Agreement - Offering Memorandum — San Jose City Council, September 29, 2026

Agenda Version

COMMERCIAL PAPER OFFERING MEMORANDUM
BOOK-ENTRY-ONLY Ratings: See “RATINGS” herein.

In the opinion of Orrick, Herrington & Sutcliffe LLP, bond counsel to the Authority, based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, the accuracy of certain representations and complianc e with certain covenants, interest on the Series A-1 Notes will be excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 and interest on the Notes will be exempt from State of California personal income taxes. In the further opinion of Bond Counsel, interest on the Series A-1 Notes will not be a specific preference item for purposes of the federal individual alternative minimum tax. Bond Counsel observes that interest on the Series A-1 Notes included in adjusted financial statement income of certain corporations will not be excluded from the federal corporate alternative minimum tax. The amount treated as interest on the Series A-1 Notes and excluded from gross income will depend upon the taxpayer’s election under Internal Revenue Notice 94 -84. Bond Counsel observes that interest on the Series A -2 Notes will not be excluded from gross income for federal income taxes. Bond Counsel expresses no opinion regarding any other tax consequences related to the ownership or disposition of, or the amount, accrual or receipt of interest on, the Notes. See “TAX MATTERS.” City of San José Financing Authority
Subordinate Wastewater Revenue Commercial Paper Notes,
Series A-1 and Series A-2 (Federally Taxable)
This Offering Memorandum is being furnished in connection with the issuance, from time to time, by the City of San José Financing Authority (the “Authority”) of its Subordinate Wastewater Revenue Commercial Paper Notes, Series A -1 (the “Series A -1 Notes”) and its Subordinate Wastewater Revenue Commercial Paper Notes, Series A -2 (Federally Taxable) (the “Series A -2 Notes,” and collectively with the Series A-1 Notes, the “Notes”). The Authority is a joint exercise of powers entity duly organized and existing under the laws of the State of California (the “State”), authorized to, among other things, issue revenue notes to finance and refinance the acquisition, construction and installation of improvements, additions and betterments to, and extensions and rehabilitations of, the Wastewater System (as defined herein) of the City of San José (the “City”).

IN MAKING AN INVESTMENT DECISION REGARDING A POSSIBLE PURCHASE OF THE NOTES, PROSPECTIVE PURCHASERS OF THE NOTES SHOULD RELY SOLELY ON THE CREDIT OF BANK OF AMERICA, N.A. (THE “BANK”) AND NOT ON THE CREDIT OF THE AUTHORITY, THE CITY OR THE WASTEWATER SYSTEM.

The Notes will be issued pursuant to an Issuing and Paying Agent Agreement, dated as of October 1, 2026 (the “Issuing Agreement”), between the Authority and U.S. Bank Trust Company, National Association, as issuing and paying agent (the “Issuing and Paying Agent”). Credit support for the timely payment of the principal of and interest on the Notes will be provided by the Bank pursuant to an irrevocable transferable direct-pay letter of credit (the “Letter of Credit”) to be issued on October [15], 2026 under a Reimbursement Agreement, dated as of October 1, 2026 (the “Reimbursement Agreement”), among the Authority, the City and the Bank. Pursuant to the terms of the Letter of Credit, the Issuing and Paying Agent will make draws under the Letter of Credit to pay the principal of and interest on the Notes at maturity. The Letter of Credit will be issued in an original stated amount of $217,753,425 (calculated as the sum of the maximum principal amount of the Notes supported by the Letter of Credit, in an amount equal to $200,000,000, plus interest thereon at a maximum rate of 12% per annum for 270 days calculated on the basis of a 365-day year), and will expire on [October __, 2029], unless extended or terminated sooner in accordance with its terms. No Notes will be issued unless and until the Letter of Credit is issued. See “THE LETTER OF CREDIT AND THE REIMBURSEMENT AGREEMENT” and “APPENDIX B—CERTAIN INFORMATION REGARDING THE BANK.”
The Notes will be issued only as fully registered notes in denominations of $100,000 and integral multiples of $1,000 in excess thereof.

When issued, the Notes will be registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York (“DTC”). Purchases of beneficial interests in the Notes will be made in book-entry-only form. Purchasers of beneficial interests in the Notes (the “Beneficial Owners”) will not receive physical delivery of certificates representing their interests in the Notes. Interest on the Notes, together with the principal of the Notes, will be paid directly to DTC, so long as the Notes are held in book -entry-only form. See “APPENDIX C— BOOK- ENTRY-ONLY SYSTEM.”

THE PRINCIPAL OF AND INTEREST ON THE NOTES WILL BE PAYABLE SOLELY FROM PROCEEDS OF

DRAWINGS ON THE LETTER OF CREDIT AND, TO THE EXTENT THAT ANY DRAWINGS ON THE LETTER OF CREDIT ARE

INSUFFICIENT, FROM THE INSTALLMENT PAYMENTS (AS DEFINED HEREIN) AND THE OTHER AMOUNTS HELD BY THE ISSUING AND PAYING AGENT AND PLEDGED UNDER THE ISSUING AGREEMENT. THE NOTES ARE LIMITED OBLIGATIONS OF THE AUTHORITY. THE FULL FAITH AND CREDIT OF THE AUTHORITY IS NOT PLEDGED FOR THE

PAYMENT OF THE PRINCIPAL OF OR THE INTEREST ON THE NOTES, AND NO TAX OR ASSESSMENT WILL EVER BE LEVIED OR COLLECTED TO PAY THE PRINCIPAL OF OR THE INTEREST ON THE NOTES. THE NOTES DO NOT

CONSTITUTE AN INDEBTEDNESS OF THE AUTHORITY WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION O R RESTRICTION. THE OBLIGATION OF THE CITY TO MAKE THE INSTALLMENT

PAYMENTS IS A SPECIAL OBLIGATION OF THE CITY PAYABLE SOLELY FROM NET SYSTEM REVENUES (AS DEFINED

HEREIN), DOES NOT CONSTITUTE A DEBT OF THE CITY OR OF THE STATE OR OF ANY POLITICAL SUBDIVISION

THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION,

AND DOES NOT CONSTITUTE AN OBLIGATION FOR WHICH THE CITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION. The City has designated the Installment Payments as Subordinate Obligations under the Master Resolution (as defined herein) and, as such, the Installment Payments are payable solely from, and secured by a pledge of and lien on, Net System Revenues with a payment priority that is subordinate to the payment of the City’s Parity Obligations (as defined herein) and is on a parity with Subordinate Obligations of the City. See “SECURITY AND SOURCES OF PAYMENT FOR THE NOTES.” This cover page is not intended to be a summary of the terms of, or the security for, the Notes. Investors are advised to read this Offering Memorandum in its entirety to obtain information essential to the making of an informed investment decision.

Subject to certain conditions, it is expected that the Notes will be authorized to be issued commencing October [15], 2026.

Dealers for the Notes
Barclays Morgan Stanley & Co. LLC TD Financial Products Date of Commercial Paper Offering Memorandum: October [8], 2026.

DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

Th
e information in this Offering Memorandum has been obtained from the Authority, the City, the Issuing and Paying Agent, the Bank, DTC and other sources believed to be reliable. The references herein to the Master Resolution, the Issuing Agreement, the I nstallment Purchase Contract, the Notes, the Letter of Credit and the Reimbursement Agreement do not purport to be complete or definitive, do not constitute summaries thereof and are qualified in their entirety by reference to the provisions thereof.

No dealer, salesperson or other person has been authorized to give any information or to make any representation other than those contained herein and, if given or made, such other information or representation should not be relied upon as having been authorized by the Authority, the City or any other person.

The information and expressions of opinion in this Offering Memorandum are subject to change without notice and neither the delivery of this Offering Memorandum nor any sale hereunder shall under any circumstances create the implication that there has been no change in the matters referred to in this Offering Memorandum since the date hereof.

This Offering Memorandum is not to be construed as a contract between the Authority or the City and the purchasers of the Notes. This Offering Memorandum does not constitute an offer to sell securities in any jurisdiction to any person to whom it is unlawful to make such offers.

Prospective purchasers of the Notes are expected to conduct their own review and analysis before making an investment decision.

The Notes are exempted from the requirements of Rule 15c2 -12 adopted by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended. The Notes have not been registered under the Securities Act of 1933, as amended, in reliance upon an exemption contained therein, and have not been registered or qualified under the securities laws of any state.

Neither the Master Resolution nor the Issuing Agreement has been qualified under the Trust Indenture Act of 1939, as amended, in reliance upon an exemption contained therein. The Notes have not been recommended by any federal or state securities commission or regulatory commission.

Furthermore, the foregoing authorities have not confirmed the accuracy or determined the adequacy of this Offering Memorandum.

DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

TABLE OF CONTENTS
Page
THE NOTES ................................................................................................................................................. 1 SECURITY AND SOURCES OF PAYMENT FOR THE NOTES ............................................................. 2 General ...................................................................................................................................................... 2 Letter of Credit .......................................................................................................................................... 3 Pledge of Net System Revenues ................................................................................................................ 4 THE LETTER OF CREDIT AND THE REIMBURSEMENT AGREEMENT .......................................... 6 General ...................................................................................................................................................... 7 Certain Provisions of the Letter of Credit ................................................................................................. 7 Events of Default ....................................................................................................................................... 8 Rights and Remedies ................................................................................................................................. 9 Special Acceleration Terms for Certain Events of Default ..................................................................... 10 THE AUTHORITY ..................................................................................................................................... 11 THE CITY AND THE WASTEWATER SYSTEM ................................................................................... 11 Miscellaneous .......................................................................................................................................... 13 INVESTMENT CONSIDERATIONS ........................................................................................................ 13 TAX MATTERS ......................................................................................................................................... 14 RATINGS .................................................................................................................................................... 16 THE DEALERS .......................................................................................................................................... 16 NO CONTINUING DISCLOSURE OBLIGATION .................................................................................. 17 LEGAL MATTERS .................................................................................................................................... 17 ADDITIONAL INFORMATION ............................................................................................................... 17

APPENDIX A FORM OF OPINION OF BOND COUNSEL

APPENDIX B CERTAIN INFORMATION REGARDING THE BANK

APPENDIX C BOOK-ENTRY-ONLY SYSTEM
DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

1 COMMERCIAL PAPER OFFERING MEMORANDUM

City of San José Financing Authority
Subordinate Wastewater Revenue Commercial Paper Notes,
Series A-1, and Series A-2 (Federally Taxable)

This Offering Memorandum has been prepared in connection with the issuance, from time to time, by the City of San José Financing Authority (the “Authority”) of its (a) Subordinate Wastewater Revenue Commercial Paper Notes, Series A-1 (the “Series A-1 Notes”); and (b) Subordinate Wastewater Revenue Commercial Paper Notes, Series A-2 (Federally Taxable) (the “Series A-2 Notes”). The Series A-1 Notes and the Series A-2 Notes are collectively referred to herein as the “Notes.”

All references to documents and other materials herein are qualified in their entirety by reference to the complete provisions of those documents and other materials. The information and expressions of opinion in this Offering Memorandum are subject to change without notice after October [8], 2026, and future use of this Offering Memorandum will not otherwise create any implication that there has been no change in the matters referred to in this Offering Memorandum since October [8], 2026.

IN MAKING AN INVESTMENT DECISION REGARDING A POSSIBLE PURCHASE OF

THE NOTES, PROSPECTIVE PURCHASERS OF THE NOTES SHOULD RELY SOLELY ON

THE CREDIT OF THE BANK AND NOT ON THE CREDIT OF THE AUTHORITY, THE CITY OR THE WASTEWATER SYSTEM (AS SUCH TERMS ARE DEFINED HEREIN).

THE NOTES

The Notes will be issued, from time to time, pursuant to Article 4 of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the “State”), the Joint Powers Agreement (as defined herein), Section 53580 et seq. of the Government Code of the State, and the Issuing Agreement (as defined herein). The Authority is authorized to issue the Notes pursuant to a resolution adopted by the Governing Board of the Authority on September 29, 2026, and the issuance and sale of the Notes has been approved by a re solution adopted by the Council of the City (the “Council”) of the City of San José (the “City”) on September 29, 2026 (collectively, the “Authorizing Resolutions”). The Authorizing Resolutions authorize the issuance of the Notes in an aggregate principal amount not to exceed $200 million outstanding at any one time.

The Notes may be outstanding, from time to time, in a combined amount of principal of and interest thereon not to exceed $217,753,425 (the initial stated amount of the Letter of Credit (as defined herein)).

The aggregate principal amount of, together with interest payable at maturity on, all Notes then outstanding and supported by the Letter of Credit may not exceed the amount then available to be drawn under the Letter of Credit. Said available amount is subject to reduction and reinstatement in accordance with the terms of the Letter of Credit. Under the Issuing Agreement, the Issuing and Paying Agent may not authenticate any Note if doing so would cause said available amount to be exceeded. The Notes are issuable only while the Letter of Credit is in effect, and no Notes will be issued unless and until the Letter of Credit has been issued. See “THE LETTER OF CREDIT AND THE REIMBURSEMENT AGREEMENT.”

The Notes may be issued, from time to time, to: (i) finance and refinance the acquisition, construction and installation of improvements, additions and betterments to, and extensions and rehabilitations of, the Wastewater System; (ii) refund other obligations of the Authority issued or incurred for such purposes, including the Authority’s outstanding Subordinate Wastewater Revenue Notes, Series A (the “Subordinate Wastewater Revenue Notes”); (iii) pay the principal of and interest on outstanding Notes when due; (iv) reimburse the Bank for amounts paid under the Letter of Credit with respect to maturing DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

2 Notes; and (v) pay costs of issuing the Notes. See “THE CITY AND THE WASTEWATER SYSTEM – Outstanding Obligations – Obligations on Parity with the Notes ” for a description of the outstanding Subordinate Wastewater Revenue Notes.

The Notes will be issued in denominations of $100,000 or integral multiples of $1,000 in excess thereof. The Notes will mature on such dates as the Authority may establish, provided that no Note will mature more than 270 days after its date of issuance or later than one Business Day before the Stated Expiration Date (as hereinafter defined) of the Letter of Credit. The Notes will be sold at a price of not less than the principal amount thereof, except that Series A-2 Notes may be sold at a price less than the principal amount thereof as described below, and will mature on a Business Day. “Business Day” means any day other than (a) a Saturday or Sunday, (b) a day on which banks located in the State of New York or State of California are required or authorized by law or executive order to be closed, (c) a day on which the New York Stock Exchange is closed, or (d) any day which is a day on which commercial banks in the city at which drawing requests under the Letter of Credit are to be presented are required or authorized to close

The Notes may bear interest at rates not in excess of 12% per annum. Interest on the Series A -1 Notes is calculated on the basis of a 365/366-day year and actual days elapsed and payable at maturity. The Series A-2 Notes may be issued and sold either as interest bearing notes or at a price less than the principal amount thereof, as determined by the Authority at the time such Series A -2 Notes are issued. Interest, if any, payable on Series A-2 Notes will accrue from their respective dates, payable at matur ity, at a rate to be determined upon the issuance thereof calculated on the basis of a 360 -day year and actual number of days elapsed.

The Notes are not subject to prepayment prior to maturity.

The Notes will be issued as fully registered notes and registered in the name of Cede & Co., as registered owner and nominee for The Depository Trust Company (“DTC”), New York, New York. The Authority may deliver the Notes in the form of a Master Note rep resenting the Notes of each Series to be issued from time to time. Beneficial ownership interests in the Notes will be available in book-entry form only, and purchasers of the Notes will not receive certificates representing their interests in the Notes purchased. While held in book-entry-only form, all payments of principal of and interest on the Notes will be made by wire transfer to DTC or its nominee as the sole registered owner of the Notes. Payments to the beneficial owners are the responsibility o f DTC and its participants. See “APPENDIX C —BOOK- ENTRY-ONLY SYSTEM.”

SECURITY AND SOURCES OF PAYMENT FOR THE NOTES

General

DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

3 The Notes are not subject to acceleration upon the occurrence of an Event of Default under the Issuing Agreement, the Installment Purchase Contract or the Reimbursement Agreement.

THE NOTES ARE LIMITED OBLIGATIONS OF THE AUTHORITY. THE PRINCIPAL

OF AND INTEREST (IF ANY) ON THE NOTES WILL BE PAYABLE SOLELY FROM

PROCEEDS OF DRAWINGS ON THE LETTER OF CREDIT, AND, TO THE EXTENT THAT

ANY DRAWINGS ON THE LETTER OF CREDIT ARE INSUFFICIENT, FROM THE INSTALLMENT PAYMENTS. THE AUTHORITY IS NO T OBLIGATED TO PAY THE

PRINCIPAL OF AND INTEREST ON THE NOTES EXCEPT FROM FUNDS ADVANCED UNDER THE LETTER OF CREDIT AND THE INSTALLMENT PAYMENTS.

THE FULL FAITH AND CREDIT OF THE AUTHORITY IS NOT PLEDGED FOR THE

PAYMENT OF THE PRINCIPAL OF OR THE INTEREST ON THE NOTES, AND NO TAX OR

ASSESSMENT WILL EVER BE LEVIED OR COLLECTED TO PAY THE PRINCIPAL OF OR THE INTEREST ON THE NOTES. THE NOTES ARE NOT SECURED BY A LEGAL OR

EQUITABLE PLEDGE OF, OR CHARGE, LIEN OR ENCUMBRANCE UPON, ANY PROPERTY

OF THE AUTHORITY OR ANY OF ITS INCOME OR RECEIPTS EXCEPT THE

INSTALLMENT PAYMENTS AND THE OTHER AMOUNTS PLEDGED UNDER THE ISSUING AGREEMENT. THE NOTES DO NOT CONSTITUTE AN INDEBTEDNESS OF THE

AUTHORITY WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT

LIMITATION OR RESTRICTION, AND NEITHER THE AUTHORITY NOR ANY OFFICER OR

EMPLOYEE THEREOF SHALL BE LIABLE FOR THE PAYMENT OF THE INTEREST

THEREON OR THE PRINCIPAL THEREOF OTHERWISE THAN FROM THE INSTALLMENT PAYMENTS AND THE OTHER AMOUNTS PLEDGED UNDER THE ISSUING AGREEMENT.

IN MAKING AN INVESTMENT DECISION REGARDING A POSSIBLE PURCHASE OF

THE NOTES, PROSPECTIVE PURCHASERS OF THE NOTES SHOULD RELY SOLELY ON

THE CREDIT OF THE BANK AND THE LETTER OF CREDIT, AND NOT ON THE CREDIT OF THE AUTHORITY, THE CITY OR THE WASTEWATER SYSTEM.

Letter of Credit

At the request of the Authority and the City, Bank of America, N.A. (the “Bank”), on October [15], 2026, will issue an irrevocable transferable direct-pay letter of credit (the “Letter of Credit”) in favor of the Issuing and Paying Agent, providing credit support for the timely payment of principal of and interest on the Notes. The Letter of Credit will be issued in an original stated amount of $217,753,425, consisting of $200,000,000 available to support the principal amount of the Notes and $17,753,425 available to support interest thereon at a maximum rate of 12% per annum for 270 days, calculated o n the basis of a 365 -day year. The Letter of Credit will expire on the Stated Expiration Date, unless extended or terminated sooner in accordance with its terms. See “THE LETTER OF CREDIT AND THE REIMBURSEMENT AGREEMENT” and “APPENDIX B—CERTAIN INFORMATION REGARDING THE BANK.”

On or before the maturity date of any Note, the Issuing and Paying Agent will draw on the Letter of Credit in an amount equal to the principal of and interest due on the Notes maturing on that date. Pursuant to the Issuing Agreement, amounts received from a drawing on the Letter of Credit are required to be deposited in the applicable account of the Reimbursement Agreement Fund established under the Issuing Agreement, held in trust and set aside exclusively for payment of the principal of and interest on the Notes for which the drawing was made. The Issuing and Paying Agent is required to apply such amounts to payment of the principal of and interest on such Notes on their applicable maturity date.

DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

4 Subject to the terms and conditions of the Letter of Credit, Notes issued while the Letter of Credit is in effect and supported thereby will remain supported by the Letter of Credit through their respective maturities. Pursuant to the terms of the Reimbursement Agreement, the Bank may deliver a Non-Issuance Notice or the Final Drawing Notice (as such terms are defined in the Reimbursement Agreement) under certain circumstances. Delivery thereof prevents the issuance of additional Notes in accordance with the Issuing Agreement, but does not by itself alter the obligation of the Bank to honor properly presented and conforming draw notices with respect to outstanding Notes supported by the Letter of Credit. A Non - Issuance Notice or the Final Drawing Notice received by the Issuing and Paying Agent at or after 9:30 a.m., New York City time, on any day on which Notes are being issued is effective on the next succeeding day.

In the event of the Final Drawing Notice, the Issuing and Paying Agent is required to make the drawing required by the Letter of Credit for payment of the principal of and interest on the outstanding Notes and hold the proceeds solely for that payment.

The Authority will at all times maintain in effect a letter of credit or letters of credit in an aggregate amount equal to at least the sum of the principal amount of Notes outstanding under the Issuing Agreement plus interest due at maturity thereof. The Authority may obtain an alternate letter of credit (each an “Alternate Letter of Credit”) to replace one or more of the letters of credit then in effect (each an “Existing Letter of Credit”), provided, among other things, that (a) the Existing Letter of Credit remains in effect and is drawn upon to pay the principal and interest on all Outstanding Notes payable from draws under such Existing Letter of Credit and (b) the Alternate Letter of Credit is in effect at the time the Existing Letter of Credit is terminated or expires.

Pledge of Net System Revenues

The Installment Payments are payable solely from, and are secured by a pledge of and lien on, Net System Revenues of the Wastewater System. The City has designated the Installment Payments as Subordinate Obligations within the meaning of Resolution No. 80770, entitled a “Resolution of the City Council of the City of San José Amending and Restating Resolution No. 78382 Providing for the Allocation of Wastewater System Revenues, the Pledge of Wastewater Net System Revenues and Establishing Covenants to Secure the Payment of Obligations Payable from Wastewater Net System Revenues,” adopted by the Council on November 15, 2022 (the “Master Resolution”). Accordingly, the City’s obligation to pay the Installment Payments from the Net System Revenues is in all respects subordinate to the City’s obligation to pay the City’s Parity Obligations (as defined herein) under the Master Resolution.

The City’s obligation to pay the Installment Payments from Net System Revenues is on a parity with the City’s obligation to pay any other Subordinate Obligations of the City.

The City may incur additional obligations payable from Net System Revenues that are Parity Obligations, and therefore payable from Net System Revenues on a senior basis to the Installment Payments, subject to the terms and conditions of the Master Resolution. The City may also incur additional obligations payable from Net System Revenues that are Subordinate Obligations, and therefore payable on a parity basis with the Installment Payments, subject to the terms and conditions of the Master Resolution and the Reimbursement Agreement. See “THE CITY AND THE WASTEWATER SYSTEM — Outstanding Obligations” for a description of the City’s outstanding obligations payable from Net System Revenues.

The term “Capital Costs of the Wastewater System” is defined in the Master Resolution to mean costs, or charges made therefor, for capital additions, replacement (except for capital expenditures for obtaining and installing equipment, accessories or appurtenances which are necessary during the service life of the Treatment Plant to maintain the capacity and performance for which the Treatment Plant was designed and constructed and do not constitute major rehabilitation needed as individual unit processes or DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

5 other facilities near the end of their useful lives, structural rehabilitation, or Treatment Plant expansions or upgrades to meet future user demands), betterments, extensions or improvements to or retirements from the Wastewater System.

The term “Contracts” is defined in the Master Resolution to mean any indenture, trust agreement, installment purchase agreement, lease, contract or other instrument or agreement (including any Hedge Agreement) designated as a “Contract” under the Master Resolution by the City, the payments under which are payable from the Net System Revenues.

The term “Maintenance and Operation Costs” is defined in the Master Resolution to mean the City’s reasonable and necessary costs of and charges for maintenance and operation of the Wastewater System, determined in accordance with generally accepted account ing principles, including (among other things) the City’s reasonable expenses of management, repair and other expenses necessary to maintain and preserve the Wastewater System in good repair and working order, reasonable amounts for administration, overhead, taxes (if any) and other similar costs; provided, however, that Maintenance and Operation Costs shall not include (a) depreciation or obsolescence charges or reserves therefor; (b) capital asset expenditures; (c) amortization of intangibles or other bookkeeping entries of a similar nature; (d) interest charges and charges for the payment of bonded or other indebtedness; (e) losses from the sale, abandonment, reclassification, revaluation or other disposition of any properties of the Wastewater System; (f) such property-items which are capitalized pursuant to then-existing accounting practices of the City; (g) Maintenance and Operation Costs payable from amounts identified in clause (e) of the definition of System Revenues; (h) Capital Costs of the Wastewater System; or (i) any costs of or charges for or relating to the South Bay Water Recycling Program System. Maintenance and Operation Costs shall also include (1) all fees, compensation or expenses required to be paid by the City pursuant to any Contract or other agreement relating to an Obligation, including fees, compensation or expenses of trustees, paying agents, credit enhancement providers, liquidity providers, hedge providers, remarketing agents or similar entities (for the avoidance of doubt, payments made under any such Contract that is or may be taken into account in connection with the calculation of Debt Service shall be excluded from Maintenance and Operation Costs and any payment owed pursuant to a Hedge Agreement by reason of an event of default under or termination of such Hedge Agreement shall be excluded from Maintenance and Operation Costs) and (2) Qualified Take or Pay Obligations.

The term “Net System Revenues” is defined in the Master Resolution to mean, for any period, the System Revenues for such period less Maintenance and Operation Costs for such period.

The term “Obligations” is defined in the Master Resolution to mean any obligation of the City payable from Net System Revenues as set forth in any Contract and, as the context may require and without duplication, the portion of any obligation secured by such obligation of the City with the approval of the City.

The term “Parity Obligations” is defined in the Master Resolution to mean all Obligations designated as such in the Contracts creating such Obligations and which are created in accordance with the provisions of the Master Resolution providing for the creation Parity Obligations.

The term “Sanitary Sewer Collection System” is defined in the Master Resolution to mean the whole and each and every part of the sanitary sewer collection and conveyance system of the City including the portion thereof existing on the date of the Master Resolution, and including all additions, betterments, extensions and improvements to such system or any part thereof and hereafter acquired or constructed but excluding the Treatment Plant.

DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

6 The term “Subordinate Obligations” is defined in the Master Resolution to mean all Obligations designated as such in the Contracts creating such Obligations and created in accordance with the provisions of the Master Resolution providing for the creation of Subordinate Obligations.

The term “System Revenues” is defined in the Master Resolution to mean all income, rents, rates, fees, charges, subsidies and receipts derived by the City from the ownership and operation of the Wastewater System, determined in accordance with generally ac cepted accounting principles, including (1) sewer service and use charges imposed by the City with respect to the Wastewater System; (2) connection charges imposed for the cost of connecting to the Treatment Plant to the extent lawfully available for the payment of Obligations; (3) connection fees imposed for the cost of connecting to the Sanitary Sewer Collection System to the extent lawfully available for the payment of Obligations; and (4) payments received from other users of the Treatment Plant for (i) Maintenance and Operation Costs of the Treatment Plant or (ii) debt service related to the Treatment Plant payable by other users of the Treatment Plant pursuant to any agreement entered into by such users. System Revenues also includes all interest, profits or other income derived from the deposit or investment of any moneys in any fund or account established by the City for the deposit of System Revenues and all repayments of any loans made for customer retrofits required for connection to the Treatment Plant.

“System Revenues” expressly exclude (a) refundable deposits made to establish credit, lease deposits and security deposits; (b) the proceeds of any Obligations or indebtedness; (c) insurance proceeds or condemnation awards; (d) grants to the City which are designated by the grantor for a specific purpose and are therefore not available to be treated as System Revenues; (e) payments by users of the Wastewater System made to cover Capital Costs of the Wastewater System; (f) moneys received from the levy of ad valorem taxes by the City; and (g) all income, rents, rates, fees, charges, subsidies and receipts derived by the City from the ownership and operation of, or otherwise derived from or related to, the South Bay Water Recycling Program System.

Notwithstanding the foregoing, amounts transferred into the Rate Stabilization Fund (as defined in the Master Resolution) from current System Revenues will be deducted from current System Revenues as provided in the Master Resolution, and any amounts transferred out of the Rate Stabilization Fund and deposited in the City’s Wastewater Treatment System Fund will be added to current System Revenues as provided in the Master Resolution.

The term “Treatment Plant” is defined in the Master Resolution to mean the “San José-Santa Clara Water Pollution Control Plant” (currently known as the “San José -Santa Clara Regional Wastewater Facility”) and all improvements, additions and betterments the reto and extensions and rehabilitations thereof but excluding the South Bay Water Recycling Program System.

The term “Wastewater System” is defined in the Master Resolution to mean, collectively, the Sanitary Sewer Collection System and the Treatment Plant.

THE CITY’S OBLIGATION TO MAKE THE INSTALLMENT PAYMENTS IS A SPECIAL OBLIGATION PAYABLE SOLELY FROM NET SYSTEM REVENUES. THE CITY IS

NOT OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR TO USE ITS GENERAL FUND TO PAY THE INSTALLMENT PAYMENTS.

THE LETTER OF CREDIT AND THE REIMBURSEMENT AGREEMENT

The following summary of the Letter of Credit and the Reimbursement Agreement does not purport to be comprehensive or definitive and is subject in all respects to all of the terms and provisions of the Letter of Credit and the Reimbursement Agreement, to which reference is made hereby. Investors DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

7 are urged to obtain and review a copy of the Letter of Credit and the Reimbursement Agreement in order to understand all of their terms. Unless otherwise defined in the following summary, capitalized terms used in the following summary are defined in this Offering Memorandum, the Letter of Credit or the Reimbursement Agreement and reference thereto is made for full understanding of their import.

General

Pursuant to a Reimbursement Agreement, dated as of October 1, 2026 (the “Reimbursement Agreement”), among the Authority, the City and the Bank, and upon the terms and conditions stated therein, on October [15], 2026, the Bank will issue the Letter of Credit providing credit support for the timely payment of the principal of and interest on the Notes.

Certain Provisions of the Letter of Credit

The Letter of Credit will have an initial stated amount of $217,753,425 (calculated as the sum of the maximum principal amount of the Notes supported by the Letter of Credit, or $200,000,000, plus interest thereon of $17,753,425, calculated at a maximum rate of 12% per annum for 270 days on the basis of a 365-day year). The Issuing and Paying Agent, upon compliance with the terms of the Letter of Credit, will be authorized to draw the principal amount of the Notes on their respective stated maturity dates, together with accrued interest thereon.

The Letter of Credit will expire at 5:00 p.m., New York City time, on the date (the “Termination Date”) which is the earliest to occur of the following: (a) [October __, 2029] (the “Stated Expiration Date”), as such date may be extended pursuant to a Notice of Extension delivered by the Bank to the Issuing and Paying Agent and the Authority in accordance with the terms of the Letter of Credit; (b) the date of payment of a Drawing, not subject to reinstatement, which when added to all other Drawings honored under the Letter of Credit that were not subject to reinstatement, in the aggregate equals the Available Amount (as defined below ) on the date of issuance of the Letter of Credit as adjusted pursuant to the terms and conditions of the Letter of Credit; (c) the date on which the Bank receives a termination certificate from the Issuing and Paying Agent, in the form attached to the Letter of Credit to the effect that the Letter of Credit is being terminated because the Issuing and Paying Agent has accepted a substitute letter of credit; (d) the date on which the Bank receives a termination certificate from the Issuing and Paying Agent to the effect that the Letter of Credit is being terminated because all of the Notes are wholly defeased or otherwise no longer outstanding under the Issuing Agreement and that the Authority has notified the Bank that they do not intend to issue any additional Notes; and (e) the earlier of ( x) the fifteenth ( 15 th) calendar day (or, if
such day is not a Business Day, the immediately succeeding Business Day) after the date on which the Issuing and Paying Agent receives a Final Drawing Notice from the Bank and ( y) the date on which the Drawing resulting from the delivery of the Final Drawing Notice is honored under the Letter of Credit. The Stated Expiration Date may be extended by an amendment to the Letter of Credit.

The amount available for drawings (the “Available Amount”) under the Letter of Credit will be reduced to the extent of any Drawing, and shall be reinstated only when and to the extent amounts are received by the Bank for reimbursement of the amount of such Drawing, subject to any permanent reduction in the Available Amount pursuant to a certificate delivered by the Issuing and Paying Agent at the direction of the Authority. While Notes are outstanding, upon the occurrence of an Event of Default under the Reimbursement Agreement, or at any time when the representations and warranties of the Authority or the City under the Reimbursement Agreement are no longer true and correct in all material respects, the Bank may, by the delivery of a Non -Issuance Notice to the Issuing and Paying Agent, direct the Issuing and Paying Agent to cease issuing Notes, and reduce the Available Amount to an amount equal to the principal amount of Notes then outstanding plus interest thereon. The Available Amount will then be further reduced upon the maturity of such outstanding Notes. Alternatively, the Bank may issue the Final Drawing Notice, DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

8 directing the Issuing and Paying Agent to cease issuing Notes and to make the final Drawing, and notifying the Issuing and Paying Agent that the Available Amount will not be reinstated.

Events of Default

The occurrence and continuance of any of the following constitutes an “ Event of Default” under the Reimbursement Agreement (capitalized terms used under this caption “ —Events of Default” and not otherwise defined elsewhere in this Offering Memorandum have the meanings set forth in the Reimbursement Agreement):

(a) the Authority fails to pay (i) any principal of or interest on any Drawing, Advance or the Bank Note when due, whether by scheduled maturity, required prepayment, acceleration, demand or otherwise, or (ii) any Facility Fee or other amount payable under the Reimbursement Agreement and, with respect to clause (ii) only, such failure continues for a period of three (3) Business Days from the date such obligation was due; or

(b) the Authority or the City fails to perform or observe any of the covenants specified in the Reimbursement Agreement as to which no notice or cure period applies; or

(c) the Authority or the City fails to perform any term, covenant, condition or provision of the Reimbursement Agreement or any of the Related Documents to which it is a party (other than as specified in any other subsection), which failure continues for thirt y (30) days or more after receipt by the Authority or the City of written notice of such failure; or

(d) any representation or warranty made or deemed made by the Authority or the City in the Reimbursement Agreement, in any Related Document to which it is a party or in any certificate, financial statement or other statement furnished by or on behalf of the Authority or the City pursuant to the Reimbursement Agreement or any of the Related Documents prove to have been incorrect in any material respect when made or deemed made; or

(e) an Event of Default occurs under the Issuing Agreement or the Installment Purchase Contract; or

(f) the Authority or the City defaults in the payment of any amount when due in respect of any Material Debt; or defaults under any Contract under or pursuant to which Material Debt payable from or secured by a Lien on Net System Revenues on a parity with or senior to the Installment Payments is incurred or issued, and such default continues beyond the period of grace, if any, allowed with respect thereto; or defaults under any Contract under or pursuant to which Material Debt payable from or secured by a Lien on Net System Revenues on a priority that is subordinate to the Installment Payments is incurred or issued, and such default continues beyond the period of grace, if any, allowed with respect thereto, and such default results in such Material Debt becoming, or being capable of becoming, immediately due and payable; or any act or omission by the Authority or the City occurs under any Contract under or pursuant to which Material Debt is incurred or issued which results in such Material Debt becoming, or being capable of becoming, immediately due and payable (or, with respect to any Interest Rate Swap Agreement that constitutes Material Debt, which results in such Interest Rate Swap Agreement being terminated early or being subject to early termination); or

(g) (i) the Authority or the City claims in writing, or repudiates its obligations under, or initiates any legal proceedings to seek an adjudication that, any of the provisions that DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

9 provide for the payment of principal of or interest on the Bank Note or the Notes or that establish the pledge of the Installment Payments to secure the Obligations, or the Reimbursement Agreement, the Related Documents, the Authorizing Resolutions or the Master Resolution, is not valid or binding on the Authority or the City, as applicable; or

(ii) any court of competent jurisdiction or other Governmental Authority with jurisdiction to rule on the validity of the Reimbursement Agreement or the Related Documents finds or rules that any of the provisions that provide for the payment of principal of or interest on the Bank Note or the Notes, or that establish the pledge of the Installment Payments to secure the Obligations, the Reimbursement Agreement or the Related Documents, is not valid or binding on the Authority or the City; or

(iii) except as described in clauses ( g)(i) and ( g)(ii) above, any provision of the Reimbursement Agreement, the Fee Agreement, the Issuing Agreement, the Installment Purchase Contract, the Bank Note or the Notes ceases to be valid and binding or is declared null and void; or the Authority, the City or any Governmental Authority contests any such provision; or the Authority, the City or any agent or trustee on behalf of the Authority or the City denies that it has any further liability under any provision of the Reimbursement Agreement or any of the other Related Documents to which it is a party; or the Authority or the City (A) claims that the Reimbursement Agreement or any of the other Related Documents to which it is a party is not valid or binding on it, (B) repudiates its obligations under the Reimbursement Agreement or any of the other Related Documents to which it is a party, and/or (C) initiates any legal proceedings to seek an adjudication that the Reimbursement Agreement or any of the other Related Documents to which it is a party or the Authority’s or the City’s obligation to repay any Material Debt is not valid or binding on it; or

(h) entry or filing of any final, non -appealable judgment or any similar process in an amount in excess of $20,000,000 against the Authority or the City payable from System Revenues, and failure by the Authority or the City to stay the enforcement of such judgment or other process for a period of ninety (90) days or failure to pay or satisfy the same within ninety (90) days; or

(i) an Event of Insolvency occurs with respect to the Authority or the City; or

(j) the Lien created by the Issuing Agreement, at any time and for any reason (except as expressly permitted to be released by the terms of such governing document), does not constitute a valid and perfected Lien or fails to have the priority required by the Reimbursement Agreement and the Related Documents, or the Authority or the City so asserts in writing; or

(k) any Obligor Rating is withdrawn or suspended for credit related reasons or reduced below “BBB” (or its equivalent) by S&P, “BBB” (or its equivalent) by Fitch or “BBB” (or its equivalent) by Kroll.

Rights and Remedies

Upon the occurrence and during the continuance of an Event of Default under the Reimbursement Agreement, the Bank may exercise any one or more of the following rights and remedies, in addition to any other remedies provided in the Reimbursement Agreement or by law:

DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

10 (a) subject to the provisions of the Reimbursement Agreement that are summarized under the caption “—Special Acceleration Terms for Certain Events of Default” below , by written notice to the Authority and the Issuing and Paying Agent, declare all outstanding Obligations to be immediately due and payable without presentment, demand, protest or other notice of any kind, provided that upon the occurrence of an Event of Default arising from the occurrence of an Event of Insolvency with respect to the Authority or the City all outstanding Obligations become immediately due and payable without notice;

(b) (i) deliver a Non-Issuance Notice, which upon receipt prohibits, until such time, if any, as the Bank withdraws such notice in writing, the issuance of additional Notes, and (ii) reduce the Available Amount of the Letter of Credit to the amount of the then outstanding Notes supported by the Letter of Credit and interest payable thereon at maturity, and/or permanently reduce the Available Amount as the then outstanding Notes are paid;

(c) issue the Final Drawing Notice, the effect of which is to cause the Termination Date of the Letter of Credit to occur on the fifteenth (15
th) day after the date of receipt thereof by the
Issuing and Paying Agent;

(d) pursue any rights and remedies it may have under the Related Documents; or

(e) pursue any other action available at law or in equity.

All remedies contained in the Reimbursement Agreement and any Related Document, or afforded by law, including any remedies as subrogee, are cumulative and all are available to the Bank until the Obligations have been paid in full.

Special Acceleration Terms for Certain Events of Default

Notwithstanding the provisions that are summarized under the caption “ —Rights and Remedies” above:

(a) solely in the case of the Events of Default that are described in clauses (a)(i), (f), (g)(i), (g)(ii), (h), (j) or (k) under the caption “— Events of Default” above, an acceleration pursuant to the provisions of the Reimbursement Agreement that are described in clause (a) under the caption “—Rights and Remedies” above shall not be declared or directed by the Bank until seven (7) days after the occurrence of such Event of Default; and

(b) solely in the case of an Event of Default described under the caption “Events of Default” above other than in clauses (a)(i), (f), (g)(i), (g)(ii), (h), (i), (j) and (k), an acceleration pursuant to the provisions of the Reimbursement Agreement that are described in paragraph (a) under the caption “—Rights and Remedies” above shall require one hundred eighty (180) days’ prior written notice from the Bank to the Authority.

Notwithstanding the foregoing, (i) if any other holder, lender, credit enhancer, liquidity provider or insurer of Debt, secured by or payable from Net System Revenues has the right to cause such Debt to be immediately due and payable (whether by repurchase , mandatory tender, mandatory redemption, acceleration or otherwise) on a date earlier than or pursuant to a notice period which is shorter than the applicable date or notice period set forth in clauses (a) and (b) above , as applicable, in connection with a similar type of default, then the period set forth in such clauses , as applicable, shall automatically be changed to reflect such shorter period or earlier date, or (ii) if any other holder, lender, credit enhancer, liquidity provider or insurer of such Debt or any counterparty to any Interest Rate Swap Agreement which, DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

11 in either case, is secured by or payable from Net System Revenues causes any such Debt or obligations of the Authority or the City under such Interest Rate Swap Agreement to become immediately due and payable or an Event of Default that is described in clause (i) under the caption “—Events of Default” above occurs, then the Bank may immediately, without notice or delay, avail itself of the remedies set forth in clause (a) under the caption “—Rights and Remedies” above and accelerate all obligations of the Authority under the Reimbursement Agreement and cause the acceleration of the Installment Payments under the Installment Purchase Contract.

THE AUTHORITY

The Authority was formed pursuant to a Joint Exercise of Powers Agreement, dated December 8, 1992 (the “Joint Powers Agreement”), by and between the City and the former Redevelopment Agency of the City of San José (the “Former Agency”). As a result of changes to the Community Redevelopment Law, the Former Agency was dissolved on February 1, 2012, and the City, pursuant to the changes in the Community Redevelopment Law, acts as the successor agency to the Former Agency (the “Successor Agency”). The Authority, the Successor Agency and the City are each separate and distinct legal entities, and the debts and obligations of one such entity are not the debts or obligations of the other entities.

The members of the Council serve as the members of the Governing Board of the Authority. The Authority has no employees and no independent source of revenue. The Authority has no obligation to pay the principal of or the interest on the Notes other than from the Installment Payments and the other amounts pledged under the Issuing Agreement.

THE CITY AND THE WASTEWATER SYSTEM

The City of San José

The City of San José is a charter city located in Santa Clara County, California. It encompasses approximately 180 square miles, in the Santa Clara Valley at the southern tip of San Francisco Bay, approximately 48 miles south of San Francisco and 40 miles south of Oakland. The City is the third largest city in the State with an estimated population of 980,434 as of January 1, 2026.

The City provides a full range of municipal services, including police and fire protection, sanitation services, environmental management, maintenance of streets and infrastructure, library services, and recreational activities. In addition to the Wastewater System, the City operates several enterprises including a parking program, a municipal water system, the San José Mineta International Airport, and San José Clean Energy. In addition, the City provides oversight of the management of convention and cultural event facilities that include the San José McEnery Convention Center, Center for the Performing Arts, California Theatre, Mexican Heritage Plaza, Ice Centre and the SAP Center at San José, home of the San José Sharks of the National Hockey League.

The City is governed by a Mayor and ten-member City Council and is authorized by its charter to own, operate and maintain facilities for the collection, treatment and disposal of wastewater.

The Wastewater System

The City owns and operates the Sanitary Sewer Collection System and, as administering agency, operates the Treatment Plant. The Treatment Plant is jointly owned by the City and the City of Santa Clara and provides wastewater-treatment services to the City, the City of Santa Clara and the City of Milpitas, West Valley Sanitation District, Cupertino Sanitary District, County Sanitation District 2 -3, and Burbank Sanitary District (each a “Tributary Agency” and collectively, the “Tributary Agencies”). E ach Tributary DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

12 Agency is responsible for its allocated share of Treatment Plant costs, as well as the operation, maintenance, and capital costs of its own sewage collection system; debt service on bonds issued by the tributary agency for sewer purposes; and any other sewer service -related costs. Each Tributary Agency is also responsible for establishing and collecting its respective sewer service and use charges, connection fees, or other charges for sewer service.

The South Bay Water Recycling Program System is located adjacent to the Treatment Plant but is not part of the Wastewater System. Revenues derived from that program are excluded from “System Revenues” under the Master Resolution and are not pledged to secure the Installment Payments.

The service area of the Sanitary Sewer Collection System covers approximately 180 square miles and is conterminous with the jurisdictional boundaries of the City. As of June 30, 2026, the Sanitary Sewer Collection System had approximately 3 44,000 residential, 9,000 commercial, 600 industrial, and 380 institutional accounts. The wastewater collected by the Sanitary Sewer Collection System is conveyed to the Treatment Plant by major interceptor pipelines located in the northern part of the City.

The Treatment Plant is located on 2,600 acres at the South San Francisco Bay shoreline in the Alviso area of the City, approximately six miles from the downtown business district. The Treatment Plant has an average five -day dry weather flow design capacity of 167 million gallons per day (“mgd”) and a peak wet weather flow design capacity of 261 mgd. The Treatment Plant serves approximately 1.4 million residents and approximately 17,000 businesses in eight cities and four sanitation districts.

Sewer service and use charges are established by the City Council. Rate adjustments are subject to applicable notice, hearing and majority -protest requirements under Article XIIID of the California Constitution, commonly known as Proposition 218.

Capital Improvement Program

The City’s 2027 -2031 Adopted Capital Improvement Program (the “2027 -2031 CIP”) includes planned capital improvements to the Sanitary Sewer Collection System totaling approximately $292.0 million. Of this amount, approximately $68.1 million and approximatel y $38.7 million are planned for Fiscal Years 2026-27 and 2027-28, respectively. The principal components of the planned Sanitary Sewer Collection System improvements include sewer rehabilitation projects totaling approximately $103.7 million, capacity improvement projects totaling approximately $80.7 million, and non -construction expenditures, including program management and condition as sessments, totaling approximately $93.7 million. Costs for capital improvements to the Sanitary Sewer Collection System are borne solely by the City; they are not allocated to the Tributary Agencies or the City of Santa Clara.

The 2027-2031 CIP includes Treatment Plant-related expenditures totaling approximately $994.0 million. Of this amount, approximately $148.3 million and approximately $153.8 million are planned for Fiscal Years 2026-27 and 2027-28, respectively. The principal components of such expenditures include improvements to primary, secondary, and tertiary treatment facilities totaling approximately $310.0 million, biosolids facilities totaling approximately $211.0 million, and site facilities totaling approximately $155.0 million. The 2027- 2031 CIP also includes installment payments totaling approximately $257.5 million for debt service on capital-improvement financings.

Costs for capital improvements to the Treatment Plant are allocated to the Tributary Agencies based on each agency’s contractual capacity in the Treatment Plant. The remainder of the costs for capital improvements are shared between the City and the City of Sant a Clara based on their respective annual assessed property value relative to the total annual assessed value in their jurisdictions. The Tributary Agencies collectively hold approximately 21% of the capacity in the Treatment Plant. Of the capacity DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

13 remaining after allocation to the Tributary Agencies, the City and the City of Santa Clara hold 80.5% and

19.5%, respectively. After allocation to the Tributary Agencies and the City of Santa Clara, the City funds approximately 65% of total capital costs for the Treatment Plant.

The scope, estimated costs, timing, prioritization and funding sources for projects included in the 2027-2031 CIP are subject to change based on final design and engineering, construction -market conditions, regulatory requirements, system needs, available funding, and future actions of the City Council. Inclusion of a project in the 2027-2031 CIP does not constitute a commitment that the project will be undertaken or completed as currently described or that any particular financing will be issued.

The budgeted costs are allocated to each tributary agency based on its contracted -for capacity in the Treatment Plant.

Outstanding Obligations

Obligations Senior to the Notes . The City’s payment obligations under the installment purchase contract relating to the Authority’s Wastewater Revenue Bonds, Series 2022B (Green Bonds —Climate Bond Certified) (the “2022B Bonds”) are designated as Parity Obligations under the Master Resolut ion.

Such payment obligations are payable from Net System Revenues on a basis senior to the payment of the Installment Payments. As of the date hereof, the 2022B Bonds are outstanding in the aggregate principal amount of approximately $255,885,000. The City may incur additional Parity Obligations subject to the terms and conditions of the Master Resolution.

Obligations on Parity with the Notes . As of the date of this Offering Memorandum , the Subordinate Wastewater Revenue Notes are outstanding in the aggregate principal amount of approximately $90 million. The Subordinate Wastewater Revenue Notes are secured by a pledge of installment payments by the City payable under a Subordinate Installment Purchase Contract, dated as of October 1, 2017 (the “2017 Installment Purchase Contract”), between the City and the Authority. The City’s payment obligations under the 2017 Installment Purchase Contract are Subordinate Obligations under the Master Resolution and, accordingly, payable from Net System Revenues on parity with all Subordinate Obligations under the Master Resolution, including the Installment Payments. The Subordinate Wastewater Revenue Notes are expected to be refunded with proceeds of the initial issuance of the Notes on October [15], 2026. The agreement pursuant to which the Subordinate Wastewater Revenue Notes were issued will be terminated concurrently with the refunding and n o additional Subordinate Wastewater Revenue Notes are expected to be issued on or after such date.

The City may incur additional Subordinate Obligations subject to the terms and conditions of the Master Resolution and the Reimbursement Agreement.

Miscellaneous

The City maintains a website at www.sanjoseca.gov. Information on such website is not part of this Offering Memorandum, nor has such information been incorporated by reference herein, and it should not be relied upon in deciding whether to invest in the Notes.

INVESTMENT CONSIDERATIONS

IN MAKING AN INVESTMENT DECISION REGARDING A POSSIBLE PURCHASE OF

THE NOTES, PROSPECTIVE PURCHASERS OF THE NOTES SHOULD RELY SOLELY ON

THE CREDIT OF THE BANK AND NOT ON THE CREDIT OF THE AUTHORITY, THE CITY OR THE WASTEWATER SYSTEM.

DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

14 The purchase and ownership of the Notes involve investment risk. Prospective purchasers of the Notes are urged to read this Offering Memorandum in its entirety. Neither the Authority nor the City has undertaken to describe herein the risks associated with the Wastewater System or with an investment in the Notes, because payment of the principal of and interest on the Notes at maturity is expected to be made from drawings on the Letter of Credit. Because no Notes will be issued unless and until the Letter of Credit is issued, purchasers of the Notes will not acquire Notes that are not supported by the Letter of Credit.

TAX MATTERS
Series A-1 Notes

In the opinion of Orrick, Herrington & Sutcliffe LLP ,
bond counsel to the Authority (“Bond
Counsel”), based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, interest on the Series A-1 Notes will be excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the “Code”) and will be exempt from State of California personal income taxes. Bond Counsel is of the further opinion that interest on the Series A -1 Notes will not be a specific preference item for purposes of the federal individual alternative minimum tax. Bond Counsel observes that interest on the Series A -1 Notes included in adjusted financial statement income of certain corporations will not be excluded from the federal corporate alternative minimum tax. The amount treated as interest on the Series A -1 Notes and excluded from gross income will depend upon the taxpayer’s election under Internal Revenue Notice 94-84. Bond Counsel expresses no opinion regarding any other tax consequences related to the ownership or disposition of, or the amount, accrual or receipt of interest on, the Series A-1 Notes. A complete copy of the proposed form of opinion of Bond Counsel is set forth in Appendix A hereto.

The Code imposes various restrictions, conditions and requirements relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the Series A-1 Notes. The Authority and the City have made certain representa tions and covenanted to comply with certain restrictions, conditions and requirements designed to ensure that interest on the Series A -1 Notes will not be included in federal gross income. Inaccuracy of these representations or failure to comply with these covenants may result in interest on the Series A-1 Notes being included in gross income for federal income tax purposes, possibly from the date of original issuance of the Series A -1 Notes. The opinion of Bond Counsel assumes the accuracy of these representations and compliance with these covenants. Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken), or events occurring (or not occurring), or any other matters coming to Bond Counsel’s attention after the date of issuance of the Series A -1 Notes may adversely affect the value of, or the tax status of interest on, the Series A-1 Notes. Accordingly, the opinion of Bond Counsel is not intended to, and may not, be relied upon in connection with any such actions, events or matters.

Although Bond Counsel is of the opinion that interest on the Series A -1 Notes will be excluded from gross income for federal income tax purposes and will be exempt from State of California personal income taxes, the ownership or disposition of, or the accr ual or receipt of amounts treated as interest on, the Series A- 1 Notes may otherwise affect a beneficial owner’s federal, state or local tax liability. The nature and extent of these other tax consequences will depend upon the particular tax status of the beneficial owner or the beneficial owner’s other items of income or deduction. Bond Counsel expresses no opinion regarding any such other tax consequences.

Current and future federal or state legislative proposals, if enacted into law, clarification of the Code or court decisions may cause interest on the Series A-1 Notes to be subject, directly or indirectly, in whole or in part, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent beneficial owners from realizing the full current benefit of the tax status of such interest.

DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

15 The introduction or enactment of any such legislative proposals or clarification of the Code or court decisions may also affect, perhaps significantly, the market price for, or marketability of, the Series A -1 Notes. Prospective purchasers of the Series A-1 Notes should consult their own tax advisors regarding the potential impact of any pending or proposed federal or state tax legislation, regulations or litigation, and regarding the impact of future legislation, regulations or litigation, as to which Bond Counsel expresses no opinion.

The opinion of Bond Counsel is based on current legal authority, covers certain matters not directly addressed by such authorities, and represents Bond Counsel’s judgment as to the proper treatment of the Series A-1 Notes for federal income tax purposes. It is not binding on the Internal Revenue Service (“IRS”) or the courts. Furthermore, Bond Counsel cannot give and has not given any opinion or assurance about the future activities of the Authority or the City, or about the effect of future changes in th e Code, the applicable regulations, the interpretation thereof or the enforcement thereof by the IRS. The Authority and the City have covenanted, however, to comply with the requirements of the Code.

Bond Counsel’s engagement with respect to the Series A -1 Notes ends with the delivery of its opinion, and, unless separately engaged, Bond Counsel is not obligated to defend the Authority, the City or the beneficial owners regarding the tax -exempt status o f the Series A- 1 Notes in the event of an audit examination by the IRS. Under current procedures, beneficial owners would have little, if any, right to participate in the audit examination process. Moreover, because achieving judicial review in connection with an audit examination of tax -exempt obligations is difficult, obtaining an independent review of IRS positions with which the Authority or the City legitimately disagrees, may not be practicable. Any action of the IRS, including but not limited to se lection of the Series A-1 Notes for audit, or the course or result of such audit, or an audit of obligations presenting similar tax issues may affect the market price for, or the marketability of, the Series A -1 Notes, and may cause the Authority, the City or the beneficial owners to incur significant expense.

Payments on the Series A -1 Notes generally will be subject to U.S. information reporting and possibly to “backup withholding.” Under Section 3406 of the Code and applicable U.S. Treasury Regulations issued thereunder, a non -corporate beneficial owner of Series A -1 Notes may be subject to backup withholding with respect to “reportable payments,” which include interest paid on the Series A -1 Notes and the gross proceeds of a sale, exchange, redemption, retirement or other disposition of the Series A-1 Notes. The payor will be required to deduct and withhold the prescribed amounts if (i) the payee fails to furnish a U.S. taxpayer identification number (“TIN”) to the payor in the manner required, (ii) the IRS notifies the payor that the TIN furnished by the payee is incorrect, (iii) there has been a “notified payee underreporting” described in Section 3406(c) of the Code or (iv) the payee fails to certify under penalty of perjury that the payee is not subject to withholding under Section 3406(a)(1)(C) of the Code. Amounts withheld under the backup withholding rules may be refunded or credited against a beneficial owner’s federal income tax liability, if any, provided that the required information is timely furnished to the IRS.

Certain beneficial owners (including among others, corporations and certain tax-exempt organizations) are not subject to backup withholding. The failure to comply with the backup withholding rules may result in the imposition of penalties by the IRS.

Series A-2 Notes

State of California Income Tax Considerations. In the opinion of Bond Counsel, interest on the Series A-2 Notes is exempt from State of California personal income taxes.

Certain United States Federal Tax Considerations. Interest on the Series A -2 Notes is not excluded from gross income for federal income tax purposes.

DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

16 Prospective investors that are not individuals or regular C corporations who are U.S. persons purchasing the Series A -2 Notes for investment should consult their own tax advisors as to any tax consequences to them from the purchase, ownership and disposition of the Series A-2 Notes.

RATINGS

Moody’s Investors Service Inc. (“Moody’s”) and S&P Global Ratings, a division of Standard & Poor’s Financial Services LLC (“S&P”), are expected to assign short -term ratings of “[P -1” and “A-1],” respectively, to the Notes based on the credit support provided by the Bank pursuant to the Letter of Credit, which ratings will be released upon the delivery of the Letter of Credit. Such ratings will expire upon the expiration of the Letter of Credit.

The ratings on the Notes provided by the respective rating agencies are based, in part, on information provided by the Authority, the City and the Bank. Such ratings reflect only the respective views of such rating agencies, and an explanation of the significance of such ratings may be obtained from the rating agency furnishing the same. There is no assurance that a rating will continue for any given period of time or that a rating will not be revised or withdrawn entirely by the rating agency that issued that rating if, in its judgment, circumstances so warrant. Any downward revision or withdrawal of a rating could have an adverse effect on the market prices of the Notes.

THE DEALERS

The Authority and the City have appointed Barclays Capital Inc., Morgan Stanley & Co. LLC and TD Financial Products LLC as dealers with respect to the offering and sale of the Notes (the “Dealers”).

Under the respective dealer agreements among the Authority, the City and each of the respective Dealers, the Dealers have no commitment to purchase any of the Notes, but are obligated only to use their best efforts to solicit and arrange sales of the Notes.

Morgan Stanley & Co. LLC, one of the Dealers of the Notes, has entered into a retail distribution arrangement with its affiliate, Morgan Stanley Smith Barney LLC. As part of the distribution arrangement, Morgan Stanley & Co. LLC may distribute securities t o retail investors through the financial network of Morgan Stanley Smith Barney LLC. As part of this arrangement, Morgan Stanley & Co. LLC may compensate Morgan Stanley Smith Barney LLC for its efforts with respect to the Notes.

Each Dealer and its respective affiliates together comprise a full -service financial institution engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, principal in vestment, hedging, financing and brokerage activities. Each Dealer and its respective affiliates may have, from time to time, performed and may in the future perform, various investment banking services for the Authority and the City for which they received or will receive customary fees and expenses. In the ordinary course of their various business activities, each Dealer and its respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related de rivative securities and financial instruments which may include bank loans and/or credit default swaps) for its own account and for the accounts of its customers and may at any time hold long and short positions in such securities and instruments. Such investment securities activities may involve securities and instruments of the Authority and the City. Each Dealer and its respective affiliates may also communicate independent investment recommendations, market color or trading ideas and publish independent research views in respect of such offerings of the Authority and the City.

No Dealer is acting as a financial or municipal advisor to the Authority or the City in connection with the Notes.

DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

17 NO CONTINUING DISCLOSURE OBLIGATION

The Notes are exempt from the continuing disclosure requirements of Rule 15c2 -12 promulgated under the Securities Exchange Act of 1934, as amended. Neither the Authority nor the City have undertaken to provide any secondary market information regarding the Notes; however, the Authority and the City file official statements and continuing disclosure reports and notices with respect to certain of their outstanding bonds and notes with the Municipal Securities Rulemaking Board (the “MSRB”). Such filings may be accessed through the Electronic Municipal Market Access website of the MSRB, currently located at https://emma.msrb.org. Neither such website nor the information contained therein (including such filings) are incorporated by reference herein.

LEGAL MATTERS

The validity of the Notes and certain other legal matters are subject to the approving opinion of Bond Counsel. A complete copy of the proposed form of Bond Counsel opinion is contained in Appendix A hereto. Bond Counsel undertakes no responsibility for the accuracy, completeness or fairness of this Offering Memorandum. Certain legal matters will be passed upon for the Authority and the City by the City Attorney, and by Anzel Galvan LLP, San Francisco, California, as Disclosure Counsel.

NO LITIGATION RELATING TO THE NOTES

There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body pending or, to the best of the knowledge of the Authority or the City after reasonable investigation, threa tened in writing with proper service having been accomplished, in any way seeking to restrain or enjoin the issuance, sale or delivery of the Notes or challenging the validity of the Notes.

ADDITIONAL INFORMATION

The purpose of this Offering Memorandum is to provide information to purchasers of the Notes.

The information contained herein has been obtained from the Authority, the City, the Bank, DTC and other sources believed to be reliable. No warranty or representation is made by the Dealers as to the accuracy or completeness thereof. Except as expressly set forth herein, no attempt is made herein to summarize the Authorizing Resolutions, the Issuing Agreement, the Installment Purchase Contract, the Master Resolution, the Letter of Credit or the Reimbursement Agreement, the financial condition or operations of the Authority, the City or the Wastewater System, the terms and provisions of the Notes or other matters which may be material to a decision to purchase th e Notes. Purchasers of the Notes are expected to conduct their own due diligence and analysis prior to making an investment decision.

The Dealers have reviewed the information in this Offering Memorandum in accordance with, and as part of, their responsibility to investors under the federal securities law as applied to the facts and circumstances of this transaction, but the Dealers do not guarantee the accuracy or completeness of such information.

All references to the Authorizing Resolutions, the Issuing Agreement, the Installment Purchase Contract, the Master Resolution, the Notes, the Letter of Credit and the Reimbursement Agreement do not purport to be complete or definitive, do not constitute summaries thereof and are qualified in their entirety by reference to the provisions thereof. Copies of those documents are available upon request from the City.

DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

18 Requests for any of the foregoing should be directed to:

U.S. Bank Trust Company, National Association
100 Wall Street, Suite 600
New York, NY 10005
Telephone: (212) 361-6151
Facsimile: (212) 361-6153
Attention: Corporate Trust Services

This Offering Memorandum is submitted in connection with the issuance and sale of the Notes and may not be reproduced or used, in whole or in part, for any other purpose. The information contained herein and in the Appendices hereto is subject to change w ithout notice and neither the delivery hereof nor any sale made hereunder will create any implication that there has been no change in the affairs of the Authority, the City, the Wastewater System or the Bank since the date hereof.

Any statements in this Offering Memorandum involving matters of opinion, projections or estimates, whether or not expressly so stated, are intended as such and not as representations of fact. No representation is made that any of such statements will be realized. Neither any advertisement of the Notes nor this Offering Memorandum is to be construed as constituting a contract or agreement between the Authority or the City and the purchasers or owners of the Notes.

DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

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DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

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APPENDIX A

PROPOSED FORM OF OPINION OF BOND COUNSEL
DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

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APPENDIX B

CERTAIN INFORMATION REGARDING THE BANK

IN MAKING AN INVESTMENT DECISION REGARDING A POSSIBLE PURCHASE OF

THE NOTES, PROSPECTIVE PURCHASERS OF THE NOTES SHOULD RELY SOLELY ON

THE CREDIT OF THE BANK AND NOT ON THE CREDIT OF THE AUTHORITY, THE CITY OR THE WASTEWATER SYSTEM. The following information relates to and has been furnished by the Bank for inclusion herein. No other party has independently verified or assumes any responsibility for such information, and each of the Authority, the City and the Dealers cannot and does not make any representation as to the accuracy or completeness of such information or the absence of material adverse changes in such information subsequent to the date hereof. The delivery of this Offering Memorandum shall not create any implication that there has been no change in the affairs of the Bank since the date hereof or that the information contained or referred to in this section is correct as of any time subsequent to the date hereof.

BANK OF AMERICA, N.A.

Bank of America, N.A. (the “Bank”) is a national banking association organized under the laws of the United States, with its principal executive offices located in Charlotte, North Carolina. The Bank is a wholly-owned indirect subsidiary of Bank of America Corporation (the “Corporation”) and is engaged in a general consumer banking, commercial banking and trust business, offering a wide range of commercial, corporate, international, financial market, retail and fiduciary banking services. As of June 30, 2026, the Bank had consolidated assets of $2.655 trillion, consolidated deposits of $2.122 trillion and stockholder’s equity of $240.789 billion based on regulatory accounting principles.

The Corporation is a bank holding company and a financial holding company, with its principal executive offices located in Charlotte, North Carolina. Additional information regarding the Corporation is set forth in its Annual Report on Form 10-K for the fiscal year ended December 31, 2025, together with its subsequent periodic and current reports filed with the Securities and Exchange Commission (the “SEC”).

The SEC maintains a website at www.sec.gov which contains the filings that the Corporation files with the SEC such as reports, proxy statements and other documentation. The reports, proxy statements and other information the Corporation files with the SEC are also available at its website, www.bankofamerica.com.

The information concerning the Corporation and the Bank is furnished solely to provide limited introductory information and does not purport to be comprehensive. Such information is qualified in its entirety by the detailed information appearing in the re ferenced documents and financial statements referenced therein.

The Bank will provide copies of the most recent Bank of America Corporation Annual Report on Form 10-K, any subsequent reports on Form 10-Q, and any required reports on Form 8-K (in each case as filed with the SEC pursuant to the Securities Exchange Act of 1934, as amended), and the publicly available portions of the most recent quarterly Call Report of the Bank delivered to the Comptroller of the Currency, without charge, to each person to whom this document is delivered, on the written request of such person.

Written requests should be directed to:

Bank of America Corporation
Office of the Corporate Secretary/Shareholder Relations One Bank of America Center
DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

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100 North Tryon Street, NC1-007-56-06
Charlotte, North Carolina 28255

PAYMENTS OF PRINCIPAL AND INTEREST ON THE NOTES WILL BE MADE FROM DRAWINGS UNDER THE LETTER OF CREDIT. ALTHOUGH THE LETTER OF CREDIT IS

A BINDING OBLIGATION OF THE BANK, THE NOTES ARE NOT DEPOSITS OR

OBLIGATIONS OF THE CORPORATION OR ANY OF ITS AFFILIATED BANKS AND ARE NOT GUARANTEED BY ANY OF THESE ENTITIES. THE NOTES ARE NOT INSURED BY

THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL

AGENCY AND ARE SUBJECT TO CERTAIN INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.

The delivery of this information shall not create any implication that there has been no change in the affairs of the Corporation or the Bank since the date of the most recent filings referenced herein, or that the information contained or referred to in t his Appendix B is correct as of any time subsequent to the referenced date.

DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

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APPENDIX C

BOOK-ENTRY-ONLY SYSTEM
Introduction
Unless otherwise noted, the information contained under the caption “—General” below has been provided by The Depository Trust Company (“DTC”). The Authority, the City, the Issuing and Paying Agent and the Dealers make no representation as to the accuracy or the completeness of such information.

The Beneficial Owners (as defined below) of the Notes should confirm the following information with DTC, the Direct Participants (as defined below) or the Indirect Participants (as defined below).

NEITHER THE AUTHORITY, THE CITY NOR THE ISSUING AND PAYING AGENT

WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO DIRECT PARTICIPANTS, TO

INDIRECT PARTICIPANTS, OR TO ANY BENEFICIAL OWNER WITH RESPECT TO (A) THE

ACCURACY OF ANY RECORDS MAINTAINED BY DTC, ANY DIRECT PARTICIPANT, OR ANY INDIRECT PARTICIPANT; (B) ANY NOTICE THAT IS PERMITTED OR REQUIRED TO BE GIVEN TO THE OWNERS OF NOTES UNDER THE ISSUING AGREEMENT; (C) THE

PAYMENT BY DTC OR ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY

AMOUNT WITH RESPECT TO THE PRINCIPAL OR INTEREST DUE WITH RESPECT TO THE OWNERS OF THE NOTES; (D) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS THE OWNERS OF NOTES; OR (E) ANY OTHER MATTER REGARDING DTC.

General

1. DTC will act as securities depository for the Notes. The Notes 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 Master Note Certificate will be issued for each Series of the Notes and will be deposited with DTC.

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 co rporation” 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 P articipants of sales and other securities transactions in deposited securities, through electronic computerized book -entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly -owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC” ). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Ind irect 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.

DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

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3. Purchases of the Notes under the DTC system must be made by or through Direct Participants, which will receive a credit for the Notes on DTC’s records. The ownership interest of each actual purchaser of each Note (“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 Notes are to be accomplished by entries made on the books o f Direct and Indirect Participants acting on behalf of Beneficial Owners.

Beneficial Owners will not receive certificates representing their ownership interests in the Notes, except in the event that use of the book-entry system for the Notes is discontinued.

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

5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. The Authority, the City and the Issuing and Paying Agent will not have any responsibility or obligation to such DTC Participants or the persons for whom they act as nominees with respect to the Notes.

6. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Notes unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Authority or the Issuing and Paying Agent as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the Notes are credited on the record date (identified in a listing attached to the Omnibus Proxy).

7. Principal and interest payments on the Notes will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Authority or the Issuing and Paying Agent, on the payment date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Issuing and Paying Agent, the Authority or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Authority or the Issuing and 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.

8. DTC may discontinue providing its services as depository with respect to the Notes at any time by giving reasonable notice to the Authority or the Issuing and Paying Agent. Under such circumstances, DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

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in the event that a successor depository is not obtained, certificates representing the Notes are required to be printed and delivered.

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

No Assurance Regarding DTC Practices
AS LONG AS CEDE & CO. OR ITS SUCCESSOR IS THE REGISTERED HOLDER OF

THE NOTES, AS NOMINEE OF DTC, REFERENCES HEREIN TO THE REGISTERED HOLDERS OF THE NOTES SHALL MEAN CEDE & CO., AS AFORESAID, AND SHALL NOT MEAN THE BENEFICIAL OWNERS OF THE NOTES. ANY FAILU RE OF DTC TO ADVISE

ANY PARTICIPANT, OR OF ANY PARTICIPANT TO NOTIFY ANY BENEFICIAL OWNER,

OF ANY NOTICE AND ITS CONTEXT OR EFFECT WILL NOT AFFECT THE VALIDITY OR SUFFICIENCY OF THE PROCEEDINGS RELATING THERETO. Each person for whom a Participant acquires an interest in the Notes, as nominee, may desire to make arrangements with such Participant to receive a credit balance in the records of such Participant, and may desire to make arrangements with such Participan t to have all notices of redemption or other communications to DTC, which may affect such person, forwarded in writing by such Participant and to receive notification of all interest payments.

NEITHER THE AUTHORITY, THE CITY, THE ISSUING AND PAYING AGENT NOR

THE DEALERS WILL HAVE ANY RESPONSIBILITY OR OBLIGATION WITH RESPECT TO

THE PAYMENTS TO THE DIRECT PARTICIPANTS, ANY INDIRECT PARTICIPANTS OR

THE BENEFICIAL OWNERS, THE SELECTION OF THE BENEFICIAL INTERESTS IN THE

NOTES TO BE REDEEMED IN THE EVENT OF REDEMPTION OF LESS THAN ALL NOTES

OF A PARTICULAR MATURITY OR THE PROVISION OF NOTICE TO THE DIRECT

PARTICIPANTS, ANY INDIRECT PARTICIPANTS OR THE BENEFICIAL OWNERS WITH RESPECT TO THE NOTES. NO ASSURANCE CAN BE GIVEN BY THE AUTHORITY, THE

CITY, THE ISSUING AND PAYING AGENT OR THE DEALERS THAT DTC, DIRECT

PARTICIPANTS, INDIRECT PARTICIPANTS OR OTHER NOMINEES OF THE BENEFICIAL

OWNERS WILL MAKE PROMPT TRANSFER OF PAYMENTS TO THE BENEFICIAL

OWNERS, THAT THEY WILL DISTRIBUTE NOTICES, INCLUDING REDEMPTION

NOTICES (REFERRED TO ABOVE), RECEIVED AS THE REGISTERED OWNER OF THE

NOTES TO THE BENEFICIAL OWNERS, THAT THEY WILL DO SO ON A TIMELY BASIS,

OR THAT DTC WILL ACT IN THE MANNER DESCRIBED IN THIS OFFERING MEMORANDUM.

In the event the Authority or the Issuing and Paying Agent determines not to continue the book - entry system or DTC determines to discontinue its services with respect to the Notes, and the Authority does not select another qualified securities depository, the Authority will deliver one or more Notes in such principal amount or amounts, in authorized denominations, and registered in whatever name or names, as DTC designates. In such event, transfers and exchanges of Notes will be governed by the provisions of the Issuing Agreement.

DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

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DRAFT – Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.

San Jose City CouncilSeptember 29, 2026

San Jose City Council
September 29, 2026