San Bruno City Council
July 14, 2026

Crime Prevention Committee
Culture & Arts Commission; and
Emergency Preparedness Committee.

Applicants to these bodies can be found on Attachment 2.

Additional interviews will be scheduled throughout the year should the City Clerk’s Office receive additional new applications to fill any current or future vacancies.

FISCAL IMPACT:

There is no fiscal impact.

ENVIRONMENTAL IMPACT:

The action is not a project subject to CEQA.  City Council’s action is not considered a “Project” per CEQA Guidelines and therefore no further environmental analysis is required.

RECOMMENDATION:

Consider Appointments to Fill Current Vacancies on Commissions, Boards and Committees – Crime Prevention Committee; Culture & Arts Commission; and Emergency Preparedness Committee.

ALTERNATIVES:

1. Direct staff to assist in scheduling additional interviews for consideration of appointments.

2. Direct staff to launch another new recruitment.

ATTACHMENTS:

1. Section 8 of the City Council Policies and Procedures Manual

2. Matrix of Applicants

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Section 8. Appointments to City Commissions, Boards and Committees (CBCs)
A. Appointments per San Bruno Municipal Code Process

1. In accordance with the San Bruno Municipal Code, the Mayor shall make all appointments to and removals from City boards, commissions, and committees, subject to approval by the City Council. (SB MuniCode 2.04.120 and CA Gov’t Code §40605)

2. Us
e of the Alternative Appointment Process for Commission, Board or Committee Members
a. The Mayor may elect to use the Alternative Appointment Processes outlined in Sections 7.B and 7.C.
b. A majority of the City Council may only elect to use the Alternative Appointment Process after the Mayor has
proposed an appointment(s) that the City Council has not approved in accordance with SB MuniCode 2.04.120 and
CA Gov’t Code §40605.

3. Rem
ovals from City boards, commissions, and committees shall follow the process outlined in SB MuniCode 2.04.120 as well as applicable Federal and State law.

B. Alternative Appointment Process for Commission, Board or Committee Members
Does
not apply to San Bruno Community Foundation Board of Director Appointments, see Section 7.C.

Round O
ne: Nominations
o Mayor or Presiding Officer of the Meeting to facilitate nominations o Council members to be given the opportunity to make a Motion for Consideration for Appointment for any applicant
• Requires a Second
Note: Any applicant that receives a Motion and a Second advances to Round 2 (no vote of the full City Council taken at this time).

During the nomination process, Council members will not be called upon in alpha order. Members must ask to be recognized through the Chair if they would like to make a nomination.

Round Two: Simultaneous Voting Process for Nominees
o City Clerk to call Council members alphabetically, with the Vice M
ayor and Mayor last.

ATTACHMENT 1

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o Once called upon, Council members shall vote for their preferred nominee or abstention.

o In the event of a tie or if no single nominee receives three votes from the City Council, the appointment process proceeds to Round Three.
• The nominee(s) that receive the lowest number of votes (or are tied for the lowest number of votes) shall be eliminated.  Note: If five nominees each receive one vote, all five nominees advance to Round Three.

Round Three: Simultaneous Voting Process for Nominees, if needed o City Clerk to call Council members alphabetically, with the Vice Mayor and Mayor last.

o Once called upon, Council members shall vote for their preferred nominee or abstention.

o In the event of a tie or if no single nominee receives three votes from the City Council, the appointment process proceeds to Round Four.
• The nominee(s) that receive the lowest number of votes (or are tied for the lowest number of votes) shall be eliminated.  Note: If five nominees each receive one vote, all five nominees advance to Round Four.

Round Four: Simultaneous Voting Process for Nominees, if needed o City Clerk to call Council members alphabetically, with the Vice Mayor and Mayor last.

o Once called upon, Council members shall vote for their preferred nominee or abstention.

o In the event of a tie or if no single nominee receives three votes from the City Council, the appointment process ends and Council shall provide direction to staff whether to leave the position vacant or conduct a new recruitment process to fill the vacancy.

C. Appointment Process for SBCF Board of Director Appointments

Founded in 2013 by the City of San Bruno, the San Bruno Community Foundation (SBCF) is a 501(c)(3) tax-exempt nonprofit organization. The SBCF is distinguished from other City CBC’s in that its legal structure is a dependent- nonprofit corporation under the City of San Bruno and SBCF Board members have a legal fiduciary duty to the Foundation (not the City). As such, the City Council has established the following Alternative Process for appointing SBCF

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Board members, which may be used at the discretion of the Mayor or a majority of the City Council.

1. Advertising for and recruitment of SBCF Board members shall be done in accordance with Section 7D of this document, with the exception that:
o The City Council shall receive all applications.
o The Council may meet to review applications and determine which applicants to invite for an interview.
o The SBCF Board shall select two members to attend and participate in the City Council interview process.
o The appointment process for SBCF Board members shall follow the procedures outlined in Section 7A (option: Section 7B) of this document.

D. Recruitment Officer for Commission, Board or Committee Members

1. The City Clerk serves as the official Recruitment Officer for members of the CBC’s. As such, the City Clerk is responsible for advertising vacancies (whether scheduled or unscheduled) in conformance with Government Code section 54974, receiving and processing applications, scheduling interviews, and preparing staff reports related to CBC appointments. Additionally, as the CBC Recruitment Officer, the City Clerk is responsible for maintaining the City’s official lists of CBC membership, vacancies, appointment dates, and term expirations.

2. Prior to the end of the term for a filled position or when a CBC position is vacated, the City Clerk shall initiate a recruitment, which includes an initial recruitment period of 10 business days or greater, and/or schedule interviews to fill the position, if there are at least 2 individuals have applied for vacancy.

3. Per Government Code Section 54974 (a), a Notice of Vacancy, shall be posted not earlier than 20 days before, or not later than 20 days after the vacancy occurs. The Notice of Vacancy shall be posted to the City’s website, as well as published on the City’s social media accounts, and the City Clerk’s Office will share the Notice of Vacancy with the City Council during the initial recruitment period, schedule permitting. The initial recruitment period may be extended at the discretion of the City Clerk in the event that fewer than 2 individuals have applied for the vacancy.

4. Per Government Code Section 54974 (a), final appointment to the board, commission, or committee shall not be made by the legislative body for at least 10 working days after the posting of the notice in the clerk’s office.

5. Notwithstanding a decision to extend the initial recruitment period, the City Clerk shall furnish all submitted applications to the City Council at the close of the initial recruitment period and each subsequent recruitment period. During

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the period when the recruitment is extended, if a majority of the City Council requests to interview the applicants, the City Clerk shall work to schedule interviews with the City Council.

6. Unless directed by a majority of the City Council, all CBC applicants shall be given the opportunity to be interview by the City Council.

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ATTACHMENT 2

Applicants for

Commission, Board & Committee

CBC Applicant
Crime Prevention
Committee
Two (2) Vacancies: B oth expire 10/31/2028
Isin al-Otat* (2nd Choice)
Matt Jones* (1st choice)
Kevin Carraway
Daniel Mitsunaga
Culture & Arts
Commission
Two (2) Vacancies: 1 expires 10/31/2026
1 expires 10/31/2028
Johnny Huerta
Gary Landis
Rema Mansi
Salina Welsh
Emergency
Preparedness Committee
One (1) Vacancy: E xpires 10/31/2026
Isin al-Otat* (1st Choice)
Matt Jones* (2nd choice)
Elaine Lau

* Applicant selected multiple committee preferences. Order of preference is listed.

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City Council Agenda Item
Staff Report

CITY OF SAN BRUNO
DATE: July 14, 2026
TO: Honorable Mayor and Members of the City Council
FROM: Alex D. McIntyre, City Manager
PREPARED BY: Nick Pegueros, Administrative Services Director SUBJECT: Consider Adoption of a Resolution Authorizing the Issuance and Sale of General Obligation Bonds in an Aggregate Principal Amount Not to Exceed $37,000,000, and Authorizing the Execution of Documents and the Taking of Other Actions Related Thereto
BA
BACKGROUND:

On November 5, 2024, voters approved Measure Q, authorizing the City to issue general obligation bonds in the aggregate principal of $102 million. A two-thirds (66.67%) supermajority vote was required for the approval of Measure Q, with the City receiving a 73.09% approval.

California Government Code Section 53410 restricts the use of the proceeds from the bond sale to the specific purposes identified in the bond measure. Measure Q states that bond proceeds will be used to repair deteriorating storm-drains, repair potholes and city streets, and upgrade fire stations. Measure Q authorizes a levy on the assessed value of taxable property within the City by an amount needed to pay the principal and interest on these bonds in each year that the bonds are outstanding.

DISCUSSION:

Section 1 - Financing Strategy
Staff, in consultation with the City's Municipal Advisor and Bond Counsel, recommends issuing the first series of bonds in a principal amount not to exceed $37 million (the “2026 Bonds”).

Issuing bonds in multiple series allows the City to match debt issuance with project cash flow needs and avoid incurring interest costs on funds not immediately needed for approved capital improvements.

Proceeds of the 2026 Bonds will be used to finance street and roadway improvement projects authorized by Measure Q, including pavement rehabilitation and related road infrastructure improvements throughout the City. Bond proceeds may also be used to fund preliminary planning, design, engineering, and related pre-construction activities associated with a future fire station project authorized by Measure Q.

City staff also recommends that the Bonds be sold through a competitive sale process. Under a competitive sale, underwriters submit bids on the date of sale and the Bonds are awarded to the bidder offering the lowest true interest cost to the City, subject to the parameters established by the City Council. Staff and the City's municipal advisor have determined that a competitive sale 430 of 558
Item 8b.

Honorable Mayor and Members of the City Council
July 14, 2026

is appropriate given current market conditions and the anticipated positive credit characteristics of the 2026 Bonds.

Section 2 - Financing Parameters
The proposed resolution authorizes the sale of the 2026 Bonds in an aggregate principal amount not to exceed $37 million and authorizes the execution of documents and the taking of other required actions by City Staff. The resolution also sets a maximum underwriter’s discount of 1% of the principal amount of the 2026 Bonds. The resolution delegates authority to designated City officials to finalize the terms of the Bonds within the parameters approved by the City Council and to award the 2026 Bonds to the successful bidder.

Section 3 - Financing Documents
The resolution being presented for approval authorizes the issuance of the 2026 Bonds and approves the form and authorizes execution of the related financing documents, including:
Paying Agent/Bond Registrar Agreement – An agreement between the City and U.S.

Bank Trust Company, N.A. (U.S. Bank), serving as Paying Agent and Bond Registrar.

As Paying Agent/Bond Registrar, U.S. Bank will pay the registered bond owners the principal, interest, and redemption premium (if any), and maintain all books and records of ownership of the 2026 Bonds.
Preliminary Official Statement – The Preliminary Official Statement is the primary offering and disclosure document for the 2026 Bonds. It provides information regarding the City, Measure Q, the security for the 2026 Bonds, and other material information to prospective investors and underwriters in connection with the competitive sale of the 2026 Bonds.
Official Notice of Sale – The Official Notice of Sale establishes the terms and procedures for the competitive sale of the 2026 Bonds, including bidding requirements, sale parameters, and the process by which bids will be received and evaluated. The Bonds will be awarded to the bidder offering the lowest true interest cost, subject to the parameters approved by the City Council in the resolution.

Section 4 – Good Faith Estimates
The required good faith estimates discussed below, with respect to the 2026 Bonds, are provided in accordance with California Government Code Section 5852.1. Such good faith estimates have been provided by Fieldman, Rolapp & Associates, Inc., the City’s Municipal Advisor, and are based on market interest rates prevailing as of June 22, 2026. The estimates reflect the combined totals for the 2026 Bonds, as follows:

Principal Amount: The Municipal Advisor informed the City that based on the City’s financing plan and current market conditions, the good faith estimate of the principal amount of the 2026 Bonds to be sold (the Estimated Principal Amount) is $34,885,000.

True Interest Cost of the Bonds: The Municipal Advisor informed the City that its good faith estimate of the true interest cost of the 2026 Bonds, which is the rate necessary to discount the amounts payable on the respective principal and interest payment to the purchase price received for the 2026 Bonds, is 4.52%.

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Honorable Mayor and Members of the City Council
July 14, 2026

Finance Charge of the Bonds: The Municipal Advisor informed the City that its good faith estimates of the finance charge for the 2026 Bonds, which is the sum of all fees and charges paid to third parties, or costs associated with the 2026 Bonds, is $385,000. Such fees and charges include fees for bond and disclosure counsel, municipal advisor, paying agent/bond registrar, rating agency, printing and underwriting. These fees are all paid for with bond proceeds.

Amount of Proceeds to be Received: The Municipal Advisor informed the City that its good faith estimate of the amount of proceeds expected to be received by the City for sale of the 2026 Bonds less the finance charge of the Bonds, as estimated above, and any capitalized interest funded with proceeds of the 2026 Bonds is $34,500,000.

Total Payment Amount: The Municipal Advisor informed the City that its good faith estimate of the total payment amount of all payments the City will make to pay debt service on the 2026 Bonds, less any capitalized interest proceeds, calculated to the final maturity of the 2026 Bonds is $63,598,666.

The foregoing estimates constitute good faith estimates only. The actual principal amount of the 2026 Bonds issued and sold, the true interest costs, the finance charges, the amount of proceeds received, and the total payment amount may differ from such good faith estimates due to:

1. The actual date of the sale of the 2026 Bonds being different than the date assumed for purposes of such estimates;

2. The actual principal amount of the 2026 Bonds sold being different from the Estimated Principal Amount;

3. The actual amortization of the 2026 Bonds being different than the 30-year amortization assumed for purposes of such estimates;

4. The actual market interest rates at the time of sale of the 2026 Bonds being different than those estimated for purposes of such estimates;

5. Other market conditions; and/or

6. Alterations in the City’s financing plan, delays in the financing, additional legal work (including federal tax law due diligence), or a combination of such factors.

Section 5 – Next Steps
Should the City Council adopt the Resolution, City staff and the financing team will finalize the Preliminary Official Statement and Official Notice of Sale and distribute those documents to the market. The posting of the financing documents is currently anticipated to occur on or about July 30, 2026, with the competitive sale of the Bonds expected to occur on or about August 6, 2026.

Closing of the Bonds is currently anticipated on or about August 20, 2026. The schedule remains preliminary and may be adjusted based on market conditions and financing readiness.

FISCAL IMPACT:

As of June 22, 2026, the 2026 Bonds are estimated to be issued in a principal amount of approximately $34,885,000 and are expected to provide approximately $34,500,000 in project funds to finance the improvements previously described. The Bonds are currently structured with a final maturity on September 1, 2056. Debt service on the 2026 Bonds will be payable

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Honorable Mayor and Members of the City Council
July 14, 2026

from ad valorem property taxes levied on taxable property within the City pursuant to Measure Q and applicable law.

Bond issuance maximizes the Measure Q levy on assessed value in 2028 and 2029. After 2029, the tax rate drops off until a future bond series is issued. If there is a desire to reduce the levy in those years, the issuance can be restructured to lower the tax rate in 2028 and 2029. Staff recommends maximizing the levy in 2028 and 2029, to minimize interest costs and keep the Measure Q levy lower in future years, to allow flexibility in issuing future series.

ENVIRONMENTAL IMPACT:

The proposed action authorizes the issuance and sale of general obligation bonds and does not constitute a commitment to any specific construction project. The issuance of bonds is not a project subject to the California Environmental Quality Act ("CEQA") pursuant to CEQA Guidelines Section 15378(b)(4), which excludes government fiscal activities that do not result in a direct or reasonably foreseeable indirect physical change in the environment. Any future projects financed with bond proceeds will undergo environmental review, as required, prior to project approval.

RECOMMENDATION:

It is recommended that the City Council adopt the Resolution, authorizing the issuance and sale of General Obligation Bonds in an aggregate principal amount not to exceed $37,000,000, and authorizing the execution of documents and the taking of other actions related thereto.

ATTACHMENTS:

1. Resolution authorizing issuance of bonds

2. Paying Agent/Bond Registrar Agreement

3. Preliminary Official Statement

4. Official Notice of Sale

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RESOLUTION NO. 2026 - ___
A

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN BRUNO AUTHORIZING

THE ISSUANCE AND SALE OF GENERAL OBLIGATION BONDS IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $37,000,000, AND AUTHORIZING THE

EXECUTION OF DOCUMENTS AND THE TAKING OF OTHER ACTIONS RELATED

THERETO
W
HEREAS, on July 9, 2024, the City Council adopted, by a unanimous vote of all its members, Resolution No. 2024-59, determining the necessity to incur a bonded indebtedness to finance municipal improvement projects of the City; and W
HEREAS, on July 23, 2024, the City Council adopted, by a unanimous vote of all its members, Ordinance No. 1951, ordering the submission to the voters of the City a proposition authorizing bonded indebtedness; and
W
HEREAS, on July 23, 2024, the City Council adopted, by a unanimous vote of all its members, Resolution No. 2024-66, approving placing a measure to approve the issuance of bonds a bonded indebtedness on the November 5, 2024 ballot; and W
HEREAS, on November 5, 2024, an election was duly and regularly held in the City on the general obligation bond measure, known as Measure Q (the “Bond Measure”), and the abbreviated form of the Bond Measure was:
“S
hall City of San Bruno measure be adopted to repair deteriorating storm-drains, preventing failure, flooding, water pollution/ sinkholes; repair potholes/ city streets; upgrade fire stations, improving emergency response, accommodate modern firefighting/ lifesaving emergency medical equipment, function during earthquakes/ natural disasters; authorizing $102,000,000 in bonds, at a tax rate of 3¢ per $100 of assessed value, while bonds are outstanding, initially generating $3,300,000 annually, without funds for administrators/ cannot be taken by the State of California, with citizen oversight/ independent audits?; and W
HEREAS, at the election, more than two-thirds of the electors voting on the Bond Measure voted in favor of the Bond Measure, authorizing the issuance by the City of general obligation bonds in the aggregate principal amount of $102,000,000 for the purpose of providing funds for the purposes specified in the Bond Measure; and W
HEREAS, the City Council wishes at this time to authorize the issuance and sale of a series of general obligation bonds in the aggregate principal amount of not to exceed $37,000,000 (the “Bonds”) pursuant to Article 4.5 of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (the “Bond Law”) and this Resolution; and W
HEREAS, the information required to be obtained and disclosed by the City Council related to the Bonds by Government Code Section 5852.1 is set forth in the staff report accompanying this Resolution; and
W
HEREAS, the City Council previously approved a debt management policy in accordance with Government Code Section 8855, and the delivery of the Bonds will be in compliance with said policy.
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ATTACHMENT 1
2 NOW THEREFORE, BE IT RESOLVED, by the City Council of the City of San Bruno, California, as follows.

ARTICLE I

DEFINITIONS; AUTHORITY

SECTION 1.01. Definitions. The terms defined in this Section 1.01, as used and capitalized herein, shall, for all purposes of this Resolution, have the meanings given them below, unless the context clearly requires some other meaning.

“Bond Counsel” means (a) Jones Hall LLP, and (b) any other attorney or firm of attorneys nationally recognized for expertise in rendering opinions as to the legality and tax- exempt status of securities issued by public entities.

“Bondowner” or “Owner,” whenever used herein with respect to a Bond, means the person in whose name the ownership of such Bond is registered on the Registration Books.

“Bond Law” means Article 4.5 of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California, commencing with Section 53506 of said Code.

“Bond Measure” means Measure Q submitted to and approved by more than the requisite 2/3 of voters in the City on November 5, 2024, under which the issuance of the Bonds has been authorized.

“Bonds” means the bonds designated as the “City of San Bruno (County of San Mateo, California) 2026 General Obligation Bonds,” or similar designation, authorized to be issued under this Resolution in the aggregate principal amount of not to exceed $37,000,000.

“City” means the City of San Bruno, a general law city and municipal corporation organized under the Constitution and laws of the State of California, and any successor thereto.

“City Representative” means the Mayor, the City Manager, the Assistant City Manager, the Administrative Services Director, the Chief Financial Officer and any other officer of the City authorized by resolution of the City Council to act on behalf of the City with respect to this Resolution and the Bonds.

“Closing Date” means the date upon which there is a delivery of the Bonds in exchange for the amount representing the purchase price of the Bonds by the Original Purchaser.

“Continuing Disclosure Certificate” means the Continuing Disclosure Certificate or similar disclosure document related to the Bonds to be executed and delivered by a City Representative on the Closing Date.

“Costs of Issuance” means all items of expense directly or indirectly payable by or reimbursable to the City and related to the authorization, issuance, sale and delivery of the Bonds, including but not limited to the costs of preparation and reproduction of documents, printing expenses, filing and recording fees, initial fees and charges of the Paying Agent and its counsel, legal fees and charges, fees and disbursements of consultants and professionals,

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3 rating agency fees, fees and charges for the preparation, execution and safekeeping of the Bonds, and any other cost, charge or fee in connection with the original issuance of the Bonds.

“County” means the County of San Mateo, a political subdivision of the State of California, duly organized and existing under the Constitution and laws of the State of California.

“Debt Service Fund” means the account established and held by the City under Section

4.03. “Depository” means (a) initially, DTC, and (b) any other Securities Depository acting as Depository under Section 2.09.

“Depository System Participant” means any participant in the Depository’s book-entry system.

“DTC” means The Depository Trust Company, and its successors and assigns.

“Federal Securities” means United States Treasury notes, bonds, bills or certificates of indebtedness, or any other obligations the timely payment of which is directly or indirectly guaranteed by the faith and credit of the United States of America.

“Interest Payment Date” means March 1, 2027, and each succeeding September 1 and March 1 while the Bonds are Outstanding, or such other dates determined by a City Representative in connection with the pricing of the Bonds.

“Official Notice of Sale” means the Official Notice of Sale, including any amendment or supplement thereto, related to the Bonds.

“Original Purchaser” means the original purchaser of the Bonds from the City, in accordance with Section 3.01.

“Outstanding,” when used as of any particular time with reference to Bonds, means all Bonds except: (a) Bonds theretofore canceled by the Paying Agent or surrendered to the Paying Agent for cancellation; (b) Bonds paid or deemed to have been paid within the meaning of Section 9.02; and (c) Bonds in lieu of or in substitution for which other Bonds shall have been authorized, executed, issued and delivered by the City under this Resolution.

“Paying Agent” means U.S. Bank Trust Company, National Association, as the initial paying agent, registrar and authenticating agent for the Bonds, its successors and assigns, and any other corporation or association which may at any time be substituted in its place, as provided in Section 6.01.

“Principal Office” means the office or offices of the Paying Agent for the payment of the Bonds, as such office or offices shall be identified in a written notice filed with the City by the Paying Agent.

“Project Fund” means the fund established and held by the City under Section 4.02.

“Record Date” means the 15th day of the month preceding an Interest Payment Date, whether or not such day is a business day.

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4 “Registration Books” means the records maintained by the Paying Agent for the registration of ownership and registration of transfer of the Bonds under Section 2.08.

“Resolution” means this Resolution, as originally adopted by the City Council, and including all amendments hereto and supplements hereof which are duly adopted by the City Council from time to time in accordance herewith.

“Securities Depositories” means DTC; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other securities depositories as the City may designate.

“Supplemental Resolution” means any resolution supplemental to or amendatory of this Resolution, adopted by the City Council in accordance with Article VIII.

“Tax Code” means the Internal Revenue Code of 1986 as in effect on the Closing Date or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the Closing Date, together with applicable, temporary and final regulations promulgated, and applicable official public guidance published, under said Code.

“Written Request of the City” means an instrument in writing signed by a City Representative or by any other officer of the City duly authorized to act on behalf of the City under a written certificate of a City Representative.

S
ECTION 1.02. Interpretation.

(a) Unless the context otherwise indicates, words expressed in the singular shall include the plural and vice versa and the use of the neuter, masculine, or feminine gender is for convenience only and shall be deemed to include the neuter, masculine or feminine gender, as appropriate.

(b) Headings of articles and sections herein and the table of contents hereof are solely for convenience of reference, do not constitute a part hereof and shall not affect the meaning, construction or effect hereof.

(c) All references herein to “Articles,” “Sections” and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Resolution; the words “herein,” “hereof,” “hereby,” “hereunder” and other words of similar import refer to this Resolution as a whole and not to any particular Article, Section or subdivision hereof.

S
ECTION 1.03. Authority for this Resolution; Findings. This Resolution is entered into under the provisions of the Bond Law. It is hereby certified that all of the things, conditions and acts required to exist, to have happened or to have been performed precedent to and in the issuance of the Bonds do exist, have happened or have been performed in due and regular time and manner as required by the laws of the State of California, and that the amount of the Bonds, together with all other indebtedness of the City, does not exceed any limit prescribed by any laws of the State of California.

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5 ARTICLE II

THE BONDS

SECTION 2.01. Authorization. Bonds in the aggregate original principal amount of not to exceed $37,000,000 are hereby authorized by the City to be issued by the City under and subject to the terms of the Bond Law and this Resolution, for the purpose of raising money to finance the acquisition and improvement of City facilities, as provided in the Bond Measure, and to pay costs of issuance and capitalized interest related thereto. This Resolution constitutes a continuing agreement between the City and the Owners of all of the Bonds issued or to be issued hereunder and then Outstanding to secure the full and final payment of principal of and interest and redemption premium, if any, on all Bonds which may be Outstanding hereunder, subject to the covenants, agreements, provisions and conditions herein contained.

SECTION 2.02. Terms of Bonds.

(a) Principal Amount of Bonds. The Bonds are authorized to be issued in the aggregate principal amount of not to exceed $37,000,000.

(b) Form; Numbering. The Bonds will be issued in fully registered form, without coupons, in authorized denominations of $5,000 each or any integral multiple thereof. The Bonds will be lettered and numbered as the Paying Agent prescribes.

(c) Date of Bonds. The Bonds will be dated as of the Closing Date.

(d) CUSIP Identification Numbers. Unless the Bonds are sold via private placement, “CUSIP” identification numbers will be imprinted on the Bonds, but such numbers do not constitute a part of the contract evidenced by the Bonds and no error or omission with respect thereto will constitute cause for refusal of the Original Purchaser to accept delivery of and pay for the Bonds. In addition, failure on the part of the City to use such CUSIP numbers in any notice to Owners of the Bonds will not constitute an event of default or any violation of the City’s contract with such Owners and will not impair the effectiveness of any such notice.

(e) Determination of Maturities and Interest Rates. The Bonds shall mature (or, alternatively, be subject to mandatory sinking fund redemption as hereinafter provided) on September 1 in each year, or such other date as determined upon the sale thereof via public offering or private sale in accordance with Section 3.01. The exact principal amount of the Bonds maturing on September 1 in each year shall be determined upon the sale of the Bonds.

Each Bond will bear interest at the respective rates to be determined upon the sale of the Bonds in accordance with Article III. Interest on the Bonds is payable from the Interest Payment Date next preceding the date of authentication thereof unless:

• a Bond is authenticated as of an Interest Payment Date, in which event it will bear interest from such date,

• a Bond is authenticated prior to an Interest Payment Date and after the close of business on the preceding Record Date, in which event it will bear interest from such Interest Payment Date,

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6 • a Bond is authenticated on or before the first Record Date, in which event it shall bear interest from the Closing Date, or

• at the time of authentication of a Bond, interest is in default thereon, in which event it will bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon.

(f) Manner of Payment. Interest on the Bonds (including the final interest payment upon maturity) is payable by check of the Paying Agent mailed to the Owner thereof at such Owner’s address as it appears on the Registration Books at the close of business on the preceding Record Date; except that at the written request of the Owner of at least $1,000,000 aggregate principal amount of the Bonds, which written request is on file with the Paying Agent as of any Record Date, interest on such Bonds shall be paid by wire transfer on the succeeding Interest Payment Date to an account in the United States of America as shall be specified in such written request. Principal of and redemption premium (if any) on the Bonds is payable in lawful money of the United States of America upon presentation and surrender at the Principal Office of the Paying Agent.

(g) Provisions of Bond Sale Documents to Control. Notwithstanding the foregoing provisions of this Section and the following provisions of Section 2.03, any of the terms of the Bonds may be established or modified in connection with the final pricing of the Bonds via public offering or private sale pursuant to Section 3.01. In the event of a conflict or inconsistency between this Resolution and the official notice of sale, term sheet or similar document pursuant to which the final pricing terms of the Bonds are set, the latter will be controlling.

SECTION 2.03. Redemption.

(a) Optional Redemption. The Bonds shall be subject to redemption prior to maturity, at the option of the City, in whole or in part among maturities on such basis as designated by the City and by lot within a maturity, from any available source of funds, on the dates and upon payment of a redemption price (equal to the principal amount of Bonds to be redeemed together with a redemption premium, if any) as determined upon the sale of the Bonds via public offering or private sale pursuant to Section 3.01.

(b) Mandatory Sinking Fund Redemption. If and to the extent specified in the official notice of sale, term sheet or similar document pursuant to which the final pricing terms of the Bonds are set, any maturities of the Bonds designated as “Term Bonds” shall be subject to mandatory sinking fund redemption on September 1 in each of the years and in the respective principal amounts set forth in such agreement, at a redemption price equal to 100% of the principal amount of the Bonds to be redeemed, in each case without premium, together with interest accrued thereon to the redemption date. If some but not all of the Term Bonds have been redeemed under the preceding subsection (a) of this Section, the aggregate principal amount of Term Bonds to be redeemed in each year under this subsection (b) shall be reduced on a pro rata basis or as determined by the City in integral multiples of $5,000, as designated in written notice filed by the City with the Paying Agent.

(c) Selection of Bonds for Redemption. Whenever less than all of the Outstanding Bonds of any one maturity are designated for redemption, the Paying Agent shall select the Outstanding Bonds of such maturity to be redeemed by lot in any manner deemed fair by the Paying Agent. For purposes of such selection, each Bond shall be deemed to consist of individual Bonds of $5,000 denominations which may be separately redeemed.

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7 (d) Redemption Procedure. The Paying Agent shall cause notice of any redemption to be mailed, first class mail, postage prepaid, at least 20 days but not more than 60 days prior to the date fixed for redemption, (i) to the Securities Depositories and the Electronic Municipal Market Access (EMMA) of the Municipal Securities Rulemaking Board, and (ii) to the respective Owners of any Bonds designated for redemption, at their addresses appearing on the Registration Books. Such mailing shall not be a condition precedent to such redemption and failure to mail or to receive any such notice shall not affect the validity of the proceedings for the redemption of Bonds. The City is entitled to send a redemption notice that declares that the redemption is conditional upon the availability of moneys to accomplish the redemption, and the City may rescind any notice of optional redemption of the Bonds by written notice to the Paying Agent on or prior to the date fixed for redemption, and the Paying Agent shall mail notice of such rescission of redemption in the same manner as the original notice of redemption was sent under this section. Any notice of redemption shall be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for redemption. The City and the Paying Agent shall have no liability to the Owners or any other party related to or arising from such rescission.

Such notice shall state the redemption date and the redemption price and, if less than all of the then Outstanding Bonds are to be called for redemption, shall designate the serial numbers of the Bonds to be redeemed by giving the individual number of each Bond or by stating that all Bonds between two stated numbers, both inclusive, or by stating that all of the Bonds of one or more maturities have been called for redemption, and shall require that such Bonds be then surrendered at the Principal Office of the Paying Agent for redemption at the said redemption price, giving notice also that further interest on such Bonds will not accrue from and after the redemption date.

Upon surrender of Bonds redeemed in part only, the City shall execute and the Paying Agent shall authenticate and deliver to the Owner, at the expense of the City, a new Bond or Bonds, of the same maturity and interest rate, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond or Bonds.

From and after the date fixed for redemption, if notice of such redemption has been duly given and funds available for the payment of the principal of and interest (and redemption premium, if any) on the Bonds so called for redemption have been duly provided, such Bonds so called will cease to be entitled to any benefit under this Resolution other than the right to receive payment of the redemption price, and no interest will accrue thereon on or after the redemption date specified in such notice. The Paying Agent shall cancel all Bonds redeemed under this Section 2.03, and shall submit to the City a certificate of cancellation.

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ECTION 2.04. Form of Bonds. The form of the Bonds, including the form of the Paying Agent’s Certificate of Authentication and the Form of Assignment to appear thereon, with necessary or appropriate variations, omissions and insertions, as permitted or required by this Resolution, are set forth in Appendix A attached hereto.

SECTION 2.05. Execution of Bonds. The Bonds shall be executed on behalf of the City by the facsimile signatures of its Mayor and City Clerk, or officials acting in those roles, who are in office on the date of adoption of this Resolution or at any time thereafter. If any officer whose signature appears on any Bond ceases to be such officer before delivery of the Bonds to the Original Purchaser, such signature will nevertheless be as effective as if the officer had remained in office until the delivery of the Bonds to the Original Purchaser. Any Bond may be

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8 signed and attested on behalf of the City by such persons as at the actual date of the execution of such Bond are the proper officers of the City although at the nominal date of such Bond any such person does not serve as such officer of the City.

Only those Bonds bearing a Certificate of Authentication in the form set forth in Appendix A attached hereto, executed and dated by the Paying Agent, will be valid or obligatory for any purpose or entitled to the benefits of this Resolution, and such Certificate of Authentication of the Paying Agent constitutes conclusive evidence that the Bonds so registered have been duly authenticated, registered and delivered hereunder and are entitled to the benefits of this Resolution.

SECTION 2.06. Transfer of Bonds. Any Bond may, in accordance with its terms, be transferred, upon the Registration Books, by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation at the Principal Office at the Paying Agent, accompanied by delivery of a written instrument of transfer in a form approved by the Paying Agent, duly executed. The City may charge a reasonable sum for each new Bond issued upon any transfer.

Whenever any Bond or Bonds is surrendered for transfer, the City shall execute and the Paying Agent shall authenticate and deliver a new Bond or Bonds, for like aggregate principal amount of the same maturity and interest rate.

SECTION 2.07. Exchange of Bonds. Bonds may be exchanged at the Principal Office of the Paying Agent for a like aggregate principal amount of Bonds of authorized denominations and of the same maturity and interest rate. The City may charge a reasonable sum for each new Bond issued upon any exchange.

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ECTION 2.08. Registration Books. The Paying Agent shall keep or cause to be kept sufficient books for the registration and transfer of the Bonds, which shall at all times be open to inspection by the City upon reasonable notice; and, upon presentation for such purpose, the Paying Agent shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said books, Bonds as herein before provided.

SECTION 2.09. Book-Entry System. Except as provided below or in the event of the Bonds are sold via private placement, DTC will be the Owner of all of the Bonds, and the Bonds will be registered in the name of Cede & Co. as nominee for DTC. The Bonds shall be initially executed and delivered in the form of a single fully registered Bond for each maturity date of the Bonds in the full aggregate principal amount of the Bonds maturing on such date. The Paying Agent and the City may treat DTC (or its nominee) as the sole and exclusive owner of the Bonds registered in its name for all purposes of this Resolution, and neither the Paying Agent nor the City shall be affected by any notice to the contrary. The Paying Agent and the City shall not have any responsibility or obligation to any Depository System Participant, any person claiming a beneficial ownership interest in the Bonds under or through DTC or a Depository System Participant, or any other person which is not shown on the register of the City as being an owner, with respect to the accuracy of any records maintained by DTC or any Depository System Participant or the payment by DTC or any Depository System Participant of any amount in respect of the principal or interest with respect to the Bonds. The City shall cause to be paid all principal and interest with respect to the Bonds only to DTC, and all such payments shall be valid and effective to fully satisfy and discharge the City’s obligations with respect to the principal and interest with respect to the Bonds to the extent of the sum or sums so paid.

Except under the conditions noted below, no person other than DTC shall receive a Bond.

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9 Upon delivery by DTC to the City of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., the term “Cede & Co.” in this Resolution shall refer to such new nominee of DTC.

If the City determines that it is in the best interest of the beneficial owners that they be able to obtain Bonds and delivers a written certificate to DTC to that effect, DTC shall notify the Depository System Participants of the availability through DTC of Bonds. In such event, the City shall issue, transfer and exchange Bonds as requested by DTC and any other owners in appropriate amounts. DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving notice to the City and discharging its responsibilities with respect thereto under applicable law. Under such circumstances (if there is no successor securities depository), the City shall be obligated to deliver Bonds as described in this Resolution. Whenever DTC requests the City to do so, the City will cooperate with DTC in taking appropriate action after reasonable notice to (a) make available one or more separate Bonds to any Depository System Participant having Bonds credited to its DTC account or (b) arrange for another securities depository or its agent to maintain custody of certificates evidencing the Bonds.

Notwithstanding any other provision of this Resolution to the contrary, so long as any Bond is registered in the name of Cede & Co., as nominee of DTC, all payments with respect to the principal and interest with respect to such Bond and all notices with respect to such Bond shall be made and given, respectively, to DTC as provided as in the representation letter delivered on the date of issuance of the Bonds.

SECTION 2.10. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond becomes mutilated the City, at the expense of the Owner of said Bond, shall execute, and the Paying Agent shall thereupon authenticate and deliver, a new Bond of like maturity, interest rate and principal amount in exchange and substitution for the Bond so mutilated, but only upon surrender to the Paying Agent of the Bond so mutilated. The Paying Agent shall cancel every mutilated Bond so surrendered to it. If any Bond is lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the City and, if such evidence is satisfactory to the City and the City receives satisfactory indemnity, the City, at the expense of the Owner, shall execute, and the Paying Agent shall thereupon authenticate and deliver, a new Bond of like maturity, interest rate and principal amount in lieu of and in substitution for the Bond so lost, destroyed or stolen.

The City may require payment of a sum not exceeding the actual cost of preparing each new Bond issued under this Section and of the expenses which may be incurred by the City and the Paying Agent. Any Bond issued under the provisions of this Section 2.10 in lieu of any Bond alleged to be lost, destroyed or stolen will constitute an original additional contractual obligation of the City whether or not the Bond so alleged to be lost, destroyed or stolen is at any time enforceable by anyone, and such Bond will be equally and proportionately entitled to the benefits of this Resolution with all other Bonds issued under this Resolution.

Notwithstanding any other provision of this Section 2.10, in lieu of delivering a new Bond for which principal has or is about to become due for a Bond which has been mutilated, lost, destroyed or stolen, the Paying Agent may make payment of such Bond in accordance with its terms.

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10 ARTICLE III

SALE OF BONDS

SECTION 3.01. Sale of Bonds. Pursuant to Section 53508.7 of the California Government Code, the Bonds shall be sold via public offering in a competitive sale pursuant to the Official Notice of Sale in substantially the form on file with the City Clerk, with such changes therein, deletions therefrom and modifications thereto as a City Representative may approve, such approval to be conclusively evidenced by the posting of the Official Notice of Sale; provided, however, that if a City Representative, working in consultation with the City’s municipal advisor, determines it would be more advantageous to the City for the Bonds to be sold via a public offering in a negotiated sale or via a private placement sale, the Bonds shall be sold in that manner; provided, further, however, that whether the Bonds are sold via public offering or private placement sale, the Bonds shall contain the following terms:

(i) the Bonds shall bear a rate of interest of not to exceed 12.00% per annum and the final maturity shall not exceed 40 years; and

(ii) the Original Purchaser’s discount (or placement agent’s fee) shall not exceed 1.0% of the principal amount of the Bonds.

In accordance with Sections 53508.7 and 53508.9 of the California Government Code, the Bonds may be sold via negotiated sale for the following reasons: (a) a negotiated sale provides more flexibility to choose the time and date of the sale, which is often advantageous in the municipal bond market; and (b) a negotiated sale provides time for underwriters to educate potential investors about the City and the Bonds with the goal of maximizing investor orders and reducing interest cost on the day of Bond pricing. The Bond Counsel for the sale shall be Jones Hall LLP, and the municipal advisor for the sale shall be Fieldman Rolapp & Associates. If a negotiated sale of the Bonds is chosen by a City Representative, the identity of the bond underwriter shall be disclosed at the public meeting of the City Council first occurring after the underwriter has been selected. Estimated costs associated with the issuance of the Bonds are set forth in the staff report accompanying this Resolution and incorporated herein.

Subject to the foregoing, the City Council hereby authorizes a City Representative to execute and deliver a term sheet, bond purchase agreement, and/or any other documents necessary or conducive to the chosen method of sale in the name, and on behalf, of the City.

As required pursuant to Section 53509.5 of the California Government Code, after the sale of the Bonds, the City Council will present actual cost information of the sale at its next scheduled public meeting and submit an itemized summary of the costs of the Bond sale to the California Debt and Investment Advisory Commission (CDIAC).

Notwithstanding the above, the City Council hereby authorizes a City Representative to enter into a bond purchase agreement between the City and an underwriter to be selected by a City Representative, if such City Representative determines that the sale of the Bonds by negotiated sale with such underwriter will result in a lower overall financing cost.

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ECTION 3.02. Official Statement. The City Council hereby approves and deems final within the meaning of Rule 15c2-12 of the Securities Exchange Act of 1934 (the “Rule”), the Preliminary Official Statement describing the Bonds in substantially the form on file with the City Clerk. A City Representative is hereby authorized to execute an appropriate certificate stating

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11 the City Council’s determination that the Preliminary Official Statement has been deemed final within the meaning of such Rule. Distribution of the Preliminary Official Statement in connection with the sale of the Bonds is hereby approved. Each City Representative is hereby authorized and directed to approve any changes in or additions to a final form of said Official Statement, and the execution thereof by a City Representative shall be conclusive evidence of the approval of any such changes and additions. The City Council hereby authorizes the distribution of the final Official Statement. The final Official Statement shall be executed in the name and on behalf of the City by a City Representative.

SECTION 3.03. Payment of Costs of Issuance. The City Council hereby authorizes a City Representative to execute on behalf of the City a costs of issuance custodian agreement or similar agreement with a custodian, which may be the Paying Agent, for the payment of costs of issuance of the Bonds. As provided in said agreement, amounts provided for payment of the costs of issuing the Bonds shall be deposited thereunder and the payment of costs shall be requisitioned by a City Representative in accordance with said agreement.

SECTION 3.04. Paying Agency Agreement. The City Council hereby authorizes a City Representative to execute, on behalf of the City, a paying agency / bond registrar agreement or similar agreement with the Paying Agent regarding its services related to the Bonds.

Section 3.05. Professional Services. The City Council hereby approves and confirms the engagement of Fieldman Rolapp & Associates, to act as the City’s municipal advisor in connection with the issuance and sale of the Bonds, Jones Hall LLP, to act as the City’s bond counsel and disclosure counsel in connection with the issuance of the Bonds, and U.S. Bank Trust Company, National Association, as Paying Agent.

ARTICLE IV

F

UNDS AND ACCOUNTS

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ECTION 4.01. Application of Proceeds of Sale of Bonds. On the Closing Date, the proceeds of sale of the Bonds shall be paid by the Original Purchaser to the City, and shall be applied on the Closing Date as follows: (a) the City shall cause to be transferred an amount required to pay the estimated Costs of Issuance to a custodian, to be held and administered in accordance with the agreement which is approved under Section 3.03; (b) after making the transfer described in the preceding clause (a), the City shall deposit in the Debt Service Fund an amount equal to the scheduled capitalized interest, if any, and any remaining original issue premium received by the City on the sale of the Bonds; and (c) the City shall deposit the remainder of such proceeds in the Project Fund.

SECTION 4.02. Project Fund. The City Council hereby establishes a special fund to be held by the City separate and apart from all other funds of the City, to be known as the Project Fund. The net proceeds from the sale of the Bonds, as described in Section 4.01(c), shall be deposited by the City in the Project Fund, and shall be expended by the City solely for the payment of the costs of acquisition or improvement of real property for which the Bond proceeds are authorized to be expended under the Bond Measure. All interest and other gain arising from the investment of amounts deposited to the Project Fund shall be retained in the Project Fund and used for the purposes thereof. Any amounts remaining on deposit in the Project Fund and not needed for the purposes thereof shall be withdrawn from the Project Fund and transferred to the Debt Service Fund, to be applied to pay the principal of, interest and redemption premium (if

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12 any) on the Bonds. Alternatively, the City may direct the County to hold the Project Fund whereupon the City may periodically withdraw from such fund for authorized costs.

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ECTION 4.03. Debt Service Fund. The City Council hereby establishes a special fund to be held by the City separate and apart from all other funds of the City, to be known as the Debt Service Fund. The amount of Bond proceeds deposited to pay capitalized interest, if any, on the Bonds pursuant to Section 4.01(b) and all taxes levied by the County, as directed by the City herein, for the payment of the principal of and interest on the Bonds in accordance with Section 5.03 shall be deposited in the Debt Service Fund by the City promptly upon receipt thereof. The Debt Service Fund is hereby pledged for the payment of the principal of and interest on the Bonds when and as the same become due. The City shall transfer amounts in the Debt Service Fund, to the extent necessary to pay the principal of and interest on the Bonds as the same become due and payable, to the Paying Agent as required to pay the principal of and interest on the Bonds. Alternatively, the City may in the future elect to direct the County to transfer the taxes levied for the Bonds, in whole or in part, directly to the Paying Agent for the purpose of making payments of principal of and interest on the Bonds.

If, after payment in full of the Bonds, any amounts remain on deposit in the Debt Service Fund, the City shall transfer such amounts to its general fund, to be applied solely in a manner which is consistent with the requirements of applicable state and federal tax law.

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ECTION 4.04. Investments. The City shall invest all moneys held in any of the funds or accounts established with it hereunder in accordance with the investment policies of the City, as such policies shall exist at the time of investment, and in accordance with Section 53601 of the California Government Code.

The City covenants that all investments of amounts deposited in any fund or account created by or under this Resolution, or otherwise containing proceeds of the Bonds, shall be acquired and disposed of at the Fair Market Value thereof. For purposes of this Section, the term “Fair Market Value” shall mean, with respect to any investment, the price at which a willing buyer would purchase such investment from a willing seller in a bona fide, arm’s length transaction (determined as of the date the contract to purchase or sell the investment becomes binding) if the investment is traded on an established securities market (within the meaning of Section 1273 of the Tax Code) and, otherwise, the term “Fair Market Value” means the acquisition price in a bona fide arm’s length transaction (as described above) if (i) the investment is a certificate of deposit that is acquired in accordance with applicable regulations under the Tax Code, (ii) the investment is an agreement with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate (for example, a guaranteed investment contract, a forward supply contract or other investment agreement) that is acquired in accordance with applicable regulations under the Tax Code, or (iii) the investment is a United States Treasury Security - State and Local Government Series that is acquired in accordance with applicable regulations of the United States Bureau of Public Debt.

ARTICLE V

OTHER COVENANTS OF THE CITY;

SECURITY FOR THE BONDS

SECTION 5.01. Punctual Payment. The City shall punctually pay, or cause to be paid, the principal of and interest on the Bonds, in strict conformity with the terms of the Bonds and of

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13 this Resolution, and shall faithfully observe and perform all of the conditions, covenants and requirements of this Resolution and of the Bonds. Nothing herein contained prevents the City from making advances of its own moneys howsoever derived to any of the uses or purposes permitted by law.

SECTION 5.02. Extension of Time for Payment. In order to prevent any accumulation of claims for interest after maturity, the City will not, directly or indirectly, extend or consent to the extension of the time for the payment of any claim for interest on any of the Bonds and will not, directly or indirectly, approve any such arrangement by purchasing or funding said claims for interest or in any other manner.

SECTION 5.03. Security for the Bonds. The Bonds are general obligations of the City and the City has the power, is obligated and hereby covenants to levy ad valorem taxes upon all property within the City subject to taxation by the City, without limitation of rate or amount, for the payment of the Bonds and the interest thereon, in accordance with the Bond Law and Section 43632 of the California Government Code. Amounts in the general fund of the City are not pledged to the payment of the Bonds. However, nothing herein limits the ability of the City to provide for payment of the principal of and interest on the Bonds from any source of legally available funds of the City. Any amounts so advanced by the City from legally available funds may be reimbursed from ad valorem property taxes subsequently collected under this Section

5.03. SECTION 5.04. Books and Accounts; Financial Statement. The City will keep, or cause to be kept, proper books of record and accounts, separate from all other records and accounts of the City in which complete and correct entries are made of all transactions relating to the Bonds. Such books of record and accounts shall at all times during business hours be subject to the inspection of the Paying Agent and the Owners of not less than 10% in aggregate principal amount of the Bonds then Outstanding, or their representatives authorized in writing.

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ECTION 5.05. Protection of Security and Rights of Bondowners. The City will preserve and protect the security of the Bonds and the rights of the Bondowners, and will warrant and defend their rights against all claims and demands of all persons. From and after the sale and delivery of any of the Bonds by the City, the City may not contest the authorization, issuance, sale or repayment of the Bonds.

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ECTION 5.06. Tax Covenants.

(a) Private Activity Bond Limitation. The City shall assure that the proceeds of the Bonds are not so used as to cause the Bonds to satisfy the private business tests of Section 141(b) of the Tax Code or the private loan financing test of Section 141(c) of the Tax Code.

(b) Federal Guarantee Prohibition. The City shall not take any action or permit or suffer any action to be taken if the result of the same would be to cause any of the Bonds to be “federally guaranteed” within the meaning of Section 149(b) of the Tax Code.

(c) No Arbitrage. The City shall not take, or permit or suffer to be taken by the Paying Agent or otherwise, any action with respect to the proceeds of the Bonds which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the Closing Date would have caused the Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Tax Code.

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14 (d) Maintenance of Tax-Exemption. The City shall take all actions necessary to assure the exclusion of interest on the Bonds from the gross income of the Owners of the Bonds to the same extent as such interest is permitted to be excluded from gross income under the Tax Code as in effect on the Closing Date.

(e) Rebate of Excess Investment Earnings to United States. The City shall calculate or cause to be calculated excess investment earnings with respect to the Bonds which are required to be rebated to the United States of America under Section 148(f) of the Tax Code, and shall pay the full amount of such excess investment earnings to the United States of America in such amounts, at such times and in such manner as may be required under the Tax Code, if and to the extent such Section 148(f) is applicable to the Bonds. Such payments shall be made by the City from any source of legally available funds of the City. The City shall keep or cause to be kept, and retain or cause to be retained for a period of six years following the retirement of the Bonds, records of the determinations made under this subsection (e). In order to provide for the administration of this subsection (e), the City may provide for the employment of independent attorneys, accountants and consultants compensated on such reasonable basis as the City may deem appropriate.

SECTION 5.07. Continuing Disclosure. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate, which a City Representative is hereby authorized and directed to execute and deliver on the Closing Date. Notwithstanding any other provision of this Resolution, failure of the City to comply with the Continuing Disclosure Certificate will not be considered a default by the City hereunder or under the Bonds; however, any Participating Underwriter (as such term is defined in the Continuing Disclosure Certificate) or any holder or beneficial owner of the Bonds may, take such actions as may be necessary and appropriate to compel performance, including seeking mandamus or specific performance by court order. The City Council hereby authorizes a City Representative to execute and deliver the final form of the Continuing Disclosure Certificate in the name and on behalf of the City.

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ECTION 5.08. CDIAC Annual Reporting. The City hereby covenants and agrees that it will comply with the provisions of California Government Code Section 8855 subdivision (k) with respect to annual reporting to the California Debt and Investment Advisory Commission. Said reporting will occur at the times and include the types of information as set forth therein.

Notwithstanding any other provision of this Resolution, failure of the City to comply with said reporting does not constitute a default by the City hereunder or under the Bonds.

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ECTION 5.09. Further Assurances. The City will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Resolution, and for the better assuring and confirming unto the Owners of the Bonds of the rights and benefits provided in this Resolution.

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15 ARTICLE VI

THE PAYING AGENT

SECTION 6.01. Appointment of Paying Agent. U.S. Bank Trust Company, National Association is hereby appointed to act as Paying Agent for the Bonds. The Paying Agent undertakes to perform such duties, and only such duties, as are specifically set forth in this Resolution, and even during the continuance of an event of default with respect to the Bonds, no implied covenants or obligations shall be read into this Resolution against the Paying Agent.

The Paying Agent shall signify its acceptance of the duties and obligations imposed upon it by this Resolution by executing and delivering to the City a certificate to that effect.

The City may remove the Paying Agent initially appointed, and any successor thereto, and may appoint a successor or successors thereto, but any such successor shall be a bank or trust company doing business and having an office in the State of California, having a combined capital (exclusive of borrowed capital) and surplus of at least $50,000,000, and subject to supervision or examination by federal or state authority. If such bank or trust company publishes a report of condition at least annually, under law or under the requirements of any supervising or examining authority above referred to, then for the purposes of this Section 6.01 the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.

The Paying Agent may at any time resign by giving written notice to the City and the Bondowners of such resignation. Upon receiving notice of such resignation, the City shall promptly appoint a successor Paying Agent by an instrument in writing. Any resignation or removal of the Paying Agent and appointment of a successor Paying Agent becomes effective upon acceptance of appointment by the successor Paying Agent. If no successor Paying Agent has been appointed and accepted appointment within 60 days following giving notice of removal or notice of resignation as aforesaid, the resigning Paying Agent, at the expense of the City, or any Bondowner (on behalf of such Bondowner and all other Bondowners) may petition any federal or state court for the appointment of a successor Paying Agent, and such court may thereupon, after such notice (if any) as it may deem proper, appoint such successor Paying Agent. Any successor Paying Agent appointed under this Indenture shall signify its acceptance of such appointment by executing and delivering to the City and to its predecessor Paying Agent a written acceptance thereof, and to the predecessor Paying Agent an instrument indemnifying the predecessor Paying Agent for any costs or claims arising during the time the successor Paying Agent serves as Paying Agent hereunder, and such successor Paying Agent, without any further act, deed or conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Paying Agent, with like effect as if originally named Paying Agent herein; but, nevertheless, upon the receipt by the predecessor Paying Agent of a request of the City or the request of the successor Paying Agent, such predecessor Paying Agent shall execute and deliver any and all instruments of conveyance or further assurance and do such other things as may reasonably be required for more fully and certainly vesting in and confirming to such successor Paying Agent all the right, title and interest of such predecessor Paying Agent in and to any property held by it under this Indenture and shall pay over, transfer, assign and deliver to the successor Paying Agent any money or other property subject to the conditions herein set forth. Upon request of the successor Paying Agent, the City will execute and deliver any and all instruments as may be reasonably required for more fully and certainly vesting in and confirming to such successor Paying Agent all such moneys, estates, properties, rights, powers, duties and obligations. Upon acceptance of appointment by a successor Paying Agent as provided in this paragraph, the City

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16 will mail or cause the successor Paying Agent to mail, by first class mail postage prepaid, a notice of the succession of such Paying Agent to the duties hereunder to each rating agency which then maintains a rating on the Bonds and to the Bondowners at the addresses shown on the Registration Books. If the City fails to mail such notice within 15 days after acceptance of appointment by the successor Paying Agent, the successor Paying Agent shall cause such notice to be mailed at the expense of the City.

Any bank, national association, federal savings association, or trust company into which the Paying Agent may be merged or converted or with which it may be consolidated or any bank, national association, federal savings association, or trust company resulting from any merger, conversion or consolidation to which it shall be a party or any bank, national association, federal savings association, or trust company to which the Paying Agent may sell or transfer all or substantially all of its corporate trust business, provided such bank, federal savings association, or trust company shall be eligible as described in this Section 6.01 shall be the successor to such Paying Agent, without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding.

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ECTION 6.02. Paying Agent May Hold Bonds. The Paying Agent may become the Owner of any of the Bonds in its own or any other capacity with the same rights it would have if it were not Paying Agent.

SECTION 6.03. Liability of Paying Agent. The recitals of facts, covenants and agreements herein and in the Bonds contained shall be taken as statements, covenants and agreements of the City, and the Paying Agent assumes no responsibility for the correctness of the same, nor makes any representations as to the validity or sufficiency of this Resolution or of the Bonds, nor shall incur any responsibility in respect thereof, other than as set forth in this Resolution. The Paying Agent is not liable in connection with the performance of its duties hereunder, except for its own negligence or willful default.

In the absence of bad faith, the Paying Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Paying Agent and conforming to the requirements of this Resolution.

The Paying Agent has no liability for any error of judgment made in good faith by a responsible officer of its corporate trust department in the absence of the negligence of the Paying Agent.

No provision of this Resolution requires the Paying Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it has reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

The Paying Agent may execute any of the powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Paying Agent is not responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder.

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ECTION 6.04. Notice to Paying Agent. The Paying Agent may rely and shall be protected in acting or refraining from acting upon any notice, resolution, request, consent, order, certificate, report, warrant, bond or other paper or document believed by it to be genuine and to

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17 have been signed or presented by the proper party or proper parties. The Paying Agent may consult with counsel, who may be counsel to the City, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith.

Whenever in the administration of its duties under this Resolution the Paying Agent deems it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of bad faith on the part of the Paying Agent, be deemed to be conclusively proved and established by a certificate of the City, and such certificate will be full warrant to the Paying Agent for any action taken or suffered under the provisions of this Resolution upon the faith thereof, but in its discretion the Paying Agent may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may deem reasonable.

SECTION 6.05. Compensation; Indemnification. The City will pay to the Paying Agent from time to time reasonable compensation for all services rendered under this Resolution, and also all reasonable expenses, charges, counsel fees and other disbursements, including those of their attorneys, agents and employees, incurred in and about the performance of their powers and duties under this Resolution. The City further agrees to indemnify the Paying Agent against any liabilities which it may incur in the exercise and performance of its powers and duties hereunder which are not due to its negligence or bad faith.

ARTICLE VII

R

EMEDIES OF BONDOWNERS

SECTION 7.01. Remedies of Bondowners. Upon the happening and continuation of any default by the City hereunder or under the Bonds, any Bondowner has the right, for the equal benefit and protection of all Bondowners similarly situated:

(a) by mandamus, suit, action or proceeding, to compel the City and its members, officers, agents or employees to perform each and every term, provision and covenant contained in this Resolution and in the Bonds, and to require the carrying out of any or all such covenants and agreements of the City and the fulfillment of all duties imposed upon it;

(b) by suit, action or proceeding in equity, to enjoin any acts or things which are unlawful, or the violation of any of the Bondowners’ rights; or

(c) by suit, action or proceeding in any court of competent jurisdiction, to require the City and its members and employees to account as if it and they were the trustees of an express trust.

S
ECTION 7.02. Remedies Not Exclusive. No remedy herein conferred upon the Owners of Bonds is exclusive of any other remedy. Each remedy is cumulative and shall be in addition to every other remedy given hereunder or thereafter conferred on the Bondowners.

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18 ARTICLE VIII

AMENDMENT OF THIS RESOLUTION

SECTION 8.01. Amendments Effective Without Consent of the Owners. For any one or more of the following purposes and at any time or from time to time, the City Council may by Supplemental Resolution amend this Resolution in whole or in part, without the consent of any of the Bondowners:

(a) to add to the covenants and agreements of the City in this Resolution, other covenants and agreements to be observed by the City which are not contrary to or inconsistent with this Resolution as theretofore in effect;

(b) to confirm, as further assurance, any pledge under, and to subject to any lien or pledge created or to be created by, this Resolution, of any moneys, securities or funds, or to establish any additional funds or accounts to be held under this Resolution;

(c) to cure any ambiguity, supply any omission, substitute any party or cure or correct any defect or inconsistent provision in this Resolution, which in any event does not materially adversely affect the interests of the Bondowners, in the opinion of Bond Counsel filed with the City; or

(d) if applicable, to make such additions, deletions or modifications as may be necessary to assure compliance with the applicable provisions of the Tax Code relating to the rebate of excess investment earnings to the United States or otherwise as may be necessary to assure that the interest on the Bonds remains excludable from gross income of the Owners thereof for federal income tax purposes, in the opinion of Bond Counsel filed with the City.

S
ECTION 8.02. Amendments Effective With Consent to the Owners. Any modification or amendment of this Resolution and of the rights and obligations of the City and of the Owners of the Bonds, in any particular, may be made by a Supplemental Resolution, with the written consent of the Owners of a majority in aggregate principal amount of the Bonds Outstanding at the time such consent is given. Without the consent of the Owners of all affected Bonds, no such modification or amendment may (a) change the maturity of the principal of any Bonds or any interest payable thereon, (b) reduce the principal amount of the Bonds or the rate of interest thereon, (c) reduce the percentage of Bonds the consent of the Owners of which is required to effect any such modification or amendment, (d) change any of the provisions in Section 7.01 relating to a default by the City hereunder or under the Bonds, (e) reduce the amount of moneys pledged for the repayment of the Bonds. Without the consent of the Paying Agent, no such modification or amendment may change or modify any of the rights or obligations of the Paying Agent.

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19 ARTICLE IX

MISCELLANEOUS

SECTION 9.01. Benefits of Resolution Limited to Parties. Nothing in this Resolution, expressed or implied, is intended to give to any person other than the City, the Paying Agent and the Owners of the Bonds, any right, remedy, claim under or by reason of this Resolution.

Any covenants, stipulations, promises or agreements in this Resolution contained by and on behalf of the City shall be for the sole and exclusive benefit of the Owners of the Bonds.

S
ECTION 9.02. Defeasance.

(a) Discharge of Resolution. Bonds may be paid by the City, in whole or in part, in any of the following ways provided that the City also pays or causes to be paid any other sums payable hereunder by the City:

(i) by paying or causing to be paid the principal of and interest on such Bonds, as and when the same become due and payable;

(ii) by irrevocably depositing, in trust, at or before maturity, money or securities in the necessary amount to pay such Bonds as provided in Section 9.02(c); or

(iii) by delivering such Bonds to the Paying Agent for cancellation by it.

If the City pays all Outstanding Bonds and also pays or causes to be paid all other sums payable hereunder by the City, then and in that case, at the election of the City (evidenced by a certificate of a City Representative filed with the Paying Agent, signifying the intention of the City to discharge all such indebtedness and this Resolution), and notwithstanding that any Bonds have not been surrendered for payment, this Resolution, all taxes and other assets pledged under this Resolution and all covenants, agreements and other obligations of the City under this Resolution shall cease, terminate, become void and be completely discharged and satisfied, except only as provided in Section 9.02(b). In such event, upon request of the City, the Paying Agent shall cause an accounting for such period or periods as may be requested by the City to be prepared and filed with the City and shall execute and deliver to the City all such instruments as may be necessary to evidence such discharge and satisfaction, and the Paying Agent shall pay over, transfer, assign or deliver to the City all moneys or securities or other property held by it under this Resolution which are not required for the payment of Bonds not theretofore surrendered for such payment.

(b) Discharge of Liability on Bonds. Upon the deposit, in trust, at or before maturity, of money and/or securities in the necessary amount to pay any Outstanding Bond Bonds as provided in Section 9.02(c), then all liability of the City in respect of such Bonds will cease and be completely discharged, except only that thereafter the Owner thereof is entitled only to payment of the principal of and interest and redemption premium (if any) on such Bond by the City, and the City remains liable for such payment, but only out of such money or securities deposited with the Paying Agent as aforesaid for such payment, provided further, however, that the provisions of Section 9.02(d) apply in all events.

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20 The City may at any time surrender to the Paying Agent for cancellation by it any Bonds previously issued and delivered, which the City acquires in any manner whatsoever, and such Bonds, upon such surrender and cancellation, will be deemed paid and retired.

(c) Deposit of Money or Securities with Paying Agent. Whenever in this Resolution it is provided or permitted that there be deposited with or held in trust by the Paying Agent money or securities in the necessary amount to pay any Bonds, the money or securities so to be deposited or held may include money or securities held by the Paying Agent in the funds and accounts established under this Resolution and must be:

(i) lawful money of the United States of America in an amount equal to the principal amount of such Bonds and all unpaid interest thereon to maturity; or

(ii) Federal Securities the principal of and interest on which when due, in the opinion of a certified public accountant delivered to the City, will provide money sufficient to pay the principal of and all unpaid interest and redemption premium (if any) to maturity on the Bonds to be paid, as such principal and interest become due.

(d) Payment of Bonds After Discharge of Resolution. Notwithstanding any provisions of this Resolution, any moneys held by the Paying Agent in trust for the payment of the principal of, or interest and redemption premium (if any) on, any Bonds and remaining unclaimed for two years after the principal of all of the Bonds has become due and payable, if such moneys were so held at such date, or two years after the date of deposit of such moneys if deposited after said date when all of the Bonds became due and payable, shall, upon request of the City, be repaid to the City free from the trusts created by this Resolution, and all liability of the Paying Agent with respect to such moneys shall thereupon cease. Before the repayment of such moneys to the City as aforesaid, the Paying Agent may (at the cost of the City) first mail to the Owners of all Bonds which have not been paid at the addresses shown on the Registration Books a notice in such form as may be deemed appropriate by the Paying Agent, with respect to the Bonds so payable and not presented and with respect to the provisions relating to the repayment to the City of the moneys held for the payment thereof.

S
ECTION 9.03. Execution of Documents and Proof of Ownership by Bondowners. Any request, declaration or other instrument which this Resolution may require or permit to be executed by Bondowners may be in one or more instruments of similar tenor, and shall be executed by Bondowners in person or by their attorneys appointed in writing.

Except as otherwise herein expressly provided, the fact and date of the execution by any Bondowner or their attorney of such request, declaration or other instrument, or of such writing appointing such attorney, may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state in which he purports to act, that the person signing such request, declaration or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such notary public or other officer.

Except as otherwise herein expressly provided, the ownership of registered Bonds and the amount, maturity, number and date of holding the same are proved by the Registration Books.

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21 Any request, declaration or other instrument or writing of the Owner of any Bond binds all future Owners of such Bond in respect of anything done or suffered to be done by the City or the Paying Agent in good faith and in accordance therewith.

SECTION 9.04. Waiver of Personal Liability. No City Council member, officer, agent or employee of the City has any individual or personal liability for the payment of the principal of or interest and redemption premium (if any) on the Bonds. Nothing herein contained relieves any City Council member, officer, agent or employee from the performance of any official duty provided by law.

S
ECTION 9.05. Destruction of Canceled Bonds. Whenever in this Resolution provision is made for the surrender to the City of any Bonds which have been paid or canceled under the provisions of this Resolution, a certificate of destruction duly executed by the Paying Agent constitutes the equivalent of the surrender of such canceled Bonds and the City is entitled to rely upon any statement of fact contained in any certificate with respect to the destruction of any such Bonds therein referred to.

S
ECTION 9.06. Partial Invalidity. If any section, paragraph, sentence, clause or phrase of this Resolution is for any reason held illegal or unenforceable, such holding will not affect the validity of the remaining portions of this Resolution. The City hereby declares that it would have adopted this Resolution and each and every other section, paragraph, sentence, clause or phrase hereof and authorized the issue of the Bonds pursuant hereto irrespective of the fact that any one or more sections, paragraphs, sentences, clauses, or phrases of this Resolution may be held illegal, invalid or unenforceable.

S
ECTION 9.07. Execution of Documents. Each City Representative, and any and all other officers of the City, are each authorized and directed in the name and on behalf of the City to make any and all certificates, requisitions, agreements, notices, consents, warrants and other documents, which they or any of them might deem necessary or appropriate in order to consummate the lawful issuance, sale and delivery of the Bonds, including an agreement for paying agent services. Whenever in this Resolution any officer of the City is authorized to execute or countersign any document or take any action, such execution, countersigning or action may be taken on behalf of such officer by any person designated by such officer to act on his or her behalf in the case such officer shall be absent or unavailable.

S
ECTION 9.08. Effective Date of Resolution. This Resolution becomes effective upon the date of its passage and adoption.

---oOo---

I hereby certify that foregoing Resolution No. 2026 - ___ was introduced and adopted by the San Bruno City Council at a regular meeting on July 14, 2026, by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:
_________________________________
Lupita Huerta, City Clerk

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APPENDIX A

FORM OF BOND

REGISTERED BOND NO. R-___ ***$______________***

CITY OF SAN BRUNO
(SAN MATEO COUNTY, CALIFORNIA)
2026 GENERAL OBLIGATION BOND

INTEREST RATE: MATURITY DATE: DATED DATE: CUSIP:
___% per annum September 1, 20__ ________, 2026 _____

REGISTERED OWNER: CEDE & CO.

PRINCIPAL AMOUNT: _________________________________________ DOLLARS

The CITY OF SAN BRUNO, a general law city and municipal corporation duly organized and existing under the Constitution and laws of the State of California (the “City”), for value received, hereby promises to pay to the Registered Owner named above, or registered assigns, the Principal Amount set forth above on the Maturity Date set fo rth above, together with interest thereon at the Interest Rate set forth above, calculated on a 30/360 day basis, until the Principal Amount hereof is paid or provided for, such interest to be paid on March 1 and September 1 of each year, commencing March 1, 2027 (the “Interest Payment Dates”). This Bond will bear interest from the Interest Payment Date next preceding the date of authentication hereof, unless (a) it is authenticated as of a business day following the 15th day of the month immediately preceding any Interest Payment Date and on or before such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (b) it is authenticated on or before February 15, 2027, in which event it shall bear interest from the Dated Date set forth above.

Principal, interest and redemption premium (if any) are payable in lawful money of the United States of America to the person in whose name this Bond is registered (the “Registered Owner”) on the Registration Books maintained by t he Paying Agent, initially U.S. Bank Trust Company, National Association. Principal hereof and any redemption premium hereon are payable upon presentation and surrender of this Bond at the principal corporate trust office of the Paying Agent. The first principal payment date shall be September 1, 2027. Interest hereon is payable by check mailed by the Paying Agent on each Interest Payment Date to the Registered Owner of this Bond by first -class mail at the address appearing on the Registration Books at t he close of business on the 15th day of the calendar month next preceding such Interest Payment Date (the “Record Date”); provided, however, that at the written request of the registered owner of Bonds in an aggregate principal amount of at least $1,000,000, which written request is on file with the Paying Agent prior to any Record Date, interest on such Bonds shall be paid on each succeeding Interest Payment Date by wire transfer in immediately available funds

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to such account of a financial institution wit hin the United States of America as shall be specified in such written request.

This Bond is one of a series of $____________ aggregate principal amount of bonds (collectively, the “Bonds”) issued for the purpose of raising money to finance the acquisition and improvement of City facilities and related costs, [fund capitalized interest], and pay costs of issuance of the Bonds. The Bonds have been issued under authority of and under the laws of the State of California, and the requisite two- thirds vote of the electors of the City cast at an election held on November 5, 2024, upon the question of issuing bonds in the aggregate principal amount of $102,000,000, the Bond Law, and a resolution of the City Council of the City adopted on ___________, 2026 (the “Bond Resolution”). Capitalized terms used but not defined herein are defined in the Bond Resolution.

The Bonds are payable as to both principal and interest from the proceeds of the levy of ad valorem taxes on all property subject to such taxes in the City, which taxes are unlimited as to rate or amount (except certain personal property that is taxable at limited rates).

The principal of and interest and redemption premium, if any, on this Bond do not constitute a debt of the County, the State of California, or any of its political subdivisions other than the City, or any of the officers, agents and employees thereof, and neither the County, the State of California, any of its political subdivisions other than the City, nor any of the officers, agents and employees thereof shall be liable hereon. In no event shall the principal of and interest and redemption premium, if any, on this Bond be payable out of any funds or properties of the City other than ad valorem taxes levied upon all taxable property in the City.

The Bonds are issuable only as fully registered bonds in the denominations of $5,000 or any integral multiple thereof. This Bond is exchangeable and transferable for bonds of other authorized denominations at the principal corporate trust office of the Paying Agent, by the Registered Owner or by a person legally empowered to do so, upon presentation and surrender hereof to the Paying Agent, together with a request for exchange or an assignment signed by the Registered Owner or by a person legally empowered to do so, in a form satisfactory to the Paying Agent, all subject to the terms, limitations and conditions provided in the Bond Resolution. Any tax or governmental charges shall be paid by the transferor. The City and the Paying Agent may deem and treat the Registered Owner as the absolute owner of this Bond for the purpose of receiving payment of or on account of principal or interest and redemption premium (if any) and for all other purposes, and neither the City nor the Paying Agent shall be affected by any notice to the contrary.

The Bonds maturing on or before September 1, ____, are not subject to redemption prior to their respective stated maturities. The Bonds maturing on or after September 1, ____, are subject to redemption prior to maturity, at the option of the City, in whole or in part among maturities on such basis as designated by the City and by lot within a maturity, from any available source of funds, on September 1, ____, and on any date thereafter, at a redemption price equal to 100% of the principal amount of Bonds to be redeemed together with accrued interest thereon to the date fixed for redemption, without premium.

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The Bonds maturing on September 1, 20__, September 1, 20__ and September 1, 20__ (the “ Term Bonds”) are subject to redemption prior to their stated maturity date, without a redemption premium, in part by lot, from mandatory sinking fund payments on each September 1, on and after September 1, 20__ in the principal amounts as set forth in the following tables:

$_________ Term Bond Due September 1, 20__

Payment Date
(September 1)
Payment
Amount

$_________ Term Bond Due September 1, 20__

Payment Date
(September 1)
Payment
Amount

$_________ Term Bond Due September 1, 20__

Payment Date
(September 1)
Payment
Amount

The Paying Agent shall give notice of the redemption of the Bonds at the expense of the City. Such notice shall specify: (a) that the Bonds or a designated portion thereof are to be redeemed, (b) the CUSIP numbers of the Bonds to be redeemed, (c) the date of notice and the date of redemption, (d) the place or places where the redemption will be made, and (e) descriptive information regarding the Bonds including the dated date, interest rate and stated maturity date. Such notice shall further state that on the specified date there shall become due and payable upon each Bond to be redeemed, the portion of the principal amount of such Bond to be redeemed, together with interest accrued to said date, the redemption premium, if any, and that from and after such date interest with respect thereto shall cease to accrue and be payable.

Notice of any redemption of Bonds shall be mailed by first class mail, postage prepaid, at least 20 days but not more than 60 days prior to the date fixed for redemption, to the respective Owners of any Bonds designated for redemption, at their addresses appearing on the Registration Books maintained by the Paying Agent; but such mailing shall not be a condition precedent to such redemption and failure to mail or to receive any such notice shall not affect the validity of the proceedings for the redemption of such Bonds or the cessation of accrual of interest thereon from and after the redemption date.

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The City may provide conditional notices of optional redemption, and the City is entitled to rescind any notice of optional redemption of the Bonds by written notice to the Paying Agent on or prior to the date fixed for redemption, and the Paying Agent shall mail notice of such rescission of redemption in the same manner as the original notice of redemption. Any notice of redemption shall be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for redemption. The City and the Paying Agent have no liability to the Owners or any other party related to or arising from such rescission.

Neither the City nor the Paying Agent will be required: (a) to issue or transfer any Bond during a period beginning with the opening of business on the 15th calendar day next preceding either any Interest Payment Date or any date of selection of any Bond to be redeemed and ending with the close of business on the Interest Payment Date or a day on which the applicable notice of redemption is given, or (b) to transfer any Bond which has been selected or called for redemption in whole or in part.

Reference is made to the Bond Law and the Bond Resolution for a more complete description of the provisions, among others, with respect to the nature and extent of the security for the Bonds, the rights, duties and obligations of the City, the Paying Agent and the Registered Owners, and the terms and conditions upon which the Bonds are issued and secured. The owner of this Bond assents, by acceptance hereof, to all of the provisions of the Bond Resolution.

It is certified, recited and declared that all acts and conditions required by the Constitution and laws of the State of California to exist, to be performed or to have been met precedent to and in the issuing of the Bonds in order to make them legal, valid and binding general obligations of the City, have been performed and have been met in regular and due form as required by law; that payment in full for the Bonds has been received; that no statutory or constitutional limitation on indebtedness or taxation has been exceeded in issuing the Bonds; and that due provision has been made for levying and collecting ad valorem property taxes on all of the taxable property within the City in an amount sufficient to pay principal and interest and redemption premium (if any) when due, and for levying and collecting such taxes.

This Bond shall not be valid or obligatory for any purpose and shall not be entitled to any security or benefit under the Bond Law or the Bond Resolution until the Certificate of Authentication herein has been manually signed by the Paying Agent.

Unless this Bond is presented by an authorized representative of The Depository Trust Company (“DTC”), to the City or the Paying Agent for registration of transfer, exchange, or payment, and any Bond issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of D TC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.

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I
N WITNESS WHEREOF, the City of San Bruno has caused this Bond to be executed by the facsimile signature of its Mayor and attested by the facsimile signature of its City Clerk, all as of the date stated above.

CI

TY OF SAN BRUNO
By

Mayor
Attest:

City Clerk
CE

RTIFICATE OF AUTHENTICATION
Thi
s Bond is one of the Bonds described in the Bond Resolution referred to herein.

D
ate of Authentication: ________, 2026
U.

S. BANK TRUST COMPANY,

NATIONAL ASSOCIATION,
as Paying Agent
By

Authorized Signatory
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F

ORM OF ASSIGNMENT
For
value received, the undersigned do(es) hereby sell, assign and transfer unto (Name, Address and Tax Identification or Social Security Number of Assignee) t
he within Bond and do(es) hereby irrevocably constitute and appoint ______________________
at torney, to transfer the same on the registration books of the Bond Registrar, with full power of substitution in the premises.

D
ated: ______________
S
ignature Guaranteed:

Note: Signature(s) must be guaranteed
by an eligible guarantor institution.

Note: The signature(s) on this
Assignment must correspond with the
name(s) as written on the face of the
within Bond in every particular without
alteration or enlargement or any change
whatsoever.
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$_______

CITY OF SAN BRUNO
(County of San Mateo, California)
2026 GENERAL OBLIGATION BONDS

PAYING AGENT/BOND REGISTRAR AGREEMENT
T
HIS PAYING AGENT/BOND REGISTRAR AGREEMENT (this "Agreement"), is entered into on __________, 2026, between the City of San Bruno (the "City") and U.S.

Bank Trust Company, National Association ("Bank"), as Paying Agent and Bond Registrar.

RE
CITALS
W
HEREAS the City has duly authorized and provided for the issuance of the above- captioned bonds, dated the date hereof (together, the “Bonds”), in the form of book entry fully registered bonds;
W
HEREAS the City will ensure all things necessary to make the Bonds the valid obligations of the City, in accordance with their terms, will be done upon the issuance and delivery thereof;
W
HEREAS the City and the Bank wish to provide the terms under which Bank will act as Paying Agent to pay the principal, redemption premium (if any) and interest on the Bonds, in accordance with the terms thereof, and under which the Bank will act as Registrar for the Bonds;
W
HEREAS the Bank has agreed to serve in such capacities for and on behalf of the City and has full power and authority to perform and serve as Paying Agent and Bond s Registrar for the Bonds; and
W
HEREAS the City has duly authorized the execution and delivery of this Agreement; and all things necessary to make this Agreement a valid agreement have been done.

NO
W, THEREFORE, it is mutually agreed as follows:

A

RTICLE ONE
DE

FINITIONS
For
all purposes of this Agreement except as otherwise expressly provided or unless the context otherwise requires:
"B
ank" means U.S. Bank Trust Company, National Association, a national banking association organized and existing under the laws of the United States of America. “B
ond” or “Bonds” means the: (i) the $___________ aggregate principal amount of 461 of 558
ATTACHMENT 2
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City of San Bruno (County of San Mateo) 2026 General Obligation Bonds.

"Bond Register" means the book or books of registration kept by the Bank in which are maintained the names and addresses and principal amounts registered to each Registered Owner.

"Bond Resolutions" means, collectively, the Resolutions of the City pursuant to which the Bonds have been issued.

"City" means the City of San Bruno.

"Fiscal Year" means the fiscal year of the City ending on June 30 of each year.

"Paying Agent" means the Bank when it is performing the function of paying agent for the Bonds.

"Person" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision of a government or any entity whatsoever.

"Registered Owner" means a Person in whose name a Bond is registered in the Bond Register.

"Registrar" means the Bank when it is performing the function of registrar for the Bond.

"Stated Maturity" when used with respect to any Bond means the date specified in the Bond Resolutions or Bond Purchase Agreement or Bid Sheet as the date on which the principal of such Bond is due and payable.

ARTICLE TWO

APPOINTMENT OF BANK AS

PAYING AGENT AND BOND REGISTRAR

Section 2.01. Appointment and Acceptance.

The City hereby appoints the Bank to act as Paying Agent with respect to the Bonds, to pay to the Registered Owners in accordance with the terms and provisions of this Agreement and the Bond Resolutions the principal of, redemption premium (if any), and interest on all or any of the Bonds.

The City hereby appoints the Bank as Registrar with respect to the Bond s. As Registrar, the Bank shall keep and maintain for and on behalf of the City, books and records as to the ownership of the Bonds and with respect to the transfer and exchange thereof as provided herein and in the Bond Resolutions.

The Bank hereby accepts its appointment, and agrees to act as Paying Agent and Bond Registrar.

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Section 2.02. Compensation.

As compensation for the Bank's services as Paying Agent and Bond Registrar, the City hereby agrees to pay the Bank the fees and amounts set forth in the Bank’s fee schedule then in effect for services as Paying Agent/Bond Registrar.

In addition, the City agrees to reimburse the Bank, upon its request, for all reasonable and necessary out-of-pocket expenses, disbursements, and advances, including without limitation the reasonable fees, expenses, and disbursements of its agents and attorneys, made or incurred by the Bank in connection with entering into and performing under this Agreement and in connection with investigating and defending itself against any claim or liability in connection with its performance hereunder.

ARTICLE THREE

PAYING AGENT

Section 3.01. Duties of Paying Agent.

As Paying Agent, the Bank, provided sufficient collected funds have been provided to it for such purpose by or on behalf of the City, shall pay on behalf of the City the principal of, redemption premium, if any, and interest on each Bond in accordance with the provisions of the Bond Resolutions.

Section 3.02. Payment Dates.

The City hereby instructs the Bank to pay the principal of, redemption premium (if any) and interest on the Bond s on the dates specified in the Bond s and in the Bond Resolutions, to the extent such funds have herein been provided by the City.

The Bank shall not be required to pay interest on any funds of the City for any period during which such funds are held by the Bank awaiting the presentation of the Bond s for payment.

Section 3.03 Receipt of Funds.

The City hereby agrees to provide the Paying Agent with sufficient funds to make principal and interest payments as follows: (1) payment by check must be received by the Paying Agent at least 5 business days prior to payment date and (2) payment by wire must be received by Paying Agent no later than 11:30 a.m. CST on the payment date.

ARTICLE FOUR

REGISTRAR

Section 4.01. Initial Delivery of Bond.

The Bonds will be initially registered and delivered to the purchaser designated by the City as one Bond for each maturity. If such purchaser delivers a written request to the

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Bank not later than five business days prior to the date of initial delivery, the Bank will, on the date of initial delivery, deliver Bonds of authorized denominations, registered in accordance with the instructions in such written request.

Section 4.02. Duties of Registrar.

The Bank shall provide for the proper registration of transfer, exchange and replacement of the Bonds. Every Bond surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, the signature on which as been guaranteed by an eligible guarantor institution, in form acceptable to the Bank, duly executed by the Registered Owner thereof or his attorney duly authorized in writing. The Registrar may request any supporting documentation it deems necessary or appropriate to affect a re-registration.

Section 4.03. Unauthenticated Bond.

The City shall provide to the Bank on a continuing basis, an adequate inventory of unauthenticated Bond to facilitate transfers. The Bank agrees that it will maintain such unauthenticated Bonds in safekeeping.

Section 4.04. Form of Bond Register.

The Bank as Registrar will maintain its records as Bond Registrar in accordance with the Bank's general practices and procedures in effect from time to time.

Section 4.05. Reports.

The Bank will not release or disclose the content of the Bond Register to any person other than to the City at its written request, except upon receipt of a subpoena or court order or as may otherwise be required by law. Upon receipt of a subpoena or court order the Bank will notify the City.

Section 4.06. Cancelled Bond.

All Bonds surrendered for payment, redemption, transfer, exchange, or replacement, if surrendered to the Bank, shall be promptly cancelled by it and, if surrendered to the City, shall be delivered to the Bank and, if not already cancelled, shall be promptly cancelled by the Bank. The City may at any time deliver to the Bank for cancellation any Bonds previously authenticated and delivered which the City may have acquired in any manner whatsoever, and all Bonds so delivered shall be promptly cancelled by the Bank. All cancelled Bonds held by the Bank for its retention period then in effect and shall thereafter be destroyed and evidence of such destruction furnished to the City upon its written request.

Section 4.07. Mutilated, Lost, Stolen or Destroyed Bond.

In case any Bond shall become mutilated or be destroyed, stolen or lost, the Bank shall deliver a new Bond of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of any such mutilated Bond or in lieu of and i n substitution for any such Bond destroyed, stolen or lost, upon the payment of the reasonable expenses and charges of the Bank in connection therewith; and, in the case of a Bond destroyed, stolen or lost, upon filing by the owner with the Bank of evidence satisfactory to

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the Bank that such Bond was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Bank of an appropriate bond of indemnity in form, substance and amount as may be required by law and as is satisfactory to the Bank. All Bond so surrendered to the Bank shall be canceled by it and evidence of such cancellation shall be given to the City. If the mutilated, destroyed, stolen or lost Bond has already matured or been called for redemption in accordance with its terms it shall not be necessary to issue a new Bond prior to payment, provided that the owner shall first provide the Bank with a bond of indemnity as set forth above.

ARTICLE FIVE

THE BANK

Section 5.01. Duties of Bank.

The Bank undertakes to perform the duties set forth herein. No implied duties or obligations shall be read into this Agreement against the Bank. The Bank hereby agrees to use the funds deposited with it for payment of the principal of and interest on the Bonds to pay the same as it shall become due and further agrees to establish and maintain such accounts and funds as may be required for the Bank to function as Paying Agent.

Section 5.02. Reliance on Documents, Etc.

(a) The Bank may conclusively rely, as to the truth of the statements and correctness of the opinions expressed therein, on certificates or opinions expressed therein, on certificates or opinions furnished to the Bank by the City.

(b) The Bank shall not be liable for any error of judgment made in good faith. The Bank shall not be liable for other than its negligence or willful misconduct in connection with any act or omission hereunder.

(c) No provision of this Agreement shall require the Bank to expend or risk its own funds or otherwise incur any financial liability for performance of any of its duties hereunder, or in the exercise of any of its rights or powers. The Bank shall not be obligated to take any legal action or commence any proceeding in connection with this Agreement, the Bond, or money held or disbursed by the Bank.

(d) The Bank may rely, or be protected in acting or refraining from acting, upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Bank need not examine the ownership of any Bonds, but shall be protected in acting upon receipt of Bond containing an endorsement or instruction of transfer or power of transfer which appears on its face to be signed by the Registered Owner or agent of the Registered Owner.

(e) The Bank may consult with counsel, and the written advice or opinion of counsel shall be full authorization and protection with respect to any action taken, suffered or omitted by it hereunder in good faith and reliance thereon.

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(f) The Bank may exercise any of the powers hereunder and perform any duties hereunder either directly or by or through agents or attorneys and shall not be liable for the actions of such agent or attorney if appointed by it with reasonable care.

(g) The Bank shall not be responsible for delays or failures in performance resulting from acts beyond its control, including without limitation acts of God, strikes, lockouts, riots, acts of war or terror, epidemics, governmental regulations, fire, communication line failures, computer viruses, power failures, earthquakes or other disasters.

(h) The Bank is authorized, in its sole discretion, to comply with final orders issued or process entered by any court with respect to any money held by the Bank hereunder, without determination by the Bank of such court's jurisdiction in the matter. If any portion of money held by the Bank hereunder is at any time attached, garnished or levied upon under any court order, or in case the payment, assignment, transfer, conveyance or delivery of any such property shall be stayed or enjoined by any court order, or in case any order, judgment or decree shall be made or entered by any court affecting such property or any part thereof, then and in any such event, the Bank is authorized, in its sole discretion, to rely upon and comply with any such order, writ, judgment or decree which it is advised by legal counsel selected by it is binding upon it without the need for appeal or other action; and if the Bank complies with any such order, writ, judgment or decree, it shall not be liable to any of the parties hereto or t o any other person or entity by reason of such compliance even though such order, writ, judgment or decree may be subsequently reversed, modified, annulled, set aside or vacated.

Section 5.03. Recitals of City.

The recitals contained in the Bonds shall be taken as the statements of the City, and the Bank assumes no responsibility for their correctness.

Section 5.04. May Own Bond.

The Bank, in its individual or any other capacity, may become the owner or pledgee of Bond with the same rights it would have if it were not the Paying Agent and Bond Registrar for the Bonds.

Section 5.05. Money Held by Bank.

Money held by the Bank hereunder need not be segregated from other funds. The Bank shall have no duties with respect to investment of funds deposited with it and shall be under no obligation to pay interest on any money received by it hereunder.

Any money deposited with or otherwise held by the Bank for the payment of the principal, redemption premium (if any) or interest on any Bond and remaining unclaimed for two years after such deposit will be paid by the Bank to the City, and the City and the Bank agree that the Registered Owner of such Bond shall thereafter look only to the City for payment thereof, and that all liability of the Bank with respect to such moneys shall thereupon cease.

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Section 5.06. Other Transactions.

The Bank may engage in or be interested in any financial or other transaction with the City.

Section 5.07. Interpleader.

The City and the Bank agree that the Bank may seek adjudication of any adverse claim, demand, or controversy over its person as well as funds on deposit, in a court of competent jurisdiction. The City and the Bank further agree that the Bank has the right to file an action in interpleader in any court of competent jurisdiction to determine the rights of any person claiming any interest herein.

Section 5.08. Indemnification.

The City shall indemnify the Bank, its officers, directors, employees and agents ("Indemnified Parties") for, and hold them harmless against any loss, cost, claim, liability or expense arising out of or in connection with the Bank's acceptance or administration of the Bank's duties hereunder (except any loss, liability or expense as may be adjudged by a court of competent jurisdiction to be attributable to the Bank's negligence or willful misconduct), including the cost and expense (including its counsel fees) of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties under this Agreement. Such indemnity shall survive the termination or discharge of this Agreement or discharge of the Bonds.

ARTICLE SIX

MISCELLANEOUS PROVISIONS

Section 6.01. Amendment.

This Agreement may be amended only by an agreement in writing signed by both of the parties hereto.

Section 6.02. Assignment

This Agreement may not be assigned by either party without the prior written consent of the other party.

Section 6.03. Notices.

Any request, demand, authorization, direction, notice, consent, waiver or other document provided or permitted hereby to be given or furnished to the City or the Bank shall be mailed, faxed, sent pdf or delivered to the City or the Bank, respectively, at the address shown below, or such other address as may have been given by one party to the other by fifteen (15) days written notice:

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If to the City: City of San Bruno
567 El Camino Real
San Bruno, California 94066
Attn: Administrative Services Director
Phone: (650) 616-7080
E-mail: : [email protected]

If to the Bank: U.S. Bank Trust Company, National Association Attn.: Global Corporate Trust
633 West Fifth Street, 24th Floor
Los Angeles, California 90071

Section 6.04. Effect of Headings.

The Article and Section headings herein are for convenience of reference only and shall not affect the construction hereof.

Section 6.05. Successors and Assigns.

All covenants and agreements herein by the City and the Bank shall bind their successors and assigns, whether so expressed or not.

Section 6.06. Severability.

If any provision of this Agreement shall be determined to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby.

Section 6.07. Benefits of Agreement.

Nothing herein, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, any benefit or any legal or equitable right, remedy or claim hereunder.

Section 6.08. Entire Agreement.

This Agreement shall constitute the entire agreement between the parties hereto relative to the Bank acting as Paying Agent and Bond Registrar.

Section 6.09. Counterparts.

This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which shall constitute one and the same Agreement.

Section 6.10. Term and Termination.

This Agreement shall be effective from and after its date and until the Bank resigns; provided, however, that no such termination shall be effective until a successor has been appointed and has accepted the duties of the Bank hereunder.

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The Bank may resign at any time by giving written notice thereof to the City. If the Bank shall resign, or become incapable of acting, the City shall promptly appoint a successor Paying Agent and Bond Registrar. If an instrument of acceptance by a successor Paying Agent and Bond Registrar shall not have been delivered to the Bank within thirty 30 days after the Bank gives notice of resignation, the Bank may petition any court of competent jurisdiction at the expense of the City for the appointment of a successor Paying Agent and Bond Registrar. In the event of resignation of the Bank as Paying Agent and Bond Registrar, upon the written request of the City and upon payment of all amounts owing to the Bank hereunder the Bank shall deliver to the City or its designee all funds and unauthenticated Bond, and a copy of the Bond Register. The provisions of Section 2.02 and Section 5.08 hereof shall survive and remain in full force and effect following the termination of this Agreement.

Section 6.11. Governing Law.

This Agreement shall be construed in accordance with and shall be governed by the laws of the State of California.

Section 6.12. Documents to be Filed with Bank.

At the time of the Bank's appointment as Paying Agent and Bond Registrar, the City shall file with the Bank the following documents: (a) a specimen Bond; (b) a copy of the opinion of bond counsel provided to the City in connection with the issuance of the Bond; and (c) such other information that the Bank may request.

Section 6.13. Patriot Act Compliance.

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account. For a non-individual person such as a business entity, a charity, a Trust or other legal entity we will ask for documentation to verify its formation and existence as a legal entity. We may also ask to see financial statements, licenses, identification and authorization documents from individuals claiming authority to represent the entity or other relevant documentation.

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IN WITNESS WHEREOF, the City and the Bank have caused this agreement to be executed in their respective names by their duly authorized representatives, in two counterparts, each of which shall be deemed an original.

CITY OF SAN BRUNO

By:

Nick Pegueros, Chief Financial Officer

U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Authentication Agent,
Transfer Agent, Registrar and Paying Agent

By:

Authorized Officer

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Jones Hall Draft of June 17, 2026

P
RELIMINARY OFFICIAL STATEMENT DATED JULY [16], 2026
N
EW ISSUE – FULL BOOK-ENTRY RATING: S&P: “___”
S ee “RATING”
I
n the opinion of Jones Hall LLP, Bond Counsel, subject, however to certain qualifications described herein, under existing law, the interest on the Bonds is excluded from gross income for federal income tax purposes and such interest is not an item of tax p reference for purposes of the federal alternative minimum tax. I nterest on the Bonds may be subject to the corporate alternative minimum tax. In the further opinion of Bond Counsel, such interest is exempt from California personal income taxes. See “TAX MATTERS.” $___________*

CITY OF SAN BRUNO
(County of San Mateo, California)
2026 General Obligation Bonds
D
ated: Date of Delivery Due: September 1, as shown on inside cover Cover Page. This cover page contains information for quick reference only. It is not a summary of all the provisions of the Bonds. Investors must read the entire official statement to obtain information essential to making an informed investment decision.

Authority and Purpose. The above-captioned general obligation bonds (the “Bonds”) are being issued by the City of San Bruno (the “City”), which is located in San Mateo County, California (the “County”), pursuant to certain provisions of the California Government Code, and an authorizing resolution of the City Council of the City (the “City Council”) adopted on July [14], 2026.

The Bonds were authorized at an election of the registered voters of the City held on November 5, 2024 , which authorized the issuance of general obligation bonds for the purpose of repair ing deteriorating storm-drains, preventing failure, flooding, water pollution/ sinkholes; repairing potholes and city streets; upgrading fire stations, improving emergency response, accommodate modern firefighting/ lifesaving emergency medical equipment, function during earthquakes and natural disasters. See “THE BONDS – Authority for Issuance” and “THE FINANCING PLAN” herein.

Security. The Bonds are general obligations of the City, payable from ad valorem property taxes levied by the City and collected by the County. The City Council is empowered and is obligated to annually levy ad valorem taxes for the payment of interest on, and principal of, the Bonds upon all property subject to taxation by the City, without limitation of rate or amount (except certain personal property that is taxable at limited rates). See “SECURITY FOR THE BONDS.” Book-Entry Only. The Bonds will be issued in book-entry form only, and will be initially issued and registered in the name of Cede & Co. as nominee of The Depository Trust Company (“DTC”). Purchasers will not receive physical certificates representing their interests in the Bonds. See APPENDIX E for additional information about the book-entry only system.

Payments. Interest on the Bonds accrues from the date of delivery and is payable semiannually on March 1 and September 1 of each year, commencing March 1, 2027, by check, draft or wire mailed to the person in whose name the Bond is registered.

Payments of principal and interest on the Bonds will be paid by U.S. Bank Trust Company, National Association, as paying agent for the Bonds (the “Paying Agent”), to DTC for subsequent disbursement to participants in DTC (“DTC Participants”) who will remit such payments to the beneficial owners of the Bonds. See “THE BONDS – Description of the Bonds.” Redemption. The Bonds are subject to optional redemption and mandatory sinking fund redemption prior to maturity as described herein. See discussion of redemption under the heading “THE BONDS.”

BIDS FOR THE PURCHASE OF THE BONDS WILL BE RECEIVED BY THE CITY UNTIL [9:00] A.M. PACIFIC TIME ON JULY [23], 2026 UNLESS POSTPONED OR CANCELLED

AS SET FORTH IN THE OFFICIAL NOTICE OF SALE
The Bonds are offered when, as and if issued and received by the Underwriter and subject to the approval as to their legality by Jones Hall LLP, as Bond Counsel. Certain legal matters will also be passed upon for the City by Jones Hall LLP, as Disclosure Counsel, and by the City Attorney. It is anticipated that the Bonds in definitive form will be available for delivery to Cede & Co., as nominee of The Depository Trust Company, on or about August [6], 2026.

Th
e date of this Official Statement is _______, 2026.
* Preliminary; subject to change.

This Preliminary Official Statement and the information contained herein are subject to completion or amendment. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. 471 of 558
ATTACHMENT 3

MATURITY SCHEDULE

$_____________*

CITY OF SAN BRUNO
(County of San Mateo, California)
2026 General Obligation Bonds

(Base CUSIP†: _____)

Maturity Date
(September 1)
Principal
Amount* Interest Rate Yield

Price CUSIP† No.

$__________ _____% Term Bond due September 1, 20__; Yield: _______; Price: _______ CUSIP† No. ______

$__________ _____% Term Bond due September 1, 20__; Yield: _______; Price: _______ CUSIP† No. _____

*Preliminary; subject to change.
† CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by FactSet Research Systems Inc. Copyright (c) 2026 CUSIP Global Services. All rights reserved.

CUSIP® data herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. CUSIP® numbers are provided for convenience of reference only. Neither the City nor its agents or counsel take any responsibility for the accuracy of such numbers.

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GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT

Deemed Final. The Preliminary Official Statement has been deemed final by the City for purposes of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934, as amended, except for information permitted to be omitted therefrom by Rule 15c2-12.

Use of Official Statement. This Official Statement is submitted in connection with the sale of the Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose. This Official Statement is not a contract between any bond owner and the City or the Underwriter. This Official Statement and the information contained herein are subject to completion or amendment without notice.

No Offering Except by This Official Statement. No dealer, broker, salesperson or other person has been authorized by the City or the Underwriter to give any information or to make any representations relating to the Bonds other than those contained in this Official Statement and, if given or made, such other information or representation must not be relied upon as having been authorized by the City or the Underwriter.

No Unlawful Offers or Solicitations. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor may there be any sale of the Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale.

Estimates and Projections. When used in this Official Statement and in any continuing disclosure by the City, in any press release and in any oral statement made with the approval of an authorized officer of the City, the words or phrases “will likely result, ” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “forecast,” “expect,” “intend” and similar expressions identify “forward looking statements ” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. Any forecast is subject to such uncertainties. Inevitably, some assumptions used to develop the forecasts will not be realized and unanticipated events and circumstances may occur. Therefore, there are likely to be differences between forecasts and actual results, and those differences may be material.

Information in Official Statement. The information set forth in this Official Statement has been furnished by the City and other sources which are believed to be reliable, but it is not guaranteed as to accuracy or completeness by the City.

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

Stabilization of Prices. The Underwriter may offer and sell the Bonds to certain dealers and others at prices lower than the public offering prices set forth on the cover page hereof and said public offering prices may be changed from time to time by the Underwriter.

Document Summaries. All summaries of the Bond Resolution or other documents referred to in this Official Statement are made subject to the provisions of such documents and qualified in their entirety to reference to such documents, and do not purport to be complete statements of any or all of such provisions.

No Securities Laws Registration. The Bonds have not been registered under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, in reliance upon exceptions therein for the issuance and sale of municipal securities. The Bonds have not been registered or qualified under the securities laws of any state.

Effective Date. This Official Statement speaks only as of its date, and the information and expressions of opinion contained in this Official Statement are subject to change without notice. Neither the delivery of this Official Statement nor any sale of the Bonds will, under any circumstances, give rise to any implication that there has been no change in the affairs of the City, or the other parties described in this Official Statement, or the condition of the property within the City since the date of this Official Statement.

Website. The City maintains a website; however, the information presented on the website is not a part of this Official Statement and should not be relied upon in making an investment decision with respect to the Bonds.

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CITY OF SAN BRUNO
(COUNTY OF SAN MATEO, CALIFORNIA)

MEMBERS OF THE CITY COUNCIL

Rico E. Medina, Mayor
Sandy Alvarez, Vice Mayor
Tom Hamilton, Councilmember
Marty Medina, Councilmember
Michael Salazar, Councilmember

CITY OFFICIALS AND STAFF

Alex McIntyre, City Manager
Joseph Toney, Assistant City Manager
Nick Pegueros, Administrative Services Director
Lupita Huerta, City Clerk
Trisha Ortiz of Richards, Watson & Gershon, City Attorney

____________________________________________________

PROFESSIONAL SERVICES

MUNICIPAL ADVISOR

Fieldman Rolapp & Associates, Inc.

San Francisco, California

B

OND AND DISCLOSURE COUNSEL

Jones Hall LLP
San Mateo, California

BOND REGISTRAR, TRANSFER AGENT, AND PAYING AGENT

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

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TABLE OF CONTENTS
Page
INTRODUCTION ........................................... 1 The City ..................................................... 1 Sources of Payment for the Bonds ........... 2
Purpose for Issuance ................................ 2 Authority for Issuance ............................... 2 Description of the Bonds ........................... 2
Legal Matters ............................................. 2 Tax Matters ............................................... 2 Continuing Disclosure ............................... 3 Other Information ...................................... 3 THE FINANCING PLAN ................................ 4
Bond Measure and Purpose of Issue ........ 4
Estimated Sources and Uses of Funds ..... 4
THE BONDS ................................................. 5 Authority for Issuance ............................... 5 Description of the Bonds ........................... 5
Payment .................................................... 6 Redemption ............................................... 6 Registration, Transfer and Exchange of
Bonds .................................................... 7 Defeasance ............................................... 8 DEBT SERVICE SCHEDULE ....................... 9
SECURITY FOR THE BONDS ................... 10
Ad Valorem Taxes ................................... 10 Debt Service Fund................................... 10 Limited Obligation.................................... 11 Statutory Lien .......................................... 11 PROPERTY TAXATION ............................. 11
Property Tax Collection Procedures ....... 11
Taxation of State-Assessed Utility Property
............................................................ 12 Assessed Valuation ................................. 13 Alternative Method of Tax Apportionment –
Teeter Plan .......................................... 15 Appeals of Assessed Value .................... 16
Typical Tax Rates ................................... 17 Major Taxpayers ..................................... 18 Direct and Overlapping Debt .................. 18

CONSTITUTIONAL AND STATUTORY

PROVISIONS AFFECTING CITY
REVENUES AND APPROPRIATIONS .. 20
Article XIIIA of the State Constitution ...... 20
Legislation Implementing Article XIIIA .... 20
Article XIIIB of the State Constitution ...... 21
Articles XIIIC and XIIID of the State
Constitution ......................................... 21 Proposition 62 ......................................... 22 Proposition 1A; Proposition 22 ; Property
Tax Base Transfer Ballot Measure ..... 23
Possible Future Initiatives ....................... 23
RISK FACTORS ......................................... 23 Reduction in Taxable Value .................... 24
In-Lieu Vehicle License Fee and Excess
Educational Revenue Augmentation
Fund Allocation .... Error! Bookmark not
defined.

Bankruptcy and Foreclosure ................... 27
Cyber Security ........................................ 27 COVID-19 Pandemic .............................. 28
Loss of Tax-Exemption ........................... 28
Secondary Market ................................... 28 TAX MATTERS ........................................... 29 CONTINUING DISCLOSURE ..................... 30
LITIGATION ................................................ 30 RATING ...................................................... 31 MUNICIPAL ADVISOR ............................... 32
COMPETITIVE SALE OF BONDS ............. 32
EXECUTION ............................................... 32

APPENDIX A - CERTAIN INFORMATION REGARDING THE CITY OF SAN BRUNO AND

COUNTY OF SAN MATEO
APPENDIX B - AUDITED FINANCIAL STATEMENT FOR FISCAL YEAR ENDED JUNE 30, 2025

APPENDIX C - PROPOSED FORM OF OPINION OF BOND COUNSEL

APPENDIX D - FORM OF CONTINUING DISCLOSURE CERTIFICATE

APPENDIX E - DTC AND THE BOOK-ENTRY ONLY SYSTEM

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__________________________________

OFFICIAL STATEMENT
__________________________________

$_________*

CITY OF SAN BRUNO
(County of San Mateo, California)
2026 General Obligation Bonds

INTRODUCTION

This Official Statement, which includes the cover page and appendices hereto, provides information in connection with the sale and delivery of the above-captioned bonds (the “Bonds”).

This Introduction is not a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement, including the cover page and appendices hereto, and the documents summarized or described herein. A full review should be made of the entire Official Statement to make an informed investment decision. The offering of the Bonds to potential investors is made only by means of the entire Official Statement.

The City

The City of San Bruno (the "City") is located on the San Francisco Peninsula in the County of San Mateo (the “County”) in the State of California (the “State”), approximately 12 miles south of San Francisco, 14 miles north of Redwood City (the County seat), and immediately adjacent to the San Francisco International Airport. The City covers a total land area of 5.5 square miles, located between the cities of South San Francisco and Millbrae, and immediately adjacent to the San Francisco International Airport and Golden Gate National Cemetery. San Bruno serves as a major transportation center, with immediate access to major interstate freeways, including US 101, I-280 and I-380; and commuter rail lines, such as Caltrain and Bay Area Rapid Transit (BART). San Bruno is adjacent to San Francisco International Airport, which can be accessed using BART or US 101. However, the other major San Francisco Bay Area airports (Oakland and San Jose) are accessible from San Bruno via BART, for the former, and Caltrain plus Santa Clara Valley Transportation Authority (VTA) services, for the latter. The community has more than 12,000 homes and residences of all types and serves a population of approximately 42,631.

The City is a general law c ity and operates under the Council -City Manager form of government. The City Council is the governing body of the City, and has the power to make and enforce all laws and set all policy related to municipal affairs. For more statistical and demographic information regarding the Cit y and the County, as well as certain City financial information, see APPENDIX A and APPENDIX B.

* Preliminary; subject to change.

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Sources of Payment for the Bonds

The Bonds are general obligations of the City payable solely from ad valorem property taxes levied by the City and collected by the County. The City Council is empowered and obligated to annually levy ad valorem taxes for the payment of interest on, and principal of, the Bonds upon all property subject to taxation by the City, without limitation of rate or amount (except with respect to certain personal property that is taxable at limited rates). See “SECURITY FOR THE BONDS” and “PROPERTY TAXATION.”

Purpose for Issuance

The Bonds are being issued to provide funds for approximately $35 million of funds for City road improvement projects authorized by Measure Q (described herein), as well as pay costs of issuance for the Bonds. See “THE FINANCING PLAN.”

Authority for Issuance

The Bonds are being issued under the provisions of Article 4.5 of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California, commencing with Section 53506 (the “Bond Law”), and a resolution adopted by the City Council of the City on July [14], 2026 ( the “Bond Resolution”). The Bonds were authorized by the voters in the City pursuant to “Measure Q ,” which was approved by the 2/3- required vote on November 5, 2024 .

See “THE BONDS – Authority for Issuance.”

Description of the Bonds

Generally. The Bonds mature in the years and in the amounts as set forth on the inside cover page of this Official Statement. The Bonds will be issued in book-entry form only, and will be initially issued and registered in the name of Cede & Co. as nominee for DTC. Purchasers will not receive physical certificates representing their interest in the Bonds. See “ THE BONDS – Description of the Bonds” and APPENDIX E.

Redemption. The Bonds are subject to optional and sinking -fund redemption prior to maturity as described under the heading, “THE BONDS – Redemption.”

Legal Matters

Issuance of the Bonds is subject to the approving opinion of Jones Hall LLP, as bond counsel (“Bond Counsel”), to be delivered in substantially the form attached as APPENDIX C.

Jones Hall LLP is also serving as disclosure counsel to the City (“Disclosure Counsel”). Certain legal matters will also be passed upon for the City by the City Attorney.

Tax Matters

In the opinion of Bond Counsel, interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax. Interest on the Bonds may be subject to the corporate alternative minimum tax. In the further opinion of Bond Counsel, interest on the Bonds is exempt from California personal income taxes. See “ TAX MATTERS” for additional information, and APPENDIX C for the form of Bond Counsel’s opinion to be delivered concurrently with the Bonds.

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Continuing Disclosure

The City has covenanted and agreed that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate. The form of the Continuing Disclosure Certificate is included in APPENDIX D. See also “CONTINUING DISCLOSURE.”

Other Information

This Official Statement speaks only as of its date, and the information contained herein is subject to change. Copies of documents referred to in this Official Statement and information concerning the Bonds are available from the City of San Bruno City Clerk, 567 EL Camino Real, San Bruno, California 94066. The City may impose a charge for copying, mailing and handling.

This Official Statement is not to be construed as a contract between any Bond owner and the City or the Underwriter . Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of fact. The summaries and references to documents, statutes and constitutional provisions referred to herein do not purport to be comprehensive or definitive, and are qualified in their entireties by reference to each of such documents, statutes and constitutional provisions.

The information set forth herein has been obtained from official sources which are believed to be reliable but it is not guaranteed as to accuracy or completeness, and is not to be construed as a representation by the City. The information and expressions of opinions herein are subject to change without notice and neither delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City since the date hereof. This Official Statement is submitted in connection with the sale of the Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose.

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THE FINANCING PLAN

Bond Measure and Purpose of Issue

The net proceeds of the Bonds will be used to finance the projects approved by more than the requisite two-thirds of City voters that voted at an election held in the City on November 5, 2024 (the “Bond Election”). The abbreviated form of the ballot measure, labeled Measure Q (the “Bond Measure”), is set forth below:

“Shall City of San Bruno measure be adopted to repair deteriorating storm- drains, preventing failure, flooding, water pollution/ sinkholes; repair potholes/ city streets; upgrade fire stations, improving emergency response, accommodate modern firefighting/ lifesaving emergency medical equipment, function during earthquakes/ natural disasters; authorizing $102,000,000 in bonds, at a tax rate of 3¢ per $100 of assessed value, while bonds are outstanding, initially generating $3,300,000 annually, without funds for administrators/ cannot be taken by the State of California, with citizen oversight/ independent audits?”

The Bonds will be the first of three anticipated series of general obligation b onds issued by the City pursuant to the authority received at the Bond Election.

The net proceeds of the Bonds, in the amount of approximately $35 million, are anticipated to fund road improvement projects within the City that are currently programmed into the City’s pavement management program for Fiscal Year 2026-27 and Fiscal Year 2027-28. Funds may also be used for the preliminary design of a new fire station or other authorized purposes.

Estimated Sources and Uses of Funds

The estimated sources and uses of funds with respect to the Bonds are as follows:

Sources of Funds
Principal Amount of Bonds $
Plus: [Net] Original Issue Premium
Total Sources $

Uses of Funds
Deposit to Project Fund $
Deposit to Debt Service Fund(1)
Costs of Issuance(2)
Total Uses $

(1) To fund capitalized interest on the Bonds through [September 1, 2028]. (2) Includes all estimated costs of issuance including, but not limited to, underwriter’s discount, printing costs, and fees of bond counsel, disclosure counsel, the municipal advisor, the paying agent and rating agency.

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THE BONDS

Authority for Issuance

The Bonds are issued under the Bond Law and other applicable law. The City authorized the issuance of the Bonds pursuant to the Bond Resolution. The City received authorization at the Bond Election to issue $102,000,000 of general obligation bonds to finance the projects described in the Bond Measure, of which the Bonds represent the first series.

Description of the Bonds

Book-Entry Form. The Bonds will be issued in book-entry form only, and will be initially issued and registered in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”). Purchasers of the Bonds (the “Beneficial Owners”) will not receive physical certificates representing their interest in the Bonds. Payments of principal of and interest on the Bonds will be paid by the Paying Agent to DTC for subsequent disbursement to DTC Participants which will remit such payments to the Beneficial Owners of the Bonds.

As long as DTC ’s book-entry method is used for the Bonds, the Paying Agent will send any notice of prepayment or other notices to owners only to DTC. Any failure of DTC to advise any DTC Participant, or of any DTC Participant to notify any Beneficial Owner, of any such notice and its content or effect will not affect the validity or sufficiency of the proceedings relating to the prepayment of the Bonds called for prepayment or of any other action premised on such notice.

The Paying Agent, the City, and the Underwriter have no responsibility or liability for any aspects of the records relating to or payments made on account of beneficial ownership, or for maintaining, supervising or reviewing any records relating to beneficial ownership, of interests in the Bonds. See APPENDIX E for additional information.

Interest. Interest on the Bonds is payable semiannually on March 1 and September 1 of each year (the “Interest Payment Dates”), commencing March 1, 2027. Interest on the Bonds will be calculated on the basis of a 360-day year comprised of twelve 30-day months.

Interest on the Bonds is payable from the Interest Payment Date next preceding the date of authentication thereof unless: (i) a Bond is authenticated as of an Interest Payment Date, in which event it will bear interest from such date, (ii) a Bond is authenticated prior to an Interest Payment Date and after the close of business on the 15th day of the month preceding the Interest Payment Date (each, a “Record Date”), in which event it will bear interest from such Interest Payment Date, (iii) a Bond is authenticated on or before the first Record Date, in which event it shall bear interest from the Closing Date, or (iv) at the time of authentication of a Bond, interest is in default thereon, in which event it will bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon.

Denominations and Maturity. The Bonds shall be issued in the denomination of $5,000 each or any integral multiple of $5,000. The Bonds mature on September 1 in the years and amounts set forth on the inside cover page hereof. See the maturity schedule on the inside cover page hereof and “DEBT SERVICE SCHEDULE” herein.

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Payment

Interest on the Bonds (including the final interest payment upon maturity) is payable by check of the Paying Agent mailed to the owner thereof at such owner’s address as it appears on the Registration Books (as defined below) at the close of business on the preceding Record Date, except that at the written request of the Owner of at least $1,000,000 aggregate principal amount of the Bonds, which written request is on file with the Paying Agent as of any Record Date, interest on such Bonds shall be paid by wire transfer on the succeeding Interest Payment Date to an account in the United States of America as shall be specified in such written request.

Principal of and redemption premium (if any) on the Bonds is payable in lawful money of the United States of America upon presentation and surrender at the principal office of the Paying Agent.

Redemption
*

Optional Redemption. The Bonds maturing on or before September 1, 20__, are not subject to redemption prior to their respective stated maturities. The Bonds maturing on or after September 1, 20__, are subject to redemption prior to maturity, at the option of the City, in whole or in part among maturities on such basis as designated by the City and by lot within a maturity, from any available source of funds, on September 1, 20__ , and on any date thereafter, at a redemption price equal to 100% of the principal amount of Bonds to be redeemed together with accrued interest thereon to the date fixed for redemption, without redemption premium.

Mandatory Sinking Fund Redemption. The Term Bonds maturing on September 1, 20__ and September 1, 20__ (the “Term Bonds”) are subject to redemption prior to their stated maturity date, without a redemption premium, in part by lot, from mandatory sinking fund payments on each September 1, in the principal amounts as set forth in the following tables:

$_______ Term Bond Due September 1, 20__

Payment Date
(September 1)
Payment
Amount

(Maturity)

$_______ Term Bond Due September 1, 20__

Payment Date
(September 1)
Payment
Amount

(Maturity)

If some but not all of the Term Bonds have been optionally redeemed, the aggregate principal amount of Term Bonds to be subject to Mandatory Sinking Fund Redemption in each

* Preliminary; subject to change.

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year will be reduced on a pro rata basis in integral multiples of $5,000, as designated in written notice filed by the City with the Paying Agent.

Redemption Procedure; Right to Rescind. The Paying Agent will cause notice of any redemption to be mailed, first class mail, postage prepaid, at least 20 days but not more than 60 days prior to the date fixed for redemption, (i) to DTC and the Municipal Securities Rulemaking Board, and (ii) to the respective Owners of any Bonds designated for redemption, at their addresses appearing on the Registration Books (as defined below) maintained by the Paying Agent. Such mailing will not be a condition precedent to such redemption and failure to mai l or to receive any such notice will not affect the validity of the proceedings for the redemption of such Bonds.

The City is entitled to send a redemption notice that declares that the redemption is conditional upon the availability of moneys to accomplish the redemption, and the City may rescind any notice of optional redemption of the Bonds by written notice to the Paying Agent on or prior to the date fixed for redemption, and the Paying Agent shall mail notice of such rescission of redemption in the same manner as the original notice of redemption was sent under this section. Any notice of redemption shall be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for redemption. The City and the Paying Agent have no liability to the owners of the Bonds (the “ Owners”) or any other party related to or arising from such rescission.

A redemption notice will state the redemption date and the redemption price and, if less than all of the then Outstanding Bonds are to be called for redemption, will designate the CUSIP numbers of the Bonds to be redeemed by giving the individual number of each Bond or by stating that all Bonds between two stated numbers, both inclusive, or by stating that all of the Bonds of one or more maturities have been called for redemption, and will require that such Bonds be then surrendered at the principal office of the Paying Agent for redemption at the said redemption price, giving notice also that further interest on such Bonds will not accrue from and after the redemption date.

Partial Redemption. Upon surrender of Bonds redeemed in part only, the City will execute and the Paying Agent will authenticate and deliver to the owner, at the expense of the City, a new Bond or Bonds, of the same maturity, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond or Bonds.

Effect of Redemption. From and after the date fixed for redemption, if notice of such redemption has been duly given and funds available for the payment of the principal of and interest (and redemption premium, if any) on the Bonds so called for redemption have been duly provided, such Bonds so called will cease to be entitled to any benefit under the Bond Resolution other than the right to receive payment of the redemption price, and no interest will accrue thereon on or after the redemption date specified in such notice.

Registration, Transfer and Exchange of Bonds

Registration Books. The Paying Agent will keep or cause to be kept sufficient books for the registration and transfer of the Bonds (the “Registration Books”), which will at all times be open to inspection by the City upon reasonable notice; and, upon presentation for such purpose, the Paying Agent shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said books, the Bonds.

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Transfer. Any Bond may, in accordance with its terms, be transferred, upon the Registration Books, by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation at the principal office of the Paying Agent, accompanied by delivery of a written instrument of transfer in a form approved by the Paying Agent, duly executed. The City may charge a reasonable sum for each new Bond issued upon any transfer.

Whenever any Bond or Bonds are surrendered for transfer, the City will execute and the Paying Agent will authenticate and deliver a new Bond or Bonds, for like aggregate principal amount of the same maturity and interest rate.

Exchange. Bonds may be exchanged at the principal office of the Paying Agent for a like aggregate principal amount of Bonds of authorized denominations and of the same maturity and interest rate . The City may charge a reasonable sum for each new Bond issued upon any exchange.

Defeasance

The City has the option to pay and discharge the entire indebtedness on all or any portion of the outstanding Bonds in any one or more of the following ways:

(a) by paying or causing to be paid the principal of and interest on such Bonds, as and when the same become due and payable;

(b) by irrevocably depositing, in trust, at or before maturity:

(i) lawful money of the United States of America in an amount equal to the principal amount of such Bonds and all unpaid interest thereon to maturity; or

(ii) Federal Securities (as defined below), the principal of and interest on, which when due, in the opinion of a certified public accountant delivered to the City, will provide money sufficient to pay the principal of and all unpaid interest and redemption premium (if any) to maturity on the Bonds to be paid, as such principal and interest become due.

(c) by delivering such Bonds to the Paying Agent for cancellation by it.

“Federal Securities” means United States Treasury notes, bonds, bills or certificates of indebtedness, or any other obligations, the timely payment of which is directly or indirectly guaranteed by the faith and credit of the United States of America.

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DEBT SERVICE SCHEDULE

The following table shows the debt service schedule with respect to the Bonds, assuming no optional redemptions. The City does not have any other general obligation bonds outstanding; however, the Bonds represent the first of three planned series of general obligation bonds to be issued pursuant to the authority granted by the Bond Measure.

Bond Year
Ending
September 1 Principal Interest(1)
Total
Debt Service(1)

Total
____________________
(1) Capitalized interest is being funded through September 1, 2028.

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SECURITY FOR THE BONDS

Ad Valorem Taxes

Bonds Payable from Ad Valorem Property Taxes. The Bonds are general obligations of the City, payable solely from ad valorem property taxes levied by the City and collected by the County. The City is empowered and is obligated, and under the Bond Resolution has covenanted, to annually levy ad valorem taxes for the payment of the Bonds and the interest thereon upon all property within the City subject to taxation by the City, without limitation of rate or amount (except certain personal property that is taxable at limited rates).

Levy and Collection; Teeter Plan. The City will levy and the County will collect such ad valorem taxes in such amounts and at such times as is necessary to ensure the timely payment of debt service. Such taxes, when collected, will be deposited into a debt service fund for the Bonds, which is maintained by the City and which is irrevocably pledged f or the payment of principal of and interest on the Bonds when due.

City property taxes are assessed and collected by the County in the same manner, at the same time and in the same installments as other ad valorem taxes on real property and will have the same priority, become delinquent at the same times and in the same proportionate amounts and bear the same proportionate penalties and interest after delinquency as do the other ad valorem taxes on real property. As described below, the County has adopted a Teeter Plan that will apply to the ad valorem property taxes securing the Bonds. See “PROPERTY TAXATION – Alternative Method of Tax Apportionment – Teeter Plan.”

Annual Tax Rates. The amount of the annual ad valorem tax levied by the City to repay the Bonds will be determined by the relationship between the assessed valuation of taxable property in the City and the amount of debt service due on the Bonds. Fluctuations in the annual debt service on the Bonds and the assessed value of taxable property in the City may cause the annual tax rate to fluctuate.

Economic and other factors beyond the City ’s control, such as economic recession, deflation of land values, a relocation out of the City or financial difficulty or bankruptcy by one or more major property taxpayers, or the complete or partial destruction of taxable property caused by, among other eventualities, earthquake, flood, fire, epidemic, or other natural disaster or event, could cause a reduction in the assessed value within the City and necessitate a corresponding increase in the annual tax rate. See RISK FACTORS” herein.

Debt Service Fund

Pursuant to the Bond Resolution, the City will establish a debt service fund for the Bonds (the “Debt Service Fund”), which will be established as a separate fund to be maintained distinct from all other funds of the City. Proceeds of the Bonds used for capitalized interest on the Bonds and all taxes levied by the City pursuant to the Bond Resolution for the payment of the principal of and interest on the Bonds will be deposited in the Debt Service Fund by the City promptly upon receipt. The Debt Service Fund is pledged for the payment of the principal of and interest on the Bonds, when and as the same become due. The City will transfer amounts in the Debt Service Fund, to the extent necessary , to pay the principal of and interest on the Bonds as the same become due and payable, to the Paying Agent, as required to pay the principal of and interest on the Bonds.

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If, after payment in full of the Bonds, any amounts remain on deposit in the Debt Service Fund, the City shall transfer such amounts to its General Fund, to be applied solely in a manner that is consistent with the requirements of applicable state and federal tax law.

Limited Obligation

The Bonds are payable solely from the proceeds of an ad valorem tax levied by the City, and collected by the County, for the payment of principal of and interest on the Bonds. Although the County is obligated to collect the ad valorem tax for the payment of the Bonds, the Bonds are not a debt of the County.

Statutory Lien

In accordance with Section 53515 of the California Government Code, the Bonds are secured by a statutory lien on all revenues received pursuant to the levy and collection of the ad valorem tax. This lien automatically arises without the need for any action or authorization by the City or the City Council, and shall be valid and binding from the time the Bonds are executed and delivered. The revenues received pursuant to the levy and collection of the ad valorem tax shall be immediately subject to the lien, and the lien shall immediately attach to the revenues and be effective, binding, and enforceable against the City, its successors, transferees, and creditors, and all others asserting rights therein, irrespective of whether those parties have notice of the lien and without the need for any physical delivery, recordation, filing, or further act.

PROPERTY TAXATION

Property Tax Collection Procedures

In California, property which is subject to ad valorem taxes is classified as “ secured” or “unsecured.” The “secured roll” is that part of the assessment roll containing state assessed public utilities’ property and property, the taxes on which are a lien on real property sufficient, in the opinion of the county assessor, to secure payment of the taxes. A tax levied on unsecured property does not become a lien against such unsecured property, but may be come a lien on certain other property owned by the taxpayer. Every tax which becomes a lien on secured property has priority over all other liens arising pursuant to State law on such secured property, regardless of the time of the creation of the other l iens. Secured and unsecured property are entered separately on the assessment roll maintained by the county assessor. The method of collecting delinquent taxes is substantially different for the two classifications of property.

Property taxes on the secured roll are due in two installments, on November 1 and February 1 of each fiscal year. If unpaid, such taxes become delinquent after December 10 and April 10, respectively, and a 10% penalty attaches to any delinquent payment. In addition, property on the secured roll with respect to which taxes are delinquent is declared tax defaulted on or about June 30 of the fiscal year. Such property may thereafter be redeemed by payment of the delinquent taxes and a delinquency penalty, plus a redemption penalty of 1.5% per month to the time of redemption. If taxes are unpaid for a period of five years or more, the property is subject to sale by the County.

Property taxes are levied for each fiscal year on taxable real and personal property situated in the taxing jurisdiction as of the preceding January 1. A bill enacted in 1983, SB813 (Statutes of 1983, Chapter 498), however, provided for the supplemental assessment and

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taxation of property as of the occurrence of a change of ownership or completion of new construction. Thus, this legislation eliminated delays in the realization of increased property taxes from new assessments. As amended, SB813 provided increased revenue to taxing jurisdictions to the extent that supplemental assessments of new construction or changes of ownership occur subsequent to the January 1 lien date and result in increased assessed value.

Property taxes on the unsecured roll are due on the January 1 lien date and become delinquent, if unpaid on the following August 31. A 10% penalty is also attached to delinquent taxes in respect of property on the unsecured roll, and further, an additional penalty of 1.5% per month accrues with respect to such taxes beginning the first day of the third month following the delinquency date. The taxing authority has four ways of collecting unsecured personal property taxes: (1) a civil action against the taxpayer; (2) filing a certificate in the office of the county clerk specifying certain facts in order to obtain a judgment lien on certain property of the taxpayer; (3) filing a certificate of delinquency for record in the county recorder’s office, in order to obtain a lien on certain property of the taxpayer; and (4) seizure and sale of personal property, improvements or possessory interests belonging or assessed to the assessee. The exclusive means of enforcing the payment of delinquent taxes in respect of property on the secured roll is the sale of the property securing the taxes for the amount of taxes which are delinquent.

Taxation of State-Assessed Utility Property

The State Constitution provides that most classes of property owned or used by regulated utilities are assessed by the State Board of Equalization ( “SBE”) and taxed locally. Property valued by the SBE as an operating unit in a primary function of the utility taxpayer is known as “unitary property,” a concept designed to permit assessment of the utility as a going concern rather than assessment of each individual element of real and personal property owned by the utility taxpayer. State -assessed unitary and “operating nonunitary ” property (which excludes nonunitary property of regulated railways) is allocated to the counties based on the situs of the various components of the unitary property. Except for unitary property of regulated railways and certain other excepted property, all unitary and operating nonunitary property is taxed at special county-wide rates and tax proceeds are distributed to taxing jurisdictions according to statutory formulae generally based on the distribution of taxes in the prior year.

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Assessed Valuation

Assessed Valuation History. The following is a table summarizing the historical assessed valuation of the taxable property in the City since Fiscal Year 2016-17.

Table 1

CITY OF SAN BRUNO
Assessed Valuations of All Taxable Property
Fiscal Years 2016-17 to 2025-26

Fiscal Year
Local
Secured Utility Unsecured Total
Percent
Change
2016-17 $6,730,259,256 $542,478 $212,376,474 $6,943,178,208 -- 2017-18 7,153,754,664 542,478 193,402,416 7,347,699,558 5.83% 2018-19 7,695,841,327 542,478 191,580,394 7,887,964,199 7.35 2019-20 8,213,126,975 167,126 191,613,489 8,404,907,590 6.55 2020-21 8,834,319,948 167,126 144,575,709 8,979,062,783 6.83 2021-22 9,175,120,730 167,126 130,101,776 9,305,389,632 3.63 2022-23 9,856,861,747 167,126 101,307,134 9,958,336,007 7.02 2023-24 10,626,469,102 167,126 107,490,029 10,734,126,257 7.79 2024-25 11,226,097,260 111,001 125,471,218 11,351,679,479 5.75 2025-26 11,755,929,771 111,001 150,971,438 11,907,012,210 4.89

Source: California Municipal Statistics, Inc.

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Assessed Valuation by Land Use. The following table shows the land use of parcels in the City, according to assessed valuation for Fiscal Year 2025-26. As shown, the majority of land in the City is used for single-family residential purposes.

Table 2

CITY OF SAN BRUNO
Assessed Valuation and Parcels by Land Use
Fiscal Year 2025-26

2025-26 % of No. of % of
Non-Residential: Assessed Valuation(1) Total Parcels Total Commercial/Office $2,670,687,766 22.72% 422 3.27%
Industrial 164,912,674 1.40 85 0.66
Recreational/Airport 27,933,867 0.24 42 0.33
Government/Social/Institutional 16,454,254 0.14 57 0.44 Miscellaneous 6,270,514 0.05 64 0.50
Subtotal Non-Residential $2,886,259,075 24.55% 670 5.19%

Residential:

Single Family Residence $6,635,747,783 56.45% 9,340 72.41% Condominium/Townhouse 797,388,769 6.78 2,258 17.51
Hotel/Motel 82,890,548 0.71 13 0.10
2-4 Residential Units 281,611,752 2.40 343 2.66
5+ Residential Units/Apartments 1,019,429,826 8.67 173 1.34 Subtotal Residential $8,817,068,678 75.00% 12,127 94.02%

Vacant Parcels $52,602,018 0.45% 101 0.78%

Totals $11,755,929,771 100.00% 12,898 100.00%
___________________________
(1) Local Secured Assessed Valuation; excluding tax-exempt property.

Source: California Municipal Statistics, Inc.

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Assessed Valuation of Single-Family Residential Parcels Per Parcel. The following table shows a breakdown of the assessed valuations of improved single-family residential parcels in the City, according to assessed valuation for Fiscal Year 2025-26.

Table 3

CITY OF SAN BRUNO
Per Parcel 2025-26 Assessed Valuation
of Single-Family Homes

No. of 2025-26 Average Median
Parcels Assessed Valuation Assessed Valuation Assessed Valuation Single Family Residential 9,340 $6,635,747,783 $710,466 $627,387

2025-26 No. of % of Cumulative Total % of Cumulative
Assessed Valuation Parcels (1) Total % of Total Valuation Total % of Total $0 - $99,999 321 3.437% 3.437% $27,801,614 0.419% 0.419% $100,000 - $199,999 1,214 12.998 16.435 167,806,365 2.529 2.948 $200,000 - $299,999 631 6.756 23.191 158,384,741 2.387 5.335 $300,000 - $399,999 745 7.976 31.167 261,868,593 3.946 9.281 $400,000 - $499,999 843 9.026 40.193 377,688,305 5.692 14.973 $500,000 - $599,999 735 7.869 48.062 401,276,903 6.047 21.020 $600,000 - $699,999 631 6.756 54.818 410,009,972 6.179 27.199 $700,000 - $799,999 632 6.767 61.585 474,231,546 7.147 34.345 $800,000 - $899,999 550 5.889 67.473 467,416,113 7.044 41.389 $900,000 - $999,999 564 6.039 73.512 534,952,779 8.062 49.451 $1,000,000 - $1,099,999 498 5.332 78.844 522,159,922 7.869 57.320 $1,100,000 - $1,199,999 377 4.036 82.880 432,087,898 6.512 63.831 $1,200,000 - $1,299,999 327 3.501 86.381 408,409,122 6.155 69.986 $1,300,000 - $1,399,999 303 3.244 89.625 408,739,328 6.160 76.146 $1,400,000 - $1,499,999 284 3.041 92.666 409,758,665 6.175 82.321 $1,500,000 - $1,599,999 234 2.505 95.171 361,781,564 5.452 87.773 $1,600,000 - $1,699,999 171 1.831 97.002 281,269,677 4.239 92.011 $1,700,000 - $1,799,999 115 1.231 98.233 200,186,894 3.017 95.028 $1,800,000 - $1,899,999 67 0.717 98.951 123,298,795 1.858 96.886 $1,900,000 - $1,999,999 35 0.375 99.325 68,287,336 1.029 97.915 $2,000,000 and greater 63 0.675 100.000 138,331,651 2.085 100.000 Totals 9,340 100.000% $6,635,747,783 100.000%
____________________
(1) Improved single family residential parcels. Excludes condominiums and parcels with multiple family units.

Source: California Municipal Statistics, Inc.

Alternative Method of Tax Apportionment – Teeter Plan

The County operates a Teeter Plan whereby taxing entities, including the City, receive 100% of their secured ad valorem property tax levy assessed by the County. The Teeter Plan will apply with respect to the ad valorem property taxes levied for the Bonds.

The Teeter Plan will remain in effect unless the County orders its discontinuance or unless the County receives a petition for its discontinuance joined in by resolutions adopted by at least two -thirds of the participating revenue districts in the County, in which event the Board of Supervisors of the County shall order discontinuance of the Teeter Plan effective at the commencement of the subsequent fiscal year. Additionally, the County may discontinue the procedures under the Teeter Plan with respect to any political subdivision in the County if the rate of secured property tax delinquency in that political subdivision in any year exceeds 3% of the total of all taxes and assessments levied on the secured rolls for that political subdivision. If the Teeter Plan is discontinued subsequent to its implementation, only those secured property taxes actually collected would be allocated to political subdivisions (including

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the City) for which the County acts as the tax -levying or tax-collecting agency. For further information, please see “ APPENDIX A – CERTAIN INFORMATION REGARDING THE CITY OF SAN BRUNO AND COUNTY OF SAN MATEO – CITY FINANCIAL INFORMATION – Property Taxes” herein.

Under the Teeter Plan, the County funds current year delinquencies from certain moneys in its treasury, including, currently, tax payments from prior years ’ delinquencies. There can be no assurance that the County will continue to utilize the Teeter Plan with respect to the tax levy for the Bonds or for the City. Further, the amounts expected to be available to the County may not be sufficient to fund all delinquencies in current tax levies, in which case the City may not receive the full amount required for the payment of debt service on the Bonds on a timely basis.

Property tax delinquencies may be impacted by economic and o ther factors beyond the City’s control or the control of the County , including the ability or willingness of property owners to pay property taxes during an economic recession or depression. An economic recession or depression could be caused by many factors outside the control of the City, including high interest rates, reduced consumer confidence, reduced real wages or reduced economic activity, including but not limited to as a result of the spread of COVID-19 or other pandemic or natural or manmade disaster.

Pursuant to Revenue and Taxation Code Section 4985.2, the Treasurer -Tax Collector of the respective County may cancel any penalty, costs or other charges resulting from tax delinquency upon a finding that the late payment is due to reasonable cause and circumstances beyond the taxpayer’s control, and occurred notwithstanding the exercise of ordinary care in the absence of willful neglect, provided the property taxes are paid within four fiscal years of such taxes coming due.

Appeals of Assessed Value

There are two types of appeals of assessed values that could adversely impact property tax revenues within the City.

Appeals may be based on Proposition 8 of November 1978, which requires that for each January 1 lien date, the taxable value of real property must be the least of its base year value, annually adjusted by the inflation factor pursuant to Article XIIIA of the State Constitution, or its full cash value, taking into account reductions in value due to damage, destruction, depreciation, obsolescence, removal of property or other factors causing a decline in value.

Under California law, property owners may apply for a Proposition 8 reduction of their property tax assessment by filing a written application, in form prescribed by the SBE, with the County board of equalization or assessment appeals board. In most cases, the appeal is filed because the applicant believes that present market conditions (such as prevailing conditions in the residential home market) cause the property to be worth less than its current assessed value.

Proposition 8 reductions may also be unilaterally applied by the County Assessor.

Any reduction in the assessment ultimately granted as a result of such appeal applies to the year for which application is made and during which the written application was filed. These reductions are subject to yearly reappraisals and are adjusted back to their original values when market conditions improve. Once the property has regained its prior value, adjusted for inflation, it once again is subject to the annual inflationary factor growth rate allowed under Article XIIIA.

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A second type of assessment appeal involves a challenge to the base year value of an assessed property. Appeals for reduction in the base year value of an assessment, if successful, reduce the assessment for the year in which the appeal is taken and prospectively thereafter.

The base year is determined by the completion date of new construction or the date of change of ownership. Any base year appeal must be made within four years of the change of ownership or new construction date.

The City cannot predict the changes in assessed values that might result from pending or future appeals by taxpayers. Any reduction in aggregate City assessed valuation due to appeals, as with any reduction in assessed valuation due to other causes, will cause the tax rate levied to repay the Bonds to increase accordingly, so that the fixed debt service on the Bonds (and other outstanding general obligation bonds, if any) may be paid.

Typical Tax Rates

Tax rate areas (“TRAs”) are specific geographic regions within each county in California where a unique combination of local tax agencies – such as the county, cities, school districts and special districts – have the authority to levy taxes and assessments that appear on the county property tax bill. There are multiple TRAs within the City of San Bruno, each of which will show a slightly different combination of levies. The table below shows typical tax rates within TRA 10- 001 within the City for; other TRAs within the City will be slightly different.

Table 4

CITY OF SAN BRUNO
Typical Tax Rate Per $100 Assessed Valuation (TRA 10-001) Fiscal Year 2021-22 through 2025-26

2021-22 2022-23 2023-24 2024-25 2025-26
General Tax Rate 1.0000 1.0000 1.0000 1.0000 1.0000
San Bruno Park School District .0388 .0329 .0268 0242 .0231 San Mateo Union High School District .0488 .0504 .0476 .0445 .0420 San Mateo Community College District .0227 .0193 .0190 .0178 .0180 Total Tax Rate 1.1103 1.1026 1.0934 1.0865 1.0831

Source: California Municipal Statistics, Inc.

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Major Taxpayers

General. The following table shows the twenty largest property taxpayers in the City as determined by their secured assessed valuations for Fiscal Year 2025-26.

Table 5

CITY OF SAN BRUNO
Largest 2025-26 Local Secured Taxpayers

2025-26 % of
Property Owner Primary Land Use Assessed Valuation Total(1)

1. Google Inc. Office Building $1,368,691,582 11.64%

2. Crystal Springs Terrace Owner LLC Apartments 195,340,855 1.66

3. ASN Tanforan Crossing I & II LLC Apartments 172,545,719 1.47

4. Walmart Stores Inc. Office Building 148,329,492 1.26

5. ARE-San Francisco No. 96 Holding LLC Shopping Center 143,413,535 1.22

6. ARE-San Francisco No. 95 Holding LLC Shopping Center 133,499,966 1.14

7. ARE-San Francisco No. 94 Holding LLC Shopping Center 113,041,428 0.96

8. San Bruno III Financing LP Apartments 106,363,482 0.90

9. Benringer Harvard Acappella LP Apartments 97,500,000 0.83

10. Amazon.com Services LLC Industrial 89,788,341 0.76

11. Welch Family Partnership Commercial Properties 69,952,754 0.60

12. Aimco San Bruno Apartments Partners LP Apartments 67,245,895 0.57

13. Virtu Aperture Owner LLC Apartments 65,902,795 0.56

14. The Police Credit Union of California Office Building 64,305,368 0.55

15. Bel Camino LLC Supermarket 54,625,103 0.46

16. San Bruno Towne Center Partnership Shopping Center 52,502,363 0.45

17. Bayhill Office Partners LLC Office Building 48,744,609 0.41

18. Artichoke Enterprises Inc. Card Room 35,426,941 0.30

19. SCG Airport Trade Center LLC Industrial 34,330,124 0.29

20. FW CA Bay Hill Shopping Center Shopping Center 31,367,044 0.27 Totals $3,092,917,396 26.31%
______________________
(1) 2025-26 Local Secured Assessed Valuation: $11,755,929,771.

Source: California Municipal Statistics, Inc.

Concentration of Ownership. As shown in the table, the top twenty taxpayers in the City account for 26.31% of the assessed valuation in the City, with the top secured taxpayer, Google Inc. (“Google”), accounting for approximately 11.64% of the City’s assessed valuation, with an assessed valuation of $1,368,691,582 for fiscal year 2025-26. Non-payment of property taxes by a large owner in the City could reduce the City’s local property tax receipts that secure repayment of the Bonds. See also “APPENDIX A – CERTAIN INFORMATION REGARDING THE CITY OF SAN BRUNO AND COUNTY OF SAN MATEO - CITY FINANCIAL INFORMATION – Property Taxes.”

Google is a global software and technology company, with the headquarters for its subsidiary YouTube located in the City. YouTube is currently expanding its presence in the City, with around 440,000 square footage of office space under construction.

Direct and Overlapping Debt

Set forth below is a direct and overlapping debt report (the “ Debt Report”) prepared by California Municipal Statistics, Inc. The Debt Report is included for general information purposes only. The City has not reviewed the Debt Report for completeness or accuracy and makes no representation in connection therewith.

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

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long-term obligations generally are not payable from revenues of the City (except as indicated) nor are they necessarily obligations secured by land 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 such public agency.

The contents of the Debt Report are as follows: (1) the first column indicates the public agencies which have outstanding debt as of the date of the Debt Report and whose territory overlaps the City; (2) the second column shows the percentage that the City’s assessed valuation represents of the total assessed valuation of each public agency identified in the first column; and (3) the third column is an apportionment of the dollar amount of each public agency’s outstanding debt to property in the City, as determined by multiplying the total outstanding debt of each agency by the percentage of the City’s assessed valuation represented in the second column.

Table 6

CITY OF SAN BRUNO
Statement of Direct and Overlapping Bonded Debt
As of March 31, 2026

2025-26 Assessed Valuation: $11,907,012,210

DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable Debt(1) San Mateo Community College District 3.486% $21,851,265 South San Francisco Unified School District 0.953 2,559,646 San Mateo Union High School District 9.996 72,880,753
San Bruno Park School District 96.859 69,996,387
Millbrae School District 2.998 1,123,187
TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT $168,411,238

OVERLAPPING GENERAL FUND DEBT:

San Mateo County General Fund Obligations 3.486% $17,917,464 San Mateo County Board of Education Certificates of Participation 3.486 185,804 San Mateo County Flood and Sea LRR District General Fund Obligations 5.979 675,029 South San Francisco Unified School District General Fund Obligations 0.953 20,204 San Bruno Park School District General Fund Obligations 96.859 711,914 City of San Bruno General Fund Obligations 100.000 1,099,338 City of San Bruno Pension Obligation Bonds 100.000 2,220,000 San Mateo County Mosquito and Vector Control District Gen. Fund Obs. 3.486 103,171 TOTAL OVERLAPPING GENERAL FUND DEBT $22,932,924

OVERLAPPING TAX INCREMENT DEBT (Successor Agency):

City of San Bruno Lease Revenue Bonds(2) 100.000% $2,625,000 TOTAL OVERLAPPING TAX INCREMENT DEBT $2,625,000

COMBINED TOTAL DEBT $193,969,162
(3)

Ratios to 2025-26 Assessed Valuation:

Total Overlapping Tax and Assessment Debt .................................................. 1.41% Combined Direct Debt ($3,319,338) ............................................................. 0.03% Combined Total Debt ...................................................................................... 1.63%

Ratios to Redevelopment Incremental Valuation ($2,468,824,255):

Total Overlapping Tax Increment Debt ............................................................ 0.11%

(1) Excludes the Bonds to be sold.
(2) Lease payments are reimbursed to the City by the Successor Agency using tax increment under an Amended and Restated Reimbursement Agreement.
(3) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations.

Source: California Municipal Statistics, Inc.

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CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING CITY REVENUES

AND APPROPRIATIONS

Principal and interest on the Bonds are payable from the proceeds of an ad valorem property tax levied by the County, as directed by the City, for the payment thereof. See “THE BONDS” and “SECURITY FOR THE BONDS.” Articles XIIIA, XIIIB, XIIIC and XIIID of the State Constitution, Propositions 62, 111, 218, 26, 1A and 22, and certain other provisions of law discussed below are included in this section to describe the potential effect of these Constitutional and statutory measures on the ability of the County to levy, and the City to spend, tax proceeds for operating and other purposes, and it should not be inferred from the inclusion of such materials that these laws impose any limitation on the ability of the County to levy taxes for payment of the Bonds. The tax levied by the County, as directed by the City, for payment of the Bonds was approved by the City’s voters in compliance with Article XIIIA and all applicable laws.

Article XIIIA of the State Constitution

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

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

Legislation Implementing Article XIIIA

Legislation has been enacted and amended a number of times since 1978 to implement Article XIIIA. Under current law, local agencies are no longer permitted to levy directly any property tax (except to pay voter -approved indebtedness). The one percent property tax is automatically levied by the County and distributed according to a formula among taxing agencies.

The formula apportions the tax roughly in proportion to the relative shares of taxes levied prior to 1989.

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

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Article XIIIB of the State Constitution

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

The State and each local government entity has its own appropriations limit. Each year, the limit is adjusted to allow for changes, if any, in the cost of living, the population of the jurisdiction, and any transfer to or from another government entity of financial responsibility for providing services. Proposition 111 requires that each agency’s actual appropriations be tested against its limit every two years. If the aggregate “proceeds of taxes” for the preceding two-year period exceeds the aggregate limit, the excess must be returned to the agency ’s taxpayers through tax rate or fee reductions over the following two years.

The City has never exceeded its appropriations limit.

Articles XIIIC and XIIID of the State Constitution

General. On November 5, 1996, the voters of the State approved Proposition 218, known as the “Right to Vote on Taxes Act.” Proposition 218 adds Articles XIIIC and XIIID to the California Constitution and contains a number of interrelated provisions affecting the ability of the City to levy and collect both existing and future taxes, assessments, fees and charges.

On November 2, 2010, California voters approved Proposition 26, entitled the “Supermajority Vote to Pass New Taxes and Fees Act.” Section 1 of Proposition 26 declares that Proposition 26 is intended to limit the ability of the State Legislature and local government to circumvent existing restrictions on increasing taxes by defining the new or expanded taxes as “fees.” Proposition 26 amended Articles XIIIA and XIIIC of the State Constitution. The amendments to Article XIIIA limit the ability of the State Legislature to impose higher taxes (as defined in Proposition 26) without a two- thirds vote of the Legislature. The amendments to Article XIIIC define “taxes” that are subject to voter approval as “any levy, charge, or exaction of any kind imposed by a local government,” with certain exceptions.

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Taxes. Article XIIIC requires that all new local taxes be submitted to the electorate before they become effective. Taxes for general governmental purposes of the City ( “general taxes”) require a majority vote; taxes for specific purposes (“special taxes”), even if deposited in the City’s General Fund, require a two-thirds vote.

Property-Related Fees and Charges. Article XIIID also adds several provisions making it generally more difficult for local agencies to levy and maintain property -related fees, charges, and assessments for municipal services and programs.

Reduction or Repeal of Taxes, Assessments, Fees and Charges. Article XIIIC also removes limitations on the initiative power in matters of reducing or repealing local taxes, assessments, fees or charges. No assurance can be given that the voters of the City will not, in the future, approve an initiative or initiatives which reduce or repeal local taxes, assessments, fees or charges currently comprising a substantial part of the City’s General Fund. If such repeal or reduction occurs, the City’s ability to pay debt service on the Bonds could be adversely affected.

Burden of Proof . Article XIIIC provides that local government “bears the burden of proving by a preponderance of the evidence that a levy, charge, or other exaction is not a tax, that the amount is no more than necessary to cover the reasonable costs of the governmental activity, and that the manner in which those costs are allocated to a payor bear a fair or reasonable relationship to the payor ’s burdens on, or benefits received from, the governmental activity. ” Similarly, Article XIIID provides that in “any legal action contesting the validity of a fee or charge, the burden shall be on the agency to demonstrate compliance” with Article XIIID.

Judicial Interpretation of Proposition 218. The interpretation and application of Articles XIIIC and XIIID will ultimately be determined by the courts, with various decisions already handed down, but none impacting the City’s ability to pay the Bonds.

Proposition 62

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

California appellate court cases have overturned the provisions of Proposition 62 pertaining to the imposition of taxes for general government purposes. However, the California Supreme Court upheld Proposition 62 in its decision on August 28, 1995, in Fresno County Transportation Authority v. Guardino . This decision reaffirmed the constitutionality of Proposition 62. Certain matters regarding Proposition 62 were not addressed in the Supreme Court’s decision, such as what remedies exist for taxpayers subject to a tax not in compliance

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with Proposition 62, and whether the decision applies to charter cities. The City has not experienced any substantive adverse financial impact as a result of the passage of this initiative.

Proposition 1A; Proposition 22

Proposition 1A . Proposition 1A, proposed by the Legislature in connection with the State’s Fiscal Year 2004-05 Budget, approved by the voters in November 2004 and generally effective in Fiscal Year 2006-07, provided that the State may not reduce any local sales tax rate, limit existing local government authority to levy a sales tax rate or change the allocation of local sales tax revenues, subject to certain exceptions. Proposition 1A generally prohibited the State from shifting to schools or community colleges any share of property tax revenues allocated to local governments for any Fiscal Year , as set forth under the laws in effect as of November 3, 2004. Any change in the allocation of property tax revenues among local governments within a county had to be approved by two-thirds of both houses of the Legislature.

Proposition 22. Proposition 22, entitled “The Local Taxpayer, Public Safety and Transportation Protection Act, ” was approved by the voters of the State in November 2010.

Proposition 22 eliminates or reduces the State’ s authority to (i) temporarily shift property taxes from cities, counties and special districts to schools, (ii) use vehicle license fee revenues to reimburse local governments for State-mandated costs (the State will have to use other revenues to reimburs e local governments), (iii) redirect property tax increment from redevelopment agencies to any other local government, (iv) use State fuel tax revenues to pay debt service on State transportation bonds, or (v) borrow or change the distribution of State fuel tax revenues.

Property Tax Base Transfer Ballot Measure . On November 3, 2020, State voters approved a constitutional amendment entitled Property Tax Transfers, Exemptions and Revenue for Wildfire Agencies and Counties Amendment (“ Proposition 19”), which: (i) expands special rules that give property tax savings to homeowners that are over the age of 55, severely disabled, or whose property has been impacted by a natural disaster or contamination, when they buy a different home; (ii) narrows exist ing special rules for inherited properties; and (iii) broadens the scope of legal entity ownership changes that trigger reassessment of properties. The City cannot make any assurance as to what effect the implementation of Proposition 19 will have on assessed valuation of real property in the City.

Possible Future Initiatives

Articles XIIIA, XIIIB, XIIIC and XIIID and Propositions 62, 111, 218, 26, 1A, 22 and 19 were each adopted as measures that qualified for the ballot pursuant to the State’ s initiative process. From time to time other initiative measures could be adopted, further affecting revenues of the City or the City ’s ability to expend revenues. The nature and impact of these measures cannot be anticipated by the City.

RISK FACTORS

The following information should be considered by prospective investors in evaluating the Bonds. However, the following does not purport to be an exhaustive listing of risks and other considerations which may be relevant to investing in the Bonds . In addition, the order in which the following information is presented is not intended to reflect the relative importance of any such risks.

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The various legal opinions to be delivered concurrently with the issuance of the Bonds will be qualified as to the enforceability of the various legal instruments by limitations imposed by State and federal laws, rulings and decisions affecting remedies, and by bankruptcy, reorganization or other laws of general application affecting the en forcement of creditors’ rights, including equitable principles.

Reduction in Taxable Value

Property tax revenue available to pay principal of and interest on the Bonds are determined by the amount of taxable value in the City and the current rate or rates at which property in the City is taxed. The reduction of taxable values of property in the City caused by economic factors beyond the City’s control, such as the complete or partial destruction of property caused by, among other eventualities, fire, earthquake or other natural disaster, could cause a reduction in the property taxes available to pay debt service on the Bonds and in turn have an adverse effect on the City’s ability to make timely payments on the Bonds.

Seismic. Earthquakes pose risks to the City due to the City’s close proximity to active faults with histories of regular movements. The City straddles the San Andreas Fault and is approximately 18 miles southwest of the Hayward Fault. The San Andreas and Hayward faults are the two principally active, strike- slip faults in the San Francisco Bay Area. Other principal faults capable of producing significant ground shaking in the City include the San Gregorio-Hosgri, Rodger’s Creek-Healdsburg, Calaveras, Concord -Green Valley, and Pilarcitos faults. The four major hazards associated with earthquakes include fault surface rupture, groundshaking, ground failure (landslides), and settlement.

Flood. No part of the City lies within the 100-year flood plain meaning that the statistical probability of flooding is less than one percent in any part of the City on any given year. The City has been designated Flood Zone C (Flood Hazard No. 060326B) per lette r from the Federal Insurance Administration dated March 30, 1981. Although the City contains no areas officially designated as flood zones, there are some areas in the City that may occasionally flood due to combined high tides and heavy rains.

The Federal Emergency Management Agency (“FEMA”) completed an engineering study of the San Francisco Bay including detailed analyses of coastal hazards as part of the California Coastal Analysis and Mapping Project in July, 2014. The results of the Coastal Flood Hazard Study are being used by FEMA to remap the elevation and inland extent of wave induced coastal flood hazards for San Francisco Bay communities including the City. FEMA conducted the study as part of their nationwide Risk Mapping, Assessment, and Planning Program to determine revised Bas e Flood Elevation, the extent of the Special Flood Hazard Areas for coastal communities, and to update the Flood Insurance Study reports and Flood Insurance Rate Maps.

The results of the study identified potential flood hazard areas in the City, the majority of which is comprised of residential properties located on the west side of Highway 101 and south of Interstate 380. As part of its review of the proposed flood hazard maps which include portions of San Bruno, the City has raised significant technical comments concerning the 2014 study methodology and results related to the actual extent of potential flood hazard in the City. The City worked with a firm that has technical expertise in coastal engineering and with FEMA to evaluate and confirm the impacts and extent of the FEMA flood hazard area.

The analysis completed by the City’s technical expert concluded the flooding area is significantly smaller than FEMA’s findings. Based on the results, the City submitted an appeal package to FEMA on August 2016 along with letters of support from both Congresswoman Jackie

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Speier and Supervisor David Pine. The City’s appeal was denied by FEMA. The City continued and submitted the application to FEMA immediately requesting the Scientific Resolution Panel (“SRP”) which is the last step in the appeal process. The City wanted the SRP to review the analysis and provide independent review of our findings. In April 2018, the City was informed that the SRP denied the appeal.

Since the appeal process has been completed, FEMA issued a Letter of Final Flood Evaluation Determination to the County and City on October 5, 2018. In response, the City adopted a Floodplain Management Ordinance, which FEMA made minor revisions to in 2019.

The City continues to work on this issue and is currently working with the County and City of South San Francisco to study one of the flooding sources and trying to determine how to mitigate the issue. In 2025, the City solicited bids for engineering services related to updates to its Storm Drain Master Plan, which was last revised in June 2014. In January 2020, the San Mateo County Flood and Sea Level Rise Resiliency District (also known as OneShoreline) was established as the first government agency in California that is solely focused on water -related impacts of climate change. OneShoreline is funded with a mix of contributions from cities within the County (including the City) along with County and State grants, and also manages the San Bruno Creek Flood Zone, which is funded by property taxes in the San Bruno creek watershed.

OneShoreline is developing proposed solutions to flood risks within the Sa n Bruno Creek Floodzone.

Wildfires and Fire Insurance. In the past, drought conditions in the State (see “– Natural Calamities – Droughts” below) have led to increased risk of wildfire. In particular, certain electrical operators in the State have seen their distribution/transmission lines cause billions of dollars in property damage and the loss of lives. In 2023, as in several prior years, for example, devastating wildfires burned in various communities in California, causing wide- spread damage. In 2025, communities in Los Angeles County, including Pacific Palisades, Malibu and Altadena, experienced widespread devastation from wildfires causing losses of life, thousands of burned homes, and billions of dollars in property damage. Portions of the City are located in “very high”, “high” and “moderate” fire hazard severity zones, and no assurance can be given that wildfires will not erupt in the City and negatively impact development of property in the City or willingness and ability to pay property taxes in the future.

On January 16, 2025, Governor Gavin Newsom issued Executive Order N -10-25 (the “Governor’s Order”) which canceled penalties, costs and interest on overdue property taxes ) within certain zip codes affected by the Palisades Fire and the Altadena Fire during calendar year 2025. This will likely cause a delay in the payment of taxes by certain property owners in any areas affected by the Governor’s Order. In the event of a major fire or other natural disaster affecting the City, a similar order affecting the City could impact the debt service payment for the Bonds.

Droughts. From time to time, areas of the State have experienced significant drought conditions that resulted in negative impacts to water supplies, which could have an adverse effect on property values in the City. The City cannot predict what effect drought conditions may have on the desirability to live in the City or property values therein.

Hazardous Substances. An additional environmental condition that may result in the reduction in the assessed value of property would be the discovery of a hazardous substance that would limit the beneficial use of taxable property within the City . In general, the owners and operators of property may be required by law to remedy conditions of the property relating to

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releases or threatened releases of hazardous substances. The owner or operator may be required to remedy a hazardous substance condition of property whether or not the owner or operator has anything to do with creating or handling the hazardous substance. The effect, therefore, should any of the property within the City be affected by a hazardous substance, could be to reduce the marketability and value of the property by the costs of remedying the condition.

Economic Instability. The general economy of the City will be subject to all of the risks generally associated with urban real estate markets. Real estate prices may be adversely affected by changes in general economic conditions, fluctuations in the real estate market and interest rates, unexpected increases in home improvement costs and by other similar factors. In addition, if there is a significant decline in the general economy of the City, the owners of property within the City may be less able or less willing to make timely payments of property taxes or may petition for reduced assessed valuation causing a delay or interruption in the receipt of property tax revenues by the City.

In the event that one or more of such above conditions occur, such occurrence could cause damages of varying seriousness to the land and improvements and the value of property in the City could be diminished in the aftermath of such events. A substantial reduction of the value of such properties could affect the ability or willingness of the property owners to pay the property taxes. The above list is not exhaustive.

Potential General Fund Structural Deficit

On April 17, 2023 the CDTFA issued a reallocation notice to the City which states that certain sales tax revenues ( in the amount of approximately $27.5 million) should be reallocated from the City to other jurisdictions. On May 17, 2023, the City submitted a petition to CDTFA to object to and appeal the reallocation notices. In addition, on October 20, 2023, the City and Walmart filed a Verified Petition for Writ of Mandate and Complaint for Declaratory and Injunctive Relief asking the court to find the City’s allocation of local sales taxes is proper. On June 16, 2026, the court entered judgement in favor of CDTFA, dismissing the entirety of the lawsuit with prejudice. As a result, the City’s objection to the reallocation notices must be heard through the administrative appeal process before coming back to the court. As of June 30, 2025, the amount in dispute was approximately $64.3 million.

Property Tax In-Lieu of Vehicle License Fees (“In-Lieu VLF”) represents the swap of VLF for property tax as part of a state- local budget agreement in 2004. The agreement permanently reduced the VLF tax rate from 2% to 0.65%, and the revenue loss was replaced with a similar amount from property tax. However, in recent years, the formula used to calculate In- Lieu VLF and ERAF has resulted in a unique circumstance for the County where there is insufficient property tax to backfill the losses resulting from the 2004 decision. Affected cities in the County are lobbying for the State to backfill the In -Lieu VLF shortfall with State General Fund monies; however, the State faces similar budget challenges and may not make the City whole. As a result, while the City is entitled to approximately $7 million in Fiscal Year 2025-26, the budget assumes a loss of $3 million. The City anticipates a complete loss of In-Lieu VLF in the next several years without legislative changes to the formulas.

The City is also at risk of losing $2 million in revenues annually if the State Controller finds that the County has miscalculated their Excess Educational Revenue Augmentation Fund (ERAF) distributions, and at risk of losing approximately $3.4 million in cardroom revenues fees pending

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regulatory approvals required by the State for the ability to offer certain card games. A change in the types of games authorized may have a material impact on the cardrooms’ operations.

These potential revenue risks could result in a structural deficit for the City’s General Fund for the next five Fiscal Years. The City made structural deficit reductions by reducing authorized employees by 8.0 in response to the In -Lieu VLF loss of $3 mil lion in fiscal year 2026- 27. The City continues to explore various scenarios which may include reductions in services provided and workforce reductions. Additionally, the City Council is considering a potential ballot measure on the November 2026 ballot t hat would generate revenue to offset threatened as discussed above. If the City Council decides to move forward with a ballot measure, their final action is scheduled for the July 28 Council meeting.

Bankruptcy and Foreclosure

The payment of property taxes and the ability of the County to foreclose the lien of a delinquent unpaid tax may be limited by bankruptcy, insolvency, or other laws generally affecting creditors’ rights or by the laws of the State relating to judicial foreclosure. The various legal opinions to be delivered concurrently with the delivery of the Bonds (including Bond Counsel’s approving legal opinion) will be qualified as to the enforceability of the various legal instruments by bankruptcy, insolvency, reorganization, moratorium, or other similar laws affecting creditors ’ rights, by the application of equitable principles and by the exercise of judicial discretion in appropriate cases.

Cyber Security

The City, like many other public and private entities, rely on computer and other digital networks and systems to conduct its operations. As a recipient and provider of personal, private or other sensitive electronic information, the City is potentially subject to multiple cyber threats, including without limitation hacking, viruses, ransomware, malware and other attacks. No assurance can be given that their efforts to manage cyber threats and attacks will be successful in all cases, or that any such attack will not materially adversely impact the operations or finances of any entity, including with respect to the administration of the Bonds. The City is also reliant on other entities and service providers in connection with the administration of the Bonds, including without limitation the County Auditor-Controller for the levy and collection of taxes, State agencies, and the Paying Agent. No assurance can be given that the City and these other entities will not be affected by cyber threats and attacks in a manner that may affect the Bond owners.

Proximity to San Francisco International Airport

The Airport is a major international airport located near the City, with flights to points throughout North America, Europe and Asia. It is the largest airport in the San Francisco Bay Area and the second busiest airport in the State, after Los Angeles International Airport. In fiscal year 2025 (the most recent year for which information is available from the Airport) , the Airport reports 54.1 million total passengers and 555,099 metric tons of cargo passing through the Airport. The City lies directly within the flight path of the Airport, and a major disaster occurring at the Airport could adversely affect assessed valuations in the City.

Natural Gas Transmission Pipelines

On September 9, 2010, a Pacific Gas and Electric Company (“ PG&E”) high pressure natural gas transmission pipeline exploded in the City, with catastrophic results, including the destruction of 38 homes and the loss of 8 lives . There are similar transmission pipelines and

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numerous other types of pipelines owned, operated and maintained by PG&E located throughout the City, none of which is currently considered to be one of PG&E’s top 100 at-risk pipelines.

Following the explosion, PG&E has decommissioned its Transmission Line 132 in the City and has completed significant inspection and testing of its pipelines within the City. Ongoing regulatory proceedings conducted by the California Public Utilities Commi ssion have required PG&E to make safety improvements to its system in the City and throughout the State.

Pandemic Diseases

In recent years, the COVID-19 pandemic impacted governments, businesses and people in a manner having negative effects on global and local economies. In response to the pandemic, the City took actions to activate its emergency operations center, temporari ly close all non - essential City services, introduced teleworking as and where appropriate, implemented daily screening of all employees, and abided by all state and federal guidelines and orders.

Although the COVID-19 pandemic is now officially over, the City cannot predict the impact that COVID-19 or another future pandemic or other health event may have on the City. There can be no assurances that the spread of future pandemics or other health ev ents, such as declining business and travel activity, will not materially adversely impact the financial condition of the City, and assessed valuations within the City. In addition, the City may experience increased personnel costs and/or reduced revenues due to any such situation and the related impact on economic and other activity in and around the City, potentially adversely impacting assessed valuations.

Loss of Tax-Exemption

Interest on the Bonds could become includable in gross income for purposes of federal income taxation, retroactive to the date the Bonds were issued, as a result of future acts or omissions of the City in violation of its covenants in the Bond Resolution. In addition, current and future legislative proposals, if enacted into law, may cause interest on the Bonds to be subject, directly or indirectly, to federal income taxation by, for example, changing the current exclusion or deduction rules to limit the aggregate amount of interest on state and local government bonds that may be treated as tax exempt by individuals. Should such an event of taxability occur, the Bonds are not subject to special redemption and will remain outstanding until maturity or until redeemed under other provisions set forth in the Bond Resolution.

Secondary Market

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

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TAX MATTERS

Federal Tax Status. In the opinion of Jones Hall LLP, Bond Counsel, subject, however to the qualifications set forth below, under existing law, the interest on the Bonds is excluded from gross income for federal income tax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax. Interest on the Bonds may be subject to the corporate alternative minimum tax.

The opinions set forth in the preceding paragraph are subject to the condition that the City comply with all requirements of the Internal Revenue Code of 1986, as amended (the “Tax Code”) that must be satisfied subsequent to the issuance of the Bonds in order that the interest thereon be, and continue to be, excludable from gross income for federal income tax purposes. The City has made certain representations and covenants in order to comply with each such requirement.

Inaccuracy of those representations, or failure to comply with certain of those covenants, may cause the inclusion of such interest in gross income for federal income tax purposes, which may be retroactive to the date of issuance of the Bonds.

Tax Treatment of Original Issue Discount and Premium . If the initial offering price to the public (excluding bond houses and brokers) at which a Bond is sold is less than the amount payable at maturity thereof, then such difference constitutes “original issue discount ” for purposes of federal income taxes and State of California personal income taxes. If the initial offering price to the public (excluding bond houses and brokers) at which a Bond is sold is greater than the amount payable at maturity thereof, then such difference constitutes “ original issue premium” for purposes of federal income taxes and State of California personal income taxes.

De minimis original issue discount and original issue premium is disregarded.

Under the Tax Code, original issue discount is treated as interest excluded from federal gross income and exempt from State of California personal income taxes to the extent properly allocable to each owner thereof subject to the limitations described in t he first paragraph of this section. The original issue discount accrues over the term to maturity of the Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight-line interpolations between compounding dates). The amount of original issue discount accruing during each period is added to the adjusted basis of such Bonds to determine taxable gain upon disposition (including sale, redemption, or payment on maturity) of such Bond. The Tax Code contains certain provisions relating to the accrual of original issue discount in the case of purchasers of the Bonds who purchase the Bonds after the initial offering of a substantial amount of such maturity. Owners of such Bonds should consult their own tax advisors with respect to the tax consequences of ownership of Bonds with original issue discount, including the treatment of purchasers who do not purchase in the original offering to the public at the first price at which a substantial amount of such Bonds is sold to the public.

Under the Tax Code, original issue premium is amortized on an annual basis over the term of the Bond (said term being the shorter of the Bond’ s maturity date or its call date). The amount of original issue premium amortized each year reduces the adjusted basis of the owner of the Bond for purposes of determining taxable gain or loss upon disposition. The amount of original issue premium on a B ond is amortized each year over the term to maturity of the Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight-line interpolations between compounding dates). Amortized bond premium is not deductible for federal income tax purposes. Owners of premium Bonds, including purchasers who do not purchase in the original offering, should consult their own tax advisors with respect to State of California personal income tax and federal income tax cons equences of owning such Bonds.

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California Tax Status. In the further opinion of Bond Counsel, interest on the Bonds is exempt from California personal income taxes.

Form of Opinion; Contingent Compensation. The proposed form of opinion of Bond Counsel is attached hereto as APPENDIX C. Jones Hall will receive compensation from the City contingent upon the sale and delivery of the Bonds.

Other Considerations. Owners of the Bonds should also be aware that the ownership or disposition of, or the accrual or receipt of interest on, the Bonds may have federal or state tax consequences other than as described above. Bond Counsel expresses no opinion regarding any federal or state tax consequences arising with respect to the Bonds other than as expressly described above, including any opinion regarding federal tax consequences arising with respect to the ownership, sale or disposition of the Bonds, or the amount, accrual or receipt of interest on the Bonds.

In addition, future legislation, if enacted into law, or clarification of the Tax Code may cause interest on the Bonds to be subject, directly or indirectly, to federal income taxation, or otherwise prevent owners of the Bonds from realizing the full current benefit of the tax status of such interest.

The introduction or enactment of any such future legislation or clarification of the Tax Code may also affect the market price for, or marketability of, the Bonds. Prospective purchasers of the Bonds should consult their own tax advisors regarding any pending or proposed federal tax legislation, as to which Bond Counsel expresses no opinion.

CONTINUING DISCLOSURE

The City will covenant for the benefit of owners of the Bonds to provide certain financial information and operating data relating to the City by not later than April 1 after the end of each fiscal year of the City (currently June 30), commencing with the report for the 2025-26 fiscal year (the “Annual Report”), and to provide notices of the occurrence of certain enumerated events.

The specific nature of the information to be contained in an Annual Report or the notices of enumerated events is set forth in the form of Continuing Disclosure Certificate attached as APPENDIX D. These covenants will be made to assist the Underwriter (as defined below) in complying with Securities Exchange Commission Rule 15c2-12(b)(5) (the “Rule”).

In the past five years, the City has been in compliance with its prior undertakings under the Rule, other than (i) a late filing of certain statistical tables in its 2022 Operating Data Report, which were subsequently included in the final audit posted in June 2026 and (ii) a material events notice related to its entry into the 2022 Fire Truck lease, which was filed after the 10-day deadline.

The City has engaged [Urban Futures, Inc.] to serve as dissemination agent for the City respect to the Bonds.

LITIGATION

No Bond- Related Litigation . No litigation is pending or threatened concerning the validity of the Bonds, and a certificate to that effect will be furnished to the Underwriter at the time of the original delivery of the Bonds. The City is not aware of any litigation pending or threatened questioning the political existence of the City or contesting the City’s ability to receive ad valorem taxes or to collect other revenues or contesting the City’s ability to issue and repay the Bonds.

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Other Litigation. As discussed under “BOND OWNERS’ RISKS – Potential General Fund Structural Deficit, on April 17, 2023 , the CDTFA issued a reallocation notice to the City and Walmart in the amount of approximately $27.5 million, which states that certain sales tax should be reallocated to other jurisdictions. The City and Walmart filed a Verified Petition for Writ of Mandate and Complaint for Declaratory and Injunctive Relief on October 26, 2023 to find the City’s allocation of local sales taxes is proper. If the City and Walmart lose the case, the City would owe up to approximately $20.9 million to the CDTFA , which amount would then be redistributed to other local sales tax entities . In July 2025, the City and Walmart’s claim was dismissed by the California Superior Court, which ruled that the City cannot bypass the required administrative process by challenging the reallocation within CDTFA.

The City is also at risk of losing $3.4 million annually in cardroom taxes and fees pending outcome of lawsuits authorized by 2024 State Senate Bill 549 which allows Native American tribes to sue gambling halls across California alleging that those establishments illegally offer card games such as black jack and poker that cut into the tribes’ gambling revenues.

As discussed under “BOND OWNERS’ RISKS – Potential General Fund Structural Deficit,” the City anticipates a complete loss of In -Lieu VLF in the next several years without legislative changes to the formulas which determine VLF allocations. The City has joined in a lawsuit brought by the County against the State, which accuses the State of withholding VLF funds.

RATING

S&P Global Ratings, a division of Standard & Poor’s Financial Services LLC (“S&P”), has assigned its municipal bond rating on the Bonds of “___.” There is no assurance that the rating will continue for any given period of time or that it will not be revised downward or withdrawn entirely by S&P, if, in the judgment of S&P, circumstances so warrant. Any such downward revision or withdrawal of such rating may have an adverse effect on the market price of the Bonds.

The City has furnished to S&P information and material which has not been included in this Official Statement. Generally, rating agencies base their ratings on information and material so furnished and on investigations, studies and assumptions made by the rating agencies. The ratings reflect only the view of such organization and an explanation of the significance of such rating may be obtained from S&P.

The City has covenanted in a Continuing Disclosure Certificate to file on the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access website (“EMMA”) notices of any ratings changes on the Bonds. See “ CONTINUING DISCLOSURE.” Notwithstanding such covenant, information relating to rating changes on the Bonds may be publicly available from the rating agency prior to such information being provided to the City and prior to the date the City is obligated to file a notice of rating change on EMMA. Purchasers of the Bonds are directed to the rating agency and its website and official media outlets for the most current rating changes with respect to the Bonds after the initial issuance of the Bonds.

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MUNICIPAL ADVISOR

The City has retained Fieldman Rolapp & Associates, Inc ., as its municipal advisor (the “Municipal Advisor”) in connection with the issuance of the Bonds. The Municipal Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or assumes any responsibility for the accuracy, completeness, or fairness of the information contained in this Official Statement. The Municipal Advisor has provided the following sentence for inclusion in this Official Statement : The Municipal Advisor has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to the City and, as applicable, to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Municipal Advisor does not guarantee the accuracy or completeness of such information.

The Municipal Advisor has assisted the City with the structure, timing and terms for the sale of the Bonds. The Municipal Advisor provides municipal advisory services only and do not engage in the underwriting, marketing, or trading of municipal securities or other negotiable instruments. The compensation of the Municipal Advisor is contingent upon the delivery of the Bonds.

COMPETITIVE SALE OF BONDS

The Bonds were sold following a competitive bidding process, and were awarded to ______________ (the “Underwriter”), whose proposal represented the conforming bid with the lowest true interest cost for the Bonds as determined in accordance with the Official Notice of Sale. The Underwriter has agreed to purchase the Bonds at a price of $____________, which is equal to the initial principal amount of the Bonds of $____________ plus a net original issue premium of $_______________, less an Underwriter’s discount of $____________. The Underwriter intends to offer the Bonds to the public at the offering prices set forth on the inside cover page of this Official Statement. The Underwriter may offer and sell to certain dealers and others at a price lower than the offering prices stated on the inside cover page hereof. The offering price may be changed from time to time by the Underwriter.

EXECUTION

The execution of this Official Statement and its delivery have been approved by the City Council.

CITY OF SAN BRUNO

By:

City Manager

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APPENDIX A

CERTAIN INFORMATION REGARDING

THE CITY OF SAN BRUNO AND COUNTY OF SAN MATEO

The Bonds are secured solely by an ad valorem property tax levied by the County, on behalf of the City, in an amount sufficient to pay principal of and interest on the Bonds each year.

The Bonds are not payable from any other funds or revenues. Information regarding the City and its General Fund finances is provided for informational purposes only; and does not constitute security for the repayment of the Bonds.

Introduction

The City. The City of San Bruno (the "City") is located on the San Francisco Peninsula in the County of San Mateo (the “County”) in the State of California (the “State”), approximately 12 miles south of San Francisco, 14 miles north of Redwood City (the County seat), and immediately adjacent to the San Francisco International Airport. The City covers a total land area of 5.5 square miles.

The County. The County is located directly south of the City and County of San Francisco and north of the County of Santa Cruz on the California Coast and the County of Santa Clara along the San Francisco Bay. The County is a major employment base, and is also accessible to the San Jose and Silicon Valley areas approximately 30 miles south via Interstate 280 or U.S.

Highway 101. The County has an approximate total area of 741 square miles , of which 448 square miles is land and 293 square miles is water. It is the third-smallest county in California by land area.

Population

Population figures for the City, County and State for the last five years are shown in the following table.

CITY OF SAN BRUNO, COUNTY OF SAN MATEO

AND STATE OF CALIFORNIA
Population Estimates
(as of January 1)

Year
City of
San Bruno
County of
San Mateo
State of
California
2021 43,464 757,341 39,369,530
2022 42,621 744,660 39,179,680
2023 42,801 749,670 39,228,444
2024 42,507 747,777 39,420,663
2025 42,631 748,337 39,529,101

Source: California State Department of Finance estimates.

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City Government
The Ci
ty was incorporated on December 23, 1914, as a general law city . The City is governed by the City Council and operates under a Council-Manager form of government. As the policy-making body, it has the ultimate responsibility to the people of the City and the implementation of all programs and City services. It approves all ordinances, resolutions, and major contracts modifies and approves the budget, and has the responsibility of employing a City Manager and City Attorney.

The Ci
ty Manager is responsible for carrying out the policies of the City Council and for the proper and efficient management of municipal activities. The City Manager directs and manages the various departments and municipal services through appointed Department Heads who directly supervise and administer the various City programs, services, and activities.

The c
urrent members of the City Council are shown in the following table:

Member Office Term Expires
Rico E. Medina Mayor December 2026
Sandy Alvarez Vice Mayor December 2026
Tom Hamilton Council Member December 2028
Marty Medina Council Member December 2026
Michael Salazar Council Member December 2028

CITY FINANCIAL INFORMATION
Account
ing Policies and Financial Reporting
The acc
ounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for by providing a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. City resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.

The Ci
ty’s most recent audited financial statement for the fiscal year ending June 30, 2025, are attached as “ APPENDIX B – AUDITED FINANCIAL STATEMENT OF THE CITY FOR THE FISCAL YEAR ENDED JUNE 30, 2025” to this Official Statement, which were prepared by the City and audited by Badawi & Associates, CPAs (the “Auditor”).

The audit
ed financial statement should be read in their entirety. The City has not requested nor did the City obtain permission from the Auditor to include the audited financial statement as an appendix to this Official Statement. Accordingly, the Auditor has not performed any post-audit review of the financial condition or operations of the City or the General Fund. In addition, the Auditor has not reviewed this Official Statement. 509 of 558 A-3
Financial Statements
The tables on the following pages provide a recent history of the City ’s General Fund balance sheet, and General Fund revenues, expenditures, transfers, and ending fund balances.

C

ITY OF SAN BRUNO

GENERAL FUND BALANCE SHEET
(Fiscal Year Ending June 30)
Audited Audited Audited Audited Audited
2020-21 2021-22 2022-23 2023-24 2024-25
ASSETS:

Cash and investments(1) $21,888,196 $29,536,324 $25,224,890 $54,052,858 $57,534,380 Cash and investments with fiscal agent 50,496 50,496 50,496 53,082 57,718 Receivables:

Taxes 6,161,557 5,099,304 6,745,058 8,796,961 9,829,931 Accounts -- -- 69,757 91,112 533,851
Interest 137,168 76,483 647,297 723,898 872,295
Loans 775,862 749,809 1,089,120 885,047 926,596
Other 1,407,317 5,461,012 1,493,976 1,552,472 1,382,302 Due from other funds 27,135 -- 1,450,548 1,671,225 3,590,531 Advances to other funds 14,415,651 15,316,895 16,679,225 2,000,000 2,000,000 Other assets -- -- -- -- --
TOTAL ASSETS 44,863,382 56,290,323 53,450,367 69,826,655 76,727,604 LIABILITIES:

Accounts Payable and Accrued Liabilities 5,117,831 5,238,378 5,517,269 5,512,618 7,844,566 Deposits Payable 3,504,872 2,070,937 1,966,495 2,150,139 2,510,795 Unearned revenue 859,418 1,944,239 4,836,826 98,133 109,427 Other liabilities -- 440,500 1,102,681 1,228,448 185,761 TOTAL LIABILITIES 9,482,121 9,694,054 13,423,271 8,989,448 10,650,549

DEFERRED INFLOWS OF RESOURCES
Unavailable revenues -- -- -- -- --

TOTAL DEFERRED INFLOWS OF RESOURCES -- -- -- -- --

FUND BALANCES (DEFICIT)
Nonspendable 14,415,651 15,316,895 16,679,225 2,885,047 2,926,596 Restricted -- -- -- -- --
Assigned 30,408,528 26,045,126 15,910,896 18,161,142 9,666,621 Unassigned (9,442,918) 5,234,248 7,436,975 39,791,018 53,483,838 TOTAL FUND BALANCES (DEFICIT) 35,381,261 46,596,269 40,027,096 60,837,207 66,077,055 TOTAL LIABILITIES AND FUND BALANCES $44,863,382 $56,290,323 $53,450,367 $69,826,655 $76,727,604 (1) Increase in cash and investments in Fisal Year 2023-24 i s attributable to a repayment of a loan to the CityNet Fund.

Source: City of San Bruno, Annual Financial Statements for Fiscal Years 2020-21 through 2024-25. 510 of 558
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CITY OF SAN BRUNO

GENERAL FUND REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCE (Fiscal Year Ending June 30)
Audited Audited Audited Audited Audited
2020-21 2021-22 2022-23 2023-24 2024-25
REVENUES:

Taxes $34,081,291 $42,335,688 $44,206,883 $45,201,975 $48,923,037 Licenses and permits 4,914,700 5,609,093 7,237,718 9,226,757 3,651,136 Intergovernmental and grants 4,755,748 11,054,305 7,743,930 10,603,420 6,299,037 Charges for service 2,093,216 3,915,518 4,595,952 4,288,484 3,354,749 Fines and forfeitures 722,685 612,247 626,532 973,565 937,116 Use of money and property (347,948) (6,745,185) (584,768) 7,802,726 8,967,607 Other Revenues 9,964,869 6,579,462 5,864,628 8,062,262 398,014 TOTAL REVENUES 56,184,561 63,361,128 69,690,875 86,159,189 72,530,696 EXPENDITURES:

Current:

General Government 7,012,591 7,945,649 8,630,693 8,632,785 11,599,685 Public Safety 28,143,174 30,356,530 34,306,350 36,271,471 33,109,212 Public Works 1,540,457 1,551,310 2,053,186 2,143,316 1,583,990 Streets 1,570,931 1,755,168 2,055,155 2,423,858 2,285,308 Parks and recreation 4,645,159 4,937,774 5,443,772 6,576,173 4,642,063 Library 1,930,827 2,071,002 2,218,207 2,303,670 2,244,810 Community and economic development 2,516,995 2,787,248 3,198,317 3,364,108 7,870 Capital outlay 800,041 2,008,149 1,112,575 881,804 943,831 Debt service-principal -- -- -- -- --
Debt service-interest -- -- -- -- --
TOTAL EXPENDITURES 48,160,175 53,412,830 59,018,255 62,597,186 56,416,769 Excess Revenues Over (Under) Expenditures 8,024,386 9,948,298 10,672,620 23,562,003 16,113,927

OTHER FINANCING SOURCES (USES)
Transfers in 3,138,051 5,094,598 2,928,207 4,204,266 1,687,868 Transfers out (3,145,999) (3,827,888) (20,860,702) (11,661,913) (13,561,932) Proceeds from sale of property -- -- 690,702 4,705,755 999,985 TOTAL OTHER FINANCING SOURCES (USES) (7,948) 1,266,710 (17,241,793) (2,751,892) (10,874,079) Net Change in Fund Balance 8,016,438 11,215,008 (6,569,173) 20,810,111 5,239,848 Fund Balance, July 1 27,364,823 35,381,261 46,596,269 40,027,096 60,837,207 Fund Balance, June 30 $35,381,261 $46,596,269 $40,027,096 $60,837,207 $66,077,055 Source: City of San Bruno, Audited Financial Statements for Fiscal Years 2020-21 through 2024-25. 511 of 558
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General Fund Budgets
G
eneral. The City’s annual budget serves as the foundation of the City ’s financial planning and control. Upon adoption of the budget by the City Council, the responsibility of implementing each department’s budget lies with each Department Head, with oversight by the Administrative Services Director and ultimate responsibility resting with the City Manager.

Department Heads are expected to operate their departments within the appropriations established in the budget.

Thi
s budget is arranged by department, fund, and function. The level of budgetary control is established at the fund level. Department Heads may authorize the transfer of appropriations within a department, except transfers: (1) that would purport an increase in the number of regular personnel, and (2) that would decrease appropriations for capital outlay. The City Manager may transfer appropriations between departments so long as total appropriations are not increased within a fund. The City Council has the overriding authority to control the use of revenues and the appropriations of funds and therefor may modify this policy at any time. The total appropriations in any fund may not be increase except by the City Council.

The budge
t is reviewed and presented to City Council on a quarterly basis with a more extensive mid- year budget review. During the quarterly budget review by City Council, consideration is given to necessary adjustments for new programs, projects, and othe r adjustments to ensure that expenditures and revenues are in line with the budgeted projections.

A
carefully designed system of internal accounting and budgetary controls is used to ensure that revenues and expenditures/expenses are tracked and used as intended. These controls are designed to provide reasonable, but not necessarily absolute, assurance with respect to the reliability of financial and budgetary records for use in the preparation of financial statements, as well as accountability for all City assets. At the end of each fiscal year- end, all operating budget appropriations lapse.

I
mpact of State Budget on City Finances. In general, the State budget does not have a material impact on the City’s annual budgets. Instead, the City relies on local revenue sources, such as property taxes, real property transfer taxes, sales tax, transient occupancy taxes , voter approved parcel taxes, and local business license to fund its operations.

I
nformation about the Fiscal Year 2025-26 adopted State budget and other State budgets is regularly available at various State-maintained websites. An impartial analysis of the budget is posted by the Legislative Analyst Office at www.lao.ca.gov. The information referred to in this paragraph is prepared by the respective State agency maintaining each website and not by the City, and the City and its agents take no responsibility for the continued accuracy of the Internet addresses or for the accuracy or timeliness of information posted there, and such information is not incorporated in this Official Statement by these references. 512 of 558
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City General Revenues
Tax
es and other sources of revenue received by the City are listed in the table below , which presents the major general revenues of the City ’s government activities for the last five fiscal years for which audited financial statements are available. Certain taxes currently imposed by the City are affected by Proposition 218. See “CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING CITY REVENUES AND APPROPRIATIONS – Article XIIIC and Article XIIID of the State Constitution.”
A
s shown in the table, sales taxes represent the largest source of general revenues of the City’s government activities to the City for each of the past five fiscal years for which audited financial statements are available.

C

ITY OF SAN BRUNO
Major Revenues by Source – General Revenues for Government Activities Audited Audited Audited Audited Audited
REVENUES: 2020-21 2021-22 2022-23 2023-24 2024-25
Property taxes $12,618,447 $14,532,727 $14,931,681 $15,417,048 $16,171,524 Transient occupancy taxes 1,247,467 2,408,999 3,459,947 3,558,287 3,409,014 Franchise taxes 1,798,673 1,624,176 1,705,417 2,076,227 2,153,559 Sales taxes 17,780,042 21,549,194 20,928,603 20,818,065 23,611,601 Cardroom taxes 2,035,009 2,220,592 3,181,236 3,333,236 3,435,504 Other taxes 2,045,462 2,277,785 2,219,479 4,028,690 3,118,653 State gasoline tax 5,032,607 7,646,019 5,314,866 5,584,474 6,084,725 Miscellaneous -- -- -- -- --
Use of money and property (341,249) (6,715,096) (541,036) 11,237,201 10,114,200 Transfers -- -- 94,724 -- --
TOTAL REVENUES $42,216,458 $45,544,396 $51,294,917 $66,053,228 $68,098,780 Source: City of San Bruno Audited Financial Statements for Fiscal Years 2020-21 through 2024-25.

S
ales Taxes
G
eneral. Sales taxes represent the single largest source of General Fund revenues to the City each year. For Fiscal Year 2024-25, the City received $23,611,601 in sales taxes , an increase of $2,793,536 or 13.4%, from the prior fiscal year adjusted budget for this category.

Thi
s section describes the current system for levying, collecting and distributing sales and use tax revenues in the State of California.

S
ales and use taxes are complementary taxes; when one applies, the other does not. In general, the statewide sales tax applies to gross receipts of retailers from the sale of tangible personal property in the State of California. The use tax is imposed on the purchase, for storage, use or other consumption in the State of tangible personal property from any retailer. The use tax generally applies to purchases of personal property from a retailer outside the State of California where the use will occur within the State of California.

C
ertain transactions are exempt from the State sales tax, including sales of the following products:
• f
ood products for home consumption;
• pr
escription medicine;
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• new spapers and periodicals;
• edi
ble livestock and their feed;
• s
eed and fertilizer used in raising food for human consumption; and • gas
, electricity and water when delivered to consumers through mains, lines and pipes.

Thi
s is not an exhaustive list of exempt transactions. A comprehensive list can be found on the Department of Tax and Fee Administration’s website at http://www.boe.ca.gov/. The reference to this Internet website is provided for reference and convenience only. The information contained within the website may not be current, has not been reviewed by the City and is not incorporated in this Official Statement by reference.

S
ales Tax Collection Procedures. Collection of the sales and use tax is administered by the California Department of Tax and Fee Administration ( “CDTFA”). Under the Sales and Use Tax Law, all sales and use taxes collected by the CDTFA under a contract with any city, city and county, redevelopment agency, or county are required to be transmitted by the CDTFA to such city, city and county, redevelopment agency, or county periodically as promptly as feasible.

These transmittals are required to be made at least twice in each calendar quarter.

U
nder its procedures, the Department of Tax and Fee Administration projects receipts of the sales and use tax on a quarterly basis and remits an advance of the receipts of the sales and use tax to the City on a monthly basis. The amount of each monthly advance is based upon the Department of Tax and Fee Administration’s quarterly projection. During the last month of each quarter, the Department of Tax and Fee Administration adjusts the amount remitted to reflect the actual receipts of the sales and use tax for the previous quarter.

A
ccording to the CDTFA, it distributes quarterly tax revenues to cities, counties and special districts using the following method:

U
sing the prior year ’s like quarterly tax allocation as a starting point, the Department of Tax and Fee Administration first eliminates nonrecurring transactions such as fund transfers, audit payments and refunds, and then adjusts for growth, in order to establish the estimated base amount. The Department of Tax and Fee Administration disburses 90% to each local jurisdiction in three monthly installments (advances) prior to the final computation of the quarter ’s actual receipts. Ten percent is withheld as a reserve against unexpected occurrences that can affect tax collections (such as earthquakes, fire or other natural disaster) or distributions of revenue such as unusually large refunds or negative fund transfers. The first and second advances each represent 30% of the 90% distribution, while the third advance represents 40%. One advance payment is made each month, and the quarterly reconciliation payment (clean- up) is distributed in conjunction with the fir st advance for the subsequent quarter. Statements showing total collections, administrative costs, prior advances and the current advance are provided with each quarterly clean-up payment.

The CDT
FA receives an administrative fee based on the cost of services provided by the Board to the City in administering the City’s sales tax, which is deducted from revenue generated by the sales and use tax before it is distributed to the City.

S
ales Tax Rates. The City receives a percentage of taxable sales in the City (minus certain administrative costs imposed by the Department of Tax and Fee Administration) pursuant 514 of 558
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to the Bradley-Burns Uniform Local Sales and Use Tax (the “Sales Tax Law”), as shown below.

Currently, taxable transactions in the City are subject to the following sales and use tax, of which the City’s shar e is only a portion. The State collects and administers the tax, and makes distributions on taxes collected within the City, as follows:

C

ITY OF SAN BRUNO
Sales Tax Rates
As of April 1, 2026
Component Rate
State-Wide Tax Rate 6.000%
San Mateo County 0.250
City of San Bruno (Measure G) 0.500
San Mateo County Local Tax 1.000
San Mateo County Special Tax 2.125
Total City of San Bruno Tax Rate 9.875%
Source: State Department of Tax and Fee Administration.

C
ity of San Bruno Transactions and Use Tax (Measure G). Measure G is a 1/2 cent general sales tax that was passed by voters in the City November 2019 to fund City services/facilities such as neighborhood police patrols; fire prevention services; urban wildfire protection; crime suppression/investigation; pothole/street repair; increasing parking supply; upgrading parks/other city services/facilities; and expanding services supporting local businesses. There is no sunset date and all funds are available for all General Fund purposes.

Taxabl
e Transactions. Total taxable sales during the first three quarters of calendar year 2025 in the City were reported to be $1,761,375,908, a 14.90% increase in total taxable sales of $1,532,899,900 reported during the comparable three quarters of calendar year 2024.

The f
ollowing table shows number of permits and taxable transactions within the City for the years shown.

C

ITY OF SAN BRUNO
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions (Dollars in Thousands)
Retail Stores Total All Outlets
Year
Number
of Permits
Taxable
Transactions
Number
of Permits
Taxable
Transactions
2020 669 428,643 1,109 642,394
2021 604 1,047,601 984 2,005,913
2022 585 1,099,923 982 1,908,802
2023 565 1,164,701 946 1,929,624
2024 559 1,234,083 932 2,243,488
Source: State Department of Tax and Fee Administration. 515 of 558
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The following table shows taxable transactions within the City by type of business for the years shown.

CI

TY OF SAN BRUNO

TAXABLE TRANSACTIONS
(Figures in Thousands)
2021 2022 2023 2024 2025
Apparel Stores $370,370 $325,117 $289,164 $251,411 $217,484 Auto Dealers and Supplies 1,274,083 1,523,178 2,037,469 2,143,898 2,353,955 Building Materials 581,778 555,816 538,856 521,737 494,908 Drug Stores 90,234 96,022 89,816 92,890 149,758
Eating and Drinking Places 1,028,352 1,176,720 1,253,336 1,188,555 1,191,014 Food Stores 131,690 130,325 130,568 124,912 115,831
Furniture and Appliances 125,374 148,055 136,442 135,387 123,562 General Merchandise 448,716 477,228 453,081 462,786 398,214 Other Retail Stores 426,211 377,769 296,731 281,555 272,769 Packaged Liquor 124,748 123,802 125,927 117,922 113,520 Service Stations 651,526 812,443 709,087 680,767 609,571 Non-Store & Part Time Retailers 11,186 9,647 7,004 6,234 3,504 Business, Service & Repair Group 210,341 226,669 241,202 251,956 250,535 Contractors & Material 105,023 296,862 139,239 239,154 135,411 Drugs & Chemical 0 22 6 25 6,548
Food/Farm Products & Equip 622 597 259 474 964
Furniture & Textiles 11,382 9,972 1,287 969 1,296
Heavy Industrial Equipment 34,350 35,095 22,789 3,107 2,248 Industrial Equipment 4,827 6,352 10,768 39,913 37,384
All Other Equipment 13,094,892 12,841,195 12,921,260 15,974,028 19,664,811 State Adjustments & Transfers 30 2,847 4,861 13,512 63,030 Non-Store & Part Time Retailers 11,186 9,647 7,004 6,234 3,504 Business, Service & Repair Group 210,341 226,669 241,202 251,956 250,535 Manufacturer & Wholesaler Group 13,251,095 13,190,095 13,095,607 16,257,669 19,848,662 State Adjustments & Transfers 30 2,847 4,861 13,512 63,030 County Pool 5,734,006 5,038,821 4,623,388 5,739,167 6,760,695 State Pool 5,614 9,138 10,247 12,464 19,737
County Share (1,286,192) (1,214,603) (1,122,715) (1,411,826) (1,644,839) TOTAL: $36,651,815 $36,438,347 $36,268,746 $43,400,368 $51,507,641 Source: HdL Coren & Cone.

P
roperty Taxes
G
eneral. Property taxes generally represent the 2nd largest source of tax revenue to the City. The City received $ 16,171,524 in property tax revenue for Fiscal Year 2024- 25, slightly higher than the estimates for the prior fiscal year. See “ – Assessed Valuation” below. This amount includes: Property Tax Secured, Property Tax Unsecured, ERAF, Prior Year Property Tax, Real Property Transfer Tax, In Lieu VLF, and Homeowner Property Tax.

A
s discussed under “BOND OWNERS’ RISKS – In-Lieu Vehicle License Fee and Excess Educational Revenue Augmentation Fund Allocation,” the City anticipates a complete loss of In- Lieu VLF in the next several years without legislative changes to the formulas which determine VLF allocations.

Thi
s section describes property tax levy and collection procedures and certain information regarding historical assessed values and major property taxpayers in the City. Property taxes have historically been the primary revenue source affected by voter initiatives and legislative 516 of 558
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actions. S ee “CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING CITY REVENUES AND APPROPRIATIONS.”
Levy and C
ollection. Property taxes are levied for each fiscal year on taxable real and personal property as of the preceding January 1. For assessment and collection purposes, 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 public utilities property and real property the taxes on which are a lien sufficient, in the opinion of the County Assessor, to secure payment of the taxes. Other property is assessed on the “unsecured roll.”
P
roperty taxes on the secured roll are due in two installments, on November 1 and February 1 of each fiscal year, and become delinquent on December 10 and April 10, respectively.

A penalty of 10% attaches immediately to all delinquent payments. Property on the secured roll with respect to which taxes are delinquent become tax defaulted on or about June 30 of the fiscal year. Such property may thereafter be redeemed by payment of a penalty of 1.5% per month to the time of redemption, plus costs and a redemption fee. If taxes are unpaid for a period of five years or more, the property may be sold at public auction.

P
roperty taxes on the unsecured roll are due as of the January 1 lien dates and become delinquent on August 31. A 10% penalty attaches to delinquent unsecured taxes. If unsecured taxes are unpaid at 5:00 p.m. on October 31, an additional penalty of 1.5% attaches to them on the first day of each month until paid. The County has four ways of collecting delinquent unsecured personal property taxes: (1) a civil action against the taxpayer; (2) filing a judgment in the office of the County Clerk specifying certain facts in order to obtain a lien on certain property of the taxpayer; (3) filing a certificate of delinquency for record in the County Recorder’s office in order to obtain a lien on certain property of the taxpayer; and (4) seizure and sale of personal property, improvements or possessory interests belonging or assessed to the assessee.

For
additional information the levy and collection of property taxes, see the main body of this Official Statement.

A
ssessed Valuation. All property is assessed using full cash value as defined by Article XIIIA of the State Constitution. State law provides exemptions from ad valorem property taxation for certain classes of property such as churches, colleges, non- profit hospitals, and charitable institutions. Future assessed valuation growth allowed under Article XIIIA of the State Constitution (new construction, certain changes of ownership, 2% inflation) will be allocated on based on “ situs” among the jurisdictions that serve the tax rate area within which the growth occurs. Local agencies and schools will share the growth of “base” revenues from the tax rate area. Each year ’s growth allocation becomes part of each agency ’s allocation in the following year. See “CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING CITY REVENUES AND APPROPRIATIONS.”
A
ssessed Valuation History. Table 1, in the main body of this Official Statement, shows a history of the City’s assessed valuation.

M
ajor Property Taxpayers. Table 5, in the main body of this Official Statement, shows the principal property taxpayers in the City as determined by their secured assessed valuations in Fiscal Year 2025-26.
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Other Revenue

Use of Money and Property. This revenue refers to the resources and revenues a local government generates from investments, renting out public assets, and taxing private property.

These are used to fund essential public services, infrastructure projects, and operational costs.

In Fiscal Year 2024-25 the City received approximately $10,114,200.

State Gasoline Tax. This revenue is generated by a tax paid on gasoline within the City.

In Fiscal Year 2024-25 the City received approximately $6,084,725.

Other revenue consists of the following miscellaneous items: cardroom tax, transient occupancy taxes, and franchise taxes.

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Employee Relations

There are approximately 281 full time equivalent employees of the City, represented by formal labor organizations and not represented groups. The City has never experienced a work stoppage and believes its relationship with its employees is good.

Risk Management

The City participates in the PLAN JPA, a joint powers authority established to provide liability insurance coverage, claims, risk management, and legal defense to its participating members. PLAN JPA provides $5,000,000 per occurrence of general liability and automobile coverage, $25,000,000 excess liability coverage per occurrence, $5,000,000 of catastrophic liability coverage, and is responsible for paying the claims in excess of the City’s $100,000 self - insurance retention. PLAN JPA also provides for property coverage up to $1 billion per occurrence subject to lower categorical sub-limits in excess of the City’s self-insurance retention of $5,000 or property and vehicle loss.

The retained earnings/net position of the Self -Insurance Fund, which is categorized as part of Governmental Activities, represent amounts set aside for possible additional losses after providing for actuarially determined liabilities for claims including claims adjustment expenses.

No claim settlement exceeded either this self-insured amount or the insurance coverage for any of the past three years. As of June 30, 2025, claims payable are as follows:

Claims payable June 30, 2024 $5,600,000
Changes to estimated claims liability 2,470,607
Claims paid (1,456,607)

Claims payable June 30, 2025 $6,614,000
Current portion $1,623,000

See Note 7 in the City ’s Fiscal Year 2024- 25 audited financial statements, which are attached to this Official Statement as APPENDIX B, for additional information about the City’s risk management practices.

Employee Retirement System

This caption contains certain information relating to California Public Employees ’ Retirement System (“CalPERS”). The information is primarily derived from information produced by CalPERS, its independent accountants and actuaries. The City has not independently verified the information provided by CalPERS and makes no representations and expresses no opinion as to the accuracy of the information provided by CalPERS.

The audited financial statements of CalPERS are available on its Internet website at www.calpers.ca.gov. The CalPERS website also contains CalPERS’ most recent actuarial valuation reports and other information concerning benefits and other matters. Such information is not incorporated by reference in this Official Statement . Neither the City nor its agents can guarantee the accuracy of such information. Actuarial assessments are “ forward-looking” statements that reflect the judgment of the fiduciaries of the pension plans, and are based upon a variety of assumptions, one or more of which may not materialize or may be changed in the future. Actuarial assessments will change with the future experience of the pension plans.

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Plan Description. All qualified permanent and probationary employees are eligible to participate in the Public Agency Cost -Sharing Multiple-Employer Defined Benefit Pension Plan (the “Plan”) administered by California Public Employees’ Retirement System (“CalPERS”). The Plan consists of a Miscellaneous Plan (the “ Miscellaneous Plan”) , agent multiple- employer defined benefit pension plan administered by CalPERS, which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Miscellaneous Plan are established by State statute and the City’s resolution.

Additionally, The CalPERS Plan consists of individual rate plans (benefit tiers) within a miscellaneous risk pool and a safety risk pool. CalPERS Plan assets may be used to pay benefits for any employer rate plan of the safety and miscellaneous risk pools. Accordingly, rate plans within the safety or miscellaneous pools are not separate plans under GASB Statement No. 68.

The City sponsors two rate plans (two safety), (together, the “Safety Plans”). Benefit provisions under the Plan are established by State statute and City resolution.

CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

Benefits Provided. CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees, and beneficiaries. Benefits are based on years of credited service, equal to one year of full t ime employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service.

The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.

The Miscellaneous Plan’s provisions and benefits in effect as of June 30, 2025, are summarized as follows:

Miscellaneous
Hire Date Prior to Jan. 1, 2013 On or after Jan. 1, 2013 Benefit formula 2.7% @ 55 2.0% @ 62
Benefit vesting schedule 5 years of service 5 years of service Benefit payments Monthly for life Monthly for life
Retirement age 50-67 52-67
Monthly benefits, as a % of eligible compensation 2.0% - 2.7% 1.0% - 2.5% Required employee contribution rates 8% 6.25%
Required employer contribution rates 12.220% 11.860%
Required UAL payment $4,736,567 $0
__________________________________
Source: City of San Bruno.

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The Safety Plan’s provisions and benefits in effect as of June 30, 2025, are summarized as follows:

Safety
Hire Date Prior to Jan. 1, 2013 On or after Jan. 1, 2013 Benefit formula 3% @ 50 2.7% @ 57
Benefit vesting schedule 5 years of service 5 years of service Benefit payments Monthly for life Monthly for life
Retirement age 50-55 50-57
Monthly benefits, as a % of eligible compensation 3.0% 2.0% - 2.7% Required employee contribution rates 9.0% 13.0%
Required employer contribution rates 27.320% 13.760%
Required UAL payment $5,108,978 $26,311
__________________________________
Source: City of San Bruno.

Employees Covered. At the measurement date June 30, 2024, for the Miscellaneous Plan, there were 306 Inactive employees or beneficiaries currently receiving benefits, 219 Inactive employees entitled to but not yet receiving benefits, and 160 active employees.

Contributions. Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate.

Funding contributions for the Plan are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. For the measurement period ended June 30, 2024, contributions to the Safety Plan were $7,350,579.

Beginning in fiscal year 2016, CalPERS collects employer contributions for the Plan as a percentage of payroll for the normal cost portion as noted in the rates above and as a dollar amount for contributions toward the unfunded accrued liability. The dollar amounts are billed on a monthly basis. See “–Actions Taken by CalPERS Related to Discount Rate and Other Assumptions” below. The City’s required contribution for the unfunded liability for the Safety Plan was $4,337,977 in fiscal year 2025.

Actions Taken by CalPERS Related to Discount Rate and Other Assumptions. In 2013, the CalPERS’ Board of Administration (the “ Board of Administration”) approved a recommendation to change the CalPERS amortization and smoothing policies. In 2018, the Board of Administration voted to shorten the period over which CalPERS will amortize actuarial gains and losses from 30 years to 20 years for new pension l iabilities. In 2014, the Board of Administration approved new demographic actuarial assumptions based on a 2013 study of recent experience. The largest impact, applying to all benefit groups, is a new 20- year mortality projection reflecting longer life expectancies and that longevity will continue to increase. Because retirement benefits will be paid out for more years, the cost of those benefits will increase as a result. In 2015, the Board of Administration adopted a funding risk mitigation policy intended to incrementally lower its discount rate – its assumed rate of investment return – in years of good investment returns, help pay down the pension fund’s unfunded liability, and provide greater predictability and less volatility in contribution rates for employers. In 2016, the Board of Administration voted to lower its discount rate for local agencies per the following schedule:

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Fiscal Year
Discount
Rate
2018-19 7.375%
2019-20 7.250
2020-21 7.000

On July 12, 2021, CalPERS announced it had achieved a preliminary investment return of 21.3% for the 12-month period ending June 30, 2021. Under the Funding Risk Mitigation Policy approved by the CalPERS Board of Administration in 2015, the double- digit return triggered a November 2021 reduction in the discount rate from 7.00% to 6.80%.

Lowering the discount rate means employers that contract with CalPERS to administer their pension plans will see increases in their normal costs and unfunded actuarial liabilities.

Active members hired after January 1, 2013, under PEPRA will also see their contribution rates rise. PEPRA included certain other provisions to try to minimize pension costs for covered employees. The three -year reduction of the discount rate will result in average employer rate increases of about 1 percent to 3 percent of normal cost as a percent of payroll for most miscellaneous retirement plans, and a 2 percent to 5 percent increase for most safety plans.

Additionally, many CalPERS employers will see a 30 to 40 percent increase in their current unfunded accrued liability payments. These payments are made to amortize unfunded liabilities over 20 years to bring the pension fund to a fully funded status over the long-term.

Net Pension Liability. The City’s net pension liability for the Miscellaneous Plan and Safety Plan is measured as the total pension liability, less the pension plan’s fiduciary net position.

The net pension liability of each of the Miscellaneous Plan is measured as of June 30, 2024, using an annual actuarial valuation as of June 30, 2023 rolled forward to June 30, 2024 using standard update procedures. As of June 30, 2025, the City reported net pension liability for its proportionate share of the net pension liability of the Safety Plan of $65,677,173. For additional details see Note 8 in APPENDIX B.

Pension Expense. For the fiscal year ended June 30, 2025, the City recognized pension expense of $8,838,445 for the Miscellaneous Plan and $13,106,681 for the Safety Plan.

Other Post-Employment Benefits (OPEB)

Plan Description. The City contracts with the Teamsters Local #856 Health and Welfare Trust Fund to provide health benefits to both active and retired employees as a defined benefit plan. The City provides no direct financial contribution towards retiree health benefits; however, due to retirees and active employees being insured in the same pool, it indirectly subsidizes their premiums through payments for current employees.

Eligibility. Employees (and their dependents) are eligible for retiree health benefits if they retire from the City on or after age 55 with at least 10 years of service (with 12 continuous months prior to date of retirement) and are eligible for a CalPERS pension. Mem bership of the plan consisted of the following at June 30, 2025:

Current Retirees 105
Active Employees 242
Total 347

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Funding Policy. The Teamsters Local #856 Health and Welfare Trust Fund determines the contribution requirements of the City. The contribution required to be made under City Council and labor agreement requirements is based on a pay-as-you-go basis (i.e., as medical insurance premiums become due). For fiscal year 2024- 25 the City’s actual contribution to the Teamsters Local #856 Health and Welfare Fund was $7,986,827, which includes the calculated benefit cost for the City’s retirees and the cost of implicit subsidies where applicable.

Annual OPEB Cost and Net OPEB Liability. The City’s annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC). The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The City does not record a net OPEB liability due to the inability to obtain information from the Teamsters Local #856 Health and Welfare Trust Fund in order to measure the liability.

Long-Term General Fund Obligations

The following table is a summary of changes in long-term obligations of the City’s general fund for the fiscal year ended June 30, 2025.

Governmental Activities
Beginning
Balance

Additions

Retirements
Ending
Balance
Due Within
One Year
2013 Pension Obligation Bond $3,265,000 -- $(1,045,000) $2,220,000 $1,90,000 Discount on POBs (58,554) -- 19,518 (39,036) --
Total Bonds $3,206,446 -- $(1,025,482) $2,180,964 $1,090,000 Direct Borrowings:
2022 Fire Pumper Trucks 1,426,436 -- $(251,962) $1,174,474 $151,531 SBITA Liability 425,872 -- (145,064) 280,808 137,685 Total Direct Borrowing $1,852,308 -- $(397,026) $1,455,282 $289,216 Total Governmental Activities $5,058,754 -- $1,422,508 $3,636,246 $1,379,216

Investment Policies and Procedures

The City invests its funds in accordance with the City’s Investment Policy (the “Investment Policy”), which is subject to annual review and approval by the City Council. The purpose of the Investment Policy is to establish the investment goals of safety, liquidity, and yield (in that order).

The Investment Policy complies with the provisions of the California Government Code, Sections 53600 through 53659 (the authority governing investments for municipal governments in the State). The Investment Policy limits the City to investments authorized by State law (Sections 53601 et sec). In addition, the Investment Policy establishes further guidelines.

It is the policy of the City to invest public funds in a prudent manner which will provide the highest yield consistent with the maximum security and preservation of invested principal, while meeting the daily cash flow demands of the City, and conforming to all applicable federal, state and local statutes governing the investment of public funds.

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Employment

The unemployment rate in the San Francisco -San Mateo- Redwood City MD was 3.9 percent in January 2026, up from a revised 3.7 percent in December 2025, and unchanged from the year-ago estimate of 3.9 percent. This compares with an unadjusted unemployment rate of

5.5 percent for California and 4.7 percent for the nation during the same period. The unemployment rate was 4.1 percent in San Francisco County, and 3.8 percent in San Mateo County.

The table below list employment by industry group for San Francisco-Redwood City-South San Francisco Metropolitan Statistical Area MSA for the years 2020 to 2024.

SAN FRANCISCO-REDWOOD CITY-SOUTH SAN FRANCISCO METROPOLITAN DIVISION (SAN FRANCISCO AND SAN MATEO COUNTIES)
Civilian Labor Force, Employment and Unemployment
(March 2024 Benchmark)

2020 2021 2022 2023 2024
Civilian Labor Force (1) 518,700 497,100 517,200 517,200 510,400 Employment 474,500 469,800 502,900 499,500 490,600
Unemployment 44,200 27,300 14,300 17,700 19,800
Unemployment Rate 8.5% 5.5% 2.8% 3.4% 3.9%
Wage and Salary Employment: (2)
Agriculture 200 300 300 200 200
Mining, Logging and Construction 23,200 22,100 22,900 22,900 22,000 Manufacturing 13,400 11,700 11,900 11,600 10,900
Wholesale Trade 11,000 10,900 11,600 10,500 9,700
Retail Trade 39,100 36,400 37,300 35,100 33,200
Transportation, Warehousing, Utilities 23,100 22,800 21,700 21,700 21,500 Information 54,600 58,200 67,500 64,300 62,000
Financial Activities 60,300 61,000 61,700 58,600 54,800 Professional and Business Services 200,900 200,600 217,000 203,800 190,300 Educational and Health Services 91,500 93,900 96,500 99,200 101,300 Leisure and Hospitality 59,100 57,000 75,600 81,500 81,500 Other Services 21,800 22,800 23,900 24,600 24,200
Federal Government 13,400 12,900 12,300 11,500 11,400
State Government 37,600 41,800 47,800 49,900 51,100
Local Government 47,200 46,600 46,500 47,500 48,000
Total, All Industries (3) 696,500 699,000 754,500 743,000 722,200

(1) Labor force data is by place of residence; includes self -employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(2) Industry employment is by place of work; excludes self -employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(3) Totals may not add due to rounding.

Source: State of California Employment Development Department.

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Principal Employers

The table below lists the principal employers in the City for Fiscal Year 2024-25.

CITY OF SAN BRUNO
Principal Employers
Fiscal Year 2024-25

Employer Employees
% of Total
Employment(1)
YouTube, Inc. 2,535 10.30%
Walmart eCommerce Corp Office 2,165 8.80
Skyline College 549 2.23
Artichoke Joe’s Casino 448 1.82
City of San Bruno 280 1.14
San Bruno Park School District 234 0.95
Target Store 175 0.71
Lowe’s Home Improvement Store 170 0.69
Capuchino High School (SMUHSD) 132 0.54
Church of the Highlands 92 0.37
Totals 6,780 27.56%

(1) Based on estimated total employees in the City of 24,600, provided by EDD Labor Force Data.

Source: Annual Comprehensive Financial Report for the City of San Bruno for the Fiscal Year Ended June 30, 2025.

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Effective Buying Income

“Effective Buying Income” is defined as personal income less personal tax and nontax payments, a number often referred to as “disposable” or “after-tax” income. Personal income is the aggregate of wages and salaries, other labor-related income (such as employer contributions to private pension funds), proprietor ’s income, rental income (which includes imputed rental income of owner -occupants of non -farm dwellings), dividends paid by corporations, interest income from all sources, and transfer payments (such as pensions and welfare assistance).

Deducted from this t otal are personal taxes (federal, state and local), nontax payments (fines, fees, penalties, etc.) and personal contributions to social insurance. According to U.S. government definitions, the resultant figure is commonly known as “disposable personal income.” The following table summarizes the total effective buying income for the City of San Bruno, the County of San Mateo, the State and the United States for the period 2022 through 2026.

CITY OF SAN BRUNO, COUNTY OF SAN MATEO,

STATE OF CALIFORNIA AND UNITED STATES
Effective Buying Income
2022 through 2026

Year

Area
Total Effective
Buying Income
(000’s Omitted)
Median Household
Effective Buying
Income

2022 City of San Bruno $2,284,923 $106,932
San Mateo County 48,351,364 120,425
California 1,452,426,153 77,058
United States 11,208,582,541 64,448

2023 City of San Bruno $2,264,666 $109,919
San Mateo County 46,729,979 123,273
California 1,461,799,662 77,175
United States 11,454,846,397 65,326

2024 City of San Bruno $2,082,667 $104,743
San Mateo County 44,702,740 119,658
California 1,510,708,521 80,973
United States 11,987,185,826 67,876

2025 City of San Bruno $2,296,954 $112,529
San Mateo County 46,888,892 125,548
California 1,557,429,767 82,725
United States 12,525,577,707 69,687

2026 City of San Bruno $2,474,937 $117,932
San Mateo County 50,221,251 135,193
California 1,730,654,738 90,403
United States 13,932,177,817 75,433

Source: Claritas, LLC.

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APPENDIX B

AUDITED FINANCIAL STATEMENT
FOR FISCAL YEAR ENDED JUNE 30, 2025

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APPENDIX C

FORM OF OPINION OF BOND COUNSEL

________, 2026

City Council
City of San Bruno
567 EL Camino Real
San Bruno, CA 94066

OPINION: $______ City of San Bruno (County of San Mateo, California) 2026 General Obligation Bonds

Members of the City Council:

We have acted as bond counsel to the City of San Bruno (the “City”) in connection with the issuance by the City of the above-captioned general obligation bonds (the “Bonds”). In such capacity, we have examined such law and such certified proceedings, certifications and other documents as we deem necessary to render this opinion.

The Bonds are being issued under the provisions of Article 4.5 of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California, commencing with Section 53506 (the “Bond Law”), and a resolution adopted by the City Council of the City on July [14], 2026 (the “Resolution”). We have examined the law and such certified proceedings and other papers as we deem necessary to render this opinion.

Regarding questions of fact material to our opinion, we have relied upon certified proceedings and other certifications of public officials and others furnished to us, without undertaking to verify the same by independent investigation.

Based on the foregoing, we are of the opinion that, under existing law:

1. The City is a duly created and validly existing general law city and municipal corporation with the power to adopt the Resolution, perform the agreements on its part contained therein, and issue the Bonds.

2. The Resolution has been duly adopted by the City Council and constitutes a valid and binding obligation of City, enforceable against the City in accordance with its terms.

3. The Bonds have been duly authorized and executed by City, and are valid and binding general obligations of City.

4. The City is obligated and authorized under the laws of the State of California to levy ad valorem taxes, without limit as to rate or amount (except with respect to certain personal

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property that is taxable at limited rates), upon the taxable property in the City for the payment when due of the principal of and interest on the Bonds.

5. The interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax.

The opinions set forth in the preceding sentence are subject to the condition that the City comply with all requirements of the Internal Revenue Code of 1986, as amended, relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the Bonds.

The City has made certain representations and covenants in order to comply with each such requirement. Inaccuracy of those representations, or failure to comply with certain of those covenants, may cause the inclusion of such interest in gross income for federal i ncome tax purposes, which may be retroactive to the date of issuance of the Bonds.

6. The interest on the Bonds is exempt from personal income taxation imposed by the State of California.

Interest on the Bonds may be subject to the corporate alternative minimum tax. We express no opinion regarding any other tax consequences arising with respect to the ownership, sale or disposition of, or the amount, accrual or receipt of interest on, the Bonds.

The rights of the owners of the Bonds and the enforceability of the Bonds and the Fiscal Agent Agreement may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights heretofore or hereafter enacted and may also be subject to the exercise of judicial discretion in accordance with principles of equity or otherwise in appropriate cases.

This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law that may hereafter occur. Moreover, our opinions are not a guarantee of a particular result, and are not binding on the Internal Revenue Service or any court; rather, our opinions represent our legal judgment based upon our review of existing law that we deem relevant to such opinions and in reliance upon the representations, opinions, and covenants referenced above.

Our engagement with respect to this matter has terminated as of the date hereof.

Respectfully submitted,

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APPENDIX D

FORM OF CONTINUING DISCLOSURE AGREEMENT

$_______

CITY OF SAN BRUNO
(County of San Mateo, California)
2026 General Obligation Bonds

CONTINUING DISCLOSURE CERTIFICATE

This Continuing Disclosure Certificate (this “Disclosure Certificate ”) is executed and delivered by the City of San Bruno (the “City”) in connection with the issuance of the above- captioned bonds (the “Bonds”). The Bonds are being issued under the provisions of Article 4.5 of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California, commencing with Section 53506 (the “Bond Law”), and a resolution adopted by the City Council of the City on July [14], 2026 (the “Bond Resolution”).

The City hereby covenants and agrees as follows:

Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the City for the benefit of the holders and beneficial owners of the Bonds and to assist the Participating Underwriter in complying with the Rule.

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

“Annual Report ” means any Annual Report provided by the City pursuant to, and as described in, Sections 3 and 4.

“Annual Report Date ” means the date not later than April 1 after the end of each fiscal year of the City (currently June 30th).

“Dissemination Agent” means [ Urban Futures, Inc. ], or any other Dissemination Agent designated in writing by the City and which has filed with the City a written acceptance of such designation.

“Listed Events” means any of the events listed in Section 5(a).

“MSRB” means the Municipal Securities Rulemaking Board, which has been designated by the Securities and Exchange Commission as the sole repository of disclosure information for purposes of the Rule.

“Official Statement” means the final official statement executed by the City in connection with the issuance of the Bonds.

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

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“Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time.

Section 3. Provision of Annual Reports.

(a) The City shall, or shall cause the Dissemination Agent to, not later than the Annual Report Date, commencing April 1, 2027 with the report for the 2025-26 fiscal year, provide to the MSRB in an electronic format as prescribed by the MSRB, an Annual Report that is consistent with the requirements of Section 4 of this Disclosure Certificate. Not later than 15 Business Days prior to the Annual Report Date, the City shall provide the Annual Report to the Dissemination Agent (if other than the City). I f by 15 Business Days prior to the Annual Report Date the Dissemination Agent (if other than the City) has not received a copy of the Annual Report, the Dissemination Agent shall contact the City to determine if the City is in compliance with the previous sentence. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the City may be submitted separately from the balance of the Annual Report, and later than the Annual Report Date, if not available by that date. If the City ’s fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(b). The City shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by the City hereunder.

(b) If the City does not provide (or cause the Dissemination Agent to provide) an Annual Report by the Annual Report Date, the City shall , in a timely manner, provide (or cause the Dissemination Agent to provide) a notice of late filing to the MSRB, in an electronic format, as prescribed by the MSRB.

(c) With respect to each Annual Report, the Dissemination Agent shall:

(i) determine each year prior to the Annual Report Date the then -applicable rules and electronic format prescribed by the MSRB for the filing of annual continuing disclosure reports; and

(ii) if the Dissemination Agent is other than the City, file a report with the City certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, and stating the date it was provided.

Section 4. Content of Annual Reports. The City ’s Annual Report shall contain or incorporate by reference the following:

(a) The City ’s a udited financial statements prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the City’s audited financial statements are not available by the Annual Report Date, the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available.

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(b) Unless otherwise provided in the audited financial statements filed on or before the Annual Report Date, financial information and operating data with respect to the City for the preceding fiscal year, substantially similar to that provided in the Official Statement:

(i) Assessed value of taxable property within the City;

(ii) Top ten property tax assessees for current fiscal year, and their respective secured property assessed values, but only if the City’s general obligation bond collections are not included on the County’s Teeter Plan;

(iii) property tax levies, collections and delinquencies, but only if the City’s general obligation bond collections are not i ncluded on the County’s Teeter Plan; and

(iv) Amount of all general obligation debt of the City outstanding, and total scheduled debt service on such general obligation debt.

(c) In addition to any of the information expressly required to be provided under this Disclosure Certificate, the City shall provide such further material information, if any, as may be necessary to make the specifically required statements, in light of the circumstances under which they are made, not misleading.

(d) Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the City or related public entities, which are available to the public on the MSRB ’s internet web site or filed with the Securities and Exchange Commission. The City shall clearly identify each such other document so included by reference.

Section 5. Reporting of Significant Events.

(a) The City shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds:

(1) Principal and interest payment delinquencies.
(2) Non-payment related defaults, if material.
(3) Unscheduled draws on debt service reserves reflecting financial difficulties.
(4) Unscheduled draws on credit enhancements reflecting financial difficulties.
(5) Substitution of credit or liquidity providers, or their failure to perform. (6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701- TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security. (7) Modifications to rights of security holders, if material. (8) Bond calls, if material, and tender offers.
(9) Defeasances.

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(10) Release, substitution, or sale of property securing repayment of the securities, if material.
(11) Rating changes.
(12) Bankruptcy, insolvency, receivership or similar event of the City. (13) The consummation of a merger, consolidation, or acquisition involving the City, or the sale of all or substantially all of the assets of the City (other than in the ordinary course of business), the entry into a definitive agreement to undertake such an ac tion, or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material. (14) Appointment of a successor or additional trustee or the change of name of a trustee, if material.
(15) Incurrence of a financial obligation of the City, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the City, any of which affect security holders, if material.
(16) Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the City, any of which reflect financial difficulties.
(b) Whenever the City obtains knowledge of the occurrence of a Listed Event, the City shall, or shall cause the Dissemination Agent (if not the City) to, file a notice of such occurrence with the MSRB, in an electronic format as prescribed by the MSRB, in a timely manner not in excess of 10 business days after the occurrence of the Listed Event. Notwithstanding the foregoing, notice of a Listed Event described in subsection (a)(8) above need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to holders of affected Bonds under the Bond Resolution.

(c) The City acknowledges that the events described in subparagraphs (a)(2), (a)(7), (a)(8) (if the event is a bond call), (a)(10), (a)(13), (a)(14) , and (a)(15) of this Section 5 contain the qualifier “if material” and that subparagraph (a)(6) also contains the qualifier “ material” with respect to certain notices, determinations or other events affecting the tax status of the Bonds .

The City shall cause a notice to be filed as set forth in paragraph (b) above with respect t o any such event only to the extent that it determines the event’s occurrence is material for purposes of U.S. federal securities law.

(d) For purposes of this Disclosure Certificate, any event described in paragraph (a)(12) above is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the City in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but s ubject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the City.

(e) For purposes of Section 5(a)(15) and (16), “financial obligation” means a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The term financial obligation shall not include municipal securities as to which a final official statement has been provided to the Municipal Securities Rulemaking Board consistent with the Rule.

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Section 6. Identifying Information for Filings with the MSRB. All documents provided to the MSRB under the Disclosure Certificate shall be accompanied by identifying information as prescribed by the MSRB.

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

Section 8. Dissemination Agent. The City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any Dissemination Agent, with or without appointing a successor Dissemination Agent. Any Dissemination Agent may resign by providing 30 days’ written notice to the City.

Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, if the City has received an opinion of counsel knowledgeable in federal securities laws to the effect that such amendment or waiver would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the Rule.

Section 10. Additional Information . Nothing in this Disclosure Certificate shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the City chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the City shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.

Section 11. Default . If the City fails to comply with any provision of this Disclosure Certificate, the Participating Underwriter or any holder or beneficial owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Bond Resolution, and the sole remedy under this Disclosure Certificate in the event of any failure of the City to comply with this Disclosure Certificate shall be an action to compel performance.

Section 12. Duties, Immunities and Liabilities of Dissemination Agent.

(a) The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the City agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which they may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilit ies due to the Dissemination Agent ’s negligence or willful misconduct. The Dissemination Agent shall have no duty or obligation to review any information

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provided to it by the City hereunder, and shall not be deemed to be acting in any fiduciary capacity for the City, the Bond holders or any other party. The obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds.

(b) The Dissemination Agent shall be paid compensation by the City for its services provided hereunder in accordance with its schedule of fees as amended from time to time, and shall be reimbursed for all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder.

Section 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the City, the Dissemination Agent, the Participating Underwriter and holders and beneficial owners from time to time of the Bonds, and shall create no rights in any other person or entity.

Section 14. Counterparts. This Disclosure Certificate may be executed in several counterparts, each of which shall be regarded as an original, and all of which shall constitute one and the same instrument.

Date: ______________, 2026 CITY OF SAN BRUNO

By:

City Manager

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APPENDIX E

DTC AND THE BOOK-ENTRY ONLY SYSTEM

The following description of the Depository Trust Company ( “DTC”), the procedures and record keeping with respect to beneficial ownership interests in the Bonds, payment of principal, interest and other payments on the Bonds to DTC Participants or Beneficial Owners, confirmation and transfer of beneficial ownership interest in the Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC. Accordingly, no representations can be made concerning these matters and neither the DTC Participants nor the Beneficial Owners should rely on the foregoing information with respect to such matters, but should instead confirm the same with DTC or the DTC Participants, as the case may be.

Neither the City nor the Paying Agent take any responsibility for the information contained in this Section.

No assurances can be given that DTC, DTC Participants or Indirect Participants will distribute to the Beneficial Owners (a) payments of interest, principal or redemption premium, if any, with respect to the Bonds, (b) Bonds representing ownership interest in or other confirmation or ownership interest in the Bonds, or (c) redemption or other notices sent to DTC or Cede & Co., its nominee, as the registered owner of the Bonds, or that they will so do on a timely basis, or that DTC, DTC Participants or DTC Indirect Participants will act in the manner described in this Appendix. The current “Rules” applicable to DTC are on file with the Securities and Exchange Commission and the current “Procedures” of DTC to be followed in dealing with DTC Participants are on file with DTC.

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

2. DTC, the world’ s largest securities depository, is a limited- purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants ( “Direct Participants ”) deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book -entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates.

Direct Participants include both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly -owned

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subsidiary of The Depository Trust & Clearing Corporation ( “DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is als o available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. The information contained on this Internet site is not incorporated herein by reference.

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

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

5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subjec t to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of the notices be provided directly to them.

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

7. Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC ’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co. ’s consenting or voting rights to

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those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

8. Redemption proceeds, distributions, and interest payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants ’ accounts, upon DTC’s receipt of funds and corresponding detail information from City or Paying Agent on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “ street name,” and will be the responsibility of such Participant and not of DTC nor its nominee, Paying Agent, or City , subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of City or Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

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

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

11. The information in this section concerning DTC and DTC ’s book-entry system has been obtained from sources that City believes to be reliable, but City takes no responsibility for the accuracy thereof.

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1 OFFICIAL NOTICE OF SALE
$______________ *

CITY OF SAN BRUNO
(County of San Mateo, California)
2026 GENERAL OBLIGATION BONDS
NOTICE IS HEREBY GIVEN by the City of San Bruno (the "City"), that bids will be received by a representative of the City for the purchase of $ _______* principal amount of bonds of the City designated the "City of San Bruno 2026 General Obligation Bonds (the "Bonds"). Bids will be received in electronic form through S&P Global’s BiDCOMP™/PARITY® System (“Parity”) on:
___________
, _________, 2026, _____ a.m. Pacific Time
The City reserves the right to postpone or change the sale date up to 5:00 p.m. Pacific Time on the business day preceding the date for receiving bids by publishing notice thereof on the Parity website. Notice of the new date and time for receipt of bids shall be given through Parity as soon as practicable following a postponement and no later than 1:00 p.m. Pacific Time on the business day preceding the new date for receiving bids. See "TERMS OF SALE – Right to Cancel, Postpone, or Reschedule Sale.”
The City reserves the right to modify or amend this Official Notice of Sale in any respect, including, without limitation, increasing or decreasing the principal amount of any serial maturity or mandatory sinking fund payment for the Bonds and adding or deleting serial or term maturity and mandatory sinking fund payment dates, along with corresponding principal amounts with respect thereto; provided, that any such modification or amendment will be communicated to potential bidders through Parity not later t han 5:00 P.M. Pacific Time on the business day preceding the date for receiving bids. Failure of any potential bidder to receive notice of any modification or amendment will not affect the sufficiency of any such notice or the legality of the sale. Bidders are required to bid upon the Bonds as so modified or amended. See " CLOSING CONDITIONS - Right to Modify or Amend." If the summary of the terms of sale of the Bonds posted on Parity conflicts with this Official Notice of Sale in any respect, the terms of this Official Notice of Sale shall control, unless a notice of an amendment is given as described herein.

The Bonds will be issued under the provisions of a Resolution adopted by the City Council of the City on _______________, 2026 (the "Bond Resolution") and under the laws of the State of California. Bidders are referred to the Bond Resolution and the City’s Preliminary Official Statement for the Bonds dated ___________, 2026 (the “Preliminary Official Statement”), for additional information regarding the City, the Bonds, the security for the Bonds and other matters.

Capitalized terms used and not defined in this Official Notice of Sale shall have the meanings ascribed to them in the Preliminary Official Statement. Copies of the Bond Resolution and the Preliminary Official Statement will be furnished to the bidder upon request. * P reliminary, subject to change.
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2 Important Note: The winning bidder will be required to pay, from underwriter's gross spread, certain costs of issuance of the Bonds. See "TERMS OF SALE - Payment of Issuance Costs" herein.

DESCRIPTION OF THE BONDS

THE AUTHORITY FOR ISSUANCE, PURPOSES, PAYMENT OF PRINCIPAL AND

INTEREST, REDEMPTION, DEFEASANCE, SOURCES AND USES OF FUNDS, SECURITY AND

SOURCES OF PAYMENT, FORM OF LEGAL OPINION OF BOND COUNSEL AND OTHER

INFORMATION REGARDING THE BONDS ARE PRESENTED IN THE PRELIMINARY OFFICIAL

STATEMENT, WHICH EACH BIDDER IS DEEMED TO HAVE OBTAINED AND REVIEWED PRIOR TO BIDDING FOR THE BONDS. THIS OFFICIAL NOTICE OF SALE GOVERNS ONLY THE TERMS OF SALE, BIDDING, AWARD AND CLOSING PROCEDURES FOR THE BONDS. THE

DESCRIPTION OF THE BONDS CONTAINED IN THIS OFFICIAL NOTICE OF SALE IS QUALIFIED

IN ALL RESPECTS BY THE DESCRIPTION OF THE BONDS CONTAINED IN THE PRELIMINARY OFFICIAL STATEMENT.

ISSUE; BOOK -ENTRY FORM: The Bonds will be issued in the aggregate principal amount of $ ___________* in the form of fully registered Bonds without coupons. The Bonds will be dated as of as of their original delivery and will be issued in minimum denominations of $5,000. The Bonds will be issued in a book entry only system with no physical distribution of the Bonds made to the public. The Depository Trust Company, New York, New York ("DTC"), will act as depository for the Bonds which will be immobilized in its custody. The Bonds will be registered in the name of Cede & Co., as nominee for DTC, on behalf of the participants in the DTC system and the subsequent beneficial owners of the Bonds. As of the date of award of the Bonds, the purchaser of the Bonds must either participate in DTC or must clear through or maintain a custodial relationship with an entity that participates in DTC.

MATURITIES: The Bonds shall be serial and/or term Bonds and principal shall be payable on, or the Bonds shall be subject to mandatory sinking fund redemption on, September 1 in each of the years, and in the amounts, as set forth in the following table. The final principal amount of the Bonds, and the final amount of each maturity of the Bonds, is subject to increase or reduction as described below under the heading "Adjustment of Principal Maturities". Each bidder must specify in its bid whether, for any particular year, the Bonds will mature or, alternately, be subject to mandatory sinking fund redemption. Bidders for the Bonds must provide bids for all maturities listed below.

* Preliminary, subject to change.

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3 Serial Bonds Or Term Bonds (Bidder’s Option)
Maturity Date
(September 1)
Principal
Amount*
Maturity Date
(September 1)
Principal
Amount*
2027 2043
2028 2044
2029 2045
2030 2046
3031 2047
2032 2048
2033 2049
2034 2050
2035 2051
2036 2052
2037 2053
2038 2054
2039 2055
2040 2056
2041 2057
2042

* Preliminary, subject to change.

PAYMENT PROVISIONS: Interest on the Bonds will be payable on each March 1 and September 1 , commencing March 1, 2027 (the "Interest Payment Dates"), to the registered owners by check or draft of U.S. Bank Trust Company, National Association, as paying agent (the "Paying Agent") or, in the case of the owner of Bonds in an aggregate principal amount of at least $1,000,000, at the written request of such owner by wire transfer. Principal of and premium (if any) on any Bond will be paid upon presentation and surrender thereof at the office of the Paying Agent. Principal, interest and premium (if any) on the Bonds are payable in lawful money of the United States of America. Interest shall be calculated on the basis of a 360-day year comprised of twelve 30-day months from the date of original delivery of the Bonds.

DESIGNATION OF INTEREST RATES: Each bidder must specify the rate or rates of interest which the Bonds will bear. The maximum rate bid on any Bonds may not exceed [6].00% per annum. Bidders may specify any number of separate rates, and the same rate or rates may be repeated as often as desired, provided:
• each interest rate specified must be in a multiple of 1/20% or 1/8% of 1% per annum;
• no Bond may bear more than one rate of interest;
• interest on each Bond will be computed from the date of original delivery to its stated maturity at the interest rate specified in the proposal, payable on the Interest Payment Dates as set forth above; and
• all Bonds maturing at any one time will bear the same rate of interest.

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4 ADJUSTMENT OF PRINCIPAL PAYMENTS . The principal amounts set forth in this Official Notice of Sale reflect certain estimates of the City with respect to the likely interest rates of the winning bid and the premium contained in the winning bid. To achieve the financial goals of the City, the City may need to adjust the schedule of principal maturities for the Bonds based on the bids that are received. The City reserves the right to change the principal payment schedule set forth above after the determination of the successful bidder, by adjusting one or more of the principal payments of the Bonds, in increments of $5,000, as determined in the sole discretion of the City.

Notice of such increase or decrease shall be given to the winning bidder as soon as practicable following the notification of award, as described below. Any such adjustment will not change the average per Bond dollar amount of the underwriter's discount. No such adjustment will have the effect of altering the basis upon which the best bid is determined. In the event of any such adjustment, no rebidding or recalculation of the bids submitted will be required or permitted and no successful bid may be withdrawn.

The successful bidder will not be permitted to change the interest rates in its bid.

See also CLOSING CONDITIONS - Right to Modify or Amend," regarding the City's right to modify or amend this Official Notice of Sale in any respect including, without limitation, increasing or decreasing the principal amount of any serial maturity or mandat ory sinking fund payment for the Bonds and adding or deleting serial or term maturity and mandatory sinking fund payment dates, along with corresponding principal amounts with respect thereto.

OPTIONAL REDEMPTION: The Bonds maturing on or before September 1, _____ are not subject to redemption prior to their respective stated maturities. The Bonds maturing on or after September 1, _______ are subject to redemption prior to maturity, at the option of the City, in whole or in part among maturities on such basis as designated by the City and by lot within a maturity, from any available source of funds, on September 1, _______, and on any date thereafter, at a redemption price equal to 100% of the principal amount of Bonds to be redeemed together with accrued interest thereon to the date fixed for redemption, without premium. See the Preliminary Official Statement - "THE BONDS – Redemption - Optional Redemption." SINKING FUND REDEMPTION: Any bidder may, at its option, specify that one or more maturities of the Bonds will consist of term Bonds which are subject to mandatory sinking fund redemption in consecutive years immediately preceding the maturity thereof, as designated in the bid of s uch bidder. If the bid of the winning bidder specifies that any maturity of Bonds will be term Bonds, such term Bonds will be subject to mandatory sinking fund redemption on September 1 in each year so designated in the bid, in the respective amounts for s uch years as set forth above under the heading "MATURITIES", at a redemption price equal to the principal amount thereof to be redeemed together with accrued interest to the redemption date, without premium. No term Bonds may be redeemed from mandatory sinking fund payments until all term Bonds maturing on preceding term maturity dates, if any, have been retired. See the Preliminary Official Statement - "THE BONDS – Redemption - Mandatory Sinking Fund Redemption."
SECURITY: The Bonds are general obligations of the City, and the City will direct the appropriate officials of the County of San Mateo to levy ad valorem taxes for the payment of the

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5 Bonds and the interest thereon without limitation as to rate or amount for the payment of the Bonds and the interest thereon.

PURPOSE: The proceeds of the Bonds will be applied by the City for the purpose of street and storm-drain improvements, fire safety and emergency medical equipment improvements, and other projects in accordance with the ballot pr oposition under which the issuance of the Bonds has been authorized.

RATING: S&P Global Ratings, a Standard & Poor’s Financial Services LLC business, have assigned the rating of “_____” to the Bonds. The cost of obtaining such rating will be borne entirely by the City and not by the successful bidder .

TAX-EXEMPT STATUS: In the opinion of Jones Hall LLP, Bond Counsel to the City, interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax. Bidders are referred to the Preliminary Official Stat ement for a description of the proposed opinion of Bond Counsel. In the further opinion of Bond Counsel, such interest is exempt from California personal income taxes. If prior to the delivery of the Bonds either (a) the interest on other obligations of t he same type and character shall be declared to be taxable (either at the time of such declaration or at any future date) under any federal income tax laws, either by the terms of such laws or by ruling of a federal income tax authority or official which i s followed by the Internal Revenue Service, or by decision of any federal court, or (b) any federal income tax law is adopted which will have a substantial adverse effect upon owners of the Bonds as such, the winning bidder for the Bonds may, at its option, prior to the tender of the Bonds, be relieved of its obligation under the contract to purchase the Bonds, and in such case the deposit accompanying its proposal will be returned. See the Preliminary Official Statement - "TAX MATTERS."

FURTHER INFORMATION: A copy of the Preliminary Official Statement describing the Bonds, and any other information concerning the proposed financing, will be furnished upon request to Fieldman Rolapp & Associates, Inc. the “Municipal Advisor” to the City as follows:

Fieldman Rolapp & Associates, Inc.

One Sansome Street, Suite 1400
San Francisco, CA 94104
Telephone: (949) 246-2344
Email: [email protected]

The Official Notice of Sale and Preliminary Official Statement are available from the Municipal Advisor and may also be viewed on the Parity website at www.i-dealprospectus.com.

TERMS OF SALE
RIGHT TO CANCEL, POSTPONE OR RESCHEDULE SALE: The City reserves the right to cancel, postpone or reschedule the sale of the Bonds upon notice on the Parity web site at www.i-dealprospectus.com, no later than 5:00 p.m. Pacific Time on the business day preceding the date for receiving bids. If the sale is postponed, notice of the new date and time for receipt of bids shall be given through Parity as soon as practicable following a postponement and no later than 1:00 p.m. Pacific Time on the business day preceding the new date for receiving bids. Failure of any bidder to receive such Parity notice or any other form of notice of canceled, postponed or rescheduled sale will not affect the legality or validity of any sale.

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6 SUBMISSION OF BIDS: Bids will be received electronically as described below, provided that such electronic bid must be received no later than the date and time set for receipt of bids.

ELECTRONIC BIDS: The City will accept bids in electronic form solely through Parity .

Neither the City, the Municipal Advisor nor Bond Counsel assumes any responsibility for, and each bidder expressly assumes risk of, any incomplete, inaccurate or untimely bid submitted by internet transmission by such bidder, including, without limitation, by reason of garbled transmissions, mechanical failure, engaged telephone or telecommunications lines, or any other cause arising from delivery by internet transmission. Bidders must comply with the following provisions relating the receipt of electronic bids:

Registration and Admission to Bid: Only FINRA registered broker -dealers and dealer banks with DTC clearing arrangements shall be eligible to bid. Bidders who have already registered with Parity may call Parity at (212) 849- 5021 to confirm their ID number and password.

Bidding Details: All bids must be unconditional and submitted on the Parity BiDCOMP™/PARITY® website. No facsimile, personal delivery bids or bids delivered by any other method will be accepted.

Verification: All bids are subject to verification and approval by the City. The City has the right to deem each final bid reported on Parity immediately after the deadline for receipt of bids to be accurate and binding on the bidder. Information or calculations provided by Parity other than the information required to be provided by the bidder in accordance with this Official Notice of Sale is for information purposes only and is not binding on either the bidder or the City. If two or more bidders offer bids for the same Bonds at the same lowest TIC, the City reserves the right to exercise its own discretion and judgment in making the award.

UNDERWRITER’S DISCOUNT ; NOT -TO-EXCEED AMOUNT: The maximum Underwriter’s Discount cannot exceed 1% of the par amount of the issue.

FORM OF BID; MINIMUM PURCHASE PRICE: All bids must be for not less than all the Bonds hereby offered for sale and for not less than the aggregate par amount thereof. Upon notification of award of the bid, the successful bidder for the Bonds shall provide initial offering prices for each maturity of the Bonds.

The aggregate purchase price to be paid for the Bonds may not be less than ____% or greater than ____% of the par value thereof. This purchase price is net of the purchaser’s discount. No bid will be entertained which fails to provide the purchase price specified in this paragraph. In addition, no bid shall provide for original issue premium, net of purchaser’s compensation which results in remaining original issue premium which exceeds interest due on the Bonds in the first 33 months. All premium will be applied to the payment of debt service on the Bonds.
[INSURANCE: No bids with municipal bond insurance will be accepted.] All bids will be deemed to incorporate all the terms of this Official Notice of Sale.

If the sale of the Bonds is canceled or postponed, all bids for the Bonds shall be rejected. No bid will be accepted after the time for receiving bids.

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7 THE CITY RETAINS ABSOLUTE DISCRETION TO DETERMINE WHETHER ANY BID IS TIMELY AND COMPLETE. NONE OF THE CITY, THE MUNICIPAL ADVISOR, OR JONES HALL (“BOND COUNSEL”) TAKES ANY RESPONSIBILITY FOR INFORMING ANY BIDDER

PRIOR TO THE TIME FOR RECEIVING BIDS THAT ITS BID IS INCOMPLETE OR NOT RECEIVED.

EACH BIDDER SUBMITTING AN ELECTRONIC BID UNDERSTANDS AND AGREES

BY DOING SO THAT IT IS SOLELY RESPONSIBLE FOR ALL ARRANGEMENTS WITH BiDCOMP/PARITY® AND THAT BiDCOMP/PARITY® IS NOT ACTING AS AN AGENT OF THE CITY. INSTRUCTIONS AND FORMS FOR SUBMITTING ELECTRONIC BIDS MUST BE OBTAINED FROM BiDCOMP/PARITY® AND THE CITY ASSUMES NO RESPONSIBILITY

FOR ENSURING OR VERIFYING BIDDER COMPLIANCE WITH THE PROCEDURES OF BiDCOMP/PARITY®. THE CITY SHALL ASSUME THAT ANY BID RECEIVED THROUGH BiDCOMP/PARITY® HAS BEEN MADE BY A DULY AUTHORIZED AGENT OF THE BIDDER.

THE CITY WILL MAKE ITS BEST EFFORTS TO ACCOMMODATE ELECTRONIC BIDS; HOWEVER, THE CITY, THE MUNICIPAL ADVISOR AND BOND COUNSEL ASSUME

NO RESPONSIBILITY FOR ANY ERROR CONTAINED IN ANY BID SUBMITTED

ELECTRONICALLY, OR FOR FAILURE OF ANY BID TO BE TRANSMITTED, RECEIVED OR ACCEPTED AT THE OFFICIAL TIME FOR RECEIPT OF BIDS. THE OFFICIAL TIME

FOR RECEIPT OF BIDS WILL BE DETERMINED BY THE CITY AND THE CITY SHALL NOT BE REQUIRED TO ACCEPT THE TIME KEPT BY BiDCOMP/PARITY® AS THE OFFICIAL TIME.

DETERMINATION OF BEST BID: Unless all bids are rejected, the Bonds will be awarded to the responsible bidder who submits a conforming bid that represents the lowest true interest cost to the City. The true interest cost specified in any bid will be that rate which, when used in computing the present worth of all payments of principal and interest to be paid on all Bonds from the date of original delivery (which is assumed to be _________, 2026) to their respective maturity dates or mandatory sinking fund redemption dates, produces an amount equal to the purchase price specified in such bid. For purposes of computing the true interest cost represented by any proposal, the purchase price specified in such proposal shall be equal to the par amount of the Bonds plus any net premium (proposed premium less any proposed discount) specified in such proposal, and the true interest cost shall be calculated by the use of a semiannual interval of compounding interest based on the Interest Payment Dates for the Bonds using a 360-day year comprised of twelve 30-day months from the date of original delivery (which is assumed to be _________, 2026).

In the event two or more bidders offer bids for the Bonds at the sam e true interest cost, the City reserves the right to exercise its own discretion and judgment in making the award. If multiple bids with respect to the Bonds are received from a single bidder by any means or combination thereof, the City shall be entitled to accept the bid representing the lowest true interest cost to the City, and each bidder agrees by submitting multiple bids to be bound by the bid representing the lowest true interest cost to the City. Bid evaluations or rankings made by Parity are not binding on the City.

ESTIMATE OF TRUE INTEREST COST . Each bidder is requested, but not required, to supply an estimate of the true interest cost based upon its bid, which will be considered as informative only and not binding on either the bidder or the City.

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8 RIGHT OF REJECTION AND WAIVER OF IRREGULARITY : The City reserves the right, in its sole discretion, to reject any and all bids and to waive any irregularity or informality in any bid which does not materially affect such bid or change the ranking of the bids.

PROMPT AWARD: An authorized representative of the City will accept the best responsible bid for the purchase of the Bonds by notice to the winning bidder. If two or more bids setting forth identical interest rates and premium are received, the City reserves the right to exercise its own discretion and judgment in making the award. An authorized representative of the City may also reject any and all bids. Sale of the Bonds will be awarded or all bids will be rejected not later than 24 hours after the expiration of the time prescribed for the receipt of proposals unless such time of award is waived by the winning bidder; p rovided, that the award may be made after the expiration of the specified time if the bidder does not notify the City in writing of the withdrawal of its proposal.

PLACE OF DELIVERY; CANCELLATION FOR LATE DELIVERY: It is expected that the Bonds will be delivered to DTC for the account of the winning bidder on _________, 2026.

The winning bidder has the right, at the winning bidder's option, to cancel the contract of purchase if the Bonds are not tendered for delivery within 60 days from the date of the sale thereof, and in such event the Purchaser will be entitled only to the return of the Good Faith Deposit, without interest thereon.

GOOD FAITH DEPOSIT. To secure the City from any loss resulting from the failure of the apparent winning bidder to comply with the terms of its bid, the winning bidder will be required to deposit the amount of Three Hundred Fifty Thousand Dollars ($350,000) (the "Good Faith Deposit") by no later than 12:00 p.m. Pacific Time, on the day following the receipt of the bids, by wire transfer to the Paying Agent, as follows:

U.S. Bank Trust Company, National Association
ABA #091000022
Beneficiary Account #180121167365
Beneficiary: City of San Bruno
REF: 2026 GO Bonds

No interest will be paid upon the Good Faith Deposit made by any bidder. The Good Faith Deposit of the Purchaser will immediately become the property of the City. The Good Faith Deposit will be held and invested for the exclusive benefit of the City. The Good Faith Deposit, without interest thereon, will be credited against the purchase price of the Bonds purchased by the Purchaser at the time of delivery thereof.

If the purchase price is not paid in full upon tender of the Bonds, the City shall retain the Good Faith Deposit and the Purchaser will have no right in or to the Bonds or to the recovery of its Good Faith Deposit, or to any allowance or credit by reason of such deposit, unless it shall appear that the Bonds would not be validly delivered to the Purchaser in the form and manner proposed, except pursuant to a right of cancellation. See "TERMS OF SALE – Place of Delivery; Cancellation for Late Delivery,” above. In the event of nonpayment for the Bonds by a successful bidder, the City reserves any and all rights granted by law to recover the full purchase price of the Bonds, and, in addition, any damages suffered by the City.

CLOSING CONDITIONS

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9 PAYMENT OF PURCHASE PRICE: The winning bidder will be required to pay the purchase price of the Bonds (including any premium) to the accounts specified by the City and in funds which are immediately available to the City. Such payment shall be made on the date of original delivery of the Bonds to DTC. Any expense for making payment in immediately available funds shall be borne by the Purchaser. The City will deliver to the Purchaser, dated as of the delivery date, the legal opinions with respect to the Bonds described in APPENDIX C – “PROPOSED FORM OF OPINION OF BOND COUNSEL" to the Preliminary Official Statement.

NO LITIGATION: There is no litigation pending restraining or enjoining the sale, issuance or delivery of the Bonds or any part thereof, or the entering into or performance of any obligation of the City, or concerning the validity of the Bonds, the ability of the City to levy and collect the ad valorem tax required to pay debt service on the Bonds, the corporate existence or the boundaries of the City, or the entitlement of any officers of the City who will execute the Bonds to their respective offices , and the purchaser will be furnished a no- litigation certificate certifying to the foregoing as of and at the delivery of the Bonds.

DETERMINATION OF ISSUE PRICE:
(a) The winning bidder shall assist the City in establishing the issue price of the Bonds and shall execute and deliver to the City at closing an “issue price” or similar certificate setting forth the reasonably expected initial offering price to the public of the Bonds, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit A, with such modifications as may be appropriate or necessary, in the reasonable judgment of the winning bidder, the City, the Municipal Advisor and Bond Counsel. If the competitive sale requirements below are not met, the winning bidder shall execute and deliver to the City at Closing an “issue price” or similar certificate, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit B with such modifications as may be appropriate or necessary, in the reasonable judgment of the winning bidder, the City and Bond Counsel. All actions to be taken by the City under this Notice of Sale to establish the issue price of the Bonds may be taken on behalf of the City by the Municipal Advisor and any notice or report to be provided to the City may be provided to the Municipal Advisor.
(b) The City intends that the provisions of Treasury Regulation Section 1.148-1(f)(3)(i) (defining “competitive sale” for purposes of establishing the issue price of the Bonds) will apply to the initial sale of the Bonds (the “competitive sale requirements”) because:
(i) the City shall disseminate this Notice of Sale to potential underwriters in a manner that is reasonably designed to reach potential underwriters; (ii) all bidders shall have an equal opportunity to bid; (iii) the City may receive bids from at least three underwriters of municipal bonds who have established industry reputations for underwriting new issuances of municipal bonds; and
(iv) the City anticipates awarding the sale of the Bonds to the bidder who submits a firm offer to purchase the Bonds at the highest price (or lowest interest cost), as set forth in this Notice of Sale.

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10 Any bid submitted pursuant to this Notice of Sale shall be considered a firm offer for the purchase of the Bonds, as specified in the bid. Bidders should prepare their bids on the assumption that the City will determine the issue price of the Bonds either based on the reasonably expected initial offering price to the public or by application of the 10% test.

Paragraphs (c) through ( f) below shall apply only In the event that the competitive sale requirements are not satisfied.
(b) In the event that the competitive sale requirements are not satisfied, the City shall so advise the prospective winning bidder prior to awarding the Bonds. The City will determine to treat the first price at which 10% of each maturity of the Bonds (the “10% test”) is sold to the public as the issue price of that maturity. The prospective winning bidder shall advise the City if any maturity of the Bonds satisfies the 10% test as of the date and time of the award of the Bonds. (d) Until the 10% test has been satisfied as to each maturity of the Bonds, the winning bidder agrees to promptly report to the City the prices at which the unsold Bonds of that maturity have been sold to the public. That reporting obligation shall continue, whether or not the Closing Date has occurred, until the 10% test has been satisfied as to the Bonds of that maturity or until all Bonds of that maturity have been sold to the public. (e) By submitting a bid, each bidder confirms that: (i) any agreement among underwriters, any selling group agreement and each retail distribution agreement (to which the bidder is a party) relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each underwriter, 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 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 winning bidder 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 and (ii) any agreement among underwriters relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each underwriter that is a party to a retail distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require each broker-dealer that is a party to such retail distribution agreement to (A) 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 winning bidder or such 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.
(f) Sales of any Bonds to any person that is a related party to an underwriter shall not constitute sales to the public for purposes of this Notice of Sale. Further, for purposes of this Notice of Sale:
(i) “public” means any person other than an underwriter or a related party, (ii) “underwriter” means (A) any person that agrees pursuant to a written contract with the City (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the public),

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11 (iii) a purchaser of any of the Bonds is a “related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (i) at least 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direc t ownership by one corporation of another), (ii) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other), and

(iv) “sale date” means the date that the Bonds are awarded by the City to the winning bidder.

CUSIP NUMBERS: The Municipal Advisor will timely apply for CUSIP numbers with respect to the Bonds as required by Municipal Securities Rulemaking Board’s Rule G -34. The purchaser will be responsible for the cost of assignment of such CUSIP numbers and any CUSIP Service Bureau charges related to the Bonds awarded to the p urchaser. The purchaser shall also notify the CUSIP Service Bureau as to the final structure of the Bonds awarded to the purchaser.

It is anticipated that CUSIP numbers will be printed on the Bonds, but neither the failure to print such numbers on any Bonds nor any error with respect thereto will constitute cause for a failure or refusal by the purchaser to accept delivery of and pay for the Bonds in accordance with the terms hereof.

CALIFORNIA DEBT AND INVESTMENT ADVISORY COMMISSION FEES: All fees payable to the California Debt and Investment Advisory Commission in connection with the issuance of the Bonds are the sole responsibility of the purchaser of the Bonds. The purchaser must pay to the California Debt and Investment Advisory Commission, within sixty (60) days from the sale date, the statutory fee for the Bonds purchased.

DTC FEES: All fees due DTC with respect to the Bonds shall be paid by the successful bidder or bidders.

OFFICIAL STATEMENT: The City has approved a preliminary Official Statement relating to the Bonds. Copies of such preliminary Official Statement will be distributed to any bidder, upon request, prior to the sale in a form "deemed final" by the City for purposes of Rule 15c2-12 under the Securities Exchange Act of 1934 (the "Rule"). Within seven business days from the sale date, the City will deliver to the purchaser copies of the final Official Statement, executed by an authorized representative of the City and the City and dated the date of delivery thereof to the purchaser, in sufficient number to allow the purchaser to comply with paragraph (b)(4) of the Rule and to satisfy the Municipal Securities Rulemaking Board (the "MSRB") Rule G-32, or any other rules adopted by the MSRB, but not in excess of 25 copies, which shall include information permitted to be omitted by paragraph (b)(1) of the Rule and such other amendments or supplements as are been approved by the City (the "Final Official Statement").

The purchaser agrees that it will not confirm the sale of any Bonds unless the confirmation of sale is accompanied or preceded by the delivery of a copy of the Final Official Statement. The City will furnish to the winning bidder, at no charge, not more than 25 copies of the Final Official Statement for use in connection with any resale of the Bonds.

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12 CERTIFICATE REGARDING FINAL OFFICIAL STATEMENT: A responsible officer of the City will certify to the original purchaser of the Bonds, as a condition of closing, to the best of such officer's knowledge and belief , nothing has come to his or her attention to lead him or her to believe that the Final Official Statement (excluding reoffering information and information relating to The Depository Trust Company and its book -entry system, as to which no view will be expressed) contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

CONTINUING DISCLOSURE: To assist bidders in complying with S.E.C. Rule 15c2 - 12(b)(5), the City will execute and deliver a Continuing Disclosure Certificate, under which the City undertakes to provide certain annual financial information and notices of the occurrence of certain enumerated events. A description of this undertaking is set forth in the Preliminary Official Statement and will also be set forth in the final Official Statement. Such Continuing Disclosure Certificate will be a document required to be delivered at closing by the City, and the failure by the City to deliver such document in form and substance acceptable to Bond Counsel and the winning bidder will relieve the winning bidder of its obligation to purchase the Bonds.

QUALIFICATION FOR SALE. The City will furnish such information and take such action not inconsistent with law as the purchaser may request and the City may deem necessary or appropriate to qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States of Ameri ca as may be designated by the purchaser; provided, that the City will not execute a general or special consent to service of process or qualify to do business in connection with such qualification or determination in any jurisdiction. By submitting its bid for the Bonds, the purchaser assumes all responsibility for qualifying the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of the states and jurisdictions in which the purchaser offers or sells the Bonds, including the payment of fees for such qualification. Under no circumstances may the Bonds be sold or offered for sale or any solicitation of an offer to buy the Bonds be made in any jurisdiction in which such sale, offer or solicitation would be unlawful under the securities laws of the jurisdiction.

CLOSING PAPERS. Each proposal will be understood to be conditioned upon the City furnishing to the purchaser, without charge, concurrently with payment for and delivery of the Bonds, the following closing papers, each dated the date of delivery:
(a) The opinion of Bond Counsel, approving the validity of the Bonds and stating that, subject to compliance by the City with certain covenants, interest on the Bonds is excludable from gross income of the owners thereof for federal income tax purposes and is not included as an item of tax preference in computing the federal alternative minimum tax , and interest on the Bonds is exempt from personal income taxation imposed by the State of California. Other tax consequences to holders of the Bonds, if any, will not be addressed in the opinion; (b) A certificate of the City certifying that on the basis of the facts, estimates and circumstances in existence on the date of issue, it is not expected that the proceeds of the Bonds will be used in a manner that would cause the Bonds to be arbitrage bonds; (c) A certificate of the City , signed by officers and representatives of the City , certifying that the officers and representatives have signed the Bonds whether by facsimile or manual signature, and that they were respectively duly authorized to execute the same;

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13 (d) The receipt of the Paying Agent evidencing the receipt of the purchase price of the Bonds;
(e) A certificate of the City, certifying that there is no known litigation threatened or pending affecting the validity of the Bonds; and
(f) A certificate of the City to the effect that at the time of the sale of the Bonds, and at all times subsequent thereto up to and including the time of the delivery of the Bonds, the Final Official Statement did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

RIGHT TO MODIFY OR AMEND. Other than with respect to postponement or cancellation as described in this Official Notice of Sale, and in addition to the City's right to adjust the payment amounts of the Bonds as provided in " DESCRIPTION OF THE BONDS - Adjustment of Principal Payments" the City reserves the right to modify or amend this Official Notice of Sale in any respect including, without limitation, increasing or decreasing the principal amount of any serial maturity or mandatory sinking fund payment for the Bonds and adding or deleting serial or term maturity and mandatory sinking fund payment dates, along with corresponding principal amounts with respect thereto; provided, that, subject to the terms of this Notice of Sale (see "DESCRIPTION OF THE BONDS - Adjustment of Principal Payments") any such modification or amendment will be communicated to potential bidders through Parity not later than 1:00 p.m. Pacific Time on the business day preceding the date for receiving bids.

Failure of any potential bidder to receive notice of any modification or amendment will not affect the sufficiency of any such notice or the legality of the sale.

ADDITIONAL INFORMATION. Prospective bidders should read the entire Preliminary Official Statement, copies of which may be obtained in electronic form from the Municipal Advisor from the following address : Fieldman Rolapp & Associates , One Sansome Street, Suite 1400 , San Francisco, CA 94104, telephone: (949) 246-2344, email: [email protected].

Date: _________, 2026

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14 EXHIBIT A
$___________

CITY OF SAN BRUNO
(County of San Mateo , California)
2026 GENERAL OBLIGATION BONDS

ISSUE PRICE CERTIFICATE

The undersigned, on behalf of [NAME OF UNDERWRITER] (the “Purchaser”), hereby certifies as set forth below with respect to the sale of the above -captioned obligations (the “Bonds”).

1. Reasonably Expected Initial Offering Price.

(a) As of the Sale Date, the reasonably expected initial offering prices of the Bonds to the Public by the Purchaser are the prices listed in Schedule A (the “Expected Offering Prices”).

The Expected Offering Prices are the prices for the Maturities of the Bonds used by the Purchaser in formulating its bid to purchase the Bonds. Attached as Schedule B is a true and correct copy of the bid provided by the Purchaser to purchase the Bonds.

(b) The Purchaser was not given the opportunity to review other bids prior to submitting its bid.

(c) The bid submitted by the Purchaser constituted a firm offer to purchase the Bonds

2. Defined Terms.

(a) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities.

(b) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term “related party” for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly.

(c) 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 _____________, 2026.

(d) Underwriter means (i) any person that agrees pursuant to a written contract with the City of San Bruno (the “City”) (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public).

The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents the Purchaser’s interpretation of any laws, including specifically

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15 Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the City with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Jones Hall in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the City from time to time relating to the Bonds.

[UNDERWRITER]

By: __________________________________
Name: _______________________________
Dated: ______________, 2026

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SCHEDULE A

EXPECTED OFFERING PRICES

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SCHEDULE B
COPY OF PURCHASER’S BID

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EXHIBIT B
$__________

CITY OF SAN BRUNO
(County of San Mateo , California)
2026 GENERAL OBLIGATION BONDS

ISSUE PRICE CERTIFICATE
The undersigned, on behalf of [NAME OF UNDERWRITER] (the “Purchaser”) hereby certifies as set forth below with respect to the sale and issuance of the above -captioned obligations (the “Bonds”).

1. Sale of the Bonds. As of the date of this certificate, for each Maturity of the Bonds, the first price at which at least 10% of such Maturity of the Bonds was sold to the Public is the respective price listed in Schedule A.

2. Defined Terms.
(a) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities.
(b) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term “related party” for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (c) Underwriter means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public).

The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents Purchaser’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issue with respect to certain of the representations set forth in the Certificates of Arbitrage and with respect to compliance with the federal income tax rules affecting the Bonds, and by Jones Hall, A Professional Law Corporation in connection with rendering i ts opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038 -G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds. [Signature Page Follows]

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[UNDERWRITER]

By:__________________________________
__
Name:_______________________________
__
Dated: ____________, 2026

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SCHEDULE A

SALE PRICES
(Attached)

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