Sacramento City Council
August 29, 2023

City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2023-01055 8/29/2023 Discussion Item 12.

Waiver of City Code Section 4.04.020.C for the Agreements Pertaining to North Natomas Community Facilities District No. 4, City of Sacramento, County of Sacramento, State of California, Special Tax Refunding Bonds, Series G (2023) (Two-Thirds Vote Required) and Authorize the Issuance of North Natomas Community Facilities District No. 4, City of Sacramento, County of Sacramento, State of California, Special Tax Refunding Bonds, Series G (2023)
File ID: 2023-01055
Location: District 1, Represented by Councilmember Kaplan Recommendation: 1) Pass a Motion by two-thirds vote waiving the 10-day posting requirement of City Code section 4.04.020.C for the agreements pertaining to the North Natomas Community Facilities District No. 4, City of Sacramento, County of Sacramento, State of California, Special Tax Refunding Bonds, Series G (2023); and 2) Adopt a Resolution authorizing: a) the issuance of the North Natomas Community Facilities District No. 4, City of Sacramento, County of Sacramento, State of California, Special Tax Refunding Bonds, Series G (2023); b) the execution and delivery of a Seventh Supplemental Indenture, a Bond Purchase Contract, an Official Statement, and a Continuing Disclosure Certificate; and c) certain other related actions.

Contact: Claudia Lara, Debt Analyst, (916) 808-2267, [email protected]; Brian Wong, Debt Manager, (916) 808-5811, [email protected], Office of the City Treasurer Presenter: Claudia Lara, Debt Analyst, (916) 808-2267, [email protected], Office of the City Treasurer
Attachments:
1-Description/Analysis
2-Resolution
3-Seventh Supplemental Indenture
4-Bond Purchase Contract
5-Preliminary Official Statement
6-Continuing Disclosure Certificate
Description/Analysis
Issue Detail: Passing a Motion will waive the 10-day posting requirements of City Code section

File ID: 2023-01055 8/29/2023 Discussion Item 12.

4.04.020.C for the agreements pertaining to the North Natomas Community Facilities District No. 4, City of Sacramento, County of Sacramento, State of California, Special Tax Refunding Bonds, Series G (2023) (the “Series G (2023) Bonds”). Staff is seeking this waiver of the posting requirement concerning the contracts being approved today, the Bond Purchase Contract, the Master Indenture, and the Seventh Supplemental Indenture of the Bonds because certain terms in the contracts will be subject to negotiation up until the day of the pricing of the Series G (2023) Bonds.

Adoption of the recommended resolution will authorize the issuance of Series G (2023) Bonds, the execution and delivery of related documents, and other related actions. The Series G (2023) Bonds will be issued in a principal amount not to exceed $30 million, and the proceeds will be used for the following purposes:
· To refund bonds the City issued and sold in 2013 for North Natomas Community Facilities District No. 4 (the “CFD”), which may now be redeemed at par (the “Series E (2013) Bonds”).

Like the Series E (2013) Bonds, the Series G (2023) Bonds will be secured under a Master Indenture, as previously supplemented and amended (the “Master Indenture”), and a supplemental indenture, in this case, a seventh supplemental indenture by a pledge of special taxes levied on taxable parcels within the CFD and by the corresponding special tax lien on those parcels.
· To fund a Reserve Fund and/or purchase a reserve fund insurance policy or surety bond to fund all or a portion of a Reserve Fund.
· To pay costs of issuance, including, if applicable, the costs of a bond insurance policy for some or all of the series G (2023) Bonds.

Policy Considerations: City Code section 4.04.020.C requires all agreements greater than $1 million be posted on the City’s website and made available to the public at least 10 days prior to the City Council acting on agreements meeting this criterion. The City Council may waive this requirement if two-thirds of its members vote to do so.

The Series G (2023) Bonds will be issued in accordance with the Mello-Roos Community Facilities Act of 1982 (California Government Code section 53311 through 53368.3), the authorizing vote of the CFD’s qualified electors in 1998, the Master Indenture and the Seventh Supplemental Indenture for the Series G (2023) Bonds. The issuance of the Series G (2023) Bonds will also be consistent with the City’s Debt-Management Policy.

Economic Impacts: Not applicable.

Environmental Considerations: Not applicable.

Sustainability: Not applicable.

File ID: 2023-01055 8/29/2023 Discussion Item 12.

Commission/Committee Action: Not applicable.

Rationale for Recommendation: The Bond Purchase Contract pertaining to the Series G (2023) Bonds between the City of Sacramento and BofA Securities, Inc., the underwriter of the Series G (2023) Bonds, the Master Indenture, and the Seventh Supplemental Indenture for the Series G (2023) Bonds are each contracts expected to involve more than $1 million. Staff is seeking this waiver of the posting requirement concerning the contracts being approved today, the Bond Purchase Contract, the Master Indenture, and the Seventh Supplemental Indenture for the Series G (2023) Bonds because certain terms in the contracts will be subject to negotiation up until the day of the pricing of the Series G (2023) Bonds.

Approval of the attached resolution authorizes the issuance of the Series G (2023) Bonds and authorizes the City Treasurer or his designee to take the actions necessary for the issuance of the Series G (2023) Bonds, including the execution of related documents. The issuance of the Series G (2023) Bonds will finance the redemption of the Series E (2013) Bonds and is expected to benefit all property owners within the CFD that are subject to the special tax by lowering the interest owed on a portion of the outstanding bonds of the CFD.

Financial Considerations: The Series E (2013) Bonds were identified as a suitable refunding candidate, with potential net-present-value savings above the 5% threshold specified in Section 4.1 (D)(2) of the City’s Debt-Management Policy.

While the City will be the issuer of the Series G (2023) Bonds, the City’s General Fund will have no obligation to pay debt service or ensure repayment of the debt. Payment of debt service is secured primarily by special taxes levied on taxable property within the CFD and is the sole responsibility of the owners of taxable property within the CFD.

Interest on the Series G (2023) Bonds will be exempt from taxation as described in the draft Preliminary Official Statement.

File ID: 2023-01055 8/29/2023 Discussion Item 12.

Estimated Sources and Uses
Sources: Refunding Bonds
Bond Proceeds:

PAR Amount $26,510,000.00
Premium $ 1,586,611.65
$28,096,611.65
Other Sources of Funds:

Debt Service Reserve Fund $ 4,084,086.06
Total Sources $32,180,697.71
Uses: Refunding Bonds
Refunding Escrow Deposits:

Cash Deposit $29,013,712.16
Other Fund Deposits:

Debt Service Reserve Fund $ 2,809,661.17
Delivery Date Expenses:

Cost of Issuance $ 250,000.00
Underwriter’s Discount $ 106,040.00
$ 356,040.00
Other Uses of Funds:

Additional Proceeds $ 1,284.38
Total Uses $32,180,697.71
Summary of Refunding Results
PAR Amount of Refunded Bonds $28,845,000.00
Cashflow Savings $ 3,375,202.78
Average Annual Cashflow Savings $ 337,520.28
Net Present Value Savings $ 1,553,255.92
Percentage Savings of Refunded Bonds 5.384836%
Estimated Bond Statistics
Principal (PAR) $26,510,000.00
True Interest Cost 3.813953%
All-in True Interest Cost 4.008030%
Total Interest Payments to Final Maturity$ 7,116,722.22 Total Debt Service to Final Maturity$33,626,722.22

File ID: 2023-01055 8/29/2023 Discussion Item 12.
*Information provided are estimates provided by BofA Securities based on market conditions as of June 29, 2023, and includes an interest rate buffer of 0.50%. Actual results may vary.

Terms of the Sale
The Series G (2023) Bonds will be issued in a principal amount not to exceed $30 million. The true interest cost for the Series G (2023) Bonds must not exceed 4.5%, and the underwriter’s compensation must not exceed 0.75% of the principal amount of the Series G (2023) Bonds. Good faith estimates of certain financial terms of the Series G (2023) Bonds, as required by Government Code section 5852.1, are provided in the tables above.

Value to Lien
Under the California Debt and Investment Advisory Commission’s guidelines for issuing land secured bonds, the ratio of property values within a community facilities district to the total tax and assessment burden on the district’s parcels, the “value-to-lien ratio,” must be at least 3:1. Here, the value-to-lien ratio, when conservatively calculated using only the assessed values of the CFD’s parcels on January 1, 2022 (as determined by the Sacramento County Assessor’s Office), is 20:1, well above the minimum 3:1 ratio.

Local Business Enterprise (LBE): Not applicable.

RESOLUTION NO. 2023-_____
Adopted by the Sacramento City Council
August 29, 2023
AUTHORIZING (1) THE ISSUANCE OF NORTH NATOMAS COMMUNITY FACILITIES DISTRICT NO. 4, CITY OF SACRAMENTO, COUNTY OF

SACRAMENTO, STATE OF CALIFORNIA SPECIAL TAX REFUNDING BONDS, SERIES G (2023); (2) THE EXECUTION AND DELIVERY OF A SEVENTH

SUPPLEMENTAL INDENTURE, A BOND PURCHASE CONTRACT, AN OFFICIAL

STATEMENT, AND A CONTINUING DISCLOSURE CERTIFICATE IN CONNECTION WITH THE BONDS; AND (3) CERTAIN OTHER ACTIONS IN CONNECTION WITH

THE BONDS
BACKGROUND:

A. At an election held on November 5, 1998, in the North Natomas Community Facilities District No. 4, City of Sacramento, County of Sacramento, State of California (the “ CFD”), the qualified electors in the CFD duly authorized the issuance of $85,000,000 principal amount of special -tax bonds under the Mello - Roos Community Facilities Act of 1982 (Government Code sections 53311 through 53368) as amended (the “ Act”) for the purpose of financing the acquisition and construction of certain public facilities.

B. At the election, the qualified electors in the CFD also authorized the levy and collection of a special tax under the Act to be used to pay the interest on, principal of, and redemption premiums (if any) on, the bonds.

C. In connection with the issuance of bonds through the CFD, the City of Sacramento (the “City”) and U.S. Bank Trust Company, National Association, as successor in interest to The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”), entered into Master Indenture dated as of February 1, 1999 (the “Master Indenture”).

D. On February 24, 1999, under a First Supplemental Indenture to the Master Indenture (the “ First Supplemental Indenture ”), the City issued the North Natomas Community Facilities District No. 4, City of Sacramento, County of Sacramento, State of California Special Tax Bonds, Series A (1999) in the principal amount of $16,215,000 (the “Series A Bonds”).

E. On April 19, 2001, under a Second Supplemental Indenture to the Master Indenture (the “ Second Supplemental Indenture ”), the City issued the North Natomas Community Facilities District No. 4, City of Sacramento, County o f Sacramento, State of California Special Tax Bonds, Series B (2001) in the principal amount of $12,750,000 (the “Series B Bonds”).
2 F. On October 28, 2003, under a Third Supplemental Indenture to the Master Indenture (the “ Third Supplemental Indenture ”), the City issued the North Natomas Community Facilities District No. 4, City of Sacramento, County of Sacramento, State of California Special Tax Bonds, Series C (2003) in the principal amount of $29,765,000 (the “Series C Bonds”).

G. On December 7, 2006, under a Fourth Supplemental Indenture to the Master Indenture (the “ Fourth Supplemental Indenture ”), the City issued the North Natomas Community Facilities District No. 4, City of Sacramento, County of Sacramento, State of California Special Tax Bonds, Series D (2006) in the principal amount of $26,210,000 (the “Series D Bonds”).

H. On July 25, 2013, under a Fifth Supplemental Indenture to the Master Indenture (the “ Fifth Supplemental Indenture ”), the City issued the North Natomas Community Facilities District No. 4, City of Sacramento, County of Sacramento, State of California Special Tax Refunding Bonds, Series E (2013) in the principal amount of $46,075,000 (the “ Series E Bonds ”), of which $28,845,000 will be outstanding at the time the Series G Bonds (as defined below) are expected to be issued, to refund and defease the Series A Bonds, the Series B Bonds, and the Series C Bonds. As a result, the Series A, B, and C Bonds are no longer outstanding.

I. On July 9, 2015, under a Sixth Supplemental Indenture to the Master Indenture (the “ Sixth Supplemental Indenture ”), the City issued the North Natomas Community Facilities District No. 4, City of Sacramento, County of Sacramento, State of California, Special Tax Refunding Bonds, Series F (2015) in the principal amount of $21,110,000 (the “Series F Bonds”) to refund and defease the Series D Bonds. As a result, the Series D Bonds are no longer outstanding.

J. The Act authorizes the City to issue bonds for the purpose of refunding the Series E Bonds.

K. The Sacramento City Council (the “City Council”) has determined to authorize the issuance of the North Natomas Community Facilities District No. 4, City of Sacramento, County of Sacramento, State of California Special Tax Refunding Bonds, Series G (2023) (the “Series G Bonds”) under the Act for the purpose of refunding all or a portion of the Series E Bonds that are outstanding at the time of issuance of the Series G Bonds and has determined that the issuance of the Series G Bonds is prudent in the management of the City’s fiscal affairs.

L. The City desires to sell the Series G Bonds to BofA Securities, Inc. (the “Underwriter”), and the City Council has determined that a private (i.e., negotiated) sale of the Series G Bonds to the Underwriter under the Act will result in a lower overall cost to the City.
3 M. In furtherance of the City’s issuance of the Series G Bonds, forms of the following documents have been filed with the Sacramento City Clerk (the “ Clerk”) for the City Council’s consideration and approval:
 A Seventh Supplemental Indenture between the City and the Trustee, which supplements the Master Indenture and specifies the terms on which the Series G Bonds are to be issued and secured (the “ Seventh Supplemental Indenture” and, together with the Master Indenture, the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture, the Fifth Supplemental Indenture and the Sixth Supplemental Indenture, the “Indenture”).  A Bond Purchase Contract, under the terms of which, among other things, the City agrees to sell the Series G Bonds to the Underwriter and the Underwriter agrees to purchase the Series G Bonds (the “Bond Purchase Contract”).  A preliminary form of an Official Statement describing the Series G Bonds (the “Preliminary Official Statement”).
 A Continuing Disclosure Certificate obligating the City to provide certain ongoing disclosure with respect to the Series G Bonds (the “ Continuing Disclosure Certificate”).

N. All acts, conditions, and things required by Californi a law to exist, to have happened, and to have been performed before and in connection with the consummation of the financing authorized by this resolution do exist, have happened, and have been performed in regular and due time, form, and manner as required by law, and the City is now duly authorized and empowered, under each requirement of law, to authorize the execution and delivery of certain documents in order to further implement the financing in the manner and upon the terms provided in this resolution.

BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:

Section 1. The statements in paragraphs A through N of the Background are true.

Section 2. The City Council hereby authorizes and approves the issuance of the Series G Bonds in accordance with the Indenture in an aggregate principal amount not to exceed $30,000,000. The final maturity date of the Series G Bonds may not be later than the final maturity date of the Series E Bonds. The total interest cost to maturity on t he Series G Bonds plus the principal amount of the Series G Bonds may not exceed the total interest cost to maturity on the Series E Bonds to be refunded plus the principal amount of the Series E Bonds to be refunded.

Section 3. The City Council hereby determines that the value of the real property within the CFD that will be subject to the levy of a special tax under the Act to pay debt service 4 on the Series G Bonds (based upon the full cash value as shown on the ad valorem assessment roll) is at least three times th e sum of the following: the principal amount of the Series G Bonds, plus the principal amount of all other bonds outstanding that are secured by a special tax levied under the Act on property within the CFD, plus the principal amount of all other bonds outstanding that are secured by special assessments levied on property within the CFD. Accordingly, the limitations of section 53345.8(a) of the Act have been duly satisfied.

Section 4. The City Council hereby approves the Seventh Supplemental Indenture and its terms an d conditions. The date, maturity date or dates, fixed interest rates, interest - payment dates, forms, registration privileges, place or places of payment, terms of redemption and number of Series G Bonds, and other terms of the Series G Bonds are to be as p rovided in the S eventh Supplemental Indenture as finally executed and delivered.
(a) The Sacramento City Treasurer or the designee thereof (the “ Treasurer”) is hereby authorized and directed to execute and deliver to the Trustee, on the City’s behalf, the Seventh Supplemental Indenture in substantially the form on file with the Clerk, with any changes the Treasurer may require or approve with the concurrence of the Sacramento City Attorney or the designee thereof (the “City Attorney”), and with approval to be conclusively evidenced by the execution and delivery of the Seventh Supplemental Indenture.
(b) The City Council hereby authorizes and directs the Treasurer to execute and deliver to the Trustee, on the City’s behalf, written instructions providing for the delivery of the Series G Bonds to the Underwriter in accordance with the Bond Purchase Contract upon payment by the Underwriter of the purchase price of the Series G Bonds (the “Instructions”).
(c) The Series G Bonds are to be executed by the manual or facsimile signature of the Mayor of the City and countersigned by the manual or facsimile signature of the Clerk, and each of the Series G Bonds must be in the form set forth in, and otherwise be in accordance with, the Indenture. When the Series G Bonds are so executed, the Treasurer shall deliver them to the Trustee under the Indenture for authentication by the Trustee. The Trustee is then to deliver the Series G Bonds to the Underwriter in accordance with the Instructions.

Section 5. The City Council hereby appr oves the Bond Purchase Contract and authorizes the Treasurer to execute and deliver it to the Underwriter on the City’s behalf in substantially the form on file with the Clerk, with any changes the Treasurer may require or approve with the concurrence of the City Attorney, and with approval to be conclusively evidenced by the execution and delivery of the Bond Purchase Contract, all subject to the following: the true interest cost for the S eries G Bonds may not exceed 4.50% and the Underwriter’s compensation may not exceed 0.75% of the principal amount of the Series G Bonds.
5 Section 6. The City Council hereby approves the Preliminary Official Statement and authorizes the Underwriter to distribute it.
(a) The City Council hereby authorizes and directs the Treasurer to execute and deliver to the Underwriter on the City’s behalf a certificate deeming the Preliminary Official Statement, in substantially the form on file with the Clerk and with any changes the Treasurer approves in the interest of the City with the concurrence of the City Attorney, to be final within the meaning of Securities Exchange Commission Rule 15c2-12.
(b) The City Council hereby authorizes and directs the Treasurer to execute and deliver to the Underwriter, on the City’s behalf, a final form of the Official Statement describing the Series G Bonds (the “Final Official Statement”) in substantially the form of the Preliminary Official Statement, with any changes the Treasurer may require or approve with the concurrence of the City Attorney, and with such approval to be conclusively evidenced by the execution and delivery of the Final Official Statement.
(c) The City Council hereby authorizes the Underwriter to distribute the Final Official Statement.

Section 7. The City Council hereby approves the Continuing Disclosure Certificate and authorizes and directs the Treasurer to execute and deliver it to the Underwriter on the City’s behalf in substantially the form on file with the Clerk, with any chang es the Treasurer may require or approve with the concurrence of the City Attorney, and with approval to be conclusively evidenced by the execution and delivery of the Continuing Disclosure Certificate.

Section 8. The officers of the City, each acting alone, are hereb y authorized and directed to do any and all things (including but not limited to the creation of funds required for the proper accounting and management of tax and bond proceeds) and to execute and deliver any and all documents and agreements they consider necessary or advisable to carry out, give effect to, and comply with, the terms and intent of this resolution, the Indenture, the Bond Purchase Contract, the Preliminary Official Statement, the Final Official Statement, the Continuing Disclos ure Certificate, and the Series G Bonds. This authorization includes the execution and delivery of any documents required to obtain bond insurance, a reserve-fund insurance policy, or a reserve -fund surety in connection with the issuance of the Series G Bonds and of any documents necessary to refund any of the Series E Bonds, including an escrow agreement relating to the defeasance of any of the Series E Bonds ; it also includes the purchase of bond insurance, a reserve -fund insurance policy, or a reserve -fund surety in connection with the issuance of the Series G Bonds. All actions previously taken by those officers with respect to the Series G Bonds and the refunding of the Series E Bonds are hereby ratified, confirmed, and approved.

Section 9. The City Council hereby approves the execution and delivery of all agreements, documents, certificates and instruments referred to herein with electronic signatures as may be permitted under the California Uniform Electronic Transactions Act 6 and digital signatures as may be perm itted under Section 16.5 of the California Government Code using DocuSign.

Section 10. This resolution takes effect when adopted.

OH&S DRAFT: 07/26/2023

4129-4258-0040.3

SEVENTH SUPPLEMENTAL INDENTURE

between the

CITY OF SACRAMENTO

and

U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,

as Trustee

Relating to the

$[PAR AMOUNT]

NORTH NATOMAS COMMUNITY FACILITIES DISTRICT NO. 4

CITY OF SACRAMENTO, COUNTY OF SACRAMENTO, STATE OF CALIFORNIA SPECIAL TAX REFUNDING BONDS, SERIES G (2023)

Dated as of September 1, 2023

TABLE OF CONTENTS

Page

-i-
4129-4258-0040.3

ARTICLE I DEFINITIONS .......................................................................................................... 3 SECTION 1.01. Definitions............................................................................................ 3 ARTICLE II ISSUANCE OF SERIES G (2023) BONDS ............................................................ 4 SECTION 2.01. Authorization of Series G (2023) Bonds ............................................. 4 SECTION 2.02. Terms of Series G (2023) Bonds ......................................................... 4 SECTION 2.03. Redemption Prices of Series G (2023) Bonds. .................................... 5 SECTION 2.04. Form of Series G (2023) Bonds ........................................................... 6 SECTION 2.05. Use of Depository for Series G (2023) Bonds ..................................... 6 SECTION 2.06. Application of Proceeds of Sale of Series G (2023) Bonds ................. 7 ARTICLE III MISCELLANEOUS ............................................................................................... 8 SECTION 3.01. Authority for Seventh Supplemental Indenture ................................... 8 SECTION 3.02. Terms of Series G (2023) Bonds Subject to the Master Indenture .............................................................................................. 8 SECTION 3.03. Covenant Regarding Additional Bonds ............................................... 8 SECTION 3.04. E-mail and Facsimile Instructions ....................................................... 8 SECTION 3.05. Effective Date of Seventh Supplemental Indenture ............................. 9 EXHIBIT A FORM OF SERIES G (2023) BONDS ................................................................ A-1

1 4129-4258-0040.3

SEVENTH SUPPLEMENTAL INDENTURE

This Seventh Supplemental Indenture (the “ Seventh Supplemental Indenture”), dated as of September 1, 2023 , is between the CITY OF SACRAMENTO, a California municipal corporation (the “ City”), and U.S. BANK TRUST COMPANY , NATIONAL ASSOCIATION (as successor in interest to The Bank of New York Mellon Trust Company, N.A. ), a national banking association duly organized and existing under and by virtue of the laws of the United States and authorized to accept and execute trusts o f the character herein set forth, as trustee (the “Trustee”).

BACKGROUND
A. The City and the Trustee duly executed a Master Indenture (the “ Master Indenture ”) dated as of February 1, 1999, which authorized the issuance of $85,000,000 aggregate principal a mount of North Natomas Community Facilities District No. 4, City of Sacramento, County of Sacramento, State of California, Special Tax Bonds (the “Original Bonds”) and provided for the issuance of the Original Bonds in series.

B. The City and the Trustee duly executed a First Supplemental Indenture (the “ First Supplemental Indenture ”) dated as of February 1, 1999, which prescribed the terms, conditions and form of $16,215,000 aggregate principal amount of Series A (1999) of the Original Bonds (the “Series A (1999) Bonds”).

C. The City and the Trustee duly executed a Second Supplemental Indenture (the “ Second Supplemental Indenture ”), dated as of April 1, 2001, which Second Supplemental Indenture prescribed the terms, conditions and form of $12,750,000 aggre gate principal amount of Series B (2001) of the Original Bonds (the “Series B (2001) Bonds”).

D. The City and the Trustee duly executed a Third Supplemental Indenture (the “ Third Supplemental Indenture ”), dated as of October 1, 2003, which Third Supplement al Indenture prescribed the terms, conditions and form of $29,765,000 aggregate principal amount of Series C (2003) of the Original Bonds (the “Series C (2003) Bonds”).

E. The City and the Trustee duly executed a Fourth Supplemental Indenture (the “ Fourth Supplemental Indenture”), dated as of November 1, 2006, which Fourth Supplemental Indenture prescribed the terms, conditions and form of $26,210,000 aggregate principal amount of Series D (2006) of the Original Bonds (the “Series D (2006) Bonds”).

F. The C ity and the Trustee duly executed a Fifth Supplemental Indenture (the “ Fifth Supplemental Indenture ”), dated as of July 1, 2013, which Fifth Supplemental Indenture prescribed the terms, conditions and form of $46,075,000 aggregate principal amount of North Natomas Community Facilities District No. 4, City of Sacramento, County of Sacramento, State of California Special Tax Refunding Bonds, Series E (2013) (the “Series E (2013) Bonds ”), which Series E (2013) Bonds were issued to refund and defease the Series A (1999) Bonds, the Series B (2001) Bonds and the Series C (2003) Bonds. As a result, the Series A (1999) Bonds, Series B (2001) Bonds, and Series C (2003) Bonds are no longer outstanding.

2 4129-4258-0040.3

G. The City and the Trustee duly executed a Sixth Supplemental Ind enture (the “ Sixth Supplemental Indenture ”), dated as of July 1, 2015, which Sixth Supplemental Indenture prescribed the terms, conditions and form of $21,110,000 aggregate principal amount of North Natomas Community Facilities District No. 4, City of Sacr amento, County of Sacramento, State of California Special Tax Refunding Bonds, Series F (2015) (the “Series F (2015) Bonds”), which Series F (2015) Bonds were issued to refund and defease the Series D (2006) Bonds. As a result, the Series D (2006) Bonds ar e no longer outstanding.

H. The City has determined to prescribe the terms, conditions, and form of $ [PAR AMOUNT] aggregate principal amount of North Natomas Community Facilities District No. 4, City of Sacramento, County of Sacramento, State of California Special Tax Refunding Bonds, Series G (2023) (the “ Series G (2023) Bonds”) under the Master Indenture for the purpose of refunding the outstanding principal amount of the Series E (2013) Bonds (the “Refunded Bonds”).

I. Section 8.01(b)(iv) of the Master Indenture authorizes the City and the Trustee to supplement and amend the Master Indenture, without the consent of any Holders (as defined in the Master Indenture), for the purpose of authorizing, under and subject to the Law (as defined in the Master Inde nture), any refunding bonds for any of the Bonds (as defined in the Master Indenture) and to provide the conditions and terms under which the refunding bonds may be issued.

J. In accordance with Section 8.01 of the Master Indenture, the City and the Truste e have determined to supplement the Master Indenture in the manner set forth in this Seventh Supplemental Indenture.

K. The City has determined that all things necessary to cause the Series G (2023) Bonds, when duly executed by the City and authenticated by the Trustee and delivered as provided herein, to be legal and valid special tax obligations of the City enforceable in accordance with their terms, and to constitute this Seventh Supplemental Indenture a valid agreement for the uses and purposes herein set forth in accordance with its terms, have been done and taken, and the execution and delivery hereof and the execution and delivery of the Series G (2023) Bonds, subject to the terms hereof, have in all respects been duly authorized.

NOW, THEREFORE, in order to secure the payment of the interest on and the principal of and the redemption premiums, if any, on all Series G (2023) Bonds at any time issued and outstanding hereunder according to their tenor, and to secure the observance and performance of all the agreements, conditions, covenants, and terms therein and herein set forth, and to declare the conditions and terms upon and subject to which the Series G (2023) Bonds will be issued and received, and in consideration of the premises and of the mutual agreements and covenants contained herein and of the purchase and acceptance of the Series G (2023) Bonds by the registered owners thereof from time to time, and for other valuable considerations, the receipt whereof is hereby acknowledged, the City does h ereby agree and covenant with the Trustee, for the benefit of the respective registered owners from time to time of the Series G (2023) Bonds, as follows:

3 4129-4258-0040.3

ARTICLE I

DEFINITIONS
SECTION 1.01. Definitions.
(a) Except as otherwise provided herein, all terms defined in Section 1.01 of the Master Indenture have the same definitions in this Seventh Supplemental Indenture that are given to them in Section 1.01 of the Master Indenture.
(b) Unless the context otherwise requires, the terms defined in this Section 1.01(b) have the meanings set for th, and those meanings apply for all purposes of this Seventh Supplemental Indenture, of the Master Indenture, of the Series G (2023) Bonds, and of any certificate, opinion, report, request, or other document mentioned herein or therein; and those meanings apply equally to both the singular and plural forms of the terms:
“City Treasurer” means the Treasurer of the City.
“Escrow Agent” means the U.S. Bank Trust Company, National Association , as escrow agent under the Escrow Agreement.
“Escrow Agreement ” means the Escrow Agreement dated as of September 1, 2023 , between the City and the Escrow Agent relating to the defeasance of the Refunded Bonds.
“Seventh Supplemental Indenture” means this Seventh Supplemental Indenture dated as of September 1, 2023 , between the City and the Trustee entered into under the Law and the Master Indenture.
“Master Indenture ” means the Master Indenture dated as of February 1, 1999, as amended and supplemented to the date hereof, between the City and the Trustee entered into under the Law.
“Refunded Bonds ” has the meaning given to the term in background recital H to this Seventh Supplemental Indenture.
“Series G (2023) Bonds” means the Bonds referred to by that name author ized to be issued by Article II of this Seventh Supplemental Indenture. “Series G (2023) Bonds Costs of Issuance Fund ” means the North Natomas Community Facilities District No. 4, City of Sacramento, County of Sacramento, State of California, Special Tax Refunding Bonds, Series G (2023) Costs of Issuance Fund established under Section 2.06(c) of this Seventh Supplemental Indenture. “Trustee” means U.S. Bank Trust Company, National Association (successor in interest to The Bank of New York Mellon Trust Company, N.A. (successor to BNY Western Trust Company)), a national banking association duly organized and existing under and by virtue of the laws of the United States and authorized to accept and execute trusts of

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the character set forth in the Master Indenture, at its Principal Corporate Trust Office, and its successors or assigns, or any other bank or trust company having a corporate trust office in Los Angeles or San Francisco, California, that may at any time be substituted in its place as provided in the Master Indenture.

ARTICLE II

ISSUANCE OF SERIES G (2023) BONDS
SECTION 2.01. Authorization of Series G (2023) Bonds. The City Council has reviewed all proceedings heretofore taken relative to the authorization of the Series G (2023) Bonds and has found, as a result of such review, and hereby finds and determines, that all acts, conditions, and things required by law to exist, happen, and be performed precedent to and in the issuance of the Series G (2023) Bonds do exist, have happened, and have been performed in due time, form, and manner as required by the Law. Accordingly, the City is now authorized, under every requirement of the Law, the Master Indenture, and this Seventh Supplemental Indenture, to issue the Series G (2023) Bonds in the form and manner provided herein to provide funds to refund the Refunded Bonds and to pay the Costs of Issuance of the Series G (2023) Bonds, which Series G (2023) Bonds will be entitled to the benefit, protection, and security of the Law, the Master Indenture, and this Seventh Supplemental Indenture.

SECTION 2.02. Terms of Series G (2023) Bonds. The Series G (2023) Bonds will be issued in the agg regate principal amount of $ [PAR AMOUNT]; will be designated the “North Natomas Community Facilities District No. 4, City of Sacramento, County of Sacramento, State of California, Special Tax Refunding Bonds, Series G (2023)”; will be dated the date of the original delivery thereof; will be issued in fully registered form in denominations of $5,000 or any integral multiple thereof; and will mature on the dates and in the principal amounts and bear interest (computed on a 360 -day year of twelve 30 -day calendar months) at the rates per annum, payable semiannually on March 1 and September 1 in each year, commencing on March 1, 2024, as follows:

Maturity Date
(September 1)

Principal Amount

Interest Rate
$ %

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Maturity Date
(September 1)

Principal Amount

Interest Rate

SECTION 2.03. Redemption Prices of Series G (2023) Bonds. (a) The Series G (2023) Bonds maturing on or after September 1, 20 __, are subject to optional redemption by the City before their respective stated maturity dates, as a whole or in part on any date on or after September 1, 20 __, from any source of available funds, upon mailed notice as provided in the Master Indenture, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest thereon to the date of redemption, without premium.
(b) The Series G (2023) Bonds are subject to extraordinary redemption by the City before their respective stated maturity dates, as a whole or in part on any interest -payment date, solely from prepayments of the Special Tax, upon mai led notice as provided in the Master Indenture, at the following redemption prices (expressed as a percentage of the principal amount of Series G (2023) Bonds or portions thereof called for redemption), together with accrued interest thereon to the date of redemption:

Redemption Date Redemption Price
Any interest-payment date from March 1, 20__ through
March 1, 20__
103%
September 1, 20__ and March 1, 20__ 102%
September 1, 20__ and March 1, 20__ 101%
September 1, 20__ and any interest-payment date
thereafter
100%

(c) Notwithstanding anything to the contrary contained in the Master Indenture, with respect to any notice of redemption of Series G (2023) Bonds under Section 2.03(a) or Section

2.03(b) of this Seventh Supplemental Indenture, unless, upon the giving of notice, the Series G (2023) Bonds have been deemed to have been paid within the meaning of Article X of the Master Indenture, the notice must state that the redemption will be conditional upon the receipt by the Trustee on or before the date fixed for redemption of amounts sufficient to pay the principal of, and premium, if any, and interest on, such Series G (2023) Bonds to be redeemed, and that if those amounts have not been so received the notice will b e of no force and effect and the City will not be required to redeem the Series G (2023) Bonds. If any such notice of redemption contains such a condition and such amounts are not so received, the redemption will not be made and the Trustee shall within a reasonable time thereafter give notice to the Holders of the Series G (2023) Bonds to the effect that the amounts were not so received and the redemption was not made, the notice to be given by the Trustee in the manner in which the notice of

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redemption w as given. The failure to redeem the Series G (2023) Bonds will not constitute an Event of Default.
(d) Notwithstanding anything to the contrary contained in the Master Indenture, any notice of redemption of Series G (2023) Bonds under Section 2.03(a) or Section 2.03(b) of this Seventh Supplemental Indenture may be rescinded by written notice given to the Trustee by the City no later than five Business Days before the date specified for redemption.

The Trustee shall give no tice of such rescission as soon thereafter as practicable in the same manner, and to the same parties, as notice of such redemption was given.

SECTION 2.04. Form of Series G (2023) Bonds. The Series G (2023) Bonds and the authentication and registration endorsements a nd the assignment and the DTC endorsement to appear thereon must be substantially in the forms set forth in Exhibit A hereto, with such variations, insertions, or omissions as are appropriate and not inconsistent herewith.

SECTION 2.05. Use of Depository for Series G (2023) Bonds. (a) The Series G (2023) Bonds will be initially registered in the name of “Cede & Co.,” as nominee of The Depository Trust Company, New York, New York, and will be initially issued as one Series G (2023) Bond for each maturity in the principal amounts set forth in Section 2.02 above, and The Depository Trust Company, New York, New York, is hereby appointed depository for the Series G (2023) Bonds. After the initial registration, registered ownership of the Series G (2023) Bonds, or any portion t hereof, may not thereafter be transferred except as follows:
(i) To any successor of Cede & Co., as nominee of The Depository Trust Company, or its nominee, or to any substitute depository designated under Section 2.05(a)(ii) (a “Substitute Depository”). Any s uccessor of Cede & Co., as nominee of The Depository Trust Company, or any Substitute Depository, must be qualified under any applicable laws to provide the services proposed to be provided by it. (ii) To any Substitute Depository not objected to by the Trustee , upon (A) the resignation of The Depository Trust Company or its successor (or any Substitute Depository or its successor) from its functions as depository, or (B) a determination by the City to substitute another depository for The Depository Trust Company (or its successor) because The Depository Trust Company or its successor (or any Substitute Depository or its successor) is no longer able to carry out its functions as depository. Any such Substitute Depository must be qualified under any applicable laws to provide the services proposed to be provided by it. (iii) To any person as provided below, upon (A) the resignation of The Depository Trust Company or its successor (or any Substitute Depository or its successor) from its functions as depository, or (B) a determination by the City to remove The Depository Trust Company or its successor (or any Substitute Depository or its successor) from its functions as depository.
(b) In the case of any transfer under Section 2.05(a)(i) or Section 2.05(a)(ii), upon receipt of the Outstanding Series G (2023) Bonds by the Trustee, together with a Written Request

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of the City to the Trustee, new Series G (2023) Bonds will be executed and delivered in the same aggregate principal amounts and maturities of the Series G (2023) Bonds then Outstanding, registered in the name of such successor or such Substitute Depository, or their nominees, as the case may be, all as specified in such Written Request of the City.

In the case of any transfer under Section 2.05(a)(iii), upon receipt of the Outstanding Series G (2023) Bonds by the Trustee, together with a Written Request of the City to the Trustee, new Series G (2023) Bonds will be executed and delivered in such denominations numbered in the manner determined by the Trustee and registered in the names of such persons as are requested in such Written Request of the City, subject to the limitations of this Section 2.02, and thereafter, the Series G (2023) Bonds will be transferred under Section 3.03 of the Master Indenture, except that the T rustee is not required to deliver such new Series G (2023) Bonds on a date sooner than 60 days after receipt of such Written Request of the City.
(c) The City and the Trustee may treat the person in whose name any Series G (2023) Bond is registered as the owne r thereof for all purposes hereof and any applicable laws, notwithstanding any notice to the contrary received by the City or the Trustee; and the City and the Trustee have no responsibility for transmitting payments to, communication with, notifying, or o therwise dealing with any beneficial owners of the Series G (2023) Bonds, and neither the City nor the Trustee has any responsibility or obligation, legal or otherwise, to the beneficial owners or to any other party, including The Depository Trust Company or its successor (or any Substitute Depository or its successor), except to The Depository Trust Company or its successor (or any Substitute Depository or its successor) as a Holder of any Series G (2023) Bonds.
(d) So long as the Outstanding Series G (2023) Bonds are registered in the name of Cede & Co. or its registered assigns, the City and the Trustee shall cooperate with Cede & Co., as sole Holder, or its registered assigns, in effecting payment of the interest on and the principal of and the redemption premiums, if any, on the Series G (2023) Bonds by arranging for the payment in such manner that funds for such payments are properly identified and are made immediately available on the date they are due.

SECTION 2.06. Application of Proceeds of Sale of Series G (2023) Bonds. Upon the receipt of payment of the purchase price of the Series G (2023) Bonds when duly sold by the City, the Trustee shall (upon receipt of a Written Request of the City) set aside and deposit or transfer such purchase price of the Series G (2023) Bonds in the following accounts and funds (or in a temporary account or fund in its books used to facilitate such transfers) in the following order:
(a) [First, the Trustee shall deposit $ [Reserve Fund Deposit] in the Bond Reserve Fund, which, together with the amount of $ [Reserve Fund Balance] currently on deposit in the Reserve Fund, equals the Required Bond Reserve.]
(b) Second, the Trustee shall transfer the amount of $ [Escrow Deposit] to the Escrow Agent for deposit in accordance with the Escrow Agreement.

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(c) Third, the Trustee shall deposit in the “ Series G (2023) Bonds Costs of Issuance Fund” (which fund is hereby established with the Trustee) the amount of $ [COI Fund Deposit].

The Trustee shall apply all money in the Series G (2023) Bonds Costs of Issuance Fund as directed in writing by the City in the manner provided by law for payment of Costs of Issuance of the Series G (2023) Bonds, except that any money remaining in the Series G (2023) Bonds Costs of Issuance Fund after the completion of the payment of the Costs of Issuance of the Series G (2023) Bonds as specified in writing by the City to the Trustee will be withdrawn by the Trustee and transferred to the City for deposit in the Special Tax Fund, and the Series G (2023) Bonds Costs of Issuance Fund wil l be closed. The Trustee shall invest all money held in the Series G (2023) Costs of Issuance Fund as required by a Written Request of the City received by the Trustee at least two days before making any such investment in those Legal Investments specifie d in such Written Request of the City that mature not later than the date on which it is estimated that such money will be required to be paid out hereunder. All interest received on any such money so deposited or invested shall be retained in the Series G (2023) Costs of Issuance Fund until applied or transferred as set forth in this paragraph.

ARTICLE III

MISCELLANEOUS
SECTION 3.01. Authority for Seventh Supplemental Indenture . This Seventh Supplemental Indenture is executed in accordance with the Law, is supplemental to the Master Indenture, and is executed in accordance with Articles II and VIII of the Master Indenture.

SECTION 3.02. Terms of Series G (2023) Bonds Subject to the Master Indenture .

Except as expressly provided in this Seventh Supplemental Indenture, every agreement, condition, covenant, and term in the Master Indenture applies to this Seventh Supplemental Indenture and to the Series G (2023) Bonds with the same force and effect as if the y were set forth at length in this Seventh Supplemental Indenture, with such omissions, variations, and modifications as may be appropriate to conform them to this Seventh Supplemental Indenture.

SECTION 3.03. Covenant Regarding Additional Bonds . Notwithstanding anything to the contrary in the Indenture, for so long as the Series G (2023) Bonds are Outstanding, the City shall not issue any additional Bonds (other than the Series G (2023) Bonds) under the Indenture except for the purpose of refun ding any Bonds (including the Series G (2023) Bonds) then Outstanding under the Master Indenture.

SECTION 3.04. E-mail and Facsimile Instructions . The Trustee shall have the right to accept and act upon instructions, including funds transfer instructions (“ Instructions”) given pursuant to this Seventh Supplemental Indenture and delivered using Electronic Means (“Electronic Means” shall mean the following communications methods: e -mail, facsimile transmission, secure electronic transmission containing applicable authori zation codes, passwords and/or authentication keys issued by the Trustee, or another method or system specified by the Trustee as available for use in connection with its services hereunder); provided, however, that the City shall provide to the Trustee an incumbency certificate listing officers with the authority to provide such Instructions (“ Authorized Officers ”) and containing specimen

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signatures of such Authorized Officers, which incumbency certificate shall be amended by the City whenever a person is to be added or deleted from the listing. If the City elects to give the Trustee Instructions using Electronic Means and the Trustee in its discretion elects to act upon such Instructions, the Trustee’s understanding of such Instructions shall be deemed co ntrolling.

The City understands and agrees that the Trustee cannot determine the identity of the actual sender of such Instructions and that the Trustee shall conclusively presume that directions that purport to have been sent by an Authorized Officer lis ted on the incumbency certificate provided to the Trustee have been sent by such Authorized Officer. The City shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Trustee and that the City and all Authorized Of ficers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the City. The Trustee shall not be liable for any losses, costs or expenses arising dire ctly or indirectly from the Trustee’s reliance upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent with a subsequent written instruction.

The City agrees: (i) to assume all risks arising out of the use o f Electronic Means to submit Instructions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Trustee and that there may be more secure methods of transmitting Instructions than the method(s) selected by the City; (iii) that the security procedures (if any) to be foll owed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Trustee immediately upon learning of any compromise or unauthor ized use of the security procedures.

SECTION 3.05. Execution in Counterparts; Electronic Signatures . This Seventh Supplemental Indenture may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. Each of the parties hereto agrees that the transaction consisting of this agreement may be conducted by electronic means. Each party agrees, and acknowledges that it is such party’s intent, that if such party signs this agreement using an electronic signature, it is signing, adopting, and accepting this agreement and that signing this agreement using an electronic signature is the legal equivalent of having placed its handwritten signature on this agreement on paper. Each party acknowled ges that it is being provided with an electronic or paper copy of this agreement in a usable format.

SECTION 3.06. Effective Date of Seventh Supplemental Indenture . This Seventh Supplemental Indenture takes effect from and after its execution and delivery.

[The remainder of this page intentionally left blank.]

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IN WITNESS WHEREOF, the City has caused this Seventh Supplemental Indenture to be signed in its name by the City Treasurer, and U.S. Bank Trust Company, National Association, as Trustee, in token of its acceptance of the trusts created hereunder, has caused this Seventh Supplemental Indenture to be signed in its corporate name by its officer thereunto duly authorized, all as of the date and year first above written.

CITY OF SACRAMENTO

By: __________________________________
John Colville, City Treasurer

U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Trustee

By: _________________________________
Authorized Signatory

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EXHIBIT A

FORM OF SERIES G (2023) BONDS

No. ____________ $____________

UNITED STATES OF AMERICA

STATE OF CALIFORNIA

COUNTY OF SACRAMENTO

NORTH NATOMAS COMMUNITY FACILITIES DISTRICT NO. 4

CITY OF SACRAMENTO, COUNTY OF SACRAMENTO, STATE OF CALIFORNIA SPECIAL TAX REFUNDING BOND, SERIES G (2023)

Interest
Rate
Maturity
Date
Dated
as of CUSIP
_____% September 1, 20__ [Closing Date] 786071 __

REGISTERED OWNER: CEDE & CO.

PRINCIPAL AMOUNT: DOLLARS
The City of Sacramento, a municipal corporation duly organized and existing under and pursuant to the Constitution and laws of the State of California (the “City”), for value received hereby promises to pay (but only out of the proceeds of the Special Tax hereinafter referred to and certain other funds herei nafter referred to) to the registered owner set forth above on the maturity date set forth above (subject to any right of prior redemption hereinafter provided for) the principal amount set forth above, together with interest thereon from the interest paym ent date next preceding the date of authentication of this Bond (unless this Bond is authenticated on a day during the period from the sixteenth (16th) day of the month next preceding an interest payment date to such interest payment date, both dates inclu sive, in which event it shall bear interest from such interest payment date, or unless this Bond is authenticated on a day on or before the fifteenth (15th) day of the month next preceding the first interest payment date on the Bonds, in which event it sha ll bear interest from its date) until the principal hereof shall have been paid, at the interest rate per annum set forth above (computed on a 360 -day year of twelve 30-day calendar months), payable semiannually on March 1 and September 1 in each year, commencing on March 1, 20 24. The interest on and principal of and redemption premium, if any, on this Bond are payable in lawful money of the United States of America at the Principal Corporate Trust Office (as that term is defined in the Indentures hereinaf ter referred to, and herein the “Principal Corporate Trust Office”) of U.S. Bank Trust Company, National Association (the “Trustee”), in San Francisco, California. The interest on this Bond due on or before the maturity or prior redemption hereof shall be payable only to the person whose name appears in the registration books, required to be kept by the Trustee, as the registered owner hereof at the close of business on the fifteenth (15th) day of the month next preceding each interest payment date, such i nterest to be paid by check mailed by first class mail to such

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registered owner at his address as it appears on such books, except that in the case of a registered owner of one million dollars ($1,000,000) or more in aggregate principal amount of Bonds, payment shall be made at such owner’s option by federal wire transfer of immediately available funds according to written instructions provided by such owner to the Trustee at least fifteen (15) days before such interest payment date to an account in a bank or trust company or savings bank that is a member of the Federal Reserve System and that is located in the United States of America. The principal of and redemption premium, if any, on this Bond shall be payable only to the person whose name appears in such registration books as the registered owner hereof, such principal and redemption premium, if any, to be paid only on the surrender of this Bond at the Principal Corporate Trust Office of the Trustee at maturity or on redemption prior to maturity.

This Bond is one of a duly authorized issue of bonds in the aggregate principal amount of $[PAR AMOUNT] issued by the City Council of the City for the North Natomas Community Facilities District No. 4, City of Sacramento, County of Sacramento, State of Californi a (the “Community Facilities District”) located in the City, designated the “North Natomas Community Facilities District No. 4, City of Sacramento, County of Sacramento, State of California, Special Tax Refunding Bonds, Series G (2023)” (the “ Series G (2023) Bonds”), under and pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (being Sections 53311 et seq. of the Government Code of the State of California), and all laws amendatory thereof or supplemental thereto (the “Law”), and under a nd pursuant to a Master Indenture, dated as of February 1, 1999 (as amended and supplemented, the “Master Indenture”), by and between the City and the Trustee, which Master Indenture authorized the issuance in various series from time to time of “North Nat omas Community Facilities District No. 4, City of Sacramento, County of Sacramento, State of California, Special Tax Bonds” (the “Bonds”), and a Seventh Supplemental Indenture (the “ Seventh Supplemental Indenture,” and together with the Master Indenture, the “Indentures”) supplemental thereto, dated as of September 1, 2023, by and between the City and the Trustee, all of like tenor and date (except for such variations, if any, as may be requ ired to designate varying numbers, denominations, maturities, interest rates or redemption provisions of the Series G (2023) Bonds). All the Series G (2023) Bonds are payable on a parity with all other Bonds issued under the Master Indenture in accordance with the terms and conditions of the Indentures (copies of which are on file at the office of the City Clerk and at the above -mentioned office of the Trustee), and reference is hereby made to the Law and to the Indentures and any and all amendments thereo f and supplements thereto for a description of the terms on which the Series G (2023) Bonds are issued and for the rights of the registered owners of the Series G (2023) Bonds; and all the terms of the Law and the Indentures are hereby incorporated herein and constitute a contract between the City and the registered owner from time to time of this Series G (2023) Bond, to all the provisions of which the registered owner of this Series G (2023) Bond, by his acceptance hereof, agrees and consents; and each ta ker and subsequent registered owner hereof shall have recourse to all the provisions of the Law and the Indentures and shall be bound by all the conditions and terms thereof.

The Series G (2023) Bonds are issued to provide funds to refund certain of the outstanding Bonds, [including depositing funds in the Bond Reserve Fund to satisfy the Required Bond Reserve], and to pay the Costs of Issuance (as that term is defined in the Indentures) of the Series G (2023) Bonds in accordance with the Indentures and are special tax obligations of the City, and the interest on and principal of and redemption premiums, if any, on the Series G (2023) Bonds are payable solely from the proceeds of the Special Tax (as that term is defined in

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the Indentures, and herein the “Spe cial Tax”) and certain other funds as provided in the Indentures for such payment, and the City is not obligated to pay them except from the proceeds of the Special Tax and such other funds. The General Fund of the City is not liable and the full faith and credit of the City is not pledged for the payment of the interest on or the principal of or the redemption premiums, if any, on the Series G (2023) Bonds, and no tax or assessment other than the Special Tax shall ever be levied or collected to pay the in terest on or the principal of or the redemption premiums, if any, on the Series G (2023) Bonds. The Series G (2023) Bonds are not secured by a legal or equitable pledge of or charge, lien or encumbrance upon any property of the City or any of its income or receipts except the money in the Special Tax Fund and certain other funds established under the Indentures, and neither the payment of the interest on or the principal of or the redemption premiums, if any, on the Series G (2023) Bonds is a general debt, liability or obligation of the City. Additional Bonds payable on a parity with the Series G (2023) Bonds from the proceeds of the Special Tax may be issued subject to the conditions and limitations contained in the Indentures.

The Series G (2023) Bonds m aturing on or after September 1, 20 __, are subject to optional redemption by the City before their respective stated maturity dates, as a whole or in part on any date on or after September 1, 20 __, from any source of available funds, upon mailed notice as provided in the Indentures, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest thereon to the date of redemption, without premium.

The Series G (2023) Bonds are subject to extraordinary redemption by the City before to their respective stated maturity dates, as a whole or in part on any interest -payment date, solely from prepayments of the Special Tax, upon mailed notice as provided in the Indentures, a t the following redemption prices (expressed as a percentage of the principal amount of Series G (2023) Bonds or portions thereof called for redemption), together with accrued interest thereon to the date of redemption:

Redemption Date Redemption Price
Any interest-payment date from March 1, 20__ through
March 1, 20__
103%
September 1, 20__ and March 1, 20__ 102%
September 1, 20__ and March 1, 20__ 101%
September 1, 20__ and any interest-payment date
thereafter
100%

If less than all the Series G (2023) Bonds are to be redeemed at the option of the City at any one time, the City shall select the maturity date or dates of the Series G (2023) Bonds to be redeemed, and if less than all the Series G (2023) Bonds of any one maturity date are to be redeemed at any one time, the Trustee shall select the Series G (2023) Bonds or portions thereof of such maturity date to be redeemed in integral multiples of five thousand dollars ($5,000) in any manner that it deems appropriate.

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Notice of redemption of any Series G (2023) Bond or any portion thereof shall be mailed by first class mail not less than thirty (30) days nor more than ninety (90) days before the redemption date to the registered owner thereof and to all securities information services selected by the City in accordance with the Indentures and to the original purchaser or underwriter of the Series G (2023) Bonds, but neither failure to receive any such notice nor any immaterial defect contained therein shall affect the sufficiency or validity of such proceedings for redemption. If a notice of redemption has been duly given as aforesaid and money for the payment of the principal of and redemption premiums, if any, on, together with interest to the redemption date on, the Series G (2023) Bonds or portions thereof so called by redemption is held by the Trustee, then this Series G (2023) Bond or the portion thereof to be redeemed shall, on the redemption date designated in such notice, become due and payable at the above-described redemption price; and from and after the date so designated interest on this Series G (2023) Bond or the portion thereof to be redeemed shall cease to accrue and the registered owner of this Series G (2023) Bond shall have no rights in respect hereof except to receive payment of the redemption price of this Series G (2023) Bond or the portion thereof to be redeemed, and upon surrender of this Series G (2023) Bond if redeemed in part only, the City shall execute and the Trustee shall authenticate and deliver to the registered owner hereof at the expense of the City a new Series G (2023) Bond or Bonds of authorized denominations equal in aggregate principal amount to the unredeemed portion of this Series G (2023) Bond so surrendered.

The City has covenant ed that, so long as any Series G (2023) Bonds are outstanding, it will annually levy the Special Tax against all Taxable Land (as that term is defined in the Indentures) in the Community Facilities District and make provision for the collection of the Special Tax in amounts which will be sufficient, together with the money then on deposit in the Bond Redemption Fund (as that term is defined in the Indentures), after making reasonable allowances for contingencies and errors in the estimates, to yield proceed s equal to the amounts required for compliance with the agreements, conditions, covenants and terms contained in the Indentures, and which in any event will be sufficient to pay the interest on and the principal of and the Sinking Fund Account Payments, if any, for and the redemption premiums, if any, on the Series G (2023) Bonds as they become due and payable and to replenish the Bond Reserve Fund (or to reinstate any surety bond issued in whole or partial satisfaction thereof) established under the Indentures and to pay all Expenses (as that term is defined in the Indentures) as they become due and payable in accordance with the provisions of the Indentures.

The Series G (2023) Bonds are issuable in the form of fully registered Bonds in denominations of five thousand dollars ($5,000) or any integral multiple thereof. The registered owner of any Series G (2023) Bond or Bonds may surrender the same (together with a written instrument of transfer satisfactory to the Trustee duly executed by the registered own er or his duly authorized attorney) in exchange for an equal aggregate principal amount of Series G (2023) Bonds of any other authorized denominations in the manner, subject to the conditions and upon payment of the charges provided in the Indentures.

The registration of this Series G (2023) Bond is transferable on the registration books kept by the Trustee by the registered owner hereof or by his duly authorized attorney upon surrender of this Series G (2023) Bond together with a written instrument of transfer satisfactory to the Trustee duly executed by the registered owner or his duly authorized attorney, and thereupon a new Series G (2023) Bond or Bonds of authorized denominations in the same

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aggregate principal amount will be issued to the transferee in exchange therefor in the manner, subject to the conditions and upon payment of the charges provided in the Indentures. The City and the Trustee may deem and treat the person in whose name this Series G (2023) Bond is registered as the absolute owner hereof for the purpose of receiving payment of, or on account of, the interest hereon and principal hereof and redemption premium, if any, hereon and for all other purposes.

The rights and obligations of the City and of the registered owners of the Series G (2023) Bonds may be amended at any time in the manner, to the extent and upon the terms provided in the Indentures, but no such amendment shall (1) extend the maturity of this Series G (2023)) Bond or reduce th e interest rate hereon or otherwise alter or impair the obligation of the City to pay the interest hereon or the principal hereof or any Sinking Fund Account Payment herefor or the redemption premium, if any, hereon at the time and place and at the rate an d in the currency and from the funds provided herein without the express written consent of the registered owner of this Series G (2023) Bond, or (2) permit the issuance by the City of any obligations payable from the proceeds of the Special Tax other than as provided in the Indentures, or jeopardize the ability of the City to levy and collect the Special Tax, or (3) reduce the percentage of Series G (2023) Bonds required for the written consent to an amendment or supplement of the Indentures, or (4) modify any rights or obligations of the Trustee without its prior written assent thereto; all as more fully set forth in the Indentures.

The Series G (2023) Bonds do not constitute an indebtedness of the City within the meaning of any constitutional or statutory debt limitation or restriction, and neither the City Council of the City nor the City nor any officer or employee thereof shall be liable for the payment of the interest on or principal of or redemption premiums, if any, on the Series G (2023) Bonds otherwise than from the proceeds of the Special Tax and the other funds as provided in the Indentures.

This Series G (2023) Bond shall not be entitled to any benefits under the Indentures or become valid or obligatory for any purpose until the certificate of authentication and registration hereon endorsed shall have been signed by the Trustee.

It is hereby certified that all a cts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in the issuance of this Series G (2023) Bond do exist, have happened and have been performed in due time, form and manner as required by law a nd that the amount of this Series G (2023) Bond, together with all other obligations of the City, does not exceed any limit prescribed by the laws of the State of California and is not in excess of the amount of Series G (2023) Bonds permitted to be issued under the Indentures.

A-6
4129-4258-0040.3

IN WITNESS WHEREOF, the City of Sacramento has caused this Series G (2023) Bond to be executed in its name and on its behalf by the manual or facsimile signature of t he Mayor of the City and countersigned by the manual or facsimile signature of the City Clerk, and has caused its seal to be impressed or imprinted hereon, and has caused this Series G (2023) Bond to be dated [Closing Date].

CITY OF SACRAMENTO

By _________________________________
Mayor
(Seal)

Countersigned:

_______________________________
City Clerk

[FORM OF CERTIFICATE OF AUTHENTICATION AND
REGISTRATION TO APPEAR ON SERIES G (2023) BONDS]

This is one of the Series G (2023) Bonds described in the within -mentioned Indentures which has been authenticated and registered on the date indicated below.

Date: [Closing Date]
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Trustee

By _________________________________
Authorized Signatory

A-7
4129-4258-0040.3

[FORM OF ASSIGNMENT TO APPEAR ON SERIES G (2023) BONDS] For value received the undersigned do(es) hereby sell, assign and transfer unto _______________________________________________ the within Series G (2023) Bond and do(es) hereby irr evocably constitute and appoint ______________________________ attorney to transfer the same on the bond register of the Trustee, with full power of substitution in the premises.

___________________________________
Dated: _____________________

SIGNATURE GUARANTEED BY:

__________________________________

Note: The signature(s) to this Assignment must correspond with the name(s) as written on the face of the within Series G (2023) Bond in every particular, without alteration or enlargement or any change whatsoever, and the signature(s) must be guaranteed by an eligible guarantor institution.

Social Security Number, Taxpayer Identification Number or other identifying number of Assignee: ____________________

[FORM OF DTC ENDORSEMENT TO APPEAR ON SERIES G (2023) BONDS]

Unless this Series G (2023) Bond is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to U.S. Bank Trust Company, National Association for registration of transfer, exchange, or payment, and any Series G (2023) Bond issued is registered in the name of Cede & Co. or in such other name as is requested 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 rep resentative 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.

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BOND PURCHASE CONTRACT
$[PAR AMOUNT]
NORTH NATOMAS COMMUNITY FACILITIES DISTRICT NO. 4
CITY OF SACRAMENTO, COUNTY OF SACRAMENTO, STATE OF CALIFORNIA SPECIAL TAX REFUNDING BONDS, SERIES G (2023)
[Pricing Date]
City of Sacramento
915 I Street
Sacramento, California 95814
Greetings:

BofA Securities, Inc., as underwriter (the “Underwriter”), acting not as a fiduciary or agent for you, but on behalf of itself, offers to enter into this Bond Purchase Contract (this “Contract”) with the City of Sacramento (the “City”) with respect to the special tax bonds captioned above (the “Bonds”) issued by the City for the City of Sacramento North Natomas Community Facilities District No. 4 (the “CFD”). Upon your acceptance of this offer, this Contract will be binding upon the City and the Underwriter. Terms not otherwise  defined  in  this  Contract  have  the  same  meanings  as  set  forth  in  the  Indenture  identified  in Section 2(c) below.

This offer is made subject to the City’s acceptance of this Contract on or before 11:59 p.m. on the date first set forth above (the “Effective Date”).

1. Purchase  and  Sale  of  Bonds.  Relying  on  the  representations,  warranties,  and  covenants  in  this Contract, the Underwriter shall purchase from the City, and the City shall sell to the Underwriter, on the terms and conditions set forth below, all (but not less than all) of $[PAR AMOUNT] aggregate principal amount of the Bonds at a purchase price (the “Purchase Price”) of $[AMOUNT] (being an amount equal to the par amount of the Bonds of $[PAR AMOUNT], [plus/less] an [net] original issue [premium/discount] of $[AMOUNT], and less an Underwriter's discount of $[UW DISCOUNT]).

2. Authorizing Instruments. The City will issue the Bonds under— (a) the Mello‐Roos Community Facilities Act of 1982, as amended (the “Act”); (b) the  resolution  of  the  Sacramento  City  Council  (the  “City  Council”),  adopted  on  [Resolution Date], that authorizes the issuance of the Bonds (the “Resolution”); and (c) a Master Indenture, dated as of February 1, 1999, as heretofore amended and supplemented, as further supplemented by a Seventh Supplemental Indenture (the “Seventh Supplemental Indenture”), dated as of September 1, 2023 (collectively, the “Indenture”), by and between the City and U.S. Bank Trust Company, National Association, as successor in interest to The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”).

3. Terms of the Bonds. The Bonds are secured by and payable from the proceeds of the Special Tax (as defined in the Indenture, “Special Taxes”) and moneys deposited in the Bond Redemption Fund and the Bond Reserve Fund, and the Special Tax Fund until disbursed as provided in the Indenture. The Bonds will mature on the dates and in the principal amounts, will bear interest at the rates, and will be subject to redemption before maturity as set forth in Exhibit A to this Contract. The Underwriter shall make a bona fide public offering of all of the Bonds at the offering prices set forth in Exhibit A.

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Additional  details  related  to  the  establishment  of  the  issue  price  for  the  Bonds  are  set  forth  in Section 20 below. The Bonds are being issued to (a) refund all of the outstanding North Natomas Community Facilities District No. 4, City of Sacramento, County of Sacramento, State of California, Special Tax Refunding Bonds, Series E (2013) (the “Series E Bonds”); (b) fund a reserve fund securing the Bonds; and (c) pay  costs of issuance of the Bonds. To facilitate the refunding of the Series  E Bonds, the City will enter into an Escrow Agreement, dated as of September 1, 2023 (the “Escrow Agreement”), with U.S. Bank Trust Company, National Association, as escrow agent thereunder.

4. Preliminary Official Statement; Official Statement; Continuing Disclosure. (a) The City shall deliver the Official Statement relating to the Bonds, dated the Effective Date (as supplemented  and  amended  from  time  to  time,  the  “Final  Official  Statement”),  to  the Underwriter 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 City shall deliver the Final Official Statement within seven (7) business days after the Effective Date and in sufficient time to accompany any confirmation that requires payment from a customer. The Underwriter  shall  deposit  the  Final  Official  Statement  with  the  MSRB  using  the  MSRB’s Electronic Municipal Market Access system.
(b) The  City  has  authorized  and  approved  the  Underwriter’s  distribution  and  use  of  the Preliminary  Official  Statement  relating  to  the  Bonds  dated  [POS  DATE]  (the  “Preliminary Official Statement”), and the City has authorized the execution, delivery, and distribution of the Final Official Statement.
(c) In connection with the issuance of the Bonds, and to assist the Underwriter with complying with Rule 15c2‐12 promulgated by the SEC (“Rule 15c2‐12”), the City shall execute a continuing disclosure certificate, under which the City will provide certain financial and operating data relating to the CFD as required by Rule 15c2‐12 (the “Continuing Disclosure Certificate”). The form of the Continuing Disclosure Certificate will be attached as an appendix to the Preliminary Official Statement and Final Official Statement.

5. Representations  and  Warranties  of  the  City.  The  City  makes  the  following  representations  and warranties to the Underwriter as of the Effective Date:
(a) Due  Organization  and  Authority.  The  CFD  was  duly  formed  and  is  validly  existing  as  a community facilities district under the Act.
(b) Full Right, Power, and Authority. The City has complied with all provisions of applicable law, including the Act, in all matters relating to the adoption of the Resolution, the formation of the CFD, the incurrence of bonded indebtedness for the CFD, and the levy of the Special Taxes within the CFD. The City Council thus has the full legal right, power, and authority to adopt the Resolution, and the City has the full legal right, power, and authority— (1) to  enter  into  this  Contract,  the  Indenture,  the  Escrow  Agreement  and  the  Continuing Disclosure Certificate (collectively, the “City Documents”); (2) to issue, sell, and deliver the Bonds;
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(4) to carry out and consummate on its part all other transactions contemplated by the City Documents.
(c) Authorization of Documents; Consents and Approvals. Except as may be required under blue‐ sky laws or other securities laws of any state, all consents or approvals the City must obtain in connection with the foregoing have been obtained, and the consents or approvals so obtained are still in full force and effect. The City Council thus has duly authorized— (1) the execution and delivery of the City Documents and the Final Official Statement, and the execution, delivery, and due performance of the City’s obligations under the Bonds and the City Documents; and
(2) the taking of any action that may be required on the part of the City to carry out, give effect to, and consummate on its part the transactions contemplated by the Bonds and the City Documents.
(d) Due Adoption of Resolution and Enforceability of Documents. The Resolution has been duly adopted  by  the  City  Council  and  is  in  full  force  and  effect;  and  the  City  Documents,  when executed  and  delivered  by  the  City  and  the  other  parties,  will  constitute  legal,  valid,  and binding obligations of the City, enforceable against the City in accordance with their terms, except  as  enforceability  may  be  limited  by  bankruptcy,  insolvency,  or  other  laws  affecting creditors’ rights generally or by the application of equitable principles. (e) Enforceability of Bonds. When delivered to the Underwriter, the Bonds will have been duly authorized by the City; will have been duly executed, issued, and delivered by the City; will constitute  legal,  valid,  and  binding  obligations  of  the  City  enforceable  against  the  City  in accordance  with  their  terms,  except  as  enforceability  may  be  limited  by  bankruptcy, insolvency, or other laws affecting creditors’ rights generally or by the application of equitable principles; and will be entitled to the benefit of, and security afforded by, the Resolution, the Indenture, and the Act.
(f) Preliminary and Final Official Statements.
(1) In this Section 5(f) only, “information” and “material fact” refer to information and facts that  relate  to  the  City  and  the  CFD.  They  do  not  include,  and  no  representation  or warranty is provided with respect to, information and facts that (A) are provided by the Underwriter,  including  but  not  limited  to  the  information  under  the  caption “UNDERWRITING;”  (B)  relate  to  the  Depository  Trust  Company  (“DTC”)  and  its  book‐ entry system; and (C) are included in Appendices D, E and F to the Official Statement. (2) The information in the Preliminary Official Statement was true in all material respects as of the date of the Preliminary Official Statement, and the information in the Final Official Statement will be true in all material respects as of the Effective Date and the Closing Date.  The  Preliminary  Official  Statement  did  not  as  of  its  date,  and  the  Final  Official Statement will not as of the Effective Date and the Closing Date, contain any untrue or misleading statement of a material fact relating to the City or the CFD or omit to state any  material  fact  relating  to  the  City  or  the  CFD  necessary  to  make  the  statements therein, in the light of the circumstances under which they were made, not misleading.

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(g) Supplements or Amendments to Official Statement. If, between the Effective Date and the date that is 25 days after the end of the underwriting period (as determined in accordance with this section 5(g)), an event occurs that would cause the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to  state  a  material  fact  necessary  to  make  the  statements  in  it,  in  the  light  of  the circumstances  under  which  they  were  made,  not  misleading,  and  if  the  City  has  actual knowledge of the event, then the City shall notify the Underwriter of the event. If, in the reasonable opinion of the Underwriter, the event requires the preparation and publication of a supplement or an amendment to the Official Statement, then the City shall furnish to the  Underwriter  a  supplement  or  amendment  to  the  Official  Statement,  in  electronic format, in form and substance reasonably acceptable to the Underwriter and, if the event notice  is  after  the  Closing  Date,  such  City  documentation  as  the  Underwriter  may reasonably  deem  necessary  to  evidence  the  truth  and  accuracy  of  the  supplement  or amendment. The term “end of the underwriting period” means the later of the following:
the Closing Date or the date when the Underwriters no longer retain an unsold balance of the Bonds for sale to the public. The end of the underwriting period will be the Closing Date unless the Underwriter notifies the City that it will be a different date, which may not be later  than  30  days  after  the  Closing  Date.  Any  notice  delivered  in  accordance  with  the preceding sentence must be delivered in writing to the City at or before the Closing. If the information in the Official Statement is amended or supplemented in accordance with this section 5(g), then at the time of each supplement or amendment and at all times afterward up to and including the date that is 25 days after the end of the underwriting period, the Official  Statement  so  supplemented  or  amended  (including  any  financial  and  statistical data) will be true and correct in all material respects and will not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the information in it, in light of the circumstances under which it was made, not misleading.
(h) No  Conflicts.  To  the  City’s  actual  knowledge  as  of  the  Effective  Date,  the  adoption  of  the Resolution, the issuance of the Bonds, the execution and delivery of the City Documents, the consummation of the transactions on the part of the City contemplated herein or therein, and the City’s compliance with the provisions hereof or thereof will not conflict with, or constitute on the City’s part a violation of, or a breach of or default under, any of the following in a way that would have a material adverse effect on the City’s ability to perform its obligations under the Bonds and the City Documents:
(1) A material indenture, mortgage, commitment, note, or other agreement or instrument to which the City is a party or by which it is bound.
(2) A provision of the Act or the California Constitution. (3) An existing law, rule, regulation, ordinance, judgment, order, or decree to which the City (or the members of the City Council or any of the City’s officers in their capacities as such) is subject.
(i) No Defaults. The City has never been in default at any time as to principal of, or interest on, any obligation it has issued where the default might have an adverse effect on the City’s ability to consummate the transactions described in the Bonds and the City Documents, except as Bond Purchase Contract |  Page 5

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specifically disclosed in the Final Official Statement; and, except as specifically disclosed in the Final Official Statement, the City has not entered into any agreement or arrangement of any kind that might give rise to any lien or encumbrance on any of the Special Taxes. (j) No  Litigation.  To  the  actual  knowledge  of  the  Sacramento  City  Attorney’s  Office  as  of  the Effective Date, except as is specifically disclosed in the Final Official Statement, the City has not been served with process in, and has not been overtly threatened with, any action, suit, proceeding, inquiry, or investigation, at law or in equity, before or by any court, public board, or public body—
(1) that questions in any way the powers of the City Council in connection with the issuance of the Bonds;
(2) that  questions  in  any  way  the  validity  of  any  proceeding  taken  by  the  City  Council  in connection with the issuance of the Bonds;
(3) in which an unfavorable decision, ruling, or finding is likely to have a material adverse effect on the CFD’s financial condition or on the transactions described in this Contract; (4) that is likely to adversely affect the validity or enforceability of the Resolution, the Bonds, or the City Documents; or
(5) that  questions  in  any  way  the  status  of  the  Bonds  under  California’s  tax  laws  or  tax regulations.
(k) Certificates of the City. Any certificate that is signed by an authorized City official and delivered to the Underwriter in connection with the transactions contemplated by this Contract will be deemed a representation and warranty by the City to the Underwriter as to the truth of the statements in the certificate.
(l) Security for the Bonds. Debt service on the Bonds will be paid solely from the Special Taxes the City receives under the Indenture and the moneys in certain funds and accounts established thereunder.
(m) Levy of Special Taxes. The Special Taxes have been and will be levied in accordance with the Rate and Method of Apportionment of Special Tax relating to the CFD and are secured by a lien on the Taxable Parcels (as that term is defined in the Rate and Method of Apportionment for the CFD) within the CFD.
(n) Pledge of Special Taxes. The Indenture creates a valid pledge of, and first lien upon, the Special Taxes  deposited  thereunder  and  the  moneys  in  certain  funds  and  accounts  established thereunder, subject in all cases to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth therein. (o) Prior Continuing Disclosure Undertakings. Except as disclosed in the Final Official Statement, the City has complied in all material respects with previous undertakings under Rule 15c2‐12. (p) Prior Assessment and Special Tax Liens. Except as disclosed in the Final Official Statement, to the  City’s  current  and  actual  knowledge  there  are  no  entities  with  outstanding  assessment liens or special tax liens against any of the Taxable Parcels within the CFD.

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6. Blue Sky. The City shall cooperate with the Underwriter (at the Underwriter’s cost) in qualifying the Bonds for offer and sale under the securities or blue‐sky laws of such jurisdictions of the  United States as the Underwriter may reasonably request, except that the City is not required to consent to suit or to service of process in, or to qualify to do business in, any jurisdiction. The City consents to the Underwriter’s use of the City Documents, the Preliminary Official Statement, and the Final Official Statement for complying with such securities or blue‐sky laws.

7. Closing.
(a) At 9:00 a.m. (Sacramento time) on [CLOSING DATE], or at such other time or date as the City and the Underwriter may agree on (the “Closing Date”), the City shall deliver or cause to be delivered  to  the  Underwriter  the  Bonds  in  definitive  form,  duly  executed  by  the  City’s authorized  officers  and  authenticated  by  the  Trustee,  together  with  the  other  documents identified in  Section 7(b)  below, and the  Underwriter shall accept  the delivery and pay  the Purchase Price of the Bonds by making a wire transfer in federal funds payable to the order of the Trustee.
(b) The  activities  relating  to  the  final  execution  and  delivery  of  the  Bonds  and  the  payment therefor and the delivery of the resolutions, certificates, opinions, and other instruments as described in Section 9 of this Contract will occur electronically. Documents will be emailed to Orrick,  Herrington  &  Sutcliffe  LLP  (“Bond  Counsel”)  in  final  form  and  fully  executed.  Bond Counsel  will  hold  such  documents  in  escrow  on  behalf  of  the  interested  parties  until  the Closing, at which time such documents will be deemed to be delivered. Bond Counsel will make the documents described in Section 9 hereof electronically available to the parties via an online deal  room.  The  payment  for  the  Bonds  and  simultaneous  delivery  of  the  Bonds  to  the Underwriter is the “Closing.” The Bonds must be delivered as fully registered Bonds initially in denominations of $5,000 each and any integral multiple thereof. The Bonds must be registered in the name of Cede & Co., as nominee of The Depository Trust Company, and must be made available for checking by the Underwriter at such place as the Underwriter and the Trustee agree at least twenty‐four (24) hours before the Closing.

8. Termination Events. The Underwriter may cancel its obligations to purchase the Bonds if any of the following occurs between the Effective Date and the Closing Date:
(a) The House of Representatives or the Senate of the United States Congress, or a committee of either, has pending before it or favorably passes or recommends legislation that, if enacted, would have the purpose or effect of imposing federal income taxation upon revenues or other income of the general character to be derived by the City or by any similar body under the Resolution, the Indenture, or the Act, or upon interest received on obligations of the general character of the Bonds, or of causing interest on obligations of the general character of the Bonds  to  be  includable  in  gross  income  for  purposes  of  federal  income  taxation,  and  the legislation, in the Underwriter’s opinion, materially adversely affects the market price of the Bonds.
(b) Any action or event occurs, including any of the following, that directly or indirectly has the purpose  or  effect,  in  the  Underwriter’s  opinion,  of  materially  and  adversely  affecting  the market  price  of  the  Bonds  or  the  market  for  the  Bonds;  of  adversely  affecting  the  federal income‐tax consequences of owning the Bonds (including causing interest on the Bonds to be included in gross income for purposes of federal income taxation); or of imposing a federal Bond Purchase Contract |  Page 7

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income tax upon revenues or other income of the general character to be derived by the City under  the  Resolution  or  the  Indenture,  or  upon  interest  received  on  the  Bonds  or  on obligations of the general character of the Bonds:
(1) A tentative decision with respect to legislation is reached by a committee of the House of Representatives or the Senate of the United States Congress, or legislation is favorably reported  or  re‐reported  by  such  a  committee  or  introduced  in  (by  amendment  or otherwise),  or  passed  by,  the  House  of  Representatives  or  the  Senate;  or  is recommended to the United States Congress for passage by the President of the United States; or is enacted.
(2) A decision by a federal court (i.e., the United States Supreme Court, a United States Court of Appeals, a United States District Court, or the United States Tax Court) is rendered. (3) A ruling, release, order, regulation, or official statement (tentative, proposed, or final) by or on behalf of the United States Treasury Department, the Internal Revenue Service, or other governmental agency is made or proposed to be made. (c) Legislation that takes effect before the Closing is enacted or actively considered for enactment, or  a  decision  by  a  federal  court  is  rendered,  the  effect  of  which  is  that  the  Bonds  are  not exempt from the registration, qualification, or other requirements of the Securities Act of 1933 as then in effect or the Securities Exchange Act of 1934 as then in effect, or that the Resolution or the Indenture, as the case may be, is not exempt from the Trust Indenture Act of 1939 as then in effect.
(d) A  stop  order,  ruling,  regulation,  or  official  statement  by  the  Securities  and  Exchange Commission  or  any  other  governmental  agency  having  jurisdiction  of  the  subject  matter  is issued or made or any other event occurs, the effect of which is that the issuance, offering, or sale  of  the  Bonds,  or  the  execution  and  delivery  of  the  Indenture  as  contemplated  by  this contract or by the Final Official Statement, is or would be in violation of any provision of the federal securities laws, including the Securities Act of 1933 as  then in effect, the Securities Exchange Act of 1934 as then in effect, or the Trust Indenture Act of 1939 as then in effect. (e) Any  event  occurs  or  any  information  becomes  known  to  the  Underwriter  that  causes  the Underwriter  to  reasonably  believe  that  the  Final  Official  Statement  as  then  amended  or supplemented includes an untrue statement of a material fact or omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
(f) There  occurs  any  outbreak  of  hostilities  or  any  national  or  international  calamity  or  crisis, including a financial crisis, the effect of which on the financial markets of the United States is such  as,  in  the  Underwriter’s  reasonable  judgment,  would  materially  adversely  affect  the market for or market price of the Bonds.
(g) There is in force a general suspension of trading on the New York Stock Exchange, the effect of  which  on  the  financial  markets  of  the  United  States  is  such  as,  in  the  Underwriter’s reasonable judgment, would materially adversely affect the market for or market price of the Bonds.
(h) A general banking moratorium is declared by United States, New York, or California authorities.

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(i) Any proceeding is pending or threatened by the Securities and Exchange Commission against the City.
(j) Additional material restrictions not in force as of the Effective Date are imposed upon trading in securities generally by any governmental authority or by any national securities exchange, and the restrictions adversely affect the Underwriter's ability to sell the Bonds. (k) The  New  York  Stock  Exchange  or  other  national  securities  exchange,  or  any  governmental authority, imposes, as to the Bonds or obligations of the general character of the Bonds, any material restrictions not in force on the Effective Date, or increases materially those in force on the Effective Date, with respect to the extension of credit by, or the charge to the net capital requirements of, the Underwriter.
(l) Standard  and  Poor’s  downgrades,  suspends,  or  withdraws  (or  announces  its  intent  to downgrade, suspend, or withdraw) its rating of the Bonds, or issues any negative qualification with respect to the Bonds (such as being placed on “credit watch” with negative implications or “negative outlook” or any similar qualification).
(m) An amendment to the United States or California Constitution is enacted or action is taken by any federal or California court, legislative body, regulatory body, or other authority materially adversely affecting the tax status of the City or its property, income, or securities (or interest thereon); the validity or enforceability of the Special Taxes or the ability of the City to issue the Bonds;  or  the  levy  of  any  of  the  Special  Taxes,  all  as  contemplated  by  the  Resolution,  the Indenture, this Contract, and the Final Official Statement.

9. Conditions to Closing. The Underwriter’s obligations to purchase the Bonds are subject to the City’s performance of the City’s obligations under this Contract at and before the Closing, to the accuracy as of the Effective Date and as of the time of the Closing of the City’s representations and warranties in this Contract, and to the following conditions, including the delivery by the City of the documents identified in this Section 9 in form and substance satisfactory to the Underwriter:
(a) At  the  time  of  Closing,  (1) the  Final  Official  Statement,  the  Resolution,  the  Indenture,  the Continuing Disclosure Certificate, and this Contract must be in full force and effect and must not have been amended, modified, or supplemented except as may have been agreed to in writing by the Underwriter; and (2) the CFD must have been duly formed and there must be in full force and effect all resolutions, including the Resolution, that in Bond Counsel’s opinion are necessary in connection with the transactions contemplated by this Contract. (b) The  Underwriter  must  receive  the  Bonds  at  or  before  the  Closing.  The  terms  of  the  Bonds delivered must in all instances be as described in the Indenture. (c) At or before the Closing, the Underwriter must receive the following documents in the number of counterparts as are agreeable to the Underwriter and the City:
(1) Bond Counsel’s final approving opinion, dated the Closing Date and substantially in the form attached as Appendix B to the Preliminary Official Statement and the Final Official Statement, together with a letter addressed to the Underwriter to the effect that the Underwriter  may  rely  upon  the  opinion  to  the  same  extent  as  if  the  opinion  were addressed to the Underwriter.

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(2) A supplemental opinion of Bond Counsel addressed to the Underwriter in substantially the form attached to this Contract as Exhibit F.
(3) One or more letters from disclosure counsel to the City, Stradling Yocca Carlson & Rauth, a  Professional  Corporation  (“Disclosure  Counsel”),  addressed  to  the  City  and  the Underwriter, stating the following:
(A) without  passing  upon  or  assuming  any  responsibility  for  the  accuracy, completeness,  or  fairness  of  the  statements  contained  in  the  Final  Official Statement,  and  making  no  representation  that  Disclosure  Counsel  has independently  verified  the  accuracy,  completeness,  or  fairness  of  any  such statements, based upon the information made available to Disclosure Counsel in the  course  of  Disclosure  Counsel’s  participation  in  the  preparation  of  the  Final Official Statement, nothing has come to Disclosure Counsel’s attention that would lead Disclosure Counsel to believe that the Final Official Statement, including the cover  page  (except  for  any  (i)  expressions  of  opinion,  the  assumptions,  the projections, estimates and forecasts, the charts, the financial statements or other financial,  numerical,  economic,  demographic  or  statistical  data,  assessed  or appraised valuations, or environmental matters; (ii) information relating to CUSIP numbers;  (iii)  information  with  respect  to  DTC  and  its  book‐entry  system;  (iv) information  contained  in  the  Appendices  to  the  Final  Official  Statement;  (v) information incorporated  by reference  into the Final Official  Statement; and (vi) information with respect to the Underwriter or underwriting matters with respect to  the  Bonds,  including  but  not  limited  to  information  under  the  caption “UNDERWRITING,” as to which no opinion or view need be expressed) contains an untrue statement of a material fact or omits to state a material fact required to be stated  therein  or  necessary  to  make  the  statements  therein,  in  the  light  of  the circumstances under which they were made, not misleading; and (B) the Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification under the Trust Indenture Act of 1939, as amended.
(4) A letter from counsel to the Underwriter, Hawkins Delafield & Wood LLP (“Underwriter’s Counsel”),  addressed  to  the  Underwriter,  in  form  and  substance  acceptable  to  the Underwriter.
(5) The  opinion  of  the  Sacramento  City  Attorney’s  Office,  dated  the  Closing  Date  and addressed to the Underwriter, and in substantially the form attached to this Contract as Exhibit G.
(6) The Final Official Statement executed on the City’s behalf by a duly authorized officer. (7) A certified copy of the Resolution.
(8) Specimen Bonds.
(9) Evidence that the City has signed Internal Revenue Service Form 8038‐G and will cause same to be filed with the Internal Revenue Service.
(10) Executed copies of the City Documents.

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(11) A tax certificate signed by the City in form and substance satisfactory to Bond Counsel. (12) In  connection  with  printing  and  distribution  of  the  Preliminary  Official  Statement,  a signed certificate of the City in the form attached to this Contract as Exhibit B. (13) A closing certificate of the City, in form and substance as set forth in Exhibit C to this Contract, dated as of the Closing Date.
(14) A certificate of the special tax consultant to the City, Goodwin Consulting Group, Inc., Sacramento, California (“Special Tax Consultant”), in form and substance as set forth in Exhibit D to this Contract, dated as of the Closing Date. (15) A  certificate  of  the  Trustee,  in  form  and  substance  as  set  forth  in  Exhibit E  to  this Contract, dated as of the Closing Date.
(16) An opinion of counsel to the Trustee, dated as of the Closing Date, in form and substance satisfactory to the Underwriter and Bond Counsel.
(17) A defeasance letter of Bond Counsel, dated the Closing Date, to the effect that the Series E Bonds are no longer outstanding.
(18) A  Blanket  Letter  of  Representations  of  the  City  to  DTC,  which  qualifies  the  Bonds  for delivery via the facilities of DTC.
(19) Evidence that the rating on the Bonds as set forth in the Final Official Statement is in full force and effect as of the Closing Date.
(20) Such  additional  legal  opinions,  certificates,  proceedings,  instruments,  and  other documents as the Underwriter or Bond Counsel may reasonably request to evidence the City’s  compliance  with  legal  requirements;  the  truth  and  accuracy,  as  of  the  time  of Closing, of the City’s representations in this Contract; and the City’s due performance or satisfaction at or before the time of Closing of all agreements then to be performed and all conditions then to be satisfied by the City.
(d) If the City is unable to satisfy the conditions in Sections 9(a), 9(b), and 9(c) of this Contract, or if the Underwriter’s obligations to purchase and accept delivery of the Bonds are terminated for any reason permitted by this Contract, then this Contract will terminate, and neither the Underwriter nor the City will be under further obligation under this Contract other than their obligations to pay expenses, as provided in Section 12 of this Contract, which will continue in full force and effect.

10. Conditions to the City’s Obligations. The City’s obligations under this Contract are subject to the Underwriter’s performance of its obligations under this Contract and the Underwriter’s delivery of an issue price certificate in form and substance reasonably satisfactory to Bond Counsel.

11. Survival  of  Representations,  Warranties,  and  Agreements.  All  of  the  City’s  representations, warranties,  and  agreements  in  this  Contract  will  remain  operative  and  in  full  force  and  effect, regardless  of  any  investigations  made  by  or  on  behalf  of  the  Underwriter,  and  will  survive  the Closing.

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12. Expenses.
(a) The City shall pay or cause to be paid all reasonable expenses incident to the issuance of the Bonds and to the performance of its obligations under this Contract, including (1) expense of delivery  of  the  Bonds  and  this  Contract;  (2) expense  of  printing  the  Preliminary  Official Statement, the Final Official Statement, and any amendment or supplement to the Preliminary Official Statement or the Final Official Statement; (3) fees and disbursements of Bond Counsel, Disclosure  Counsel,  municipal  advisor,  and  other  consultants,  the  Special  Tax  Consultant, verification agent, and the Trustee/Escrow Agent and their counsel; and (4) expenses (included in  the  expense  component  of  the  Underwriter’s  discount)  incurred  by  the  Underwriter  on behalf  of  City’s  employees  which  are  incidental  to  implementing  this  Contract,  including transaction‐related meals of those employees.
(b) The Underwriter shall pay all advertising expenses in connection with the public offering of the Bonds and all other expenses it incurs in connection with its public offering and distribution of the Bonds, including the fees and expenses of Underwriter’s Counsel.

13. No Fiduciary Duty.
(a) The City and the Underwriter acknowledge and agree that— (1) the purchase and sale of the Bonds under this Contract is an arm’s‐length commercial transaction between the City and the Underwriter;
(2) in  connection  with  the  purchase  and  sale  of  the  Bonds  and  with  the  discussions, undertakings, and procedures leading up to the consummation of the purchase and sale of  the  Bonds  under  this  Contract,  the  Underwriter  is  and  has  been  acting  solely  as principal and is not acting as the agent or fiduciary of the City; (3) the  Underwriter  has  not  assumed  a  fiduciary  responsibility  in  favor  of  the  City  with respect to (A) the offering of the Bonds contemplated by this Contract or the process leading  to  this  Contract  (whether  or  not  the  Underwriter  or  any  affiliate  of  the Underwriter has advised or is currently advising the City on other matters), or (B) any other obligation to the City with respect to the offering contemplated by this Contract except the obligations expressly set forth in this Contract; and (4) the City and the Underwriter have consulted their own legal, financial, and other advisors to the extent they have deemed appropriate in connection with this transaction. (b) This Section 13 does not limit the Underwriter’s obligations of fair dealing under Municipal Securities Rulemaking Board Rule G‐17.

14. Notices.
(a) To be effective, any notice or other communication given to the City under this Contract must be in writing and must be delivered to the following person at the following address:

Office of the City Treasurer
Historic City Hall
915 I Street, 3rd Floor
Sacramento, California 95814
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Attention: Brian Wong, Debt Manager
Email address: [email protected]
(b) To be effective, any notice or other communication to be given to the Underwriter under this Contract must be in writing and must be delivered to the following person at the following address:

BofA Securities, Inc.
315 Montgomery Street, 1st Floor
San Francisco, California 94104
Attention: Holly Vocal, Managing Director
Email address: [email protected]

15. Benefit. This Contract is made solely for the benefit of the parties and their successors and assigns, and no other person, including any purchaser of the Bonds, will acquire or have any right under or by virtue of it.

16. Governing Law and Interpretation. This Contract is to be governed by, and construed in accordance with, the laws of the State of California. All currency amounts set forth in this Contract are in United States Dollars. The word “including” means “including but not limited to.”

17. Effective Date. This Contract becomes effective when the City accepts it, as indicated in the City’s signature block below.

18. Counterparts. The parties may sign this Contract in counterparts, each of which will be considered as an original, but all of which will constitute the same instrument. Such signatures may be made manually or electronically. Each of the parties hereto agrees that the transaction consisting of this Contract may be conducted by electronic means. Each party agrees, and acknowledges that it is such party’s  intent,  that  if  such  party  signs  this  Contract  using  an  electronic  signature,  it  is  signing, adopting, and accepting this Contract and that signing this Contract using an electronic signature is the legal equivalent of having placed its handwritten signature on this Contract on paper. Each party acknowledges that it is being provided with an electronic or paper copy of this Contract in a usable format.

19. Severability.  If  a  court  with  jurisdiction  rules  that  any  provision  of  this  Contract  is  invalid, unenforceable, or contrary to law or public policy, then the parties want the court to interpret this Contract as follows: (a) by modifying the provision to the minimum necessary to make it enforceable or, if that modification is not permitted by law, by disregarding the provision; (b) by holding that the rest of the contract will remain in effect as written; (c) by holding that the provision will remain as written in any circumstances other than those in which the provision is held to be unenforceable; and (d) by holding the entire contract unenforceable if modifying or disregarding the unenforceable provision would result in the failure of an essential purpose of this Contract.

20. Establishment of Issue Price. The Underwriter agrees to make an bona fide initial public offering of all of the Bonds in compliance with federal and state securities laws, at the initial offering prices set forth on Exhibit A attached hereto and incorporated herein by reference. Subject to the paragraphs below, the Underwriter may change the initial offering prices as it deems necessary in connection with the offering of the Bonds without any requirement of prior notice, and may offer and sell the Bonds to institutions at prices lower than those stated in Exhibit A.

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(a) The following definitions apply only in this Section 20:
(1) “Public” means any person other than an Underwriter or a Related Party. (2) “Underwriter” means (A) any person who agrees under a written contract with the City (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 under a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail‐distribution agreement participating in the initial sale of the Bonds to the Public). (3) 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  (A)  at  least  50%  common ownership  of  the  voting  power  or  the  total  value  of  their  stock,  if  both  entities  are corporations (including direct ownership by one corporation of another); (B) 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  (C)  more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other). (4) “Sale Date” means the date of execution of this contract by all parties. (b) The  Underwriter  shall  assist  the  City  in  establishing  the  issue  price  of  the  Bonds  and  shall execute and deliver to the City at the Closing an “issue price” or similar certificate, together with  the  supporting  pricing  wires  or  equivalent  communications,  substantially  in  the  form attached hereto as Exhibit H, with any modifications that be appropriate or necessary, in the reasonable judgment of the Underwriter, the City, 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 City under this section to establish the issue price of the Bonds may be taken on behalf of the City by the City’s municipal advisor, Montague DeRose and Associates, LLC (“Municipal Advisor”) and any notice or report to be provided to the City may be provided to the City’s Municipal Advisor.
(c) Except as otherwise set forth in Exhibit A attached hereto, the City will treat the first price at which 10% of each maturity of the Bonds (the “10% Test”) identified under the column “10% Test  Used” in  Exhibit A, is sold to the Public as the issue price  of that maturity (if  different interest rates apply within a maturity, each separate CUSIP number within that maturity will be  subject  to  the  10%  Test).  At  or  promptly  after  the  execution  of  this  contract,  the Underwriter shall report to the City the price or prices at which it has sold to the Public each maturity of Bonds.  If at that time the 10% Test has not been satisfied as to any maturity of the Bonds, the Underwriter agrees to promptly report to the City the prices at which it sells the unsold Bonds of that maturity to the Public.  That reporting obligation shall continue until the earlier of the date set forth in Sections 20(d)(1) and 20(d)(2).  For purposes of this Section, if Bonds mature on the same date but have different interest rates, each separate CUSIP number within that maturity will be treated as a separate maturity of the Bonds (d) The  Underwriter  confirms  that  the  Underwriter  has  offered  the  Bonds  to  the  Public  on  or before the date of this contract at the offering price or prices (the “Initial Offering Price”), or Bond Purchase Contract |  Page 14

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at the corresponding yield or yields, set forth in Exhibit A attached hereto, except as otherwise set forth therein. Exhibit A also sets forth, identified under the column “Hold the Offering Price Rule Used,” as of the date of this Contract, the maturities, if any, of the Bonds for which the 10% Test has not been satisfied and for which the City and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the City to treat the Initial Offering Price to the public of each such maturity as of the sale date as the issue price of that maturity (the “hold‐the‐offering‐price rule”). So long as the hold‐the‐offering‐price rule remains applicable to any maturity of the Bonds, the Underwriter will neither offer nor sell unsold Bonds of that maturity to any person at a price that is higher than the Initial Offering Price to the Public during the period starting on the sale date and ending on the earlier of the following.
(1) the close of the 5th business day after the sale date; or (2) 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. (e) The Underwriter will advise the City promptly after the close of the 5th business day after the sale date whether it has sold 10% of that maturity of the Bonds to the Public at a price that is no higher than the Initial Offering Price to the Public. (f) The  Underwriter  hereby  confirms  that  any  selling  group  agreement  and  any  third‐party distribution 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 who is a member of the selling group and each broker‐dealer that is a party to such retail distribution agreement, as applicable, to (1) report the prices at which it sells to the Public the unsold Bonds of each maturity allotted to it until it is notified by the Underwriter that either the 10% Test has been satisfied as to the Bonds of that maturity or all Bonds of that maturity have been sold to the Public, provided that,  the reporting obligation after the Closing  Date may be at reasonable periodic intervals; and (2) comply with the Hold‐the‐Offering‐Price Rule, if applicable, in each case if and for so long as directed by the Underwriter. (g) The  City  acknowledges  the  following  with  respect  to  the  Underwriter’s  representation  in Section 20(f):
(1) If a selling group has been created in connection with the initial sale of the Bonds to the Public, the Underwriter will rely on the agreement of each dealer who is a member of the selling group to comply with the Hold‐the‐Offering‐Price Rule, if applicable, as set forth in a selling group agreement and the related pricing wires. (2) If a third‐party distribution agreement was employed in connection with the initial sale of the Bonds to the Public, the Underwriter will rely on the agreement of each broker‐ dealer that is a party to the 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.
(3) The  Underwriter will 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  regarding  the  Hold‐the‐ Offering‐Price Rule as applicable to the Bonds.

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(h) The Underwriter acknowledges that sales of any Bonds to any person who is a Related Party to the Underwriter will not constitute sales to the Public for purposes of this Section 20.

(Signature Page Follows)
Bond Purchase Contract | Signature Page

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BOFA SECURITIES, INC.

By:

Authorized Representative

Accepted and agreed to as of
the date first above written:

CITY OF SACRAMENTO

By:

John P. Colville Jr., City Treasurer

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EXHIBIT A

$[PAR AMOUNT]
NORTH NATOMAS COMMUNITY FACILITIES DISTRICT NO. 4
CITY OF SACRAMENTO, COUNTY OF SACRAMENTO, STATE OF CALIFORNIA SPECIAL TAX REFUNDING BONDS, SERIES G (2023)

MATURITY SCHEDULE AND REDEMPTION TERMS

Maturity
(September 1)  Principal Amount
Interest
Rate  Yield
Initial
Offering Price
10% Test
Used
Hold the
Offering
Price Used
$  %  %
Term Bonds Subtotal       $

Total:      $

T  Term bond.

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REDEMPTION TERMS
Optional  Redemption.   The  Bonds  maturing  on  or  after  September  1,  20[__],  are  subject  to optional redemption by the City before their respective stated maturity dates, as a whole or in part on any  date  on  or  after  September  1,  20[__],  from  any  source  of  available  funds,  upon  mailed  notice  as provided in the Indenture, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest thereon to the date of redemption, without premium.

Extraordinary  Redemption  from  Special  Tax  Prepayments.  The  Bonds  are  subject  to extraordinary redemption by the City before their respective stated maturity dates, as a whole or in part on any Interest Payment Date, solely from prepayments of the Special Tax, upon mailed notice as provided in the Indenture, at the following redemption prices (expressed as a percentage of the principal amount of  Bonds  or  portions  thereof  called  for  redemption),  together  with  accrued  interest  to  the  date  of redemption:

Redemption Dates
Redemption
Price
Any  Interest  Payment  Date  from  September  1,  2023  through  and  including March 1, 20[__]
103 %
September 1, 20[__], and March 1, 20[__]  102
September 1, 20[__], and March 1, 20[__]  101
September 1, 20[__], and any Interest Payment Date thereafter  100

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EXHIBIT B

NORTH NATOMAS COMMUNITY FACILITIES DISTRICT NO. 4
CITY OF SACRAMENTO, COUNTY OF SACRAMENTO, STATE OF CALIFORNIA SPECIAL TAX REFUNDING BONDS, SERIES G (2023)

CERTIFICATE REGARDING PRELIMINARY OFFICIAL STATEMENT

I, John P. Colville Jr., Sacramento City Treasurer, hereby state and certify as follows:

1. I am the duly appointed, qualified, and acting Treasurer of the City of Sacramento (the “City”), a municipal corporation duly organized and existing under its charter and the Constitution and laws of the State of California. As such, I am familiar with the facts herein certified and am authorized and qualified to certify those facts.

2. With respect to the above‐captioned bonds, the City has deemed the Preliminary Official Statement dated [POS DATE], including the cover page and all appendices, to be final as of its date for purposes of  Rule  15c2‐12  promulgated  under  the  Securities  Exchange  Act  of  1934,  except  for  information permitted to be omitted therefrom by Rule 15c2‐12.

Dated as of [DATE]
CITY OF SACRAMENTO

By
John P. Colville Jr.

City Treasurer

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EXHIBIT C

$[PAR AMOUNT]
NORTH NATOMAS COMMUNITY FACILITIES DISTRICT NO. 4
CITY OF SACRAMENTO, COUNTY OF SACRAMENTO, STATE OF CALIFORNIA SPECIAL TAX REFUNDING BONDS, SERIES G (2023)

CLOSING CERTIFICATE OF THE CITY OF SACRAMENTO

The  undersigned  hereby  certifies  and  represents  that  they  are  the  duly  appointed  and  acting representative
of the City of Sacramento (the “City”), that they are authorized to execute this certificate in connection with the issuance of the bonds identified above, and further certifies and reconfirms the following on the City’s behalf:

1. The representations and warranties of the City contained in the Bond Purchase Contract between the City and BofA Securities, Inc., dated [SALE DATE] (the “Contract”), are true in all material respects as of the date of this certificate as if made on the date of this certificate.

2. The City has complied with all agreements, covenants, and conditions to be complied with by the City under the Indenture and the Contract as of the date of this certificate.

Each capitalized term not defined in this certificate has the meaning given to it in the Contract.

Dated: [DATE]
CITY OF SACRAMENTO

By:

John P. Colville Jr.

City Treasurer

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EXHIBIT D

$[PAR AMOUNT]
NORTH NATOMAS COMMUNITY FACILITIES DISTRICT NO. 4
CITY OF SACRAMENTO, COUNTY OF SACRAMENTO, STATE OF CALIFORNIA SPECIAL TAX REFUNDING BONDS, SERIES G (2023)

CERTIFICATE OF SPECIAL TAX CONSULTANT
The City of Sacramento has retained Goodwin Consulting Group, Inc., Sacramento, California, California (the “Special Tax Consultant”) as special tax consultant in connection with the bonds identified above (the “Bonds”) for the City of Sacramento North Natomas Community Facilities District No. 4 (the “CFD”).

The Special Tax Consultant has reviewed the rate and method of apportionment of special tax for the CFD (the “RMA”), which is set forth in Appendix B to the Official Statement (the “Official Statement”) dated [SALE  DATE],  relating  to  the  Bonds.  The  Special  Tax  Consultant  has  also  reviewed  the  summaries  and descriptions of the RMA in the Official Statement. Based upon that review, the Special Tax Consultant hereby certifies as follows:
(a) The Special Tax levied and applied in accordance with the terms set forth in the RMA, if levied in the maximum amounts permitted under the special tax formula set forth in the RMA on the date of this certificate,  would  be  levied  in  a  combined  amount  equal  to  at  least  110%  of  the  projected  debt service on the Bonds and priority Administrative Fees and Expenses (if applicable), provided that information and other data supplied by the City, the CFD Administrator, the Underwriter or by any of their agents which has been relied upon by Special Tax Consultant, is true and correct. Although the Special Tax, if levied in the maximum amounts under the special tax formula set forth in the RMA, would be levied in an amount equal to at least 110% of the projected debt service on the Bonds and Administrative Fees and Expenses, no representation is made herein as to actual amounts that will be collected in future years.
(b) All summaries of and information with respect to the RMA in the Official Statement, all information in Tables 1 ‐ 8 and 10 in the Official Statement, and all other information provided by the Special Tax Consultant for inclusion in the Official Statement are true and correct as of the date of the Official Statement and as of the date hereof, provided that the information and data provided by the CFD Administrator, which has been relied on by the Special Tax Consultant, is also true and correct. (c) The aggregate value of all real property subject to the levy of the Special Tax in the CFD, based upon the assessed value determined by the Sacramento County Assessor’s Office based on a January 1, 2022 lien date, is at least three times the lien of the Special Tax and any overlapping community facilities district or assessment district bonds on taxable property within the CFD.

Each capitalized term not defined in this certificate has the meaning given to it in the Official Statement.

Dated:  [DATE]  Goodwin Consulting Group, Inc.

By:  _____________________________________

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EXHIBIT E

$[PAR AMOUNT]
NORTH NATOMAS COMMUNITY FACILITIES DISTRICT NO. 4
CITY OF SACRAMENTO, COUNTY OF SACRAMENTO, STATE OF CALIFORNIA SPECIAL TAX REFUNDING BONDS, SERIES G (2023)

CERTIFICATE OF TRUSTEE

The  undersigned  hereby  states  and  certifies  that  they  are  an  authorized  officer  of  U.S.  Bank  Trust Company, National Association, as successor in interest to The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”), under that certain Master Indenture, dated as of February 1, 1999, as heretofore amended and supplemented, as further supplemented by a Seventh Supplemental Indenture (the “Seventh Supplemental Indenture”), dated as of September 1, 2023 (collectively, the “Indenture”), by and between the City and the Trustee, relating to the above‐captioned bonds (the “Bonds”).

As such, the undersigned is familiar with the following facts and is authorized and qualified to certify the following facts on behalf of the Trustee:
(1) The Trustee is duly organized and existing as a national banking association under the laws of the United States of America, having the full power and authority to enter into and perform its duties under  the  Indenture  and  the  Escrow  Agreement,  dated  as  of  September  1,  2023  (the  “Escrow Agreement”), with the City.
(2) The Trustee has duly authorized, executed, and delivered the Indenture and the Escrow Agreement. (3) To  the  Trustee’s  best  knowledge  after  due  inquiry,  there  is  no  action,  suit,  proceeding,  or investigation at law or in equity before or by any court or governmental agency, public board, or public body (a) pending against the Trustee or threatened against the Trustee that in the Trustee’s reasonable judgment would affect the Trustee’s existence, or (b) in any way contesting or affecting the validity or enforceability of the Indenture or contesting the Trustee’s powers or its authority to enter into, and perform its obligations under, the Indenture and the Escrow Agreement.

Dated:  [DATE]
U.S. Bank Trust Company, National
Association,
as Trustee

By
Authorized Officer

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EXHIBIT F

SUPPLEMENTAL OPINION OF BOND COUNSEL

[DATE]

BofA Securities, Inc.

San Francisco, California

NORTH NATOMAS COMMUNITY FACILITIES DISTRICT NO. 4
CITY OF SACRAMENTO, COUNTY OF SACRAMENTO, STATE OF CALIFORNIA SPECIAL TAX REFUNDING BONDS, SERIES G (2023)
(Supplemental Opinion)
Greetings:

This letter is addressed to you, as Underwriter, pursuant to Section 9(c)(2) of the Bond Purchase

Contract,  dated  [SALE  DATE]  (the  “Contract”),  between  you  and  the  City  of  Sacramento  (the  “City”), providing for the purchase of $[PAR AMOUNT] principal amount of City of Sacramento North Natomas Community Facilities District  No. 4 Special Tax Bonds, Series 2023 (the “Bonds”). The Bonds are being issued pursuant to a certain Master Indenture, dated as of February 1, 1999, as heretofore amended and supplemented,  as  further  supplemented  by  a  Seventh  Supplemental  Indenture  (the  “Seventh Supplemental Indenture”), dated as of September 1, 2023 (collectively, the “Indenture”), by and between the City and U.S. Bank Trust Company, National Association, as successor in interest to The Bank of New York  Mellon  Trust  Company,  N.A.,  as  trustee  (the  “Trustee”).  Capitalized  terms  not  otherwise  defined herein shall have the meanings ascribed thereto in the Indenture or, if not defined in the Indenture, in the Contract.

In connection with our role as bond counsel to the City, we have reviewed the Indenture; the Contract; the Tax Certificate, dated the date hereof (the “Tax Certificate”), executed by the City; opinions of counsel to the City and the Trustee; certificates of the City, the Trustee and others; and such other documents,  opinions  and  matters  to  the  extent  we  deemed  necessary  to  render  the  opinions  and conclusions set forth herein.

The  opinions  and  conclusions  expressed  herein  are  based  on  an  analysis  of  existing  laws, regulations,  rulings  and  court  decisions  and  cover  certain  matters  not  directly  addressed  by  such authorities. Such opinions or conclusions may be affected by actions taken or omitted or events occurring after the original delivery of the Bonds on the date hereof. We have not undertaken to determine, or to inform any person, whether any such actions are taken or omitted or events do occur or any other matters

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come to our attention after the original delivery of the Bonds on the date hereof. We have assumed the genuineness of all documents and signatures provided to us and the due and legal execution and delivery thereof by, and validity against, any parties other than the City. We have assumed, without undertaking to verify, 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 second paragraph hereof. We have further assumed compliance with all covenants and agreements contained in such documents. In addition, we  call  attention  to  the  fact  that  the  rights  and  obligations  under  the  Bonds,  the  Indenture,  the  Tax Certificate  and  the  Contract  and  their  enforceability  may  be  subject  to  bankruptcy,  insolvency, reorganization, receivership, arrangement, fraudulent conveyance, moratorium and other laws relating to  or  affecting  creditors’  rights,  to  the  application  of  equitable  principles,  to  the  exercise  of  judicial discretion in appropriate cases and to the limitations on legal remedies against governmental entities such as  the  City  in  the  State  of  California.  We  express  no  opinion  with  respect  to  any  indemnification, contribution,  liquidated  damages,  penalty  (including  any  remedy  deemed  to  constitute  or  to  have  the effect of a penalty), right of set‐off, arbitration, judicial reference, choice of law, choice of forum, choice of  venue,  non‐exclusivity  of  remedies,  waiver  or  severability  provisions  contained  in  the  foregoing documents, nor do we express any opinions with respect to the state or quality of title to or interest in any assets described in or as subject to the lien of  the Indenture or the accuracy or sufficiency of the description  contained  therein  of,  or  the  remedies  available  to  enforce  liens  on,  any  such  assets.  We express no opinion with respect to the plans, specifications, maps, financial report or other engineering or financial details of the proceedings, or upon the rate and method of apportionment of the Special Tax or the validity of the Special Tax levied upon any individual parcel. Finally, we undertake no responsibility for the accuracy, except as expressly set forth in numbered paragraph 3 below, completeness or fairness of the Official Statement, dated [SALE DATE] (the “Official Statement”), or other offering material relating to the Bonds and express no opinion or conclusion relating thereto.

Based on and subject to the foregoing, and in reliance thereon, as of the date hereof, we are of the following opinions and conclusions:

1.  The Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended.

2.  The Contract has been duly executed and delivered by, and constitutes a valid and binding obligation of, the City.

3.  The statements contained in the Official Statement under the captions   “THE BONDS,” “SOURCES  OF  PAYMENT  FOR  THE  BONDS,”  and  “TAX  MATTERS,”  and  contained  in  APPENDIX  C  – “SUMMARY OF THE INDENTURE” thereto, excluding any material that may be treated as included under such captions by cross reference or reference to other documents or sources, insofar as such statements expressly summarize certain provisions of the Indenture or set out the content of our final legal opinion as bond counsel to the City concerning the validity of the Bonds and certain other matters, dated the date hereof and addressed to the City, are accurate in all material respects.

This  letter  is  furnished  by  us  as  bond  counsel  to  the  City.  No  attorney‐client  relationship  has existed or exists between our firm and you in connection with the Bonds or by virtue of this letter. We disclaim any obligation to update this letter. This letter is delivered to you as Underwriter of the Bonds, is solely for your benefit as such Underwriter in connection with the original delivery of the Bonds on the date hereof, and is not to be used, circulated, quoted or otherwise referred to or relied upon for any other

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purpose or by any other person. This letter is not intended to, and may not, be relied upon by owners of the Bonds or by any other party to whom it is not specifically addressed.

Very truly yours,

ORRICK, HERRINGTON & SUTCLIFFE
LLP

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EXHIBIT G

OPINION OF THE CITY ATTORNEY

[DATE]

BofA Securities, Inc.

San Francisco, California

Re:   $[PAR AMOUNT] City of Sacramento North Natomas Community Facilities District No. 4 Special Tax Bonds, Series 2023

Greetings:

We are legal counsel for the City of Sacramento (the “City”) in connection with the issuance and delivery
of  the  special  tax  bonds  captioned  above  (the  “Bonds”).  The  Bonds  are  being  issued  under  a  certain Master Indenture, dated as of February 1, 1999, as heretofore amended and supplemented, as further supplemented by a Seventh Supplemental Indenture (the “Seventh Supplemental Indenture”), dated as of  September  1,  2023  (collectively,  the  “Indenture”),  by  and  between  the  City  and  U.S.  Bank  Trust Company, National Association, as successor in interest to The Bank of New York Mellon Trust Company, N.A.,  as  trustee  (the  “Trustee”).  We  are  providing  this  opinion  to  you  in  connection  with  the  Bond Purchase Contract dated [SALE DATE], between the City and BofA Securities, Inc. (the “Contract”), which among other things provides for the purchase of the Bonds in the aggregate principal amount of $[PAR AMOUNT].  Unless  otherwise  defined  in  this  opinion,  or  unless  the  context  otherwise  requires,  the capitalized terms used below have the meanings given them in the Indenture or, if not defined in the Indenture, in the Contract.

We  have  examined  the  Indenture,  the  Contract,  the  Continuing  Disclosure  Certificate  and  the  Escrow Agreement (collectively, the “City Documents”) and the Bonds. Based on that examination and on our examination of such other information, papers, and documents as we considered necessary or advisable to examine before rendering an opinion (including the State of California’s Constitution and laws and the City’s governing instruments, ordinances, and public proceedings), we have concluded that the following statements are accurate as of the date of this opinion:

1. The  City  is  a  charter  city  duly  organized  and  validly  existing  under  its  charter  and  the  State  of California’s Constitution and laws, with full right and lawful authority (a) to adopt the Resolution; (b) to  sign  and  deliver  the  City  Documents,  the  Bonds,  and  all  related  documents;  (c)  to  perform  its obligations under the documents identified in clause (b) of this paragraph; and (d) to issue the Bonds.

2. The City of Sacramento North Natomas Community Facilities District No. 4 (the “CFD”) is a community facilities district duly organized and validly existing under California law, including the Mello‐Roos Community  Facilities  Act  of  1982  set  out  in  the  California  Government  Code  commencing  with Section 53311 (the “Mello‐Roos Act”).

3. The City has duly and validly authorized, executed, and delivered the City Documents and the Bonds.

Hence, the City Documents and the Bonds constitute legal, valid, and binding obligations of the City,

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enforceable against the City in accordance with their terms, except as enforcement may be limited by—
(a) bankruptcy,  insolvency,  reorganization,  moratorium,  or  similar  laws  relating  to  or  affecting creditors’ rights generally (including fraudulent‐conveyance laws); (b) general principles of equity, including concepts of materiality, reasonableness, and good faith and fair dealing;
(c) the possible unavailability of specific performance or injunctive relief, whether in a proceeding in equity or at law; or
(d) the  exercise  of  judicial  discretion  in  appropriate  cases  or  the  limitations  on  legal  remedies against public entities in California.

4. At a public meeting called and held according to law with all public notice required by law, and at which a quorum was present and acting throughout, the Sacramento City Council (the “City Council”) duly adopted the Resolution, which is in full force and effect and has not been amended or rescinded.

5. To  our  actual  knowledge,  the  City  Council’s  adoption  of  the  Resolution;  the  City’s  execution  and delivery of the City Documents, the Bonds, the Final Official Statement, and all related documents; the  consummation  of  the  transactions  described  in  the  Resolution,  the  City  Documents,  and  all related documents; and the City’s compliance with the Resolution, the City Documents, the Bonds, and all related documents do not in any material way—
(a) conflict with, or constitute on the part of the City a violation of, or a breach of or default under, any  material  indenture,  mortgage,  commitment,  note,  or  other  agreement  or  instrument  to which the City is a party or by which it is bound;
(b) violate the City’s charter, the Mello‐Roos Act, or the California Constitution; or (c) violate any law, rule, regulation, ordinance, judgment, order, or decree that applies to the City or to the members of the City Council or any of the City’s officers in their capacity as an officer.

6. Except as specifically disclosed in the Official Statement, to our actual knowledge the City has not been served with process in, and has not been overtly threatened with, any action, suit, proceeding, inquiry, or investigation, at law or in equity, before or by any court, public board, or public body— (a) that questions in any way the powers of the City Council in connection with the issuance of the Bonds;
(b) that questions in any way the validity of any proceeding taken by the City Council in connection with the issuance of the Bonds;
(c) in which an unfavorable decision, ruling, or finding is likely to have a material adverse effect on the City’s financial condition or on the transactions described in the Contract; (d) that is likely to adversely affect the validity or enforceability of the Resolution, the Bonds, or the City Documents; or
(e) that  questions  in  any  other  way  the  status  of  the  Bonds  under  California’s  tax  laws  or  tax regulations.

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● ● ●
We  express  no  opinion  about  the  following:  any  indemnification  or  contribution  provision  in  the  City Documents; the City’ financial  capacity  or lack of financial  capacity; and  the state or federal laws that pertain to the tax‐exempt status of the Bonds. The phrase “to our actual knowledge” does not imply that we have undertaken any independent investigation about the facts at issue, and in fact we have not done so.

Sincerely yours,

Susana Alcala Wood
City Attorney

By: ________________________________
Jeffrey L. Massey
Senior Deputy City Attorney

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EXHIBIT H
$[PAR AMOUNT]
NORTH NATOMAS COMMUNITY FACILITIES DISTRICT NO. 4
CITY OF SACRAMENTO, COUNTY OF SACRAMENTO, STATE OF CALIFORNIA SPECIAL TAX REFUNDING BONDS, SERIES G (2023)
FORM OF ISSUE PRICE CERTIFICATE

The undersigned, on behalf of BofA Securities, Inc. (“BofA Securities”), hereby certifies as set forth below with respect to the sale and issuance of the above‐captioned obligations (the “Bonds”).

1. Bond Purchase Contract. On [SALE DATE] (the “Sale Date”), BofA Securities and the Issuer executed a Bond Purchase Contract (the “Purchase Agreement”) in connection with the sale of the Bonds.

BofA Securities has not modified the Purchase Agreement since its execution on the Sale Date.

2. Sale of 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 was sold to the Public is the respective price listed in Schedule A.

3. 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 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 third‐party distribution agreement shall contain the agreement of each broker‐dealer who is a party to the third‐party distribution agreement, to comply with the hold‐the‐offering‐price rule. Pursuant to such agreement, no Underwriter (as defined below) has offered or sold 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.

4. 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,  or  (ii) the  date  on  which  BofA  Securities  has  sold  at  least  10%  of  such  Hold‐the‐Offering‐Price

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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 City on behalf of North Natomas Community Facilities District No. 4. (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  or  CUSIP identification numbers, 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. (g)  Related  Party  means  any  entity  that  shares  with  another  entity  (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 profit interests, if both entities are partnerships (including direct ownership by one partnership of another), or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other).
(g)  Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is [SALE DATE]. (h)  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  third‐party  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’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in its Certificate as to Arbitrage and with respect to compliance with  the  federal  income  tax  rules  affecting  the  Bonds,  and  by  Orrick,  Herrington  &  Sutcliffe  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 the Internal Revenue Service Form 8038‐G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds.

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BOFA SECURITIES, INC.

By:
[Title]

Dated: [DATE]

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SCHEDULE A
TO
ISSUE PRICE CERTIFICATE

Actual Sales Information as of Closing Date

Maturity
(September 1)  Principal Amount
Interest
Rate  Yield
Initial
Offering Price
10% Test
Used
Hold the
Offering
Price Used
$  %  %
TOTAL $

Total:      $

T  Term bond.

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3818090.7 046887 AGMT
SCHEDULE B
TO
ISSUE PRICE CERTIFICATE

PRICING WIRES

Stradling Yocca Carlson & Rauth
Draft dated August 15, 2023

4873-8514-9548v6/022536-0034
PRELIMINARY OFFICIAL STATEMENT DATED SEPTEMBER __, 2023 NEW ISSUE - BOOK-ENTRY ONLY RATING S&P: “___”
(See “Rating”)
In the opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the City (“Bond Counsel”), based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 and is exempt from State of California personal income taxes. In the further opinion of Bond Counsel, interest on the Bonds is not a specific preference item for purposes of the federal individual alternative mi nimum tax. Bond Counsel observes that, for tax years beginning after December 31, 2022, interest on the Bonds included in adjusted financial statement income of certain corporations is not excluded from the federal corporate alternative minimum tax. Bond Counsel expresses no opinion regarding any other tax consequences related to the ownership or disposition of, or the amount, accrual or receipt of interest on, the Bonds. See “TAX MATTERS” herein.

$26,510,000*
NORTH NATOMAS COMMUNITY FACILITIES DISTRICT NO. 4

CITY OF SACRAMENTO, COUNTY OF SACRAMENTO,

STATE OF CALIFORNIA
SPECIAL TAX REFUNDING BONDS, SERIES G (2023)

Dated: Date of Delivery Due: September 1, as shown on inside front cover This Official Statement describes bonds (the “Bonds”) being issued by the City of Sacramento (the “City”) with respect to the North Natomas Community Facilities District No. 4, City of Sacramento, County of Sacramento, State of California (the “Community Faci lities District”) and delivered primarily to refund and defease the outstanding North Natomas Community Facilities District No. 4 City of Sacramento, County of Sacramento, State of California, Special Tax Refunding Bonds, Series E (2013). The Community Facilities District has been formed by and is located within the boundaries of the City in Sacramento County (the “County”), California.

The Bonds are authorized to be issued pursuant to the Mello-Roo s Community Facilities Act of 1982, as amended. The Bonds are being issued pursuant to City Resolution No. ________ adopted on August 29, 2023 and a Seventh Supplemental Indenture dated as September 1, 2023, by and between the City and U.S. Bank Trust Company, National Association, as successor trustee (the “Trustee”), which supplements a Master Indenture, dated as of February 1, 1999, as supplemented by the First Supplemental Indenture dated as of February 1, 1999, the Second Supplemental Indenture dated as of April 1, 2001, the Third Supplemental Indenture da ted as of October 1, 2003, the Fourth Supp lemental Indenture dated as of November 1, 2006, the Fifth Supplemental Indenture dated as of July 1, 2013, and the Sixth Supplemental Indenture dated as of July 1, 2015 (collectively, the “Indenture”). The Bonds ar e special obligations of the City issued on behalf of the Comm unity Facilities District and are payable solely from revenues derived from certa in annual special taxes to be le vied on the Taxable Parcels (as defined herein) within the Community Facilities District (the “Special Tax”) and from certain other funds pledged under the Indenture. The Bonds are payable from the Special Tax on a parity with the North Natomas Community Facilities District No. 4, City of Sacramento, County of Sacramento, State of California, Special Tax Refunding Bonds, Series F (2015) which are currently outstanding in the aggregate principal amount of $15,045,000 (the “Series F Bonds”).

The Bonds are being issued in book-entry form and, when issued, wi ll be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). Purchasers of Bonds will not receive certificates representing their ben eficial ownership thereof but will receive credit balances on the books of their respective nominees. The Bonds will not be transferable or exchangeable except for transfer to another nominee of DTC or as otherwise de scribed herein. Individual purchas es may be made in integral m ultiples of $5,000.

Interest on the Bonds will be payable on March 1 and September 1 of each year commencing March 1, 2024. Principal of and interest on the Bonds will be paid by the Trustee to DTC for subsequent disbursement to DTC Participants who will remit such payments to the beneficial owners of the Bonds.

Neither the full faith and credit nor the taxing power of the City, the County, the State of California or any of its political subdivisions (other than the taxing power of the City conferred on it by the Community Facilities District) is pledged to the payment of the Bonds. No taxes other than the Special Tax are pledged to the payment of the Bonds.

The Bonds are subject to [optional redemption] and redemption resulting from the prepayment of the Special Tax, as described herein.

MATURITY SCHEDULE
(See Inside Cover Page)
This cover page contains certain informati on for general reference only. It is not a summary of this issue. Investors must re ad the entire Official Statement to obtain information essential to the making of an informed investment decision.

The Bonds are offered when, as and if issued and received by BofA Securities, Inc., the Underwriter, subject to the approval of validity by Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the City, and to certain other conditions. Certain legal matters will be passed upon for the City by the Office of the City Attorney and by Stradling Yocca Carlson & Rauth, a Professional Corporation, as Disclosure Counsel. Certain legal matters will be passed upon for the Underwriter by its coun sel, Hawkins Delafield & Wood LLP, Los Angeles, California, an d for the Trustee by its counsel. It is anticipated that the Bonds will be available for delivery to The Depository Trust Company or its agent on or about September __, 2023.

* Preliminary, subject to change.

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

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BofA Securities
Dated: September __, 2023

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MATURITY SCHEDULE
NORTH NATOMAS COMMUNITY FACILITIES DISTRICT NO. 4

CITY OF SACRAMENTO, COUNTY OF SACRAMENTO

STATE OF CALIFORNIA
SPECIAL TAX REFUNDING BONDS, SERIES G (2023)
BASE CUSIP: 786071
Maturity Date
(September 1)
Principal
Amount Interest Rate Yield Price CUSIP No. ®†
$ % % %

† CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by FactSet Research Systems Inc. Copyright(c) 2023 CUSIP Global Services. All rights reserved. CUSIP® data herein is provided by CUSIP Global Services. This data is not in tended to create a database and does not serve in any way as a substitute for the CGS database. CUSIP® numbers are provided for convenience of reference only. None of the City, the Underwriter or their agents or counsel assumes responsibility for the accuracy of such numbers.

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CITY OF SACRAMENTO

CITY COUNCIL
Darrell Steinberg, Mayor
Lisa Kaplan, District 1
Sean Loloee, District 2
Karina Talamantes, District 3
Katie Valenzuela, District 4
Caity Maple, District 5
Eric Guerra, District 6
Rick Jennings II, District 7
Mai Vang, District 8
_______________________

ADMINISTRATIVE OFFICES
Howard Chan, City Manager
Michael Jasso, Assistant City Manager
Mario Lara, Assistant City Manager
Leyne Milstein, Assistant City Manager
Ryan Moore, Assistant City Manager
John Colville, City Treasurer
Susana Alcala Wood, City Attorney
Jorge Oseguera, City Auditor
Mindy Cuppy, City Clerk
_______________________

PROFESSIONAL SERVICES

Bond Counsel
Orrick, Herrington & Sutcliffe LLP

Disclosure Counsel
Stradling Yocca Carlson & Rauth, A Professional Corporation

Muncipal Advisor
Montague DeRose and Associates, LLC
Westlake Village, California

Trustee
U.S. Bank Trust Company, National Association
Los Angeles, California

Special Tax Consultant
Goodwin Consulting Group, Inc.

Sacramento, California

Verification Agent
Robert Thomas CPA, LLC
Minneapolis, Minnesota

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Except where otherwise indicated, all information contained in this Official Statement has been provided by the City. No dealer, broker, salesperson or other person has been authorized by the City, the Trustee or the Underwriter to give any information or to make any representations in connection with the offer or sale of the Bonds other than those contained in this Official Statement and, if given or made, such other information or representations must not be relied upon as having been authorized by the City, the Trustee or the Underwriter. 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 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 Bonds. Statements contained in this Official Stat ement which involve estimates, forecasts or matte rs of opinion, whether or not expressly so described in this Official Statement, are intended solely as such and are not to be construed as representations of fact. This Official Statement, including any supplement or amendment to this Official Statement, is intended to be deposited with the Electronic Municipal Market Access System of the Municipal Securities Rulemaking Board ("EMMA”), which can be found at www.emma.msrb.org.

The information set forth in this Official Statement which has been obtained from third party sources is believed to be reliable, but such information is not guaranteed as to accuracy or completeness by th e City. The information and expressions of opinion in this Official Statement are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City or any other parties described in this Official Statement since the date of this Official Statement. All summaries of the Indenture or other documents are made subject to the provisions of such documents respectively and do not purport to be complete statements of any or all of such provis ions. Reference is made by this Official Statement to such documents on file with the City for further information. While the City maintains an internet website for various purposes, none of the information on that website is incorporated by re ference herein or intended to assist investors in making any investment decision or to provide any continuing information with respect to the Bonds or any other bonds or obligations of the City. Any such information that is inconsistent with th e information set forth in this Official Statement should be disregarded.

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 th e 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.

Certain statements included or incorporated by referenc e 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” or other similar words. Such forward-looking statements include, but are not limited to, certain statements contained in the information under the caption “THE COMMUNITY FACILITIES DISTRICT.”

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 FORW ARD-LOOKING STATEMENTS SET FORTH IN THIS OFFICIAL STATEMENT.

IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITER MAY

OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF SUCH BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.

SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE UPON AN EXEMPTION CONTAINED IN SUCH ACT. THE BONDS HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE.

TABLE OF CONTENTS

i
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INTRODUCTION .................................................. 1 General ................................................................ 1 The Community Facilities District ...................... 2 THE REFUNDING PLAN ..................................... 3 Estimated Sources and Uses of Funds ................. 4 THE BONDS .......................................................... 4 Authority for Issuance ......................................... 4 General Provisions .............................................. 5 Redemption ......................................................... 5 Book-Entry System ............................................. 6 DEBT SERVICE SCHEDULE ............................... 7 LIMITATION OF LIABILITY .............................. 7 SECURITY FOR THE BONDS ............................. 7
General ................................................................ 7 The Special Tax ................................................... 8 Bond Reserve Fund ............................................. 9 Covenant for Superior Court Foreclosure ......... 10
Teeter Plan ......................................................... 10 No Additional Bonds Except for Refunding
Purposes ......................................................... 11 THE COMMUNITY FACILITIES DISTRICT ... 11
General Information .......................................... 11 De Facto Building Moratorium from 2008 to
2015 ............................................................... 12 Flood Hazard ..................................................... 13 Tax Zones .......................................................... 14 Rate and Method of Apportionment .................. 15
Allocation of Annual Costs ............................... 18 Estimated Special Tax Proceeds and Debt
Service Coverage ........................................... 19 Assessed Value-to-Lien Ratios .......................... 22 Top Taxpayers ................................................... 25 Direct and Overlapping Indebtedness................ 27
Delinquency History .......................................... 29 SPECIAL RISK FACTORS ................................. 30 Risks of Real Estate Secured Investments
Generally ........................................................ 30 Insufficiency of Special Tax Revenues ............. 31
Limitation of Special Tax Levy to Allocated
Share of Annual Costs.................................... 32 Uncertainties in Land Development –
General ........................................................... 32 Disclosure to Future Purchasers ........................ 33 Teeter Plan Termination .................................... 33 Geologic, Topographic and Climatic
Conditions ...................................................... 33 Hazardous Substances ....................................... 34 Bankruptcy and Foreclosure .............................. 35 FDIC/Federal Government Interests in
Parcels ............................................................ 36 Direct and Overlapping Indebtedness ............... 37
Reductions in Property Values .......................... 37 Special Tax Delinquencies ................................ 38 Payment of Special Tax is not a Personal
Obligation of the Property Owners ................ 38
No Acceleration Provision ................................ 38 Proposition 218.................................................. 38 Ballot Initiatives ................................................ 39 Loss of Tax Exemption ..................................... 39 Limited Secondary Market ................................ 39 Limitations on Remedies ................................... 40 Potential Early Redemption of Bonds from
Prepayments or Bond Proceeds ...................... 40
Cybersecurity .................................................... 40 Litigation with Respect to Community
Facilities Districts .......................................... 40 TAX MATTERS .................................................. 41 LEGAL MATTERS .............................................. 43 ABSENCE OF LITIGATION .............................. 44 MUNICIPAL ADVISOR ..................................... 44 RATING ............................................................... 44

VERIFICATION OF MATHEMATICAL
ACCURACY ........................................................ 44 UNDERWRITING ............................................... 44 CONTINUING DISCLOSURE ............................ 45
FINANCIAL INTERESTS ................................... 45 PENDING LEGISLATION .................................. 46 ADDITIONAL INFORMATION ......................... 46

APPENDIX A SUMMARY OF INDENTURE ..... A-1

APPENDIX B PROPOSED FORM OF

OPINION OF BOND
COUNSEL .................................... B-1

APPENDIX C RATE AND METHOD OF

APPORTIONMENT OF
SPECIAL TAX.............................. C-1

APPENDIX D INFORMATION

CONCERNING THE

DEPOSITORY TRUST
COMPANY ................................... D-1

APPENDIX E FORM OF CONTINUING
DISCLOSURE CERTIFICATE .... E-1

APPENDIX F GENERAL INFORMATION

ABOUT THE CITY OF

SACRAMENTO AND THE
COUNTY OF SACRAMENTO ..... F-1

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$26,510,000*
NORTH NATOMAS COMMUNITY FACILITIES DISTRICT NO. 4

CITY OF SACRAMENTO, COUNTY OF SACRAMENTO,

STATE OF CALIFORNIA
SPECIAL TAX REFUNDING BONDS, SERIES G (2023)

INTRODUCTION
General
The purpose of this Official Statement, which includes the cover page and the appendices, is to provide certain information concerning the North Natomas Community Facilities District No. 4, City of Sacramento, County of Sacramento, State of California, Special Tax Refunding Bonds, Series G (2023) (the “Bonds”).

The Bonds are being issued pursuant to Resolution No. 2023-____ (the “Resolution”) adopted by the City Council (the “City Council”) of the City of Sacramento (the “City”) on August 29, 2023, and a Seventh Supplemental Indenture dated as of September 1, 2023, by and between the City and U.S. Bank Trust Company, National Association, as successor trustee (the “Trustee”), which supplements a Master Indenture, dated as of February 1, 1999 (the “Master Indenture”), as suppleme nted by the First Supplemental Indenture dated as of February 1, 1999, the Second Supplemental Indenture dated as of April 1, 2001, the Third Supplemental Indenture dated as of October 1, 2003, the Fourth Supplemental Indenture dated as of November 1, 2006, the Fifth Supplemental Indenture dated as of July 1, 2013 and the Sixth Supplemental Indenture dated as of July 1, 2015 (collectively, the “Indenture”). The Bonds are payable from the Special Tax levied in the North Natomas Community Facilities District No. 4 City of Sacram ento, County of Sacramento, State of California (the “Community Facilities District”) and from certain other funds pledged under the Indenture.

The Bonds are payable from the Special Tax on a parity with the North Natomas Community Facilities District No. 4, City of Sacramento , County of Sacramento, State of California, Special Tax Refunding Bonds, Series F (2015) which are currently outstanding in the aggregate principal amount of $15,045,000 (the “Series F Bonds”). Additional bonds secured on parity with the Bonds and the Series F Bonds may only be issued to refund other bonds outstanding under the Indenture, including Bonds or Series F Bonds. See “SECURITY FOR THE BONDS — No Additional Bonds Except for Refunding Purposes.” The proceeds of the Bonds, together with certain available funds of the City relating to the Refunded Bonds (defined below), will be used to refund and defease all of the outstanding North Natomas Community Facilities District No. 4 City of Sacramento, County of Sacramento, State of California, Special Tax Refunding Bonds, Series E (2013), originally issued in the aggregate principal amount of $46,075,000 and now outstanding in the principal amount of $28,845,000 (the “Refunded Bonds”). A portion of the proceeds of the Bonds will also be used to fund a deposit to the Bond Reserve Fund and to pay costs of issuance of the Bonds. See “THE REFUNDING PLAN” and “ESTIMATED SOURCES AND USES OF FUNDS.” The Mello-Roos Community Facilities Act of 1982, as amended, Section 53311, et seq ., of the California Government Code (the “Act”), was enacted by the California Legislature to provide an alternative method of funding certain essential public capital facilities and services, especially in developing areas of the State of California (the “State”). Subject to approval by a two-thirds vote of the qualified electors voting and compliance with the provisions of the Act, the legislative body of a local agency may issue bonds for a community facilities district and may levy and collect a sp ecial tax within such community facilities district to repay such indebtedness.

* Preliminary, subject to change.

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The Community Facilities District
On September 8, 1998, the City Council adopted a resolution stating its intention to establish the Community Facilities District and a resolution stating its intention to authorize bonded indebtedness for the Community Facilities District. On October 20, 1998, the City established the Community Facilities District and authorized bonded indebtedness in an aggregate amount not to exceed $85,000,000 to be issued pursuant to the provisions of the Act. The City administers the Community Facilities District.

At the November 5, 1998 election within the Community Facilities District, the qualified electors within the Community Facilities District (a) authorized the City to incur bonded indebtedness of up to $85,000,000 to finance certain public facilities and various related costs, (b) approved a rate and method of apportionment of special tax for the Community Facilities District (the “Rate and Method of Apportionment”), and (c) approved the levy of a special tax on the Taxable Parcels within th e Community Facilities District (the “Special Tax”) to pay the principal of, and interest on, the Bonds and annual administrative expenses, and to make any replenishments to the reserve fund for the Bonds (the “Bond Reserve Fund”).

The area within the Community Facilities District is divided into four tax zones (Tax Zone IA, IB, II and IV) (each a “Tax Zone”). Pursuant to the Rate and Method of Apportionment, the applied Special Tax levy and the maximum amount of the Special Tax levy for each Tax Zone is determined by allocation of Annual Costs (as defined below) to each Tax Zone.

The allocation of Annual Costs is generally determined by the proportion of facilities funded by bond proceeds and special taxes for a Tax Zone to the total amount of facilities funded by bond proceeds and special taxes within the Community Facilities District. The allocation of facilities funded by bond proceeds for each Tax Zone was set at the time each series of bonds issued to finance facilities were issued for the Community Facilities District. As a result, notwithstanding the Maximum Annual Special Tax rate (as set forth in the Rate and Method of Apportionment), the Special Tax may only be levied on property in each Tax Zone up to an amount necessary to pay its allocation of Annual Costs. Notwithstanding such allocation, debt service on the Bonds and the Series F Bonds are payable on a parity from amounts deposited in the Special Tax Fund. See “THE COMMUNITY FACILITIES DIST RICT—Rate and Method of Apportionment” and “—Allocation of Annual Costs.”
“Annual Costs” is defined in the Rate and Method of Apportionment as (i) Debt Service for the Calendar Year commencing January 1 of each Fiscal Year thro ugh December 31 of the following Fiscal Year, (ii) Administrative Expenses for such Fiscal Year, (iii) any amounts needed to replenish any bond reserve fund for the bonds of the City issued for the Community Facilities District to the level required under the documents pursuant to which such bonds were issued, (iv) an amount equal to the amount of delinquencies in payments of the Special Tax levied in the previous Fiscal Year and an amount for anticipated delinquencies for the current Fiscal Year, (v) pay-as-you-go expenditures for authorized facilities to be constructed or acquired by the Community Facilities District, less any credit from earnings on the bond reserve fund, less any reimbursements, less any grants/other project funding and/or less the application of any funds from Special Tax prepayments.

The Bonds are secured by the Special Tax and amounts on deposit in certain funds established under the Indenture, including the Special Tax Fund and Bond Reserve Fund, subject to the provisions of the Indenture.

The Special Tax levy is included in the secured property tax bills sent to the record owners of property within the Community Facilities District. See “SECURITY FOR THE BONDS — The Special Tax.” The City has covenanted for the benefit of the owners of the Bonds that, under certain circumstances, it will annually on or before October 1 of each year review the public records of the County of Sacramento (the “County”) to determine the Special Tax collected in the prior Fiscal Year and, if certain conditions are met, commence judicial foreclosure proceedings with respect to delinquent Special Tax amounts by the succeeding December 1 and will diligently pursue such proceedings. See “SECUR ITY FOR THE BONDS — Covenant for Superior Court Foreclosure.”

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Neither the full faith and credit nor the taxing power of the City, the County, the State or any of its political subdivisions (other than the taxing power of the City conferred upon it by the Community Facilities District) is pledged to the payment of the Bonds. Except for the Special Tax, no other taxes are pledged to the payment of the Bonds. The Bonds are not general or special obligations of the City but are limited obligations of the City payable solely from the Special Tax and certain amounts held under the Indenture as more fully described in the Official Statement.

See the section of this Official Statement entitled “SPECIAL RISK FACTORS” for a discussion of special factors that should be consid ered, in addition to the other matters set forth herein, in considering the investment quality of the Bonds.

The Community Facilities District was formed by th e City to finance various public improvements needed to develop property located within the Community Facilities District. The property in the Community Facilities District is located in the northern portion of the City, adjacent to the County border. The Community Facilities District is bounded by Interstate 5 and Highway 99 on the west, Del Paso Road on the south, the City limits on the east, and Elkhorn Boulevard on the north. The Community Facilities District contains approximately 2,700 gross acres and approximately 1,860 net developable acres. Development in the Community Facilities District is substantially complete. Based on development status as of May 1, 2022, the Community Facilities District includes 8,968 Taxable Parcels, 8,962 of which are classified as Developed Parcels under the Rate and Method of Apportionment with residential (single family detached units, multi-family units and other residential uses) and non-residential uses. Of the 8,962 parcels that were classified as Developed Parcels for the Fiscal Year 2022-23 Special Tax levy, 89 did not have improvement value as of January 1, 2022.

See “THE COMMUNITY FACILITIES DISTRICT.”
The Community Facilities District is located in and about the City’s North Natomas Community Plan and North Natomas Financing Plan Areas, within the greater Natomas Basin. At build out, the North Natomas Area is projected to have approximately 65,000 residents and approximately 32,000 residential units. See Appendix F — “General Information About the City of Sacramento and the County of Sacramento” for certain demographic information regarding the City and the County.

The City has not engaged an independent appraiser to provide an opinion concerning the updated values of the parcels that comprise the taxable parcels within the Community Facilities District. The aggregate assessed value of the Taxable Parcels within the Community Facili ties District as shown on the Fiscal Year 2022-23 County Assessor’s roll is $3,920,392,028 (based on the January 1, 2022 lien date). See “THE COMMUNITY FACILITIES DISTRICT — Assessed Value-to-Lien Ratios.”
This Official Statement sets forth brief descriptions of the Bonds, the Indenture, the City’s Continuing Disclosure Certificate, and certain other matters. Those descriptions do not purport to be comprehensive or definitive. All references herein to any of the above documents are qualified in their entirety by reference to their forms, which are available for inspection at the o ffice of the City Clerk in Sacramento, California.

Capitalized terms not defined in this Official Statement have the meanings ascribed to them in Appendix A or, if not defined in Appendix A, the meanings ascribed to them in the Indenture. Th is Official Statement speaks only as of its date, and the information contained herein is subject to change.

THE REFUNDING PLAN
A portion of the proceeds from the sale of the Bonds will be used along with other funds held by the City relating to the Refunded Bonds to defease and redeem the Refunded Bonds. The City will enter into an Escrow Agreement relating to the Refunded Bonds (the “Escrow Agreement”), dated as of September 1, 2023, with U.S. Bank Trust Company, National Association, as escrow agent (the “Escrow Agent”). An irrevocable escrow fund will be established under the Escrow Agreement (the “Escrow Fund”). A portion of the amounts deposited with the Escrow Agent in the Escrow Fund will be invested in Federal Securities (as defined in the Indenture), the interest on and principal of which, together with the other amounts held in the Escrow Fund, will

4 4873-8514-9548v6/022536-0034
be sufficient to redeem the Refunded Bonds on or a bout December __, 2023 (the “Redemption Date”), at a redemption price equal to 100% of the principal amount of the Refunded Bonds, together with accrued interest thereon to the date of redemption, without premium (the “Redemption Price”).

Upon deposit of the amounts and securities into the Escrow Fund as described above, the Refunded Bonds will be deemed to have been paid under the Indenture, and the owners of the Refunded Bonds will have no rights under the Indenture except to be paid the Redemption Price of the Refunded Bonds from the amounts and securities held in the Escrow Fund.

Robert Thomas CPA, LLC, upon delivery of the Bonds, will deliver a verification report relating to the sufficiency of moneys and securities deposited into the Escrow Fund to pay the Redemption Price of the Refunded Bonds on the Redemption Date.

Amounts and securities deposited in the Escrow Fund will not be available to pay debt service on the Bonds
Estimated Sources and Uses of Funds
The Bond proceeds and funds related to the Refunded Bonds are expected to be applied approximately as follows:

Sources:

Princi pal amount of the Bonds $
Plus Net Original Issue [Premium/Discount]
Prior Funds (1)
Total $

Uses:

Escrow Fun d $
Bond Reserve Fun d(2)
Costs of Issuance Fun d
Underwriter’s Discoun t
Total $

(1) Funds transferred from [the Redemption Fund of the Special Tax Fund] and the Bond Reserve Fund relating to the Refunded Bonds.
(2) Such amount, together with $_________ on deposit in the Bond Rese rve Fund has been calculated to equal the Required Bond Reserve as of the date of issuance of the Bonds. See “SECURITY FOR THE BONDS — Bond Reserve Fund.”

THE BONDS
Authority for Issuance
The Community Facilities District was established on October 20, 1998, and bonded indebtedness in an aggregate amount not to exceed $85,000,000 was authorized to be issued under the Act. A proposition relating to the incurrence of the indebtedness in this amount was submitted to and approved by the qualified electors of the Community Facilities District on November 5, 1998. The Rate and Method of Apportionment and the amount of the Special Tax that can be collected from the land within the Community Facilities District are more fully described in the sections herein entitled “SECURITY FOR THE BONDS — The Special Tax” and “THE COMMUNITY FACILITIES DISTRICT.” See also Appendix C — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.”
The Bonds are being issued pursuant to the Act, the Resolution and the Indenture.

5 4873-8514-9548v6/022536-0034
General Provisions
The Bonds will be dated as of the date of their initial delivery and bear interest at the rates and mature (subject to prior redemption as described below) on the dates set forth on the inside front cover page of this Official Statement. Interest on the Bonds will be calculated on the basis of a 360-day year consisting of twelve 30-day months and will be payable on March 1 and September 1 of each year commencing March 1, 2024 (each such date, an “Interest Payment Date”). The Bonds will be issued in fully registered form and will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”).

DTC will act as securities depository of the Bonds. Ownership interests in the Bonds may be purchased in book- entry form only in integral multiples of $5,000. See the subsection entitled “Book-Entry System.” The principal of, and interest on, the Bonds will be payable in lawful money of the United States of America.

Additional bonds secured on parity with the Bonds can be issued under the Indenture only to refund other bonds outstanding under the Indenture, including the Bonds or the Series F Bonds. See “SECURITY FOR THE BONDS — No Additional Bonds Except for Refunding Purposes.” Redemption
[Optional Redemption.
* The Bonds maturing on or after September 1, 20__, are subject to optional redemption by the City before their respective stated maturity dates, as a whole or in part on any date on or after September 1, 20__, from any source of available funds, upon mailed notice as provided in the Indenture, at a redemption price equal to the principal amount of the Bonds to be redeemed, together with accrued interest to the date of redemption, without premium.]
Extraordinary Redemption from Prepayments .
* The Bonds are subject to extraordinary redemption
by the City before their respective stated maturity dates, as a whole or in part on any interest payment date, solely from prepayments of the Special Tax, upon mailed notice as provided in the Indenture, at the following redemption prices (expressed as a percentage of the principal amount of the Bonds or portions thereof called for redemption ), together with accrued interest to the date of redemption:

Redemption Dates Redemption Prices
Any interest payment date from March 1, 2024 through March 1, 2031 103% September 1, 2031 and March 1, 2032 102
September 1, 2032 and March 1, 2033 101
September 1, 2033 and any interest payment date thereafte r 100

Selection of Bonds for Redemption. If less than all of the Bonds outstanding are to be redeemed at any one time, the City will select the maturity dates from which the Bonds are to be redeemed. If less than all of the outstanding Bonds of any one maturity date are to be redeemed at any one time, the Trustee shall select such outstanding Bonds or the portions thereof of such maturity date to be redeemed in integral multiples of $5,000 in any manner that the Trustee deems appropriate.

Notice of Redemption . When Bonds are to be redeemed under the Indenture the Trustee shall give notice of the redemption of such Bonds. The notice of redemption must state the date of the notice, the Bonds to be redeemed, the date of issue of the Bonds, the redemption date, the redemption price, the place of redemption (being the address of the principal corporate trust o ffice of the Trustee), the CUSIP number (if any) of the maturity or maturities and, if less than all of any such maturity, the numbers of the Bonds of such maturity to be redeemed and, in the case of Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be redeemed. The notice must further state that additional interest on the Bonds to be redeemed or the

* Preliminary, subject to change.

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portions thereof will not accrue from and after the date of redemption and that all Bonds must be surrendered for redemption at the principal corporate trust office of the Trustee so designated. If any Bond chosen for redemption is not redeemable in whole, the notice must stat e that the Bond is to be redeemed in part only and that upon presentation of the Bond for redemption there will be issued in lieu of the unredeemed portion of principal a new Bond or Bonds of the same series and maturity date of authorized denominations equal in aggregate principal amount to the unredeemed portion.

At least 30 days but no more than 90 days before the redemption date, the Trustee shall mail a copy of such notice by first-class mail, postage prepaid, to (a) the Holders at their addresses appearing on the register maintained by the Trustee in accordance with the Indenture, (b) to securities depositories and securities information services selected by the City in accordance with the Indenture, and (c) to the Underwriter. Neither the failure to receive any such notice nor any immaterial defect in such notice will affect the sufficiency or validity of the proceedings for redemption.

Notwithstanding anything to the contrary contained in the Indenture, with respect to any notice of optional or extraordinary redemption of Bonds, unless, upon the giving of such notice, such Bonds are deemed to have been paid within the meaning of the Indenture, such notice will state that such redemption is conditional upon the receipt by the Trustee on or prior to the date fixed for such redemption of amounts sufficient to pay the principal of, and premium, if any, and interest on, such Bonds to be redeemed, and that if such amounts are not received the notice will be of no force and effect and the City will not be required to redeem such Bonds. In the event that any such notice of redemp tion contains such a co ndition and such amounts ar e not so received, the redemption will not be made and the Trustee will within a reasonable time thereafter give notice to the Holders of the Bonds to the effect that such amounts were not so received and such redemption was not made, such notice to be given by the Trustee in the manner in which the notice of redemption was given. Such failure to redeem such Bonds shall not constitute an event of default under the Indenture.

Notwithstanding anything to the contrary contained in the Indenture, any notice of optional or extraordinary redemption of Bonds may be rescinded by written notice given to the Trustee by the City no later than five Business Days prior to the date specified for redemption. The Trustee will give notice of such rescission as soon thereafter as practicable in the same manner, and to the same parties, as notice of such redemption was given.

Effect of Redemption . If notice of redemption is given as provided in the Indenture and the money necessary for the payment of the principal of, and any redemption premiums and interest to the redemption date on, the Bonds or portions thereof so called for redemption is held by the Trustee, then on the redemption date the Bonds called for redemption or portions thereof will become due and payable, and from and after the redemption date interest on those Bonds or such portions thereof will cease to accrue and the Holders of such Bonds shall have no rights in respect thereof except to receive payment of the principal or such portions thereof and the redemption premiums, if any, thereon and the interest accrued thereon to the redemption date.

Book-Entry System
DTC will act as securities depository for the Bonds, and the Bonds will be registered in the name of Cede & Co. (DTC’s nominee). One fully-registered bond certificate will be issued for each maturity of the Bonds, in each case in the aggregate principal amount of such maturity of such Bonds, and will be deposited with DTC. So long as Cede & Co. is the registered own er of the Bonds, references herein to the Holders of the Bonds are references to Cede & Co. and do not refer to the actual purchasers (the “Beneficial Owners”) of the Bonds. The City does not give any a ssurances that DTC, its Part icipants or others will distribute payments with respect to the Bonds or noti ces concerning the Bonds to the Beneficial Owners thereof or that DTC will service and act in the manner described in this Official Statement.

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See Appendix D for a further description of DTC and its book-entry system based solely on information provided by DTC. The City makes no representation co ncerning the accuracy of information provided in Appendix D.

DEBT SERVICE SCHEDULE
The table below sets forth the estimated annual debt service payments for the Bonds and the Series F Bonds, assuming no redemptions of Bonds or Series F Bonds before maturity.

Period
Ending
Bonds
Principal
Bonds
Interest
Series F Bonds
Debt Service
Total Semi-
Annual Debt
Service
Total Annual
Debt Service
3/1/2024 $ 364,425.00
9/1/2024 1,444,425.00
3/1/2025 337,425.00
9/1/2025 1,507,425.00
3/1/2026 319,875.00
9/1/2026 1,554,875.00
3/1/2027 289,000.00
9/1/2027 1,629,000.00
3/1/2028 255,500.00
9/1/2028 1,700,500.00
3/1/2029 219,375.00
9/1/2029 1,774,375.00
3/1/2030 180,500.00
9/1/2030 1,850,500.00
3/1/2031 138,750.00
9/1/2031 1,938,750.00
3/1/2032 93,750.00
9/1/2032 2,023,750.00
3/1/2033 45,500.00
9/1/2033 1,865,500.00

Total $19,533,200.00

LIMITATION OF LIABILITY
The Bonds are secured only by the Special Tax and amounts on deposit in the Special Tax Fund and the Bond Reserve Fund established by the Indenture. In the event of delinquencies in the payment of the Special Tax, neither the City nor the Community Facilities District is required to advance any funds for the payment of debt service on the Bonds. The City will only be required to enforce delinquent amounts of the Special Tax in the manner provided in the Act and in its covenant to take judicial foreclosure proceedings as set forth in the Indenture. See “SECURITY FOR THE BONDS — Covenant for Superior Court Foreclosure.” The full faith and credit of the City and the Community Facilities District are not pledged to the payment of the Bonds, nor is the payment of the Bonds secured by any encumbrance, mortgage or other pledge of property of the City or the Community Facilities District, except the pledge described above.

SECURITY FOR THE BONDS
General
The Bonds are payable from and secured on a parity with the Series F Bonds by the proceeds of the Special Tax levied on Taxable Parcels within the Comm unity Facilities District and by amounts on deposit in

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the Special Tax Fund and the Bond Reserve Fund. Th e Bonds are not secured by moneys on deposit in the Expense Fund, the Rebate Fund or the Community Facilities Fund established by the Indenture.

The Indenture defines the term “Special Tax” to mean the special tax authorized to be levied and collected annually on all Taxable Land in the Community Facilities District under and pursuant to the Act at the special election held in the Community Facilities District on November 5, 1998. See Appendix A — “SUMMARY OF INDENTURE — Definitions.”
The City is legally authorized and has covenanted in the Indenture to cause the levy and collection of the Special Tax in an amount determined according to the Rate and Method of Apportionment. See “SECURITY FOR THE BONDS — The Special Tax” and “SPECIAL RISK FACTORS — Proposition 218” below. The Rate and Method of Apportionment apportions the total amount of the Special Tax to be collected among the Taxable Parcels in the Community Facilities Dist rict. See “THE COMMUNITY FACILITIES DISTRICT— Rate and Method of Apportionment” and Appendix C — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.”
Although the Special Tax will be levied against Taxable Parcels within the Community Facilities District, it does not constitute a personal indebtedness of the property owners. There is no assurance that the property owners will be able to pay the annual Special Tax or that they will pay it even if able to do so. See “SPECIAL RISK FACTORS.”
The Special Tax
The Special Tax applicable to each Taxable Parcel within the Community Facilities District each Fiscal Year is required to be calculated pursuant to the Rate and Method of Apportionment. See “THE COMMUNITY FACILITIES DISTRICT — Rate and Method of Apportionment” and Appendix C — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.”
The Special Tax is collected by the County at th e same time and in the same manner as general ad valorem property taxes. The Indenture requires that the City hold the Special Tax collected in trust for the benefit of the Holders of the Bonds and the Series F Bonds.

Under the Indenture, all proceeds of the annual Special Tax are to be deposited in the Special Tax Fund, which has been established under the Indenture and is he ld and maintained in trust by the City Treasurer. The City agrees in the Indenture to deposit all proceeds of the Special Tax (including any prepayments) in the Special Tax Fund when and as received and to transfer all amounts in the Special Tax Fund into the following funds in the following order of priority:
(1) to the Bond Redemption Fund to pay debt service payments on all outstanding bonds, (2) to the Bond Reserve Fund to the extent necessary to replenish the Bond Reserve Fund to the Required Bond Reserve,
(3) to the Expense Fund to pay administrative costs of the Community Facilities District, and
(4) to the Community Facilities Fund.

On or before the first day in each March and Sept ember, the Treasurer sha ll, from the money in the Special Tax Fund, transfer to the Trustee for deposit in the Bond Redemption Fund an amount of money equal to the aggregate amount of interest becoming due and payable on all bonds outstanding on such March 1 or September 1, as the case may be, and on or before the first day in September 1 of each year, the Treasurer shall, from the then remaining money in the Special Tax Fund, transfer to the Trustee for deposit in the Bond

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Redemption Fund an amount of money equal to the aggregate amount of principal becoming due and payable on all outstanding serial bonds on such September 1 plus the Sinking Fund Account Payments required to be made on such September 1 into the Sinking Fund Account; provided, that all of the aforesaid payments shall be made without priority of any payment over any other payment, and in the event that the money in the Bond Redemption Fund on any March 1 or September 1 is not equal to the amount of interest becoming due on all outstanding bonds on such date, or in the event that the money in the Bond Redemption Fund on any September 1 is not equal to the amount of principal of the bonds becoming due on such date plus the amount of the Sinking Fund Account Payments becoming due on such date, as the case may be, then such money shall be applied pro rata in such proportion as such interest and principal and Sinking Fund Account Payments bear to each other; provided further that no deposit need be made into the Bond Redemption Fund if the amount of money in the Bond Redemption Fund is at least equal to the amount required by the terms of the Indenture to be deposited in the Bond Redemption Fund at the time and in the amounts provided in the Indenture.

As a result of the limitation on the Special Tax levy in each Tax Zone to the amount of the Annual Costs allocated to such Tax Zone, bonds issued for the Communi ty Facilities District have been structured so that, assuming no delinquencies, the Special Tax levied on Developed Parcels, based on development status at the time such bonds were issued, would generate not less than 100% of debt service, based on the allocation of Annual Costs.

In the event of delinquencies, the Special Tax may be increased in each Tax Zone, only up to the amount for each Tax Zone necessary to pay its share of Annual Costs allocated in accordance with the Rate and Method of Apportionment. For the Fiscal Year 2022-23 Special Tax levy (development status as of May 1, 2022), 8,962 parcels of the 8,968 Taxable Parcels within the Community Facilities District were classified as Developed Parcels. Notwithstanding the above, under no circumstan ces will the Special Tax levied against any parcel of residential property within the Community Facilities District be increased as a consequence of delinquency or default by the owner of any other assessor’s parcel within the Community Facilities District by more than 10% above the amount that would have been levied in such Fiscal Year had there never been any such delinquencies or defaults. See “THE COMMUNITY FACILITIES DISTRICT — Rate an d Method of Apportionment.” Bond Reserve Fund
To further secure the payment of principal of and interest on the Bonds, the City will deposit an amount into the Bond Reserve Fund sufficient to make the balance on deposit therein equal the Required Bond Reserve.

The Required Bond Reserve is defined in the Indenture as the amount, as of any date of calculation, that is equal to the sum of the least of (a) 10% of the original principal amount of the bonds issued and Outstanding under the Indenture, (b) the maximum Debt Service on the bonds issued and Outstanding under the Indenture payable in the current and in all future Bond Years, or (c) 125% of the average Debt Service on the bonds issued and Outstanding under the Indenture payable in the current and in all future Bond Years, all as determined by the City under the Code and specified in writing to the Trustee. Immediately following the issuance of the Bonds, the Required Bond Reserve will be $___________. The City will deposit from a portion of the proceeds of the Bonds, the amount of $____________ in the Bond Reserve Fund, which together with the amount on deposit in the Bond Reserve Fund after the refunding of the Refunded Bonds as described herein, will equal the Required Bond Reserve.

At any time, the City may satisfy the Required Bond Reserve (or any portion thereof) by the provision of one or more policies of municipal bond insurance or surety bonds issued by a municipal bond insurer or by a letter of credit issued by a bank, the obligations insured by which insurer or issued by which bank, as the case may be, have ratings at the time of issuance of such policy or surety bond or letter of credit equal to “AA” or higher assigned by Fitch or “Aa” or higher assigned by Moody’s or “AA” or higher assigned by Standard & Poor’s, in each case without regard to any numerical modifier or plus or minus sign.

As a condition to the issuance of bonds payable on parity with the Bonds and the Series F Bonds (which may be issued for refunding purposes only; See “— No Additional Bonds Except for Refunding Purposes”),

10 4873-8514-9548v6/022536-0034
proceeds from the sale of such bonds, or one or more polices of municipal bond insurance or surety bonds or letters of credit satisfying the requirements described above, in an amount sufficient to cause the balance in the Bond Reserve Fund to equal the Required Bond Reserve are to be deposited in the Bond Reserve Fund.

Moneys in the Bond Reserve Fund must be used solely for the purpose of paying the interest on, and principal of, bonds issued and Outstanding under the I ndenture if there is insufficient money in the Bond Redemption Fund available for this purpose; provided, that if as a result of any valuations it is determined that the amount of money in the Bond Reserve Fund exceeds the Required Bond Reserve, the Trustee will withdraw the amount of money representing su ch excess from the Bond Reserve Fund and shall deposit such amount of money in the Bond Redemption Fund as provided in the Indenture. For a further discussion of the Bond Reserve Fund, see Appendix A — “SUMMARY OF INDENTURE — Allocation of Money in the Special Tax Fund.” Covenant for Superior Court Foreclosure
Pursuant to Section 53356.1 of the Act, the City has covenanted under the Indenture that it will review the County’s records in connection with the collection of the Special Tax not later than October 1 of each year to determine the amount of Special Tax collected in the pr ior Fiscal Year. On the basis of that review, (a) the City will, not later than the succeeding December 1, ins titute foreclosure proceedings as authorized by the Act against all parcels that are delinquent in the payment of such Special Tax in such Fiscal Year by $1,000 or more to enforce the lien of all such delinquent installments of such Special Tax, and will diligently pursue the foreclosure proceedings to judgment and sale; and (b) if the City determines that the total amount so collected is less than 95% of the total amount of the Special Tax levied in such Fiscal Year, the City will, not later than the succeeding December 1, instit ute foreclosure proceedings as authorized by the Act ag ainst all parcels that are delinquent in the payment of such Special Tax in such Fiscal Year to enforce the lien of all the delinquent installments of such Special Tax and will diligently prosecute and pursue the fo reclosure proceedings to judgment and sale.

The City is not obligated to enforce the lien of any delinquent installment of the Special Tax for any Fiscal Year in which the City has received 100% of the amount of the installment from the County under the Teeter Plan (as defined below). See “— Teeter Plan” below.

Under the Act, the City may waive delinquency penalties and redemption penalties if it determines that (a) the waivers will apply only to parcels delinquent at the time of the determination, (b) the waivers will only be available with respect to parcels for which all past due and currently due amounts of the Special Tax and all other related costs are paid in full within a limited period of time specified in the determination, (c) the waivers will be available only with respect to parcels sold or otherwise transferred to new owners unrelated to the owner responsible for the delinquency, and (d) the waivers are in the best interest of the Bond Holders.

If foreclosure or foreclosures are necessary, there may be a delay in payments to Bond Holders pending prosecution of the foreclosure proceedings and receipt by th e City of the proceeds of the foreclosure sale; it is also possible that no bid for the purchase price for the ap plicable property would be received at the foreclosure sale. See “SPECIAL RISK FACTORS — Foreclosure Delays — Bankruptcy.” Notwithstanding any other provision of the Indenture, the City is not obligated to advance any funds from any source other than the Special Tax to cure any deficiency in the Special Tax Fund.

Teeter Plan
In July 1993, the Board of Supervisors of the County approved the implementation of the Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds (the “Teeter Plan”), as provided for in Section 4701 et seq. of the California Revenue and Taxation Code. Under the Teeter Plan, the County apportions secured property taxes on an accrual basis (irrespective of actual collections) to local political subdivisions for which the County acts as the tax-levying or tax-collecting agency.

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Under the Teeter Plan, the County distributes tax collections on a cash basis to taxing entities during the fiscal year and shortly after year-end, and also distributes 100% of any taxes delinquent as of June 30th to the taxing entities and those special assessment districts and community facilities districts (and individual parcels within each district) that the County determines are eligib le to participate in the Teeter Plan by the end of the calendar year. The County may make eligibility determin ations on an annual basis and may exclude a district or an individual parcel that had previously been included in the plan. The County has the discretion to determine which delinquent special taxes will be paid through the Teeter Plan on a case-by-case basis.

The County’s policy includes the following criteria for delinquent parcels to be excluded from the County’s Teeter Plan: (1) tax bills belonging to a governmental/public agency; (2) common area parcels; (3) tax bills on the unitary assessed values or pipeline assesse d values; (4) special assessments (subject to judiciary foreclosure) to be stripped from the tax bill; (5) bankruptcy; (6) demolition of the property; (7) vacant buildings (due to a risk of possible demolition); (8) contamination of the property; (9) property that is subjected to the “sealed bid”; (10) the delinquent amount is greater than or equal to assessed value of the property; (11) property that is de-enrolled from the Teeter Plan in previous years under the same owner and (12) the amount of code enforcement liens, other delinquent abatement liens, an d delinquent utilities abatement liens, and delinquent utilities levied on the property is equal to or greater than 5% of the assessed value of the property. Such policy may be amended by the County at any time and could impact the inclusion of certain delinquent parcels in the Teeter Plan in future years.

The County’s policy is that any new taxing entity or special assessment district that includes its levy on the County tax roll is qualified to be under the County’s Teeter Plan. The Community Facilities District is included in the County’s Teeter Plan. See, however, “SPECIAL RISK FACTORS — Teeter Plan Termination.” No Additional Bonds Except for Refunding Purposes
The City has covenanted in the Indenture that it will not issue any additional bonds to finance additional facilities under the Indenture. However, refunding bonds secured by the Special Tax on a parity with the Bonds may be issued to repay and redeem any bonds issued and outstanding under the Indenture in advance of their stated maturities if the annual debt service payable with respect to such refunding bonds will be less than the annual debt service payable with respect to the bonds that are being so redeemed or if none of the bonds previously issued under the Indenture will be Outstanding after the issuance of the refunding bonds.

THE COMMUNITY FACILITIES DISTRICT
General Information
The City Council approved the formation of the Community Facilities District under the Act to provide for the financing of public improvements to meet the needs of new development within the Community Facilities District. The qualified electors within the Community Facilities District authorized the City to incur bonded indebtedness, approved the Rate and Method of Apportionment, and authorized the levy of the Special Tax.

The Community Facilities District is located within the City’s North Natomas Community Plan and North Natomas Financing Plan Areas, part of the greater Natomas Basin in the northwest portion of the City. At build out, the North Natomas area is projected to have approximately 65,000 residents and approximately 32,000 residential units. See Appendix F — “GENER AL INFORMATION ABOUT THE CITY OF SACRAMENTO AND THE COUNTY OF SACRAMENTO” for certain demographic information regarding the City and the County.

The Community Facilities District is bounded by Interstate 5 and Highway 99 on the west, Del Paso Road on the south, the City limits on the east, and Elkhorn Boulevard on the north. The Community Facilities District contains approximately 2,700 gross acres and approximately 1,860 net developable acres. Development in the Community Facilities District is substantially complete. Based on development status as of May 1, 2022,

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the Community Facilities District includes 8,968 Taxable Parcels, 8,962 of which are classified as Developed Parcels under the Rate and Method of Apportionment with residential (single family detached units, multi-family units and other residential uses) and non-residential uses. Of the 8,962 parcels that were classified as Developed Parcels for the Fiscal Year 2022-23 Special Tax levy, 89 did not have improvement value as of January 1, 2022.

For the Fiscal Year 2022-23 Special Tax levy (development status as of May 1, 2022), there were six parcels classified as Developable Parcels under the Rate and Method of Apportionment that were subject to the Special Tax levy.

Although, like all of Northern California, the land within the Community Facility District is subject to seismic activity, it is not located within an Alquist-Priolo Earthquake Fault Zone.

An aerial photograph of the Community Facilities District and a map showing the location of the Community Facilities District are included following the Table of Contents.

De Facto Building Moratorium from 2008 to 2015
In 2005, in response to revised criteria and standards relating to levees and flood protection, the United States Army Corp of Engineers (the “Corps”) and the Sacramento Area Flood Control Agency (“SAFCA”) commissioned the Natomas Levee Eval uation Study (“NLES”). The NLES final report concluded that considerable improvements were necessary along the south levee of the Natomas Cross Canal, the east levee of the Sacramento River, and the north levee of the American River. As a result of these conclusions, on July 20, 2006, the Corps issued a letter to SAFCA stating that the Corps could no longer support its original position certifying the levees in the Natomas Basin. On December 29, 2006, FEMA issued a letter to the City notifying the City that FEMA planned to update the Flood Insurance Rate Map within the Natomas Basin. On December 8, 2008, FEMA’s Revised Map became effective, placing the Natomas Basin (including the Community Facilities District) within a Special Flood Hazard Area (“Zone AE”). As a result of the Revised Map and the Zone AE designation, the Natomas Basin was subject to a de facto building moratorium from December 8, 2008, through June 15, 2015.

On June 10, 2014, then President Barack Obama signed the Water Resources Reform & Redevelopment Act (“WRRDA”) into law. With respect to the Natomas Basin, the WRRDA directs the Corps to strengthen 24 miles of levees surrounding the Natomas Basin (the “Levee Project”). As a result of the implementation of the Levee Project, FEMA issued a revised map and designated the area within the Natomas Basin (including the Community Facilities District) as Zone A99 effective J une 16, 2015, which allows for the resumption of new building construction, subject to the limitations described below. According to FEMA, an area designated as Zone A99 has a 1% annual chance of a flood event (i.e., a 100-year flood) but ultimately will be protected upon completion of an under-construction federal flood-protection system. The four major requirements for that designation are (a) 50% of the critical improvements to achieve a 100-year level of flood protection have been constructed, (b) 50% of the total cost for such improvements has been expended, (c) 60% of the total cost of the improvements has been appropriated, and (d) 100% of th e improvements have been authorized. As described below, construction of the Levee Project is underway (see “—Fl ood Hazard” below).

On March 31, 2015, the City adopted an ordinance allowing for non-residential development and a limited resumption of residential development in the portion of the Natomas Basin that is within the City and designated as Zone A99 (the “Building Ordinance”). The Building Ordinance became operative on June 16, 2015, upon the revised map and Zone A99 designation by FEMA. The Building Ordinance allows non- residential development to resume with no cap and limited residential development of up to 1,000 single-family detached units and 500 multi-family attached units each calendar year. Dwelling units in excess of those limits will require City Council approval. While development in the Community Facilities District is substantially complete, there remain certain developable lots therein. The foregoing caps may limit the ability to complete development of such remaining lots.

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Flood Hazard
Development in the Community Facilities District is subject to federal and State requirements regarding the restoration of protection against flood hazards (e.g., levees).

Compliance with Federal Flood-Protection Requirements . As required by 44 C.F.R. § 65.14(g), the City annually submits to FEMA a certification that the Zone A99 restoration plan will be completed within a specified time. This Federal regulation also requires that the City and the cost-sharing Federal agency update the restoration plan and identify any permitting or constr uction problems that will delay the Levee Project’s completion beyond the deadline set out in the restoration plan previously submitted to the Federal Insurance Administrator. The FEMA Regional Office that has jurisdiction over the Community Facilities District makes an annual assessment and recommendation to the Federa l Insurance Administrator about the viability of the restoration plan and will conduct periodic on-site inspecti ons of the flood-protection system under restoration.

Should FEMA make an adverse finding as to the viability of the restoration plan, FEMA could revise the flood map from its current Zone A99 designation, which could result in the Natomas Basin, including the property in the Community Facilities District, becoming subject again to a de facto building moratorium. The City currently does not expect any delays with respect to the Levee Project that would cause the Natomas Basin to be subject to another de facto building moratorium.

Compliance with State Flood Protection Requirements . The Central Valley Flood Protection Act of 2008 requires that cities and counties within the California Central Valley (including the City) make certain findings with respect to flood protection before approving development agreements, tentative maps, discretionary permits, and ministerial permits for new residences. One of those findings is that the local flood- management agency has made “adequate progress” on the construction of a flood-protection system that will provide an Urban Level of Flood Protection (“ULOP”) by 2025. An ULOP is the level of flood protection needed to withstand a flood event that has a 0.5% chance of occurring in a year (i.e., a 200-year flood).

SAFCA is the local flood-management agency that serves the area within the City. In 2016, SAFCA prepared its ULOP plan, which the City accepted in June 2016. When making the adequate-progress finding, the City has relied on annual progress reports prepared by SAFCA, which demonstrate that the Levee Project is meeting specified development milestones toward providing an ULOP by 2025. If construction of the Levee Project is delayed so that the City is unable to make a finding of adequate progress toward an ULOP, then the City might not be able to approve either or both of the following: a discretionary permit or other discretionary entitlement for construction of a new building or constr uction that would result in an increase in allowed occupancy for an existing building; or a ministerial permit for construction of a new residence. The City currently does not expect any delays with respect to the Levee Project that would cause this to occur.

Status of the Levee Project . Even though the Natomas Basin has been designated as Zone A99, the Natomas Basin will not be outside of a 100-year flood zone until the Levee Project is completed. The Corps began construction of the Levee Project in 2017 and the Levee Project is currently estimated to be completed in 2025. To date, 18 miles have been completed and construction of the remaining 24 miles began in 2019. The Corps will need to acquire additional land and obtain additional approvals and permits in order to complete the Levee Project.

When the Levee Project is completed, the City expects that, under current FEMA criteria, the Natomas Basin will be zoned “X (shaded),” meaning an area that is subject to between a 1.0% (100-year flood zone) to

0.2% annual chance of a flood event (i.e., a 500-year flood zone). As described above, under State law, completion of the Levee Project will mean the Natomas Basin will have an ULOP, which is the level of flood protection needed to withstand a flood event that has a 0.5% chance of occurring in a year (200-year flood zone).

As described above, completion of the Levee Project provides additional protection but does not eliminate the risk of flood-related property damage within the Natomas Basin (including the property in the Community Facilities District). The requirement to purchase flood insurance will remain in effect even though

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the Natomas Basin is designated as Zone A99. Flood insurance is available for purchase by homeowners within the Natomas Basin. The City participates in FEMA’s national flood-insurance program community rating system, which provides flood insurance premium discounts resulting from the communi ty’s efforts to reduce certain flood risks. Notw ithstanding the foregoing, the City can make no assurances as to the continued availability of flood insurance or any discounts on premiums through the community rating system. See “SPECIAL RISK FACTORS — Natural Disasters.”
Tax Zones
The area within the Community Facilities District is divided into four tax zones (Tax Zone IA, IB, II and IV). Pursuant to the Rate and Method of Apportionment, the applied Special Tax levy and the maximum amount of the Special Tax levy for each Tax Zone is determined by the amount of Annual Costs allocated to such Tax Zone. Such allocation is generally determined by the proportion of facilities funded by bond proceeds and special taxes for a Tax Zone to the total amount of facilities funded by bond proceeds and special taxes within the Community Facilities District. The allocation of facilities funded by bond proceeds for each Tax Zone was set at the time each series of bonds issued to finance facilities were issued for the Community Facilities District. Upon the issuance of refunding bonds, such as the Bonds, the principal amount of the refunding bonds are allocated to the Tax Zones in the same proportion as the refunded bonds. As a result, notwithstanding the Maximum Annual Special Tax rate (as set forth in the Rate and Method of Apportionment), the Special Tax may only be levied on Taxable Parcels in each Tax Zone up to an amount necessary to pay its allocation of Annual Costs, which includes the replenishment of the Bond Reserve Fund. See “—Allocati on of Annual Costs” for a description of the Bonds and the Series F Bonds allocated to each Tax Zone. Although 100% of the principal amount of the Series F Bonds is allocated to Zone IB, due to the fact that the Bonds and the Series F Bonds are payable on a parity from amounts in the Special Tax Fund and that amounts necessary to replenish the Bond Reserve Fund are included in allocated Annual Costs, the Bonds are cross-collateralized by each Tax Zone to a limited extent.

Tax Zone IA. Tax Zone IA includes 2,477 Taxable Parcels, all of which were classified as Developed Parcels (two of which did not have improvement value as of January 1, 2022) under the Rate and Method of Apportionment for the Fiscal Year 2022-23 Special Tax levy (reflecting development status as of May 1, 2022).

The Fiscal Year 2022-23 assessed value of such parcels (based on a January 1, 2022 lien date) was approximately $1,188,271,372. Development within Tax Zone IA is nearly complete and includes single-family detached homes, condominium units, apartment units and retail and other commercial uses. Approximately $10,450,000 *
of the principal amount of the Bonds is allocated to Tax Zone IA.

Tax Zone IB. Tax Zone IB includes 3,428 parcels that were classified as De veloped Parcels for the Fiscal Year 2022-23 Special Tax Levy, 84 of which did not have improvement value shown on the County Assessor’s roll as of January 1, 2022. Six parcels were classified as Developable Parcels. Development in Tax Zone IB is substantially complete and includes single-family detached homes, condominium units, and retail and other commercial uses. The Fiscal Year 2022-23 assessed value for the Taxable Parcels within Tax Zone IB was approximately $1,306,635,742. In addition to the $4,445,000 * principal amount of the Bonds, all of the principal
amount of the Series F Bonds are allocated to the Annual Costs of Tax Zone IB.

Tax Zone II. Tax Zone II includes 1,180 Taxable Parcels, all of which were classified as Developed Parcels (two of which did not have improvement value as of January 1, 2022) for the Fiscal Year 2022-23 Special Tax levy (reflecting development status as of May 1, 2022). The Fiscal Year 2022-23 assessed value of such parcels (based on a January 1, 2022 lien date) is approximately $613,880,839. Development within Tax Zone II is nearly complete and includes single-family detached homes and apartment units. Approximately $6,505,000
* of the principal amount of the Bonds is allocated to the Annual Costs of Tax Zone II.

Tax Zone IV. Tax Zone IV includes 1,877 Taxable Parcels, all of which were classified as Developed Parcels (one of which did not have improvement value as of January 1, 2022) for the Fiscal Year 2022-23 Special Tax levy (reflecting development status as of May 1, 2022). The Fiscal Year 2022-23 assessed value of such

15 4873-8514-9548v6/022536-0034
parcels (based on a January 1, 2022 lien date) is approximately $811,604,075. Development within Tax Zone IV is nearly complete and includes single-family detached homes, condominium units, apartment units and retail and other commercial uses. Approximately $5,110,000 * of the principal amount of the outstanding Bonds is allocated to the Annual Costs of Tax Zone IV.

Table 1 below sets forth the number of Developed Parcels, Developable Parcels, Development- Restricted Parcels and Tax-Exempt Parcels within each Tax Zone, as applicable, of the Community Facilities District for the Fiscal Year 2022-23 Special Tax levy (reflecting development status as of May 1, 2022).

TABLE 1

CITY OF SACRAMENTO
NORTH NATOMAS COMMUNITY FACILITIES DISTRICT NO. 4

LAND USE BY TAX ZONE
(as of May 1, 2022)

Development Status and Land Use Class Tax Zone IA Tax Zone IB Tax Zone II Tax Zone IV Total Developed Parcels
Detached Residential Unit Parcel > 5,000 Sq. Ft. 1,639 parcels 568 parcels 785 parcels 1,263 parcels 4,255 parcels Detached Residential Unit Parcel < 5,000 Sq. Ft. 578 pa rcels 2,188 parcels 390 parcels 407 parcels 3,563 parcels Condominiums 245 parcels 661 parcels 0 parcels 200 parcels 1,106 parcels Other Residential 2 parcels 0 par cels 5 parcels 1 parcels 8 parcels Non-Residential 13 parcels 11 parcels 0 parcels 6 parcels 30 parcels Subtotal 2,477 parcels 3,428 parcels 1, 180 parcels 1,877 parcels 8,962 parcels

Developable Parcels
Final Use Parcels 0 parcels 4 parcels 0 parcels 0 parcels 4 parcels Large Lot Parcels 0 parcels 2 parcels 0 parcels 0 parcels 2 parcels Subtotal 0 parcels 6 parcels 0 parcels 0 parcels 6 parcels

Development-Restricted Parcels 0 parcels 10 par cels 0 parcels 0 parcels 10 parcels

Tax-Exempt Property 103 parcels 161 par cels 79 parcels 28 parcels 371 parcels

Prepayment Parcels
(1) 0 parcels 7 parcels 0 parcels 1 parcels 8 parcels

Total 2,580 parcels 3,612 parcels 1, 259 parcels 1,906 parcels 9,357 parcels

(1) Parcels for which the Special Tax obligation has been prepaid and permanently satisfied.

Sources: Harris and Associates as compiled by Goodwin Consulting Group, Inc.

Rate and Method of Apportionment
The following summary of the Rate and Method of Apportionment should be read in conjunction with the complete text of the Rate and Method of Apportionment, including its attachments, attached as Appendix C.

The meanings of the defined terms used in this section are as set forth in Appendix C. This section provides only a summary of the Rate and Method of Apportionment and is qualified by the more complete and detailed information contained in the entire Rate and Method of Apportionment attached as Appendix C.

General. The Special Tax is levied and collected according to the Rate and Method of Apportionment, which provides the means by which the City Council may annually levy the Special Tax within the Community Facilities District. In general, the Rate and Method of Apportionment imposes different maximum Special Tax rates on Taxable Parcels within the Community Facilities District depending upon whether a Taxable Parcel is a Developed Parcel (i.e., a Taxable Parcel that has (1) a recorded final small lot subdivision map for residential uses permitting up to two units per lot, (2) a special use permit for residential use permitting three or more units per lot, or (3) a special use permit for Non-Residential Development), a Developable Parcel (a parcel which has been created after January 1, 1994 by a recorded Master Parcel Map, or any other Final Subdivision Map, but still requires further subdivision into individual small lots or a special use permit to develop), a Development-

* Preliminary, subject to change.

16 4873-8514-9548v6/022536-0034
Restricted Parcel (a Taxable Parcel that has not met the definition of a Developable Parcel or a Developed Parcel). Development-Restricted Parcels may only be taxed after the City has received written authorization from the property owner.

A Veteran Developed Parcel is a Parcel that has been classified as a Developable or Developed Parcel for 30 years. After 30 years of being subject to the Special Tax as a Developable or Developed Parcel, the Veteran Developed Parcel is only subject to the Special Tax if there is a shortfall in the revenues generated from all other Taxable Parcels to pay for the Annual Costs of the Community Facilities District. Certain Taxable Parcels will become classified as Veteran Developed Pa rcels beginning in Fiscal Year 2029-30. The Special Tax is levied on Developed Parcels and Developable Parcels earlier in priority than Veteran Developed Parcels under the Rate and Method of Apportionment (see step 3 under “— Annual Calculation of Special Tax” below).

As a result, beginning in Fiscal Year 2029-30, as certain Taxable Parcels become classified as Veteran Developed Parcels, the amount of the Special Tax levy on the then remaining parcels classified as Developed Parcels and Developable Parcels may increase and may result in a Special Tax levied on parcels classified as Veteran Developed Parcels pur suant to step 3 under “— Annual Calculation of Special Tax ” below. Veteran Developed Parcels remain subject to the Special Tax levy so long as necessary to pay the Annual Costs. Under the Rate and Method of Apportionment, Developed Parcels and Veteran Developed Parcels have the same Maximum Annual Special Tax rate.

Annual Calculation of Special Tax. The calculation of the Special Tax payable by each Taxable Parcel in each year involves the following steps:

First, by each May 1, the City classifies each of the parcels within the Community Facilities District as follows:
(a) Each Parcel is classified as Tax-Exempt, Taxable or Reimbursement Parcel (the last classification refers to pa rcels for which the parcel owner has advance-funded the parcel’s allocated Community Facilities District drainage improvement costs, as determined by the City, but has not received any reimbursement from bond proceeds; once a reimbursement has been made, the parcel is reclassified as a Deve loped Parcel, Developable Parcel or a Development-Restricted Parcel).
(b) Each Taxable Parcel is identified according to the Tax Zone in which it is located.
(c) Each Taxable Parcel within a Tax Zone is further classified as a Developed Parcel, Developable Parcel, Develo pment-Restricted Parcel, Veteran Developed Parcel or Prepayment Parcel.
(d) Each Developed Parcel is classified in one of the following Land Use Categories:
 Developed Residential Unit Parcel
 Condominium Parcel
 Other Residential Parcel
 Non-Residential Parcel

(e) Each Developable Parcel and Developm ent-Restricted Parcels will be taxed based on acreage as set forth in the Rate and Method of Apportionment:
 Final Use Parcels
 Large Lot Parcels

17 4873-8514-9548v6/022536-0034
 Tentative Map Parcels / Unmapped Parcels

Second, after classifying the Parcels, the City calc ulates the Annual Costs for each Tax Zone, and determines the Maximum Annual Special Tax for each parcel based on the assignment in the first step above. The Annual Costs include (i) Debt Service for the Calendar Year commencing January 1 of each Fiscal Year through December 31 of the following Fiscal Year, (ii) Administrative Expenses for such Fiscal Year, (iii) any amounts needed to replenish any bond reserve fund for the bonds of the City issued for the Community Facilities District to the level required under the documents pursuant to which such bonds were issued, (iv) an amount equal to the amount of delinquencies in payments of Special Taxes levied in the previous Fiscal Year and an amount for anticipated delinquencies for the current Fiscal Year, (v) pay-as-you- go expenditures for authorized facilities to be constructed or acquired by the Community Facilities District, less any credit from earnings on the bond reserve fund, less any reimbursements, less any grants/other project funding and/or less the application of any funds from Special Tax prepayments. The Annual Costs allocated to each Tax Zone will be allocated as follows:
• Determine share of total facilities costs funded by Community Facilities District bonds for each Tax Zone. For each series of bonds issued, the share of total facilities costs funded by Community Facilities District bonds will be set at the time of sale of bonds, and will be used until all bonds for that issue have been retired. • Add the total pay-as-you-go expenditures for the present and prior year for each Tax Zone.
• Add the allocation of bond-funded costs and pay-as-you-go expenditures for each Tax Zone.
• Determine the percentage share of bond-funded facilities cost and pay-as-you-go expenditures for each Tax Zone. Calculate this by dividing the result of the last step by total bond-funded costs and pay-as-you-go expenditures in the Community Facilities District.
• Multiply Annual Costs by the percentage share to determine the allocation of Annual Costs for each Tax Zone.

Third, for each Tax Zone, the City calculates the Special Tax for each Taxable Parcel by the following steps:
(1) Determine if sufficient Special Tax revenues are available by taxing each Developed Parcel at 100% of its Maximum Annual Special Tax. If revenues are greater than the Annual Costs assigned to the Tax Zone, the tax is reduced proportionately against Developed Parcels until the taxes are set at an amount sufficient to cover Annual Costs. (2) If revenues from taxing Developed Parcels at 100% of their Maximum Annual Special Tax are not sufficient, the City will then proportionately levy the tax on Developable Parcels up to 100% of their Maximum Annual Special Tax until the tax levy is set at an amount sufficient to cover each Tax Zone’s Annual Costs. (3) If revenues from taxi ng Developed Parcels and Developable Parcels is not sufficient, Development-Restricted Parcels will be levied up to 100% of their Maximum Annual Special Tax.

18 4873-8514-9548v6/022536-0034
(4) If revenues are still not sufficient to pay for Annual Costs, the City will then proportionately tax Veteran Developed Parcels up to 100% of the Maximum Special Annual Tax until the tax levy is set at an amount sufficient to cover Annual Costs.

Maximum Annual Special Tax Rates. The Maximum Annual Special Tax Rates by taxation category for each Fiscal Year are shown in the tables attached as Attachment 1 to the Rate and Method of Apportionment.

Tax rates escalate 2% annually. See Appendix C.

Prepayment of the Special Tax Obligation . Landowners may permanently satisfy the Special Tax obligation by a cash settlement with the City as permitted under Government Code Section 53344. Prepayment is permitted only under the following conditions:
(a) The City determines that the prepayment do es not jeopardize the ability to make timely payments of debt service on outstanding bonds of the Community Facilities District. (b) Any landowner who wishes to exercise the right to a prepayment for a parcel must pay any and all delinquent Special Taxes and penalties.
(c) Prepayment must be made on or before June 1 in order to prevent the levy of Special Taxes due during the fiscal year beginning July 1.

The prepayment amount will be established by the procedures that are described in Section 6 of the Rate and Method of Apportionment, which is set forth in full in Appendix C.

Duration of Levy. The Special Tax is authorized to be levied for as long as needed to pay debt service on Bonds issued to fund authorized facilities, but not later than Fiscal Year 2039-40.

Exemptions. Under Section 53340 of the Act, the Rate and Method of Apportionment exempts properties that are or are intended to be publicly ow ned except that the Special Tax on property not otherwise exempt that is acquired by a public entity will be required to be permanently satisfied pursuant to Sections 53317.3 and 53317.5 of the Act.

Parcels for which the owner has prepaid and satisfied the Special Tax are also exempt from further Special Taxes. See Appendix C.

Allocation of Annual Costs
The Rate and Method of Apportionment provides that the Special Tax levy on property within each Tax Zone shall be in an amount sufficient to pay the Annu al Costs allocated to such Tax Zone. See “—Rate and Method of Apportionment” above. Table 2 below sets forth the allocation of the share of Bonds and Series F Bonds for each Tax Zone. As shown in Table 2, the Series F Bonds are allocated entirely to Tax Zone IB for purposes of determining the share of Annual Costs. Notwithstanding such allocation, debt service on the Bonds and debt service on the Series F Bonds are payable on a parity from amounts deposited in the Special Tax Fund.

The relative burden of debt service on the Bonds of each Tax Zone will change as such debt service is amortized. After the Bond Year ending September 1, 2031, there will no longer be any Annual Costs allocated to Tax Zone IV. The Special Tax is not expected to be levied in Tax Zone IV after the Bond Year ending September 1, 2031, except to pay for additional facilities, if necessary. As a result, no additional Special Tax revenues will be available to pay debt service on the Bonds from Tax Zone IV after the Bond Year ending September 1, 2031, including any amounts that may be necessary to replenish the Bond Reserve Fund to the Required Bond Reserve. After the Bond Year ending September 1, 2031, up to 63% of the debt service on the Bonds and the Series F Bonds will be allocated to Tax Zone IB.

19 4873-8514-9548v6/022536-0034
As described above under the caption “—Rate and Method of Apportionment,” Annual Costs include amounts necessary to replenish the Bond Reserve Fund up to the Required Bond Reserve. As a result, the Special Tax levy in each Tax Zone may exceed the amount nece ssary to pay its allocated share of debt service if additional amounts are necessary to replenish the Bond Reserve Fund, regardless of whether the draw on the Bond Reserve Fund was caused by delinquencies in such Tax Zone. The Bonds have been sized and the Annual Costs have been allocated, to produce Special Tax revenues from Developed Parcels (based on development status for the Fiscal Year 2022-23 Special Tax levy) of not less than 100% of the debt service on the Bonds and the Series F Bonds, based on the allocation of Annual Costs set forth in Table 2 below.

TABLE 2

CITY OF SACRAMENTO
NORTH NATOMAS COMMUNITY FACILITIES DISTRICT NO. 4

ALLOCATED SHARE OF ANNUAL COSTS BY TAX ZONE
Series F Bonds Series G Bonds
*
Bonds Outstanding $ 15,045,000 $26,510,000

Final Maturity September 1, 2033 September 1, 2033

Tax Zone IA
Bonds $ 0 $ 10,450,000
Allocated Share 0.0% 39.4%

Tax Zone IB

Bonds $ 15,045,000 $ 4,445,000
Allocated Share 100.0% 16.8%

Tax Zone II
Bonds $ 0 $ 6,505,000
Allocated Share 0.0% 24.5%

Tax Zone IV
(1)
Bonds $ 0 $ 5,110,000
Allocated Share 0.0% 19.3%

Total All Zones
Total Bonds $ 15,045,000 $ 26,510,000
Allocated Share 100.0% 100.0%

* Preliminary, subject to change.
(1) After the Bond Year ending September 1, 2031, there will no long er be any Annual Costs alloca ted to Tax Zone IV. As a result, no additional Special Tax revenues will be available to pay debt service on the Bonds from Tax Zone IV after the Bond Year ending September 1, 2031, including any amounts that may be necessary to replenish the Bond Reserve Fund to the Required Bond Reserve.

Sources: City of Sacramento, Harris and Associates, the Underwriter and Goodwin Consulting Group, Inc.

Estimated Special Tax Proceeds and Debt Service Coverage Table 3 below shows the coverage on the Bonds and the Series F Bonds, based on a levy of the Special Tax at the Maximum Special Tax rate on all Developed Parcels in the Community Facilities District and Developable Parcels in Tax Zone IB, based on development status as of May 1, 2022). See “THE BONDS — Debt Service Schedule.” The Special Tax levied within each Tax Zone is limited to the share of the Annual Costs allocated to such Tax Zone. In addition, pursuant to California Government Code Section 53321(d), the Special Tax levied against any assessor’s parcel for which an occupancy permit for private residential use has

20 4873-8514-9548v6/022536-0034
been issued may not be increased as a consequence of delinquency or default by the owner of any other assessor’s parcel within the Community Facilities District by more than 10% above the amount that would have been levied in such Fiscal Year had there never been any such delinquencies or defaults. As a result, it is possible that the Special Tax levy may not be increas ed to the Maximum Special Tax rate under the Rate and Method of Apportionment in all years.

21 4873-8514-9548v6/022536-0034
TABLE 3

CITY OF SACRAMENTO
NORTH NATOMAS COMMUNITY FACILITIES DISTRICT NO. 4

PROJECTED DEBT SERVICE COVERAGE BY TAX ZONE

Tax Zone IA Tax Zone IB Tax Zone II Tax Zone IV
Year Ending
September 1
Maximum
Special
Tax(1)
Debt
Service(2)*
Coverage
Ratio*
Maximum
Special
Tax(1)
Debt
Service(3)*
Coverage
Ratio*
Maximum
Special
Tax(1)
Debt
Service(2)*
Coverage
Ratio*
Maximum
Special
Tax(1)
Debt
Service(2)(4)*
Coverage
Ratio*
2024 $2,618,037 $1,394,444 1.88 $2,800,897 $2,381,406 1. 18 $1,322,334 $774,111 1.71 $1,698,571 $762,111 2.23 2025 2,670,398 1,416,000 1.89 2,856 ,915 2,433,350 1.17 1,348,781 786, 000 1.72 1,732,543 768,750 2.25 2026 2,723,806 1,439,000 1.89 2,914 ,054 2,474,000 1.18 1,375,757 801, 750 1.72 1,767,194 776,750 2.28 2027 2,778,282 1,458,500 1.90 2,972 ,335 2,531,500 1.17 1,403,272 820, 500 1.71 1,802,537 783,000 2.30 2028 2,833,847 1,479,500 1.92 3,031 ,781 2,582,000 1.17 1,431,337 837, 000 1.71 1,838,588 792,500 2.32 2029 2,890,524 1,501,750 1.92 3,092 ,417 2,635,500 1.17 1,459,964 851, 250 1.72 1,875,360 800,000 2.34 2030 2,948,335 1,525,000 1.93 3,154 ,265 2,681,500 1.18 1,489,163 868, 250 1.72 1,912,867 810,500 2.36 2031 3,007,302 1,544,000 1.95 3,217 ,351 2,745,000 1.17 1,518,947 882, 750 1.72 1,951,124 813,750 2.40 2032(4) 3,067,448 733,750 4.18 3,281,698 2,794, 750 1.17 1,549,326 904,750 1.71 -- -- -- 2033 3,128,797 745,500 4.20 3,347,332 1,911 ,000 1.75 1,580,312 918,750 1.72 -- -- --

* Preliminary, subject to change.
(1) Amounts reflect a Special Tax levy on Develo ped Parcels at the Maximum Special Tax Rate. Amounts for Tax Zone IB also include Special Tax revenues from Developable Parcels reflecting a levy at the Maximum Special Tax Rate. The Special Tax levied within each Tax Zone is limited to the amount necessary to cover the Annual Costs allocated to such Tax Zone. In addition, pursuant to California Government Code Section 53321(d), the Special Tax levied against any assessor’s parcel for which an occupancy permit for private residential use has been issued may not be increase d as a consequence of delinquency or default by the owner of any other assessor’s parcel within the Community Facilities District by more than 10% above the amount that would have been levied in such Fiscal Year had there never been any such delinquencies or defaults. As a result, it is possible that the Special Tax levy may not be increased to the Maximum Special Tax rate under the Rate and Method of Apportionment. (2) Includes debt service on the Bonds only. The Series F Bonds are only allocated to Tax Zone IB. (3) Includes all debt service on the Series F Bonds and a 16.8% a llocated share of the principal amount of the Bonds. The Special Tax within Tax Zone IB is projected to be levied at approximately ____% of the Maximum Special Tax rate to pay the Annual Costs allocated to Tax Zone IB. (4) After September 1, 2031, no Annual Costs will be allocated to Tax Zone IV.

Sources: City of Sacramento, Harris and Associates, the Underwriter and Goodwin Consulting Group, Inc.

22 4873-8514-9548v6/022536-0034
Assessed Value-to-Lien Ratios
The City has not engaged an independent appraiser to provide an opinion concerning the values of the Taxable Parcels within the Community Facilities District. The aggregate assessed value of the Taxable Parcels within the Community Facilities District as shown on the Fiscal Year 2022-23 County Assessor’s roll is $3,920,392,028 (based on a January 1, 2022 lien date).

The value of the property within the Community Facilities District is significant to an evaluation of the Bonds because, in the event of a delinquency in the payment of the Special Tax, the City may foreclose only against delinquent parcels. Likewise, the ratio of the value of a parcel to its “share” of the applicable Bonds is important because it provides an indication of the extent of the relative burden imposed on each parcel by the Special Tax. As indicated above, the aggregate assess ed value of the taxable parcels within the Community Facilities District as shown on the 2022-23 County Assessor’s roll is $3,920,392,028 (excluding 10 Development-Restricted Parcels for which the Special Tax was not levied in Fiscal Year 2022-23). The ratio of that value to the $26,510,000 * total principal amount of the Bonds and the $15,045,000 total outstanding principal amount of the Series F Bonds is approximately 94-to-1*. This ratio does not include other overlapping debt within the Community Facilities District. See “— Direct and Overlapping Debt” below. Taking direct and overlapping debt into account, the ratio of the aggregate assessed value of the Taxable Parcels within the Community Facilities District to the total principal amount of all direct and overlapping special tax and assessment bonds for the Community Facilities District ($69,957,202, inclusive of the Bonds and the Series F Bonds) is approximately 56-to-1
*. See Table 5 below.

For the Fiscal Year 2022-23 Special Tax levy (development status as of May 1, 2022), there were 8,962 parcels that were levied as Developed Parcels. For Fiscal Year 2022-23, the City also levied the Special Tax on six Developable Parcels, all of which were in Tax Zone IB. See Table 5 below.

Each of the value-to-lien ratios described above is for the entire Community Facilities District; however, the ratios of the value of individual lots within the Community Facilities District to their shares of the principal amount of the Bonds can be expected to vary substantially depending upon the status of development and the selling price of the lots. See Table 5 below.

Assessed values do not necessarily represent market values. Article XIIIA of the California Constitution (Proposition 13) defines “full cash value” to mean “the Co unty assessor’s valuation of real property as shown on the 1975/76 roll under ‘full cash value’, or, thereafter, the appraised value of real property when purchased or newly constructed or when a change in ownership has occurred after the 1975 assessment,” subject to exemptions in certain circumstances of property transfer or reconstruction. The “full cash value” is subject to annual adjustment to reflect increases, not to exceed 2% for any year, or decreases in the consumer price index or comparable local data, or to reflect reductions in property value caused by damage, destruction or other factors. Because of the general limitation to 2% per y ear in increases in full cash value of properties which remain in the same ownership, the County tax roll does not reflect values uniformly proportional to actual market values. As a result of the foregoing, there can be no a ssurance that the assessed valu ations of the properties within the Community Facilities District accurately reflect their respective market values, and the future fair- market values of those properties may be lower or greater than their current assessed valuations.

Proposition 8. Proposition 8, approved in 1978 (California Revenue and Taxation Code Section 51(b)), provides for the assessment of real property at the lesser of its originally determined (base year) full cash value compounded annually by the inflation factor, or its full cash value as of the lien date, taking into account reductions in value due to damage, destruction, obsolescence or other factors causing a decline in market value.

Reductions pursuant to Proposition 8 may be initiated by the County Assessor or requested by the property owner, and such reductions apply only to a single tax year.

* Preliminary, subject to change.

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After a roll reduction is granted pursuant to Proposition 8, the property is reviewed on an annual basis to determine its full cash value, and the valuation is adjusted accordingly. This may result in further reductions or in value increases. Such increases must be in accordance with the fu ll cash value of the property and may exceed the maximum annual inflationary growth rate allowed on other properties under Article XIIIA of the State Constitution. Once the property has regained its prior value, adjusted for inflation, it once again is subject to the annual inflationary factor growth rate allowed under Article XIIIA. The County Assessor has the ability to use Proposition 8 criteria to apply blanket reductions in valuation to classes of property affected by particular negative economic conditions.

Table 4 below sets forth historical assessed values within the Tax Zones and the Community Facilities District in the aggregate from Fiscal Years 2018-19 thro ugh 2022-23. The assessed values in Table 4 do not include the 10 Development-Restricted Parcels in Tax Zone IB.

TABLE 4

CITY OF SACRAMENTO
NORTH NATOMAS COMMUNITY FACILITIES DISTRICT NO. 4
HISTORICAL ASSESSED VALUES(1)
Fiscal Year Tax Zone IA Tax Zone IB Tax Zone II Tax Zone IV Total (2) Percentage
Change in
Assessed
Value
2018-19 $ 999,191,483 $ 952,452,364 $483,969,071 $692,038,976 $3,127,651,894 -- 2019-20 1,022,697,473 1,081,982,038 533,174, 716 714,231,212 3,352,085,439 7.18% 2020-21 1,093,075,555 1,175,806,063 551,503, 207 737,621,148 3,558,005,973 6.14 2021-22 1,130,836,800 1,294,301,372 582,297, 644 765,771,977 3,773,207,793 6.05 2022-23 1,188,271,372 1,306,635,742 613,880, 839 811,604,075 3,920,392,028 3.90

(1) Assessed values shown may not reflect adjustments made after the County deadline for setting the Special Tax levy each year. (2) Assessed values as of January 1 of Fiscal Year shown provide d by the County Assessor. Assessed value is calculated as the sum of land value and improvement value.

Sources: Sacramento County Assessor's Office as compiled by NBS for Fiscal Years 2018-19 and 2019-20 and Harris and Associates for Fiscal Years 2020-21 to 2022-23; City of Sacramento; Goodwin Consulting Group, Inc.

Table 5 below sets forth the assessed value-to-lien calculations for the various land use categories of Developed Parcels and Developable Parcels within the Community Facilities District, based on Fiscal Year 2022-23 assessed values and the total direct and overlapping special tax and assessment bonds (including the Bonds and the Series F Bonds) for the Community Facilitie s District. See Table 9 below for a description of the outstanding direct and overlapping bonded debt within the Community Facilities District.

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TABLE 5

CITY OF SACRAMENTO
NORTH NATOMAS COMMUNITY FACILITIES DISTRICT NO. 4

VALUE-TO-LIEN ANALYSIS BASED BY LAND USE CATEGORY
Development Status and
Land Use Class(1)
Number
of
Parcels
Fiscal Year
2022-23
Actual
Special Tax
Levy
Fiscal Year
2022-23
Assessed Value(2)
Allocated
CFD No. 4
Bond Debt(3)*
Overlapping
Debt(4) Total Debt *
Value-
to-Lien
Ratio(5)*
Tax Zone IA
Developed Parcels
Detached Residential Unit Parcel 2,217 $ 1,281,726 $ 944,246,065 $ 7,983,524 $ 6,764,408 $ 14,747,932 64.03 Condominiums 245 63,112 65,076,847 393,107 583,850 976,958 66.61 Other Residential 2 100,074 107,178,987 623,333 575,551 1,198,884 89.40 Non-Residential 13
232,798 71,769,473 1,450,036 947,156 2,397,192 29.94 Subtotal 2,477 $ 1,677, 710 $ 1,188,271,372 $ 10,450,000 $ 8,870,9 65 $ 19,320,965 61.50

Tax Zone IB
Developed Parcels
Detached Residential Unit Parcel 2,756 $ 2,132,232 $ 1,092,162,108 $ 16,322,694 $ 6,252,862 $ 22,575,556 48.38 Condominiums 661 265,722 165,206,542 2,034,159 717,167 2,751,326 60.05 Non-Residential 11
115,186 46,361,051 881,773 281,518 1,163,292 39.85 Subtotal 3,428 $ 2,513, 140 $ 1,303,729,701 $ 19,238,626 $ 7,251,5 47 $ 26,490,173 49.22

Developable Parcels

Final Use Parcels 4 $ 25,862 $ 1,896,820 $ 197,982 $ 9,568 $ 207,550 9.14 Large Lot Parcels 2 6,975 1,009,221 53,392 2,070 55,463 18.20 Subtotal 6 $ 32,837 $ 2,906,041 $ 251,374 $ 11,639 $ 263,013 11.05

Subtotal 3,434 $ 2,545, 977 $ 1,306,635,742 $ 19,490,000 $ 7,263,1 86 $ 26,753,186 48.84

Tax Zone II
Developed Parcels
Detached Residential Unit Parcel 1,175 $ 700,915 $ 498,499,935 $ 5,115,527 $ 3,790,058 $ 8,905,585 55.98 Other Residential 5 190,382 115,380,904 1,389,473 849,770 2,239,243 51.53 Subtotal 1,180 $ 891,297 $ 613,880,839 $ 6,505,000 $ 4,639,828 $ 11, 144,828 55.08

Tax Zone IV
Developed Parcels
Detached Residential Unit Parcel 1,670 $ 844,938 $ 736,487,104 $ 4,553,122 $ 6,864,513 $ 11,417,635 64.50 Condominiums 200 44,884 46,290,786 241,867 381,602 623,469 74.25 Other Residential 1 25,175 13,811,312 135,659 211,028 346,687 39.84 Non-Residential 6
33,283 15,014,873 179,352 171,080 350,433 42.85 Subtotal 1,877 $ 948,280 $ 811,604,075 $ 5,110,000 $ 7,628,223 $ 12, 738,223 63.71

TOTAL 8,968 $ 6,063,264 $ 3,920,392,028 $ 41,555,000 $ 28,402,202 $ 69,957,202 56.04

* Preliminary, subject to change.
(1) Based on development status as of May 1, 2022. Pursuant to the Rate and Method of Apportionment, a Developed Parcel is generally a parcel which has (1) a recorded final small lot subdivision map for residential uses permitting up to two units per lot, (2) a special-use permit for residential use permitting thr ee or more units per lot or (3) a special use permit for Non- Residential Development.
(2) As shown on the Fiscal Year 2022-23 Count y Assessor’s roll (based on a January 1, 2022 lien date). Does not include 10 Development-Restricted Parcels for which the Special Tax was not levied in Fiscal Year 2022-23. (3) Includes the Bonds and the Series F Bonds allocated based on the Fiscal Year 2022-23 Special Tax levy. (4) Includes overlapping bonded debt. See Table 9.
(5) Calculated by dividing the Assessed Va lue column by the Total Debt column.

Sources: City of Sacramento; California Municipal Statistics, Inc.; the Underwriter; Harris and Associates as compiled by Goodwin Consulting Group, Inc.

Table 6 below sets forth the stratification of value-to -lien ratios of the parcels within the Tax Zones of the Community Facilities District (excluding 10 Development-Restricted Parcels for which the Special Tax was not levied in Fiscal Year 2022-23) based on the Fiscal Year 2022-23 assessed values (as of the January 1, 2022

25 4873-8514-9548v6/022536-0034
lien date), such parcels’ respective shares of the principal amount of the Bonds and the Series F Bonds and other direct and overlapping debt within the Community Facilities District.

TABLE 6

CITY OF SACRAMENTO
NORTH NATOMAS COMMUNITY FACILITIES DISTRICT NO. 4

VALUE-TO-LIEN STRATIFICATION BY TAX ZONE
Value-to-Lien
Number
of
Parcels
Fiscal Year
2022-23
Actual
Special Tax
Levy
Percent of
Actual
Fiscal Year
2022-23
Special Tax
Levy
Fiscal Year
2022-23
Assessed Value(1)
Allocated
CFD No. 4
Bond Debt(2)*
Overlapping
Debt(3) Total Debt *
Average
Value-
to-Lien*
Tax Zone IA
Greater than 75:1 689 $ 471,004 7.8% $ 471,411,736 $ 2,933,758 $ 2,407,909 $ 5,341,667 88.25 50:1 to 75:1 1,237 700,745 11.6 508,470,852 4,364,750 3,878,029 8,242,779 61.69 25:1 to 50:1 534 337,041 5.6 169,943,414 2,099,334 1,875,943 3,975,277 42.75 3:1 to 25:1 17 168,920 2.8 38,445,370 1,052,158 709,084 1,761,243 21.83 Less than 3:1 0
0 0.0 0 0 0 0 n/a
Total 2,477 $ 1,677,711 27.7% $ 1,188,271,372 $ 10,450,000 $ 8,870,965 $ 19,320,965 61.50

Tax Zone IB
Greater than 75:1 289 $ 130,022 2.1% $ 113,980,598 $ 995,346 $ 355,283 $ 1,350,629 84.39 50:1 to 75:1 1,434 1,047,403 17.3 648,043,329 8,018,098 3,141,825 11,159,922 58.07 25:1 to 50:1 1,573 1,277,555 21.1 534,307,102 9,779,957 3,598,464 13,378,421 39.94 3:1 to 25:1 134 70,205 1.2 10,279,877 537,434 162,072 699,507 14.70 Less than 3:1 4
20,792 0.3 24,836 159,165 5,541 164,706 0.15 Total 3,434 $ 2,545,977 42.0% $ 1,306,635,742 $ 19,490,000 $ 7,263,186 $ 26,753,186 48.84

Tax Zone II
Greater than 75:1 147 $ 122,131 2.0% $ 110,591,582 $ 891,352 $ 463,034 $ 1,354,385 81.65 50:1 to 75:1 657 504,958 8.3 392,060,587 3,685,363 2,898,748 6,584,111 59.55 25:1 to 50:1 339 198,082 3.3 103,518,766 1,445,675 1,104,630 2,550,305 40.59 3:1 to 25:1 37 66,126 1.1 7,709,904 482,610 173,416 656,026 11.75 Less than 3:1 0
0 0.0 0 0 0 0 n/a
Total 1,180 $ 891,297 14.7% $ 613,880,839 $ 6,505,000 $ 4,639,828 $ 11,144,828 55.08

Tax Zone IV
Greater than 75:1 467 $ 205,063 3.4% $ 242,968,478 $ 1,105,026 $ 1,684,709 $ 2,789,735 87.09 50:1 to 75:1 1,079 542,953 9.0 461,692,134 2,925,811 4,473,326 7,399,137 62.40 25:1 to 50:1 328 182,618 3.0 102,911,147 984,077 1,383,766 2,367,843 43.46 3:1 to 25:1 3 17,645 0.3 4,032,316 95,086 86,423 181,509 22.22 Less than 3:1 0
0 0.0 0 0 0 0 n/a
Total 1,877 $ 948,280 15.6% $ 811,604,075 $ 5,110,000 $ 7,628,223 $ 12,738,223 63.71

TOTAL 8,968 $ 6,063,264 100.0% $ 3,920,392,028 $ 41,555,000 $ 28,402,202 $ 70,972,202 56.04

* Preliminary, subject to change.
(1) As shown on the Fiscal Year 2022-23 Count y Assessor’s roll (based on a January 1, 2022 lien date). Does not include 10 Development-Restricted Parcels for which the Special Tax was not levied in Fiscal Year 2022-23. (2) Includes the Bonds and the Series F Bonds allocate d based on the Fiscal Year 2022-23 Special Tax levy. (3) Includes overlapping bonde d debt. See Table 9.

Sources: City of Sacramento; California Municipal Statistics, Inc.; the Underwriter; Harris and Associates as compiled by Goodwin Consulting Group, Inc.

Top Taxpayers
Table 7 below lists the largest property taxpayers within the Community Facilities District measured by the percentage of the Fiscal Year 2022-23 Special Tax levy. All property owners responsible for 0.5% or more of the Fiscal Year 2022-23 Special Tax levy are id entified. The City did not levy the Special Tax on Development-Restricted Parcels in Fiscal Year 2022-23 a nd does not expect to do so in Fiscal Year 2023-24.

26 4873-8514-9548v6/022536-0034
Based on ownership status as of January 1, 2022, the nine property owners responsible for 0.5% or more of the Fiscal Year 2022-23 Special Tax levy represent approximately 10.01% of the total tax levy.

TABLE 7

CITY OF SACRAMENTO
NORTH NATOMAS COMMUNITY FACILITIES DISTRICT NO. 4

TOP PROPERTY OWNERS

Property Owner(1)
Tax
Zone(s)
Primary
Land Use
Number
of
Parcels
Fiscal Year
2022-23
Actual
Special Tax
Levy(2)
Percent of
Actual
Special
Tax
Levy(2)(3)
B33 PARK PLACE LLC(KOHLS) IA Commercial 4 $ 120,071 1.98% TC MIRAMONTE I LLC/TC MIRAMONTE II LLC IA Residential 2 100,074 1.65 CAREFREE NATOMAS LIMITED PARTNERSHIP II Residential 2 98,314 1.62 DS PARK PLACE L P IA Commercial 6 65,132 1.07
NORTH NATOMAS TOWN CENTER LLC IB Commercial 7 61,110 1.01 NATOMAS SENIOR COMMUNITIES LLC II Residential 1 47,083 0.78 SABRINA PLAZA LLC II Resi dential 2 44,985 0.74
ROMAN CATHOLIC BISHOP SACRAMENTO IA & II Church 2 37,746 0.62

NORTH NATOMAS TOWN CENTER LLC
(SAFEWAY #2697) IB Commercial 1 32,367 0.53
All Other Owners -- -- 8,941
5,456,383 89.99
Total 8,968 $ 6,063,264 100.00%

(1) Ownership status as shown on the County Assessor’s roll as of January 1, 2022. (2) May not total due to rounding.
(3) All holdings of property owners responsible for 0.50% or more of the Fiscal Year 2022-23 Special Tax Levy are identified.

Sources: Harris and Associates as compiled by Goodwin Consulting Group, Inc.

Table 8 below shows the percentage share of the Bonds and the Series F Bonds, based on the Fiscal Year 2022-23 Special Tax levy, allocated by development status and land use classifications within the Tax Zones and in the Community Facilities District in the aggregate. As shown in Table 8 below, approximately

99.4% of the Fiscal Year 2022-23 Special Tax levy was on Developed Parcels.

27 4873-8514-9548v6/022536-0034
TABLE 8

CITY OF SACRAMENTO
NORTH NATOMAS COMMUNITY FACILITIES DISTRICT NO. 4

PERCENTAGE SHARE OF BONDS AND SERIES F BONDS
BY DEVELOPMENT STATUS AND LAND USE CLASS (1)*
Development Status
and Land Use Class Tax Zone IA Tax Zone IB Tax Zone II Tax Zone IV Total Developed Parcels
Detached Residential Unit Parcel 76.4% 83.7% 78.6% 89.1% 81.8% Condominiums 3.8 10.4 0.0 4.7 6.5
Other Residential 6.0 0.0 21.4 2.7 5.2
Non-Residential 13.9 4.5 0.0 3.5 6.0
Subtotal 100.0% 98.7% 100.0% 100.0% 99.4%

Developable Parcels

Final Use Parcels 0.0% 1.0% 0.0% 0.0% 0.5%
Large Lot Parcels 0.0 0.3 0.0 0.0 0.1
Subtotal 0.0% 1.3% 0.0% 0.0% 0.6%

Developmen
t-Restricted Parcels 0.0% 0.0% 0.0% 0.0% 0.0%

Total 100.0% 100.0% 100.0% 100.0% 100.0%

* Preliminary, subject to change.
(1) Figures may not total due to rounding.

Sources: Harris and Associates as compiled by Goodwin Consulting Group, Inc.

Direct and Overlapping Indebtedness
The ability of an owner of land within the Community Facilities District to pay the Special Tax could be affected by the existence of other taxes and assessments imposed upon the land. These other taxes and assessments consist of the direct and overlapping debt in the Community Facilities District are set forth in Table 9 below, (the “Debt Report”). The Debt Report sets fo rth those entities which have issued debt and does not include entities that only levy or assess fees, charges, ad valorem taxes, or special taxes. The Debt Report includes the principal amount of the Bonds. The Debt Report has been derived from data assembled and reported to the City by California Municipal Statistics, Inc., as of July 1, 2023. Neither the City nor the Underwriter has independently verified the information in the Debt Report, and neither of them guarantees the completeness or accuracy of the Debt Report. In addition to current debt, new community facilities districts and/or special assessment districts could be formed in the future encompassing all or a portion of the property within the Community Facilities District; those districts or the agen cies that form them could issue more bonds and levy additional special taxes or assessments.

28 4873-8514-9548v6/022536-0034
TABLE 9

CITY OF SACRAMENTO
NORTH NATOMAS COMMUNITY FACILITIES DISTRICT NO. 4

DIRECT AND OVERLAPPING BONDED DEBT
(as of July 1, 2023)(1)

2022-23 Assessed Valuation: $4,100,572,249 Land and Improvements(2)

DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: % App licable Debt 7/1/23 Los Rios Community College District General Obligation Bonds 1.623% $ 7,278,872 Natomas Unified School District General Obligation Bonds 21.642 85,415,394 Twin Rivers Unified School District General Obligation Bonds (former elementary schools) 5.692 4,967,313 Twin Rivers Unified School District General Obligation Bonds 4.469 12,986,997 Sacramento Area Flood Control District Consolidated Capital Assessment District No. 2 Bonds 5.695 17,433,166 Sacramento Area Flood Control District Natomas Basin Local Assessment District Bonds 18.925 5,719,947 City of Sacramento Community Facilities District No. 97-1 Mello-Roos Act Bonds 42.082 7,128,635 City of Sacramento North Natomas Community Facilities District No. 4 Bonds 100.000 41,555,000 * TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT $182,485,324 *

OVERLAPPING GENERAL FUND DEBT:

Sacramento County General Fund Obligations 1.951% $ 2,278,486 Sacramento County Pension Obligation Bonds 1.951 10,519,037 Sacramento County Board of Education Certificates of Participation 1.951 41,946 City of Sacramento General Fund Obligations 6.036 32,245,028 TOTAL GROSS OVERLAPPING GENERAL FUND DEBT $45,084,497
Less: Sacramento Coun ty supported obligations 242,911 City of Sacramento supported obligations 22,538,492
TOTAL NET OVERLAPPING GENERAL FUND DEBT $22,303,093

GROSS COMBINED TOTAL DEBT $227,569,821 (3)*
NET COMBINED TOTAL DEBT $204,788,417 *

Ratios to 2022-23 Assessed Valuation:
*
Direct Debt ($41,555,000) ............................................................................. 1.01% Total Direct and Overlapping Tax and Assessment Debt ................................ 4.45% Gross Combined Total Debt ............................................................................ 5.55% Net Combined Total Debt ................................................................................ 4.99%

* Preliminary, subject to change.
(1) Amounts of overlapping bonded debt are as of July 1, 2023. Amount of the Community Facilities District bonded debt is net of the September 1, 2023 debt service payment on the Series F Bonds and reflects the estimated par amount of the Bonds as described herein.
(2) Differs from the assessed value presented elsewhere in this Offi cial Statement because the value shown in this Table 9 includes Development-Restricted Parcels and Exempt Parcels that are not subject to the Special Tax levy. (3) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations.

Source: California Municipal Statistics, Inc.

The following table sets forth the estimated total tax obligation of sample Developed Parcels with a single-family detached unit within each Tax Zone of th e Community Facilities District. Based on the Fiscal Year 2022-23 Special Tax levy and tax rates for overlapping taxing entities, the average total Fiscal Year 2022- 23 effective tax rate for a Developed Parcel in the Community Facilities District ranges from approximately

1.37% to 1.46% of the average assessed value of a single-family detached home.

29 4873-8514-9548v6/022536-0034
TABLE 10

CITY OF SACRAMENTO
NORTH NATOMAS COMMUNITY FACILITIES DISTRICT NO. 4

SAMPLE TAX BILLS

FOR INDIVIDUALLY OWNED SAMPLE SINGLE FAMILY DETACHED UNIT

Assumptions Tax Zone IA Tax Zone IB Tax Zone II Tax Zone IV Average Assessed Value(1) $ 444,948 $ 379,205 $ 454,130 $ 460,273 Homeowner's Exemption ($7,000) ($7,000) ($7,000) ($7,000) Net Assessed Value $ 437,948 $ 372,205 $ 447,130 $ 453,273

Ad Valorem Tax Rate(2) Rate
County General 1.00000% $ 4,379 $ 3,722 $ 4,471 $ 4,533 Natomas Unified School District GOB 0.15270 669 -- -- 692 Los Rios Community College District GOB 0.02260 99 84 101 102 Twin Rivers Unified School District GOB(3) 0.05360 -- 200 240 -- Twin Rivers Unified School District GOB(3) 0.03920 -- 146 175 -- Grant Joint Union High School District GOB(3) 0.01200 -- 45 54 -- Total Ad Valorem Taxes $ 5,147 $ 4,196 $ 5,041 $ 5,327

Direct Charges
Reclamation District No. 1000 $ 27 $ 25 $ 25 $ 27
Sacramento Flood Control Agency 8 7 13 12
SAFCA Consolidated CAP ASMT #2 196 85 80 207
Sacramento ADDL Library SRV Tax 38 38 38 38
Sacto Core Library Serv. Tax 15 15 15 15
Natomas Basin Local Assessment District 69 30 28 74
N. Natomas TMA CFD 32 32 32 32
N. Natomas Landscaping CFD No. 3 95 95 95 95
N. Natomas Nghbr Landscape CFD Zone A 38 -- -- 38
N. Natomas Nghbr Landscape CFD Zone I -- 18 -- --
North Natomas Drainage 97-01 99 99 99 99
Neighborhood Park Maint. CFD -- 78 -- --
North Natomas CFD No. 4(4) 618 724 650 539
Citywide L&L Assessment District 93 93 93 93
Total Direct Charges(5) $ 1,329 $ 1,339 $ 1,169 $ 1,269

Total Taxes and Direct Charges(6) $ 6,476 $ 5,535 $ 6,210 $ 6,596 Percent of Average Assessed Value 1.46% 1.46% 1.37% 1.43%

(1) Estimated assessed value based on the average assessed value for a single-family detached home within each Tax Zone. (2) Reflects the Fiscal Year 2022-23 ad valorem tax rates for tax rate areas within each Tax Zone. Ad valorem rates are subject to change in future years. Excludes charges for any debt which has been authorized but not yet issued.

Reflects amounts for Fiscal Year 2022-23 fo r sample properties within the Commun ity Facilities Distri ct. Amounts and overlapping assessments may not apply to all overlapping a ssessments for all property within the Community Facilities District.
(3) Includes general obligation bonds of elemen tary school districts prior to unification with the Grant Joint Union High School District to form the Twin Rivers Unified School District. (4) Reflects the actual Fiscal Year 2022-23 Special Tax levy. (5) All other direct charges are based on the Fiscal Year 2022-23 charges identified on the County property tax bills. Charges are subject to change in future years. Excludes charges for any debt which has been authorized but not yet issued. (6) Totals may not total due to rounding.

Sources: Sacramento County Assessor’s Office; Sacramento County Tax Collector’s Office; Goodwin Consulting Group, Inc.

Delinquency History
The following table is a summary of Special Tax levies, collections and delinquency rates in the Community Facilities District for Fiscal Years 2018-19 through 2022-23. The Community Facilities District is currently included in the County’s Teeter Plan and, as a result, the Community Facilities District receives 100%

30 4873-8514-9548v6/022536-0034
of the Special Tax levy, without regard to the actual amount of collections. See “SECURITY FOR THE BONDS— Teeter Plan” and “SPECIAL RISK FACTORS—Teeter Plan Termination.” TABLE 11

CITY OF SACRAMENTO
NORTH NATOMAS COMMUNITY FACILITIES DISTRICT NO. 4

SPECIAL TAX LEVIES, DELINQUENCIES AND DELINQUENCY RATES FISCAL YEARS 2018-19 THROUGH 2022-23(1)
Fiscal Year
Special Tax
Levy
Parcels
Delinquent
Amount
Delinquent
Percent
Delinquent
Covered
Through Teeter
2018-19 $5,404,214 45 $39,552 0.73% Yes
2019-20 5,549,820 70 27,158 0.49 Yes
2020-21 5,648,283 43 18,444 0.33 Yes
2021-22 5,724,396 62 27,326 0.48 Yes
2022-23
(2) 6,063,264 76 31,656 0.52 Yes (3)

(1) Except as otherwise noted, reflects delinquenc ies as of fiscal year end of year levied. (2) As of June 13, 2023.
(3) One property owner was delinquent on the Fiscal Years 2021-22 and 2022-23 Special Tax levies. The County did not include the delinquent fiscal year 2022-23 for su ch property in the amount of $724 in the Teeter Plan. See “SECURITY FOR THE BONDS— Teeter Plan.” Th e City initiated the enforcement of deli nquent collections and the property ow ner subsequently paid the delinquent amounts.

Source: City of Sacramento; Sacramento County Tax Collector’s Office.

SPECIAL RISK FACTORS
The purchase of the Bonds involves significant risks that are not appropriate for certain investors. The following is a discussion of certain ri sk factors that should be considered, in addition to other matters set forth herein, in evaluating the investment quality of the Bonds. This discussion does not purport to be comprehensive or definitive and does not purport to be a complete stat ement of all factors that may be considered as risks in evaluating the credit quality of the Bonds. The occurrence of one or more of the events discussed herein could adversely affect the ability or willingness of property ow ners in the Community Facilities District to pay their Special Tax when due. Such failures to pay the Special Tax could result in the inability of the City to make full and punctual payments of debt service on the Bonds. In addition, the occurrence of one or more of the events discussed herein could adversely affect the value of the property in the Community Facilities District. See “— Reductions in Property Values” below.

Risks of Real Estate Secured Investments Generally
The Bond Holders will be subject to the risks generally incident to an investment secured by real estate, including, but not limited to, (a) adverse changes in local market conditions, such as changes in the market value of real property in the vicinity of the Community Faci lities District, the supply of or demand for competitive properties in such area, and the market value of residential property or buildings and sites in the event of sale or foreclosure; (b) changes in real estate tax rates and other operating expenses, governmental rules (including but not limited to zoning laws and laws relating to endangered species and hazardous materials), and fiscal policies; (c) natural disasters (including but not limited to earthquakes, wildfires, and floods), which may result in uninsured losses; (d) adverse changes in local market conditions; and (e) increased delinquencies due to rising mortgage costs and other factors.

No assurance can be given that the property owners within the Community Facilities District will pay the Special Tax in the future or that they will be able to pay such Special Tax on a timely basis. See the caption “—Foreclosure Delays – Bankruptcy” for a discussion of certain limitations on the City’s ability to pursue judicial proceedings with respect to delinquent parcels.

31 4873-8514-9548v6/022536-0034
Insufficiency of Special Tax Revenues
As discussed below, the Special Tax may not produce revenues sufficient to pay the debt service on the Bonds either due to nonpayment of the amounts levied or because acreage within the Community Facilities District becomes exempt from taxation due to the transfer of title to a public agency.

To pay debt service on the Bonds, it is generally necessary that the Special Tax be paid in a timely manner. Should the Special Tax not be paid on time, the City has established a Bond Reserve Fund in an amount equal to the Required Bond Reserve to pay debt service on the Bonds to the extent other funds are not available.

See “SECURITY FOR THE BONDS — Bond Reserve Fund.” The City has covenanted in the Indenture to maintain in the Bond Reserve Fund an amount equal to the Required Bond Reserve, subject to the availability of the Special Tax in amounts sufficient to do so and subject to the limitation that the City may not levy the Special Tax in any Fiscal Year at a rate in excess of the maximum amounts permitted under the Rate and Method of Apportionment. As a result, if a significant number of delinquencies occur, the City could be unable to replenish the Bond Reserve Fund to the Required Bond Reserve due to the limitations on the amount of the Special Tax that may be levied. If such defaults were to continue in successive years, the Bond Reserve Fund could be depleted and a default on the Bonds could occur.

The Act provides that, if any property within the Community Facilities District not otherwise exempt from the Special Tax is acquired by a public entity through a negotiated transaction, or by gift or devise, the Special Tax will continue to be levied on, and enforceable against, the public entity that acquired the property.

In addition, the Act provides that if property subject to the Special Tax is acquired by a public entity through eminent domain proceedings, the obligation to pay the Special Tax with respect to that property is to be treated as if it were a special assessment and paid from the eminent domain award. The constitutionality and operation of these provisions of the Act have not been tested in the courts, but it is doubtful that they would be upheld as to, for example, property owned by the federal government. If for any reason property within the Community Facilities District becomes exempt from taxation by reason of ownership by a non-taxable entity such as the federal government or another public agency, then, subject to the limitation of the Special Tax under the Rate and Method of Apportionment, the Special Tax will be reallocated to the remaining taxable parcels within the Community Facilities District. This would result in the owners of such property paying a greater amount of the Special Tax and could have an adverse impact upon thei r willingness and/or ability to pay the Special Tax.

Moreover, if a substantial portion of additional land within the Community Facilities District became exempt from the Special Tax because of public ownership or otherwise, the Special Tax which could be levied upon the remaining acreage might not be sufficient to pay principal of, and interest on, the Bonds when due and a default will occur with respect to the payment of such principal and interest.

The City has covenanted that, under certain circum stances, it will institute foreclosure proceedings to sell any property with delinquent Special Tax amounts in order to obtain funds to pay debt service on the Bonds.

If foreclosure proceedings were ever instituted, any mortga ge or deed of trust holder could, but would not be required to, advance the amount of the delinquent Special Tax to protect its security interest. See “SECURITY FOR THE BONDS — Covenant for Superior Court Foreclos ure” for provisions that apply in the event of such foreclosure and that the City must follow in the event of delinquencies.

If sales or foreclosures of property are necessary, th ere could be a delay in payments to Bond Holders (if the Bond Reserve Fund has been depleted) pending such sales or the prosec ution of the foreclosure proceedings and receipt by the City of the proceeds of sale. The City may adjust the future Special Tax levied on taxable parcels in the Community Facilities District, subject to limitations described above under the caption “THE COMMUNITY FACILITIES DISTRICT — Rate and Method of Apportionment,” to provide an amount required to pay interest on, and principal of, the Bonds, and any amount necessary to replenish the Bond Reserve Fund to an amount equal to the Required Bond Reserve and to pay all current expenses. There is, however, no assurance that the total amount of the Special Tax that could be levied and collected against taxable parcels in the Community Facilities District will be at all times sufficient to pay the amounts required to be paid by the

32 4873-8514-9548v6/022536-0034
Indenture, even if the Special Tax is levied at the maximum Special Tax rates authorized under the Rate and Method of Apportionment. See “—Foreclosure Delays – Bankruptcy.” No assurance can be given that the real property subject to sale or foreclosure will be sold, or if sold, that the proceeds of sale will be sufficient to pay any delinquent installments of the Special Tax. The Act does not require the City to purchase or otherwise acquire any lo t or parcel of property to be sold at foreclosure if there is no other purchaser at such sale. The Act and the Indenture do specify that the Special Tax will have the same lien priority as for ad valorem property taxes in the case of delinquency. Section 53356.6 of the Act requires that property sold pursuant to foreclosure under the Act be sold for not less than the amount of judgment in the foreclosure action, plus post-judgment interest and authorized costs, unless the consent of the owners of 75% of the Outstanding Bonds is obtained. Under the Act, the City may waive delinquency penalties and redemption penalties if it determines that (a) the waivers will apply only to parcels delinquent at the time of the determination, (b) the waivers will only be available with respect to parcels for which all past due and currently due amounts of the Special Tax and all other related costs are paid in full within a limited period of time specified in the determination, (c) the waivers will be available only with respect to parcels sold or otherwise transferred to new owners unrelated to the owner responsible for the delinquency, and (d) the waivers are in the best interest of the Bond Holders.

Before July 1, 1983, the right of redemption from foreclosure sales was limited to a period of one year from the date of sale. Under legislation effective July 1, 1983, the statutory right of redemption from such foreclosure sales has been repealed. However, a period of 20 days must elapse after the date on which the notice of levy of the interest in real property was served on th e judgment debtor before the sale of such lot or parcel can be made. Furthermore, if the purchaser at the sale is the judgment creditor (e.g., the City), an action to set aside the sale may be commenced by the delinquent property owner within 90 days after the date of sale. The constitutionality of this legislation repealing the one-year redemption period has not been tested, and there can be no assurance that, if tested, the legislation will be upheld. (California Code of Civil Procedure Section 701.680.)
Limitation of Special Tax Levy to Allocated Share of Annual Costs Pursuant to the Rate and Method of Apportionment, the maximum amount of the Special Tax that may be levied in each Tax Zone is limited by such Tax Zone ’s allocated share of Annual Costs, which is generally determined by the share of the principal amount of the Bonds and Series F Bonds. See “THE COMMUNITY FACILITIES DISTRICT — Allocation of Annual Costs. ” Due to such limitation, although the Bonds and the Series F Bonds are payable under the Indenture from the Special Tax collected and deposited in the Special Tax Fund, a shortfall in Special Tax revenues (including amounts needed to replenish the Bond Reserve Fund to the Required Bond Reserve) caused by delinquencies in one Tax Zone may not be adequately compensated by an increase in the Special Tax levy in the other Tax Zones.

The relative allocation of the Bonds and the Series F Bonds will change among the Tax Zones as such bonds mature. After the Bond Year ending September 1, 2031, the property in Tax Zone IV is not expected to have any allocation of Annual Costs and the Special Tax will not be levied on such property. As a result, debt service on the Bonds and the Series F Bonds will be allocated only among Tax Zones IA, IB and II. Further, the portion of the special taxes allocable to Tax Zone IB will increase over time, particularly after September 1, 2031. See “THE COMMUNITY FACILITIES DISTRICT — Allocation of Annual Costs.” Uncertainties in Land Development – General
In Fiscal Year 2022-23, 8,962 parcels within the Community Facilities were levied as Developed Parcels, 89 parcels of which did not have assessed impr ovement value as of January 1, 2022. Although the development in the Community Facilities District is substantially complete, there remain certain undeveloped areas therein. Since land without completed buildings is generally less valuable than land with completed buildings, the vacant land will provide less security for the Bonds should it be necessary for the City to

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commence foreclosure proceedings because of the non-paym ent of the Special Tax. In short, the successful development of the land within the Community Facilities District is important to the ultimate security for, and the payment of principal of, and interest on, the Bonds.

There are many reasons why a project may not be developed in the manner and within the time frame and budget originally planned. For example, a project might be adversely affected by opposition to it, unfavorable economic conditions, an inability of the landowner to obtain financing; fluctuations in the local real estate market; fluctuations in interest rates unexpected increases in development costs; changes in federal, state, or local governmental policies relating to the ownership and development of real estate; and the appearance of previously unknown environmental considerations or material changes in known environmental considerations.

Some of these factors are discussed below as individual risk factors.

Disclosure to Future Purchasers
The willingness or ability of an owner of a parcel to pay the Special Tax, even if the value of the parcel is sufficient, may be affected by whether the owner was given due notice of the Special Tax authorization when the owner purchased the parcel; was informed of the amount of the Special Tax on the parcel should the Special Tax be levied at the maximum tax rate, and the risk of such a levy; and has the ability, at the time of such a levy, to pay it as well as pay other expenses and obligations. The City has caused a Notice of Special Tax lien to be recorded against each parcel with the County Clerk/R ecorder. While title companies normally refer to such notices in title reports, there can be no guarantee that such reference will be made or, if made, that a prospective purchaser or lender will consider such Special Tax obligation in the purchase of a property within the Community Facilities District or the lending of money thereon.

The Act requires the subdivider of a subdivision (or its agent or representative) to notify a prospective purchaser or long-term lessor of any lot, parcel, or unit subject to a Mello-Roos special tax of the existence and maximum amount of such special tax using a statutorily prescribed form. California Civil Code Section 1102.6b requires that in the case of transfers other than those co vered by the above requirement, the seller must at least make a good-faith effort to notify the prospective purchaser of the special tax lien in a format prescribed by statute. Failure by an owner of the property to comply with the above requirements, or failure by a purchaser or lessor to consider or understand the nature and exis tence of the Special Tax, could adversely affect the willingness and ability of the purchaser or lessor to pay the Special Tax when due.

Teeter Plan Termination
In 1993, the County implemented its Teeter Plan as an alternative procedure for the distribution of certain property tax and assessment levies on the secured roll. Under its Teeter Plan, the County has elected to provide local agencies and taxing areas, including the Community Facilities District, with full tax and assessment levies instead of actual tax and assessment collections. In return, the County is entitled to retain all delinquent tax and assessment payments, penalties and interest. Thus, the County’s Teeter Plan may protect the Holders of the Bonds from the risk of delinquencies in the payment of the Special Tax. However, the County is entitled, and under certain circumstances could be required, to termin ate its Teeter Plan with respect to all or part of the local agencies and taxing areas covered thereby. A termination of the Teeter Plan with respect to the Community Facilities District would eliminate such protection from Special Tax delinquencies. See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS – Teeter Plan.”
Geologic, Topographic and Climatic Conditions
The market value of the property within the Community Facilities District can be adversely affected by a variety of factors that may affect public and private improvements. Those additional factors include, without limitation, geologic conditions (such as earthquakes), topographic conditions (such as earth movements) and climatic conditions (such as droughts, fire hazard, and floods). The pr operty within the Community Facilities District is not located within an Alquist-Priolo Earthquake Fault Zone.

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With respect to geologic conditions, building codes require that some of these factors be taken into account in the design of private impr ovements of the parcels, and the City has adopted the Uniform Building Code standards with regard to seismic standards. Design criteria are established upon the basis of a variety of considerations and may change, leaving previously designed improvements unaffected by more stringent subsequently established criteria. In general, design criteria reflect a balance at the time of establishment between the present costs of protection and the future costs of lack of protection, based in part upon a present perception of the probability that the condition will occur and the seriousness of the condition should it occur.

Consequently, neither the absence of, nor the establishmen t of, design criteria with respect to any particular condition means that the applicable governmental agency has evaluated the condition and has established design criteria in the situations in which the criteria are needed to preserve value, or has established the criteria at levels that will preserve value. To the contrary, the City expects that one or more of such conditions may occur and may result in damage to improvements of varying seriousness; that the damage may entail significant repair or replacement costs; and that repair or replacement may never occur because of the cost, because repair or replacement will not facilitate habitability or other use, or because other considerations preclude repair or replacement. Under any of these circumstances, the actu al value of the parcels might depreciate or disappear, notwithstanding the establishment of design criteria for any such condition.

A revised map designating the property within th e Natomas Basin as Zone A99 became effective on June 16, 2023. The Zone A99 designation means that, among other things, at least 50% of the improvements required to achieve 100-year flood protection have been completed. See “THE COMMUNITY FACILITIES DISTRICT — Flood Hazard.”
The area within the Natomas Basin has experienced flood events. For instance, in 1986, flooding caused seepage in the levees within the proximity of the Sacramento International Airport. As described in this Official Statement, the area within the Natomas Basin, including the Community Facilities District, remains at risk for flood-related property damage even if the Levee Project is complete.

Hazardous Substances
Although government taxes, assessments and charges are a common claim against the value of a parcel, other less common claims may also be relevant. One of the most serious in terms of the potential reduction in the value of a parcel is a claim with regard to a hazardous substance. In general, the owners and operators of a parcel may be required by law to remedy conditions 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 “Super Fund Act,” is the most well-known and widely applicable of these laws, but California laws with regard to hazardous substances are also stringent and similar in effect. Under many of these laws, the owner (or operator) may be obligated to remedy a hazardous substance condition of a parcel whether or not the owner (or operator) had anything to do with creating or handling the hazardous substance. The effect, therefore, should any of the parcels within the Community Facilities District be affected by a hazardous substance, is to reduce the marketability and value by the costs of remedying the condition.

The City is not aware of the presence of any federally or State classified hazardous substances located on the property within the Community Facilities District. However, it is possible that such substances do currently exist and that the City is not aware of them.

It is possible that property in the Community Facilities District may be liable for hazardous substances in the future as a result of the existence, currently, of a substance presently classified as hazardous but which has not been released or the release of which is not presently threatened, or the existence, currently, on the property of a substance not presently classified as hazardous but which may in the future be so classified. Additionally, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling such substance. All of these possibilities could reduce the value of the applicable property.

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Bankruptcy and Foreclosure
Bankruptcy, insolvency and other laws generally affecting creditors’ rights could adversely impact the interests of owners of the Bonds. The payment of property owners’ taxes and the ability of the City to foreclose the lien of a delinquent unpaid Special Tax pursuant to its covenant to pursue judicial foreclosure proceedings may be limited by bankruptcy, insolvency or other laws generally affecting creditors’ rights or by the laws of the State relating to judicial foreclosure. S ee “SOURCES OF PAYMENT FOR THE BONDS—Covenant for Superior Court Foreclosure.” In addition, the prosecution of a foreclosure could be delayed due to many reasons, including crowded local court calendars or lengthy procedural delays.

Although a bankruptcy proceeding would not cause the Special Tax to become extinguished, the amount of any Special Tax lien could be modified if the value of the property falls below the value of the lien. If the value of the property is less than the lien, such excess amount could be treated as an unsecured claim by the bankruptcy court. In addition, bankruptcy of a property owner could result in a delay in prosecuting Superior Court foreclosure proceedings. Such delay would increase the likelihood of a delay or default in payment of delinquent Special Tax installments and the possibility of delinquent Special Tax installments not being paid in full.

On July 30, 1992, the United States Court of Appeals for the Ninth Circuit issued its opinion in a bankruptcy case entitled In re Glasply Marine Industries. In that case, the court held that ad valorem property taxes levied by Snohomish County in the State of Washington after the date that the property owner filed a petition for bankruptcy were not entitled to priority over a secured creditor with a prior lien on the property.

Although the court upheld the priority of unpaid taxes imposed before the bankruptcy petition, unpaid taxes imposed after the filing of the bankruptcy petition were declared to be “administrative expenses” of the bankruptcy estate, payable after all secured creditors. As a result, the secured creditor was able to foreclose on the property and retain all the proceeds of the sale except the amount of the pre-petition taxes.

The Bankruptcy Reform Act of 1994 (the “Bankruptcy Reform Act”) included a provision which excepts from the Bankruptcy Code’s automatic stay provisions, “the creation of a statutory lien for an ad valorem property tax imposed by . . . a political subdivision of a state if such tax comes due after the filing of the petition [by a debtor in bankruptcy court].” This amendment effectively makes the Glasply holding inoperative as it relates to ad valorem real property taxes. However, it is possible that the original rationale of the Glasply ruling could still result in the treatment of post-petition specia l taxes as “administrative expenses,” rather than as tax liens secured by real property, at least during the pendency of bankruptcy proceedings.

According to the court’s ruling, as administrative expenses, post-petition taxes would be paid, assuming that the debtor had sufficient assets to do so. In certain circumstances, payment of such administrative expenses may be allowed to be deferred. Once the property is transferred out of the bankruptcy estate (through foreclosure or otherwise), it would at that time become subject to current ad valorem property taxes.

The Act provides that the Special Tax is secured by a continuing lien which is subject to the same lien priority in the case of delinquency as ad valorem property taxes. No case law exists with respect to how a bankruptcy court would treat the lien for the Special Tax levied after the filing of a petition in bankruptcy court.

Glasply is controlling precedent on bankruptcy courts in the State. If the Glasply precedent was applied to the levy of the Special Tax, the amount of the Special Tax received from parcels whose owners declare bankruptcy could be reduced.

The various legal opinions to be delivered concurrently with the delivery of the Bonds (including Bond Counsel’s approving legal opinion) will be qualified, as to the enforceability of the various legal instruments, by moratorium, bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally.

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FDIC/Federal Government Interests in Parcels
The ability of the City to collect interest and penalties specified by the Act and to foreclose the lien of delinquent Special Tax amounts may be limited in certain respects with regard to parcels in which the Federal Deposit Insurance Corporation (the “FDIC”), or other federal government entities such as Fannie Mae or Freddie Mac, have or obtain an interest.

In the case of the FDIC, if any financial institution making a loan that is secured by parcels is taken over by the FDIC and the applicable Special Tax is not paid, the remedies available to the City may be constrained.

The FDIC’s policy statement regarding the payment of state and local real property taxes (the “Policy Statement”) provides that non-ad valorem taxes secured by a valid lien in effect before the FDIC acquired an interest in a property will be paid unless the FDIC determines that abandonment of its interests is appropriate.

The Policy Statement provides that the FDIC generally will not pay installments of non-ad valorem taxes levied after the time the FDIC acquires its fee interest, nor will the FDIC recognize the validity of any lien to secure payment except in certain cases where the Resolution Trust Corporation had an interest in property on or before December 31, 1995. Moreover, the Poli cy Statement provides that, with respect to parcels on which the FDIC holds a mortgage lien, the FDIC will not permit its lien to be foreclosed out by a taxing authority without its specific consent, nor will the FDIC pay or recognize liens for any penalties, fines or similar claims imposed for the nonpayment of taxes.

The FDIC has taken a position similar to that expressed in the Policy Statement in legal proceedings brought against Orange County in United States Bankruptcy Court and in Federal District Court. The Bankruptcy Court ruled in favor of the FDIC, Orange County appealed, and the FDIC cross-appealed. On August 28, 2001, the United States Court of Appeals for the Ninth Circuit (the “Ninth Circuit”), issued a ruling favorable to the FDIC except with respect to the payment of pre-receivership liens based upon delinquent property tax.

The City is unable to predict what effect the application of the Policy Statement would have in the event of a delinquency with respect to parcels in which the FD IC has or obtains an interest, although prohibiting the lien of the FDIC to be foreclosed out at a judicial foreclosure sale would prevent or delay the foreclosure sale.

In the case of Fannie Mae and Freddie Mac, if a taxable parcel is owned by a federal government entity or federal government sponsored entity, such as Fannie Mae or Freddie Mac, or a private deed of trust secured by a taxable parcel is owned by a federal government ent ity or federal government sponsored entity, such as Fannie Mae or Freddie Mac, the ability to foreclose on th e parcel or to collect delinquent Special Tax amounts may be limited. Federal courts have held, based on the supremacy clause of the United States Constitution, that “this Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, an ything in the Constitution or Laws of any State to the contrary notwithstanding.” In the absence of Congressional intent to the contrary, a state or local agency cannot foreclose to collect delinquent taxes or assessments if foreclosure would impair the federal government interest.

This means that, unless Congress has otherwise provided, if a federal government entity owns a taxable parcel but does not pay taxes and assessments levied on the parcel (including the Special Tax), the applicable state and local governments cannot foreclose on the parcel to collect the delinquent taxes and assessments.

Moreover, unless Congress provides otherwise, if the federal government has a mortgage interest in the parcel and the City wishes to foreclose on the parcel because of delinquent Special Tax amounts, the property cannot be sold at a foreclosure sale unless it can be so ld for an amount sufficient to pay delinquent taxes and assessments on a parity with the Special Tax and preserve the federal government’s mortgage interest. In Rust v. Johnson (9th Cir. 1979) 597 F.2d 174, the Ninth Circuit held that Fannie Mae is a federal instrumentality for purposes of this doctrine, and not a private entity, and that, as a result, an exercise of state power over a mortgage interest held by Fannie Mae constitutes an exercise of state power over property of the United States. For a discussion of risks associated with taxable parcels within the Community Facilities District becoming owned by

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the federal government, federal government entities, or federal government sponsored entities, see “— Insufficiency of Special Tax Revenues.”
The City’s remedies may also be limited in the case of delinquent Special Tax amounts with respect to parcels in which other federal agencies (such as th e Internal Revenue Service and the Drug Enforcement Administration) have or obtain an interest.

Direct and Overlapping Indebtedness
The ability of an owner of property within the Community Facilities District to pay the applicable Special Tax could be affected by the existence of othe r taxes and assessments impo sed upon Taxable Parcels.

See “THE COMMUNITY FACILITIES DISTRICT — Direct and Overlapping Debt” herein. The City and other public agencies whose boundaries overlap those of the Community Facilities District could impose additional taxes or assessment liens on the Taxable Parcel s within the Community Facilities District to finance public improvements or services inside or outside the Community Facilities District. The lien created on the Taxable Parcels within the Community Facilities District through the levy of such additional taxes may be on a parity with the lien of the Special Tax applicable to the Taxable Parcels within the Community Facilities District.

The imposition of additional liens on parity with the Special Tax may reduce the ability or willingness of property owners to pay the Special Tax and increase the possibility that foreclosure proceeds will not be adequate to pay delinquent Special Tax amounts.

Reductions in Property Values
The value of the Taxable Parcels within the Community Facilities District is an important factor in determining the investment quality of the Bonds. If a property owner is delinquent in the payment of the Special Tax, the City’s only remedy is to commence foreclosure proceedings in an attempt to obtain funds to pay the the Special Tax. Reductions in property values due to a downturn in the economy, physical events such as earthquakes or floods, stricter land-use regulations, delays in development or other events will adversely impact the security underlying the Special Tax. See “THE COMMUNITY FACILITIES DISTRICT —Assessed Value- to-Lien Ratios” for a discussion of the assessed value of Taxable Parcels within the Community Facilities District.

The assessed values set forth in this Official Statement do not represent market values arrived at through an appraisal and generally reflect only the sales price of a parcel when acquired by its current owner, increased or decreased annually by an amount determined by the County Assessor based on current market conditions, generally not to exceed an increase of more than 2% per fiscal year from the date of purchase (except in the case of new construction subsequent to such acquisition). No assurance can be given that a parcel could actually be sold for its assessed value. The actual market value of the property is subject to future events such as downturn in the economy, occurrences of certain acts of nature and the decisions of various governmental agencies as to land use, all of which could adversely impact the value of the parcels in the Community Facilities District that secure the Bonds. See “THE COMMUNITY FACILITIES DISTRICT—A ssessed Value-to- Lien Ratios” above.

No assurance can be given that the estimated value-to-lien ratios set forth in Tables 5 and 6 will be maintained over time. As discussed herein, many factors beyond the City’s control could adversely affect the property values of Taxable Parcels within the Community Facilities District. The City does not have any control over the amount of additional indebtedness that may be issued by other public agencies, the payment of which is through the levy of a tax or an assessment on a parity with the Special Tax. A decrease in the assessed values of Taxable Parcels in the Community Facilities District or an increase in the indebtedness secured by taxes and amounts with parity liens on Taxable Parcels in the Community Facilities District, or both, could result in a lowering of the value-to-lien ratio of the Taxable Parcels in the Community Facilities District.

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No assurance can be given that any bid will be received for a parcel with delinquent Special Tax amounts offered for sale at foreclosure or, if a bid is received, that the bid will be sufficient to pay all delinquent Special Tax amounts.

Special Tax Delinquencies
Under the Act, the Special Tax, from which funds necessary for the payment of principal of, and interest on, the Bonds are derived, are customarily billed to the properties within the Community Facilities District on the secured property tax bills sent to the property owners by the County. The Act currently provides that Special Tax installments are due and payable when ad valorem property-tax installments are due and bear the same penalties and interest for non-payment as do ad valorem property tax installments.

See “SECURITY FOR THE BONDS — Covenant for Supe rior Court Foreclosure,” for a discussion of the provisions that apply, and procedures the City is ob ligated to follow under the Indenture, in the event of delinquencies in the payment of the Special Tax. See “SPECIAL RISK FACTORS — FDIC/Federal Government Interests in Properties” and “— Bankruptcy and Foreclosure” for a discussion of the policy of the Federal Deposit Insurance Corporation regarding the payment of special taxes and assessments and limitations on the City’s ability to foreclose on the lien of the Special Tax in certain circumstances.

Payment of Special Tax is not a Personal Obligation of the Property Owners An owner of a Taxable Parcel is not personally obligated to pay the Special Tax. Rather, the Special Tax is an obligation secured only by a lien against the Ta xable Parcel. If the value of a Taxable Parcel is not sufficient, taking into account other liens imposed by public agencies, to fully secure the Special Tax, the City has no recourse against the property owner.

No Acceleration Provision
The Bonds do not contain a provision allowing for the acceleration of the Bonds in the event of a payment default or other default under the terms of the Bonds or the Indenture.

Proposition 218
An initiative measure commonly referred to as the “Right to Vote on Taxes Act” (the “Initiative”) was approved by the voters of the State at the November 5, 1996 general election. The Initiative added Article XIIIC and Article XIIID to the California Constitution. Ac cording to the “Title and Summary” of the Initiative prepared by the California Attorney General, the Initiative limits “the authority of local governments to impose taxes and property-related assessments, fees and charges.” The provisions of the Initiative as they may relate to community facilities district are subject to interpretation by the courts. The Initiative could potentially impact the Special Tax available to the City to pay the principal of and interest on the Bonds as described below.

Among other things, Sect ion 3 of Article XIIIC states that “. . . the initiative power shall not be prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or charge.” The Act provides for a procedure which includes notice, hearing, protest and voting requirements to alter the rate and method of apportionment of an existing special tax. However, the Act prohibits a legislative body from adopting any resolution to reduce the rate of any special tax or terminate the levy of any special tax pledged to repay any debt incurred pursuant to the Act unless such legislative body determines that the reduction or termination of the special tax would not interfere with the timely retirement of that debt. On July 1, 1997, a bill was signed into law by the Governor of the State enacting Government Code Section 5854, which states that:
“Section 3 of Article XIIIC of the Calif ornia Constitution, as adopted at the November 5, 1996, general election, shall not be construed to mean that any owner or beneficial owner of a municipal security, purchased before or after that date, assumes the risk of, or in

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any way consents to, any action by initiative measure that constitutes an impairment of contractual rights protected by Section 10 of Article I of the United States Constitution.” Accordingly, although the matter is not free from doubt, it is likely that the Initiative has not conferred on the voters the power to repeal or reduce the Special Tax if such reduction would interfere with the timely retirement of the Bonds.

It may be possible, however, for voters or the City Council to reduce the Special Tax in a manner that does not interfere with the timely repayment of the Bonds, but which does reduce the maximum amount of the Special Tax that may be levied in any year below the existing levels. Furthermore, no assurance can be given with respect to the future levy of the Special Tax in amounts greater than the amount necessary for the timely retirement of the Bonds. Therefore, no assurance can be given with respect to the levy of the Special Tax for Expenses.

The interpretation and application of Article XIII C and Article XIII D will ultimately be determined by the courts with respect to a number of the matters discussed above, and it is not possible at this time to predict with certainty the outcome of such determination or the timeliness of any remedy affo rded by the courts. See “SPECIAL RISK FACTORS — Li mitations on Remedies.”
Ballot Initiatives
Articles XIII A, XIII B, XIII C and XIII D of the Ca lifornia Constitution we re adopted pursuant to measures qualified for the ballot pursuant to Californ ia’s constitutional initiative process and the State Legislature has in the past enacted legislation which has altered the spending limitations or established minimum funding provisions for particular activities. On March 6, 1995, in the case of Rossi v. Brown, the State Supreme Court held that an initiative can repeal a tax ordinance and prohibit the imposition of further such taxes and that the exemption from the referendum requirements does not apply to initiatives. From time to time, other initiative measures could be adopted by Californi a voters or legislation enacted by the legislature. The adoption of any such initiative or legislation might place limitations on the ability of the State, the City, or local districts to increase revenues or to increase appropriations.

Loss of Tax Exemption
As discussed under the heading “TAX MATTERS,” interest on the Bonds could ce ase to be excluded from gross income for purposes of federal income taxation, retroactive to the date the Bonds were issued, as a result of future acts or omissions of the City. In addition, it is possible that future changes in applicable federal tax laws could cause interest on the Bonds to be included in gross income for federal income taxation or could otherwise reduce the equivalent taxable yield of such interest and thereby reduce the value of the Bonds.

Limited Secondary Market
There can be no guarantee that there will be a secondary market for the Bonds or, if a secondary market exists, that such Bonds can be sold for any particular price. Although the City has committed to provide certain financial and operating information, there can be no assurance that such information will be available to Bond owners on a timely basis. The failure to provide the required annual financial information does not give rise to monetary damages but merely to an action for specific performance. Occasionally, because of general market conditions or lack of current information, or because of adverse history or economic prospects connected with a particular issue, secondary marketing practices in connection with a particular issue are suspended or terminated.

Additionally, prices of issues for which a market is being made will depend upon then prevailing circumstances.

Such prices could be substantially different from the original purchase price.

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Limitations on Remedies
Remedies available to the Holders of the Bonds may be limited by a variety of factors and may be inadequate to assure the timely payment of principal of, and interest on, the Bonds or to preserve the tax-exempt status of interest on the Bonds.

Bond Counsel has limited its opinion as to the enforceability of the Bonds and of the Indenture to the extent that enforceability may be limited by bankruptcy, insolvency reorganization, fraudulent conveyance or transfer, moratorium or other similar laws affecting generally the enforcement of creditor’s rights; by equitable principles; by the exercise of judicial discretion; and by limitations on remedies agains t public agencies in the State of California. The lack of availability of certain remedies or the limitation of remedies may entail risks of delay, limitation or modification of the rights of the Holders.

Potential Early Redemption of Bonds from Prepayments or Bond Proceeds Property owners within the Community Facilities District and any future individual property owner, are permitted to prepay their Special Ta x obligation at any time. Such prepayments could also be made from the proceeds of bonds issued by or on behalf of an overlapping community facilities district. Such prepayments will result in a redemption of the Bonds on the interest payment date for which timely notice may be given under the Indenture following the receipt of the prepayment. The resulting redemption of Bonds that were purchased at a price greater than par could reduce the otherwise exp ected yield on such Bonds. See the caption “THE BONDS—Redemption— Extraordinary Redemption from Prepayments.” Cybersecurity
The City relies on computers and technology to conduct its operations. The City and its departments face cyber threats from time to time, including but not limited to hacking, viruses, malware, and other attacks on computers and other sensitive digital networks and systems. In late-2019, the City experienced a cyber event relating to a fraudulently misdirected payment of a substantial amount. The City has recovered almost all of the payment, and has instituted procedures intended to prevent a reoccurrence.

No assurances can be given that the City’s security and operational control measures will guard against all cyber threats and attacks. The results of any atta ck on the City’s computer and information-technology systems could adversely affect the City’s operations and damage its digital networks and systems, and potential losses from such attacks, as well as the costs of defending against future attacks, could be substantial. The City is also reliant on other entities and service providers in connection with the administration of the Bonds, including without limitation the County tax collector for the levy and collection of Special Tax and the Trustee.

No assurance can be given that the City and these other entities will not be affected by cyber threats and attacks in a manner that may affect the Bond owners.

Litigation with Respect to Community Facilities Districts Shapiro. The California Court of Appeal, Fourth Appellate District, Division One, issued its opinion in City of San Diego v. Melvin Shapiro (2014) 228 Cal.App.4th 756 (the “San Diego Decision”). The case involved a Convention Center Facilities District (the “CCFD”) established by the City of San Diego (“San Diego”). The CCFD is a financing district much like a community facilities dist rict established under the provisions of the Act. The CCFD is comprised of all of the real property in San Diego. However, the special tax to be levied within the CCFD was to be levied only on hotel properties located within the CCFD.

The election authorizing the special tax was limited to owners of hotel properties and lessees of real property owned by a governmental entity on which a hotel is located. Thus, the election was not a registered voter election. Such approach to determining who would constitute the qualified electors of the CCFD was modeled after Section 53326(c) of the Act, which generally provides that, if a special tax will not be apportioned

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in any tax year on residential property, the legislative body may provide that the vote shall be by the landowners of the proposed district whose property would be subject to the special tax. The Court held that the CCFD special tax election was invalid under the California Constitution b ecause Article XIIIA, Section 4 thereof and Article XIIIC, Section 2 thereof require that the electors in such an election be the re gistered voters within the district.

Horizon. The Sacramento County Superior Court issued a ruling in Horizon Capital Investments, LLC v. City of Sacramento et al . (Case No. 34-2017-80002661) which as described below, involved an election to approve the levy of a special tax within a community facilities district (“CFD”) formed under the Act.

In 2017, the City initiated proceedings to form a CFD to finance certain costs to operate and maintain a streetcar line. As permitted by the Act, the proposed district included non-contiguous parcels of non-residential property. Because there were fewer than 12 registered voters residing within the territory of the proposed CFD, the City Council submitted the special tax proposed to be levied within the proposed CFD to the owners of land within the proposed CFD, as require d by Section 53326(c) of the Act. The proposed special tax received the requisite two-thirds vote in the landowner election.

Petitioners Horizon Capital Investments, LLC et al. filed a writ of mandate and complaint for reverse validation and declaratory relief. Petitioners argued, and the superior court agreed in its final ruling, that under section 4(a) of article XIII A of th e California Constitution (w hich provides that “Cities, Counties and special districts, by a two-thirds vote of the qualified electors of such district [sic], may impose special taxes on such district…”) the phrase “qualified electors” means the regist ered voters of the entire City and not just the owners of the property within the boundaries of the proposed CFD. Citing the San Diego Decision, the ruling states that the phrase “qualified electors of the district” refers to the registered voters of the entity imposing the special tax, which in this case was the City. Because the vote within the proposed CFD was by landowners only and not by all registered voters in the City, the final ruling states that the special tax is invalid.

The superior court’s final ruling is not binding upon other courts within the State and does not directly apply to the District, the Special Tax, or the Bonds. Although the City disagrees with the final ruling on a number of grounds, the City decided not to appeal.

The Special Tax Election in the Community Facilities District. With respect to the San Diego Decision, the facts of such case show that there were thousands of registered voters within the CCFD ( viz., all of the registered voters in San Diego). The elections held in the Community Facilities District had less than 12 registered voters at the time of the el ection to authorize the Special Tax. In the San Diego Decision, the court expressly stated that it was not addressing the validity of landowner voting to impose special taxes pursuant to the Act in situations where there are fewer than 12 regist ered voters. Thus, by its terms, the court’s holding in the San Diego Decision does not apply to the Special Tax election in the Community Facilities District.

Moreover, Section 53341 of the Act provides that any “action or proceeding to attack, review, set aside, void or annul the levy of a special tax…shall be commenced within 30 days after the special tax is approved by the voters.” Similarly, Section 53359 of the Act provides that any action to determine the validity of bonds issued pursuant to the Act be brought within 30 days of the voters approving the issuance of such bonds. The petitioners in Horizon filed the writ of mandate within 30 days of the landowner election. Landowners in the Community Facilities District approved the Special Tax to be levied in accordance with the Rate and Method of Apportionment on November 5, 1998. Based on Sections 53341 and 53359 of the Act and analysis of existing laws, regulations, rulings, and court decisions, the City believes that no successful challenge to the Special Tax being levied in accordance with the November 5, 1998 may now be brought. In connection with the issuance of the Bonds, Bond Counsel expects to deliver its opinion in the proposed form attached hereto as Appendix B.

TAX MATTERS
In the opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the City (“Bond Counsel”), based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other

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matters, the accuracy of certain representations and compliance with certain covenants, interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the “Code”) and is exempt from State of California personal income taxes. Bond Counsel is of the further opinion that interest on the Bonds is not a specific pr eference item for purposes of the federal individual alternative minimum tax. Bond Counsel observes that, for tax years beginning after December 31, 2022, interest on the Bonds included in adjusted financial statement income of certain corporations is not excluded from the federal corporate alternative minimum tax. Bond Counsel expresses no opinion regarding any other tax consequences related to the ownership or disposit ion of, or the amount, accrual or receipt of interest on, the Bonds. A complete copy of the proposed form of opinion of Bond Counsel is set forth in APPENDIX B hereto.

To the extent the issue price of any maturity of the Bonds is less than the amount to be paid at maturity of such Bonds (excluding amounts stated to be interest and payable at least annually over the term of such Bonds), the difference constitutes “original issue discount,” the accrual of which, to the extent properly allocable to each Beneficial Owner thereof, is treated as intere st on the Bonds which is excluded from gross income for federal income tax purposes and exempt from State of California personal income taxes. For this purpose, the issue price of a particular maturity of the Bonds is the first price at which a substantial amount of such maturity of the Bonds is sold to the public (excluding bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers). The original issue discount with respect to any maturity of the Bonds accrues daily over the term to maturi ty of such Bonds on the basis of a constant interest rate compounded semiannually (wit h straight-line interpolations between compounding dates). The accruing original issue discount is added to the adjusted basis of such Bonds to determine taxable gain or loss upon disposition (including sale, redemption, or payment on maturity) of such Bonds. Beneficial Owners of the Bonds should consult their own tax advisors with respect to the tax consequences of ownership of Bonds with original issue discount, including the treatment of Beneficial Owners who do not purchase such Bonds in the original offering to the public at the first price at which a substantial amount of such Bonds is sold to the public.

Bonds purchased, whether at original issuance or ot herwise, for an amount higher than their principal amount payable at maturity (or, in some cases, at th eir earlier call date) (“Premium Bonds”) will be treated as having amortizable bond premium. No deduction is allowable for the amortizable bond premium in the case of bonds, like the Premium Bonds, the interest on which is excluded from gross income for federal income tax purposes. However, the amount of tax-exempt interest received, and a Beneficial Owner’s basis in a Premium Bond, will be reduced by the amount of amortizable bond premium properly allocable to such Beneficial Owner.

Beneficial Owners of Premium Bonds should consult their own tax advisors with respect to the proper treatment of amortizable bond premium in their particular circumstances.

The Code imposes various restrictions, conditions and requirements relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the Bonds. The City has made certain representations and covenanted to comply with certain restrictions, conditions and requirements designed to ensure that interest on the Bonds will not be included in federal gross income. Inaccuracy of these representations or failure to comply with these covenants may result in interest on the Bonds being included in gross income for federal income tax purposes, possibly from the date of original issuance of the Bonds. The opinion of Bond Counsel assumes the accuracy of these representations and compliance with these covenants.

Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken), or events occurring (or not occurring), or any other matters coming to Bond Counsel’s attention after the date of issuance of the Bonds may adversely affect the value of, or the tax status of interest on, the Bonds.

Accordingly, the opinion of Bond Counsel is not intended to, and may not, be relied upon in connection with any such actions, events or matters.

Although Bond Counsel is of the opinion that interest on the Bonds is excluded from gross income for federal income tax purposes and is exempt from State of California personal income taxes, the ownership or disposition of, or the accrual or receipt of amounts tr eated as interest on, the Bonds may otherwise affect a Beneficial Owner’s federal, state or local tax liability. The nature and extent of these other tax consequences

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depends upon the particular tax status of the Beneficial Owner or the Beneficial Owner’s other items of income or deduction. Bond Counsel expresses no opinion regarding any such other tax consequences.

Current and future legislative proposals, if enacted into law, clarification of the Code or court decisions may cause interest on the Bonds to be subject, directly or indirectly, in whole or in part, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent Beneficial Owners from realizing the full current benefit of the tax status of such interest. The introduction or enactment of any such legislative proposals or clarification of the Code or court decisions may also affect, perhaps significantly, the market price for, or marketability of, the Bonds. Prospective purchasers of the Bonds should consult their own tax advisors regarding the potential impact of any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel expresses no opinion.

The opinion of Bond Counsel is based on current legal authority, covers certain matters not directly addressed by such authorities, and represents Bond Counsel’s judgment as to the proper treatment of the Bonds for federal income tax purposes. It is not binding on the Internal Revenu e Service (“IRS”) or the courts.

Furthermore, Bond Counsel cannot give and has not given any opinion or assurance about the future activities of the City, or about the effect of future changes in the Code, the applicable regulations, the interpretation thereof or the enforcement thereof by the IRS. The City has cove nanted, however, to comply with the requirements of the Code.

Bond Counsel’s engagement with respect to the Bonds ends with the issuance of the Bonds, and, unless separately engaged, Bond Counsel is not obligated to defend the City or the Beneficial Owners regarding the tax-exempt status of the Bonds in the event of an audit examination by the IRS. Under current procedures, Beneficial Owners would have little, if any, right to participate in the audit examination process. Moreover, because achieving judicial review in connection with an audit examination of tax-exempt bonds is difficult, obtaining an independent review of IRS positions with which the City legitimately disagrees, may not be practicable. Any action of the IRS, including but not limited to selection of the Bonds for audit, or the course or result of such audit, or an audit of bonds presenting sim ilar tax issues may affect the market price for, or the marketability of, the Bonds, and may cause the City or the Beneficial Owners to incur significant expense.

Payments on the Bonds generally will be subject to U.S. information reporting and possibly to “backup withholding.” Under Section 3406 of the Code and appl icable U.S. Treasury Regulations issued thereunder, a non-corporate Beneficial Owner of Bonds may be subject to backup withholding with respect to “reportable payments,” which include interest paid on the Bonds and the gross proceeds of a sale, exchange, redemption, retirement or other disposition of the Bonds. The payor w ill be required to deduct and withhold the prescribed amounts if (i) the payee fails to furnish a U.S. taxpayer identification number (“TIN”) to the payor in the manner required, (ii) the IRS notifies the payor that the TIN furn ished by the payee is incorr ect, (iii) there has been a “notified payee underreporting” described in Section 3406(c) of the Code or (iv) the payee fails to certify under penalty of perjury that the payee is not subject to withholding under Section 3406(a)(1)(C) of the Code. Amounts withheld under the backup withholding rules may be refunded or credited against a Beneficial Owner’s federal income tax liability, if any, provided that the required information is timely furnished to the IRS. Certain Beneficial Owners (including among others, corporations and certain tax-exempt organizations) are not subject to backup withholding. The failure to comply with the backup withholding rules may result in the imposition of penalties by the IRS.

LEGAL MATTERS
The validity of the Bonds and certain other legal matters are subject to the approving opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the City. A complete copy of the proposed form of Bond Counsel opinion is attached hereto as Appendix B. Bond Counsel undertakes no responsibility for the accuracy, completeness or fairness of this Official Statement. Certain legal matters will be passed upon for the City by the Office of the City Attorney.

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Stradling Yocca Carlson & Rauth, a Professional Corporation, is serving as Disclosure Counsel to the City.

ABSENCE OF LITIGATION
In connection with the issuance of the Bonds, the Office of the City Attorney will deliver an opinion to the effect that, to its actual knowledge as of the date of delivery of the Bonds, the City has not been served with process in, and has not been overtly threatened with, any action, suit, proceeding, inquiry or investigation before or by any court, public board or body (a) that contests in any way the completeness or accuracy of this Official Statement; (b) that seeks to contest the validity of the Special Tax or to restrain or enjoin the collection of the Special Tax; (c) in which an unfavorable decision, ruling or finding is likely to have a material adverse effect on the City’s ability to complete the transactions contemplated by the Bonds, the Indenture or this Official Statement; or (d) in which an unfavorable decision, ruling or finding is likely to have a material adverse effect on the validity or enforceability of the Bonds or the Indenture.

MUNICIPAL ADVISOR
The City has retained Montague DeRose and Associates, LLC, as municipal advisor (the “Municipal Advisor”) in connection with the issuance and sale of the Bonds. Although the Municipal Advisor has assisted in the preparation of the Official Statement, the Munici pal Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or to assume responsibility for the accuracy, completeness or fairness of the information contained in the Official Statement or any of the other legal documents, and further the Municipal Advisor does not assume any responsibility for the information, covenants and representations with respect to the federal income tax status of the Bonds, or the possible impact of any current, pending or future actions taken by any legislative or judicial bodies or rating agencies.

RATING
S&P Global Ratings (“S&P”) has assigned its municipal bond rating of “___” to the Bonds. This rating reflects only the views of S&P, and an explanation of the significance of such rating may be obtained from S&P.

There is no assurance that the rating will continue for any given time or that the rating will not be revised downward or withdrawn entirely by S&P if in its judgment circumstances so warrant. Any such downward revision or withdrawal of the rating may have an adverse effect on the market price of the Bonds.

VERIFICATION OF MATHEMATICAL ACCURACY
Robert Thomas CPA, LLC, independent accountants, upon delivery of the Bonds, will deliver a report on the mathematical accuracy of certain computations contained in schedules provided to them, which were prepared by the Underwriter, relating to the sufficiency of the moneys and securities to be deposited in the Escrow Fund to pay the Redemption Price of the Refunded Bonds on the Redemption Date.

The report of Robert Thomas CPA, LLC will include the statement that the scope of its engagement is limited to verifying the mathematical accuracy of the computations contained in the schedules provided to it and that it has no obligation to update its report because of events occurring, or data or information coming to its attention, after the date of its report.

UNDERWRITING
The Bonds are being purchased by BofA Securities, Inc. (the “Underwriter”). The Underwriter has agreed to purchase the Bonds at a price of $__________ ($___________ principal amount, plus a net original issue premium of $__________ and less an Underwriter’s discount of $__________). The Bond Purchase Agreement relating to the Bonds provides that the U nderwriter will purchase all of the Bonds if any are purchased, the obligation to make such purchase being subject to certain terms and conditions set forth in the

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Bond Purchase Agreement, the approval of certain lega l matters by counsel and certain other conditions. The Underwriter’s compensation is contingent upon the successful issuance of the Bonds.

BofA Securities, Inc., the Underwriter of the Bonds, has entered into a distribution agreement with its affiliate Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”). As part of this arrangement, the Underwriter 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, the Underwriter may compensate MLPF&S as a dealer for their selling efforts with respect to the Bonds.

The Underwriter may offer and sell Bonds to certain dealers and others at prices lower than the offering prices stated on the inside front cover page hereof. The Underwriter may change the offering prices from time to time.

CONTINUING DISCLOSURE
The City will execute a continuing disclosure certificate (the “Continuing Disclosure Certificate”) for the benefit of the Holders and Beneficial Owners of th e Bonds to provide certain financial information and operating data relating to the Community Facilities District and to provide notices of the occurrence of certain enumerated events (the “Listed Events”). The City, as the initial dissemination agent under the Continuing Disclosure Certificate, will file the City Reports and notices of Listed Events with EMMA. The specific nature of the information to be included in the City Reports and the notices of Listed Events is set forth in APPENDIX E — “FORM OF CONTINUING DISCLOSURE CERTIFIC ATE.” The City will sign and deliver to the Underwriter the Continuing Disclosure Certificate to assist the Underwriter in complying with SEC Rule 15c2- 12 (the “Rule”). The City will file the City Reports with EMMA no later than nine months after the end of the City’s fiscal year, which is currently June 30. The first Annual Report will be due March 31, 2024.

The City has previously entered into a number of continuing disclosure undertakings under the Rule in connection with the issuance of long-term obligations and has provided annual financial information and event notices in accordance with those undertakings. Certain continuing disclosure filings during the past five years were made after the required filing date, such as the City ’s annual reports for one of the past five fiscal years with respect to a certain prior issue, and certain requ ired information supplementing the City’s annual reports for certain prior issues (including the actuarial valuation reports for the Sacramento City Employees’ Retirement System and the City’s Public Employees’ Retirement System plans for two prior issues). The City did not file notices of late filings in the past five years. On two occasions, the City filed annual reports with tables determined later not to be entirely accurate. The City subsequently filed corrected tables.

The City believes it has established processes to ensure that in the future it will make its continuing disclosure filings as required.

The City is required to file certain financial statements with the City Reports. This requirement has been included in the Continuing Disclosure Certificate solely to satisfy the requirements of the Rule. The inclusion of this information does not mean that the Bonds are secured by any resources or property of the City other than as described in this Official Statem ent. See “SOURCES OF PAYMENT FOR THE BONDS” and “SPECIAL RISK FACTORS.” The list of significant events the City has agreed to report includes items that have absolutely no application whatsoever to the Bonds. These items have been included in the list solely to satisfy the requirements of the Rule. Thus, any implica tion from the inclusion of these items in the list to the contrary notwithstanding, there are no credit enhancements applicable to the Bonds and there are no credit or liquidity providers with respect to the Bonds.

FINANCIAL INTERESTS
The fees being paid to the Underwriter, the Tr ustee/Escrow Agent, the trustee’s counsel, and Underwriter’s Counsel are contingent upon the issuance and delivery of the Bonds. A portion of the respective

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fees being paid to Bond Counsel and Disclosure Counsel is contingent upon the issuance and delivery of the Bonds. From time to time, Bond Counsel and Disclosure Counsel represent the Underwriter on matters unrelated to the Bonds.

PENDING LEGISLATION
The City is not aware of any significant pending legislation which would have material adverse consequences on the Bonds or the ability of the City to pay the principal of and interest on the Bonds when due.

ADDITIONAL INFORMATION
So far as any statements made in this Official Statement involve matters of opinion, assumptions, projections, anticipated events or estimates, whether or not expressly stated, they are set forth as such and not as presentations of fact, and actual results may differ substantially from those set forth therein. Neither this Official Statement nor any statement that may have been made orally or in writing is to be construed as a contract with the Holders of the Bonds.

The summaries of certain provisions of the Bonds, statutes and other documents or agreements referred to in this Official Statement do not purport to be complete, and reference is made to each of them for a complete statement of their provisions. Copies are available for review by making requests to the City.

The appendices are an integral part of this Official Statement and must be read together with all other parts of this Official Statement.

The distribution of this Official Statement has been authorized by the City.

CITY OF SACRAMENTO

City Treasurer

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APPENDIX A

SUMMARY OF INDENTURE

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APPENDIX B

PROPOSED FORM OF OPINION OF BOND COUNSEL

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APPENDIX C

RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX

City of Sacramento, California
North Natomas Community Facilities District No. 4
(Drainage Basins No. 1, No. 2, & No. 4)

1. Basis of Special Tax Levy
A Special Tax authorized under the Mello-Roos Community Facilities Act of 1982 (the “Act”) applicable to the land in the North Natomas Drainage Community Facilities District No. 4 (the “CFD”) of the City of Sacramento (the “City”) shall be levied and collected according to the tax liability determined by the City through the application of the appropriate amount or rate, as described below.

2. Definitions
“Act” means the Mello-Roos Community Facilities Act of 1982, as amended, Sections 53311 and following of the California Government Code.
“Administrative Expenses” means the actual or estimated costs incurred by the City to determine, levy and collect the Special Taxes, including salaries of City employees and the fees of consultants, legal counsel, corporate bond-paying agents, fiscal agents, and bond trustees; the costs of collecting installments of the Special Taxes upon the general tax rolls; cost of arbitrage calculation and arbitrage rebates, preparation of required reports; and any other costs required to administer the CFD as determined by the City. “Annexation Parcel” means a Parcel that was not included within the boundaries of the CFD at the time of formation. Later participation in the CFD requires annexation proceedings. “Annual Costs” means, for any Fiscal Year, the total of (i) Debt Service for the Ca lendar Year commencing January 1 of such Fiscal Year through December 31 of the following Fiscal Year; (ii) Administrative Expenses for such Fiscal Year; (iii) any amounts needed to replenish any bond reserve fund for bonds of the City issued for the CFD to the level required under the documents pursuant to which such bonds were issued; (iv) an amount equal to the amount of delinquencies in payments of Speci al Taxes levied in the previous Fiscal Year and an amount for anticipated delinquencies for the current Fiscal Year; (v) pay-as-you-go expenditures for authorized facilities to be constructed or acquired by the CFD, less any credit from earnings on the bond reserve fund, less any reimbursements, less any grants/ other project fundi ng and/or less the application of any funds available from Prepayments as described in Section 6.
“Assessor” means the Assessor of the County of Sacramento. “Authorized Facilities” means those improvements, as listed in the Resolution forming the CFD. “Bond Year” means the 12-month period ending on the second bond payment date of each calendar year as defined in the resolution authorizing the issuance of bonds. “CFD” means the North Natomas Drainage Basins No. 1, No. 2 and No. 4 Community Facilities District No. 4 of the City of Sacramento, California.
“City” means City of Sacramento, California.

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“Condominium Parcel” means a Developed Parcel with an approved land use for condominiums (more than two attached dwelling units which are owned individually ). Parcels that are open space, recreation, clubhouse etc., owned by a Condominium Association or Home Owners Association, are Tax-Exempt Parcels. “Council” means the City Council of the City of Sacramento acting for the CFD under the Act. “County” means the County of Sacramento, California.
“Debt Service” means for each Fiscal Year or Bond Year, the to tal amount of principal and interest for any bonds, notes or certificates of participation of the City for the CFD during that Fiscal Year or Bond Year, less any applicable credits that may be available from any other sources available to the City to pay principal and interest for the previous or current Fiscal Year or Bond Year. “Detached Residential Unit Parcel” means a Developed Parcel with an approved land use for a single family, detached residential dwelling unit, or a duplex (two units per lot). The Special Tax assigned to a unit or duplex is determined by the calculated median lot size group of the Final Subdivision Map. See Section 4.A.4. “Developed Parcel” means a Parcel which has a:
 recorded final small lot subdivision map for residential uses permitting up to 2 units per lot,  special use permit for residential use permitting 3 or more units per lot, or  special use permit for Non-Residential Development.

Once classified as Developed, no Parcel shall be removed from these classifications unless the special use permit expires, is revoked, or is otherwise terminated.
“Developable Parcel” means a Parcel which has been created after 1/1/94 by a recorded Master Parcel Map, or any other Final Subdivision Map, but that still requires further subdivision into individual small lots or a special use permit to develop. A Parcel may also be reclassified from a Development-Restricted Parcel to a Developable Parcel as a result of a lot line adjustment, provided the property owner gives written authorization to the City. “Development-Restricted Parcel” means a Taxable Parcel that has not met the definition of a Developable Parcel or a Developed Parcel. These Parcels may only be taxed after the City has received written authorization from the property owner.
“Development Year” means, for each Developable Parcel, the Fiscal Year in which the Parcel changes classifications from Development-Restricted Parcel to Developable Parcel, or Developable Parcel to Developed Parcel.
“Estimated Net Acre” means the actual Net Acre of a Parcel(s) or an approximation of the Net Acres based upon the total Gross Developable Acres less an allowance for minor streets as indicated in the North Natomas Community Plan.
“Final Use Parcel” means a Parcel which has been created by a recorded Master Parcel Map or other recorded Final Subdivision Map and requires no further subdivision in order to develop. The Parcel will be classified as a Developable Parcel until a special use permit has been issued. If the City cannot determine if a Parcel is to be classified as a Final Use Parcel or a Large Lot Parcel, then the Parcel shall be classified as a Large Lot Parcel. “Fiscal Year” means the period starting July 1 and ending the following June 30. “Gross Acre” means the entire area of a Parcel prior to dedica tion of major streets, schools, parks, open space and other public right-of-way.

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“Gross Developable Acre” means the area of a Parcel associated with residential and non-residential uses after dedication of major streets, but prior to dedication of minor streets. “Large Lot Parcel” means a Parcel which is created by a reco rded Master Parcel Map or recorded Final Subdivision Map, which requires further subdivision or other entitlements and dedications of public land in order to develop.
“Master Parcel Map” means a map that subdivides large tracts of land into smaller parcels for the purpose of later selling or otherwise transferring the parcels for further subdivision in accordance with City procedures, or for the purpose of securing financing, together with planning and construction of infrastructure elements, but not for the purpose of creating either individual residential lots for sale to end-user homeowners, and not for the purpose of allowing construction or other improvements on Non-Residential Parcels. “Maximum Annual Special Tax” means the greatest amount of Special Tax that can be levied against a Parcel calculated by multiplying the Maximum Annual Special Tax Rate times the relevant acres or units of the parcel. “Maximum Annual Special Tax Rate” means the amount shown in Attachment 1 for a Fiscal Year that is used in calculating the Maximum Annual Special Tax for a Parcel based on its land use classification. “Maximum Annual Special Tax Revenue” means the greatest amount of revenue that can be collected in total from a group of Parcels by levying the Maximum Annual Special Tax Rates. “Net Acre” is the area of a Parcel associated with reside ntial and non-residential uses after dedication of all public uses and rights-of-way.
“Non-Participating Parcel” means a Parcel, which is not part of a recorded Master Parcel Map, and does not have authorization from the property owner to be taxed. Any such Parcel shall be a Tax-Exempt Parcel. Any Non-Participating Parcel which subsequently becomes Taxable must be reclassified as a Developable Parcel or a Parcel of higher tax status. Once the Non-Participating Parcel has been reclassified as a Taxable Parcel, it cannot revert to Non-Participating Parcel status.
“Non-Residential Development” means a Taxable Parcel designated for retail, commercial, office, industrial, or similar use as defined in the North Natomas Community Plan. “Non-Residential Parcel” means a Developed Parcel with an approved land use for Non-Residential Development.
“Other Residential Parcel” means a Developed Parcel with an approved land use for other than Detached Residential Unit Parcel or Condominium Parcel, such as three or more attached residential units owned in common.
“Parcel” means any Assessor’s parcel in the CFD based on the equalized tax rolls of the County as of March 1 of each Fiscal Year.
“Parcel Number” means the Assessor’s Parcel Number for any Parcel based on the equalized tax rolls of the County as of March 1 of each Fiscal Year.
“Prepayment” means the permanent satisfaction of the entire Special Tax obligation for one or more Parcels by a cash settlement with the City as permitted under Government Code Section 53344 and described in Section 6. Prepayment may occur before or after the initial bond sale, with differing criteria. “Prepayment Parcel” means a Parcel which has permanently satisfied the entire Special Tax obligation by a cash settlement with the City as permitted under Government Code Section 53344 and described in Section 6.

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“Public Parcel” means any Parcel, in its entirety, that is or is intended to be publicly owned as designated by the City that is normally exempt from the levy of general ad valorem property taxes under California law, including public streets; schools; parks; and public drainageways, public landscaping, wetlands, greenbelts, and public open space. These parcels are exempt from the le vy of Special Taxes as described below. Any such Parcel shall be a Tax-Exempt Parcel, except for Taxable parcels that are acquired by a public agency, in which case the Special Tax obligation for such parcels shall be required to be permanently satisfied pursuant to Sections 53317.3 and 53317.5 of the Government Code by the procedure described in Section 6. “Reimbursement Parcel” means a Parcel for which the Parcel owner has advance-funded the Parcel’s allocated CFD drainage improvement costs, as determined by the City, but has not received any reimbursement from CFD bond proceeds. Once a reimbursement has been made, the Parcel shall be reclassified as a Developed Parcel, Developable Parcel, or a Development-Restricted Parcel. “Special Tax(es)” mean(s) any tax levy under the Act in CFD. “Tax Collection Schedule” means the document prepared by the City for the County Auditor-Controller to use in levying and collecting the Special Taxes each Fiscal Year. “Tax Zone” means the Tax Zone indicated in Attachment 3. “Tax Zone IA” means the area labeled on Attachment 3 within Drainage Basin No. 1. “Tax Zone IB” means the area labeled on Attachment 3 within Drainage Basin No. 1. “Tax Zone II” means the area labeled on Attachment 3 within Drainage Basin No. 2. “Tax Zone IV” means the area labeled on Attachment 3 within Drainage Basin No. 4. “Taxable Parcel” means any Parcel that is not a Tax-Exempt Parcel. “Tax-Exempt Parcel” means a Parcel not subject to the Special Ta x. Tax-Exempt Parcels include: (i) Public Parcels (subject to the limitations set forth in S ection 4, below), (ii) any Prepayment Parcel, and (iii) Non-Participating Parcels. Certain non-developable privately owned Parcels may also be exempt from the levy of Special Taxes as determined by the City such as common areas, wetlands, and open space. “Tentative Subdivision Map” means a tentative subdivision map defined under the California Subdivision Map Act and Title 40 of the Sacramento City Code.
“Tentative Map Parcel” means a Development-Restricted Parcel, which has an approved Tentative Master Parcel Map or an approved Tentative Subdivision Map, but for which no Final Subdivision Map has been recorded.
“Unmapped Parcel” means a Development-Restricted Parcel that does not have a Tentative Master Parcel Map or Tentative Subdivision Map.
“Veteran Developed Parcel” means a Parcel that had been classified as a Developable or Developed Parcel for thirty years. After 30 years of being subject to th e Special Tax as a Developable or Developed Parcel, the Veteran Developed Parcel is only subject to the Special Tax if there is a shortfall in the revenues generated from all other Taxable Parcels to pay for the Annual Costs of the CFD. “Zone IA Parcel” means each Parcel that lies within Tax Zone IA. “Zone IB Parcel” means each Parcel that lies within Tax Zone IB.

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“Zone II Parcel” means each Parcel that lies within Tax Zone II. “Zone IV Parcel” means each Parcel that lies within Tax Zone IV.

3. Termination of the Special Tax
The Special Tax will be levied on and collected from Ta xable Parcels in the CFD for as long as needed to pay the principal and interest on debt for the Bonds issued to fund Authorized Facilities. However, in no event shall the Special Tax be levied after Fiscal Year 2039-2040.

When all of the bonds issued to pay for Authorized Fac ilities have been retired, the Special Tax shall cease to be levied. The City shall direct the County Recorder to record a Notice of Cessation of Special Tax. Such notice will state that the obligation to pay the Special Tax has ceased and that the lien imposed by the Notice of Special Tax Lien is extinguished.

4. Assignment of Maximum Annual Special Tax
A. Classification of Parcels. By May 1 of each Fiscal Year, using the Definitions above, the parcel records of the Assessor’s Secured Tax Roll as of January 1, and other City development approval records, the City shall cause:

1. Each Parcel to be classified as a Tax-Exempt Parcel, Taxable Parcel, or Reimbursement Parcel.

However, Taxable Parcels that are acquired by a public agency after the CFD is formed will remain subject to the applicable Special Tax unless the Special Tax obligation is satisfied pursuant to Section 53317.5 of the Government Code. An exception to this may be made if Public Parcels, such as a school site, are relo cated and the previously Tax-Exempt Parcels of comparable acreage become Taxable Parcels. Th is trading of Parcels will be permitted to the extent that there is no net loss in maximum Special Tax revenue.

2. Each Taxable Parcel to be identified acco rding to the Tax Zone that it is located in.

3. Each Taxable Parcel within its specified Tax Zone to be further classified as a Developed Parcel, Developable Parcel, Development-Restricted Parcel, Veteran Developed Parcel, or Prepayment Parcel. Once classified as a Deve loped Parcel, no Parcel shall be removed from the Developed classification unless the special use permit expires, is revoked, is otherwise terminated, or the Parcel is classified as a Veteran Developed Parcel, or becomes a Prepayment Parcel.

4. In the event that a Final Subdivision Map has Detached Residential Units with different lot size groups (e.g., 4,500 sq. ft lots and 6,000 sq. ft lots), each Developed Parcel will be further classified according to the calculated median lot si ze in each of the lot size groups. This is to avoid an outlying lot size in a Developed Parcel from paying a different tax rate.

B. Assignment of Maximum Annual Special Tax. The City shall assign the appropriate maximum Annual Special Tax for the Fiscal Year of the tax levy to each Taxable Parcel as follows (Prepayment Parcels skip to Section 6):

1. Developed Parcels and Veteran Developed Parcels
Attachment 1 shows the Maximum Special Tax Rates per unit for Developed Parcels and Veteran Developed Parcels by Fiscal Year. The only change in the Maximum Annual Special

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Tax for a Developed Parcel shall be if a Prepayment occurs after the Development Year in accordance with Section 6 below.

2. Developable Parcels
Attachment 1 also shows the Maximum Special Tax Rates for Developable Parcels by Fiscal Year. Recorded Final Use Parcels will be taxed per Net Acre. Recorded Large Lot Parcels will be taxed per Gross Developable Acre.

3. Development-Restricted Parcels
The Maximum Special Tax Rates for Development-Restricted Parcels is shown in the far right column of Attachment 1. Tentative Map Parcels and Unmapped Parcels will be taxed per Gross Acre.

C. Reimbursement Parcels. The Maximum Special Tax Rate for a Reimbursement Parcel shall be set to zero until it is reclassified as a Developed Parcel.

D. Conversion of a Public Parcel to a Taxable Parcel. If a Public Parcel is not needed for public use and is converted to a taxable use, it shall become subject to the Special Tax. The Maximum Annual Special Tax for such a Parcel shall be assigned according to 4.A and 4.B above.

E. Reclassification of a Non-Participating Parcel from Tax-Exempt status to Taxable status. Once a Non- Participating Parcel records a Master Parcel Map, th e Parcel must be reclassified as a Taxable Parcel, and shall be classified as a Developable Parcel, or a Parcel of higher tax status. The Maximum Annual Special Tax for such a Parcel shall be assigned according to 4.A and 4.B above.

F. Annexation Parcels. Parcels annexing to the CFD shall have their Maximum Special Tax rate assigned by following the procedures in Section 4.B above.

5. Calculating Annual Special Taxes
The City shall compute the Annual Costs for each Tax Zone, and determine the Maximum Annual Special Tax for each parcel based on the assignment in the Special Tax in Section 4. The City will then determine the tax levy for each parcel using the following process:

A. Compute the share of Annual Costs for each Tax Zone by the following steps:
 Determine share of total facilities costs funded by CFD bonds for each Tax Zone. For each series of bonds issued, the share of total facilities costs funded by CFD bonds will be set at the time of sale of bonds, and will be used until all bonds for that issue have been retired.  Add the total pay-as-you-go expenditures for the present and prior year for each Tax Zone.  Add the allocation of bond-funded costs and pay-as-you-go expenditures for each Tax Zone.  Determine the percentage share of bond-funded facilities cost and pay-as-you-go expenditures for each Tax Zone. Calculate this by dividing the result of the last step by total bond-funded costs and pay-as-you-go expenditures in the CFD.
 Multiply Annual Costs by the percentage share to determine the allocation of Annual Costs for each Tax Zone.

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B. For each Tax Zone, calculate the Special Tax for each Taxable Parcel by the following steps:
 Determine if sufficient special tax revenues are available by taxing each Developed Parcel at 100% of its Maximum Annual Special Tax. If revenues are greater than the Annual Costs assigned to the Tax Zone, the tax is reduced proportionately against Developed Parcels until the tax levy is set at an amount sufficient to cover Annual Costs.
 If revenues from taxing Developed Parcels at 100% of their Maximum Annual Special Tax are not sufficient, the City will then proportionately levy the tax on Developable Parcels up to 100% of their Maximum Annual Special Tax until the tax levy is set at an amount sufficient to cover each Tax Zone’s Annual Costs.
 If revenues from taxing Developed and Developable Parcels is not sufficient, Development- Restricted Parcels will be levied up to 100% of their Maximum Annual Special Tax.  If revenues are still not sufficient to pay for the Annual Costs, the City will then proportionately tax Veteran Developed Parcels up to 100% of the Maximum Special Annual Tax until the tax levy is set at an amount sufficient to cover Annual Costs.

C. Levy on each Taxable Parcel the amount calculated above.

D. Prepare the Tax Collection Schedule listing the Special Tax levy for each Taxable Parcel and send it to the County Auditor-Controller requesting that it be placed on the general, secured property tax roll for the Fiscal Year. The Tax Collection Schedule shall not be sent later than the date required by the Auditor-Controller for such inclusion.

The City shall make every effort to correctly calculate the Special Tax for each Parcel. It shall be the burden of the taxpayer to correct any errors in the determination of the parcels subject to the tax and their Special Tax assignments.

6. Prepayment of Special Tax Obligation
With a Prepayment, a landowner may permanently satisfy the Special Tax obligation for one or more parcels.

By exercising the right to Prepayment, a landowner can eliminate the future annual Special Tax liability for one or more parcels.

Prepayment is permitted only under the following conditions:
 The City determines that the Prepayment does not jeopardize the ability to make timely payments of Debt Service on outstanding bonds.
 Any landowner who wishes to exercise the right to a Prepayment for a Parcel must pay any and all delinquent Special Taxes and penalties.
 Prepayment shall be made on or before June 1 in order to prevent the levy of special taxes due during the Fiscal Year beginning July 1.

The total Prepayment amount will include the Parcel’s proportionate share of all es timated costs necessary to construct the Authorized Facilities (the “base Prepay ment amount”) plus any additional administrative and financing costs necessary to redeem bonds and calcul ate the Prepayment. These calculations are described below.

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CALCULATE BASE PREPAYMENT AMOUNT (for Attachment 2)
The base Prepayment amount will vary each year depending upon whether or not bonds have been issued and whether any bonds have been redeemed. The base Prepayment amount will be recalculated with each bond issue and on an annual basis at the time that the CFD’s annual report is prepared. The annual base Prepayment amount shall be calculated using the following steps.

Step 1: Determine the total number of acres within the CFD in each of the following categories: Gross Acres, Gross Developable Acres, and Net Acres. The acreage of all prior Prepayment Parcels will be excluded from the calculation of total acres.
 Gross Acres equal the original Gross Acres at the formation of the CFD plus any acreage that has been annexed into the CFD.
 If the acreage in the Gross Developable Acreage category is not known, it will be set by multiplying Gross Acres by a factor of 0.729.
 If the acreage in the Net Acreage category is not known, it will be set by multiplying Gross Developable Acres by a factor of 0.857.

Step 2: Determine the amount of the facility construc tion cost including CFD formation costs; total bond authorization; or total outstanding bonds, if all bonds have been issued. The facility construction cost will be based on the cost of facilities that have be en constructed or bid plus the estimated cost of facilities yet to be constructed or bid with inflation to date.

Step 3: Calculate the base Prepayment am ount per acre of the Prepayment Parcel:

Divide the total costs from the appropriate cost basis (construction cost, bond authorization, or total outstanding bonds if bonds have been issued) by the acreage in the CFD for each of the three acreage categories. Where the cost basis is the bond authorization or outstanding bonds, multiply the above result by a factor of 0.925 (to account for the Pa rcel’s share of the Reserv e Fund). Multiply the Parcel’s total acreage by the appropriate cost per acre (e.g. per Gross Acre, Gross Developable Acre, or Net Acre) to arrive at the base Prepayment amount.

Step 4: For Detached Residential Unit and Condominium Parcels, calculate the base Prepayment amount per unit of the Prepayment Parcel as follows: (for Other Residential and Non-Residential Parcels skip to Step 5)
Divide the Prepayment amount per Net Acre by the average number of lots per Net Acre according to the appropriate lot size for detached residential units (including duplexes), or average number of condominiums per Net Acre, as indicated in Attachment 2.

Step 5: Update Attachment 2 based on the above calculations to reflect the base Prepayment amount per acre for the upcoming Fiscal Year. The Attachment 2 included in this document is as of the formation of the CFD based on the current estimated acreage, by category, and estimated costs.

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DETERMINE TOTAL PREPAYMENT AMOUNT FOR PREPAYING PARCEL
The following steps will be used to determine a Parcel’s total Prepayment Amount.

Prior to First Bond Sale (skip to Step 8 if bonds have been sold) Step 6: If the Prepayment is made prior to the first bond sale, the City will determine the Parcel’s base Prepayment amount by multiplying the base Prepayment Amount per acre or per unit from Column 1 of Attachment 2 by the Parcel’s total acreage or total number of units.

Step 7: Determine the total Prepayment amount for a Parcel by adding to the base Prepayment amount calculated in Step 6, the City’s administrative cost for calculating these amounts.

Subsequent to the Initial Sale of Bonds
Step 8: Determine if all bonds have been sold or if the District is between the first and last bond sale. This will determine the bond issuance category for the base Prepayment amount. If the District is between the first and last bond sale, Column 2 of Attachment 2 will be used. If all bonds have been sold, Column 3 of Attachment 2 will be used.

Step 9 Parcel’s base Prepayment amount will be calculated by multiplying the base Prepayment Amount per acre or per unit from either Column 2 or 3 of Attachment 2 by the Parcel’s total acreage or total number of units.

Step 10 Determine the total Prepayment amount for a Parcel by adding to the base Prepayment amount calculated in Step 9 any fees, call premiums, amounts necessary to cover negative arbitrage from the date of the Prepayment to first call date on the bonds, early call penalties, and other expenses incurred by the City in connection with the Prepayment calculation or the application of the proceeds of the Prepayment.

7. Records Maintained for the CFD
As development and subdivision of North Natomas takes place, the City will maintain a file containing records of the following information for each Parcel:
 the Tax Zone that the Parcel lies in;
 the current Parcel Number;
 the Parcel acreage (gross, gross developable or net);  the Maximum Annual Special Taxes which applied in each Fiscal Year; and  the authorized Special Taxes levied in each Fiscal Year.  the Development Year.

The file containing the information listed above will be available for public inspection.

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8. Appeals
Any taxpayer who feels that the amount of the Special Tax assigned to a Parcel is in error may file a notice with the City appealing the levy of the Special Tax. The City will then promptly review the appeal, and if necessary, meet with the applicant. If the City verifies that the tax should be modified or changed, a recommendation at that time will be made to the Council and, as appropriate, the Special Tax levy shall be corrected and, if applicable in any case, a refund shall be granted.

Interpretations may be made by Resolution of the Council for purposes of clarifying any vagueness or ambiguity as it relates to the Special Tax rate, the method of apportionment, the classification of properties or any definition applicable to the CFD.

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APPENDIX D

INFORMATION CONCERNING THE DEPOSITORY TRUST COMPANY
The information in this section concerning DTC and DTC’s book-entry only system has been obtained from sources that the City believes to be reliable, but the City takes no responsibility for the completeness or accuracy thereof. The following description of the proc edures and record keeping with respect to beneficial ownership interests in the Bonds, payment of principal, premium, if any, accreted value and interest on the Bonds to DTC Participants or Beneficial Owners, confirmation and transfers of beneficial ownership interests in the Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC to the City which the City believes to be reliable, but the City and the Underwriter do not and cannot make any independent representations concerning these matters and do not take responsibility for the accuracy or completeness thereof. Neither the DTC, Direct Participants, Indirect Participants nor the Beneficial Owners should rely on the foregoing information with respect to such matters, but should instead confirm the same with DTC or the DTC Participants, as the case may be.

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

DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporati on” 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 co rporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of “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.

Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Particip ants’ 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 Dir ect or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds 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 Bonds representing their ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.

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

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants an d 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 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as prepayments, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds 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.

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

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless authorized by a Direct Participant in accord ance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City 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 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Redemption proceeds, distributions, and dividend payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the City or the Trustee, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing 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 Trustee, or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

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

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

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

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

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

ANY BENEFICIAL OWNER, OF ANY NOTICE AND ITS CONTENT OR EFFECT WILL NOT AFFECT

THE VALIDITY OF SUFFICIENCY OF THE PROCEEDINGS RELATING TO THE REDEMPTION OF

THE BONDS CALLED FOR REDEMPTION OR OF ANY OTHER ACTION PREMISED ON SUCH NOTICE.

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APPENDIX E

CONTINUING DISCLOSURE CERTIFICATE

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APPENDIX F

GENERAL INFORMATION ABOUT THE CITY OF SACRAMENTO AND THE

COUNTY OF SACRAMENTO
The following information is included only for the purpose of supplying general information regarding the City of Sacramento (the “City”) and the County of Sacramento (the “County”). This information is provided only for general informational purposes and provides prospective investors limited information about the City and the County and their economic base. The Bonds are not a debt of the County or the State or any of its political subdivisions, and the City, the County, and the State and its political subdivisions are not liable therefor.

The Bonds are special limited obligations of the City payable solely from the Net Special Tax Revenues (as defined in the Official Statement) and other amounts as set forth in the Indenture.

General
The City is located at the confluence of the Sacramento and American Rivers in the south-central portion of the Sacramento Valley, a part of the State’s Central Valley. Although the City is approximately 75 air miles northeast of San Francisco, its temperature range is more extreme than that of most Northern California coastal cities, ranging from a daily average of 45 degrees Fahren heit in January to 85 degrees Fahrenheit in July.

Average elevation of the City is 30 feet above sea level.

Population
The following table lists population figures for the Ci ty, the County and the State as of January 1 for 2019 through 2023.

CITY AND COUNTY OF SACRAMENTO
Population Estimates
Calendar
Year
City of
Sacramento
County of
Sacramento
State of
California
2019 507,490 1,538,054 39,605,361
2020 513,626 1,553,157 39,648,938
2021 518,322 1,580,624 39,303,157
2022 518,037 1,576,618 39,185,605
2023 518,161 1,572,453 38,940,231

Source: State Department of Finance estimates (as of January 1).

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Industry and Employment
The unemployment rate in the Sacramento—Arden -Arcade—Roseville, CA Metropolitan Statistical Area (“Sacramento MSA”), which includes Sacramento, Placer, El Dorado, and Yolo Counties, was 3.7% in 2022. The table below provides information about employment rates and employment by industry type for the Sacramento MSA for calendar years 2018 through 2022. As of June 2023, the unemployment rate in the Sacramento MSA was 4.4%.

SACRAMENTO MSA
Civilian Labor Force, Employment and Unemployment
Calendar Years 2018 through 2022
Annual Averages
2018 2019 2020 2021 2022
Civilian Labor Force (1) 1,088,300 1,100,800 1,091, 700 1,099,300 1,124,500 Employment 1,046,900 1,060,300 994,000 1,028,800 1,082,500 Unemployment 41,500 40,500 97,700 70,500 42,000
Unemployment Rate 3.8% 3.7% 9.0% 6.4% 3.7%
Wage and Salary Employment (2)
Agriculture 9,100 8,700 8,300 9,000 8,600
Natural Resources and Mining 500 500 600 700 500
Construction 64,500 69,400 70,200 74,100 76,800
Manufacturing 36,000 36,800 36,100 37,500 40,300
Wholesale Trade 28,400 28,600 26,500 26,400 28,300
Retail Trade 102,000 100, 500 95,200 101,100 100,800
Transportation, Warehousing and
Utilities
29,500 32,200 34,300 37,100 40,500
Information 12,400 11,900 10,200 10,000 10,500
Finance and Insurance 36,700 35,200 34,800 34,300 33,200 Real Estate and Rental and
Leasing
16,800 17,300 16,900 17,400 19,100
Professional and Business
Services
136,000 137,400 132,500 136,700 147,500
Educational and Health Services 159,800 166,600 164,000 168,400 175,400 Leisure and Hospitality 106,200 109,600 83,900 92,900 108,700 Other Services 34,200 35, 400 31,000 32,600 36,100
Federal Government 14,100 14,200 14,800 14,500 14,300
State Government 120,400 121,900 121,700 126,800 128,700 Local Government 103,500 105,300 98,900 98,000 102,900 Total, All Industries 1,009,900 1,031,400 979,700 1,017,200 1,072,300

(1) Labor force data is by place of residence; includes self-e mployed individuals, unpaid fa mily workers, household domestic workers, and workers on strike.
(2) Industry employment is by place of work; excludes self-e mployed individuals, unpaid fa mily workers, household domestic workers, and workers on strike.

Source: State of California Employment Development Department.

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Major Employers
The following table shows the largest employers located in the County as of Fiscal Year 2021-22.

COUNTY OF SACRAMENTO

PRINCIPAL EMPLOYERS
As of June 30, 2022
Rank Name of Company
Number of
Employees
Percentage
of Total City
Employment

1. UC Davis Health Syste m 16,075 2.30%

2. Kaiser Permanente 12,301 1.76

3. Sutter/California Health Services 9,595 1.37

4. Dignity/Mercy Healthcare 7,488 1.07

5. Intel Corporation 6,013 0.86

6. Siemens Mobility Inc. 2,500 0.36

7. Safeway 1,938 0.28

8. Pacific Gas & Electric 1,477 0.21

9. Blue Diamond Growers 968 0.14

10. WellSpace Health 926 0.13

Source: County of Sacramento Annual Comprehensive Financial Report for the year ending June 30, 2022.

The following table shows the largest employers located in the City as of Fiscal Year 2021-22.

CITY OF SACRAMENTO

PRINCIPAL EMPLOYERS
As of June 30, 2022
Rank Name of Company
Number of
Employees
Percentage
of Total City
Employment

1. State of Californi a 82,894 11.86%

2. UC Davis Health Syste m 16,075 2.30

3. Kaiser Permanente 12,301 1.76

4. U.S. Government 10,698 1.53

5. Sutter Health 9,595 1.37

6. Dignity Health 7,488 1.07

7. Intel Corporation 6,013 0.86

8. San Juan Unified School District 5,126 0.73

9. Los Rios Community College District 2,833 0.41

10. California State University, Sacramento 2,535 0.36

Source: City of Sacramento Annual Comprehensive Financial Report for the year ending June 30, 2022.

Personal Income
Personal Income is the income that is received by al l 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.

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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 the personal income for the County of Sacramento, the State and the United States for the period from 2016 through 2021.

COUNTY OF SACRAMENTO
Personal Income
2016 through 2021
Calendar Year Sacramento County California United States 2016 $72,128,370 $2,218,457,774 $16,092,713,000
2017 75,062,017 2,318,644,417 16,837,337,000
2018 78,804,776 2,431,821,953 17,671,054,000
2019 82,669,864 2,567,425,600 18,575,467,000
2020 90,908,707 2,790,523,500 19,812,171,000
2021 98,241,828 3,006,183,900 21,288,709,000

Note: Dollars in Thousands.

Source: U.S. Department of Commer ce, Bureau of Economic Analysis.

The following table summarizes per capita personal income for the County of Sacramento, the State and the United States for 2016 through 2021. This measure of income is calculated as the personal income of the residents of the area divided by the resident population of the area.

PER CAPITA PERSONAL INCOME
County of Sacramento, State of California and the United States 2016 Through 2021
Year Sacramento County California United States
2016 $47,723 $56,560 $49,613
2017 49,125 58,864 51,550
2018 51,187 61,508 53,786
2019 53,278 64,919 56,250
2020 58,307 70,647 59,765
2021 61,829 76,614 64,143

Source: U.S. Department of Commer ce, Bureau of Economic Analysis.

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Commercial Activity
A summary of historic taxable sales within the City for 2018 through 2022 is shown in the following table.

CITY OF SACRAMENTO
Taxable Transactions
(dollars in thousands)
Retail Stores Total All Outlets
Number of
Permits
Taxable
Transactions
Number of
Permits
Taxable
Transactions
2018 9,839 $4,904,555 15,421 $7,157,368
2019 10,006 4,999,470 15,970 7,463,634
2020 11,088 4,430,901 17,722 6,839,199
2021 10,362 5,401,724 16,793 8,118,898
2022 10,527 5,723,358 17,452 8,981,863

Source: State Board of Equalization.

A summary of historic taxable sales within the County for 2018 through 2022 is shown in the following table.

COUNTY OF SACRAMENTO
Taxable Transactions
(dollars in thousands)
Retail Stores Total All Outlets
Number of
Permits
Taxable
Transactions
Number of
Permits
Taxable
Transactions
2018 24,853 $17,593,375 39,066 $25,443,669
2019 25,530 18,195,302 40,858 26,836,365
2020 28,055 18,488,106 45,361 27,173,406
2021 25,936 23,700,364 42,482 33,783,460
2022 26,589 24,592,149 44,158 36,380,064

Source: State Board of Equalization.

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Building and Construction
Provided below are the building permits and valuations for the City and the County for calendar years 2018 through 2022.

CITY OF SACRAMENTO
Total Building Permit Valuations
(valuations in thousands)
2018 2019 2020 2021 2022
Permit Valuation
New Single-family $ 406,973.1 $ 400,648.4 $ 254,127.0 $ 359,957.8 $ 278,041.4 New Multi-family 106,149.2 176,862.7 465, 623.0 284,928.5 211,378.2 Res. Alterations/Additions 97,761.1 140,240.6 174,415.1 171,615.1 151,297.8 Total Residential $ 610,883.4 $ 717, 751.7 $ 894,165.1 $ 816,501.4 $ 640,717.4

New Commercial $ 133,602.0 $ 540,144. 9 $ 154,484.2 $ 152,871.0 $ 72,441.0 New Industrial 2,489.1 31, 485.4 31,155.0 83,171.4 11,349.9 New Other 71,153.7 427,661.2 302, 114.6 55,183.7 36,400.1 Com. Alterations/Additions 242,928.6 491,148.7 230,448.0 163,431.5 177,804.2 Total Nonresidential $ 450,173.4 $ 1,490, 440.2 $ 718,201.8 $ 454,657.6 $ 297,995.2

New Dwelling Units
Single-Family 1,608 1,552 956 1,150 952
Multiple Family 813 1,487 2,855 1,193 1,619
TOTAL 2,421 3,039 3,811 2,343 2,571

Source: Construction Industry Research Board, Building Permit Summary.

COUNTY OF SACRAMENTO
Total Building Permit Valuations
(valuations in thousands)
2018 2019 2020 2021 2022
Permit Valuation
New Single-family $ 1,069,568.3 $ 1,108,399.8 $ 1, 088,390.6 $ 1,310,379.5 $ 1,183,213.4 New Multi-family 158,638.0 265, 188.8 467,418.7 323,462.5 413,368.8 Res.

Alterations/Additions
276,723.5 293,210.5 262,864.6 276,570.3 373,409.6 Total Residential $ 1,504,929.8 $ 1,666,799.1 $ 1,818,673.9 $ 1,910,412.3 $ 1,969,991.8

New Commercial $ 292,766.9 $ 639,170. 3 $ 411,058.0 $ 152,871.0 $ 203,314.1 New Industrial 14,151.1 31, 851.4 31,155.0 83,171.4 38,163.2 New Other 137,414.6 131,286.6 113, 793.0 150,008.7 220,339.3 Com.

Alterations/Additions
518,663.2 700,603.9 335,458.0 320,3447.6 432,950.0 Total Nonresidential $ 962,995.8 $ 1,502,912 .2 $ 891,464.0 $ 3,589,498.7 $ 894,766.6

New Dwelling Units
Single-Family 3,589 3,981 3,588 4,205 3,832
Multiple Family 1,272 2,008 2,868 2,266 3,419 TOTAL 4,861 5,989 6,456 6,471 7,251

Source: Construction Industry Research Board, Building Permit Summary.

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Transportation
Sacramento’s strategic location and broad transpor tation network have contributed to the City’s economic growth. The City is traversed by the main east-west and north-south freeways serving northern and central California. Interstate 80 connects Sacramento with the San Fr ancisco Bay Area, Reno, Nevada, and points east. U.S. 50 carries traffic from Sacramento to the Lake Tahoe area. Interstate 5 is the main north-south route through the interior of California, running from Mexico to Canada. State Route 99 parallels Interstate 5 through central California and passes through Sacramento.

The Union Pacific Railroad, a transcontinental line, has junctions in Sacramento and is connected to the Burlington Northern Santa Fe Railway via the Central California Traction Company. Passenger rail service is provided by AMTRAK. Bus lines offering intercity as well as local service include Greyhound and the Sacramento Regional Transit District. The Sacramento Regional Transit District also provides light-rail service within the City. The Port of Sacramento, located 79 na utical miles northeast of San Francisco, provides direct ocean-freight service to all major Un ited States and world ports. Via a deep-water channel, ships can reach Sacramento from San Francisco in less than eight hours. The major rail links serving Sacramento connect with the port, and Interstate 80 and Interstate 5 are immediately adjacent to it.

Trucking services are offered through facilities of interstate common carriers operating terminals in the area and by contract carriers of general commodities. Greyhound Bus Lines also has passenger and package- service stations in the City.

Sacramento International Airport, about 12 miles northwest of the City’s downtown, is served by 13 major carriers and 1 commuter carrier. Sacramento Ex ecutive Airport, about 6 miles south of the City’s downtown, is a full-service, 540-acre facility serving gene ral aviation and providing a wide array of facilities and services
.

Stradling Yocca Carlson & Rauth
Draft dated August 9, 2023

4886‐6529‐3937v4/022536‐0034
CONTINUING DISCLOSURE CERTIFICATE
CITY OF SACRAMENTO

This Continuing Disclosure Certificate dated as of September 1, 2023 (this “Certificate”), is executed and delivered by the City of Sacramento (the “Issuer”) in connection with the issuance of the City of Sacramento North Natomas Community Facilities District No. 4, City of Sacramento, County  of  Sacramento,  State  of  California  Special  Tax  Refunding  Bonds,  Series  G  (2023)  (the “Bonds”).  The Bonds are being issued under a Resolution of Issuance adopted by the Sacramento City  Council  on  August  29,  2023,  and  a  Seventh  Supplemental  Indenture  dated  as  of September 1, 2023, between the Issuer and U.S. Bank Trust Company, National Association, as successor trustee (the “Trustee”), which supplements a Master Indenture, dated as of February 1, 1999, as supplemented by the First Supplemental Indenture dated as of February 1, 1999, the Second  Supplemental  Indenture  dated  as  of  April  1,  2001,  the  Third  Supplemental  Indenture dated as of October 1, 2003, the Fourth Supplemental Indenture dated as of November 1, 2006, the Fifth Supplemental Indenture dated as of July 1, 2013  and the Sixth Supplemental Indenture dated as of July 1, 2015 (collectively, the “Indenture”).

The Issuer hereby covenants as follows:

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

2. Definitions.   In  addition  to  the  definitions  set  forth  in  the  Indenture  and  the  Rate  and Method  of  Apportionment,  which  apply  to  any  capitalized  term  used  in  this  Certificate unless the term is otherwise defined in this section 2, the following capitalized terms have the following meanings:
 “Annual Report” means any annual report that meets the criteria in section 4 and is provided by the Issuer under section 3.
 “Beneficial Owner” means any person who (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bond (including a person holding Bond through a nominee, depository, or other intermediary); or (b) is treated as the owner of any Bond for federal income‐tax purposes.  “Dissemination Agent” initially means the Issuer, and thereafter it means any successor Dissemination Agent the Issuer designates in writing.
 “District”  means  the  North  Natomas  Community  Facilities  District  No.  4  City  of Sacramento, County of Sacramento, State of California.
 “EMMA”  means  the  Electronic  Municipal  Market  Access  System  of  the  Municipal Securities Rulemaking Board, which can be found at www.emma.msrb.org, or any other 2 4886‐6529‐3937v4/022536‐0034
repository  of  disclosure  information  the  Securities  and  Exchange  Commission  may designate in the future.
 “Fiscal  Year”  means  the  Issuer’s  fiscal  year,  which  begins  on  July 1  and  ends  the following June 30.
  “Listed Event” means any of the events listed in section 5 below.  “MSRB” means the Municipal Securities Rulemaking Board.  “Official Statement” means the Issuer’s official statement with respect to the Bonds.  “Participating Underwriter” means BofA Securities, Inc.  “Rate and Method of Apportionment” means the Rate and Method of Apportionment of Special Tax for the District approved by the Resolution of Formation.  “Resolution  of  Formation”  means  the  Resolution  adopted  by  the  Sacramento  City Council on October 20, 1998, by which the City formed the District.  “Rule” means Rule 15c2‐12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as it may be amended from time to time.

3. Provision of Annual Reports.
(a) Beginning with the Fiscal Year ending June 30, 2023, the Issuer shall provide to EMMA, or shall cause the Dissemination Agent to provide to EMMA, in either case not later than March 31 after the end of the Fiscal Year, an Annual Report that is consistent with the requirements of section 4 of this Certificate.  The Annual Report may be submitted as a single document or as separate documents composing a package and may include by reference other information as provided in section 4 of this Certificate, except that the Issuer’s audited financial statements 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.
(b) If the Dissemination Agent is an entity other than the Issuer, then the provisions of this section 3(b) will apply.  The Issuer shall provide the Annual Report to the Dissemination Agent, in a form suitable for filing with EMMA, not later than 15 business days before the  date  specified  in  section 3(a)  for  providing  the  Annual  Report  to  EMMA.   If  the Dissemination Agent has not received a copy of the Annual Report by the 15th business day before the date for providing the Annual Report, then the Dissemination Agent shall contact the Issuer to determine if the Issuer will be filing the Annual Report in compliance with section 3(a).  The Issuer shall provide a written certification with each Annual  Report  furnished  to  the  Dissemination  Agent  to  the  effect  that  the  Annual Report  constitutes  the  Annual  Report  required  to  be  furnished  by  it  under  this Certificate.   The  Dissemination  Agent  may  conclusively  rely  upon  the  Issuer’s certification and will have no duty or obligation to review the Annual Report. 3 4886‐6529‐3937v4/022536‐0034
(c) If the Dissemination Agent is unable to verify that an Annual Report has been provided to EMMA by the date required in section 3(a), then the Dissemination Agent shall send a notice in a timely manner to EMMA, in the form required by EMMA. (d) If  the  Dissemination  Agent  is  other  than  the  Issuer,  then  the  Dissemination  Agent shall—
(1) determine each year, before the date for providing the Annual Report, the name and address of the repository if other than the MSRB through EMMA; and (2) file  a  report  with  the  Issuer,  promptly  after  receipt  of  the  Annual  Report, certifying that the Annual Report has been provided to EMMA and the date it was provided.
(e) Notwithstanding  any  other  provision  of  this  Certificate,  all  filings  must  be  made  in accordance with the EMMA system or in another manner approved under the Rule.

4. Content of Annual Reports.  The Annual Reports shall contain or incorporate by reference the following:
(a) Financial Statements.   The Issuer’s audited financial statements for the most recent Fiscal Year then ended.  If audited financial statements are not available by the time the Annual Report is required to be filed by section 3, then the Annual Report must contain unaudited financial statements, and the audited financial statements must be filed in the same manner as the Annual Report when they become available. (b) Financial  and  Operating  Data.   The  Annual  Report  must  contain  or  incorporate  by reference the following information except to the extent the information is included in the Issuer’s audited financial statements or in a report to the California Debt and Investment Advisory Commission that has been uploaded to EMMA:
(1) Balances in each of the following funds established under the Indenture as of the close of the prior fiscal year:
(A) The  Bond  Redemption  Fund  (with  a  statement  of  the  debt‐service requirement to be discharged by the fund before the receipt of expected additional Special Tax revenue, i.e., the Debt Service due on the following September 1).
(B) The Bond Reserve Fund.
(2) The aggregate land assessed valuation and the aggregate improvement assessed valuation  within  the  District,  which  may  be  in  a  form  similar  to  Table  4  in  the Official Statement.    Such valuation should be on a gross basis (i.e., prior to any homeowner exemptions).

4 4886‐6529‐3937v4/022536‐0034
(3) A statement of the debt‐service requirements for the Bonds for the prior Fiscal Year.
(4) A statement of the actual Special Tax levy and collections for the District for the prior Fiscal Year.
(5) The  following  information  (to  the  extent  that  it  is  no  longer  reported  in  the Issuer’s  annual  filings  with  the  California  Debt  and  Investment  Advisory Commission regarding the Bonds):
(A) The Required Bond Reserve for the prior Fiscal Year. (B) A  statement  as  to  the  status  of  any  foreclosure  actions  with  respect  to delinquent payments of the Special Tax.
(C) A statement of any discontinuance of the County’s Teeter Plan with respect to any Taxable Parcel.
(c) Any  or  all  of  the  items  listed  in  section 4(a)  or  4(b)  may  be  included  by  specific reference to other documents (including official statements of debt issues of the Issuer or related public entities) that have been submitted to EMMA or the Securities and Exchange  Commission.   If  the  document  included  by  reference  is  a  final  official statement, it must be available through EMMA.  The Issuer shall clearly identify each document included by reference.

5. Reporting of Significant Events.
(a) The  Issuer  shall  give  or  cause  the  Dissemination  Agent  to  give  notice  to  the  MSRB, through EMMA, not more than ten business days after the occurrence of any of the following events with respect to the Bonds:
(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, Notices of Proposed Issue (IRS Form 5701‐TEB), or other material notices or determinations with respect to the tax status of the Bonds.
(6) Defeasances.
(7) Tender offers.
(8) Bankruptcy, insolvency, receivership, or similar proceedings. 5 4886‐6529‐3937v4/022536‐0034
Note:  For  the  purposes  of  the  event  identified  in  section 5(a)(8),  the  event  is considered to occur when any of the following occur:  if a receiver, fiscal agent, or  similar  officer  is  appointed  for  the  Issuer  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 Issuer; or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental  authority;  or  if  an  order  confirming  a  plan  of  reorganization, arrangement, or liquidation is entered by a court or governmental authority having  supervision  or  jurisdiction  over  substantially  all  of  the  assets  or business of the Issuer.
(9) Ratings changes.
(10) Default,  event  of  acceleration,  termination  event,  modification  of  terms,  or other similar events under the terms of a financial obligation of the obligated person, any of which reflect financial difficulties.
(b) Additionally, the Issuer shall give or cause the Dissemination Agent to give notice to the MSRB, through EMMA, not more than ten business days after the occurrence of any of the following events with respect to the Bonds, if material:
(1) Unless  described  in  section 5(a)(5),  other  notices  or  determinations  by  the Internal Revenue Service with respect to the tax status of the Bonds or other events affecting the tax status of the Bonds.
(2) The  consummation  of  a  merger,  consolidation,  or  acquisition  involving  an obligated  person  or  the  sale  of  all  or  substantially  all  of  the  assets  of  the obligated person, other than in the ordinary course of business; the entry into a definitive agreement to undertake such an action; or the termination of a definitive agreement relating to any such actions, other than under its terms. (3) Appointment  of  a  successor  or  additional  fiscal  agent  or  the  change  of  the name of a fiscal agent.
(4) Nonpayment related defaults.
(5) Modifications to the rights of Holders.
(6) Bond calls.
(7) Release, substitution, or sale of property securing repayment of the Bonds. (8) Incurrence of a financial obligation of the obligated person, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the obligated person, any of which affect Holders. 6 4886‐6529‐3937v4/022536‐0034
(c) For  purposes  of  the  events  identified  in  section 5(a)(10)  or  5(b)(8),  “financial obligation”  means  a  (1) debt  obligation;  (2) derivative  instrument  entered  into  in connection  with,  or  pledged  as  security  or  a  source  of  payment  for,  an  existing  or planned debt obligation; or (3) guarantee of (1) or (2).  “Financial obligation” does not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule.
(d) If  the  Issuer’s  Fiscal  Year  changes,  then  the  Issuer  shall  report  or  shall  instruct  the Dissemination Agent to report the change in the same manner and to the same parties as a Listed Event would be reported under this section 5. (e) The  undertaking  set  forth  in  this  Certificate  is  the  Issuer’s  responsibility.   The Dissemination  Agent,  if  other  than  the  Issuer,  is  not  responsible  for  determining whether  the  Issuer’s  instructions  to  the  Dissemination  Agent  under  this  section 5 comply with the Rule.

6. Termination of Reporting Obligation.  The obligations of the Issuer and the Dissemination Agent  under  this  Certificate  terminate  upon  the  legal  defeasance,  prior  redemption,  or payment in full of all of the Bonds.   If termination occurs before the final maturity of the Bonds, then the Issuer shall give notice of the termination in the same manner as for a Listed Event under section 5.

7. Dissemination  Agent.   The  Issuer  may,  from  time  to  time,  appoint  or  engage  a Dissemination Agent to assist it in carrying out its obligations under this Certificate and may discharge  any  such  Dissemination  Agent,  with  or  without  appointing  a  successor Dissemination Agent.  The Issuer will be the initial Dissemination Agent.  The Dissemination Agent  may  resign  by  providing  30‐days’  advance  written  notice  to  the  Issuer,  with  the resignation effective upon appointment of a new Dissemination Agent.

8. Amendment.
(a) The  Issuer may  amend  this  Certificate  without  the  consent  of  the  Holders,  and  any provision  of  this  Certificate  may  be  waived,  if  all  of  the  following  conditions  are satisfied:
(1) The amendment or waiver is made in connection with a change in circumstances that arises from a change in legal (including regulatory) requirements, a change in law, or a change in the identity, nature, or status of the Issuer or the type of business the Issuer conducts.
(2) The  undertakings  in  this  Certificate  as  so  amended  or  waived  would  have complied,  in  the  opinion  of  a  nationally  recognized  bond  counsel,  with  the requirements  of  the  Rule  as  of  the  date  of  this  Certificate,  after  taking  into account any amendments or interpretations of the Rule as well as any change in circumstances.
7 4886‐6529‐3937v4/022536‐0034
(3) The amendment or waiver either (A) is approved by the Holders of the Bonds in the same manner as provided in the Indenture for amendments to the Indenture with the consent of Holders or (B) does not, in the determination of the Issuer, materially impair the interests of the Holders or Beneficial Owners of the Bonds. (b) To  the  extent  any  amendment  to  this  Certificate  results  in  a  change  in  the  type  of financial information or operating data provided under this Certificate, the first Annual Report provided after the change must include a narrative explanation of the reasons for  the  amendment  and  the  effect  of  the  change  on  the  type  of  operating  data  or financial information being provided.
(c) If an amendment is made to the basis on which financial statements are prepared, the Annual Report for the year in which the change is made must present a comparison between  the  financial  statements  or  information  prepared  on  the  basis  of  the  new accounting  principles  and  those  prepared  on  the  basis  of  the  former  accounting principles.   The comparison must include both a quantitative discussion and, to the extent reasonably feasible, a qualitative discussion of the differences in the accounting principles and the effect of the change in the accounting principles on the presentation of the financial information.

9. Additional Information.  This Certificate does not prevent the Issuer (a) from disseminating any other information, using the means of dissemination set forth in this Certificate or any other means of communication; or (b) from including any other information in any Annual Report  or  notice  of  occurrence  of  a  Listed  Event,  in  addition  to  that  required  by  this Certificate.  If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that specifically required by this Certificate, then the Issuer will have no obligation under this Certificate to update the information or include it in any future Annual Report or notice of occurrence of a Listed Event.

10. Default.  If the Issuer or the Dissemination Agent fails to comply with any provision of this Certificate, then any Holder or Beneficial Owner of the Bonds may take any necessary and appropriate actions, including seeking mandate or specific performance by court order, to cause the Issuer and the Dissemination Agent to comply with their obligations under this Certificate.   A  default  under  this  Certificate  will  not  be  an  Event  of  Default  under  the Indenture, and the sole remedy under this Certificate in the event of any failure of the Issuer or  the  Dissemination  Agent  to  comply  with  this  Certificate  is  an  action  to  compel performance.

11. Duties, Immunities, and Liabilities of Dissemination Agent. (a) Where  an  entity  other  than  the  Issuer  is  acting  as  the  Dissemination  Agent,  the Dissemination Agent will have only the duties expressly set forth in this Certificate, and the Issuer shall indemnify and save the Dissemination Agent and its officers, directors, employees, and agents harmless against all losses, expenses, and liabilities that arise out  of,  or  in  the  exercise  or  performance  of,  their  powers  and  duties  under  this 8 4886‐6529‐3937v4/022536‐0034
Certificate,  including  reasonable  attorney’s  fees  and  other  expenses  of  defending against any claim of liability, but excluding losses, expenses, and liabilities due to the Dissemination Agent’s negligence or willful misconduct. (b) Except  as  provided  in  section 11(a),  the  Issuer  shall  pay  any  Dissemination  Agent (1) compensation for its services provided under this Certificate in accordance with an agreed‐upon schedule of fees; and (2) all expenses, legal fees, and advances made or incurred  by  the  Dissemination  Agent  in  the  performance  of  its  duties  under  this Certificate.
(c) The Dissemination Agent has no duty or obligation to review any information the Issuer provides to it under this Certificate.  The Issuer’s obligations under this section 11 will survive the Dissemination Agent’s resignation or removal and payment of the Bonds.

No person has any right to commence any action against the Dissemination Agent for any  remedy  other  than  specific  performance  of  this  Certificate.   The  Dissemination Agent is not liable under any circumstances for monetary damages to any person for any breach under this Certificate.

12. Beneficiaries.  This Certificate inures solely to the benefit of the Issuer, the Dissemination Agent, the Participating Underwriter, and Holders and Beneficial Owners from time to time of the Bonds, and it creates no rights in any other person or entity.

13. Merger.   Any  person  succeeding  to  all  or  substantially  all  of  the  Dissemination  Agent’s corporate trust business will be the successor Dissemination Agent without the filing of any paper or any further act.

14. Effective Date.   This Certificate is effective as of the date and year set forth above in the preamble.

CITY OF SACRAMENTO
By:

John P. Colville Jr., City Treasurer