Mindy Cuppy, City Clerk . Ms. Cuppy was appointed City Clerk in August 2017. Before her position with the City, Ms. Cuppy was the City Clerk for the City of Rancho Cordova from 2008 to 2017. Ms. Cuppy holds a Bachelor of Arts in Politics from the University of California at Santa Cruz.
Peter Coletto, Director of Finance . Mr. Coletto has served as the City’s Finance Director since July 2023 and is a finance professional with over 20 years of experience across the public and private sectors. Prior to joining the City, Mr. Coletto was at the County of Alameda where he was the Finance Director for the Social Services Agency and held multiple roles in th e County Administrator’s Office. At the County, he was responsible for the development and management of the annual County budget, Capital Improvement Plan, financial forecasting, risk management, procuremen t and contracting, obta ining federal and state reimbursement, and other projects. Before joining the public sector, Mr. Coletto worked in commodities trading and business development. Mr. Coletto graduated from the University of Notre Dame with a bachelor’s degree in finance.
Employee Relations
Under the Meyers-Milias-Brown Act (California Government Code section 3500 et seq.), the City is required to meet and confer with its employees on all matters concerning wages, hours, and working conditions.
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City employees are represented in 19 bargaining units by 11 labor organizations. The Stationary Engineers, Local 39 A of the International Union of Oper ating Engineers, is the largest labor organization.
The most recently recognized employee organization, the Sacramento City Exempt Employee Association (“SCXEA”), was formed in 2011 and is the recognized employee organization of employees in the Exempt Management Unit, the Exempt Management Support Unit, and the Confidential/Administrative Unit.
There have been no major work stoppages by City employees since 1970. Salary and benefits for all units are defined until the agreements expire.
Unrepresented employees have four units: Executive Management, Executive Management Support, Mayor/Council Support, and Non-Career units. Unrepres ented employees include the City Manager (and key staff), the City At torney (and key staff), the City Auditor, the City Treasurer, the City Clerk (and key staff), and the Director of the Office of Public Safety Accountability; the Fire Chief and Fire Deputy Chiefs; the Police Chief and Police Deputy Chiefs; department heads; and managers and staff who deal directly with labor negotiations or human resources.
A summary of the City’s labor organization is set forth in the following table. As shown in the table, the contracts with all of the employee labor organizations have either expired or will expire on or before January 9, 2026. The Fiscal Year 2025-26 Adopted Budget contains the known costs of existing labor agreements and retirement costs. The Fiscal Year 2025-26 Adopted Budget does not contain assumptions regarding potential costs of future labor agreements, which are currently in negotiations or will be in negotiations shortly for all of the City’s labor organi zations. Across all employees, every one percent increase in salary equates to approximately $4.8 million in additional General Fund cost annually. Any increased costs resulting from such negotiations will be required to be funded from corresponding reductions in expenses or the identification of new revenues.
CITY OF SACRAMENTO
SUMMARY OF CITY LABOR ORGANIZATIONS
Union Name
Contract
Expiration
Date
Fiscal Year 2025
Full-Time
Equivalents
Fiscal Year 2026
Full-Time
Equivalents
Sacramento Police Officers Association 1/24/2025 856.0 831.0 International Association of Machinists & Aerospace
Workers 7/11/2025 69.0 69.0
Plumbers and Pipefitters, Local 447 7/11/2025 180.0 188.0 Sierra Building and Construction Trades 7/11/2025 86.0 86.0 Sacramento City Exempt Employees Association 9/19/2025 956.3 959.3 Stationary Engineers Local 39 A (Miscellaneous) 9/19/2025 1,573.7 1,540.2 Stationary Engineers Local 39 C (General Supervisors) 9/19/2025 183.0 184.0 Sacramento Area Firefighters, Local 522 10/3/2025 667.0 671.0 Stationary Engineers Local 39 B (Plant Operators) 12/26/2025 83.0 83.0 Western Council of Engineers 12/26/2025 69.0 76.0
Auto, Marine & Specialty Painters, Local 1176 1/9/2026 16.0 16.0 Unrepresented Employees N/A 101.0
97.0 Total 4,839.9 4,800.4
Source: The City of Sacramento.
The City provides defined-benefit retirement benefits through the State of California’s Public Employees’ Retirement System (“ CalPERS”) and the Sacramento City Employees’ Retirement System (“SCERS”). CalPERS is a multiple-employer public-employee defined-benefit pension plan while SCERS is a single-employer defined-benefit pension plan. See “RETIREMENT AND OPEB OBLIGATIONS.” A-4
CITY FINANCES
City Budget
The Council annually adopts an operating and capital budget for a single fiscal year beginning July 1 and ending June 30 in the subsequent calendar year.
To establish the annual budget, department fund managers, in coordination with the Budget Division of the Finance Department, review actual revenue recei pts, economic and revenue forecasts from an outside consultant, and internal revenue forecasts developed by the Finance Department from estimates of tax revenues and other discretionary revenues to determine what resources will be available to support operating requirements; departments are then tasked with developing a plan for expenditure of projected available resources for the coming fiscal year. Similarly, cap ital-improvement program priorities are matched with available funds from multiple funding sources. Labor costs are updated to reflect salary and benefit changes required under the negotiated agreements and estimates for any unrepresented employees are also updated.
A base budget reflecting the estimated costs of providing programs and services in the new budget year is then prepared. This base budget also includes the estimates of revenues and other financing sources and the operating and capital budgets that are prepared and transmitted to the Mayor and the Council by the City Manager, as required by City Charter, at least 60 days before the start of the fiscal year. The Mayor and the Council review the proposed operating and capital budget in public hearings held in May or June.
Following the public-hearing process, changes from the Mayor and the Council are incorporated into an amended budget. The budget is then formally adopted by the vote of the Council on or before June 30 of each year. The budget for Fiscal Ye ar 2025-26 (“Fiscal Year 2025-26 Adopted Budget”) was adopted on June 10, 2025.
Fiscal Year 2024-25 Preliminary Results
The City is currently in the process of closing Fiscal Year 2024-25 and is anticipated to finish the year generally consistent with the Fiscal Year 2024-25 Adopted Budget and is anticipating a positive ending balance in the General Fund. Along with quarterly forecasts, the City al so conducts a thorough mid-year budget update. The Fiscal Year 2024-25 mid-year update included a reduction in the Fiscal Year 2024-25 Citywide revenue budget of $0.8 million due to lower sales tax revenues offsetting higher property and utility user tax revenues and an increase in departmental reve nues of $3.8 million primarily due to higher parking revenues.
During Fiscal Year 2024-25, Council adopted a new policy to govern the use of prior-year savings versus the budget. This policy dictates that the first use of savings is to balance any projected deficit in an upcoming budget fiscal year, the second use is to ensure the Economic Uncertainty Reserve is at least 10% of General Fund revenues, and if those two conditions are me t, the remaining savings will be split with one-third going to a new fund to address unfunded pension liabil ities, one-third to a new fund to address unfunded capital and deferred maintenance needs, and one-third fo r other one-time uses. Fiscal Year 2023-24 closed with savings of $26.8 million, and in accordance with this policy, the Council has applied this savings towards closing the projected Fiscal Year 2025-26 budget deficit.
Adopted Fiscal Year 2025-26 Budget
The Fiscal Year 2025-26 Adopted Budget totals approximately $1.67 billion from all funding sources and supports 4,984.83 full-time equivalent (“FTE”) positions. This includes $872 million for General Fund operations and capital projects, and $802 million for the City’s enterprise and other fund activities. Like many cities in California and across the country, the City is a ddressing a structural budget deficit with cost growth exceeding revenue growth. The Fiscal Year 2025-26 Adopted Budget closed a projected $62 million deficit while avoiding significant service reductions. Budget solutions included a combination of one-time and ongoing strategies with $34.6 million in ongoing reduction strategies and $35.2 million in one-time solutions.
The one-time strategies primarily consisted of the use of Fiscal Year 2023-24 year-end savings ($26.8 million, as described in “- Fiscal Year 2024-25 Preliminary Re sults”) and the reallocation of unspent project funds.
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Ongoing strategies primarily included departmental revenue increases, the elimination of certain vacant positions, and the shift of costs out of the General Fund into more restrictive funds.
Projected General Fund revenues in the Fiscal Year 2025-26 Adopted Budget of approximately $838.7 million are approximately 3.1% higher than Fi scal Year 2024-25 adopted budget revenues of $813.7 million. See “- Major Revenues” for a discussion of assumptions included in the Fiscal Year 2025-26 Adopted Budget relating to particular revenue sources.
The General Fund budget funds the delivery of the most common programs and services to the community. Because the primary function of the City is to provide services, the largest portion of the budget is tied to the cost of City employees. Aside from the outright elimination of funded positions and employee layoffs, the City has a very limited ability to reduce the cost of labor absent the cooperation of the City’s employee unions.
In addition, there are several areas of expense that have pre-determined payment schedules, including debt service, payments for taxes and serv ices to the County of Sacramento (the “ County”), and contributions to CalPERS and SCERS. These expenditures effectively limit the discretionary portion of the budget.
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The following table shows the Adopted Budget for Fiscal Year 2024-25 and the Adopted Budget for Fiscal Year 2025-26.
CITY OF SACRAMENTO - GENERAL FUND BUDGET
($ in Thousands)
AVAILABLE FUNDS:
Fiscal Year
2024-25
Adopted
Fiscal Year
2025-26
Adopted
Property Taxes $ 233,338 $ 246,439
Sales and Use Taxes
(1) 246,322 236,843
Utility Users Tax 67,465 67,802
Other Taxes 58,628 59,108
Licenses and Permits 34,690 35,221
Fines, Forfeitures and Penalties 9,088 14,109
Interest, Rents and Concessions 6,315 4,265
Intergovernmental Revenue 18,609 20,918
Charges, Fees and Services 94,007 108,984
Other Revenues 1,308 375
Transfers from Other Funds 43,935
44,766
Total Resources: $ 813,707 $ 838,742
REQUIREMENTS:
Current Operations:
Employee Services $ 682,988 $ 701,813
Other Services and Supplies 197,446 205,659
City Property 2,870 2,829
Debt Service 16,578 16,567
Transfers (7,418) (34,472)
Labor/Supply Offset (128,183) (95,033)
Use of Contingency 2,000 2,000
Operating Transfers 5,550
(4,299)
Subtotal Current Operations: $ 832,018 $ 856,665
Capital Improvements $ 15,092 $ 15,835
Total Requirements: $ 847,372 $ 872,485
Other Financing Sources (Uses) $ 30,988
$ 34,219
Total Surplus (Deficit) $ (2,577) $ 476
Ending Undesignated Fund Balance: $ 757 $ 488
(1) Includes Measure U revenues.
Source: City of Sacramento.
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General Fund Financial Summary
The information contained in the table on the following page is summarized from the City’s audited financial statements for Fiscal Years 2019-20 through 2023-24.
STATEMENT OF GENERAL FUND REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE ($ in Thousands)
2019-20 2020-21 2021-22 2022-23 2023-24
Revenues:
Property taxes $177,193 $189,315 $200,758 $216,220 $229,713 Sales and use taxes(1) 90,969 99,325 115,260 115,343 112,422 Utilities use tax 60,039 62, 164 65,461 69, 529 64,133
Other taxes 42,506 52,586 58,079 49,558 50,689
Intergovernmental 15,919 20,193 24,335 23,623 37,078
Charges for services 105,446 99,212 113,565 117,069 110,915 Fines, forfeitures and penalties 12,898 7,284 10,057 9, 112 9,874 Interest, rents and concessions 6,423 887 (14,530) 5,785 20,282 Assessment levies 341 588 483 498 565
Contributions and donations 20 30 37 1 1
Other revenues 974
1,250 653 449 139
Total revenues 512,728 532,834 574,158 607,187 635,811
Expenditures:
General government 54,949 60,257 65,855 69,337 67,011
Police 158,887 162,136 147,890 220,744 231,397
Fire 139,421 143,358 122,548 180,249 194,563
Public works 13,393 13,249 14,615 19,766 21,622
Convention and cultural services 6,485 5,462 1,485 5,538 2,517 Economic development - - - - -
Youth, parks, and community enrichment 21,670 21,538 1,653 3,218 8,420 Community developmen
t 38,629 34,623 30,471 32,077 32,912
Community response - - 6,141 8,897 4,792
Library 10,130 12,266 - - -
Utilities 3,268 3,670 3,859 67 54
Citywide and community suppor
t 50,691 51,632 57,700 53,564 63,139
Capital outlay 17,589 22,592 45,776 25,810 43,970
Debt service 568 - 322 3,989 3,880
Total Expenditures 515,680 530,783 498,315 623,256 674,277 Excess (deficiency) of revenues over
(under) expenditures (2,952) 2,051 75,843 (16,069) (38,466) Other Financing Sources (uses):
Transfers in 44,465 55,636 48,184 46,167 63,068
Transfers out (26,680) (43,133) (36,010) (39,178) (26,211) Issuance of long-term debt
5,549 3,578
Total other financing sources (uses) 17,785 12,503 12,174 12,538 40,435 Special items - - - - -
Changes in fund balances $14,833 $14,554 $88,017 $(3,531) $1,969 Fund Balance, beginning of yea
r 210,606 225,439 239,993 328,010 324,479
Fund Balance, end of year $225,439 $239,993 $328,010 $324,479 $326,448 Less reserves and commitments
Nonspendable $1,279 $1,084 $2,799 $2,499 $2,408
Restricted - - - - -
Committed:
Economic uncertainty 55,200 58,499 61,310 72,534 74,613 Capital projects 57,689 57,417 50,410 58,540 53,795
Community center theater renovation - - - - -
Fire programs 5,635 7,438 8,426 14,999 25,088
Housing trust fun
d - - 1,000 1,000 -
Pension - - - - -
OPEB 4,264 6,828 5,727 6,072 6,095
SCXEA labor fo
r Fiscal Year 2019-20 - - - - -
Budgetary savings allocated by Council for
future costs
5,500 20,891 26,500 10,443
Homeless programs - - - - -
Gas tax - - - - -
Other programs 49,405 72,809 133,367 131,163 123,702
Assigned:
Unrealized investment gains 1,960 103 - - -
Unassigned $50,007 $30,315 $44,080 $11,172 $30,304
(1) Does not include Measure U revenues, which are accounted for thr ough a separate fund. However, Measure U revenues are available for General Fund uses, and are included in the presentation of “sales and use taxes” for purposes of the General Fund budget.
Source: City of Sacramento Annual Comprehensive Financial Reports for respective fiscal years.
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Financial Schedules
A copy of the City’s Annual Comprehensive Financial Report (the “ACFR”) for the fiscal year ended June 30, 2024, is attached as Appendix B to this Official Statement. Prospective investors are encouraged to read the ACFR, including the Management’s Discussion and Analysis, the Financial Statements, and the Notes to the Financial Statements, because it includes important information concerning the City and its financial condition.
Property Taxation within the City
Property taxes make up the largest source of City discretionary revenue. The City lost the ability to set a property tax rate with the adoption of Prop osition 13 in 1978, which added Article XIIIA to the State Constitution.
As a result, beginning with Fiscal Year 1981-82, property has been assessed at 100% of cash value, and the maximum property tax rate is $1.00 per $100 of taxable value. See the forepart of the Official Statement under the caption “CONSTITUTION AL AND STATUTORY LIMITATIONS ON TAXES, REVENUES, AND APPROPRIATIONS — Article XIIIA of th e State Constitution” for a discussion of the constitutional limitations on the City’s ability to issue general-obligation debt payable from an increase in the tax rate.
Additionally, the taxable value reflects homeowners and business-inventory exemptions. Tax revenues lost as a result of each homeowner’s exempti on are reimbursed by the State based on the total taxes that would be due on the taxable value of the property qualifying for that exemption, without allowance for delinquencies. If a homeowner files for the exemption, the exemption is $7,000 of the taxable value of an owner-occupied dwelling, corresponding to $70 in taxes.
For purposes of assessment and collection, property is classified either as “secured” or “unsecured” and is listed accordingly on separate parts of the assessment roll. The “secured roll” is that part of the assessment roll containing State-assessed real property a nd property on which the taxes are a lien sufficient, in the opinion of the County Assessor, to secure payment of the taxes. Personal property is assessed on the “unsecured roll.”
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[[UPDATE FOR 2024-25 WHEN AVAILABLE]] The following table summarizes gross assessed valuations for all taxable property in the City for Fiscal Years 2015-16 through 2024-25.
GROSS ASSESSED VALUES
FOR ALL TAXABLE PROPERTY(1)
($ in Thousands)
Fiscal Year Secured Roll Unsecured Roll Public Utility Total Assessed
Valuation
(% change from
prior Fiscal
Year)
2015-16 $39,823,777 $1,513,519 $9,267 $41,346,563 4.61% 2016-17 42,300,010 1,623,203 9,193 43,932,406 6.25
2017-18 45,389,674 1,692,375 8,974 47,091,023 7.19
2018-19 48,919,753 1,868,599 8,701 50,797,053 7.87
2019-20 53,124,698 1,869,844 9,185 55,003,727 8.28
2020-21 56,812,389 1,993,337 9,069 58,814,795 6.93
2021-22 60,043,995 1,951,987 9,069 62,005,052 5.42
2022-23 64,677,204 2,136,640 8,950 66,822,794 7.77
2023-24 69,335,897 2,468,674 10,448 71,815,019 7.47
2024-25 72,524,002 2,972,439 10,501 75,506,943 5.14
(1) Derived from Equalized Assessed Valuation Report.
(2) The decrease in public utility assessed value is primarily due to the transfer of the downtown railyards to a private developer and the City.
Source: County of Sacramento, Department of Finance, Auditor-Controller Division.
The City receives only a portion of the property ta xes collected within the City, sharing the revenue with school districts, the City in its capacity as the successor to the redevelopment agency of the City, special districts, and the County. The sharing of property tax revenue is based on formula set in State law and regulations, and annual changes in tax revenue are proportional to changes in the tax-roll values within the City. Property taxes are billed, collected, and allocate d by the County. The table below summarizes property tax revenues derived from the Secured Rolls from Fiscal Years 2015-16 to 2024-25.
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PROPERTY TAX REVENUES
RECEIVED BY THE CITY
Fiscal
Year
Property Tax
Revenues
Current Secured
2015-16 $144,930,592
2016-17 138,002,134
2017-18 146,891,743
2018-19 157,303,946
2019-20 168,952,271
2020-21 180,799,367
2021-22 192,366,356
2022-23 207,295,841
2023-24 219,936,398
2024-25 226,190,027
Source: City of Sacramento, Department of Finance, Revenue Division.
The following table lists the City’s largest local secured taxpayers as of June 30, 2024. Many of the largest taxpayers own commercial office space in downtown Sacramento.
CITY OF SACRAMENTO
PRINCIPAL PROPERTY TAXPAYERS
AS OF JUNE 30, 2024
($ in Thousands)
Property Owner
Assessed
Valuation Rank % of Total
Sacramento Kings $ 352,617 1 0.49%
BRE Depot Park LLC 271,195 2 0.38
SRI Eleven 621 Capitol Mall LLC 267,318 3 0.37
CA Sacramento Commons LLC 221,577 4 0.31
Oakmont Properties ALIRA LLC 218,255 5 0.31
Hancock SREIT Sacramento LLC 208,922 6 0.29
HP Hood LLC 195,125 7 0.27
Kaiser Foundation Health Plan INC. 185,825 8 0.26
Natomas Development Partners LLC 180,056 9 0.25
AB PR QOZB III Property LLC 166,927 10 0.23
Total: $ 2,267,817 3.16%
Net Assessed Value Total: $71,378,461 100.00%
Source: The City of Sacramento Annual Comprehensive Financial Report for the fiscal year ended June 30, 2024.
Major Revenues
Property Tax . Property taxes account for 30% of all General Fund revenues. Revenues related to property taxes are affected by fluctuations in the real estate market, levels of new construction activity, and the corresponding changes to the assessed value of those pr operties on the tax roll. Total assessed value for Sacramento County’s Fiscal Year 2024-25 secured and unsecured roll surpassed $231 billion, an increase of
5.2% countywide as compared to the prior fiscal year. The Adopted 2025-26 Budget assumed a 4.1% increase in property tax revenues. Based on actual increases in Fiscal Year 2025-26 assessed valuation announced by the County, property tax revenues are now expected to grow by __% from Fiscal Year 2024-25 levels, resulting in approximately $__ less in property tax revenues than assumed in the Fiscal Year 2025-26 Adopted Budget.
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Sales and Use Tax . In 1956, the City adopted a Bradley-Burns Sales Tax Ordinance that allows the City to be allocated a percentage of the overall sales tax imposed in the City. The level of that sales tax has been set at 1% since April 1, 1969. The State Board of Equalization collects and distributes sales-and-use tax for the State, cities, counties, and other entities receiving sales-tax revenue.
Proposition 172 was approved by voters to permanently extend an additional 0.5% sales tax beyond December 21, 1993. The legislation requ ires that this sales tax continue to be deposited in the Public Safety Augmentation Trust Fund for distribution to counties and cities based on sales-tax-allocation percentages previously calculated. The City receives approximately 4% of this Proposition 172 sales-tax revenue allocated to jurisdictions within the County.
In November 2004, voters approved Measure A to extend the sales-and-use tax rate in Sacramento County by 0.5% to 2039. The proceeds of this Measure A tax are administered by the Sacramento Transportation Authority and are used to fund a comprehensive program of roadway and transit improvements, including highway, street, and road construction; highway, street, and road maintenance; bus and light-rail capital and operations; improved transportation services for elderly and handicapped persons; and transportation-related air-quality programs.
In November 2012, voters approved Measure U, a general purpose sales tax measure which increased the sales tax rate in the City by 0.5% through 2019. In November 2018, voters approved Measure U which increased the sales tax rate by an additional 0.5% and made the general purpose sales tax increase permanent.
The City estimates a 1.1% decrease in sales tax re venues in Fiscal Year 2024-25 and is anticipating
0.5% growth in Fiscal Year 2025-26 and 2% annual growth in future fiscal years. Over the past few years, sales tax revenues have been affected by a variety of unusual factors including but not limited to the following:
the COVID-19 pandemic and recovery; higher than normal inflation; supply chain issues; changes in consumer demand from taxable to non-taxable purchases; a spike in fuel prices; and now a new federal tariff policy. All segments of sales tax revenues are expected to remain flat or increa se slightly with the exception of transportation, which is projecting a long-term declin e as electric vehicle adop tion continues and exerts downward pressure on demand for gasoline sales.
Utility Users Tax . On November 8, 1988, the voters approved Measure C, an advisory measure asking this question: “Should the utility users tax rate be maintained at 7.50% in order to provide additional General Fund revenues to augment City services such as public safety?” On November 4, 2008, Measure O was approved by voters, reducing the utility users tax (“ UUT”) on telephonic services from 7.50% to 7.00% and expanding the scope of the tax to include new communication technologies. All other UUT rates remained unchanged at 7.50%.
Cable, wireless telecommunication, and wired telecommunication revenue components continue to face regulatory and fiscal pressure across their re spective industries. The City reduced UUT revenue projections in previous fiscal years to address these underperforming sectors. Electricity and gas now account for over 75% of all UUT revenue, providing overall growth despite continued losses by the other components.
Historically, these segments had accounted for about half of UUT revenue since Fiscal Year 1996-97 before growing to 60% of UUT in Fiscal Year 2018-19 and 70% in Fiscal Year 2022-23. However, the dominance of the electricity and gas segments makes the overall revenue stream less diversified and therefore more prone to volatility. For example, when Sacramento seasons ar e milder, this may result in more muted UUT revenue totals as households avoid using air conditioning and heating. The Fiscal Year 2025-26 budget assumes 0.5% growth in UUT annually due to the factors described above and the unpredictability of energy usage going forward.
Transient Occupancy Tax. Since 1990, the City has imposed a transient-occupancy tax (“ TOT”), the level of which is currently set at 12%. The revenues from the TOT are currently designated for the City’s Community Center Fund (10%) prior to the required tran sfer to Visit Sacramento (previously known as the Sacramento Convention & Visitors Bureau) in accordan ce with the Sacramento Ci ty Code, and the General Fund (2%). The City has experienced a rebound in TOT revenues post-COVID and is anticipating 3.5% growth in Fiscal Year 2025-26.
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The Five-Year Forecast
The General Fund forecast provides a multi-year review of revenues and expenditures, allowing an assessment of the fiscal consequences of both prior and current funding decisions in the context of forecasted revenues and expenditures. The Council evaluates propos ed fiscal actions in a long-term rather than a short- term context. The General Fund forecast is developed consistent with the Council’s adopted budget guidelines, which limit new revenues from being counted or spent until realized.
The following table projects a structural gap between revenues and expenditures in the General Fund in the absence of further actions to increase ongoing revenues and/or reduce ongoing expenses. The structural deficit is the result of decisions that the City and voters have made over the past few years along with macroeconomic forces such as inflation. These decisi ons include expanding into new service areas, increased costs of new labor contracts, increa sing staffing levels, and ballot measures redirecting general revenues for specific purposes. In many cases, in prior years federa l aid to assist local governments mitigated COVID-19 pandemic impacts and allowed the City to fund these cost increases; however, the federal funding was one- time while many of the increased costs are ongoing. The forecast assumes that a projected negative Ending Fund Balance will be addressed each fiscal year during budget development (and will not be carried over to the subsequent fiscal year) since the City is required to adopt a balanced budget.
GENERAL FUND REVENUES AND EXPENSES
5-YEAR BUDGET FORECAST
($ in Thousands)
Fiscal Year
2025-26
Fiscal Year
2026-27
Fiscal Year
2027-28
Fiscal Year
2028-29
Fiscal Year
2029-30
Beginning Fund Balance $12 $488 $0 $0 $0
Total Revenue 856,892 867,131 884,574 900,542 916,306
Total Expenditures 880,362 888,481 915,504 949,113 968,845 Surplus (Deficit) $ (23,469) $ (21,351) $ (30,930) $ (48,570) $ (52,538) Use of Reserve for Future Budget Development 26,807 0 0 0 0 FY2024-25 Vacancy Factor 6,467 6,596 6,728 6,863 7,000
Measure L Transfer (9,329) (9,329) (9,329) (9,329) (9,329) Homeless Services 0 (36,797) (36,853) (37,288) (37,728) Ending Fund Balance $ 488 $ (60,392) $ (70,383) $ (88,325) $ (92,595)
(1) Anticipated savings from positions contained in budget but expected to be vacant, based on prior experience. (2) Refers to amount equivalent to 40% of cannabis business operations tax revenues that is transferred from the General Fund to the Children’s Fund that was established by Measure L.
Source: City of Sacramento.
The Budget Forecast is based on a set of point-in-time assumptions. Expense assumptions include known effects of current labor agreements and anticipated effects related to required pension-related payments.
As described in “INTRODUCTION – Employee Relatio ns,” the contracts with all of the employee labor organizations have either expired or will expire on or before January 9, 2026. The City is currently in negotiations, or expects to commence negotiations shortly, with its labor organizations. The Budget Forecast does not include any increases in labor costs that may result from future labor agreements, however, every one- percent increase in salary across all employees equates to approximately $4.8 million in additional cost to the General Fund.
There can be no assurances that actual results will not be materially adversely different from the forecast.
Budget sustainability and the fiscal capacity to ad dress longer-term fiscal i ssues require that annual base-operating-cost increases be held to a level below annual revenue growth. The fiscal reality, given the lack of significant revenue growth in excess of expenditure growth in the forecast, is that current expenditure commitments are unsustainable. As a result, the City will need to continue to reduce expenditures or A-13
implement long-term revenue growth strategies in order to account for anticipated expenditure growth not supported by revenues.
Planned Sources for City Payments with Respect to Golden 1 Center In 2015, the City entered into a lease agreement (the “ Golden 1 Center Lease ”) and related agreements with the Sacramento Public Financing Authority (“ SPFA”) in connection with the issuance by the SPFA in September 2015 of lease-reve nue bonds to finance the City’s requ ired contribution to the Golden 1 Center, an arena in downtown Sacramento, which is the home of the National Basketball Association’s Sacramento Kings. The lease revenue bonds are currently outstanding in the principal amount of $241,995,000. Rental payments for those lease-revenue bonds, which are payable from the City’s General Fund, are approximately $18.3 million annually and commenced in Fiscal Year 2017-18.
The obligation of the City to pay rental payments to SPFA under the Golden 1 Center Lease when due is an obligation payable from the City’s General Fund. This obligation is offset in part by rental payments the City receives from the private developer of the Golden 1 Center (an entity of the Sacramento Kings which leases the Golden 1 Center from the City) and from certain parking revenues. The rental payments from the Golden 1 Center developer began in full in Fiscal Year 2017-18. The payments escalate with annual CPI adjustments between 3% and 5% and is expected to be at least $8.88 million in Fiscal Year 2025-26.
Payments from the developer are projected to grow to at least $18.6 million in Fiscal Year 2050-51. The payments from the developer under the Golden 1 Cent er Lease are subject to abatement under certain circumstances. (Such payments were reduced during Fi scal Year 2019-20 and Fiscal Year 2020-21 when COVID 19 pandemic restrictions reduced the number of NBA home games from being held at the Golden 1 Center during the 2020 and 2021 National Basketball Association seasons.) Net parking revenues for Fiscal Year 2024-25 are es timated to be approximately $19.2 million, and are projected to increase to $21.3 millio n in Fiscal Year 2025-26. In addition to this projected growth of more than $2 million, in future years the City also plans to use certain existing parking revenues currently devoted to paying debt service to pay for parking-related facilities and equipment as the current debt-service payments began to decrease in Fiscal Year 2019-20 and continue to decrease in future years. Parking revenues were greatly reduced during the depths of the COVID-19 pande mic but have steadily increased since Fiscal Year 2021-22. Parking revenues are projected to be at 117% of pre-pandemic levels in Fiscal Year 2025-26, demonstrating full recovery from the pandemic and ongoi ng growth as a result of the expansion of new and existing parking programs. There can be no assurances parking revenues will be generated at the projected levels as revenue projections are dependent on changes in capital and operating costs relating to the City’s parking systems, parking demand, and other factors. If projected parking revenues are materially lower than budgeted in any given fiscal year, the City’s General Fund may be required to use General Fund moneys to make rental payments for the Golden 1 Center lease revenue bonds to augment the Parking Fund revenue as it did during the pandemic.
Coupled with the City’s share of property taxes (in the form of possessory interest tax) on the Golden 1 Center, the City expects that these revenue sources will, in the aggregate, provide the General Fund with the capacity to pay all or a significant portion of all of th e payments due under the Golden 1 Center Lease without affecting other services or programs funded from the General Fund. In order to provide for the availability of sufficient available funds in the early years of operation of the Golden 1 Center, the City established and currently intends to maintain a liquidity reserve in which it would set aside certain of these revenues before completion of the Golden 1 Center and the commencement of rental payments under the Golden 1 Center Lease. As of July 1, 2025, about $6.8 million has been set aside in the liquidity reserve from TOT and parking revenues. Notwithstanding the City’s plans to use these revenues to make rental payments under the Golden 1 Center Lease, the obligation of the City to make those payments is not conditioned on the availability of revenues in the amounts expected by the City.
The City has not included projected rental payments it is required to make under the Golden 1 Center Lease in the Budget Forecast, because the revenues described above are expected to offset such rental payments. The Budget Forecast does not include potential additional revenues related to the Golden 1 Center such as higher-than-projected growth in lease paymen ts from the Kings, property taxes (in the form of possessory interest tax) on the Golden 1 Center itself, or any releases from the liquidity reserve. The Budget A-14
Forecast will be updated each year, thus any anticipate d need to draw upon the liqui dity reserve or any other source of legally available funds may change.
Limitations on Taxes; Proposition 218 Matters
As described in the forepart of the Official Statement under the caption “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES, REVENUES, AND APPROPRIATIONS,” the State Constitution limits the City’s ability to raise taxes without a vote of the electorate.
In addition, Proposition 218, which added Articles XIIIC and XIIID to the State Constitution in 1996, imposes significant limitations relating to the imposition of rates, fees, and charges for various enterprises of the City.
Similarly, Proposition 26, which amended Articles XIIIA and XIIIC of the State Constitution in 2010, extends some of the limitations of Proposition 218 to additional charges, fees, and fines.
State and Federal Funding
Although three years ago the State Budget was proj ecting a record surplus, in each of the past two years the State has had to close a budget deficit. State expenses continue to grow faster than revenues, and the State is facing threats to federal funding. The St ate’s Homelessness Housing, Assistance and Prevention (“HHAP”) program provides financial support to the City ’s homelessness response and prevention programs.
The City’s HHAP Round 5 allocation, which supported se rvices delivered primarily in Fiscal Year 2024-25 totaled $27.1 million. The City’s HHAP Round 6 allocation, which will support services delivered primarily in Fiscal Year 2025-26 was reduced to $16.1 million due to the City’s success in lowering its point-in-time count of homeless individuals as well as a 12.6% reduction in the total amount allocated to large cities. The Governor and Legislature are currently negotiating regarding a potential 7 th round of HHAP funding. If
approved, the appropriated amount may likely be less than HHAP Round 6 funding.
Information about the State budget is available through various State-maintained websites. Historical State budgets can be found at https://ebudget.ca.gov/, while the current budget can be found at http:// ebudget.ca.gov. Additionally, budget analyses are regu larly posted on the website of the Legislative Analyst’s Office at www.lao.ca.gov.
The information referred to above is prepared by the State agency maintaining each website and not by the City, and the City takes no responsibility for the continued accuracy of the internet addresses or the accuracy, completeness, or timeliness of informatio n posted there. Information on these websites is not incorporated by reference into this Official Statement.
While federal funding is not a significant source of revenue for operations, the City is concerned, and is monitoring, threats from federal agencies to withhold grant funds. To mitigate the risk of delayed or withheld federal funds, the City established a federal funding contingency as part of the Fiscal Year 2025-26 Budget. Across all funds – and spanning multiple fiscal years – the City has identified approximately $178 million of funding that originates from the federal government (this includes funding, such as those for major transportation projects funded via Caltrans, where the Ci ty receives federal funds via the State). Most of this funding is through grants for major infrastructure projects administered by Public Works, the Department of Utilities, and Information Technology. Annual ongoing funding from the Department of Homeland Security and Department of Justice that the City is closely monitoring is approximately $5 million.
General Fund Obligation Debt Service Payments
The following table summarizes the City’s total annual General Fund Obligation debt-service payments as of June 30, 2025. Obligations set forth on the following table are payable from the City’s General Fund; however, the amount actually payable from the General Fund is offset by available amounts from certain enterprise and other funds as indicated in the footnotes to the table. To the extent those other sources are unavailable, the General Fund would be responsible for these payments.
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The following table does not include obligations payable solely from funds other than the General Fund (i.e. tax allocation revenues or enterprise fund revenues) and does not reflect any potential savings from the refunding of the 2015 Revenue Refunding Bonds.
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GENERAL FUND OBLIGATION DEBT SERVICE*
2016
Refunding
H Street
Complex
2006 Capital
Improvement
Revenue
Bonds,
Series B1
2006 Capital
Improvement
Revenue
Bonds,
Series E2
2015 Lease
Revenue
Bonds
(Golden 1
Center) 3
2015
Revenue
Refunding
Bond**4
Total Debt
Service
Obligations
Amount
Gross
Percentage
of
Budgeted
Fiscal Year
General
Fund
Revenues5
Total
Offset
Debt Service
Amount
Total
General
Fund
Debt Service
Amount
Net
Percentage
of
Budgeted
Fiscal Year
General
Fund
Revenues
2026 $669,250 $3,928,351 $20,036,856 $18,286,258 $9,898,313 $52,819,027 6.3% $35,992,339 $16,826,688 2.0% 2027 673,630 3,926,060 20,030,900 18,289,420 9,904,438 52,824,447 6.3% 35,992,936 16,831,511 2.0% 2028 672,442 3,926,294 20,031,225 18,287,643 9,909,388 52,826,991 6.3% 35,998,479 16,828,512 2.0% 2029 670,899 3,923,604 20,127,975 18,285,364 9,896,838 52,904,680 6.3% 36,010,744 16,893,936 2.0% 2030 673,859 3,917,692 20,128,788 18,286,739 9,897,256 52,904,333 6.3% 36,000,349 16,903,984 2.0% 2031 676,251 3,908,259 20,128,794 18,285,638 5,854,175 48,853,116 5.8% 32,972,981 15,880,136 1.9% 2032 668,146 3,909,556 20,130,500 18,286,217 5,844,050 48,838,469 5.8% 32,962,011 15,876,459 1.9% 2033 334,686 3,900,987 20,136,150 18,282,349 5,394,175 48,048,347 5.7% 32,614,224 15,434,123 1.8% 2034 - 3,892,251 3,632,925 18,283,188 5,384,550 31,192,914 3.7% 20,901,927 10,290,987 1.2% 2035 - 3,892,453 - 18,282,324 5,130,175 27,304,951 3.3% 19,384,515 7,920,437 0.9% 2036 - 3,880,993 - 18,283,630 5,120,800 27,285,423 3.3% 19,382,366 7,903,057 0.9% 2037 - 3,872,424 - 18,280,697 5,120,400 27,273,521 3.3% 19,377,540 7,895,981 0.9% 2038 - - - 18,282,397 - 18,282,397 2.2% 18,282,397 - 0.0% 2039 - - - 18,282,040 - 18,282,040 2.2% 18,282,040 - 0.0% 2040 - - - 18,278,216 - 18,278,216 2.2% 18,278,216 - 0.0% 2041 - - - 18,279,516 - 18,279,516 2.2% 18,279,516 - 0.0% 2042 - - - 18,278,967 - 18,278,967 2.2% 18,278,967 - 0.0% 2043 - - - 18,279,878 - 18,279,878 2.2% 18,279,878 - 0.0% 2044 - - - 18,275,276 - 18,275,276 2.2% 18,275,276 - 0.0% 2045 - - - 18,273,469 - 18,273,469 2.2% 18,273,469 - 0.0% 2046 - - - 18,277,204 - 18,277,204 2.2% 18,277,204 - 0.0% 2047 - - - 18,273,943 - 18,273,943 2.2% 18,273,943 - 0.0% 2048 - - - 18,271,713 - 18,271,713 2.2% 18,271,713 - 0.0% 2049 - - - 18,272,978 - 18,272,978 2.2% 18,272,978 - 0.0% 2050 - - - 18,269,919 - 18,269,919 2.2% 18,269,919 - 0.0% Total $5,039,163 $46,878,921 $164,384,113 $457,014,983 $87,354,556 $760,671,736
$595,185,926 $165,485,809
Offset 100.0% 28.32% 63.68% 100.0% 17.4%
* Does not include obligations payable solely from funds other th an the General Fund (i.e. tax allocation revenues or enterprise fund revenues). ** These issues are expected to be refunded in whole or in part as described in “PLAN OF REFUNDING.” Savings from such refunding are not reflected in the table. (1) Payment source assumptions used for offset calculation: 2006 Capital Improvement Revenue Bonds Series B: 71.7% General Fund and 28.3% RASA Master Lease (65th Street, Army Depot, North Sacramento, River District)
(2) Payment source assumptions used for offset calculation: 2006 Capi tal Improvement Revenue Bonds, Series E: 53.6% Water Fund, 36. 3% General Fund, 8.1% North Natomas Fund, 1.1% RASA Master Lease (Stockton Boulevard), and 0.9% Culture and Leisure Fund. (3) Payment source assumptions used for offset calculation: 2015 Lease Revenue Bonds (Golde n 1 Center): 66.8% lease rental payments from the Sacramento Kings, and the reasonable expectation of 33.2% Parking Fund.
(4) Payment source assumptions used for offset calculation: 2015 Refunding Revenue Bonds: 82.6% General Fund, 8.9% Solid Waste Fund, and 8.5% Parking Fund. (5) Data Based on Fiscal Year 2025-26 Net General Fund Revenue Forecast $838,742,000.
Amounts rounded to nearest dollar.
Source: City of Sacramento.
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Debt Statement
Set forth on the following page is a direct and overlapping debt report (the “ Debt Report”) prepared by California Municipal Statistics, Inc. as of June 30, 2025. The Debt Report is included for general- information purposes only. The City makes no representations as to its completeness or accuracy.
The Debt Report generally includes long-term obligations sold in the public-credit markets by public agencies whose boundaries overlap the boundaries of the City in whole or in part. Such long-term obligations generally are not payable from revenues of the City (except as indicated), nor are they necessarily obligations secured by property within the City. In many cases, long-term obligations issued by a public agency are payable only from the general fund or other revenues of that public agency.
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CITY OF SACRAMENTO
DIRECT AND OVERLAPPING BONDED DEBT
AS OF JUNE 30, 2025
2024-25 Net Assessed Valuation: $75,074,599,639 (1)
Total Debt City’s Share of
OVERLAPPING TAX AND ASSESSMENT DEBT: 6/30/25 % Applicable (2) Debt 6/30/25 Los Rios Community College District $356,335,000 27.007% $ 96,235,393 Elk Grove Unified School District 419,300,000 11.031 46,252,983 Natomas Unified School District 358,445,000 81.186 291,007,158 Sacramento Unified School District 601,520,440 85.181 512,381,126 San Juan Unified School District 673,593,387 2.776 18,698,952 Twin Rivers Union School District (former Elementary School District bonds) 73,360,000 52.579 38,571,954 Twin Rivers Unified School District (former Grant Joint Union High School District bonds) 272,060,605 51.671 140,576,435 Robla School District 86,902,328 54.335 47,218,380
City of Sacramento Community Facilities Districts 259,880,000 00. 259,880,000 Elk Grove Unified School District Community Facilities District No. 1 181,266,133 11.031 19,995,467 California Statewide Community Development Authority Community Facilities Districts 16,680,000 100. 16,680,000 California Statewide Community Development Authority Assessment Districts 35,030,000 100. 35,030,000 Sacramento Area Flood Control Agency Consolidated Capital Districts Assessment District 292,885,000 85.335 249,933,415 Sacramento Area Flood Control Agency Natomas Local Assessment District 28,615,000 82.936 23,732,136 TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $1,796,193,399
Ratios to 2024-25 Assessed Valuation:
Total Overlapping Tax and Assessment Debt ...................................... 2.39%
DIRECT AND OVERLAPPING GENERAL FUND DEBT:
Sacramento County General Fund Obligations $ 91,907,145 32.374% $ 29,754,019 Sacramento County Pension Obligation Bonds 308,630,000 32.374 99,915,876 Sacramento County Board of Education General Fund Obligations 1,120,000 32.374 362,589 Elk Grove Unified School District General Fund Obligations 9,912,000 11.031 1,093,393 Sacramento Unified School District General Fund Obligations 45,680,000 85.181 38,910,681 Sacramento Metropolitan Fire District General Fund Obligations 6,903,000 0.014 966 Sacramento Metropolitan Fire District Pension Obligation Bonds 20,200,000 0.014 2,828 Arcade Creek Recreation and Park District General Fund Obligations 86,100 0.982 846 Fulton-El Camino Recreation and Park District General Fund Obligations 839,000 18.568 155,786 City of Sacramento General Fund Obligations 483,465,000 100. 483,465,000 TOTAL GROSS DIRECT AND OVERLAPPING GENERAL FUND DEBT $653,661,984 Less: Sacramento County supported obligations 3,094,030 City of Sacramento supported obligations (Estimated) 353,194,797 TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND DEBT $297,373,157
OVERLAPPING TAX INCREMENT DEBT (Successor Agencies): $148,811,239 100. % $148,811,239 (3)
TOTAL GROSS DIRECT DEBT $483,465,000
TOTAL NET DIRECT DEBT $130,270,203
TOTAL GROSS OVERLAPPING DEBT $2,115,201,622
TOTAL NET OVERLAPPING DEBT $2,112,107,592
GROSS COMBINED TOTAL DIRECT AND OVERLAPPING DEBT $2,598,666,622 (5) NET COMBINED TOTAL DIRECT AND OVERLAPPING DEBT $2,242,377,795
(1) Assessed valuation net of homeowners’ exemption.
(2) Percentages determined by overlapping district's gross assessed valuation located within the boundaries of the city divided by the district’s total gross taxable assessed valuation.
(3) Includes accreted values of the 2003 and 2005 tax allocation bonds as of 6/30/25. (4) Excludes tax and revenue anticipation notes, enterprise revenue, and mortgage revenue bonds.
Ratios to 2024-25 Assessed Valuation:
Total Gross Direct Debt ($483,465,000) ............................................................... 0.64% Total Net Direct Debt ($130,270,203) ................................................................... 0.17% Gross Combined Total Direct and Overlapping Debt .............................................. 3.46% Net Combined Total Direct and Overlapping Debt .................................................. 2.99%
Ratios to Successor Agency Redevelopment Increment Valuation ($11,164,866,980 - based on 100% net valuation of all City project areas):
Total Overlapping Tax Increment Debt .................................................................... 1.33%
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RETIREMENT AND OTHER POSTEMPLOYMENT BENEFITS (OPEB) LIABILITIES The City provides retirement and post-employment benefits to its employees as described below.
Employees Retirement Plans
The City provides defined-benefit retirement benefits through the California Public Employees’ Retirement System (“ CalPERS”) and the Sacramento City Employees’ Retirement System (“ SCERS”).
CalPERS is a multiple-employer public-employee defined-benefit pension plan, whereas SCERS is a single- employer defined-benefit pension plan.
All full time and certain part-time City employees hi red on or after January 28, 1977, and all City safety employees regardless of the date of hire, are eligible to participate in CalPERS. CalPERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and their beneficiaries. CalPERS acts as a common investme nt and administrative agent for participating public entities within the State. Benefit provisions and all other requirements are established by State statute and City ordinance. Copies of the CalPERS annual financial report and a separate report for the City’s plans within CalPERS may be obtained from the CalPERS website at https://www.calpers.ca.gov.
All full-time, non-safety employees hired before January 29, 1977, are eligible to participate in SCERS. SCERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries.
The City reports SCERS as a pension-trust fund. SC ERS issues a publicly available annual financial report that includes financial statements and required supplementary information. This financial report may be obtained at https://www.cityofsacramento.gov/finance/accounting /reporting.
Funded Status
The tables below summarize the funded status of the City’s retirement plans as of the most-recent actuarial-valuation dates. Additional information regarding the City’s employee-retirement plans, annual pension costs, the funding status thereof, and significan t accounting policies related thereto is set forth in Note 8 to the City’s audited financial statement for the fiscal year ended June 30, 2024, attached as Appendix B to the Official Statement.
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CITY OF SACRAMENTO
RETIREMENT PLAN TREND INFORMATION
CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
Miscellaneous Employees
($ in Millions)
Valuation
Date
(June 30)
Market
Value of
Assets
Actuarial
Accrued Liability
(AAL) – Entry
Age
Unfunded
AAL
Actuarial
Funded
Ratio
Annual
Covered
Payroll
Unfunded AAL
as % of
Covered Payroll
2014 $ 796 $1,005 $209 79% $153 137%
2015 812 1,068 256 76 162 158
2016 816 1,152 336 71 172 195
2017 905 1,245 340 73 176 193
2018 974 1,364 390 71 181 215
2019 1,031 1,437 406 72 190 214
2020 1,073 1,513 440 71 198 222
2021 1,316 1,634 318 81 201 158
2022 1,210 1,723 513 70 206 249
2023 1,279 1,820 541 70 223 243
Source: CalPERS actuarial valua tions through June 30, 2023. The actuarial valuation for the Ci ty as of June 30, 2024, is expected to be available in late calendar year 2026.
CITY OF SACRAMENTO
RETIREMENT PLAN TREND INFORMATION
CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
Safety Employees
($ in Millions)
Valuation
Date
(June 30)
Market
Value of
Assets
Actuarial
Accrued Liability
(AAL) – Entry
Age
Unfunded
AAL
Actuarial
Funded
Ratio
Annual
Covered
Payroll
Unfunded AAL
as % of
Covered Payroll
2014 $1,142 $1,517 $375 75% $109 344%
2015 1,142 1,605 463 71 117 396
2016 1,126 1,693 567 67 123 461
2017 1,231 1,799 568 68 129 440
2018 1,313 1,968 655 67 135 485
2019 1,382 2,078 696 67 143 487
2020 1,432 2,183 751 66 153 491
2021 1,754 2,352 598 75 164 365
2022 1,611 2,479 868 65 163 533
2023 1,702 2,632 930 65 169 550
Source: CalPERS actuarial valua tions through June 30, 2023. The actuarial valuation for the Ci ty as of June 30, 2024, is expected to be available in late calendar year 2026.
In the early 1980s, safety employees in the SCERS pension plan were moved to CalPERS after voters approved a change to the City Charter. There was 1 active member and 738 retirees and other beneficiaries participating in the SCERS plan as of June 30, 2024.
The SCERS pension plan has been closed to new members since 1977. Because SCERS is closed to new members and has only 1 remaining active member, the Actuarial Value of Assets is a three-year smoothed
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market value. Investment gains and losses are recogn ized over a three-year period. The actuarial value of assets is limited by a 15% corridor, meaning the actuar ial value of assets will be no greater than 115% of market value of assets and no less than 85% of market value of assets.
CITY OF SACRAMENTO
RETIREMENT PLAN TREND INFORMATION
SACRAMENTO CITY EMPLOYEES’ RETIREMENT SYSTEM
($ in Millions)
Valuation
Date
(June 30)
Market
Value of
Assets
Actuarial
Accrued Liability
(AAL) – Entry
Age
(Overfunded)
Unfunded
AAL
Funded
Ratio
Annual
Covered
Payroll
(Overfunded)
Unfunded AAL
as % of
Covered Payroll
2015 $301 $376 $ 75 80% $1.2 6,374%
2016 285 366 81 78 1.0 7,938
2017 289 337 48 86 1.0 4,611
2018 287 325 38 88 0.9 4,132
2019 282 313 31 90 0.7 4,647
2020 263 297 34 89 0.4 9,262
2021 311 282 (29) 110 0.3 (10,657)
2022 254 270 16 94 0.2 8,661
2023 250 262 12 95 0.1 11,496
2024 253 249 (4) 102 0.1 (4,699)
Source: SCERS actuarial valuati ons through June 30, 2024.
Recent CalPERS Developments
In July 2021, in accordance with the CalPERS Funding Risk Mitigation Policy (Policy) approved by the CalPERS Board of Administration (the “PERS Board”) in 2015, the discount rate was lowered from 7.0% to 6.8% following a 21.3% return for Fiscal Year 2020-21. Under the Policy, when CalPERS achieves a double-digit return on investments, a reduction in the discount rate is triggered.
In November 2021, the PERS Board adopted new actuarial assumptions based on the recommendations in the November 2021 CalPERS Expe rience Study and Review of Actuarial Assumptions.
This study reviewed the retirement rates, termination rates, mortality rates, rates of salary increases, and inflation assumption for public agencies. These assumptions were effective with the June 30, 2021 actuarial valuations and contribution rates for public agencies beginning in Fiscal Year 2023-24. In addition, the PERS Board adopted a new strategic asset allocation as part of its Asset Liability Management process. The new asset allocation, along with the new capital market assu mptions and economic assumptions, support a discount rate of 6.8%. This includes a reduction in the price in flation assumption from 2.5% to 2.3%. If the retirement plan does not meet actuarial assumptions – if earnings on plan assets are lower than the discount rate or salary increases are higher than plan assumptions, the City’s unfunded AAL will increase.
The City anticipates total employer contributions to be $178.7 million and $186 million for Fiscal Years 2024-25 and 2025-26, respectively, of which $144.4 million and $162.5 million are from the General Fund.
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City Contributions
The following table summarizes the City’s contributions to its defined-benefit pension plans.
CITY OF SACRAMENTO
ANNUAL CONTRIBUTION TO RETIREMENT PLANS
($ in Millions)
Fiscal Year CalPERS SCERS
Total City
Employer
Contribution(1)
Total General
Fund
Contribution
2014-15 $59.3 $9.2 $68.5 $57.0
2015-16 67.1 8.6 75.7 63.4
2016-17 77.3 8.6 85.9 72.5
2017-18 76.0 8.6 84.6 71.9
2018-19 90.0 7.5 97.5 83.2
2019-20 105.9 4.4 110.3 95.5
2020-21
110.9 3.8 114.7 99.0
2021-22 122.2 3.5 125.7 108.9
2022-23 132.6 0.0 132.6 115.7
2023-24 145.7 1.4 147.1 128.1
(1) Includes contributions pa yable from special funds.
Source: The City of Sacramento.
The City contributed 100% of the actuarially required contributions in each fiscal year reported in the table.
The City also provides defined-contribution retirement benefits through the City of Sacramento 401(a) Money Purchase Plan (the “Plan”). The Plan is administered by Nationwide. Plan provisions and contribution requirements are established and may be amended by the Council. Unrepresented exempt and certain represented employees may elect to participate in the Pl an. Participating exempt employees are required to contribute 5% of covered salary and the City contributes 4%, while participating non-exempt employees are required to contribute 2% of covered salary and the City contributes 2%. For Fiscal Year 2023-24, employees contributed $5,736,000 and the City contributed $4,733,000 to the Plan.
Other Postemployment Benefits (OPEB)
The City provides contribution for postemployment medical, dental, and vision benefits to employees who retire directly from the City and their dependents through an agent-multiple employer defined benefit OPEB plan through CalPERS. Participants have the choice of enrolling in one of several health plans, one of two dental plans and one of two vision plans. To be eligible for these benefits, an employee must have been employed with the City by a certain hire date, retire with a minimum of 10 full years of active service and be 50 years of age. Participants with a minimum of 20 years of service are eligible for 100% of the maximum benefit. Participants with more than 15 years but less than 20 years of service are eligible for 75% of the maximum benefit. Participants with more than 10 years but less than 15 years of service are eligible for 50% of the maximum benefit. The post-retirement health, dental, and vision care benefits range from $0 and $987 a month per participant, which covers between 0% and 100% of the benefit cost, depending on the choice of plan and number of dependents. The eligibility of the City’s postemployment health contributions has been eliminated for employees hired after certain dates dependent upon the employee’s labor agreement.
The postemployment health, dental, and vision care contributions are defined by labor agreements and resolutions approved by the Council. The City is mainly funding the OPEB Plan on a pay-as-you-go basis.
However, the Council has authorized the City Manager to establish an OPEB trust fund with CalPERS that the
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City pre-funds with budgetary savings. The City’s financial statements assume that pay-as-you-go funding will continue. The City’s annual OPEB cost is calculated based on the Actuarially Determined Contributions (“ADC”) of the City. The ADC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any unfunded actuarial liabilities of the plan.
The City’s annual ADC, actual contributions, the percentage of annual ADC contributed to the plan, and the net OPEB liability for the previous five fiscal years were as follows:
CITY OF SACRAMENTO
ANNUAL CONTRIBUTIONSAND NET LIABILITY
($ in Millions)
Fiscal Year
Actuarially
Determined
Contributions
(ADC) Contributions
% of
ADC
Contributed
Net OPEB
Liability
2019-20 $36.2 $24.6 68% $248.9
2020-21 25.6 21.7 85 244.2
2021-22 26.9 24.7 92 196.8
2022-23 22.4 23.2 104 206.5
2023-24 23.3 23.2 99 211.9
Source: The City’s Annual Comprehensive Financial Report for the fiscal year ended June 30, 2024. [[UPDATE FOR 2025-26 BUDGET]] The actuarially determined contribution for Fiscal Year 2024- 25 were $24.9 million. In the Fiscal Year 2024-25 Adopted Budget, the City projected the General Fund expenditures for OPEB pay-as-you-go costs would be a pproximately $9.1 million. Funding to the OPEB Trust will be transferred from year-end budgeted pension savings.
The following table summarizes the funded status of the City’s OP EB plan as of the most recent biennial actuarial-valuation date, June 30, 2023. Additional information regarding the City’s OPEB plan, annual OPEB costs, the funding status thereof, and significant accounting policies related thereto is set forth in Note 9 to the City’s audited financial statements attach ed as Appendix B hereto. The June 30, 2025 actuarial valuation is anticipated to be available later in 2026.
CITY OF SACRAMENTO
OPEB TREND INFORMATION
($ in Millions)
Actuarial
Valuation
Date
(June 30)
Actuarial
Accrued
Liability
(AAL)
Actuarial
Asset Value Unfunded AAL
Funded
Ratio
Annual
Covered
Payroll
Unfunded AAL
as % of
Covered Payroll
2015 $362 $ 5 $357 1% $271 132%
2017 416 26 390 6 286 136
2019 288 43 245 15 321 77
2021 271 67 204 25 348 59
2023 297 91 206 31 381 54
Source: The City’s OPEB actuarial valuations.
A-24
CERTAIN CITY ECONOMIC AND DEMOGRAPHIC INFORMATION
Population
A comparison of the City’s population growth to that of the County and the State is provided in the table below. Population estimates are as of January 1 for each year.
POPULATION ESTIMATES(1)
CITY OF SACRAMENTO, COUNTY OF SACRAMENTO
AND THE STATE OF CALIFORNIA
FOR SELECTED CALENDAR YEARS 1970 THROUGH 2025
Year
City of
Sacramento
Average
Annual
% Change
County of
Sacramento
Average
Annual
% Change
State of
California
Average
Annual
% Change
1970 257,105 634,373 19,935,134
1980 275,741 0.72% 783,381 2.35% 23,782,000 1.87%
1990 369,365 3.40 1,046,870 3.36 29,828,496 2.57
1995 384,300 0.81 1,120,733 1.41 31,910,000 1.45
2000 407,018 0.81 1,233,599 2.01 34,095,209 1.27
2005 453,592 11.44 1,378,538 11.74 36,899,392 8.22
2010
469,493 3.50 1,427,961 3.58 37,427,946 1.43
2020 520,252 10.81 1,585,055 11.00 39,538,223 5.63
2021 518,536 0.32 1,581,162 0.24 39,369,530 (0.42)
2022 518,333 (0.03) 1,577,672 (0.22) 39,179,680 (0.48)
2023 521,871 0.68 1,583,676 0.38 39,228,444 0.12
2024 526,327 0.85 1,596,281 0.79 39,420,663 0.48
2025 527,979 0.31 1,604,745 0.53 39,529,101 0.27
(1) Totals are estimates and may not add due to rounding.
Source: State of California, Department of Finance.
https://dof.ca.gov/forecasting/demographics/estimates/e-4-population-estimates-for-cities-counties-and-the-state-2021- 2025-with-2020-census-benchmark/
A-25
Industry and Employment
As the seat of State government, the City has traditionally had a large public-sector workforce. In recent years, the employment base in Sacramento and the surrounding area has diversified as the relatively low cost of living and supply of skilled labor have drawn a number of technology, financial services, and healthcare employers to the City.
The table below shows historical unemployment rates for the City, the County, and the State.
UNEMPLOYMENT RATES
CITY OF SACRAMENTO, COUNTY OF SACRAMENTO
AND THE STATE OF CALIFORNIA
Year
City of
Sacramento
County of
Sacramento
State of
California
2010 13.3% 12.6% 12.2%
2011 12.8 12.1 11.7
2012 11.1 10.5 10.4
2013 9.4 8.9 8.9
2014 7.7 7.3 7.5
2015
6.4 6.0 6.2
2016 5.2 5.2 5.5
2017 4.5 4.5 4.8
2018 3.7 3.7 4.3
2019 3.6 3.6 4.1
2020 9.2 9.1 10.1
2021 6.9 6.7 7.3
2022 4.0 3.9 4.3
2023 4.4 4.3 4.7
2024 4.8 4.7 5.3
Figures above are not seasonally adjusted.
Source: State of California. Employment Development Department. http://www.labormarketinfo.edd.ca.gov/cgi/dataanalysis/areaselection.asp?tablename=labforce.
A-26
Set forth below are data reflecting the County’s civilian labor force, employment, and unemployment.
These figures are County-wide and may not accurately reflect employment trends in the City.
SACRAMENTO COUNTY AND SACRAMENTO-ROSEVILLE-ARDEN ARCADE
METROPOLITAN STATISTICAL AREA (MSA)
CIVILIAN LABOR FORCE, EMPLOYMENT AND
THE ANNUAL AVERAGE EMPLOYMENT BY INDUSTRY
FOR YEARS 2019 THROUGH 2023(1)
LABOR FORCE (COUNTY): 2019 2020 2021 2022 2023
Labor force(2) 1,124,000 1,115,200 1,126,000 1,139,700 1,163,400 Employment 1,083,700 1,018,500 1,054,600 1,096,600 1,114,500 Unemployment 40,400 96,800 71,400 43,000 48,900
Unemployment Rate 3.6% 8.7% 6.3% 3.8% 4.2%
EMPLOYMENT INDUSTRY (MSA):
Total All Industries(3) 1,031,200 979,800 1,021,900 1,065,400 1,083,000 Total Farm 8,700 8,300 9,000 8,600 9,100
Total Non-farm 1,022,500 971,80 0 1,013,000 1,056,800 1,073,900 Goods Producing 106,700 106,800 113,200 118,200 115,700 Trade, Transportation & Utilities 161,300 155,900 165,000 169,500 169,200 Information 11,900 10,200 10,100 10,500 9,900
Financial Activities 52,500 51,700 51,800 51,800 49,000 Professional & Business Services 137,200 132,600 137,200 139,700 134,400 Education & Health Services 166,600 164,000 168,800 175,600 188,700 Leisure & Hospitality 109,600 83,900 93,600 108,700 112,500 Other Services 35,400 31,000 33,300 36,100 38,300
Government
(4) 241,400 235,300 240,200 246,800 256,300
(1) Most recent data available.
(2) Labor force data are by place of residence; includes self -employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(3) Industry employment is by place of work; excludes self-e mployed individuals, unpaid fa mily workers, household domestic workers, and workers on strike.
(4) Includes Federal and State & Local Government employees.
Source: Labor Market Information Division of the Ca lifornia State Employment Development Department. http://www.labormarketinfo.edd.ca.gov/.
Major private employers in the Sacramento area include those in health care, electronics, telecommunications, and retail and financial services, including Kaiser Permanente, Sutter Health, Dignity Health, Apple, Intel and Pacific Gas & Electric. Ma jor public-sector employers include the State and the County.
A-27
Building Permits
The following tables summarize certain information relating to building permits(1) in the City.
Fiscal
Year
Residential-
New
Construction(2)
Residential-
Repairs/Additions
Commercial-
New
Construction
Commercial-
Repairs/Additions
2020 1,419 13,975 189 2,883
2021 1,505 14,487 209 2,266
2022 1,362 15,330 178 2,568
2023 1,099 15,389 130 2,737
2024 912 16,348 98 2,780
2025 1,112 15,691 84 2,795
(1) Minor variances in the building permit counts and building permit valuation exist between information included in the respective year audited financial statement vs. updated construction valuation reports for the same time period. Minor variances occur due to the exclusion of permits that have an updated status of denied, estimate, revoked, void, or withdrawn. (2) Includes information for both permanent and temporary improvements.
Source: City of Sacramento
Fiscal
Year
Residential-New
Construction2
Residential-
Repairs/Additions
Commercial-New
Construction
Commercial-
Repairs/Additions
2020 $318,375,338 $183,527,404 $598,296,146 $360,104,125 2021 361,425,344 199,179,071 541,240,977 342,552,078
2022 345,688,587 234,958,610 450,076,310 315,380,065
2023 248,778,583 236,590,289 424,181,180 271,885,673
2024 241,128,207 262,006,850 277,334,306 314,147,303
2025 320,469,243 259,344,136 256,972,975 276,970,061
2 Includes information for both permanent and temporary improvements.
Source: City of Sacramento
A-28
Home Prices
The following table shows median home values in the City.
CITY OF SACRAMENTO
MEDIAN HOME SALE VALUES
As of
January 1
Median Home
Sale Values
2016 $240,000
2017 $287,000
2018 $314,000
2019 $323,000
2020 $350,000
2021 $412,000
2022 $475,000
2023 $446,000
2024 $465,000
2025 $473,000
Source: Redfin website
Income
The following table shows median effective buying income in the areas shown.
MEDIAN EFFECTIVE BUYING INCOME
Jurisdiction
Median Effective
Buying Income
City $73,059
Sacramento County 77,000
Californi
a 82,265
United States 69,245
Source: Claritas
A-29
Commercial Activity
The following table summarizes taxable sales within the City from 2020 through 2024, the most recent year such data are available.
CITY OF SACRAMENTO
TAXABLE TRANSACTIONS BY TYPE OF BUSINESS
FOR YEARS 2020 THROUGH 2024(1)
($ in Thousands)
Type of Business 2020 2021 2022 2023 2024
Motor Vehicle and Parts Dealers $ 602,226 $ 682,511 $ 712,130 $ 767,731 $ 743,165 Home Furnishings and Appliance
Stores 302,967 306,854 313,973 297,605 295,950
Building Material and Garden
Equipment and Supplies Dealers 468,084 500,048 454,252 444,749 428,095 Food and Bevera
ge Stores 369,784 380,744 389,526 396,715 388,747
Gasoline Stations 420,721 597,669 734,509 649,773 614,517 Clothing and Clothing
Accessories Stores 239,842 37 3,245 362,215 352,955 358,796 General Merchandise Stores 532,639 645,569 676,787 604,654 654,953 Food Services and Drinking
Places 815,445 1,15 9,745 1,378,578 1, 471,501 1,497,723 Other Retail Group 679,188
790,413 741,886 698,097 653,980
Total Retail and Food Services $ 4,430,900 $ 5,436,801 $ 5,763,860 $ 5,683,784 $ 5,635,930 All Other Outlets 2,408,298 2,724,407 3,290,801 3,132,189 2,897,751 TOTAL: $ 6,839,199 $ 8,161,209 $ 9,054,662 $ 8,815,974 $ 8,533,681
(1) Most recent full year data available.
Note: Detail may not compute to total due to rounding.
Source: California Department Tax and Fee Administration
HDW – 8/4/25 Draft
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BOND PURCHASE CONTRACT
$[PAR]
SACRAMENTO CITY FINANCING AUTHORITY
2025 REFUNDING REVENUE BONDS
(MASTER LEASE PROGRAM FACILITIES)
[Pricing Date]
Sacramento City Financing Authority
915 I Street
Sacramento, California 95814
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 Sacramento City Financing Authority (the “Authority”) and the City of Sacramento (the “City”) with respect to the refunding revenue bonds captioned above (the “Bonds”). Upon your acceptance of this offer, this Contract will be binding upon the Authority, the City and the Underwriter. Terms no t 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 Authority’s and 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 Authority, and the Authority shall sell to the Underwriter, on the terms and condi tions set forth below, all (but not less than all) of $[Par] aggregate principal amount of the Bonds at a purchase price (the “ Purchase Price”) of $[Purchase Price] (being an amount equal to the par amount of the Bonds of $[Par].00, [plus/minus] an original issue [p remium/discount] of $[OIP/OID], and less an Underwriter's discount of $[UWD]). [At the re quest of the Authority, on the Closing Date (defined in Section 7(a) below), the Underwriter will wire to the Insurer (as defined herein) an amount equal to $[Bond Insurance Premiums ], representing the sum of the premiums for the bond-insurance policy (the “ Bond Insurance Policy ”), to be issued by the Insurer simultaneously with the issuance of the Bonds. As a result, the net amount the Underwriter will wire to the Authority in connection with the purchase of the Bonds will be $[Net Wire].]
2. Authorizing Instruments.
(a) The Authority will issue the Bonds under—
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(1) an Indenture (the “ Indenture”), dated as of September 1, 2025, between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”);
(2) the Joint Exercise of Powers Act, set forth in sections 6500 through 6599.3 of the California Government Code, including the Marks-Roos Local Bond Pooling Act of 1985, set forth in sections 6584 through 6599.3 (the “Act”); and (3) Authority Resolution No. 2025-____ authorizing the issuance of the Bonds, adopted on [Authority Resolution Date] (the “Authority Resolution”). (b) The Bonds were also approv ed by the City under Reso lution No. 2025-____ adopted on [City Resolution Date] (the “City Resolution”).
(c) The terms of the Bonds and the security therefor will be as described in the Indenture and in the Final Official Statement.
(d) The “Legal Documents” consist of the Indenture; the Ma ster Project Lease, dated as of December 1, 1999, between the Authority and the City (as heretofore amended, the “Master Project Lease ”), as amended by the Twelfth Amendment to Master Project Lease, dated as of September 1, 2025, be tween the Authority and the City (the “Twelfth Amendment ” and, together with the Master Project Lease, the “ Project Lease”); the Master Site Lease, dated as of December 1, 1999 (as amended, the “Master Site Lease”), between the Author ity and the City; the herein described Continuing Disclosure Certificate; this Co ntract; and the Escrow Agreement, dated as of September 1, 2025 (the “Escrow Agreement”), between the Authority and The Bank of New York Mellon Trust Company, N.A., as escrow agent (the “ Escrow Agent”) and relating to the deposit of funds to be held in escrow for the refunding and discharge of the Defeased Obligations (as herein defined).
3. Terms of the Bonds. The Bonds are payable from the “ Trust Estate ” (as defined in the Indenture). The Bonds will mature on the date s 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 public offering of all of the Bonds at the offering prices set forth in Exhibit A. Addition al details related to the establishment of the issue price for the Bonds are se t forth in Section 20 below. Th e Bonds are being issued to (a) defease all of the outstanding Sacramen to City Financing Authority 2015 Refunding Revenue Bonds (Master Lease Program Facilities) (the “Defeased Obligations”), [(ii) pay for the costs of bond insurance] and (iii) pay the costs of issuance of the Bonds. [The scheduled payment of principal of and interest on a portion of the Bonds, as set forth in Exhibit A hereto (the “ Insured Bonds”), when due will be guaranteed under the Bond Insurance Policy to be issued concurrently wi th the delivery of the Insured Bonds by the Bond Insurer.]
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4. Preliminary Official Statement; Official Statement; Continuing Disclosure. (a) The Authority and the City shall deliver the Final Official Statement relating to the Bonds, dated the Effective Date (together with all exhibits and appendices included therein or attached thereto, 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 Authority and 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 Unde rwriter shall deposit the Final Official Statement with the MSRB using the MSRB ’s Electronic Municipal Market Access system.
(b) The Authority and the City have author ized and approved the Underwriter’s distribution and use of the Preliminary Offici al Statement relating to the Bonds dated [POS Date] (the “Preliminary Official Statement”), and the Authority and the City have authorized the execution, delivery, and distribution of the Final Official Statement. (c) In connection with the issuance of the Bo nds, 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 th e City 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 Warrant ies of the Authority. The Authority makes the following representations and warranties to the Underwriter as of the Effective Date:
(a) Due Organization and Authority. The Authority is a public entity organized and existing under the Constitution and laws of the State of California, including the Act (b) Full Right, Power, and Authority. The Authority has complied with all provisions of applicable law, including the Act, in all matters relating to the adoption of the Authority Resolution and the issuance, execution and delivery of the Bonds. The governing board of the Authority (the “ Authority Council ”) thus has the full legal right, power, and authority to adopt the Authority Resolution, and the Authority has the full legal right, power, and authority –
(1) to enter into the Legal Documents to which it is a party (collectively, the “Authority Documents”);
(2) to issue, sell and deliver the Bonds;
(3) to secure the Bonds in the manner contemplated in the Indenture; Bond Purchase Contract | Page 4
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(4) to approve the preparation and use of the Preliminary Official Statement and the Final Official Statement; and
(5) to carry out and consummate on its part all other transactions contemplated by the Authority 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 Authority 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 Authority Council thus has duly authorized—
(1) the preparation and use of the Preliminary Official Statement and the Final Official Statement;
(2) the issuance, execution and delivery of the Bonds, the execution and delivery of the Authority Documents and the Final Official Statement, and the execution, delivery, and due performance of the Au thority’s obligations relating to the Bonds and the Authority Documents; and
(3) the taking of any action that may be required on the part of the Authority to carry out, give effect to, and consummate on its part the transactions contemplated by the Bonds and the Authority Documents.
(d) Due Adoption of Authority Resolution and Enforceability of Documents. The Authority Resolution has been duly adopted by the Au thority Council and is in full force and effect; and the Authority Documents, when executed and delivered by the Authority and the other parties, will constitute legal, valid, and binding obligations of the Authority, enforceable against the Authority in accordance with their terms, except as enforceability may be limited by bankrupt cy, 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 Authority; will have been duly executed, issued, and delivered by the Authority; will constitute legal, valid, and binding obligations of the Authority enforceable against the Authority in acco rdance with their terms, except as enforceability may be limited by bankrupt cy, insolvency, or other laws affecting creditors’ rights generally or by the app lication of equitable principles; and will be entitled to the benefit of, and security afforded by, the Indenture. (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 Authority. 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 Deposito ry Trust Company Bond Purchase Contract | Page 5
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(“DTC”) and its book-entry system; [(C) re late to the Bond Insurer or the Bond Insurance Policy;] and (D) are included in Appendices D, E, F and G to the Final Official Statement.
(2) The information in the Preliminary Offici al Statement was true in all material respects as of the date of the Preliminary Official Statement, and the information in the Final Official Statement is as of the Effective Date and will be as of the Closing Date true in all material respec ts. The Preliminary Official Statement did not as of its date, and the Final Official Statement does not of the Effective Date, and will not as the Closing Date, contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(g) Supplements or Amendments to Final 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 Final Official Statement, as theretofore 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 Authority has actual knowledge of the event, then the Authority shall notify the Underwriter of the event. If, in the reason able opinion of the Underwriter, the event requires the preparation and publication of a supplement or an amendment to the Final Official Statement, then the Authority shall furnish to the Underwriter a supplement or amendment to the Final 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 Authority documentation as the Underwriter may reasonably deem necessary to evidence the truth and accuracy of the supplement or amendment. Unless otherwise notified, in writing, by the Underwriter on the date of Closing, the City may assume that the “ end of the underwriting period ” for purposes of Rule 15c2-12 and the sale of all Bonds by the Underwriter will occur on the Closing Date. After the earlier of twenty-five (25) days from the “end of the underwriting period” or the date when all of the Bonds have been sold by the Underwriter, the City will no longer be obligated to amend or supplement the Official Statement. Any notice delivered in accordance with the preceding sentence must be delivered in writing to the Authority and the Authority at or before the Closing. If the information in the Final 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 Final Official Statement, as 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 st ate any material fact necessary to make the information in it, in light of the ci rcumstances under whic h it was made, not misleading.
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(h) No Conflicts. To the Authority’s actual knowledge as of the Effective Date, the Authority is not in breach of, or default under, the following in any respect that is material to the Authority's performanc e of its obligations under the Authority Documents, no event has occurred and is co ntinuing that would constitute, with the passage of time or the giving of notice, or both, such a breach, default, or event of default, and the adoption of the Authority Resolution, the issuance, execution and delivery of the Bonds, the execution and de livery of the Authority Documents, the consummation of the transact ions on the part of the Au thority contemplated herein or therein, and the Authority’s compliance wi th the provisions hereof or thereof will not conflict with, or constitute on the Authority’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 Authority’s ability to perform its obligations under the Bonds and the Authority Documents:
(1) An indenture, mortgage, commitment, no te, or other agreement or instrument to which the Authority is a party or by wh ich it is bound or any of its property or assets is otherwise subject;
(2) A provision of the Act or the California Constitution; and (3) An existing law, rule, regulation, ordinance, judgment, order, or decree to which the Authority (or the members of the Authority Council or any of the Authority’s officers in their capacities as such) is subject.
To the Authority’s actual knowledge as of the Effective Date, any execution, delivery, or compliance as described in this subsecti on (h) will not result in the creation or imposition of any lien, charge, or other security interest or encumbrance of any nature upon any of the Authority's property or assets or under any such constitutional provision, law, administration regulati on, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement, or instrument, except as provided by the Indenture.
(i) Governmental Approvals. As used in this section 5(i) and in section 6(i), “Government Approvals” means all authorizations, approvals, licenses, permits, consents, and orders of any governmental authority, board, agency, or commission with jurisdiction over the matter, but excludes Blue Sky or other securities laws of any state. The Authority has obtained all Governmental A pprovals (1) that are required for the due authorization of its obligations under the Authority Documents; (2) that would constitute a condition precedent to its obligations under the Authority Documents; and (3) that would, if absent, materially adversely affect the due performance of its obligations under the Authority Documents.
(j) No Other Borrowings Between Effective Date and Closing Date. Between the Effective Date and the Closing Date, the Authority will not, without the Underwriter's prior written consent, offer or issue any bonds, notes, or other obligations for borrowed Bond Purchase Contract | Page 7
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money or incur any material liabilities, direct or contingent, payable from the Revenues.
(k) No Defaults. The Authority 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 Authority’s ability to consummate the transactions described in the Bonds and the Authority Documents, except as specif ically disclosed in the Final Official Statement; and, except as specifically disc losed in the Final Official Statement, the Authority has not entered into any agreement or arrangement of any kind that might give rise to any lien or encumbrance on an y of the real property and improvements that is the subject of the Project Lease.
(l) No Litigation. To the actual knowledge of the Sacram ento City Attorney’s Office as of the Effective Date, except as is specifica lly disclosed in the Preliminary Official Statement and the Final Official Statement, the Authority 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 cour t, public board, or public body—
(1) that contests or questions in any way the powers of the Authority Council in connection with the issuance, execution or delivery of the Bonds; (2) that questions in any way the validity of any proceeding take n by the Authority Council in connection with the issuance of the Bonds or the execution and delivery of the Authority Documents or the validity or enforceability of the Bonds or the Authority Documents, or in any way contests or challenges the consummation of the transactions contemplated by this Contract; (3) in which an unfavorable decision, ruling, or finding would affect the existence of the Authority or the titles of its officers or their offices; (4) that is likely to adversely affect the validity or enforceability of the the Bonds, or the Authority Documents;
(5) that questions in any way the status of the Bonds under California’s tax laws or tax regulations; or
(6) that contests the completeness or accuracy of the Preliminary Official Statement or the Final Official Statement.
(7) .
(m) No Basis for Litigation. To the current, actual knowledge of the Authority, there is no basis for any action, suit, pr oceeding, inquiry, or investig ation of the type listed in Section 6(l) in which an unfavorable deci sion, ruling, or finding would materially adversely affect the validity of the Bonds or the Authority's authorization, execution, delivery, or performance of the Authority Documents.
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(n) Certificates of the Authority . Any certificate that is signed by an authorized Authority official and delivered to the Underwrite r in connection with the transactions contemplated by this Contract will be d eemed a representation and warranty by the Authority to the Underwriter as to the truth of the statements in the certificate. (o) Use of Proceeds. The Authority will apply the proceed s from the sale of the Bonds for the purposes specified in the Preliminary Official Statement and the Official Statement.
6. 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 City is a municipal corporation duly organized and existing under, and by virtue of, the Constitution and laws of the State of California. (b) Full Right, Power, and Authority. The City has complied with all provisions of applicable law, including the Act, in all matters relati ng to the adoption of the City Resolution.
The Sacramento City Council (the “ City Council”) thus has the full legal right, power, and authority to adopt the City Resolution, and the City has the full legal right, power, and authority –
(1) to enter into the Legal Documents to wh ich it is a party (collectively, the “ City Documents”);
(2) to pay the Program Obligation Payments relating to the Bonds; (3) to approve the preparation and use of the Preliminary Official Statement and the Final Official Statement; and
(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 an y state, all consents or approvals the City must obtain in connection with the forego ing 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 preparation and use of the Preliminary Official Statement and the Final Official Statement;
(2) the execution and delivery of the Ci ty Documents and the Final Official Statement, and the execution, delivery , and due performance of the City’s obligations relating to the City Documents; and
(3) 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 City Documents.
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(d) Due Adoption of City Resolution and Enforceab ility of City Documents. The City Resolution has been duly adopted by the City Council and is in full force and effect; and the City Documents, when executed and deliv ered 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, ex cept as enforceability may be limited by bankruptcy, insolvency, or othe r laws affecting creditors’ rights generally or by the application of equitable principles.
(e) Enforceability of Program Obligations. As of the Closing Date, the Program Obligation will have been duly authorized by the City, will have been duly executed, issued, and delivered by the City, will constitute the legal, valid, and binding obligation 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. (f) Preliminary and Final Official Statements.
(1) In this Section 6(f) only, “information” and “material fact” 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 DTC and its book-entry system; [(C) relate to the Bond Insurer or the Bond Insurance Policy;] and (D) are included in Appendices D, E, F and G to the Final Official Statement. (2) The information in the Preliminary Offici al Statement was true in all material respects as of the date of the Preliminary Official Statement, and the information in the Final Official Statement is as of the Effective Date and will be as of the Closing Date true in all material respec ts. The Preliminary Official Statement did not as of its date, and the Final Official Statement does not of the Effective Date, and will not as the Closing Date, contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(g) Supplements or Amendments to Final 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 6(g)), an event occurs that would cause the Final Official Statement, as theretofore 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 opinio n of the Underwriter, the event requires the preparation and publication of a supplement or an amendment to the Final Official Statement, then the City shall furnish to the Underwriter a supplement or amendment to the Final Official Statement, in electronic format, in form and substance reasonably acceptable to the Underwriter and, if the ev ent notice is after the Closing Date, such Bond Purchase Contract | Page 10
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City documentation as the Underwriter may reasonably deem necessary to evidence the truth and accuracy of the supplement or amendment. Unless otherwise notified, in writing, by the Underwriter on the date of Closing, the City may assume that the “end of the underwriting period” for purposes of Rule 15c2-12 and the sale of all Bonds by the Underwriter will occur on the Closing Date . After the earlier of twenty-five (25) days from the “end of the underwriting period” or the date when all of the Bonds have been sold by the Underwriter, the City will no longer be obligated to amend or supplement the Official Statement. Any no tice delivered in accordance with the preceding sentence must be delivered in wr iting to the City and the Authority at or before the Closing. If the information in the Final Official Statement is amended or supplemented in accordance with this se ction 6(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 Final Official Statement, as 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 st ate any material fact necessary to make the information in it, in light of the ci rcumstances under whic h it was made, not misleading.
(h) No Conflicts. To the City’s actual knowledge as of the Effective Date, the City is not in breach of, or default under, the following in any respect that is material to the City's performance of its obligations under the Ci ty Documents, no event has occurred and is continuing that would constitute, with the passage of time or the giving of notice, or both, such a breach, default, or event of default, and the adoption of the City Resolution, the execution and delivery of th e 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 ef fect on the City’s ability to perform its obligations under the City Documents:
(1) An indenture, mortgage, commitment, no te, or other agreement or instrument to which the City is a party or by which it is bound or any of its property or assets is otherwise subject;
(2) A provision of the Act or the California Constitution; and (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.
To the City’s actual knowledge as of the E ffective Date, any execution, delivery, or compliance as described in this subsection (h) will not result in the creation or imposition of any lien, charge, or other security interest or encumbrance of any nature upon any of the City's property or assets or under any such consti tutional provision, Bond Purchase Contract | Page 11
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law, administration regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement, or instrument, except as provided by the Project Lease. (i) Governmental Approvals. The City has obtained all Governmental Approvals (1) that are required for the due authorization of its obligations under the City Documents; (2) that would constitute a condition prec edent to its obligations under the City Documents; and (3) that would, if abse nt, materially adversely affect the due performance of its obligations under the City Documents. (j) No Other Borrowings Between Effective Date and Closing Date. Between the Effective Date and the Closing Date, the City will no t, without the Underwriter's prior written consent, offer or issue any bonds, notes, or other obligations for borrowed money or incur any material liabilities, direct or contingent, payable from the City's General Fund other than in the ordinary course of business.
(k) 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 transactio ns described in the Bonds and the City Documents, except as specifically disclosed in the Final Official Statement. (l) No Litigation. To the actual knowledge of the Sacram ento City Attorney’s Office as of the Effective Date, except as is specifica lly disclosed in the Preliminary Official Statement and 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 contests or questions in any way the powers of the City Council in connection with the execution and delivery of the City Documents;
(2) that questions in any way the validity of any proceeding taken by the City Council in connection with the execution and delivery or validity or enforceability of the City Documents, or in any way contests or challenges the consummation of the transactions contemplated by this Contract;
(3) in which an unfavorable decision, ruling, or finding would affect the existence of the City or the titles of its officers or their offices; (4) that is likely to adversely affect the validity or enforceability of the City Documents;
(5) that contests the completeness or accuracy of the Preliminary Official Statement or the Final Official Statement; or
(6) that might result in a material adverse change in the financial condition of the City or might materially adversely affect the ability of the City to make Program Obligation Payments under the Twelfth Amendment.
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(m) No Basis for Litigation. To the current, actual knowledge of the City, there is no basis for any action, suit, proceeding, inquiry, or investigation of the type listed in Section 6(l) in which an unfavorable decision, rulin g, or finding would materially adversely affect the City's authorization, executio n, delivery, or performance of the City Documents.
(n) 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.
(o) Prior Continuing Disclosure Undertakings. Except as disclosed in the Final Official Statement, the City has complied in all mate rial respects with previous undertakings under Rule 15c2-12.
(p) Use of Proceeds. The City will not take any action to apply the proceeds from the sale of the Bonds for the purposes other than as specified in the Preliminary Official Statement and the Official Statement.
(q) No further consent must be obtained to include the financial statements with respect to the City for the Fiscal Year ending J une 30, 2024, which are excerpted from the audited City of Sacramento, California, Year End June 30, 2024 Comprehensive Annual Financial Report as Appendix B to the Official Statement.
6. Blue Sky. The Authority shall cooperate with the Underwriter (at the Underwriter’s cost) in qualifying the Bonds for offer and sale under th e securities or blue-sky laws of such jurisdictions of the United States as the U nderwriter may reasonably request, except that the Authority is not required to consent to suit or to service of process in, or to qualify to do business in, any jurisdiction. The Authorit y consents to the Underwriter’s use of the Authority 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 Authority and the Underwriter may agree on (the “Closing Date”), the Authority shall deliver or cause to be delivered to the U nderwriter the Bonds in definitive form, duly executed by the Authority’s authorized o fficers and authenticated by the Trustee, together with the other documents identi fied 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 resoluti ons, certificates, opinions, and other instruments as described in Section 9 of this Contract will occur electronically.
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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 pa sses or recommends legislation that, if enacted, would have th e purpose or effect of imposing federal income taxation upon revenues or other income of the general character to be derived by the Authority, the City or by any similar body under the Project Lease, or the Indenture, or upon interest received on ob ligations of the general character of the Bonds, or of causing interest on obligation s of the general character of the Bonds to be includable in gross inco me 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 Underwrite r’s opinion, of materially and adversely affecting the market price of the Bonds or the market for the Bonds; or adversely affecting the federal income-tax consequences of owning the Bonds (including causing interest on the Bonds to be included in gr oss income for purposes of federal income taxation); or of imposing a federal income tax upon revenues or other income of the general character to be derived by the Authority or the City under the the Project Lease or the Indenture, or upon in terest received on the Bonds or on obligations of the general character of the Bonds:
(1) A tentative decision with respect to legi slation 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 othe rwise), 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.
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(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 Clos ing 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 Indenture 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 agen cy having jurisdiction of the subject matter is issued or made or any other even t 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 Contra ct or by the Final Official St atement, 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 Se curities 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 become s known to the Underwriter that causes the Underwriter to reasonably believe that the Final Official Statement as theretofore 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 Underwri ter’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.
(i) Any proceeding is pending or threatened by the Securities and Exchange Commission against the Authority or the City.
(j) Additional material restrictions not in force as of the Effective Date are imposed upon trading in securities genera lly by any governmental authority or by any national securities exchange, and the restrictions ad versely affect the Underwriter's ability to sell the Bonds.
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(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) Any rating of the Bonds has been downgraded, suspended, or withdrawn by a national rating service, and, in the Underwriter's reasonable opinion, the downgrading, suspension, or withdrawal materially adversely affects the marketability or market price of the Bonds.
(m) An amendment to the United States or Califor nia Constitution is enacted or action is taken by any federal or California court, le gislative body, regulatory body, or other authority materially adversely affecting the tax status of the Authority or City or their respective property, income, or securities (or interest thereon); the validity of the Bonds or the ability of the Authority to issue the Bonds; or the City to pay the Program Obligation Payments, all as contemplated by the Project Lease, 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 Authority’s and the City’s performance of the Authority’s and 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 Authority’s and the City’s representations and warranties in this Contract, and to the following conditions, including the delivery by the Authority and the City of the documents identified in this Se ction 9 in form and substance satisfactory to the Underwriter:
(a) At the time of Closing, (1) the Final Official Statement, the Authority Resolution, the City Resolution, the City Documents and the Authority Documents must be in full force and effect and must not have been amende d, modified, or supplemented except as may have been agreed to in writing by the Underwriter; and (2) there must be in full force and effect all resolutions and all other instruments that in Bond Counsel’s opinion are necessary in connection with the transactions contemplated by this Contract. (b) The Underwriter must receive the Bonds for its account at DTC at 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) Approving Opinion . Bond Counsel’s final approving opinion, dated the Closing Date and substantially in the form atta ched as Appendix E to the Preliminary Official Statement and the Final Official Statement, together with a letter addressed to the Underwriter and the Trustee to the effect that the Underwriter may rely upon the opinion to the same ex tent as if the opinion were addressed to the Underwriter.
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(2) Supplemental Opinion. A supplemental opinion of Bond Counsel addressed to the Underwriter in substantially the form attached to this Contract as Exhibit C. (3) Disclosure Counsel Letter. 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 stat ements contained in the Preliminary Official Statement and the Final Official Statement, and making no representation that Disclosure Coun sel 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 Preliminary Official Statement and the Final Official Statement, nothing has come to Disclosure Counsel’s attention that would lead Disclosure Counsel to believe that the Preliminary Official Statement as of its date and as of the Effective Date or the Final Official Statement as of the Effective Date and as of the Closing Date, in each case 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, a ssessed or appraised valuations, or environmental matters; (ii) informatio n 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 Unde rwriter 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), contained or contains an untrue statement of a material fact or omitted or omits to state a material fa ct 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 Inde nture is exempt from qualification under the Trust Indenture Act of 1939, as amended.
(4) Underwriter’s Counsel Letter. 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) Authority Certificate. A certificate of the Authority, dated as of the Closing Date and signed on behalf of the Authority by a duly authorized officer of the Authority, to the following effect:
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a. The representations and warranties of the Authority in Section 5 above are complete and accurate in all material respects on and as of the Closing Date as if made on the Closing Date.
b. No event affecting the Authority has occu rred since the date of the Official Statement that has not been disclosed therein or in any supplement or amendment thereto, which event should be disclosed in the Official Statement in order to make the statem ents therein, in the light of the circumstances under which they were made, not misleading. c. The Authority has complied with all ag reements, covenants, and conditions to be complied with by the Authority under the Project Lease, the Indenture and this Contract as of the date of such certificate.
(6) Opinion of Counsel to the Authority . The opinion of counsel to the Authority, dated as of the Closing Date and addresse d to the Underwriter, in substantially the form attached to this Contract as Exhibit D.
(7) City Certificate. A certificate of the City, dated as of the Closing Date and signed on behalf of the City by a duly authoriz ed officer of the City, to the following effect:
a. The representations and warranties of the City in Section 6 above are complete and accurate in all material respects on and as of the Closing Date as if made on the Closing Date.
b. No event affecting the City has occurred since the date of the Official Statement that has not been disclosed therein or in any supplement or amendment thereto, which event should be disclosed in the Official Statement in order to make the statem ents therein, in the light of the circumstances under which they were made, not misleading. c. The City has complied with all agreem ents, covenants, and conditions to be complied with by the City under the Project Lease and this Contract as of the date of such certificate.
(8) Opinion of City Attorney . The opinion of the Sacramento City Attorney’s Office, dated the Closing Date and addressed to the Underwriter, in substantially the form attached to this Contract as Exhibit E.
(9) Final Official Statement. The Final Official Statement executed on the City’s behalf by a duly authorized officer.
(10) Resolutions. Certified copies of the Authority Resolution and the City Resolution. (11) Specimen Bonds. Specimen Bonds.
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(12) Form 8038-G. Evidence that the Authority has signed Internal Revenue Service Form 8038-G and will cause same to be filed with the Internal Revenue Service. (13) Legal Documents . Executed copies of the City Documents and the Authority Documents.
(14) Tax Certificate. A tax certificate signed by the Authority and the City in form and substance satisfactory to Bond Counsel.
(15) Deemed Final Certificate . 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.
(16) Trustee's Certificate. A certificate of the Trustee, dated as of the Closing Date, to the following effect:
a. The Trustee is a national banking a ssociation duly organized and validly existing under the laws of the United States of America. b. The Trustee has full power, authority, and legal right to comply with the Twelfth Amendment and to perform its obligations under it. c. The Twelfth Amendment has been duly authorized, executed, and delivered by the Trustee and (assuming due author ization, execution, and delivery by the Authority) constitutes a legal, valid, and binding obligation of the Trustee in accordance with its terms, except as the enforcement may be limited by bankruptcy, insolvency, reorganization , moratorium, or similar laws or equitable principles relating to or limiting creditors' rights generally. (17) Trustee Counsel Opinion. The opinion of counsel to th e Trustee, dated as of the Closing Date and addressed to the Underwriter, to the following effect:
a. The Trustee is a national banking a ssociation, duly organized and validly existing under the laws of the United States of America and having full power to enter into, accept, and administer the trusts created under the Twelfth Amendment.
b. The Indenture has been duly authoriz ed, executed, and delivered by the Trustee. Assuming due authorization, execution and delivery of the Twelfth Amendment by the other parties thereto, the Indenture constitutes the legal, valid, and binding obligation of the Trus tee, enforceable in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, or other laws affecting the enforcement of creditors' rights generally or by the application of equitable principles, if equitable remedies are sought. c. Except as may be required under blue-sky laws or other securities laws of any state, no consent, approval, author ization, or other action by any governmental or regulatory authority ha ving jurisdiction over the Trustee, Bond Purchase Contract | Page 19
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except for such authorizations, approvals or consents previously obtained, is required for the execution and deliv ery of the Indenture or for the consummation of the transactions contemplated by the Indenture. (18) Escrow Agent's Certificate . A certificate of the Escrow Agent, dated as of the Closing Date, to the following effect:
a. The Escrow Agent is a national banking association duly organized and validly existing under the laws of the United States of America. b. The Escrow Agent has full power, author ity, and legal right to comply with the Escrow Agreement and to perform its obligations under it. c. The Escrow Agreement has been duly authorized, executed, and delivered by the Escrow Agent and (assuming due au thorization, execution, and delivery by the Authority) constitutes a legal, valid, and binding obligation of the Escrow Agent in accordance with its terms, except as the enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, or similar laws or equitable principles relating to or limiting creditors' rights generally. (19) Escrow Agent Counsel Opinion. The opinion of counsel to the Escrow Agent, dated as of the Closing Date and addressed to the Underwriter, to the following effect:
a. The Escrow Bank is a national banking association, duly organized and validly existing under the laws of the United States of America and having full power to enter into, accept, and administer the trusts created under the Escrow Agreement.
b. The Escrow Agreement has been duly authorized, executed, and delivered by the Escrow Agent. Assuming due authorization, execution and delivery of the Twelfth Amendment by the other parties thereto, the Escrow Agreement constitutes the legal, valid, and binding obligations of the Escrow Agent, enforceable in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, or other laws affecting the enforcement of creditors' rights generally or by th e application of equitable principles, if equitable remedies are sought.
c. Except as may be required under blue-sky laws or other securities laws of any state, no consent, approval, author ization, or other action by any governmental or regulatory authority having jurisdiction over the Escrow Agent, except for such authorizations , approvals or consents previously obtained, is required for the execution and delivery of the Escrow Agreement or for the consummation of the transa ctions contemplated by the Escrow Agreement.
(20) Defeasance Letter. A defeasance letter of Bond Counsel, dated the Closing Date, to the effect that the Defeased Obligations are no longer outstanding.
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(21) Verification Report. A verification report from [Verification Agent] relating to the discharge of the Defeased Obligations, in form and substance satisfactory to the Underwriter.
(22) Blanket Letter of Representations . A Blanket Letter of Re presentations of the Authority to DTC that qualifies the Bonds for delivery via the facilities of DTC. (23) Underlying Ratings. Evidence that [Standard & Poor's Financial Services, LLC, and Moody's Investors Service, Inc.], have assigned to the Bonds the ratings set forth on the cover of the Official Statement.
(24) [Insured Ratings. In accordance with the bond insurance commitment term sheet between the City and the Bond Insurer and upon payment of the related bond premium, evidence that the ratings on the Bonds (including the rating for the Insured Bonds) as set forth in the Final Official Statement are in full force and effect as of the Closing Date.]
(25) [Bond Insurance Policy. In accordance with the bond insurance commitment term sheet between the City and the Bond In surer and upon payment of the related bond premium, a specimen copy of the Bond Insurance Policy issued by the Bond Insurer.]
(26) [Bond Insurer Disclosure Certificate . In accordance with the bond insurance commitment term sheet between the City and the Bond Insurer and upon payment of the related bond premium, an opinion of counsel to the Bond Insurer regarding the validity of the Bond Insuranc e Policy and a certificate of the Bond Insurer regarding disclosure.]
(27) Additional Materials . Such additional legal opinions, certificates, proceedings, instruments, and other documents as the Underwriter or Bond Counsel may reasonably request to evidence the Auth ority’s and the City’s compliance with legal requirements; the truth and accuracy , as of the time of Closing, of the Authority’s and the City’s representations in this Contract; and the Authority’s 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 Authority and the City.
(d) If the Authority or 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, the Authority 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.
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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 Authority’s and the City’s representations, warranties, and agreemen ts in this Contract will remain operative and in full force and effect, regardless of any in vestigations made by or on behalf of the Underwriter, and will survive the Closing.
12. Expenses.
(a) The Authority or 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 Statem ent, 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, , verification agent, and the Trustee/Escrow Agent and their counsel; (4)[ the costs associated with the Bond Insurance Policy]; and (5) 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 Authority, 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 among the Authority, 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 no t acting as the agent or fi duciary of the Authority or City;
(3) the Underwriter has not assumed a fiducia ry responsibility in favor of the Authority or 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 Authority or the City on other matte rs), or (B) any other obligation to the Authority or the City with respect to the offering contemplated by this Contract except the obligations expressly set forth in this Contract; and Bond Purchase Contract | Page 22
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(4) the Authority, the City and the Underw riter 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 Underw riter’s obligations of fair dealing under Municipal Securities Rulemaking Board Rule G-17.
14. Notices.
(a) To be effective, any notice or other co mmunication 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
Attention: Brian Wong, Debt Manager
Email address: [email protected]
(b) To be effective, any notice or other communication given to the Authority under this Contract must be in writing and must be delivered to the following person at the following address:
Sacramento City Financing Authority
Historic City Hall
915 I Street, 3
rd Floor
Sacramento, California 95814
Attention: Brian Wong, Debt Manager
Email address: [email protected]
(c) To be effective, any notice or other comm unication 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 go verned by, and construed in accordance with, the laws of the State of Calif ornia. All currency amounts set forth in this Bond Purchase Contract | Page 23
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Contract are in United States Dollars. The word “including” means “including but not limited to.”
17. Effective Date. This Contract becomes effective when the Authority and the City accepts it, as indicated in the Authority’s and the City’s signature blocks below.
18. Counterparts. The parties may sign this Contract in counterparts, each of which will be considered as an original, but all of whic h will constitute the same instrument. Such signatures may be made manually or electronica lly. Each of the parties hereto agrees that the transaction consisting of this Contract may be conducted by el ectronic 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 an y provision of this Contract is invalid, unenforceable, or contrary to law or public policy, then th e 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 wri tten in any circumstances other than those in which the provision is held to be unenforcea ble; 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 initial public offering of all of the Bonds in compliance with federal and st ate 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.
(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 Authority (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (B) any person that agrees 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 part y to a retail-distribution agreement participating in the initial sale of the Bonds to the Public).
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(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 indirect ly, 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 owne rship of their capital interests or profits interests, if both entities are pa rtnerships (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 Authority in establishing the issue price of the Bonds and shall execute and deliver to the Authority at the Closing an “issue price” or similar certificate, together with the supporting pr icing wires or equivalent communications, substantially in the form attached hereto as Exhibit F, with any modifications that be appropriate or necessary, in the reasonab le judgment of the Underwriter, the Authority, and Bond Counsel, to accurately re flect, 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 Authority under this section to establish the issue price of the Bonds may be taken on behalf of the Authority by th e Authority’s municipal advisor, Fieldman, Rolapp & Associates, Inc. (“ Municipal Advisor ”) and any notice or report to be provided to the Authority may be provided to the Authority’s Municipal Advisor. (c) Except as otherwise set forth in Exhibit A attached hereto, the Authority will treat the first price at which 10% of each maturity of the Bonds (the “10% Test”) 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 appl y 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, th e Underwriter shall report to the Authority 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 Author ity the prices at which it se lls 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 differe nt 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 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 Bond Purchase Contract | Page 25
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maturities, if any, of the Bonds for which the 10% Test has not been satisfied and for which the Authority and the Underwriter agre e that the restrictions set forth in the next sentence shall apply, which will allow the Authority to treat the Initial Offering Price to the public of each such maturity as of the sale date as the issue price of that maturity (the “ hold-the-offering-price rule ”). So long as the hold-the-offering-price rule remains applicable to any maturity of the Bonds, the Underwriter will neither offer nor sell unsold Bonds of that ma turity 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 Authority 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 Ru le, if applicable, in each case if and for so long as directed by the Underwriter.
(g) The Authority 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 wi th 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 co mply with the Hold- the-Offering-Price Rule, if applicable, as set forth in the third-party distribution agreement and the related pricing wires.
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(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. (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)
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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]
SACRAMENTO CITY FINANCING AUTHORITY
2025 REFUNDING REVENUE BONDS
(MASTER LEASE PROGRAM FACILITIES)
MATURITY SCHEDULE AND REDEMPTION TERMS
Maturity
(December
1)
Principal
Amount
Interest
Rate Yield
Initial
Offering Price
10% Test
Used
Hold the
Offering
Price Used
Total: $[Par]
[1 Insured under the Bond Insurance Policy.]
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REDEMPTION TERMS
Optional Redemption . The Bonds maturing on or be fore December 1, 20__ are not subject to optional redemption before maturity. The Bonds maturing on or after December 1, 20__, are subject to optional redemption by the Authority before their stated maturity dates as a whole or in part on any date on or after December 1, 20__, from any source of available funds, upon notice as provided in the 2025 Indenture, at a redemption price equal to the principal amount of the Bonds or portions thereof called for redemption, to gether with accrued interest thereon to the date fixed for redemption, without a redemption premium.
Extraordinary Redemption. The Bonds are subject to extraordinary redemption in part by the Authority on any date before their stated maturity dates in integral multiples of $5,000 principal amount so that the annual amounts of the interest and principal of the Bonds that are allocable to the payment of the 2025 Base Rental Payments and are payable after the redemption date will be as nearly proportional as practi cable to the annual amounts of the interest and principal then payable on all Master Lease Bonds then Outstanding that are payable from the Base Rental Payments, from prepaid Base Rental Payments made by the City from eminent- domain proceeds or net insurance proceeds received under the Master Project Lease, under the circumstances and upon the conditions and terms prescribed therein, upon notice as provided in the 2025 Indenture, at a redemption price equal to the principal amount of the Bonds or portions thereof called for redemption, to gether with accrued interest thereon to the date fixed for redemption, without a redemption premium.
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EXHIBIT B
SACRAMENTO CITY FINANCING AUTHORITY
2025 REFUNDING REVENUE BONDS
(MASTER LEASE PROGRAM FACILITIES)
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, th e 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 [POS Date]
CITY OF SACRAMENTO
By
John P. Colville Jr.
City Treasurer
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EXHIBIT C
SUPPLEMENTAL OPINION OF BOND COUNSEL
[TO COME FROM BC – SUBSTANCE FROM 2016 LRB SUPPLEMENT OPINION BELOW]
1. The Bonds are not subject to the registrati on 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. No opinion is expressed with respect to the Bond Insurance Policy.
2. The Purchase Contract has been duly exec uted and delivered by, and is a valid and binding agreement of, the Authority.
3. The statements contained in the Final O fficial Statement under the captions “THE 2025 BONDS,” “SECURITY AND SOURCES OF PAYMENT FOR THE 2025 BONDS” and “TAX MATTERS” and in APPENDIX D - “SUMMARY OF PRINCIPAL LEGAL DOCUMENTS” and APPENDIX E - “PROPOSED FORM OF BOND COUNSEL OPINION,” 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, the Master Project Lease, the Master Site Lease and the form and content of our final legal opinion as bond counsel to the Authority concerning the validit y of the Bonds and certain other matters, dated the date hereof and addressed to the Authority, are accurate in all material respects.
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EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE AUTHORITY
[Closing Date]
Sacramento City Financing Authority
Sacramento, California
BofA Securities, Inc.
San Francisco, California
Re: $_________ Sacr amento City Financing Authority 2025 Refunding Revenue Bonds (Master Lease Program Facilities)
Greetings:
We are legal counsel for the Sacramento City Financing Authority (the “ Authority”) in connection with the issuance and delivery of the Sacramento City Financing Authority 2025 Refunding Revenue Bonds (Master Lease Program Facilities) (the “Bonds”). We are providing this opinion to you in connection with that cert ain Bond Purchase Contract, dated ________, 2025, among the Authority, the City of Sacramen to and BofA Securities, Inc. (the “ Contract”), which among other things provides for the purchase of the Bonds in the aggregate principal amount of $__________. Unless otherwise defined in this opinion, or unless the context otherwise requires, the capitalized terms used below have the meanings given them in the Contract.
Based upon our examination of the Legal Do cuments and of such other information, papers, and documents as we considered necessary or advisable to examine before rendering an opinion (including the Constitution and laws of the State and the governing instruments, resolutions, and public proceedings of the Auth ority), we have concluded that the following statements are accurate as of the date of this opinion:
1. The Authority is a public entity duly organized and existing under California law, with full right and lawful authority (a) to adopt th e Authority Resolution; (b) to execute and deliver the Authority Documents and the Bonds; (c) to perform its obligations under the documents identified in clause (b) of this paragraph; and (d) to issue of the Bonds.
2. The Authority has duly and validly authoriz ed, executed, and delivered the Authority Documents and the Bonds. Hence, the Auth ority Documents and th e Bonds constitute legal, valid, and binding obligations of the Au thority, enforceable against the Authority 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);
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(b) general principles of equity , including concepts of ma teriality, 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 a ppropriate cases or the limitations on legal remedies against public entities in California.
3. 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 acti ng throughout, the governing board (the “Board”) of the Authority duly adopted the Authority Resolution, which is in full force and effect and has not been amended or rescinded.
4. To our actual knowledge, the Board’s adop tion of the Authority Resolution; the Authority’s execution and delivery of the Authority Documents; the Authority’s issuance of the Bonds; the Authority’s authorizatio n of the Final Official Statement; the consummation of the transactions described in the Authority Resolution, the Authority Documents; and the Authority’s compliance with the Authority Resolution, the Authority Documents and the Bonds, do not in any material way —
(a) conflict with, or constitute on the part of the Authority a violation of, or a breach of or default under, any material inde nture, mortgage, commitment, note, or other agreement or instrument to which the Authority is a party or by which it is bound;
(b) violate the Authority’s joint exercise of powers agreement, the Act, or the California Constitution; or
(c) violate any law, rule, regulation, ordina nce, judgment, order, or decree that applies to the Authority or to the members of the Board or any of the Authority’s officers in their capacity as an officer.
5. Except as otherwise disclosed in the Prelim inary Official Statement and the Official Statement, to our current, actual knowledg e, the Authority 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 cour t, public board, or public body —
(a) that contests or questions in any way the powers of the Board in connection with the issuance, execution or delivery of the Bonds;
(b) that questions in any way the validity of any proceeding taken by the Board in connection with the issuance of the Bonds or the execution or delivery of the Authority Documents or the validity or enforceability of the Bonds or the Authority Documents, or in any way contests or challenges the consummation of the transactions contemplated by the Contract;
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(c) in which an unfavorable decision, ruling, or finding would affe ct the existence of the Authority or the titles of its officers or their offices; (d) that is likely to adversely affect the va lidity or enforceability of the Authority Resolution, the Bonds, or the Authority Documents; or
(e) that contests the completeness or accuracy of the Preliminary Official Statement or the Final Official Statement.
***
We express no opinion about the following: any indemnification or contribution provision in the Legal Documents; and the state or federal laws that pertain to the tax-exempt status of the Bonds. The phrase “to our actu al knowledge” does not imply that we have undertaken any independent investigation about the facts at issue, and in fact we have not done so.
This opinion may be relied on by you only in connection with the issuance of the Bonds.
It may not be used or relied upon for any other purpose or by any other person, nor may copies be delivered to any other person , without in each instance our prior written consent, provided however, that it may be included in the transcri p t o f r e c o r d o f p r o c e e d i n g s r e l a t i n g t o t h e issuance of the Bonds. This opin ion is expressly limited to the matters set forth above, and we render no opinion, whether by im plication or otherwise, as to any other matters. This letter speaks only as of the date hereof and we a ssume no obligation to update or supplement this opinion to reflect any facts or circumstances that arise after the date of this opinion and come to our attention, or any future changes in laws, rules or regulations.
This opinion is given in an official capaci ty only, and not personally, and no personal liability shall derive or result from this opinion.
Sincerely yours,
Susana Alcala Wood
Authority Legal Counsel
By: ________________________________
Jeffrey L. Massey
Senior Deputy Authority Legal Counsel
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EXHIBIT E
FORM OF OPINION OF CITY ATTORNEY
[Closing Date]
City of Sacramento
Sacramento, California
BofA Securities, Inc.
San Francisco, California
Re: $_________ Sacr amento City Financing Authority 2025 Refunding Revenue Bonds (Master Lease Program Facilities)
Greetings:
We are legal counsel for the City of Sacramento (the “ City”) in connection with the issuance and delivery of the Sacramento City Financing Authority 2025 Refunding Revenue Bonds (Master Lease Program Facilities) (the “ Bonds”). We are providing this opinion to you in connection with that certain Bond Purcha se Contract, dated ________, 2025, among the Sacramento City Financing Au thority, 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 $__________. Unless otherwise defined in this opinion, or unless the context otherwise requires, the capitalized terms used below have the meanings given them in the Contract.
Based upon our examination of the Legal Do cuments and of such other information, papers, and documents as we considered necessary or advisable to examine before rendering an opinion (including the Constitution and laws of the State and the governing instruments, resolutions, and public proceedings of the City), 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 auth ority (a) to adopt the City Resolution; (b) to execute and deliver the City Documents; and (c) to perform its obligations under the documents identified in clause (b) of this paragraph.
2. The City has duly and validly authorized, executed, and delivered the City Documents.
Hence, the City Documents constitute legal, valid, and binding obligations of the City, enforceable against the City in accordance wi th 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);
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(b) general principles of equity , including concepts of ma teriality, 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 a ppropriate cases or the limitations on legal remedies against public entities in California.
3. 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 City Resolution, which is in full force and effect and has not been amended or rescinded.
4. To our actual knowledge, the City Council’s ad option of the City Resolution; the City’s execution and delivery of the City Document s and the Final Official Statement; the consummation of the transactions describe d in the City Resolution and the City Documents; and the City’s compliance with the City Resolution and the City Documents, do not in any material way —
(d) 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; (e) violate the City’s charter, the Act, or the California Constitution; or (f) violate any law, rule, regulation, ordina nce, 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.
5. Except as specifically disclosed in the Preliminary Official Statement and the Final 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— (f) that questions in any way the powers of the City Council in connection with the execution and delivery of the City Documents;
(g) that questions in any way the validity of any proceeding taken by the City Council in connection with the execution and delivery the City Documents or the validity or enforceability of the City Documents, or in any way contests or challenges the consummation of the transactions contemplated by the Contract; (h) in which an unfavorable decision, ruling, or finding would affe ct the existence of the City or the titles of its officers or their offices; (i) that is likely to adversely affect the validity or enforceability of the City Resolution or the City Documents; or
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(j) that contests the completeness or accuracy of the Preliminary Official Statement or the Final Official Statement; or
(k) that might result in a material adverse change in the financial condition of the City or might materially adversely affect the ability of the City to make Program Obligation Payments under the Twelfth Amendment or to make any other payments owed by the City under the Project Lease.
***
We express no opinion about the following: any indemnification or contribution provision in the Legal Documents; 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.
This opinion may be relied on by you only in co nnection with the issuance of the Bonds. It may not be used or relied upon for any other purpose or by any other person, nor may copies be delivered to any other person, without in each instance our prior written consent, provided however, that it may be included in the transcript of record of proceedings relating to the issuance of the Bonds. This opinion is expressly limited to the matters set forth above, and we render no opinion, whethe r by implication or otherwise, as to any other matters. This letter speaks only as of the date hereof and we assume no obligation to update or supplement this opinion to reflect any facts or circumstances that arise after the date of this opinion and co me to our attention, or any future changes in laws, rules or regulations.
This opinion is given in an official capacity only, and not personally, and no personal liability shall derive or result from this opinion.
Sincerely yours,
Susana Alcala Wood
City Attorney
By: ________________________________
Jeffrey L. Massey
Senior Deputy City Attorney
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EXHIBIT F
$[Par]
SACRAMENTO CITY FINANCING AUTHORITY
2025 REFUNDING REVENUE BONDS
(MASTER LEASE PROGRAM FACILITIES)
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 is suance of the above-capt ioned obligations (the “Bonds”).
1. Bond Purchase Contract. On [Pricing Date] (the “Sale Date”), BofA Securities, the Issuer and the City of Sacramento executed a Bond Purchase Contract (the “Purchase Contract”) in connection with the sale of the Bonds. BofA Securities has not modified the Purchase Contract since its execution on the Sale Date.
2. Sale of General Rule Maturities. As of the date of this certif icate, for each Maturity of the General Rule Maturities, the first price at whic h 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-t he-Offering-Price Maturities to the Public for purchase at the respective initia l offering prices listed in Schedule A (the “ Initial Offering Prices ” ) o n o r b e f o r e t h e S a l e D a t e . A c o p y 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 Contract , BofA Securities has agreed in writing that, (i) for each Maturity of the Hold-the-Offeri ng-Price Maturities, it would neither offer nor sell any of the Bonds of such Maturity to any pers on at a price that is higher than the Initial Offering Price for such Maturity during th e 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 wh o is a party to the third-party distribution agreement, to comply with the hold-the-offering-price rule. Purs uant to such agreement, no Underwriter (as defined below) ha s offered or sold any Maturity of the Hold-the-Offering-Price Maturities at a price that is higher than the resp ective 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.”
Bond Purchase Contract | Page F-2
3999166.3 048411 AGMT
(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 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 Sacramento City Financing Authority. (e) Maturity means Bonds with the same credit and payment term s. 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 tota l value of their stock, if both entities are corporations (including direct ownership by on e corporation of another), (ii) more than 50% common ownership of their capital interests or prof it 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 th e applicable stock or inte rests 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 [Pricing 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 certif icate are limited to factual matters only.
Nothing in this certificate represents BofA Secu rities’s interpretation of any laws, including specifically Sections 103 and 14 8 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigne d 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
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affecting the Bonds, and by Orrick, Herrington & Sutcliffe LLP, in connection with rendering its opinion that the interest on the Bonds is excl uded from gross income for federal income tax purposes, the preparation of the Internal Re venue 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.
Bond Purchase Contract | Page F-4
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BOFA SECURITIES, INC.
By:
Authorized Representative
Dated: [Closing Date]
Bond Purchase Contract | Page F-5
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SCHEDULE A
TO
ISSUE PRICE CERTIFICATE
Actual Sales Information as of Closing Date
Maturity
(December
1)
Principal
Amount
Interest
Rate Yield
Initial
Offering Price
10% Test
Used
Hold the
Offering
Price Used
Total: $[Par]
[1 Insured under the Bond Insurance Policy.]
Bond Purchase Contract | Page F-5
3999166.3 048411 AGMT
SCHEDULE B
TO
ISSUE PRICE CERTIFICATE
PRICING WIRES
Agreement for Bond-Counsel Services | Page 1
AGREEMENT FOR BOND-COUNSEL SERVICES SACRAMENTO CITY FINANCING AUTHORITY 2025 REFUNDING REVENUE BONDS (MASTER LEASE PROGRAM FACILITIES) This Agreement for Bond-Counsel Services, dated as of June 9, 2025, for reference only, is between the CITY OF SACRAMENTO, a California municipal corporation and chartered city (the “City”); and ORRICK, HERRINGTON & SUTCLIFFE LLP, a California limited-liability partnership (“Orrick”). Background The City desires to engage the services of Orrick in connection with the authorization, issuance, sale, and delivery by the Sacramento City Financing Authority (the “Issuer”) of a single series of fixed-rate bonds (the “Bonds”) on behalf of the City to refund all or a portion of the outstanding Sacramento City Financing Authority 2015 Refunding Revenue Bonds (Master Lease Program Facilities) (the “Prior Bonds”). The City and Orrick desire to enter into this agreement to evidence the engagement of Orrick in connection with the Bonds and to specify the terms of the engagement. Orrick possesses the necessary professional capabilities and resources to provide the legal services required by the City as described in this agreement. With these background facts in mind, the parties hereby agree as follows: 1.Legal Services. The City retains Orrick as special counsel to perform, and Orrick shall perform, the following legal services for the Issuer and the City in connection with the Bonds: (a) Consultation with the City Treasurer and the City Treasurer’s Office (collectively, the “City Treasurer”), the City Attorney and the City Attorney’s Office (collectively, the “City Attorney”), other representatives of the City, the underwriter and its counsel, and others with respect to the timing, terms, and legal structure of the Bonds. (b) Preparation of documents that are required for the authorization, issuance, sale, and delivery of the Bonds and are to be adopted or entered into by the Issuer and/or the City, including authorizing resolutions, an indenture, and amendments to the master site lease and master project lease between the Issuer and the City (the “Major Legal Documents”) and, if requested by the City, review and negotiation of one or more commitments for a policy of municipal-bond insurance or a surety bond for the Bonds and incorporation of applicable municipal-bond insurance or surety bond provisions into the Major Legal Documents. The Major Legal Documents do not include the official statement, the purchase contract, and the continuing-disclosure certificate or agreement, which, except as provided in sections 1(d) and 2(b) below, the City’s disclosure counsel or the underwriter’s counsel will prepare.
Agreement for Bond-Counsel Services | Page 2
(c) Review of the official statement as it relates to summaries of the Major Legal Documents and the portion of the official statement concerning certain tax matters on which Orrick will render an opinion in accordance with section 1(f). (d) Preparation of the following for inclusion in the official statement: summaries of the Major Legal Documents and the portion of the official statement concerning certain tax matters on which Orrick will render an opinion in accordance with section 1(f). (e) Attendance at such meetings or hearings of the Governing Board of the Issuer and the City Council and at such working-group meetings or conference calls as the City may request, and assistance to the City’s staff in preparation of such explanations or presentations to the Governing Board of the Issuer and the City Council as the City may request. (f) Rendering of Orrick’s customary form of final approving opinion to the Issuer on the validity of the Bonds and the tax-exempt status of interest on the Bonds. (g) Rendering of Orrick’s customary form of supplemental opinion to the underwriter on the accuracy of summaries of the Major Legal Documents in the official statement and of the tax portion of the final legal opinion and certain other matters. (h) After delivery of the Bonds, preparation and delivery to the City of a transcript of the legal proceedings for the Bonds in an electronic format (contemplated to be Box.com). (i) After delivery of the Bonds, telephone consultations with the City’s officials and staff to answer questions about the facts and circumstances concerning the Bonds. 2.Excluded Services. Orrick’s services under this agreement do not include the following, although Orrick may provide these services (other than services described in section 2(g)) under a separate agreement with the City: (a) Legal services in connection with any litigation or other legal or administrative proceeding, audit, or investigation involving any of the Bonds, the Prior Bonds or any related matter. (b) Legal services in connection with the preparation, content, or dissemination of the official statement (except as provided in section 1(d)). (c) Legal services related to compliance with the California Environmental Quality Act. (d) Legal services in connection with arbitrage-rebate compliance respecting the Bonds or the Prior Bonds. (e) Legal services relating to state blue-sky laws or to title to, or perfection of security interests in, real or personal property.
Agreement for Bond-Counsel Services | Page 3
(f) Financial analysis or advice. (g) Participating in discussions or decisions about, or advising the City about, the desirability of authorizing, issuing, selling, and delivering the Bonds; the appropriate principal amount, interest rate, and other critical pricing terms of the Bonds; the desirability of refunding the Prior Bonds; and the desirability of the City’s entering into contracts related to the issuance of the Bonds. The Governing Board of the Issuer and the Sacramento City Council, assisted by the City Treasurer, and the City’s independent municipal advisor, Fieldman, Rolapp & Associates, Inc., but without advice or assistance from Orrick, will decide whether authorizing, issuing, selling, and delivering the Bonds is in the Issuer’s and/or the City’s best interests; what the principal amount, interest rate, and other critical pricing terms of the Bonds should be; whether it is desirable to refund the Prior Bonds; and whether the Issuer and/or the City should enter into contracts related to the issuance of the Bonds. 3.City Attorney Review. The City retains the full-time services of the City Attorney to render day-to-day and ongoing legal services to the City. Orrick shall circulate documents to, and coordinate its services with, the City Attorney to the extent requested by the City or the City Attorney. Orrick may assume that the City Attorney has reviewed all documents and matters submitted to the Governing Board of the Issuer and/or the City Council for adoption or approval, or to the Issuer’s and/or City’s officers for execution, before those documents and matters are adopted, approved, or executed. 4.Consideration for Legal Services. As consideration for the services set forth in section 1, the City shall pay or cause to be paid to Orrick the following fees and disbursements: (a) As legal fees, if delivery of the Bonds occurs no later than October 31, 2025, a flat amount of $125,000. The flat amount assumes that (1) the Bonds will consist of a single series of tax-exempt, fixed rate, refunding bonds, (2) no municipal-bond insurance policy or surety bond will be purchased for the Bonds, (3) there will be no changes to the properties subject to the leases relating to the Bonds, (4) there will be no amendments to the leases or other existing documents relating to the Bonds or the Prior Bonds other than those needed to issue the Bonds, (5) the issuance of the Bonds will result in overall substantially level lease payments/debt service, and (6) the tax due diligence performed in connection with the issuance of the Prior Bonds is substantially unchanged. The flat amount will increase by (i) $15,000 if either a policy of municipal-bond insurance or a surety bond is purchased for the Bonds, (ii) $15,000 for any changes to the properties subject to the leases relating to the Bonds, and (iii) $30,000 for any other amendments to the leases or other existing documents relating to the Bonds or the Prior Bonds. If there are any other changes to the assumptions set forth above, the flat amount will increase by an amount mutually agreed upon by Orrick and the City. All increases to the flat amount will be cumulative. If delivery occurs after October 31, 2025, then Orrick and the City shall negotiate in good faith on a new flat amount of legal fees.
Agreement for Bond-Counsel Services | Page 4
(b) As payment of disbursements, including preparation and distribution of a transcript in an electronic format, Orrick’s actual out-of-pocket disbursements in an amount not exceeding $200. (c) If the Issuer successfully issues, sells, and delivers the Bonds, then the City shall pay or cause to be paid to Orrick the legal fees owed under section 4(a) and the disbursements owed under section 4(b) as soon as is practicable after receiving Orrick’s invoice for the fees and disbursements. Payment under this section 4(c) is contingent upon the issuance, sale, and delivery of the Bonds and will be exclusively from proceeds of the Bonds. (d) If this agreement is terminated under section 5 before the delivery of the Bonds, then the City shall pay Orrick for all satisfactory work at Orrick’s standard hourly rates, within 30 days after receiving Orrick’s invoice for the work, subject to the following: (1) If the City terminates for cause, then Orrick’s compensation is to be adjusted in the light of the facts and circumstances involved in the termination. (2) Payment under this section 4(d) will not exceed one half of the amount owed under section 4(a) above (e.g., if termination occurs on or before October 31, 2025, and no increases to the flat amount specified in Section 4(a) have occurred, then the amount owed under section 4(a) will equal $62,500). (3) The City’s obligation to pay Orrick under this section 4(d) is the City’s alone and is not contingent upon, and will not be extended or otherwise affected by, the issuance, sale, or delivery of the Bonds or the City’s receipt or nonreceipt of any payment from some other person or entity. 5.Termination. Either party may, at any time, terminate this agreement and all legal services to be rendered under it, with or without cause, by giving written notice to the other party. In that event, all finished and unfinished documents that Orrick has prepared for the City’s adoption, approval, or execution will, at the City’s option, become the City’s property, and Orrick shall deliver them to the City or to any party the City may designate, all subject to the condition that Orrick will have no liability whatsoever for any subsequent use of the documents. If not sooner terminated, this agreement and all legal services to be rendered under it will terminate upon issuance and sale of the Bonds, except that the City will remain liable for any unpaid fees and expenses due under section 4 above. Upon termination, Orrick will have no future duty of any kind to the City with respect to the Bonds, except as provided in sections 1(h) and 1(i) above. 6.Role of Bond Counsel. (a) In general, the role of bond counsel in financings is to prepare or review documents and to coordinate the procedures for authorization of the issuance, sale, and delivery of bonds and to provide an expert legal opinion with respect to the validity of the bonds Agreement for Bond-Counsel Services | Page 5
and other subjects addressed by the opinion. Consistent with the historical origin and unique role of bond counsel, and the reliance thereon by the public-finance market generally, Orrick’s role as bond counsel under this agreement is not the partisan role of an advocate. Instead, Orrick’s role is to provide legal documents needed for the issuance, sale, and delivery of the Bonds and to provide an opinion that represents an objective judgment on the matters addressed therein. (b) In performing its services as bond counsel in connection with the Bonds, Orrick shall act as special counsel to the City with respect to issuance, sale, and delivery of the Bonds. In that capacity, Orrick shall assist the City’s staff in representing the City, but only with respect to the sufficiency of the legal documents for the issuance, sale, and delivery of the Bonds and in a manner not inconsistent with the role of bond counsel described in section 6(a) above. (c) Orrick’s function and responsibility under this agreement, and as bond counsel with respect to the issuance, sale, and delivery of the Bonds, terminates upon the delivery of the Bonds (unless terminated sooner as provided in section 5 above), except as provided in sections 1(h) and 1(i) above. Orrick’s services as bond counsel through delivery of the Bonds are limited to those explicitly contracted for in this agreement. Any engagement of Orrick with respect to rebate compliance, disclosure, or any other matter is separate from its engagement as bond counsel through delivery of the Bonds. However, unless otherwise provided, any such post-delivery engagement with respect to the Bonds will continue on the same basis set forth in this section 6.7.Conflicts. The City acknowledges that Orrick regularly performs legal services for many private and public entities in connection with a wide variety of matters. For example, Orrick has represented, is representing, and expects to represent in the future other public entities (such as the County of Sacramento, the Sacramento Municipal Utility District, and the State of California), bond underwriters (such as BofA Securities, Inc.), trustees, rating agencies, insurers, banks, credit-enhancement providers, lenders, contractors, suppliers, financial and other consultants and advisors, accountants, investment providers or brokers, providers or brokers of derivative products, and others who may have a role or interest in the Bonds or who may be involved with, or adverse to, the City in this or some other matter. Orrick shall not represent any such entity (i.e., other private and public entities) in connection with the Bonds without the City’s express written consent. Given the special, limited role of bond counsel described in section 6 above, the City— (a) acknowledges that no conflict of interest exists or would exist in connection with any matter other than the Bonds; (b) waives any such conflict of interest that might appear actually or potentially to exist, now or in the future, by virtue of this agreement or any other attorney-client relationship that Orrick may have had, may have, or may enter into; and Agreement for Bond-Counsel Services | Page 6
(c) consents to any and all such relationships subject to the condition that the City’s separate written consent and a separate conflict-waiver letter will be required to be obtained by Orrick if Orrick concurrently represents the City and any other entity in connection with the issuance, sale, and delivery of the Bonds. 8.No Third-Party Beneficiaries. Nothing in this agreement or in any of the documents expressly or impliedly contemplated by this agreement is intended to give, or is to be construed to give, any person or entity other than the City and Orrick any legal or equitable right or claim under, or in respect of, this agreement, and this agreement inures to the sole and exclusive benefit of the City and Orrick. 9.Assignments. Orrick may not assign its obligations under this agreement without the express written consent of the City, except to a successor partnership or corporation to which all or substantially all of the assets and operations of Orrick are transferred. The City may not assign its rights and obligations under this agreement without the express written consent of Orrick. All references to Orrick and the City in this agreement refer to their respective successors and assignees and will bind and inure to the benefit of their successors and assignees whether so expressed or not. 10.Notices. To be effective, notices pertaining to this agreement must be sent by the U.S. Postal Service, first class, postage prepaid, addressed as follows: If to the City: Office of the City Treasurer Historic City Hall 915 “I” Street, Third Floor Sacramento, CA 95814 Attention: City Treasurer andOffice of the City Attorney New City Hall915 “I” Street, Fourth Floor Sacramento, CA 95812-2608 Attention: City Attorney If to Orrick: Orrick, Herrington & Sutcliffe LLP 400 Capitol Mall, Suite 3000 Sacramento, CA 95814 Attention: Jenna Magan 11.Counterparts. The parties may sign this agreement in counterparts, each of which will be considered an original, but all of which will constitute the same agreement. Delivery of signed counterparts may be accomplished email transmission of a pdf document. (Signature Page Follows) Agreement for Bond-Counsel Services | Signature Page
City of Sacramento By: ________________________________ Matthew D. Ruyak Assistant City Attorney Orrick, Herrington & Sutcliffe LLP By: ________________________________ Jenna Magan, Partner Attest Sacramento City Clerk By: ________________________________ Approved as to Form Sacramento City Attorney By: ________________________________ Jeffrey L. Massey Senior Deputy City Attorney
2025 Refunding Revenue
Bonds
(Master Lease Program
Facilities)
By: Claudia Lara
Purpose
•To refund and defease the 2015 Refunding Revenue
Bonds (Master Lease Program Facilities)
•Outstanding PAR amount $69.89 million
•Final Maturity December 1, 2036
•Benefit the City’s General Fund, Solid Waste Fund
and Parking Fund
Refinancing
Plan Estimated Sources and Uses of
Funds
PAR Amount $ 59,570,000
Premium 4,961,651
Debt Service Fund 6,970,000.00
Total Sources $ 71,501,651
Deposit to Escrow
Fund $ 70,886,065
All-in Costs of
Issuance 615,586
Total Uses $ 71,501,651
Estimated 2025 Refunding Revenue Bond
Principal Interest Debt Service
$ 59,570,000 $ 17,145,224 $ 76,715,224
Estimates are based on market
conditions plus 0.25% and is
estimated generate aggregate
cashflow savings of $3.67 million.
Estimate
d
SavingsFISCAL
YEAR
2003
(NACY)
2005
(PARKING)
2005
(SOLID
WASTE)
2005
(SAFETY GF)
2006A
(GF)
2006C
(GF) TOTAL
2026 $ 23,412 $
56,676 $ 59,583 $
38,949 $ 430,569 $ 225,900 $ 835,089
2027 29,850 37,006 40,925 29,175 520,731 272,000 929,688 2028 28,800 37,806 41,675 24,650 520,931 271,400 925,263 2029 27,750 38,606 37,550 25,250 520,131 275,175 924,463 2030 3,500 3,553 3,025 2,125 1,816 2,613 16,631
2031 2,125 2,175 4,300
2032 875 1,425 2,300
2033 4,500 675 5,175
2034 3,000 4,800 7,800
2035 1,500 3,800 5,300
2036 4,875 2,800 7,675
2037 4,500 1,150 5,650
TOTAL $ 113,312 $ 173,648 $ 182,758 $ 120,149 $ 2,015,554 $ 1,063,913 $ 3,669,333 Key Highlights
2025 Refunding
Revenue Bonds
maturity is
December 1, 2036
$3.67 million in
aggregate cashflow
savings
(estimated)
Savings are front
loaded through
FY2029
Pricing +/-
September 4th
Closing +/-
September 18th