not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (x) If the Official Statement is supplemented or amended, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended) at all times subsequent thereto up to and including that date that is 25 days from the “end of the underwriting period” (as defined in Rule 15c2-12), the Official Statement as so supplemented or amended will be true and correct in all material respects and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(xi) If between the date hereof and the end of the underwriting period, any event shall occur which might or would cause the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Agency shall notify the Underwriter thereof, and if, in the reasonable opinion of the Underwriter, such event requires the preparation and publication of a supplement or amendment to the Official Statement, the Agency shall promptly (and in any event before the Closing) prepare and furnish (at the expense of the Agency) a reasonable number of copies of an amendment of or supplement to the Official Statement in form and substance reasonably satisfactory to the Underwriter. (xii) Except as described in the Preliminary Official Statement and Official Statement, no litigation, proceeding or official investigation of any governmental or judicial body is pending against the Agency or against any other party of which the Agency Council Agenda 05-07-2024
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has notice or, to the knowledge of the Agency, threatened against the Agency: (i) seeking to restrain or enjoin the issuance or sale of any of the Bonds, (ii) in any way contesting or affecting any authority for the issuance of the Bonds or the validity or binding effect of any of the Legal Documents, (iii) which is in any way contesting the creation, existence, powers or jurisdiction of the Agency or the validity or effect of the Agency Resolution or any provision thereof or the application of the proceeds of the Bonds, (iv) contesting in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or (v) which, if adversely determined, could materially adversely affect the financial position or operating condition of the Agency or the transactions contemplated by the Preliminary Official Statement and Official Statement or any of the Original Legal documents or Legal Documents. The Agency shall advise the Underwriter promptly of the institution of any proceedings known to it by any governmental agency prohibiting or otherwise affecting the use of the Preliminary Official Statement or the Official Statement in connection with the offering, sale or distribution of the Bonds.
(xiii) The Agency, to the best of its knowledge, has never been and is not in default in the payment of principal of, premium, if any, or interest on, or otherwise is not nor has it been in default with respect to, any bonds, notes, or other obligations which it has issued, assumed or guaranteed as to payment of principal, premium, if any, or interest.

All representations, warranties and agreements of the City and the Agency shall remain operative and in full force and effect, regardless of any investigations made by the Underwriter or on the Underwriter’s behalf, and shall survive the delivery of the Bonds.

6. CLOSING.

At 8:00 A.M., California Time, on [Closing Date], or at such other time or date as the Underwriter and the City and the Agency may mutually agree upon as the date and time of the closing (the “Closing Date”), the City and the Agency will deliver or cause to be delivered to the Underwriter at the offices of Stradling Yocca Carlson & Rauth LLP (“Bond Counsel”), 660 Newport Center Drive, Suite 1600, Newport Beach, California 92660, or at such other place as the Underwriter and the City and the Agency may mutually agree upon, the documents specified in Section 7. On the Closing Date, (a) upon satisfaction of the conditions herein specified, the Underwriter shall accept the delivery of the Bonds, and pay the purchase price therefor in federal funds payable as directed by the Agency and (b) the Agency shall deliver or cause to be delivered the duly executed and authenticated Bonds to the Underwriter through the facilities of DTC in definitive or temporary form, duly executed by the Agency and in the authorized denominations as specified by the Underwriter at the closing and the City and the Agency shall deliver the other documents hereinafter mentioned. The Bonds shall be made available to the Underwriter at least one (1) business day before the Closing Date for purposes of inspection.

7. CONDITIONS PRECEDENT.

The Underwriter has entered into this Purchase Agreement in reliance upon the representations and agreements of the City and the Agency contained herein and the performance by the City and the Agency of its obligations hereunder, both as of the date hereof and as of the Council Agenda 05-07-2024
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Closing Date. The Underwriter’s obligations under this Purchase Agreement are and shall be subject to the following further conditions:
(a) The representations of the City and the Agency contained herein shall be true, complete and correct in all material respects on the date of acceptance hereof and on and as of the Closing Date.
(b) At the time of the closing on the Closing Date, the Official Statement, the Resolutions, the Original Legal Documents and the Legal Documents shall be in full force and effect and shall not have been amended, modified or supplemented except as may have been agreed to in writing by the Underwriter.
(c) The City and the Agency shall perform or have performed all of their obligations required under or specified in the Resolutions, the Original Legal Documents, the Legal Documents and the Official Statement to be performed at or prior to the Closing Date. (d) The City and the Agency shall have delivered to the Underwriter the final Official Statement by the time required by Section 3 of this Purchase Agreement. (e) As of the date hereof and at the time of closing on the Closing Date, all necessary official action of the City and the Agency relating to the Legal Documents and the Official Statement shall have been taken and shall be in full force and effect and shall not have been amended, modified or supplemented in any material respect absent the written agreement of the Underwriter.
(g) At or prior to the Closing Date, the Underwriter shall receive the following documents (in each case with only such changes as the Underwriter shall approve in writing):
(i) The approving opinion of Bond Counsel relating to the Bonds, dated the Closing Date, substantially in the form attached as Appendix D to the Official Statement, and, if not otherwise directly addressed to the Underwriter and the Trustee, a reliance letter with respect thereto addressed to the Underwriter and the Trustee; (ii) The supplemental opinion of Bond Counsel, addressed to the Underwriter, dated the Closing Date, to the effect that:

1. This Purchase Agreement has been duly executed and delivered by the City and the Agency and is a legal, valid and binding obligation of the City and the Agency enforceable in accordance with its terms, subject to laws relating to bankruptcy, insolvency, reorganization or creditors’ rights generally, to the application of equitable principles, the exercise of judicial discretion and the limitations on legal remedies against public entities in the State;

2. The statements contained in the Preliminary Official Statement and the Official Statement on the cover page and in the sections entitled “INTRODUCTION,” “THE SERIES 2024A BONDS,” (other than the information concerning DTC and the book-entry system), “SECURITY AND SOURCES OF Council Agenda 05-07-2024
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PAYMENT FOR THE SERIES 2024A BONDS” and “TAX MATTERS” insofar as such statements expressly summarize certain provisions of the Original Legal Documents, the Legal Documents, the Resolutions, the Bonds, and the form and content of such counsel's opinion attached as Appendix D to the Preliminary Official Statement and the Official Statement, present a fair and accurate summary of the provisions thereof; and

3. The Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended (the “1933 Act”) and the Indenture is exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”);
(iii) A letter, dated the Closing Date and addressed to the Underwriter, from Stradling Yocca Carlson & Rauth LLP, as disclosure counsel to the Agency, to the effect that based upon the information made available to them in the course of their participation in the preparation of the Preliminary Official Statement and the Official Statement and without passing on and without assuming any responsibility for the accuracy, completeness and fairness of the statements in the Preliminary Official Statement and the Official Statement, and having made no independent investigation or verification thereof, nothing has come to their attention which would lead them to believe that the Preliminary Official Statement, as of its date, did not and does not, and the Official Statement as of its date and all times subsequent thereto during the period up to and including the Closing Date, did not and does not, contain an untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading in any material respect; (iv) The opinion of the City Attorney, as counsel to the City, dated the date of the Closing and addressed to the Underwriter and the Trustee, to the effect that:

1. The City has been duly organized and is validly existing under the Constitution and laws of the State, and has all requisite power and authority thereunder: (a) to adopt the City Resolution, and to enter into, execute, adopt, deliver and perform its covenants and agreements under the Legal Documents to which it is a party; (b) to approve and authorize the use, execution and distribution of the Preliminary Official Statement and the Official Statement; and (c) to carry on its activities as currently conducted;

2. The City has taken all actions required to be taken by it before the Closing Date material to the transactions contemplated by the documents mentioned in paragraph (a) above, and the City has duly authorized the execution, adoption and delivery of, as the case may be, and the due performance of its obligations under, the Legal Documents to which it is a party;

3. The City Resolution was duly adopted by the City Council at a meeting of the City Council which was called and held pursuant to law and with all required notices and in accordance with all applicable open meetings laws and at Council Agenda 05-07-2024
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which a quorum was present and acting at the time of the adoption of the City Resolution;

4. The adoption of the City Resolution, the execution and delivery by the City of the Legal Documents to which it is a party and the compliance with the provisions of the Original Legal Documents and the Legal Documents, do not and will not conflict with or violate any California constitutional, statutory or regulatory provision, or, to the best of such counsel’s knowledge after due inquiry, conflict with or constitute on the part of the City a breach of or default under any agreement or instrument to which the City is a party or by which it is bound which would have a material adverse impact on its ability to fulfill its obligations under the City Resolution, the Original Legal Documents or the Legal Documents;

5. The Original Legal Documents and the Legal Documents to which the City is a party constitute legal, valid and binding obligations of the City and are enforceable according to the terms thereof, except as enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting enforcement of creditors’ rights generally, and by the application of equitable principles if equitable remedies are sought, by the exercise of judicial discretion and the limitations on legal remedies against public entities in the State;

6. No litigation is pending or, to the best of such counsel’s knowledge after due inquiry, threatened against the City in any court in any way affecting the titles of the officials of the City to their respective positions, or seeking to restrain or to enjoin the issuance or sale of the Bonds, the payment of the Base Rental Payments under the Lease Agreement, or the payment of the principal of and interest on the Bonds, or in any way contesting or affecting the validity or enforceability of the City Resolution, the Original Legal Documents or the Legal Documents to which the City is a party, or contesting in any way the completeness or accuracy of the Official Statement, or contesting the powers of the City or its authority with respect to the City Resolution, the Original Legal Documents or the Legal Documents to which the City is a party;

7. The information with respect to litigation relating to the City, of any, contained in the Preliminary Official Statement, as of its date and as of the date hereof and the Official Statement as of its date and as of the Closing Date did not and does not contain any untrue statement of a material fact and did not and does not omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;

8. To the best of such counsel’s knowledge after due inquiry, no authorization, approval, consent or other order of the State or any local agency of the State, other than such authorizations, approvals and consents which have been obtained, is required for the valid authorization, execution and delivery by the City of the Legal Documents to which it is a party and the authorization and distribution of the Preliminary Official Statement and the Official Statement (provided that no Council Agenda 05-07-2024
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opinion need be expressed as to any action required under state securities or Blue Sky laws in connection with the purchase of the Bonds by the Underwriter); and

9. To the best of such counsel’s knowledge after due inquiry, the City is not in breach of or default under any applicable law or administrative regulation of the State or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party or to which the City or the Leased Property is otherwise subject, which breach or default would materially adversely affect the City’s ability to adopt or enter into or perform its obligations under the Original Legal Documents and the Legal Documents to which it is a party, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or an event of default under any such instrument and which would materially adversely affect the City’s ability to adopt, enter into or perform its obligations under the Original Legal Documents and the Legal Documents to which it is a party;
(v) The opinion of the City Attorney, as counsel to the Agency, dated the date of the Closing and addressed to the Underwriter and the Trustee, to the effect that:

1. The Agency is a joint exercise of powers authority duly organized and validly existing and operating pursuant to Chapter 5, Division 7, Title 1 of the California Government Code, and has all requisite power and authority thereunder:
(a) to adopt the Agency Resolution, and to enter into, execute, adopt, deliver and perform its covenants and agreements under the Legal Documents to which it is a party; (b) to approve and authorize the use, execution and distribution of the Preliminary Official Statement and the Official Statement; and (c) to carry on its activities as currently conducted;

2. The Agency has taken all actions required to be taken by it before the Closing Date material to the transactions contemplated by the documents mentioned in paragraph (a) above, and the Agency has duly authorized the execution, adoption and delivery of, as the case may be, and the due performance of its obligations under, the Legal Documents to which it is a party;

3. The Agency Resolution was duly adopted by the Board of Directors at a meeting of the Board of Directors which was called and held pursuant to law and with all required notices and in accordance with all applicable open meetings laws and at which a quorum was present and acting at the time of the adoption of the Agency Resolution;

4. The adoption of the Agency Resolution, the execution and delivery by the Agency of the Legal Documents to which it is a party and the compliance with the provisions of the Original Legal Documents and the Legal Documents, do not and will not conflict with or violate any California constitutional, statutory or regulatory provision, or, to the best of such counsel’s knowledge after due inquiry, conflict with or constitute on the part of the Agency a breach of or default under Council Agenda 05-07-2024
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any agreement or instrument to which the Agency is a party or by which it is bound which would have a material adverse impact on its ability to fulfill its obligations under the Agency Resolution the Original Legal Documents or the Legal Documents;

5. The Original Legal Documents and the Legal Documents to which the Agency is a party constitute legal, valid and binding obligations of the Agency and are enforceable according to the terms thereof, except as enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting enforcement of creditors’ rights generally, and by the application of equitable principles if equitable remedies are sought, by the exercise of judicial discretion and the limitations on legal remedies against public entities in the State;

6. No litigation is pending or, to the best of such counsel’s knowledge after due inquiry, threatened against the Agency in any court in any way affecting the titles of the officials of the Agency to their respective positions, or seeking to restrain or to enjoin the issuance or sale of the Bonds, the payment of the Base Rental Payments under the Lease Agreement, or the payment of the principal of and interest on the Bonds, or in any way contesting or affecting the validity or enforceability of the Agency Resolution, the Original Legal Documents or the Legal Documents to which the Agency is a party, or contesting in any way the completeness or accuracy of the Official Statement, or contesting the powers of the Agency or its authority with respect to the Agency Resolution, the Original Legal Documents or the Legal Documents to which the Agency is a party;

7. The information with respect to litigation relating to the Agency, if any, contained in the Preliminary Official Statement, as of its date and as of the date hereof and the Official Statement as of its date and as of the Closing Date did not and does not contain any untrue statement of a material fact and did not and does not omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;

8. To the best of such counsel’s knowledge after due inquiry, no authorization, approval, consent or other order of the State or any local agency of the State, other than such authorizations, approvals and consents which have been obtained, is required for the valid authorization, execution and delivery by the Agency of the Legal Documents to which it is a party and the authorization and distribution of the Preliminary Official Statement and the Official Statement (provided that no opinion need be expressed as to any action required under state securities or Blue Sky laws in connection with the purchase of the Bonds by the Underwriter); and

9. To the best of such counsel’s knowledge after due inquiry, the Agency is not in breach of or default under any applicable law or administrative regulation of the State or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Agency is a party or to which the Agency or the Leased Property is otherwise Council Agenda 05-07-2024
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subject, which breach or default would materially adversely affect the Agency’s ability to adopt or enter into or perform its obligations under, the Obligation Legal Documents and the Legal Documents to which it is a party, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or an event of default under any such instrument and which would materially adversely affect the Agency’s ability to adopt, enter into or perform its obligations under the Original Legal Documents and the Legal Documents to which it is a party;
(vi) The opinion of Hawkins Delafield & Wood LLP, counsel to the Underwriter, dated the Closing Date and addressed to the Underwriter, and covering such matters as the Underwriter may reasonably request;
(vii) The opinion of counsel to the Trustee, dated the Closing Date and addressed to the City, the Agency and the Underwriter, in form and substance reasonably satisfactory to the City, the Agency, the Underwriter, Bond Counsel and counsel for the Underwriter; (viii) A certificate, dated the Closing Date, signed by an authorized officer of the City to the effect that: (a) the representations and agreements of the City contained herein are true and correct in all material respects as of the Closing Date; (b) the Legal Documents to which the City is a party have been duly authorized, adopted and executed, as the case may be, and are in full force and effect; (c) except as described in the Preliminary Official Statement as of its date and the Official Statement as of its date, no litigation is pending or, to his or her knowledge, threatened (i) seeking to restrain or enjoin the issuance of the Bonds, (ii) in any way contesting or affecting any authority for the issuance of the Bonds or the validity of the Bonds, the City Resolution or any Legal Documents to which the City is a party, (iii) in any way contesting the creation, existence or powers of the City or the validity or effect of the City Resolution and the Legal Documents or any provision thereof or the application of the proceeds of the Bonds, or (iv) which, if adversely determined, could materially adversely affect the City’s ability to make the Base Rental Payments under the Lease Agreement or the transactions contemplated by the Preliminary Official Statement as of its date and the Official Statement as of its date and as of the Closing Date or any of the Original Legal Documents or the Legal Documents; (d) the Official Statement is true and correct in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that no review has been made of information in the Official Statement related to DTC and its book- entry system; and (e) the City has obtained insurance, or otherwise provided for self- insurance, as required by the Lease Agreement and all required policies are in full force and effect and have not been revoked or rescinded;
(ix) A certificate, dated the Closing Date, signed by an authorized officer of the Agency to the effect that: (a) the representations and agreements of the Agency contained herein are true and correct in all material respects as of the Closing Date; (b) the Legal Documents to which the Agency is a party have been duly authorized, adopted and executed, as the case may be, and are in full force and effect; (c) except as described in the Preliminary Official Statement as of its date and the Official Statement as of its date, no Council Agenda 05-07-2024
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litigation is pending or, to his or her knowledge, threatened (i) seeking to restrain or enjoin the issuance of the Bonds, (ii) in any way contesting or affecting the validity of the Agency Resolution or any Legal Documents to which the Agency is a party, (iii) in any way contesting the creation, existence or powers of the Agency or the validity or effect of the Agency Resolution and the Legal Documents or any provision thereof or the application of the proceeds of the Bonds, or (iv) which, if adversely determined, could materially adversely affect the transactions contemplated by the Preliminary Official Statement as of its date and the Official Statement as of its date and as of the Closing Date or any of the Original Legal Documents or the Legal Documents; and (d) the Official Statement is true and correct in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that no review has been made of information in the Official Statement related to DTC and its book-entry system;
(x) Executed or certified copies of the Resolutions;
(xi) Executed or certified copies of each of the Original Legal Documents and the Legal Documents;
(xii) A Tax Certificate, in form satisfactory to Bond Counsel, executed by such officials of the City and the Agency as shall be reasonably satisfactory to the Underwriter; (xiii) Evidence that the Bonds have been assigned the rating from S&P Global Ratings, a Standard & Poor’s Financial Services LLC business (“S&P”) as set forth in the Official Statement;
(xiv) A certificate or certificates of an authorized officer of the Trustee, in form and substance reasonably satisfactory to the City, the Agency, the Underwriter, Bond Counsel and counsel for the Underwriter.
(xv) Evidence that a Form 8038-G relating to the Bonds has been executed by the Agency and will be filed with the Internal Revenue Service (the “IRS”) within the applicable time limit;
(xvi) A copy of the Blue Sky Survey with respect to the Bonds; (xvii) A copy of the Agency’s executed Blanket Letter of Representation to DTC; (xviii) Evidence that the City has obtained insurance, or otherwise provided for self-insurance, as required by the Lease Agreement and all required policies are in full force and effect and have not been revoked or rescinded; and (xix) Such additional legal opinions, certificates, proceedings, instruments and other documents as the Underwriter, counsel for the Underwriter or Bond Counsel may reasonably request to evidence compliance by the City and the Agency with legal requirements, the truth and accuracy, as of the Closing Date, of the representations of the Council Agenda 05-07-2024
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City and the Agency herein contained and the due performance or satisfaction by the City and the Agency at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the City and the Agency and all conditions precedent to the issuance of the Bonds pursuant to the Indenture and Resolutions shall have been fulfilled.

8. TERMINATION.

If the City and the Agency shall be unable to satisfy the conditions of the Underwriter’s obligations contained in this Purchase Agreement or if the Underwriter’s obligations shall be terminated for any reason permitted by this Purchase Agreement, this Purchase Agreement may be cancelled by the Underwriter at, or at any time before the Closing Date. Notice of such cancellation shall be given by the Underwriter to the City and the Agency in writing, or by telephone confirmed in writing. The performance by the City and the Agency of any and all conditions contained in this Purchase Agreement for the benefit of the Underwriter may be waived by the Underwriter.
(a) The Underwriter shall also have the right, before the Closing Date, to cancel its obligations to purchase the Bonds, by written notice to the City and the Agency, if between the date hereof and the Closing Date:
(i) Any event or circumstance occurs or information becomes known, which, in the professional judgment of the Underwriter, makes untrue any statement of a material fact set forth in the Preliminary Official Statement as amended or supplemented in accordance with the terms hereof or the Official Statement or results in an omission to state a material fact necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading; or
(ii) The market for the Bonds or the market prices of the Bonds or the ability of the Underwriter to enforce contracts for the sale of the Bonds shall have been materially and adversely affected, in the professional judgment of the Underwriter, by:
(1) An amendment to the Constitution of the United States or the State shall have been passed or legislation shall have been introduced in or enacted by the Congress of the United States or the legislature of the State or legislation pending in the Congress of the United States shall have been amended or legislation (whether or not then introduced) shall have been recommended to the Congress of the United States or otherwise endorsed for passage (by press release, other form of notice or otherwise) by the President of the United States, the Treasury Department of the United States, the Internal Revenue Service or the Chairman or ranking minority member of the Committee on Finance of the United States Senate or the Committee on Ways and Means of the United States House of Representatives, or legislation shall have been proposed (whether or not then introduced) for consideration by either such Committee by any member thereof or presented as an option for consideration (whether or not then introduced) by either such Committee by the staff of such Committee or by the staff of the joint Committee on Taxation of the Congress of the United States, or legislation shall Council Agenda 05-07-2024
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have been favorably reported for passage to either House of the Congress of the United States by a Committee of such House to which such legislation has been referred for consideration, or a decision shall have been rendered by a court of the United States or of the State or the Tax Court of the United States, or a ruling shall have been made or a regulation or temporary regulation shall have been proposed or made or any other release or announcement shall have been made by the Treasury Department of the United States, the Internal Revenue Service or other federal or State authority, with respect to federal or State taxation upon revenues or other income of the general character to be derived by the City or upon interest received on obligations of the general character of the Bonds which, in the judgment of the Underwriter, may have the purpose or effect, directly or, indirectly, of affecting the tax status of the City, its property or income, its securities (including the Bonds) or the interest thereon, or any tax exemption granted or authorized by State legislation; or
(2) The declaration of war or engagement in or escalation of hostilities or the occurrence of any other national emergency or calamity or terrorism affecting the operation of the government of, or the financial community in, the United States; or
(3) The declaration of a general banking moratorium by federal, New York or California authorities; or
(4) The occurrence of a major financial crisis, a material disruption in commercial banking or securities settlement or clearance services, or a material disruption in the fixed income or municipal securities market; or (5) Additional material restrictions not in force or being enforced as of the date hereof shall have been imposed upon trading in securities generally by any governmental authority or by any national securities exchange; or (6) The general suspension of trading on any national securities exchange; or
(iii) Legislation enacted, introduced in the Congress or recommended for passage (whether or not then introduced) by the President of the United States, or a decision rendered by a court established under Article III of the Constitution of the United States or by the Tax Court of the United States, or an order, ruling, regulation (final, temporary or proposed) or official statement issued or made by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter shall have been made or issued to the effect that the Bonds, other securities of the City or obligations of the general character of the Bonds are not exempt from registration under the 1933 Act, or that the Indenture is not exempt from qualification under the Trust Indenture Act; or (iv) An order, decree or injunction of any court of competent jurisdiction, issued or made to the effect that the issuance, offering or sale of obligations of the general character of the Bonds, or the issuance, offering or sale of the Bonds, including any or all underlying Council Agenda 05-07-2024
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obligations, as contemplated hereby or by the Preliminary Official Statement or the Official Statement, is or would be in violation of any applicable law, rule or regulation, including (without limitation) any provision of applicable federal securities laws as amended and then in effect; or (v) A stop order, ruling, regulation or official statement by the SEC or any other governmental agency having jurisdiction of the subject matter shall have been issued or made or any other event occurs, the effect of which is that the issuance, offering or sale of the Bonds, or the adoption, execution and delivery of any Legal Documents, as contemplated hereby or by the Preliminary Official Statement or the Official Statement, is or would be in violation of any applicable law, rule or regulation, including (without limitation) any provision of applicable federal securities laws, including the 1933 Act, the Securities Exchange Act of 1934 or the Trust Indenture Act, each as amended and as then in effect; or (vi) Any litigation shall be instituted or be pending on the Closing Date to restrain or enjoin the issuance or sale of the Bonds, or in any way contesting or affecting any authority for or the validity of the proceedings authorizing and approving the Resolutions, the Legal Documents or the existence or powers of the City and the Agency with respect to their obligations under the Legal Documents; or
(vii) A reduction or withdrawal in the assigned rating to the Bonds as described above, or, as of the Closing Date, the failure by S&P to assign the rating described above to the Bonds.

9. AMENDMENTS TO OFFICIAL STATEMENT.

During the period commencing on the Closing Date and ending twenty-five (25) days from the end of the underwriting period, the City and the Agency shall advise the Underwriter if any event relating to or affecting the Official Statement shall occur as a result of which it may be necessary or appropriate to amend or supplement the Official Statement in order to make the Official Statement not misleading in light of the circumstances existing at the time it is delivered to a purchaser or “potential customer” (as defined for purposes of Rule 15c2-12). If the Official Statement is supplemented or amended, at the time of each supplement or amendment thereto and at all times subsequent thereto up to and including that date that is 25 days from the end of the “underwriting period” (as defined in Rule 15c2-12), the Official Statement as supplemented or amended will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading and shall amend or supplement the Official Statement (in form and substance reasonably satisfactory to counsel for the Underwriter) so that the Official Statement will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

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10. EXPENSES.

All expenses and costs of the City and the Agency incident to the performance of their obligations in connection with the authorization, issuance and sale of the Bonds to the Underwriter, including the costs of printing or reproduction of the Bonds, the Legal Documents and the Official Statement in reasonable quantities, fees of consultants, fees of rating agencies, advertising expenses, fees and expenses of the Trustee and fees and expenses of counsel to the City and the Agency, including Bond Counsel, shall be paid by the City from the proceeds of the Bonds or other revenues of the Agency. All expenses and costs of the Underwriter incurred with respect to the Bonds or under or pursuant to this Purchase Agreement, including, without limitation, the cost of preparing this Purchase Agreement and other Underwriter documents, travel expenses and the fees and expenses of counsel to the Underwriter, shall be paid by the Underwriter (which may be included as an expense component of the Underwriter’s discount). The Underwriter shall also be responsible for payment of the fee due to the California Debt and Investment Advisory Commission related to the Bonds.

11. USE OF DOCUMENTS.

The City and the Agency hereby authorize the Underwriter to use, in connection with the public offering and sale of the Bonds, this Purchase Agreement, the Preliminary Official Statement, the Official Statement, the Original Legal Documents and the Legal Documents, and the information contained herein and therein.

12. QUALIFICATION OF SECURITIES.

The City and the Agency will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request to qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may designate and to provide for the continuance of such qualification; provided, however, that neither the City nor the Agency will be required to qualify as a foreign corporation or to file any general or special consents to service of process under the laws of any state.

13. NOTICES.

Any notice or other communication to be given to the City or the Agency under this Purchase Agreement may be given by delivering the same in writing to City of Pismo Beach, 760 Mattie Road, Pismo Beach, California 93449, Attention: Nadia Feeser, and any such notice or other communication to be given to the Underwriter may be given by delivering the same in writing to BofA Securities, Inc., 315 Montgomery Street, 1st Floor, San Francisco, California 94104, Attention: Holly Vocal, Managing Director.

14. BENEFIT.

This Purchase Agreement is made solely for the benefit of the City, the Agency and the Underwriter (including their successors or assigns) and no other person, partnership, association or corporation shall acquire or have any right hereunder or by virtue hereof. Except as otherwise expressly provided herein, all of the agreements and representations of the City and the Agency Council Agenda 05-07-2024
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contained in this Purchase Agreement and in any certificates delivered pursuant hereto shall remain operative and in full force and effect regardless of: (i) any investigation made by or on behalf of the Underwriter; (ii) delivery of and payment for the Bonds hereunder; or (iii) any termination of this Purchase Agreement, other than pursuant to Section 8.

15. GOVERNING LAW. THIS PURCHASE AGREEMENT SHALL BE DEEMED TO

BE A CONTRACT UNDER, AND FOR ALL PURPOSES SHALL BE GOVERNED BY, AND

CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD TO CHOICE OF LAW RULES.

16. WAIVER OF JURY TRIAL. THE CITY AND THE AGENCY HEREBY

IRREVOCABLY WAIVE TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,

ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT

OF OR RELATING TO THIS PURCHASE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

17. MISCELLANEOUS.
(a) This Purchase Agreement contains the entire agreement between the parties relating to the subject matter hereof and supersedes all oral statements, prior writings and representations with respect thereto.
(b) This Purchase Agreement may be executed in several counterparts, each of which shall be deemed an original hereof.

[Signature page follows]

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Very truly yours,

BOFA SECURITIES, INC.,
as Underwriter

By:______________________________
Authorized Officer

[Signature Page to Purchase Agreement]

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Approved and Agreed to: __________, 2024

CITY OF PISMO BEACH

By:

Authorized Officer

PISMO BEACH PUBLIC FINANCING
AGENCY

By:

Authorized Officer

[Signature Page to Purchase Agreement]

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SCHEDULE I
Maturities, Principal Amounts, Interest Rates, Yields, Prices and Redemption Provisions $[PAR]

PISMO BEACH PUBLIC FINANCING AGENCY
(San Luis Obispo County, California)
SERIES 2024A LEASE REVENUE BONDS
(Public Safety Facility Project)

Maturity Date
(December 1)
Principal
Amount
Interest
Rate Yield Price
10% Test
Satisfied

Redemption Provisions:

Optional Redemption. The Bonds maturing on or after December 1, 20__, are subject to redemption prior to their stated maturities, on any Business Day, on or after December 1, 20__, as a whole or in part by such maturities as may be designated by the Agency to the Trustee at least forty-five (45) days prior to the redemption date, and by lot within any one maturity, from prepayments of Base Rental Payments made at the option of the City pursuant to the Lease Agreement, at a redemption price equal to the principal amount of the Bonds to be redeemed, without premium, plus accrued but unpaid interest to the redemption date.

Mandatory Sinking Account Redemption. The Bonds maturing on December 1, 20__ (the “20__ Term Bonds”) are subject to mandatory redemption, in part by lot, from sinking account payments in each year as set forth in the following schedule, commencing December 1, 20__, and on December 1 in each year thereafter to and including December 1, 20__, at a redemption price equal to the principal amount of the 20__ Term Bonds to be redeemed, plus accrued but unpaid interest thereon to the date fixed for redemption, without premium:

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Redemption Date
(December 1)
Principal
Amount
$

* Final Maturity.

The Bonds maturing on December 1, 20__ (the “20__ Term Bonds”) are subject to mandatory redemption, in part by lot, from sinking account payments in each year as set forth in the following schedule, commencing December 1, 20__, and on December 1 in each year thereafter to and including December 1, 20__, at a redemption price equal to the principal amount of the 20__ Term Bonds to be redeemed, plus accrued but unpaid interest thereon to the date fixed for redemption, without premium:

Redemption Date
(December 1)
Principal
Amount
$

* Final Maturity.

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EXHIBIT A

$[PAR]

PISMO BEACH PUBLIC FINANCING AGENCY
(San Luis Obispo County, California)
SERIES 2024A LEASE REVENUE BONDS
(Public Safety Facility Project)

ISSUE PRICE CERTIFICATE
The undersigned, on behalf of BofA Securities, Inc. (“BofA Securities”) hereby certifies as set forth below with respect to the issuance and sale of the above-captioned obligations that are listed on Schedule A (the “Bonds”).

1. Sale of the General Rule Maturities. As of the date of this certificate, for each Maturity of the General Rule Maturities, the first price at which at least 10% of such Maturity of the Bonds was sold to the Public is the respective price listed in Schedule A.

2. Initial Offering Price of the Hold-the-Offering-Price Maturities. (a) BofA Securities offered the Hold-the-Offering-Price Maturities to the Public for purchase at the respective initial offering prices listed in Schedule A (the “Initial Offering Prices”) on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule B.
(b) As set forth in the Purchase Agreement, BofA Securities has agreed in writing that, (i) for each Maturity of the Hold-the-Offering-Price Maturities, it would neither offer nor sell any of the unsold Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the “hold-the-offering-price rule”), and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any retail distribution agreement shall contain the agreement of each broker-dealer who is a party to the retail distribution agreement, to comply with the hold-the- offering-price rule. BofA Securities has not offered or sold any unsold Bonds of any Maturity of the Hold-the-Offering-Price Maturities at a price that is higher than the respective Initial Offering Price for that Maturity of the Bonds during the Holding Period.

3. Defined Terms.
(a) General Rule Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “General Rule Maturities.”
(b) Hold-the-Offering-Price Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “Hold-the-Offering-Price Maturities.” (c) Holding Period means, with respect to a Hold-the-Offering-Price Maturity, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale Date ([Sale Date]), or (ii) the date on which the BofA Securities has sold at least Council Agenda 05-07-2024
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10% of such Hold-the-Offering-Price Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold-the-Offering-Price Maturity. (d) Issuer means the Pismo Beach Public Financing Agency. (e) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities.
(f) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term “related party” for purposes of this certificate means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (g) Underwriter means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public).

The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents BofA Securities’ interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Stradling Yocca Carlson & Rauth LLP in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of Internal Revenue Service Form 8038-G, and other federal income tax advice it may give to the Issuer from time to time relating to the Bonds. The certifications contained herein are not necessarily based on personal knowledge of the undersigned but may instead be based on either inquiry deemed adequate by the undersigned or institutional knowledge (or both) regarding the matters set forth herein.

BOFA SECURITIES, INC.

By: ______________________________________

Name: ______________________________
Dated: [Closing Date]

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SCHEDULE A

SALE PRICES OF THE GENERAL RULE MATURITIES AND

INITIAL OFFERING PRICES OF THE HOLD-THE-OFFERING-PRICE MATURITIES

$[PAR]

PISMO BEACH PUBLIC FINANCING AGENCY
(San Luis Obispo County, California)
SERIES 2024A LEASE REVENUE BONDS
(Public Safety Facility Project)

Maturity Date
(November 1)
Principal
Amount
Interest
Rate Yield Price

________________
* General Rule Maturities
** Hold-the-Offering Price Maturities

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SCHEDULE B

PRICING WIRE OR EQUIVALENT COMMUNICATION
(Attached)
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Draft of 4/25/2024
4860-5035-1795v4/024328-0006

CONTINUING DISCLOSURE CERTIFICATE
This Continuing Disclosure Certificate, dated June __, 2024 (the “Disclosure Certificate”) is executed and delivered by the City of Pismo Beach (the “City”) in connection with the issuance of the Pismo Beach Public Financing Agency’s (the “Agency”) $__________ (San Luis Obispo County, California) Series 2024A Lease Revenue Bonds (Public Safety Facility Project) (the “Bonds”) pursuant to an Indenture, dated as of June 1, 2017, as supplemented by the First Supplement to Indenture dated as of December 1, 2017 and the Second Supplement to Indenture dated as of June 1, 2024 (together, the “Indenture”), each by and between the Agency and Wilmington Trust, N.A., as trustee (the “Trustee”).

Capitalized terms not defined herein shall have the meaning set forth in the Indenture. The City covenants and agrees as follows:

SECTION 1. Purpose of this Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the City for the benefit of the Owners and Beneficial Owners of the Bonds and in order to assist the Participating Underwriter in complying with the Rule (as the foregoing capitalized terms are hereinafter defined).

SECTION 2. Definitions. In addition to the definitions set forth in the Indenture, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:
“Beneficial Owner” shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes.
“Dissemination Agent” shall mean Urban Futures, Inc. or any successor Dissemination Agent designated in writing by the City and which has filed with the City a written acceptance of such designation.

In the absence of such a designation, the City shall act as the Dissemination Agent. “Financial Obligation” shall mean, for purposes of the Listed Events set out in Section 5(a)(10) and Section (5)(b)(8), 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 defined in the Securities Exchange Act of 1934, as amended) as to which a final official statement (as defined in the Rule) has been provided to the MSRB consistent with the Rule.
“Listed Events” shall mean any of the events listed in Section 5 of this Disclosure Certificate. “MSRB” shall mean the Municipal Securities Rulemaking Board or any other entity designated or authorized by the Securities and Exchange Commission to receive reports pursuant to the Rule. Until otherwise designated by the MSRB or the Securities and Exchange Commission, filings with the MSRB are to be made through the Electronic Municipal Market Access (“EMMA”) website of the MSRB, currently located at http://emma.msrb.org .
“Official Statement” shall mean the Official Statement for the Bonds dated _____, 2024. “Participating Underwriter” shall mean the original underwriter of the Bonds required to comply with the Rule in connection with offering of the Bonds.

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“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 City shall, or shall cause the Dissemination Agent by written direction to such Dissemination Agent to, not later than March 31 after the end of the City’s fiscal year (which currently ends on June 30), commencing with the report due for the fiscal year ending June 30, 2024, provide to the MSRB an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Agreement. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 of this Disclosure Agreement; provided that the audited financial statements of the City may be submitted separately from and later than the balance of the Annual Report if they are not available by the date required above for the filing of the Annual Report.

An Annual Report shall be provided at least annually notwithstanding any fiscal year longer than 12 calendar months. The City’s fiscal year is currently effective from July 1 to the immediately succeeding June 30 of the following year. The City will promptly notify the MSRB of a change in the fiscal year dates. (b) Not later than fifteen (15) Business Days prior to the date specified in subsection (a) for providing the Annual Report to the MSRB, the City shall provide the Annual Report to the Dissemination Agent (if the Dissemination Agent is not the City). If by fifteen (15) Business Days prior to the date specified in (a) for the Annual Report, the Dissemination Agent (if other than the City) has not received a copy of the Annual Report, the Dissemination Agent shall notify the City of such failure to receive the report. If the Dissemination Agent is other than the City, the City shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by it hereunder. The Dissemination Agent may conclusively rely upon such certification of the City and shall have no duty or obligation to review such Annual Report. (c) If the City fails to provide an Annual Report by the date required in subsection (a), the City shall or shall cause the Dissemination Agent to, in a timely manner, send a notice of such failure to file to the MSRB, in substantially the form attached as Exhibit A.

SECTION 4. Content of Annual Reports. The City’s Annual Report shall contain or include by reference the following:
(a) Financial Statements. The audited financial statements of the City for the most recent fiscal year of the City then ended. If the City prepares audited financial statements and if the audited financial statements are not available by the time the Annual Report is required to be filed, the Annual Report shall contain any unaudited financial statements of the City in a format similar to the 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 of the City shall be audited by such auditor as shall then be required or permitted by State law. Audited financial statements, if prepared by the City, 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 City may from time to time, if required by federal or state legal requirements, modify the basis upon which its financial statements are prepared. In the event that the City shall modify the basis upon which its financial statements are prepared, the City shall provide a notice of such modification to the MSRB, including a reference to the specific federal or state law or regulation specifically describing the legal requirements for the change in accounting basis.

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(b) Financial and Operating Data. Numerical and tabular information for the immediately preceding fiscal year in the following charts and tables:

1. Information of the type contained in Table 1 of the Appendix A of the Official Statement;

2. Information of the type contained in Table 2 of the Appendix A of the Official Statement;

3. Information of the type contained in Table 3 of the Appendix A of the Official Statement;

4. Information of the type contained in Table 4 of the Appendix A of the Official Statement;

5. Information of the type contained in Table 5 of the Appendix A of the Official Statement; and

6. Information of the type contained in Table 6 of the Appendix A of the Official Statement.

Any or all of the items listed above may be included in, or by specific reference to, other documents, including the City’s Annual Comprehensive Financial Reports, or official statements of debt issues of the City or related public entities, which have been submitted to the MSRB or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the MSRB. The City shall clearly identify each such other document so included by reference.

SECTION 5. Reporting of Listed Events.
(a) The City shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds in a timely manner not later than ten business days after the occurrence of the event:

1. Principal and interest payment delinquencies;

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

3. Unscheduled draws on credit enhancements reflecting financial difficulties;

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

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

6. Tender offers;

7. Defeasances;

8. Rating changes;

9. Bankruptcy, insolvency, receivership or similar event of the obligated person; or Council Agenda 05-07-2024
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10. Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the City, any of which reflect financial difficulties.

Note: for the purposes of the event identified in subparagraph (9), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the City.
(b) The City shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material, in a timely manner not later than ten business days after the occurrence of the event:

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

2. Modifications to rights of Bond holders;

3. Bond calls;

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

5. Non-payment related defaults;

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

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

8. Incurrence of a Financial Obligation of the City, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the City, any of which affect security holders.
(c) Whenever the City obtains knowledge of the occurrence of a Listed Event described in Section 5(b), the City shall determine if such event would be material under applicable federal securities laws. (d) If the City learns of the occurrence of a Listed Event described in Section 5(a), or determines that knowledge of a Listed Event described in Section 5(b) would be material under applicable federal securities laws, the City shall within ten business days of occurrence file a notice of such occurrence with the MSRB. Notwithstanding the foregoing, notice of the Listed Event described in subsections (b)(3) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to owners of affected Bonds pursuant to the Indenture.

SECTION 6. Format for Filings with MSRB. Any report or filing with the MSRB pursuant to this Disclosure Certificate must be submitted in electronic format, accompanied by such identifying information as is prescribed by the MSRB.

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SECTION 7. Termination of Reporting Obligation. The City’s obligations under this Disclosure Certificate shall terminate upon the legal defeasance or payment in full of all of the Bonds. If such termination occurs prior to the final maturity date of the Bonds, the City shall give notice of such termination in a filing with the MSRB.

SECTION 8. Dissemination Agent. The City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the City pursuant to this Disclosure Certificate. The initial Dissemination Agent shall be Urban Futures, Inc..

SECTION 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied:
(a) If the amendment or waiver relates to the provisions of Sections 3, 4 or 5(a) or (b), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted;
(b) The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and
(c) The amendment or waiver does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Owners or Beneficial Owners of the Bonds.

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

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

SECTION 12. Duties, Immunities and Liabilities of Dissemination Agent. A Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the City agrees to indemnify and save such Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys’ fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds.

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

CITY OF PISMO BEACH

By:

Administrative Services Director
ACKNOWLEDGED:

URBAN FUTURES, INC.,
as Dissemination Agent

By:

Authorized Signatory

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EXHIBIT A

NOTICE TO MUNICIPAL SECURITIES RULEMAKING BOARD

OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: Pismo Beach Public Financing Agency
Name of Issue: Pismo Beach Public Financing Agency (San Luis Obispo County, California) Series 2024A Lease Revenue Bonds (Public Safety Facility Project) Date of Issuance: _____, 2024
NOTICE IS HEREBY GIVEN that the City of Pismo Beach (the “City”) has not provided an Annual Report with respect to the above-named Bonds as required by the Continuing Disclosure Certificate, dated as of June __, 2024, executed by the City. [The City anticipates that the Annual Report will be filed by __________.]
Dated: __________
URBAN FUTURES, INC., as Dissemination Agent
By:

Name:

Title:

Council Agenda 05-07-2024
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Pismo Beach City CouncilMay 7, 2024

Pismo Beach City Council
May 7, 2024