RESOLUTION NO. 24-9339
A JOINT RESOLUTION OF THE CITY OF SANTA CLARA,
CALIFORNIA, SANTA CLARA STADIUM AUTHORITY, SPORTS
AND OPEN SPACE AUTHORITY, AND HOUSING AUTHORITY
(“COUNCIL AND AUTHORITIES”) DELEGATING AUTHORITY TO
THE CITY MANAGER, EXECUTIVE DIRECTOR, AND CONTRACT
ADMINISTRATOR OR DESIGNEE TO EXECUTE CONTRACTS
ON BEHALF OF THE COUNCIL AND AUTHORITIES DURING
THE RECESS BETWEEN JULY 17, 2024 THROUGH AUGUST 19,
2024
WHEREAS, the City of Santa Clara's City Council, Santa Clara Stadium Authority, Sports and Open Space Authority, and Housing Authority ("Council and Authorities") have specific purchasing policies or ordinances, and all other agreements and actions not specifically delegated by the City Code or other formal action must be considered and approved by Council or Boards of the Authorities;
WHEREAS, the Council and Authorities do not have any meetings scheduled between July 17, 2024, and August 19, 2024; and
WHEREAS, specific actions will be needed in order to ensure projects will stay on schedule and services will not interrupted.
NOW THEREFORE, BE IT RESOLVED BY THE CITY OF SANTA CLARA AS FOLLOWS:
1. That the City Manager, Executive Director, and Contract Administrator or designee is hereby authorized to consider, approve, and execute contracts and other administrative matters needed for the on-going operation of the City within existing budgetary appropriations during the scheduled recess between July 17, 2024, and August 19, 2024. //
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2. That the City Manager, Executive Director, and Contract Administrator shall provide a report to the City Council regarding the actions taken under this Resolution at a City Council Meeting in September 2024.
3. Effective date. This resolution shall become effective immediately.
I HEREBY CERTIFY THE FOREGOING TO BE A TRUE COPY OF A RESOLUTION PASSED
AND ADOPTED BY THE CITY OF SANTA CLARA, CALIFORNIA, AT A REGULAR MEETING THEREOF HELD ON THE gm DAY OF JULY, 2024, BY THE FOLLOWING VOTE:
AYES: COUNCILORS :
NOES: COUNCILORS :
ABSENT: COUNCILORS:
ABSTAINED : COUNCILORS:
Attachments incorporated by reference: None
Resolution/Delegation of Council Authority
Rev: 7/27/2023
Becker, Chahal, Hardy, Jain, Park, and Watanabe and
Mayor Gillmor
None
None
None
ATTEST: ~
NORA PIMENTEL, MMC
ASSISTANT CITY CLERK
CITY OF SANTA CLARA
1 AL SERVICES AGREEMENT
BY AND BETWEEN
FORTY NINERS STADIUM MANAGEMENT COMPANY LLC
AND
STAFF PRO INC. DBA ALLIED UNIVERSAL EVENT SERVICES
August
1, 2024 STAFF PRO INC. DBA ALLIED UNIVERSAL EVENT
SERVICES, a California corporation with its principal place of business at 450 Exchange, Irvine, CA 92602 Santa Clara, CA 95054. Stadium
RECITALS
A.
AUTHORITY, a joint exercise of powers entity, created through Government Code sections 6500 28, 2012, as
amended by that certain First Amendment to Ground Lease (Stadium Site) (as the same may be fur
certain real property from the City upon which the Authority has developed and constructed a multi-
B. The Authority and FORTY NINERS SC STADIUM COMPANY LLC, a Delaware limited liability Agreement dated March 28, 2012 as amended and restated as of June 19, 2013 (as the same may be further amended from time
granted the right during the term of the Stadium Lease to use and occupy the Stadium for the operation of an NFL franchise, subject to, and on the basis of, the terms, covenants and conditions set forth in the Stadium Lease.
C. StadCo and FORTY NINERS FOOTBALL COMPANY LLC, a Delaware limited liability company , are parties to a certain Sublease Agreement dated March 28, 2012, as amended and all play its
NFL home games at the Stadium, subject to, and on the basis of, the terms, covenants and conditions set forth in the Team Sublease.
D. The Authority, StadCo, and Stadium Manager are parties to a certain Stadium Management Agreement effective as of March 28, 2012, as amended by that certain First Amendment to Stadium Management Agreement dated November 13, 2012, that certain Second Amendment to Stadium Management Agreement dated May 9, 2013, that certain Third Amendment to Stadium Management Agreement dated June 19, 2013, and that certain Fourth Amendment to Stadium Management Agreement dated March 18, 2014 (as the same may be further amended from time manage the operation of the Stadium year-round on behalf of the Authority and StadCo for the term and on the basis specified in the Stadium Management Agreement.
E. Pursuant to the Stadium Management Agreement, the Stadium Manager is required to maintain and operate the Stadium and areas surrounding the Stadium, and, accordingly, desires to secure the general services generally consisting of event security services as more fully described in Exhibit A
, attached hereto and incorporated herein
by this reference.
Docusign Envelope ID: B684BE6D-CCFB-4203-A53D-0FE9815964D4
LEVI'S STADIUM GENER
This Agreement for the Performance of Services ("Agreement") is made and entered into on ("Effective Date") by and between
("Contractor''), and the FORTY NINERS STADIUM MANAGEMENT COMPANY LLC, a Delaware limited liability company ("Stadium Manager''), with its principal place of business at 4900 Marie P. DeBartolo Way, Manager and Contractor may be referred to individually as a "Party" or collectively as the "Parties" or the "Parties to this Agreement." The CITY OF SANTA CLARA, a municipal corporation ("City") and the SANTA CLARA STADIUM et seq. (the "Authority"), are parties to that certain Ground Lease dated March ther amended from time to time, the "Ground Lease"), pursuant to which the Authority leases purpose stadium (the "Stadium").
company ("StadCo"), are parties to that certain Amended and Restated Stadium Lease to time, the "Stadium Lease"), pursuant to which StadCo is ("Team")
restated as of June 19, 2013 (as the same may be further amended from time to time, the "Team Sublease"), pursuant to which, during the term of the Team Sublease, the Team sh to time, the "Stadium Management Agreement"), pursuant to which the Stadium Manager will , entitled "Scope of Services" (the "Services")
2 F. Contractor represents that it, and its subcontractors, if any, have the professional qualifications, expertise, necessary licenses / certifications / permits, and desire to provide the Services which meet objectives and requirements of Stadium Manager.
G. In accordance with the Stadium Management Agreement, the Stadium Manager is authorized to enter into this Agreement on behalf of the Authority and StadCo to engage Contractor to provide the Services. The Stadium Manager and Contractor desire to enter into this Agreement whereby Contractor will perform the Services subject to the terms and conditions of this Agreement, the Ground Lease, the Stadium Lease and the Stadium Management Agreement.
H. Stadium Manager and Contractor, as successor-in-interest to Landmark Event Staffing Services, Agreement supersedes in its entirety that certain Master Agreement.
TERMS
1. DEFINITIONS.
A. Affiliate: shall mean any Person directly or indirectly controlling or controlled by or under direct or indirect common control with a Person. For purposes of this when used with respect to any entity means the power to direct the management and policies of such entity, directly or indirectly, whether through the ownership of voting correlative to the foregoing.
B.
commissions, officers, employees, volunteers and agents), the Bayshore North Project Enhancement Authority, the Successor Agency to the Santa Clara Redevelopment Agency, StadCo and its Affiliates, the Team and any Additional Team (i.e., an additional NFL franchise that plays i
the Stadium and each Event promoter, and any mortgagee, bond trustee or other financial instituti
Stadium, the Stadium Lease or the Stadium Management Agreement.
C. Default Rate: shall mean a rate per annum equal to the lesser of (i) fifteen percent (15.0%) and (ii) the maximum non-usurious rate permitted by applicable law.
D. Fiscal Year: shall mean the twelve (12) month period commencing April 1 of each year after the execution of this Agreement, except that the first Fiscal Year will commence on the Commencement Date of the Stadium Lease and end on the next following March 31.
If this Agreement expires or terminates on a date other than March 31 of a particular year, there shall be a partial last Fiscal Year ending on the date of such termination.
E. Hazardous Substance: shall mean, as of any date: (a) any petroleum or petroleum products, flammable explosives, radioactive materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation, and transformers or other equipment that contain dielectric fluid containing polychlorinated biphenyls (PCBs); (b) any chemicals or other materials or substances which as of such date are defined as or included in the under any environmental law; and (c) any other chemical or other material or substance, Docusign Envelope ID: B684BE6D-CCFB-4203-A53D-0FE9815964D4 Inc., are parties to that certain "Agreement for the Performance of Services" dated February 17, 2017, as amended from time to time ("Master Agreement"). It is understood and agreed this definition, "control"
securities, by contract or otherwise; and "controlling" and "controlled" have meanings Additional lndemnitees: shall mean the Authority's Affiliates (including without limitation, the Authority's Board of Directors, the City, its City Council, and all City or Agency ts "home" games at the Stadium) (and their respective Affiliates), Manager's Affiliates (if not any of the previously mentioned Persons), each other tenant of on from time to time holding a lien or indenture upon Manager's interest in the definition of "hazardous substances," "hazardous wastes," "hazardous materials," "extremely hazardous wastes," "restricted hazardous wastes," "toxic substances," "toxic pollutants," "contaminants," "infectious wastes," "pollutants" or words of similar import 3 exposure to which or use of which as of such date is prohibited, limited or regulated under any environmental law.
F. Person: shall mean any individual, corporation, partnership, limited liability company, association, trust or other entity whatsoever.
2. EMPLOYMENT OF CONTRACTOR.
Stadium Manager hereby employs Contractor to perform the Services. Stadium Manager shall pay for all such Services which are consistent with the terms of this Agreement.
3. SERVICES TO BE PROVIDED.
A. The Recitals above and all of the exhibits and schedules referenced in this Agreement are attached and are incorporated herein by this reference.
B. Contractor promises and agrees to furnish to the Stadium Manager all labor, materials, tools, equipment, services, and incidental and customary work necessary to fully and adequately perform the Services as described in this Agreement including, without limitation, Exhibit A attached hereto.
C. Stadium Manager may, at its discretion, provide, or cause to be provided, during the Term designated office and storage space within the Stadium for use by Contractor. The location of such office and storage space shall be in the sole discretion of Stadium Manager, and Stadium Manager may direct that the office and storage space be moved to a new location within the Stadium from time to time as it deems necessary.
D. Except as expressly provided herein, Contractor shall be responsible for all costs and expenses incurred in performing the Services, including costs and expenses of maintaining, repairing and replacing any furniture, fixtures, equipment, or other tangible property and all applicable taxes, staffing (including all managerial and Event staff, if applicable), and training. As described in greater detail in Section 8.F hereof, Contractor agrees to fully abide by all sustainability and reuse programs established for or applicable to the Stadium, as each may be modified from time to time following the Effective Date.
E. Without limiting the ge
provision of the Services shall be subject to the reasonable prior approval of Stadium Manager acting in conjunction with Contractor, including but not limited to staffing and the manner of Co
without the prior written approval of Stadium Manager.
F. If at any time, Contractor fails or is otherwise prevented from providing all or any portion of the Services whether due to a suspension or termination of any licenses or permits or otherwise, then, in addition to any other right of Stadium Manager, Stadium Manager shall have the right, in its sole discretion, without the payment of any kind to Contractor, to provide through any available means the Services, or any portion thereof, until such time as Contractor has resumed its provision of the Services. In the event Stadium Manager exercises its rights pursuant to this Section, Contractor shall, and shall cause its employees to cooperate and assist Stadium Manager in providing the Services.
G. Notwithstanding the foregoing, and subject to any restrictions imposed by the Authority, including pursuant to the Stadium Lease and Stadium Management Agreement, the Stadium Manager and its designated agents reserve the right of access to all areas that Contractor is permitted to access, use and occupy hereunder for purposes of operating, inspecting, maintaining and repairing the Stadium (and all improvements therein or thereon) and for the purpose of determining whether the terms, covenants and conditions contained in this Agreement are being fully and faithfully observed and performed by Docusign Envelope ID: B684BE6D-CCFB-4203-A53D-0FE9B15964D4 nerality of any other provision in this Agreement, Contractor's ntractor's performance. Contractor shall not offer exclusivity to any supplier 4 Contractor. Use of any space or property that Contractor is permitted to access, use and occupy hereunder for purposes other than the operations to be conducted under this Agreement, without prior written approval of Stadium Manager in its sole discretion, is prohibited. Contractor shall not interfere with any other contractor, licensee or employee of the Authority, Stadium Manager or any other person working at the Stadium.
4. COMMENCEMENT OF SERVICES.
Contractor shall begin providing the Services on the Effective Date. Contractor shall provide the Services as described in Exhibit A and shall complete all Services during the Term consistent with any milestones specified in this Agreement. The Parties may adjust any performance milestones, service schedules or commencement dates by mutual written agreement.
5. QUALIFICATIONS OF CONTRACTOR
STANDARD OF WORKMANSHIP.
A. Contractor represents and maintains that it has the necessary expertise in the professional calling to perform the Services, and its duties and obligations, expressed and implied, contained in this Agreement, and Stadium Manager expressly relies upon representations regarding its skills and knowledge. Contractor shall perform such Services and duties and obligations in conformance to and consistent with the professional standards of a specialist in the same discipline in the State of California.
B. Any plans, designs, specifications, estimates, calculations, reports, and other documents required to be furnished by Contractor under this Agreement shall be of a quality acceptable to Stadium Manager. To be accepted as provided under this Agreement, any such deliverable shall be a product of neat appearance and shall be well-organized, technically and grammatically correct, and checked, and shall identify the maker and checker. The minimum standard of appearance, organization, and content of the deliverable shall be that used by Stadium Manager for similar services.
6. TERM OF AGREEMENT.
Unless this section is subsequently modified by written amendment to this Agreement, the term of October 31, 2024.
All Services contained herein shall be completed prior to the end of the Term of this Agreement.
The Parties may, by written amendment, extend the Term.
7. WARRANTY.
Contractor expressly warrants that all Services covered by this Agreement shall be fit for the purpose intended, shall be free from defect, and shall conform to the specifications, requirements, and instructions upon which this Agreement is based. Contractor agrees to promptly replace or correct any incomplete, inaccurate, or defective Services at no further cost to Stadium Manager when defects are due to the negligence, errors, or omissions of Contractor. If Contractor fails to promptly correct or replace Services, Stadium Manager may make corrections or replace Services and charge Contractor for the cost incurred by Stadium Manager.
8. PERFORMANCE OF SERVICES.
A. Contractor shall perform all Services in an efficient and expeditious manner and shall work closely with and be guided by Stadium Manager. Contractor shall be as fully responsible to Stadium Manager for the acts and omissions of its subcontractors, and of persons either directly or indirectly employed by them, as Contractor is for the acts and omissions of persons directly employed by it. Contractor will perform all Services in a safe manner and in accordance with all Applicable Laws and safety regulations, the policies and procedures issued by the Stadium Manager relating to the Services, the general operating procedures of the Authority, and any and all other applicable rules, regulations, policies and directives Docusign Envelope ID: B684BE6D-CCFB-4203-A53D-0FE9815964D4 Contractor's
this Agreement (the "Term") shall begin on the Effective Date and terminate on 5 established or implemented by the Authority and/or Stadium Manager, the designees of either of them, or the NFL, from time to time, including scheduling rules, regulations and eement shall mean any statute, law, treaty,
rule, code, ordinance, regulation, permit, interpretation, certificate or order, whether now or hereafter existing, of any Governmental Authority, or any judgment, decision, decree, injunction, writ, order or like action of any court, arbitrator or other Governmental Authority, Agreement shall mean any federal, state, local or foreign governmental entity, authority or agency, court, tribunal, regulatory commission or other body, whether legislative, judicial or executive (or a combination or permutation thereof), and any arbitrator to whom a dispute has been presented under Applicable Laws or by agreement of the Parties with an interest in such dispute.
B. Contractor shall at all times maintain a sufficient number of qualified personnel at the Stadium and, if applicable, the Related Facilities ( e.g., offsite parking areas ) for the this Agreement.
C.
gates designated for such purpose by Stadium Manager, without charge, during all days on which Events are held and at all other times necessary to enable Contractor to prepare for Events and fulfill its responsibilities under this Agreement. Contractor shall be bound by and comply with all rules, policies and procedures relating to security and access rights, established from time to time by Stadium Manager. Nothing herein contained shall be held to limit or qualify the right of the Authority or Stadium Manager to a free and unobstructed use, occupation and control of the Stadium and ingress and egress for itself, its lessees and the public.
D. Contractor shall obtain on or before the Commencement Date and shall thereafter maintain throughout the Term, at its cost and in its name, all licenses and permits necessary for the performance of the Services and any and all other licenses and permits required to be obtained by Contractor by the terms of the Stadium Lease. Stadium Manager shall cooperate with Contractor in connection with applications submitted by Contractor for any and all licenses and permits and renewals thereof. Contractor shall not submit any application for a permit or license without first providing Stadium Manager a reasonable opportunity to review it. Contractor shall furnish Stadium Manager with copies of such licenses and permits and renewals thereof as are physically maintained at the Stadium, and all other licenses or permits otherwise required under Applicable Laws or this Agreement and shall surrender all licenses and permits to Stadium Manager upon termination of this Agreement.
E. In the event that Contractor fails to obtain or maintain in full force and effect any material license or permit necessary for the performance of the Services, including upon a suspension applicable to an Event or revocation thereof, (a) Stadium Manager shall have the right (but no obligation) to perform or have another Person perform the applicable obligation without compensation to Contractor and, whether or not Stadium Manager exercises that right or its termination rights, subject to the provisions set forth in Section 23 C., Contractor shall be responsible to Stadium Manager for all damages, suffered by Stadium Manager as the direct
(b) Contractor shall be considered in material breach of this Agreement, and Stadium Manager may, in addition to any other rights or remedies it may have, immediately terminate this Agreement.
F. Contractor shall comply in all respects with the Santa Clara Business and Commercial Recycling Program, as the same shall be amended from time to time, and shall, in Docusign Envelope ID: B684BE6D-CCFB-4203-A53D-0FE9815964D4 policies, related to the use or operation of the Stadium (collectively, "Stadium Policies").
The term "Applicable Laws" as used in this Agr
whether now or hereafter existing. The term "Governmental Authority" as used in this performance of all of Contractor's obligations under
Contractor's authorized personnel who are scheduled to work at events at the Stadium ("Events") shall be provided with ingress to and egress from the Stadium through a gate or including requirements related to screening and identification of Contractor's personnel, result of Contractor's breach of this Agreement; and
6 Waste Reduction
and Recycling Plan
composting or other diversion of compostable organics. Contractor shall train its employees in the methods and objectives of the Waste Reduction and Recycling Plan and shall direct and cause its employees to not dispose of or discharge recyclables, compostables, waste, garbage, refuse or Hazardous Substances in any area in or outside the Stadium other than in areas specifically designated therefor. Contractor shall be responsible for expeditiously collecting, separating, recycling, bagging and delivering recyclables, compostables, trash and garbage generated within the Stadium Complex, and Contractor shall cause its employees to deposit such recyclables, compostables, trash and garbage in appropriate containers or equipment in the locations specified by Stadium Manager, whereupon Stadium Manager shall be responsible for the further delivery and ultimate disposal of such recyclables, compostables, trash and garbage. In addition, Contractor shall separate, compact and recycle the trash generated by Events on non- Event days. Contractor shall take all action necessary to: (i) ensure that all such recyclables, compostables, trash and garbage are placed in bags and/or the appropriate receptacles or other containers (which receptacles and containers shall be provided by Contractor) that are durable for transport and not easily susceptible to breakage or leakage, (ii) notify Stadium Manager when the centralized Stadium recyclable, compostable and garbage receptacles are full and need to be emptied, (iii) prevent recyclables, compostables and trash from piling up around the outside of the receptacles and from using the Stadium receptacles in lieu of transferring the recyclables, compostables and trash to the required locations as described herein and (iv) ensure that recyclables, compostables and trash do not spill out prior to or during transport. Contractor agrees to and is fully committed to participating in the separation and recycling of refuse in the Stadium and to minimize the amount of non-recyclable and non-compostable refuse to be removed from the Stadium. All recyclable, compostable, trash and garbage receptacles within the areas controlled by Contractor shall be provided by Contractor and shall be cleaned and sanitized by Contractor in accordance with the standards reasonably set from time to time by the Authority and/or Stadium Manager, to ensure a consistently high standard of sanitation meeting or exceeding the standards set by the Santa Clara County Public Health Department and/or the City. Contractor will comply with all federal, state and local recycling and composting requirements and such recycling and composting programs implemented from time to time by the Authority and/or Stadium Manager and all rules and regulations eadership in Energy
and Environmental Design (LEED) Green Building Rating System. Contractor shall indemnify Stadium Manager and make Stadium Manager whole for any out of pocket costs incurred by Stadium Manager which are solely attributable to any negligence or intentional act or omission of Contractor or any of its employees with respect to the recycling or trash removal program, including the expense of returned or rejected recyclable, compostable and trash removals due to mixing or contaminating the trash flow in violation of Applicable sustainability and recycling, composting or trash removal programs. Stadium Manager will determine the type, appearance and location of the recyclable, compostable and trash receptacles.
G. Contractor agrees not to use Hazardous Substances at the Stadium, except in accordance with Applicable Laws, and agrees to indemnify, defend, and hold the Indemnified Parties harmless for all Losses (as defined in Section 23.A below) arising out of its use, generation or storage of Hazardous Substances at the Stadium.
H. Contractors acknowledges and agrees that Services performed under this Agreement shall not create any right of lien for Contractor at the Stadium, which is a publicly owned building.
Contractor hereby waives and releases any right of lien against Stadium Manager, StadCo, the Authority, the City, and the Stadium for the Services or any other work performed by Contractor at the Stadium during the Term of this Agreement.
Docusign Envelope ID: B684BE6D-CCFB-4203-A53D-0FE9B15964D4 partnership with Stadium Manager, prepare and implement a plan (the " ") that targets 100% diversion of solid waste from all Events, including applicable to the Stadium's adherence to, and/or certification by, the L Laws or specific directives provided to Contractor in writing as part of the Stadium's 7 I. If required by Applicable Laws, Contractor shall file a payment bond for one hundred percent of the total amount payable hereunder with and approved by Stadium Manager.
9. MONITORING OF SERVICES.
Stadium Manager may monitor the Services performed under this Agreement to determine whether this Agreement. Stadium Manager may also monitor the Services to be performed to determine whether the Services are being conducted in accordance with applicable Stadium Policies, National Football League requirements, and Applicable Laws.
10. CORRECTION OF SERVICES.
Contractor agrees to correct any incomplete, inaccurate, or defective Services at no cost to Stadium Manager, when such defects are due to the negligence, errors, or omissions of Contractor. If any action of Contractor constitutes a breach, Stadium Manager may terminate this Agreement pursuant to the provisions described herein.
11. RESPONSIBILITY OF CONTRACTOR.
A. Contractor shall be responsible for the professional quality, technical accuracy, and coordination of the Services furnished by it under this Agreement. Neither Stadium Agreement shall be construed to operate as a waiver of any rights under this Agreement or of any cause of action arising out of the performance of this Agreement and Contractor shall be and remain liable to Stadium Manager in accordance with Applicable Laws for all damages to Stadium Manager caused by Contractor failure to perform any of the Services furnished under this Agreement.
B. Any acceptance by Stadium Manager of plans, specifications, construction contract documents, reports, diagrams, maps, and other material prepared by Contractor shall not in any respect absolve Contractor from the responsibility Contractor has in accordance with customary standards of good professional practice in compliance with Applicable Laws.
C. Contractor shall comply and otherwise abide by, all emergency and security procedures and protocols of the Stadium Manager, the Authority, the City, the Team, the NFL and promoters of Events as the Stadium Manager or such other Persons shall adopt from time to time. Such procedures and protocols may include, without limitation, (i) employee pat- badges issued by Stadium Manager, which may include reporting criteria such as bar parts of the Stadium to specified employees of Contractor as reasonably approved by the Stadium Manager (with respect to security clearance standards); and/or (iv) conduct by Contractor, at its sole expense, of Team-specified minimum background and such other security screening checks on all of Contractor's employees as the Stadium Manager shall request from time to time, which checks may vary as to job function.
D. Personnel.
i. Contractor shall hire, employ, train, supervise and discipline any and all persons necessary to provide the Services in accordance with the terms of this Agreement and shall use its best efforts to ensure that its employees continually practice the high standards of safety, courtesy and service customarily followed in the conduct of a first-class operation. Contractor shall use its best efforts to select qualified, competent and trustworthy employees. Any and all persons who furnish services under this Agreement, whether or not employed by Contractor prior to the Effective Date, are exclusively employees, subcontractors and/or non-affiliated third parties Docusign Envelope ID: B684BE6D-CCFB-4203-A53D-0FE9815964D4 Contractor's operations conform to Stadium operating policies and directives and to the terms of Manager's review, acceptance, nor payments for any of the Services required under this down and screening, (ii) presentment by Contractor's employees of identification cards or codes, "Mag Stripes", "RFID" or other identifier systems; (iii) restricting access to certain 8 employed by Contractor and are not employees of the Authority, the City, StadCo or Stadium Manager. Such persons furnishing services under this Agreement shall be subject to appearance standards mutually acceptable to the parties hereto and as permitted by Applicable Laws, and shall wear, at all times while working at the Stadium, neat and clean uniforms provided by Contractor and approved by Stadium Manager. Such uniforms shall bear such lettering and insignia (including the name and logo of the Stadium, the Stadium naming rights sponsor, if required, and the location of the employee's assignment ( e.g., a Club or Suite area)) as Stadium Manager may require and shall be of a design reasonably satisfactory to Stadium Manager. Contractor shall cause its employees to conduct themselves in a professional and courteous manner, and not to unreasonably disturb or interfere with Events. Contractor shall at all times maintain accurate records of the names, addresses, employment history and other legal identification of those to whom Contractor issues employee badges, uniforms or other identifying items to ensure the proper identification and legal working status of Contractor's employees at the Stadium. Contractor shall conduct such background and other security screening checks on its employees as Stadium Manager shall reasonably request from time to time and shall not knowingly hire any person who has been previously terminated by the Authority, StadCo, Stadium Manager or any of their respective Affiliates or contractors. Upon Stadium Manager's request, and so long as any such action shall not be contrary to law, Contractor shall immediately remove from the Stadium any employee, agent, contractor or invitee of Contractor and permanently revoke such person's access credentials.
ii. Intentionally Left Blank.
iii. Contractor shall conduct regularly scheduled employee training programs appropriate to the Services provided, including any programs specifically requested by Stadium Manager, for all of its employees working in the Stadium mandatory for all employees, agents and any subcontractors of Contractor and, at a minimum, will include customer service, guest interaction, security procedures and specific job skills training, and will be conducted in such frequency as may be approved or directed by Stadium Manager. Contractor shall cause all Employee Training Programs to be periodically reviewed (no less frequently than annually) and updated to the extent necessary to maintain the standard of service requested by Stadium Manager. All employees of Contractor shall also be required to attend such policy and procedures training sessions as may be held by the Stadium Manager, as well as the Stadium orientation tour and training conducted by the Stadium Manager. Contractor shall not permit any employee, agent or subcontractor to work at an Event prior to his or her completion of the prescribed training sessions and Employee Training Programs.
iv. Contractor shall promptly notify Stadium Manager upon voluntary or involuntary termination of employment of its employees or contractors and ensure that each such terminated individual is denied further access to the Stadium. In no event shall the Authority, the City, StadCo or Stadium Manager be liable, and Contractor shall indemnify, protect, and hold the Authority, the City, StadCo and Stadium Manager harmless, for Contractor's record keeping (or lack of record keeping), including the legal identification and working status of Contractor's employees and subcontractors, or for any other matters relating to Contractor's employees or subcontractors.
12. COMPENSATION AND PAYMENT.
A.
in accordance with the
requirements of this Agreement, Stadium Manager shall pay Contractor for all materials Docusign Envelope ID: B684BE6D-CCFB-4203-A53D-0FE9815964D4 (the "Employee Training Programs"). The Employee Training Programs will be In consideration for Contractor's performance of the Services 9 provided and services rendered by Contractor in the amount(s) set forth in Exhibit B , B. Contractor will invoice Stadium Manager for fees as set forth in Exhibit B , subject to verification by Stadium Manager. Except as otherwise expressly provided in Exhibit B, of a valid invoice.
13. TERMINATION OF AGREEMENT.
A. In addition to any other rights or remedies Stadium Manager may have, Stadium Manager may terminate this Agreement by written notice to Contractor if: (i) Contractor fails to correct to the reasonable satisfaction of Stadium Manager any condition created or hazardous condition to occupants of the Stadium Complex, any of the Related Facilities (e.g., offsite parking areas), or any portion thereof, within twenty-four (24) hours after receipt of written notice from Stadium Manager; (ii) Contractor fails to perform any material obligation under this Agreement and such failure continues unremedied for a period of ten (10) days after receipt of written notice from Manager of the particular failure to perform (or thirty (30) days in the case that a remedy has commenced but cannot reasonably be accomplished in ten days); (iii) Contractor is placed into bankruptcy either voluntarily or involuntarily (and such involuntary proceeding is not dismissed within sixty (60) days), becomes financially insolvent, takes the benefit of any present or future insolvency statute, makes a general assignment for the benefit of creditors, or consents to the appointment of a receiver, trustee, or liquidator of all or substantially all of its property; (iv) Contractor transfers or permits a transfer of this Agreement in violation of Section 14; (v) Contractor fails to obtain and/or maintain required licenses and permits under Section 8.D; or (vi) Contractor fails to work cooperatively and in good faith with the Authority, Stadium Manager, any of their respective Affiliates or any of subcontractors of any of the foregoing.
Contractor and Stadium Manager acknowledge and agree that termination of this Agreement by Stadium Manager pursuant to this Sec
B. Upon the termination or expiration of this Agreement, (1) Contractor shall immediately surrender possession of the Related Facilities, if any (including any and all leasehold and other improvements therein), uniforms, equipment (and related manuals and software) to Stadium Manager, (2) Contractor shall immediately assign to Stadium Manager or its designee(s) all right, title and interest of Contractor in and to all items purchased by Contractor in connection with the Services (including uniforms and equipment), (3) Contractor shall make all payments required to be made by Contractor under this Agreement, (4) to the extent permitted by Applicable Laws, Contractor shall immediately surrender possession of and assign to Stadium Manager all permits and licenses acquired by Contractor in compliance with this Agreement and any Applicable Laws, and (5) all matters, rights and liabilities existing on the date of termination between the parties hereto shall be determined as of such termination date (except as described above), and discharged as promptly as possible thereafter, including any known claims for damages either party may have against the other for breach of the terms and conditions hereof. Any such surrender shall require delivery of possession in good condition, reasonable and ordinary wear and tear excepted and otherwise in compliance with the terms of this Agreement. Notwithstanding any termination or expiration of this Agreement, all liabilities and obligations of the parties will survive until they are fully satisfied.
C. If the Stadium is destroyed or otherwise rendered unusable for more than thirty (30) days ninety (90) days after the Casualty Event stating that whether the Authority intends to rebuild or restore the Stadium. If the notice states that the Authority will not rebuild or restore the Stadium, this Agreement shall be terminated. If the notice states that the Authority intends
Docusign Envelope ID: B684BE6D-CCFB-4203-A53D-0FE9B15964D4 entitled "Contractor Compensation and Fees."
Stadium Manager will pay Contractor within thirty (30) days of Stadium Manager's receipt controlled by Contractor that, in Stadium Manager's reasonable judgment, poses a tion shall be "for cause."
for any reason (a "Casualty Event"), Stadium Manager shall give Contractor a notice within to rebuild or restore the Stadium, the Parties' obligations hereunder shall 10 be abated during that period. If such notice states that the Authority reasonably believes that it will take longer than two (2) years to restore or rebuild the Stadium or, if a shorter amount of time, such amount of time is longer than the remainder of the Term, either party shall have the option of terminating this Agreement by written notice to the other at any time within one hundred and eighty (180) days after Stadium Manager gives such notice, and such termination shall be effective one hundred twenty (120) days after the other damages or compensation from Stadium Manager in the event of a Casualty Event.
D. The Parties acknowledge and agree that in the event that any permit required to be obtained by Stadium Manager for the full performance of the Services is not obtained by within a reasonable amount of time following the Effective Date, Stadium Manager shall have the right in its sole discretion to terminate this Agreement upon written notice to Contractor. Upon such termination, the Parties shall mutually agree upon any remaining payment by or refund to Stadium Manager in good faith. In no event shall Stadium Manager be responsible for any labor or other costs for services not yet performed by Contractor at the time of the notice of termination
14. NO ASSIGNMENT OR SUBCONTRACTING OF AGREEMENT.
A. Stadium Manager and Contractor bind themselves and their successors and assigns to all covenants of this Agreement. This Agreement shall not be assigned or transferred by Contractor without the prior written approval of Stadium Manager. Contractor shall not hire subcontractors without express written permission from Stadium Manager.
B. Stadium Manager may sell, assign, pledge and otherwise transfer or encumber (each, a transfer
other Person, including any source of or guarantor or insurer of financing or any trustee, collateral agent or other Person appointed in connection with such financing (each, a Manager Assignee
otherwise; provided, that such transfer shall not relieve Stadium Manager of its obligations under this Agreement unless such Manager Assignee assumes in writing Stadium Manager, Contractor shall make any payments due hereunder to such Manager Assignee and shall execute and deliver any documents that Stadium Manager or any Manager Assignee may reasonably request to acknowledge and confirm that upon any such transfer, this Agreement will remain in full force and effect, will continue to be a legal, valid and binding obligation of Contractor enforceable in accordance with its terms (subject to applicable bankruptcy or insolvency laws and general principles of equity), and that (to the extent accurate and correct) nei
Manager is in material breach or violation of this Agreement.
C. Contractor acknowledges and agrees that, in the event the Stadium Management Agreement is terminated for any reason, the Authority and StadCo shall, in accordance with the Stadium Lease, employ a replacement manager for the Stadium, who shall, purposes under this Agreement, provided, however, that for any period of time before a replacement manager is appointed, this Agreement may be assigned to the Authority or StadCo .
15. NO THIRD-PARTY BENEFICIARY.
This Agreement shall not be construed to be an agreement for the benefit of any third party or parties, except for the Authority, StadCo, and Team, and no other third party or parties shall have any claim or right of action under this Agreement for any cause whatsoever.
Docusign Envelope ID: B684BE6D-CCFB-4203-A53D-0FE9815964D4 party's receipt of such notice. Contractor shall not be entitled to any monetary or other ") this Agreement and any or all of its rights and obligations hereunder to any "), whether by security agreement, collateral assignment, transfer or Manager's obligations under this Agreement. Upon reasonable prior notice from Stadium ther Contractor, nor to Contractor's knowledge, Stadium following the effective date of such employment, constitute the "Stadium Manager" for all as deemed appropriate in the Stadium Manager's sole discretion 11 16. INDEPENDENT CONTRACTOR.
Contractor and all person(s) employed by or contracted with Contractor to furnish labor and/or materials under this Agreement are independent contractors and do not act as agent(s) or employee(s) of Stadium Manager, the Authority or StadCo. Contractor has full rights, however, to manage its employees in their performance of Services under this Agreement. All liabilities that may arise as a result of Contractor's status as an employer shall be borne exclusively by Contractor, including liability relating to payments required to be made under, and documents to be filed with respect to, the Federal Insurance Contribution Act and the Federal Unemployment Tax Act or any similar federal, state, city or local legislation or other Applicable Laws. Contractor is not authorized to bind Stadium Manager, the Authority or StadCo to any contracts or other obligations.
17. Under no circumstances shall Contractor have the authority or power to pledge the credit of the Stadium Manager or any other of the Indemnified Parties or incur any obligation in the name of such Persons. Contractor shall save and hold harmless the Authority, StadCo, Stadium Manager, their respective Affiliates, and their respective officers, employees, boards and commissions for expenses arising out of any unauthorized pledges of credit by Contractor under this Agreement.
18. CONFIDENTIALITY OF MATERIAL.
All ideas, memoranda, specifications, plans, manufacturing procedures, data, drawings, descriptions, documents, discussions, or other information developed or received by or for Contractor and all other written information submitted to Contractor in connection with the performance of this Agreement shall be held confidential by Contractor and shall not, without the prior written consent of Stadium Manager, be used for any purposes other than the performance of the Services nor be disclosed to an entity not connected with performance of the Services. Nothing furnished to Contractor which is otherwise known to Contractor shall be deemed confidential.
Notwithstanding the above, the Contractor acknowledges that the Authority is a California public entity that is subject to the California Public Records Act. Information disclosed to Stadium Manager on behalf of the Authority regarding the Contractor's Services in connection with the performance of this Agreement may be subject to public disclosure in accordance with the Public Records Act, including this Agreement and its terms.
19. NO USE OF STADIUM MANAGER NAME OR EMBLEM.
Contractor shall have no right to use the trademarks, symbols, trade names or other intellectual property of the Authority, Stadium Manager, Le
respective Affiliates, or Stadium tenants or their Affiliates or other Event performers directly or indirectly, in connection with any production, promotion, service or publication, without the written approval of Stadium Manager.
20. OWNERSHIP OF MATERIAL.
All material, including information developed on computer(s), which shall include, but not be limited to, data, sketches, tracings, drawings, plans, diagrams, quantities, estimates, specifications, proposals, tests, maps, calculations, photographs, reports, and other material developed, collected, prepared, or caused to be prepared under this Agreement shall be the property of Stadium Manager, but Contractor may retain and use copies thereof. Stadium Manager shall not be limited in any way or at any time in its use of said material. However, Contractor shall not be responsible for damages resulting from the use of said material for work other than the Services, including, but not limited to, the release of this material to third parties.
Docusign Envelope ID: B684BE6D-CCFB-4203-A53D-0FE9815964D4 NO PLEDGING OF STADIUM MANAGER'S CREDIT.
vi's Stadium®, the San Francisco 49ers, or their
12 21. RIGHT OF STADIUM MANAGER TO INSPECT RECORDS OF CONTRACTOR.
Stadium Manager, through its authorized employees, representatives, or agents shall have the right during the term of this Agreement and for three (3) years from the date of final payment for Services, to audit the books and records of Contractor for the purpose of verifying any and all charges made by Contractor in connection with Contractor compensation under this Agreement, including termination of Contractor. Contractor agrees to maintain sufficient books and records in accordance with generally accepted accounting principles to establish the correctness of all charges submitted to Stadium Manager. Any expenses not so recorded shall be disallowed by Stadium Manager.
Contractor shall submit to Stadium Manager any and all reports concerning its performance under this Agreement that may be requested by Stadium Manager in writing. Contractor agrees to assist ents with respect to
22. FAIR EMPLOYMENT.
Contractor shall not discriminate against any employee or applicant for employment because of race, color, creed, national origin, gender, sexual orientation, age, disability, religion, ethnic background, or marital status, in violation of Applicable Law.
23. HOLD HARMLESS/INDEMNIFICATION.
A. Contractor shall indemnify, defend and hold harmless the Authority, Stadium Manager and the Additional Indemnitees, and their respective officers, directors, managers, members, partners, owners and employees (collectively,
Indemnified Parties
losses, costs, suits, actions, claims, damages, amounts paid in settlement, liabilities, costs Losses
imposed upon, asserted against or incurred by any of them (including in any action between the parties) directly connected with or directly arising out of (i) any breach by Contractor under this Agreement, (ii) any negligent activity, inactivity, work or thing done or permitted by Contractor or its employees, agents or contractors in or upon the Stadium or Related Areas, in the performance of the Services, or (iii) any injury or damage to any Person or to the property of any Person caused by any negligent action or omission or willful misconduct of Contractor or its employees, agents or contractors in the performance of the Services.
shall not apply to injury or damage arising out of the sole negligence or willful misconduct of Stadium Manager.
B. If any claim, demand, action or proceeding is made or commenced by any third party (a Third Party Claims d Party shall give
Contractor prompt notice thereof; the failure to give such notice shall not affect the liability of Contractor under this Agreement except to the extent the failure materially and adversely affects the ability of Contractor to defend the Third Party Claim. Contractor shall have the right to assume the defense and resolution of the Third Party Claim, provided that (i) the Indemnified Party shall have the right to participate in the defense of the Third Party Claim at its own expense through counsel of its choice (control of the defense will remain with Contractor), (ii) Contractor shall not consent to the entry of any judgment or enter into any settlement that would require any act or forbearance on the part of the Indemnified Party or which does not unconditionally release the Indemnified Party from all liability in respect of the Third Party Claim or would otherwise bring dishonor or disrepute upon Authority, Stadium Manager, any of their respective Affiliates, without the prior written consent of the Indemnified Party, and (iii) the Indemnified Party may undertake the defense of the Third assume the defense within
ten (10) business days after notice from the Indemnified Party or (B) diligently prosecute the defense.
Docusign Envelope ID: B684BE6D-CCFB-4203-A53D-0FE9815964D4 Stadium Manager in meeting Stadium Manager's reporting requirem Contractor's Services hereunder.
and expenses, including reasonable attorneys' fees (collectively, " ") from and against all
"), resulting to,
Notwithstanding the foregoing, Contractor's indemnity obligations herein ") against any Indemnified Party, the lndemnifie
Party Claim, at Contractor's expense, if Contractor fails to (A) 13 C. EXCEPT WITH RESPECT TO THIRD PARTY CLAIMS, CONTRACTOR SHALL
HAVE NO LIABILITY FOR ANY TYPE OF INDIRECT, SPECIAL, INCIDENTAL,
PUNITIVE, OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED
TO LOSS OF OPPORTUNITY OR LOSS OF REVENUE OR PROFIT
HEREUNDER.
24. INSURANCE REQUIREMENTS.
During the term of this Agreement, and for any longer time period set forth in Exhibit C entitled
Contractor shall purchase and maintain in full force and effect, at no cost to Stadium Manager insurance policies with respect to employees and vehicles assigned to the performance of Services under this Agreement with coverage amounts, required endorsements, certificates of insurance, and coverage verifications as required in Exhibit C.
25. AMENDMENTS.
This Agreement may be amended only with the written consent of both Parties.
26. INTEGRATED DOCUMENT.
This Agreement represents the entire agreement between Stadium Manager and Contractor. No other understanding, agreements, conversations, or otherwise, with any representative of Stadium Manager prior to execution of this Agreement shall affect or modify any of the terms or obligations of this Agreement. Any verbal agreement shall be considered unofficial information and is not binding upon Stadium Manager.
27. SEVERABILITY CLAUSE.
In case any one or more of the provisions in this Agreement shall, for any reason, be held invalid, illegal, or unenforceable in any respect, it shall not affect the validity of the other provisions, which shall remain in full force and effect.
28. WAIVER
Contractor agrees that waiver by Stadium Manager of any one or more of the conditions of performance under this Agreement shall not be construed as waiver(s) of any other condition of performance under this Agreement
29. NOTICES.
All notices to the Parties shall, unless otherwise requested in writing, be sent to Stadium Manager addressed as follows:
Attention: Francine Hughes, Executive Vice President and General Manager Address: Forty Niners Stadium Management Company LLC
4900 Marie DeBartolo Way
Santa Clara, CA 95054
With a copy to: Legal Affairs
Forty Niners Stadium Management Company LLC
4949 Marie P. DeBartolo Way
Santa Clara, CA 95054
And to Contractor as follows:
Docusign Envelope ID: B684BE6D-CCFB-4203-A53D-0FE9815964D4 "Insurance Requirements" and attached hereto and incorporated herein by this reference, 14 Attention: Ty Richmond, President
Address: Allied Universal Event Services
450 Exchange
Irvine, CA 92602
Telephone: 661.607.6448
Email: [email protected]
If notice is sent via email, a signed, hard copy of the material shall also be mailed. The workday the email was sent shall control the date notice was deemed given if there is a computer-generated confirmation of receipt returned to the sender on the date of transmission. An email transmitted after 1:00 p.m. on a Friday shall be deemed to have been transmitted on the following Monday.
30. CAPTIONS.
The captions of the various sections, paragraphs, and subparagraphs of this Agreement are for convenience only and shall not be considered or referred to in resolving questions of interpretation.
31. LAW GOVERNING CONTRACT AND VENUE.
This Agreement shall be governed and construed in accordance with the statutes and laws of the State of California. The venue of any suit filed by either Party shall be vested in the state courts of the County of Santa Clara, or if appropriate, in the United States District Court, Northern District of California, San Jose, California.
32. DISPUTE RESOLUTION.
A. Unless otherwise mutually agreed to by the Parties, any controversies between Contractor and Stadium Manager regarding the construction or application of this Agreement, and claims arising out of this Agreement or its breach, shall be submitted to mediation within thirty (30) days of the written request of one Party after the service of that request on the other Party.
B. The Parties may agree on one mediator. If they cannot agree on one mediator, the Party demanding mediation shall request the Superior Court of Santa Clara County to appoint a mediator. The mediation meeting shall not exceed one day (eight (8) hours) provided the Parties may mutually agree to extend the time allowed for mediation under this Agreement.
C. The costs of mediation shall be borne by the Parties equally.
D. For any contract dispute, mediation under this section is a condition precedent to filing an action in any court. In the event of mediation which arises out of any dispute related to this costs, and cost of suit through mediation only. In the event of litigation, the prevailing Party does not resolve the dispute, the Parties agree that the matter shall be litigated in a court of law, and not subject to the arbitration provisions of the Public Contract Code.
33. COMPLIANCE WITH ETHICAL STANDARDS.
By executing this Agreement, Contractor promises and agrees that it and all of its members, officers, employees, agents, subcontractors and authorized representatives will comply with the
attached hereto as Exhibit D and incorporated herein by this reference.
Docusign Envelope ID: B684BE6D-CCFB-4203-A53D-0FE9815964D4 Agreement, the Parties shall each pay their respective attorney's fees, expert witness shall recover its reasonable costs of suit, expert's fees, and attorney's fees. If mediation "Ethical Standards for Contractors Seeking to Enter into an Agreement with Stadium Manager'' 15 34. CONFLICT OF INTERESTS.
This Agreement does not prevent either Party from entering into similar agreements with other parties. To prevent a conflict of interest, Contractor certifies that to the best of its knowledge, no Stadium Manager, StadCo, Team, Authority, or City officer, employee, or authorized representative has any financial interest in the business of Contractor and that no person associated with Contractor has any interest, direct or indirect, which could conflict with the faithful performance of this Agreement. Contractor is familiar with the provisions of California Government Code Section 87100 and following, and certifies that it does not know of any facts which would violate these code provisions. Contractor will advise Stadium Manager if a conflict arises.
[Signatures continued on next page]
Docusign Envelope ID: B684BE6D-CCFB-4203-A53D-0FE9815964D4
16 IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly appointed representatives as of the Effective Date.
STADIUM MANAGER:
FORTY NINERS STADIUM MANAGEMENT COMPANY LLC
By:_________________________________
Name: Francine Hughes
Title: Executive Vice President & General Manager
CONTRACTOR:
STAFF PRO INC. DBA ALLIED UNIVERSAL EVENT SERVICES
By:_________________________________
Name: Ty Richmond
Title: President
Docusign Envelope ID: B684BE6D-CCFB-4203-A53D -0FE9B15964D4 17 EXHIBIT A
SCOPE OF SERVICES
Contractor shall provide the following services at the Stadium during the Term, as directed by Stadium Manager:
A. Overview
Contractor shall provide unarmed, uniform security officer services for Stadium Manager on an annual basis for NFL events, Non-NFL events such as concerts, soccer games, etc., and various non ticketed events scheduled at Levi Stadium, requiring a need for security services.
Contractor shall provide and supervise security officers who have passed pre-employment drug screening and background checks prior to employment. It is also expected these officers have the mental and physical qualifications, as well as the experience and training needed to successfully perform their assigned duties. The security officer must have a temperament to work and communicate with adults, teens, and children of all ages and be capable of controlling a crowd in varying environments. The requirements1 and have a clear understanding of performance standards, as well as both required and prohibited activities, set forth by the Stadium Manager, San Francisco Forty Niners, the NFL, event promotors, and others. The Contractor is responsible for documenting post orders for each role with input from the Stadium Manager.
erly atmosphere through enforcement of
B. Security Requirements
The following scope of work and general practices provides a framework for describing the security tasks performed on a consistent basis. The following security methods, techniques, and requirements are established as performance measurements in determining acceptable levels of work performance and work quality. The list is not meant to be all-inclusive but to set the minimum standard for all tasks. w,
a 24/7 support coverage (as needed) to support overnight Stadium lockdown and/or otherwise agreed upon by Stadium Manager. At a minimum the following number of positions need to be made available adequate coverage.
1. San Francisco 49ers Games (10+ annually) (NFL ticketed event) a. Area Director: 2 (4 hours before event start)
b. Event Manager: 4 (4 hours before event start)
c. Event Staff I: 375 (2 hours before event start)
d. Supervisors: 30 (2.5 hours before event start)
e. Dispatcher: 3 (3 hours before event start)
f. Roam Team: 60 (2 hours before event start)
g. Event Staff II: 85 (2 hours before event start)
h. Field Incursion (FIT) Team: 10 (2 hours before event start)
1 As dictated by the California Bureau of Security and Investigative Services Docusign Envelope ID: B684BE6D-CCFB-4203-A53D-0FE9815964D4 Contractor is responsible for ensuring that security officers meet or exceed California's training The security officer's main responsibility will be to maintain an ord the Stadium's Fan Code of Conduct, the NFL's best practices, and other crowd management initiatives as required through the Stadium's Safety Act partnership with the Department of Homeland Security.
Contractor will provide unarmed security services for Levi's Stadium for the types of events shown belo and scalable based on Stadium Manager's needs to provide 18 2. Non-NFL Event Ticketed Concert
a. Area Director: 2 (4 hours before event start)
b. Event Manager: 4 (4 hours before event start)
c. Event Staff I: 375 (2 hours before event start)
d. Supervisors: 30 (2.5 hours before event start)
e. Dispatcher: 3 (3 hours before event start)
f. Roam Team: 60 (2 hours before event start)
g. Event Staff II: 85 (2 hours before event start)
3. Non-NFL Event
Ticketed Soccer Event
a. Area Director: 2 (4 hours before event start)
b. Event Manager: 4 (4 hours before event start)
c. Event Staff I: 375 (2 hours before event start)
d. Supervisors: 30 (2.5 hours before event start)
e. Dispatcher: 3 (3 hours before event start)
f. Roam Team: 60 (2 hours before event start)
g. Event Staff II: 85 (2 hours before event start)
4. Special Event
Non Ticketed Events
a. Contractor will work with event manager and Stadium Manager in a proper deployment for security services required for each individual event. * Time in parentheses is the expected start time for each staff member listed above per event. The event -designated door times.
** Overnight and stadium lockdown staffing will be directed on a weekly basis based off event requirements. Contractor will work directly with Stadium Manager in these needs. *** A minimum of 50% of the above allocations must be cut no later than 1 hour after the event ends. The end of event is defined as the last play of the game, the lost song by an artist, or as dictated by Stadium Manager for smaller special events.
**** The remaining 50% are expected to facilitate final clearing of the stadium and physical checks of all spaces to ensure the Stadium is clear. Once suites and club spaces close, the remaining 50% will support in egress of these spaces. The remaining staff should not be on duty longer than 2 hours past approved by Stadium Manager.
C. Personnel Requirements
Security Personnel Levels: The security firm should provide personnel across various levels, including but not limited to:
1. Event Staff Level I
2. Supervisors
3. Event Staff Level II - Emergency Response Teams (Off-Duty Officers)
4. Dispatcher
5. Roam Teams
6. Management (e.g., Management and Area Directors)
** All security personnel provided by the Contractor are required to be guard card certified through the ices. The Contractor is responsible for
maintaining guard card certificates and ensuring all guard cards are verified upon staff check in and that all are valid and in good standing, for every shift.
Docusign Envelope ID: B684BE6D-CCFB-4203-A53D-0FE9815964D4 start is defined by the events' pre
the events' end unless
State of California's Bureau of Investigative Security Serv 19 Administrative Personnel: All administrative personnel costs will not be borne by the Stadium Manager and should be listed separately. Administrative roles may include, but are not limited to:
1. Administrative Assistants
2. Operations Coordinators
3. Logistics Coordinators
4. Communication Officers
Staffing Definitions
Area Director senior manager level support with the autonomy to make necessary business decisions the direct point of contact for all things Contractor related.
Event Manager manager level support who will assist Area Director in ensuring event logistics and staffing needs are met on all levels. Will work with Stadium on staffing allocations and deployments on event day. Will complete event staffing deployments and will properly brief Supervisors prior to the start of each event.
Supervisor
will support event managers in security officer deployments. Will be responsible for response team and incident management, as well as ensuring all staffing allocations are properly met.
Will conduct post checks and provide a post order review for all security officers on deployment during each event.
Event Staff I
trained staff standing post as required by Contractor. Will also be responsible for entry screening procedures aided by the use of technology for screening measures as dictated by Stadium Management. Will also support the Stadiums Emergency and Incident Response plans when activated, as directed by the Stadium.
Roam Team
roving patrol teams, in pairs of 2, responsible for foot patrols of predesignated areas noted on their deployment. Will observe and report all security incidents to Supervisors and assist in incident response and security response as dictated through the Command Post.
Event Staff II off duty law enforcement officers who will be first on scene for all security calls for service including theft, intoxication, fights, etc. Will also support the Stadiums Emergency and Incident Response plans when activated, as directed by the Stadium.
Dispatcher will support the Command Post (CP) and work with Stadium Management Incident Commander as required. Will be responsible for documentation of incidents and noting appropriate events with the use of the Stadiums reporting system, 24/7. Will monitor radio traffic and communicate with Contractor Supervisors during the event.
Field Incursion (FIT) Team field officers required by the NFL for San Francisco Forty Niners events only. These officers are responsible for immediately responding to any patrons attempting to interrupt game of play, by entering the field of play at any time. In conjunction with Police, will be responsible for the removal of said individual from the field.
Admin check in support for staff available to assist managers and directors with administrative duties.
D. Service Levels
Contract security personnel will provide a variety of services, including NFL, promotor, and Stadium security objectives according to all policies and procedures set forth by the various groups. These may Docusign Envelope ID: B684BE6D-CCFB-4203-A53D-0FE9815964D4 in a moment's notice. Will report to Stadium security management on all things directly and will serve as 20 include but is not limited to the following general disciplines:
1. Access Control:
a. Implement and manage access control procedures for events of varying sizes to ensure only authorized personnel enter designated areas.
b. Monitor and control entry and exit points to prevent unauthorized access. c. Facilitate the security screening process for all guests and employees entering the Stadium with the use of Magnetometer screening, both frictionless and non-frictionless. d. Verify the validity of credentials at all access points into the stadium, whether it is a Stadium issued badge, an actual paid ticket for an event, or on a list provided internally with those who are granted access for a specific non-ticketed event. e. Secures all back of house areas, including equipment, broadcast compounds, and
2. Crowd Management:
a. Work directly with Stadium Manager and public safety to develop a comprehensive crowd management plan adaptable to events with different scales to ensure the safe and orderly movement of attendees for both NFL events and non-NFL events. b. Work directly with Stadium Management to coordinate with local law enforcement to manage crowds effectively during incident and emergency response. c. Respond to, and properly document, incidents as directed by dispatch in the CP.
3. Baggage and Item Inspection:
a. Conduct thorough inspections of bags and personal items at designated entry points for events of varying sizes.
b. Implement effective screening procedures to detect prohibited items. c.
safely conduct a proper assessment of the contents of the approved bag before it enters the Stadium.
4. Surveillance and Monitoring:
a. Observe and report, via roving patrols, guest activity and addressing any fan code of conduct issues seen or reported.
b. Continuously monitor live feeds and respond to any suspicious activities promptly utilizing
c. Observes and reports on security threats on the Stadium property, including all exteriors and internal parking lot spaces.
5. Emergency Response:
a. Work with Stadium Manager and public safety to develop and implement an emergency response plan adaptable to events of different magnitudes in coordination with local emergency services and Stadium Manager.
b. Conduct regular drills to ensure quick and efficient responses to various emergency scenarios. Document all drills and trainings held.
c. Learns and executes Stadium security response, access control, and evacuation plans.
6. Communication:
Docusign Envelope ID: B684BE6D-CCFB-4203-A53D-0FE9815964D4 personnel entering and exiting the Stadiums' loading docks.
Responsible for checking bags and enforcing the Stadium's bag policy, with the ability to the Stadium's CCTV infrastructure.
21 a. Establish effective communication channels among security personnel and with event organizers for events of varying sizes.
b. Provide clear and timely updates to event organizers and relevant authorities. c. Area Director working in office out of the Stadium Security Offices 3 days a week.
7. Emergency Response Teams (Off-Duty Officers):
a. Deploy off-duty law enforcement officers trained in emergency response to enhance the speed and efficiency of on-site reactions to critical incidents. b. These officers are the Event Staff II Officers, with a higher skill level, trained in specific de-escalation and crowd management techniques.
E. Staffing Support
Contractor will be required to provide all security services required to meet the specifications outlined in the scope of work and cannot selectively decline to perform a particular service. If the Contractor is unable to meet the specifications of the scope for a specific event, or does not properly fulfill their staffing requirements, the Stadium reserves the right to separately contract for any security related services. If this is necessary for the Stadium, the Contractor will assume repayment penalties, or invoice reductions, for any staffing needs not fully fulfilled. See staffing table below for penalty allocations as dictated by Stadium Manager.
Contractor must request in writing any late staffing adjustments to account for staffing shortages, call offs, and/or no shows. Stadium Manager will respond to and approve any requests in writing, at their discretion, on a case-by-case basis. Any overages that were not approved and transported to site for potential support, are not to be billed to the Stadium and are costs the Contractor will be responsible for.
Contractor is responsible for submitting all time sheets and total staffing calls no later than the start of the 2nd quarter for all NFL Events and 2 hours after doors for all non-NFL events to Stadium Manager. The Contractor will be required to submit time sheets with all invoices for each event.
F. Qualifications and Requirements
Prospective Contractors should meet the following criteria throughout the entire contract term, adhering to both California regulations and NFL Best Practices for Stadium security:
1. Experience:
a. Contractors must have a minimum of 10 years of experience in providing event security services for large-scale events, with a preference in sports. b. Demonstrated success in managing security for venues with similar capacities and similar disciplines.
2. Licensing and Certification (California Requirements):
a. Guard Card Security Personnel must hold valid California Guard Registration (Guard Card) as per the requirements of the California Bureau of Security and Investigative Services (BSIS).
b. Crowd management personnel must have additional certifications as required by local authorities as recommended by Stadium Management.
3. Training Requirements (California and NFL):
a. Security personnel should undergo mandatory training in accordance with California regulations, covering topics such as legal powers and limitations, use of force, de- escalation, public relations, anti-terrorism, and emergency procedures.
Docusign Envelope ID: B684BE6D-CCFB-4203-A53D-0FE9815964D4 22 b. Adherence to NFL Best Practices for Stadium Security training requirements, including specific modules on threat assessment and emergency response. c. Contractor must undergo Crowd Management Training approved by the Fire Code Official as recognized in the California Fire Code and California Code of Regulations, Title 19.
d. Contractor will develop a comprehensive set of post orders documenting both general procedures as well as site-specific responsibility for staff training. e. Post orders will be prepared prior to the commencement of the contract and must be reviewed and approved by Stadium Manager prior to the contractual agreement. f. All security officers will be required to read and verify they understand the post orders and, at a minimum, will be assessed during the on-the-job training period, semi-annual or more frequently during-site inspections.
g. Contractor will be required to conduct regularly scheduled employee training programs as requested by Stadium Manager
h.
and recorded with sign in sheet of those attended, as well as an agenda covering the topics trained on.
4. Technology and Equipment:
a. Contractor will be required to use and train personnel on access to modern security technology, including frictionless and non frictionless magnetometers. b. Contractor will be required to use and train personnel on any weapons detections systems or screening technology procured by stadium management. c. Contractor will be required to use and train personnel on use of hand wands. d. Contractor will be required to use and train personnel on use of body worn cameras in positions where required.
e. Contractor will be required to use and train personnel on use of two-way radio for communication.
5. Rate Breakdowns and Annual Increases:
a. Provide a detailed rate breakdown for each level of security personnel. b. Specify any annual increases in rates over the duration of the three-year contract with suggested escalators for the respective one-year renewals.
G. Performance and Reporting Requirements
Contractor will provide appropriate and necessary management and supervision for all employees and will be responsible for instituting and invoking disciplinary action of employees not in compliance with as any other policy established by the contracting
parties.
Contractor will ensure hiring, training and administration of motivated and professional employees that actor is
responsible for the daily personal appearance of security personnel. Contractor will provide seasonal uniforms and weather appropriate protective clothing necessary to support continuous performance of Contractor requirements which all must be approved by Stadium Management prior to contractual agreement. Contractor will provide two-way communication devices to personnel. Contractor will be required to share all training documents, presentations, power points, post orders, etc., with Stadium Mana
training materials.
Contractors may be required to submit monthly reports describing staffing allocations, work performed, work status, work progress, difficulties encountered, remedial actions taken, performance complaints and violations reported. Performance complaints and violations include, but are not limited to, no call/no show rates, backfill rates and numbers, personnel complaints, violation of policies and procedures by staff Docusign Envelope ID: B684BE6D-CCFB-4203-A53D-0FE9815964D4 All training done by Contractor as it relates to business at Levi's Stadium must be tracked Stadium Management's rules and regulations, as well
meet or exceed both the Contractor's Standards, as well as the San Francisco 49ers. Contr ger to be included in the Stadium's Safety Act submittals and management of documentation and 23 members, and violation of uniform dress, appearance standards, and guard card verification. Stadium Manager will require After Action Reports after every large-scale event. performance without notice throughout the
performance period.
H. Service Level Agreement
Based on the proposal response, both Parties shall incorporate a written Service Level Agreement
the administrative and operations plan within 30 days from the Effective Date of the agreement. The SLA will incorporate financial penalties for non-performance identified at events, should Contractor's performance fail to meet service levels established in the agreement, such penalty shall remain in effect for until such time those performance issues are cured.
The Stadium Manager shall conduct a year-
of the first year of the Term of this Agreement and will notify Contractor of the results of such review. In in this Agreement including, without limitation, the service level agreement established in accordance with the foregoing paragr
material breach of this Agreement such that Stadium Manager may, in its discretion, move forward with termination following notice and an opportunity to cure within the time specified and in accordance with the procedures set forth in Section 13 of the Agreement.
Docusign Envelope ID: B684BE6D-CCFB-4203-A53D-0FE9815964D4 The Stadium Manager reserves the right to audit Contractor's (defined as the "SLA") outlining
end review of Contractor's performance following completion the event Contractor's performance is deemed by Stadium Manager to be below the standards specified aph, the Stadium Manager may treat Contractor's substandard performance as a 24 EXHIBIT B
CONTRACTOR COMPENSATION AND FEES
The Parties mutually agree that as consideration for the performance of Services contained in this Agreement, Stadium Manager shall compensate Contractor upon the completion (and verification of the completion by Stadium Manager) of the Services contained in Exhibit A in accordance with the compensation terms specified below.
A. August 1, 2024 through October 31, 2025 Rates
Position Standard Hourly Rate Overtime / Holiday
Hourly Rate
Double Time Hourly
Rate
Event Manager $40.76 $42.76 $81.52
Area Director $40.76 $42.76 $81.52
Event Supervisor $40.76 $42.76 $81.52
Roam Team $36.99 $38.99 $73.98
Event Staff Level I $36.99 $38.99 $73.98
Dispatcher $36.99 $38.99 $73.98
Event Staff Level II $61.69 $63.69 $123.38
Field Incursion Team $40.76 $42.76 $81.52
Admin (Check-In) $36.99 $38.99 $73.98
Refer to additional pricing details below.
B. Pricing Details
The following details provide additional information to the hourly rates:
1. Account Manager dedicated position assigned to the account as referenced in the RFP at no cost to Stadium Manager.
2. Event Manager, Event Supervisor and Event Director positions are hourly rates (as these are not salaried employees) and will be charged for the actual hours worked. Proof of hours worked shall be
3. Stadium Manager will not incur any cost for assigned personnel for absenteeism/no-show and will only pay for actual hours worked.
4. All hourly bill rates include all payroll taxes, insurance, and overhead.
5. There is a 4-hour minimum for all confirmed personnel working on site and verified attendance.
6. Contractor will administer all cost accounting and billing relative to this contract. All invoices one-time 15% discount fee will be applied to the overall total cost.
Docusign Envelope ID: B684BE6D-CCFB-4203-A53D-0FE9B15964D4 submitted with the Contractor's invoice.
should be submitted no later than 30 days after the events' conclusion . For any late invoices, a 25 EXHIBIT C
INSURANCE REQUIREMENTS
At all times during the term hereof, Contractor shall keep and maintain in full force and effect the following types of insurance coverage and/or bonds:
1. Commercial General Liability insurance,
policy form CG 00 01 or a substitute form providing coverage at least as broad as the ISO form specified, affording protection against liability arising out of personal injury, bodily injury, death, and damage to property occurring in or about the property in the minimum amount of Five Million Dollars ($5,000,000) per occurrence and Ten Million Dollars ($10,000,000) in the annual aggregate.
2. Business Automobile Liability in the minimum amount of Two Million Dollars ($2,000,000) each accident with respect to owned, hired and non-owned vehicles.
3. Workers compensation insurance, as required by applicable law.
4. the minimum amount of One Million Dollars
($1,000,000) each accident, One Million Dollars ($1,000,000) each employee, by disease, and One Million Dollars ($1,000,000) policy aggregate by disease.
5. Employment Practices Liability insurance with limits of at least Five Million Dollars ($5,000,000) each claim and, in the aggregate, including third party coverage. Coverage shall be on a claims- made basis with a retroactive date no later than the effective date of this Agreement, with coverage to be continuously renewed and maintained throughout the Term, plus a period of three (3) years with the option of meeting such three (3) year requirement through the use of a three (3) year extended reporting period endorsement that is effective at the end of the Term.
6. Crime insurance, including employee dishonesty, covering all of Contractor's agents, contractors, managers and other employees, and including third party coverage, in the minimum amount of One Million Dollars ($1,000,000) each claim.
7. Liability insurance covering claims arising out of errors and omissions by vendors rendering professional services, in the minimum amount of Five Million Dollars ($5,000,000) each occurrence including contractual liability coverage, with all coverage retroactive to the earlier of the date of agreement or commencement of Contractor's services and with coverage to be continuously renewed and maintained throughout the Term, plus a period of three (3) years with the option of meeting such three (3) year requirement through the use of a three (3) year extended reporting period endorsement that is effective at the end of the Term.
8. Umbrella or excess liability insurance in the minimum amount of Thirty Five Million Dollars ($35,000,000) per occurrence and in the aggregate providing following form excess coverage over the CGL, AL, and EL insurance specified above, including but not limited to the required additional insureds and additional insured coverage.
9. Terrorism insurance coverage, to the extent provided under TRIA or an extension thereof, shall be required for all insurance policies required in this Agreement.
10. The above stated minimum limits may be achieved by a combination of primary and excess coverage. Any deductible or self-insured retention amounts are the Docusign Envelope ID: B684BE6D-CCFB-4203-A53D-0FE9B15964D4 ("CGL") written on standard ISO "occurrence"
("AL") insurance
Employer's liability ("EL") insurance in
26 sole responsibility of the Contractor.
11. The
shall include Stadium Manager, Santa Clara Stadium Authority, City of Santa Clara and each of their respective parent companies, subsidiaries, affiliates, officers, directors, and em
up to the contractually required limits. In all
cases, the insurance afforded to the Additional Insured Parties hereunder shall be primary insurance and, in the event the Additional Insured Parties maintain other insurance that is applicable to the loss, it will be on an excess 20 10 04 13 and CG 20 37 04 13 or equivalent manuscript endorsement shall be the additional insured wording required. ISO endorsement CG 20 01 04 13 or an equivalent manuscript endorsement shall be the primary/non- contributory wording required.
12. At Stadium Manager's request from time to time (and in any event not less than 15 (fifteen) days prior to the expiration dates of any expiring policies or bonds furnished by Contractor) , Contractor shall furnish to Stadium Manager a certificate of insurance supplied by each such insurer and surety showing that the insurance and bonds required hereunder are in full force and effect and showing the limits thereof and that all such policies and bonds contain the provisions and endorsements required hereunder, and including copies of any required additional insured endorsements and primary/non- contributory endorsements.
The certificate(s) of insurance shall be subject to
approval of Stadium Manager, but failure of Stadium Manager to request such requirements, or failure of Stadium Manager to identify deficiencies from evidence that is provided, shall in no way limit or relieve Contractor of its obligations to maintain such insurance.
In the event of a claim that involves a
coverage dispute associated with any insurance policy or policies required to be obtained by Contractor hereunder, Contractor shall furnish evidence of coverage pursuant to such policy or policies to Stadium Manager with 10
13. All insurance policies and bonds required to be maintained by Contractor shall be issued by insurers or sureties (as the case may be) reasonably satisfactory to client, authorized to do business in the state of California and having an AM Best rating and financial size category of A- /VII or better.
14. All required policies of the Contractor shall provide (i) a waiver by the insurer of any right to subrogate against Stadium Manager, Santa Clara Stadium Authority, City of Santa Clara or any of their respective parent companies, subsidiaries, affiliates, officers, directors, or employees (ii) a severability of interest or endorsement where
separately to each insured or additional insured; and (iii) a provision that the insurer will not cancel or change the coverage provided b y such without giving the Stadium Manager thirty (30) days' prior written notice.
15. The insurance requirements set forth in minimum amounts herein shall not be construed to relieve Contractor for liability in excess of such coverage, nor shall it preclude Stadium Manager from taking such other actions as is available to it under any other provision of the Agreement.
Docusign Envelope ID: B684BE6D-CCFB-4203-A53D-0FE9B15964D4 Contractor's CGL, AL, and Umbrella or excess liability insurance policies ployees (collectively , the "Additional Insured
Parties"), as additional insureds
or contingent basis. For Contractor 's CGL insurance, ISO endorsement CG certificate or other evidence of Contractor's compliance with insurance days of Stadium Manager's written request.
by Contractor's required insurance shall apply
EXHIBIT D
ETHICAL STANDARDS FOR CONTRACTORS SEEKING TO ENTER INTO AN AGREEMENT WITH
STADIUM MANAGER
Termination of Agreement for Certain Acts.
A. Stadium Manager may, at its sole discretion, terminate this Agreement in the event any one or more of the following occurs:
1. If a Contractor 2 does any of the following:
a. Is convicted 3 of operating a business in violation of any Applicable Law; b. Is convicted of a crime punishable as a felony involving dishonesty 4; c. Is convicted of an offense involving dishonesty or is convicted of fraud or a criminal offense in connection with: (1) obtaining; (2) attempting to obtain; or, (3) performing a public contract or subcontract;
d. Is convicted of any offense which indicates a lack of business integrity or business honesty which seriously and directly affects the present responsibility of a Stadium Manager contractor or subcontractor; and/or,
e. Made (or makes) any false statement(s) or representation(s) with respect to this Agreement.
2. If fraudulent, criminal or other seriously improper conduct of any officer, director, shareholder, partner, employee or other individual associated with Contractor can be imputed to Contractor when the conduct occurred in connection with the individua be evidence of such knowledge, approval or acquiescence.
2 For purposes of this Agreement, the word Consultant (whether a person or a legal entity) also refers to Contractor and means any of the following: an owner or co-owner of a sole proprietorship; a person who controls or who has the power to control a business entity; a general partner of a partnership; a principal in a joint venture; or a primary corporate stockholder [i.e., a person who owns more than ten percent (10%) of the outstanding stock of a corporation] and who is active in the day to day operations of that corporation.
3 For purposes of this Agreement, the words convicted or conviction mean a judgment or conviction of a criminal offense by any court of competent jurisdiction, whether entered upon a verdict or a plea, and includes a conviction entered upon a plea of nolo contendere within the past five (5) years.
4 As used herein,
dishonesty includes, but is not limited to, embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, failure to pay tax obligations, receiving stolen property, collusion or conspiracy.
Docusign Envelope ID: B684BE6D-CCFB-4203-A53D-0FE9815964D4 " "
l's
performance of duties for or on behalf of Contractor, with Contractor's knowledge, approval or acquiescence, Contractor's acceptance of the benefits derived from the conduct shall " "
" " " "
" "
B. Stadium Manager may also terminate this Agreement in the event any one or more of the following occurs:
1. Stadium Manager determines that Contractor no longer has the financial capability 5 or business experience6 to perform the terms of, or operate under, this Agreement; or
2. If Stadium Manager determines that Contractor fails to submit information, or submits false information, which is required to perform or be awarded a contract with Stadium Manager, d State-issued license,
failure to obtain a Stadium Manager business license (if applicable), or failure to purchase and maintain bonds and/or insurance policies required under this Agreement.
C. In the event a prospective Contractor (or bidder) is ruled ineligible (debarred) to participate in a contract award process or a contract is terminated pursuant to these provisions, Contractor may appeal the action to the Authority by filing a written request with the Authority Secretary within ten (10) days of the notice given by Stadium Manager to have the matter heard. The matter will be heard within thirty (30) days of the filing of the appeal request with the Authority Secretary.
Contractor will have the burden of proof on the appeal. Contractor shall have the opportunity to present evidence, both oral and documentary, and argument.
5 Contractor becomes insolvent, transfers assets in fraud of creditors, makes an assignment for the benefit of creditors, files a petition under any section or chapter of the federal Bankruptcy Code (11 U.S.C.), as amended, or under any similar law or statute of the United States or any state thereof, is adjudged bankrupt or insolvent in proceedings under such laws, or a receiver or trustee is appointed for all or substantially all of the assets of Contractor.
6 Loss of personnel deemed essential by Stadium Manager for the successful performance of the obligations of Contractor to Stadium Manager.
Docusign Envelope ID: B684BE6D-CCFB-4203-A53D-0FE9815964D4 including, but not limited to, Contractor's failure to maintain a require City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
24-859 Agenda Date: 9/10/2024
REPORT TO COUNCIL
SUBJECT
Action on a Resolution Approving the 2025 Civil Service Commission Calendar of Meetings, and Setting the Number and Start Time of Regular Meetings of the Civil Service Commission
COUNCIL PILLAR
Enhance Community Engagement and Transparency
BACKGROUND
City Charter Section 1003 states that each of the boards and commissions of the City shall hold regular meetings as required by City Code. City Code Section 2.120.030 states that each board or commission shall hold regular meetings at the times and on the days indicated by resolution of the City Council, which resolutions may be amended from time to time by further resolution of the Council.
DISCUSSION
At the August 8, 2024 Civil Service Commission meeting, the Commission recommended the proposed 2025 Schedule of Meetings, which includes twelve (12) regular meeting dates and six (6) potential Board of Review hearing dates, which would commence after conclusion of the regular Civil Service Commission meeting, if necessary to hear an appeal. The start time for each Civil Service Commission meeting is recommended to change from 7:00 p.m. to 6:00 p.m.
The new resolution for City Council approval establishes the 6:00 p.m. Civil Service Commission start time and twelve (12) regular meetings for the year (which may be cancelled at the discretion of the City Manager based upon best practices for agenda management). The Commission has voted to continue to hold its meetings on the second Thursday of each month, beginning in January 2025.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a government organizational or administrative activity that will not result in direct or indirect changes in the environment.
FISCAL IMPACT
There is no fiscal impact other than administrative time and expense to set the meetings.
COORDINATION
This report has been coordinated with the City Attorney’s Office.
PUBLIC CONTACT
City of Santa Clara Printed on 9/6/2024Page 1 of 2
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24-859 Agenda Date: 9/10/2024
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email [email protected] <
mailto:[email protected]>, or at the public
information desk at any City of Santa Clara public library.
RECOMMENDATION
Adopt a Resolution approving the 2025 Civil Service Commission Calendar of Meetings and setting the number and start time of regular Civil Service Commission meetings.
Reviewed by: Aracely Azevedo, Director of Human Resources Approved by: Jovan D. Grogan, City Manager
ATTACHMENTS
1. Civil Service Commission 2025 Meeting Dates
2. Resolution Approving the 2025 Civil Service Commission Calendar of Meetings, and Setting the Times and Days of Regular Meetings
City of Santa Clara Printed on 9/6/2024Page 2 of 2
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CIVIL SERVICE COMMISSION
ZOOM/CITY COUNCIL
CHAMBERS
1500 Warburton Avenue
Santa Clara, CA 95050
Schedule of Meetings
2025
Regular meetings are held on the second Thursday of each month, beginning in January 2025 beginning at 6 :00 p.m., in the City Council Chambers at 1500 Warburton Avenue, Santa Clara, or via Zoom in accordance with the following schedule.
Meeting Dates
January 9, 2025
February 13, 2025*
March 13, 2025
April 10, 2025*
May 8, 2025
June 12, 2025*
July 10, 2025
August 14, 2025*
September 11, 2025
October 9, 2025*
November 13, 2025
December 11, 2025*
*The Board of Review will commence immediately following the conclusion of the CSC meeting, if necessary.
City of
Santa Clara
The Center of What 's Possible
Resolution Page 1 of 2
Rev: 7/27/2023
RESOLUTION NO. _____
A RESOLUTION OF THE CITY OF SANTA CLARA,
CALIFORNIA APPROVING THE 2025 CIVIL SERVICE
COMMISSION CALENDAR OF MEETINGS, AND
SETTING THE NUMBER AND START TIME OF
REGULAR CIVIL SERVICE COMMISSION MEETINGS
WHEREAS, Section 2.120.030 of the Santa Clara City Code (“SCCC”) requires City boards and commissions to hold regular meetings at the times and on the days indicated by resolution of the Council;
WHEREAS, the Civil Service Commission, at its August 8, 2024, meeting recommended a regular meeting schedule for 2025, which proposes twelve (12) regular meetings and a start time of 6:00 p.m., as reflected on the attached Civil Service Commission 2025 Meeting Dates; and
WHEREAS, the Civil Service Commission also recommended reserving six (6) potential dates during the calendar year for Board of Review hearing dates, to be convened as needed, as reflected on the attached Civil Service Commission 2025 Meeting Dates.
NOW THEREFORE, BE IT RESOLVED BY THE CITY OF SANTA CLARA AS FOLLOWS:
1. That the City of Santa Clara are hereby finds that the above Recitals are true and correct and by the reference makes them a part thereof.
2. That the City Council herby approves setting the Civil Service Commission regular meeting start time at 6:00 p.m., and establishes twelve regular (12) meetings for calendar year 2025, set on the second Thursday of each month, beginning in January (as set forth on the attached Civil Service Commission 2025 Meeting Dates), which meetings may be cancelled at the discretion of the City Manager based upon best practices for agenda management.
That the City Council hereby approves the six (6) potential Civil Service Commission meeting dates during the 2025, as listed in the attached Civil Service Commission 2025 Meeting Dates, Resolution Page 2 of 2
Rev: 7/27/2023
for the Board of Review hearing dates, to be convened as needed, upon completion of the regularly scheduled Civil Service Commission meeting.
3. Effective date. This resolution shall be effective January 1, 2025.
I HEREBY CERTIFY THE FOREGOING TO BE A TRUE COPY OF A RESOLUTION PASSED
AND ADOPTED BY THE CITY OF SANTA CLARA, CALIFORNIA, AT A REGULAR MEETING THEREOF HELD ON THE ___ DAY OF _________, 2024, BY THE FOLLOWING VOTE:
AYES: COUNCILORS:
NOES: COUNCILORS:
ABSENT: COUNCILORS:
ABSTAINED: COUNCILORS:
ATTEST: ______________________________
NORA PIMENTEL, MMC
ASSISTANT CITY CLERK
CITY OF SANTA CLARA
Attachments incorporated by reference:
1. Civil Service Commission 2025 Meeting Dates
City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
24-803 Agenda Date: 9/10/2024
REPORT TO COUNCIL
SUBJECT
Action on a Resolution Accepting from the Santa Clara Valley Water District an Aerial Easement Deed for the San Tomas Junction Substation Project in Consideration of a One-time Payment not to exceed $2,000
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
On April 8, 2020, the City Council authorized the execution of a Substation Service Agreement with MECP1 Santa Clara 1, LLC to allow the City of Santa Clara’s Electric Utility, Silicon Valley Power (SVP), to design, procure equipment, and construct 60kV facilities to serve San Tomas Junction Substation.
On October 10, 2023, the City Council awarded a contract for the construction of the Memorex and San Tomas Junction Transmission Line Extension Projects to Henkels & McKoy West. The San Tomas Junction Transmission Line Extension consists of an approximately 0.2 mile long, new double circuit 60 kilovolt (kV) overhead transmission line (Transmission Line) to connect to SVP’s Juliette- Central 60kV line heading east over San Tomas Aquino Creek adjacent to U.S. Highway 101. This Transmission Line will serve the proposed San Tomas Junction Substation.
DISCUSSION
The majority of the Transmission Line would be constructed adjacent to U.S. Highway 101 and cross San Tomas Aquino Creek, and end at 2201 Laurelwood Rd. The Transmission Line requires the acquisition of a 5,819 square foot aerial easement across San Tomas Aquino Creek from the Santa Clara Valley Water District to facilitate the installation of the Transmission Line.
The City has negotiated the proposed purchase of the easement from the Santa Clara Valley Water District, upon the terms set forth below.
Address Grantors APN Purchase
Price
San Tomas Aquino
Creek
Santa Clara Valley
Water District
104-40-008 & 104-39-022 $2,000
Staff requests that the City Council authorize the City Manager to accept the deed conveying the aerial easement and execute the deed on behalf of the City.
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24-803 Agenda Date: 9/10/2024
ENVIRONMENTAL REVIEW
The Transmission Line has undergone environmental review under the California Environmental Quality Act (CEQA). On April 15, 2020, the City adopted a Mitigated Negative Declaration (MND) [State Clearinghouse Number: 2019089107] for the Transmission Line. The proposed approval will not change the project analyzed under the MND; therefore, no additional environmental review is required.
FISCAL IMPACT
The total cost of the easement purchase will not exceed $2,000.
Funds for the purchase of the electric utility aerial easement are available in the FY 2024/25 Electric Utility Capital Fund budget in the San Tomas Junction project.
COORDINATION
This report has been coordinated with the Finance Department and City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email [email protected] < mailto:[email protected]>
or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Adopt the Resolution authorizing (a) the City Manager to accept and execute, in substantial form, the attached Aerial Easement Deed (Easement Deed) and the real property interest contained therein for an overhead electric aerial easement at San Tomas Aquino Creek [APN 104-40-008 & 104-39-022]; (b) the payment not to exceed $2,000 for the Easement Deed and real property interests contained therein; and (c) the City Clerk to record the Easement Deed.
Reviewed by: Manuel Pineda, Chief Electric Utility Officer Approved by: Jovan D. Grogan, City Manager
ATTACHMENTS
1. Resolution with Aerial Easement [APN 104-40-008 & 104-39-022] City of Santa Clara Printed on 9/6/2024Page 2 of 2
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CITY
OF SANTA CLARA RESOLUTION NO. ____
A RESOLU
TION OF THE CITY OF SANTA CLARA, CALIFORNIA,
AUTHORIZING THE CITY MANAGER TO ACCEPT AND EXECUTE
AN EASEMENT DEED FROM THE SANTA CLARA VALLEY WATER
DISTRICT CONVEYING TO THE CITY OF SANTA CLARA CERTAIN
INTERESTS IN REAL PROPERTY
BE IT RESOLVED BY THE CITY OF SANTA CLARA AS FOLLOWS:
WHEREAS, the City of Santa Clara (“City”), a chartered city and municipal corporation acting by and through its municipally owned utility, Silicon Valley Power ("SVP") is engaged in a continuing effort to upgrade and enhance its overhead and underground distribution and transmission systems to meet new customer demand and to maintain the reliability of SVP's systems. The 60 kV facilities for San Tomas Junction Substation Project ("Project") is one of the projects for this effort; WHEREAS, a portion of the proposed Project is an approximately 0.2 mile long, new double circuit 60 kilovolt (kV) overhead transmission line will connect to SVP’s Juliette-Central 60kV line heading east over San Tomas Aquino Creek adjacent U.S.
Highway 101, with the primary objective to provide 60 kV service to the proposed San Tomas Junction Substation;
WHEREAS, the City requires an aerial easement fro m the Santa Clara Valley Water District (“Valley Water”) to install, operate, and maintain aerial 60 kV Aerial Transmission Lines to serve the Project and other customers; WHEREAS, Valley Water has offered to covey to the City the easement deed in substantially the form attached to this resolution as Exhibit “A” (“Easement Deed”); and WHEREAS, based on the foregoing, the Santa Clara City Council does hereby find and determine it is in the best interests of the CITY to accept the Easement Deed.
NOW, THEREFORE, BE IT FURTHER RESOLVED BY THE CITY OF SANTA CLARA as follows:
1. The above recitals are true and correct and incorporated herein.
2. The City Council authorize the City Manager to accept t he Easement Deed and the real property interests contained therein on behalf of the City of Santa Clara, and the City Council further approves the negotiated purchase price contained therein. T he City Manager is authorized to execute the Easement Deed.
3. Nothing herein shall be construed to be an acceptance of any parcel or property into the City street system (Streets and Highways Code Section 1806).
4. The City Clerk is authorized and directed to cause the Easement Deed to be recorded in the Office of the County Recorder of the County of Santa Clara.
5. Effective date. This resolution shall become effective immediately.
I HEREBY CERTIFY THE FOREGOING TO BE A TRUE COPY OF A RESOLUTION
PASSED AND ADOPTED BY THE CITY OF SANTA CLARA, CALIFORNIA, AT A SPECIAL MEETING THEREOF HELD ON THE __TH DAY OF ____________, 202 4, BY THE FOLLOWING VOTE:
AYES: COUNCILORS:
NOES: COUNCILORS:
ABSENT: COUNCILORS:
ABSTAIN: COUNCILORS:
ATTEST: ________________________________
___________________, City Clerk
Exhibit “A”
Easement Deed
[ATTACHED BEHIND THIS PAGE]
RECORD WITHOUT FEE UNDER CALIFORNIA
GOVERNMENT CODE SECTION 6103
AFTER RECORDING RETURN TO:
REAL ESTATE SERVICES UNIT
SANTA CLARA VALLEY WATER DISTRICT
5750 ALMADEN EXPRESSWAY
SAN JOSE, CALIFORNIA 95118
SPACE A BOVE THIS LINE RESERVED FOR RECORDER’S USE
APN: 104-40-008 and 104-39-022
DOCUMENT N O.: 2019-11.2, 2019-41.1, 2019-104.1
AERIAL
EASEMENT
This aerial easement (“Aerial Easement”) is made by and between the Santa Clara Valley Water District, a Special District, created by the California Legislature (hereinafter referred to as “Valley Water ” or “Grantor”), and the City of Santa Clara , a Chartered City (hereinafter referred to as “Grantee”) (each referred to, singularly, as “Party” or, together, as “Parties”).
RECITALS
WHEREAS, Valley Water owns property ("Valley Water Property"), APN 104-40-008 and 104-39-022 along and over San Tomas Aquino Creek; and
WHEREAS, Grantee seeks to install, operate, and maintain aerial 60 kV Aerial Transmission Lines (“Aerial Transmission Lines”) to provide electrical service to its customers located in Santa Clara, CA. A portion of Aerial Transmission Lines will span over Valley Water -owned real property identified as a portion of Assessor’s Parcel Nos. 104-40-008, and 104-39-022; and WHEREAS, Grantee understands that Valley Water will continue to access and use Valley Water Property to perform flood protection, stream stewardship, and water management related maintenance and operational activities; and
NOW THEREFORE, in consideration of the mutual covenants set forth herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the P arties hereto agree as follows:
1. Incorporation of Recitals. The recitals set forth above are incorporated herein into this Aerial Easement.
2. G rant of Aerial Easement. Subject to the terms and conditions specified in this Non-Exclusive Aerial Easement, Valley Water hereby GRANTS to Grantee, a non-exclusive Aerial Easement in gross, over, and above that portion of Valley Water Property described in Exhibit “ A” and depicted in Exhibit “B”, both of which are attached hereto and incorporated herein by this reference (the “Aerial Easement”), for purposes of installing, maintain ing, repair ing, renewing, replacing, protecting, inspecting, operating, and removing the Aerial Transmission Lines. Grantee shall ensure the Aerial
Transmission Lines maintain a vertical clearance of forty (40) feet to the top of the levee beneath the Aerial Easement. This Aerial Easement does not include the right to any ground access except to the extent necessary to exercise the rights contained in the preceding sentence. This Aerial Easement does not include the right to install any improvements on or in the ground or perform any ground disturbing activities without obtaining a Valley Water encroachment permit.
3. Work within Aerial Easement. Grantee’s exercise of its rights as stated in Section 2 does not require a Valley Water encroachment permit; however, Grantee is responsible for complying with, including obtaining any necessary permits, any applicable local, state, and federal requirements and regulations.
Grantee agrees to notify Valley Water in writing sixty ( 60) days in advance of activities that would obstruct or materially interf ere with Valley Water’s use of its levee/maintenance roads prior to commencement of any such activities. Notwithstanding the foregoing, such notice is not required in any emergency situation or in conducting routine maintenance activities; provided, (i) in the case of emergency activities, Grantee shall notify Valley Water as soon as possible but no later than five (5) business days of completing any such work; and (ii) in the case of routine maintenance activities, such work will not obstruct or materially interfere with Valley Water’s use of its levee/maintenance roads.
However, if Valley Water is conducting maintenance activities, Grantee shall defer its maintenance activities until Valley Water completes its work. It shall be Grantee’s responsibility to coordinate with Valley Water to avoid any conflicts with our respective operational and maintenance activities.
4. Restoration of Valley Water Facilities. Within ten (10) days of the completion of any activity by Grantee that disturbs, alters, or damages the surface of the ground or any Valley Water owned or operated levee, structure, or facility, Grantee must remove any debris arising from , or in connection with Grantee’s activities pursuant to this Aerial Easement and, as reasonably practicable, restore any Valley Water owned or operated levee, structure, or facility, to the condition which existed prior to the commencement of Grantee’s work. If Grantee fails to do so after notification by Valley Water of such failure, Grantee agrees to reimburse Valley Water for the cost of the restoration undertaken by Valley Water.
5. Liabil
ity. Valley Water shall not be liable to Grantee for any damage to the Aerial Transmission Lines, except to the extent caused by the negligence or willful misconduct of Valley Water , its agents, contractors, or employees.
6. Grantee’s Operation and Maintenance. This Aerial Easement is granted upon the condition that Grantee will be responsible for the operation and maintenance of any portion of the A erial Transmission Lines constructed within the Aerial Easement in a lawful manner at no expense to Valley Water.
7. Relocation Costs.
(a) Subject to Sections 7(b) and 7(c), Grantee will relocate at Grantee’s expense the Aerial Transmission Lines within seven hundred and twenty (720) days of receipt of written notice (“Notice to Relocate”), from Valley Water, to a site designated by Valley Water, in the event Aerial Transmission Lines shall at any time materially interfere with the operation, maintenance, replacement, or improvement of the Valley Water Property as reasonably determined by Valley Water. The foregoing time frame shall be extended on a day for day basis in the event of the following: (i) in spite of Grantee’s reasonable efforts, Grantee requires additional time to complete the relocation; (ii) unavailability of DOCUMENT NO.: 2019-11.2, 2019-41.1, 2019-104.1
equipment, materials, and labor beyond the Grantee’s reasonable control; or (iii) the inability to coordinate system outages.
(b) Upon receipt of the Notice to Relocate, Grantee m ay request in writing an alternat ive location for the Aerial Transmission Lines. In such case, the Grantor shall provide Grantee with an alternative location on Grantor’s property which is reasonably acceptable to Grantee. Upon Grantee’s acceptance of such alternative location, the Parties agree that this Aerial Easement shall be amended to reflect the new easement area location and to quitclaim the easement area no longer encumbered by this Aerial Easement. (c) Notwithstanding anything to the contrary in this section, Valley Water shall not request the relocation of Aerial Transmission within five (5) years of the effective date of this Aerial Easement.
8. Future Levee Raising. Valley Water anticipates raising the levee on the Valley Water Property up to five (5) feet. Grantee will raise its Aerial Transmission Lines at Grantee’s expense within five hundred and forty (540) days of receipt of written notice (“Notice of Levee Raising”) from Valley Water in the event Valley Water needs to raise its levee within the Aerial Easement. The foregoing time frame shall be extended on a day for day basis in the event of the following: (i) in spite of Grantee’s reasonable efforts, Grantee requires additional time to increase the height of the Aerial Transmission Lines; (ii) unavailability of equipment, materials, and labor beyond the Grantee’s reasonable control; or (iii) the inability to coordinate system outages. If Valley Water determines that it needs to raise the levee more than five ( 5) feet, both Parties shall work together to determine a mutually acceptable solution.
9. Temporary Adjustment . In the event Grantor shall at any time or times require the temporary removal, raising of, or temporary de-energization of the Aerial Transmission Lines constructed by Grantee within the hereinabove described Valley Water Property, Grantee upon receiving written notice from Grantor to do so, will relocate, temporarily remove, raise, or temporarily de -energize, within sixty (60) days of receipt of said notice at Grantee’s expense. The foregoing time frame shall be extended on a day for day basis in the event of the following: (i) in spite of Grantee's reasonable efforts, Grantee requires additional time to complete the relocation; ( ii) unavailability of equipment, materials, and labor beyond Grantee’s reasonable control ; or (iii) the inability to coordinate system outages.
10. Grantor’s Operation and Maintenance. Grantor has no obligation to perform maintenance activities to comply with California Public Utilities Commission’s General Order 95 (GO 95). Grantor agrees to not plant any trees or vegetation which may grow within the GO 95 required clearance areas of the Aerial Transmission Lines.
11. Notices. All notices under this Aerial Easement shall be in writing, shall be directed as follows, and shall be cons idered delivered if delivered in person or three (3) days after deposit in the U.S. Mail, First Class postage prepaid. Notices delivered by electronic mail and subsequently acknowledged in writing by the recipient shall constitute written notice under this Section.
DOCUMENT NO.: 2019-11.2, 2019-41.1, 2019-104.1
City of Santa Clara Valley Water
Electric Department Real Estate Services Unit
City of Santa Clara Santa Clara Valley Water District
1500 Warburton Ave 5750 Almaden Expressway
Santa Clara, CA, 95050 San Jose, CA 95118
And by e-mail at Attn. Unit Manager
[email protected]
With a copy to:
Watersheds Operations and Maintenance Unit
Santa Clara Valley Water District
5750 Almaden Expressway
San Jose, CA 95118
Attn. Unit Manager
12. No waiver. Valley Water and Grantee do not waive any rights they may have under Public Utilities Code section 10101 and any amendments thereto and its successor by Grantee’s execution and acceptance of this Aerial Easement.
13. Compliance with the Law. GRANTEE shall, at its own cost and expense , comply with all applicable local, state, and federal laws, including but not limited to, statutes, governmental rules and regulations, zoning ordinances, and permit requirements in undertaking any of the activities within this Aerial Easement.
14. Binding Obligation. The terms and conditions of this Aerial Easement shall extend to and be binding upon the respective heirs, devisees, legal representatives, successors, and assigns of Valley Water and Grantee (“Successor Parties”).
15. Indemnification. Notwithstanding any other provision of this A erial Easement, Grantee agrees to indemnify, defend and hold harmless Valley Water, its agents, officers, directors, and employees from and against any and all demands, claims, damages, losses and reasonable expenses, including but not limited to liabilities, obligations, claims , costs, reasonable expenses (including without limitation interest, penalties and reasonable attorney's fees), fines, levies, assessments, demands, damages or judgments of any kind or nature, whether in law or equity (including without limitation, death or injury to any person, property damage, administrative and judicial orders and consents, or any other loss) (collectively, “Claims”) arising out of, pertaining to, relating to, or in connection with: (i) the public use of the Aerial Easement ; (ii) the public's use of real property adjacent to the Aerial Easement ; or (iii) Grantee’s construction, operation, maintenance, or use of the Aerial Transmission Lines or any of Grantee’s activitie s within the Aerial Easement or adjacent Valley Water Property, whether such activities or performance thereof is by Grantee, its officers, agents, employees, or independent contractors, except to the extent any such Claim is caused by the negligence or willful misconduct of Valley Water . This promise to defend, indemnify, and hold harmless Valley Water will operate irrespective of the basis of the claim, liability, loss, damage, or injury and irrespective of whether the act, omission, or activity is a condition of the Aerial Easement or any other cause of any kind or nature, The rights, duties, and obligations of the Parties as set forth in this Section 15, Indemnification, shall survive termination, expiration, and suspension of this Aerial Easement.
DOCUMENT NO.: 2019-11.2, 2019-41.1, 2019-104.1
16. Insu
rance. For work within the Aerial Easement or adjacent Valley Water property , Grantee and Valley Water shall, throughout the duration of this Agreement, cause its contractors to maintain insurance coverage equivalent to those coverages the Parties normally require for similar work outside of the Aerial Easement.
17. Entire Agreement. This Aerial Easement sets forth the entire agreement of the parties and supersedes all prior discussions, negotiations, understandings, or agreements relating to the easement right granted by this Aerial Easement.
DOCUMENT NO.: 2019-11.2, 2019-41.1, 2019-104.1
WITN
ESS THE EXECUTION HEREOF the day and year first hereinabove set forth.
GRANTOR GRANTEE
Valley Water City of Santa Clara
By: By:
Nai Hsueh Jovan D. Grogan
Chair, Board of Directors
Date:
City Manager
Date:
Attest: M
ichele L. King, CMC Approved as to Form:
By: _______________________________ By: _______________________________ Gle n R. Googins
Clerk/Board of Directors City Attorney
Date:
DOCUMENT NO.: 2019-11.2, 2019-41.1, 2019-104.1
EXHIBIT A – Legal Description
DOCUMENT NO.: 2019-11.2, 2019-41.1, 2019-104.1
DESCRIPTION:
EXHIBIT "A"
OVERHEAD ELECTRIC AERIAL EASEMENT ACROSS :
SAN TOMAS AQUINO CREEK
BA YSHORE FREEWAY
SANTA CLARA, CALIFORNIA 95054
104-40-008 & 104-39-022
TOTAL EASEMENT AREA : 5,819 SQ. FT.±
SVP REF: SC __
Portions of the San Tomas Aquino Creek, as included in that certain Deed recorded July 7th, 1965 as Instrument No. 2904545 in Book 7067 at Page 301 , located in the City of Santa Clara, County of Santa Clara, State of California , and described as follows:
PART1
COMMENCING at a monument located in the centerline of Laurelwood Road as shown on Page 2 of this exhibit ; thence South 62°18'15" West 301 .40 feet along said centerline of Laurelwood Road to a monument located at the centerline intersection of said Laurelwood Road and Juliette Lane; thence South 73°56'50" West 826.58 feet to the northerly right-of-way line of the Bayshore Freeway (U.S. Route 101 ); thence North 71 °16'22" West 398.19 feet along said northerly right-of-way line of the Bayshore Freeway (U.S. Route 101 ); thence North 00°50'11" East 15 00 feet along an easterly line of the grantor's parcel of land to a line parallel with said Northerly right-of-way line of the Bayshore Freeway (U.S. Route 101) and the POINT OF BEGINNING ; thence North 72°01 '49" West
41.86 feet along said parellel line to a point herein after known as Point "A"; thence North 00°50'11" East 46.11 feet; thence South 67°57'27" East 42.90 feet; thence South 00°50'11" West 42.92 feet to the POINT OF BEGINNING .
PART 1 CONTAINING AN AREA OF: 1,781 square feet, more or less.
PART2
COMMENCING at Point "A"; thence North 55°13'45" West 18.08 feet to a (different and distinct) line parallel with said Northerly right-of-way line of the Bayshore Freeway (U.S. Route 101) and the POINT OF BEGINNING of this description ; thence North 72°57'16" West 93.73 feet along said parallel; thence North 00°50'11 " East 48.23 feet; thence South 69°05'11" East 95.82 feet; thence South 00°50'11" West 41 .50 feet to the POINT OF BEGINNING .
PART 2 CONTAINING AN AREA OF: 4,038 square feet, more or less.
CONTAINING IN TOTAL AN AREA OF: 5,819 square feet, more or less.
THE BASIS OF BEARINGS AND MONUMENT S SHOWN ON
PAGE 2 ARE ATTACHED HERETO AND MADE A PART HEREOF .
PREPARED DIRECTLY BY: JAMES J. COUTS , PLS 8360
THIS DESCRIPTION IS NOT INTENDED FOR USE IN THE CONVEYANCE OF LAND IN VIOLATION OF THE SUBDIVISION MAP ACT OF THE STATE OF CALIFORNIA.
HHUICAl
COUUlTAIT~ INC
SALT LAKE CITY, UTAH
SCALE: NIA
SAN TOMAS AQUINO CREEK
APN: 104-40-008 & 104-39-022
BA YSHORE FREEWAY
SANTA CLARA, CALIFORNIA 95054
SIGNED DIGITALLY
UNDER THE DIRECTION
OF THE SURVEYOR
SILICON
VALLEY
POWER.
CITY OF SANTA CLARA
SHEET: 1 of 2
EXHIBIT B – Plat
DOCUMENT NO.: 2019-11.2, 2019-41.1, 2019-104.1
EXHIBIT "A"
OVERHEAD ELECTRIC AERIAL EASEMENT ACROSS :
SAN TOMAS AQUINO CREEK
BA YSHORE FREEWAY
NOTTO SCALE SANTA CLARA, CALIFORNIA 95054
104-40-008 & 1 04-39-022
I TOTAL EASEMENT AREA: 5,819 SQ. FT.±
POB (PA
\---- -
N 55°13'45" W 18.08'
POINT "A" POC (PART 2)
I
I POB (PART 1)
I
I f 0[l:!J'iJ'~l1 ©@~lP@~'il'O@[l:!J
I
I I &,[p[l:!Jg '\] @~o~o@)~'i]
I I
I
I
,'b}[p[l:!Jg 'il @~□ ~@ □ @'il ®
I
I
I 1fi
I 111
I
I
I ~Ill I 0 0 s :
I z9
I Si
I 9°i
~ I • I
g ,
-I Ill -I -i •• z I
I :EZ oa. l
I 0~ 1-<I SCALE
PART 1
POB (PART
N 55°13'45"
-..IV 110
3 18 08' (TIE)
--------POINT " ' POB (PART 1)
_I ---
POC (PART 2) N 00°50'11" E 15.00' (TIE
LEGEND
THIS DRA V>!NG HAS
BEEN SEALED AND
SIGNED DIG/TALLY
UNDER THE DIRECTION
OF THE SURVEYOR .
r7 / / / / / / l TOTAL EASEMENT AREA = 5,819 SQ. FT. ± - '~"Ito -- - --- --ROADWAY PLATTED CENTERLINE li.s.i//t-!lf~
---P--- POWERLINE REFERENCE LI NE fi)"t~t
FOUND SURVEY MONUMENT
--
SVP REF: SC __
Line#
L1
L2
L3
L4
L5
L6
L7
LB
.......
Line Table
Length Direction
41.86' N72' 01' 49"W
46.11' N00' 50' 11 "E
42.90' S67' 57' 27"E
42.92' S00' 50' 11 'W
93.73' N72' 57' 16"W
48.23' NOD' 50' 11"E
95.82' S69' 05' 11 "E
41.50' SOD' 50' 11 "W
CL MON
JULIETTE LANE &
LAURELWOOD RD
THIS DRAVv1NG SHOULD BE USED ONLY AS A REPRESENTATION OF THE LOCATION OF THE EASEMENT BEING CONVEYED. THE EXACT LOCATION OF ALL STRUCTURES.
LINES AND APP URTENANCES IS SUBJECT TO CHANGE WITHIN THE BOUNDAR IES OF THE RIGHT OF WAY HEREIN GRANTED HHUICAl comuua m
SALT LAKE CITY, UTAH
SCALE: 1" = 250'
SAN TOMAS AQUINO CREEK
APN: 104-40-008 & 104-39-022
BA YSHORE FREEWAY
SANTA CLARA, CALIFORNIA 95054
, SILICON
VALLEY
PowER.
CITY OF SANTA CLARA
SHEET: 2 of 2
Stat
e of __________________________
County of ________________________
On ____________________________ before me,
______________________________a Notary Public, personally appeared ______________________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I cer
tify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature: ____________________________
Name: _______________________________
(typed or printed) (Seal)
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
DOCUMENT NO.: 2019-11.2, 2019-41.1, 2019-104.1
State o
f __________________________
County of ________________________
On ____________________________ before me,
______________________________a Notary Public, personally appeared ______________________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I cer
tify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature: ____________________________
Name: _______________________________
(typed or printed) (Seal)
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
DOCUMENT NO.: 2019-11.2, 2019-41.1, 2019-104.1
City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
24-869 Agenda Date: 9/10/2024
REPORT TO COUNCIL
SUBJECT
Authorize the City Manager to execute a Side Letter Agreement between the City of Santa Clara and Unclassified Miscellaneous Management Employees (Unit 9) Regarding Healthcare Benefits
COUNCIL PILLAR
Enhance Community Engagement and Transparency
BACKGROUND
The Unclassified Miscellaneous Management Employees of the City of Santa Clara (hereafter, “Unit 9”) Memorandum of Understanding (hereafter, “MOU”) expires on December 31, 2024.
The City and Unit 9 began negotiations on a successor MOU in February 2024 and met approximately nine (9) times. Since the MOU is expiring and in an effort to continue successful negotiations on a successor MOU, the parties agreed to a Side Letter to expand the health insurance to align with eight (8) other bargaining units in the City. Additionally, updating the health insurance benefit will qualify the City to be a bona fide benefits plan. On or about September 3, 2024, Unit 9 notified the City that the Side Letter was ratified by Unit 9 membership.
DISCUSSION
The recommended action authorizes the City Manager to execute a Side Letter Memorandum of Understanding with a term of December 31, 2024, that incorporates the terms to extend the employer contribution for employee plus family coverage effective January 1, 2025. Currently, the maximum coverage is set at the employee plus one level.
Effective January 1, 2025, the City will pay 100% of the premium of the lowest-priced Kaiser (Region 1) plan for employees in Unit 9 enrolled at the Employee Only and Employee Plus One levels, and 90% of the premium of the lowest-priced Kaiser (Region 1) plan for employees in Unit 9 enrolled in the Employee Plus Two or More level. Employees who select a plan whose premium exceeds the City contribution described above will be responsible for the difference. Employees will not receive any portion of the City’s contribution as cash or any other taxable benefit.
Current employees hired on or before December 31, 2023, who choose not to enroll in a City health plan and meets the requirements set forth in the MOU shall continue to receive a cash-in-lieu amount equal to $946.86/month, while employees hired or rehired on or after January 1, 2024, shall receive a cash-in-lieu amount of $250/month. The cash in-lieu amounts are unchanged.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a City of Santa Clara Printed on 9/6/2024Page 1 of 2
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24-869 Agenda Date: 9/10/2024
Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental organizational or administrative activity that will not result in direct or indirect changes in the environment.
FISCAL IMPACT
The City regularly budgets the total compensation cost for its current employees and integrates known and projected cost increases from MOUs in the City’s annual budget. The ten-year forecast also incorporates the projected labor costs. The costs of this MOU are within budget authority approved by the City Council through the negotiation process.
The costs associated with the changes to healthcare cannot be determined at this time as the City cannot predict enrollment behavior, especially with the change to the City paying 90% of the lowest priced Kaiser (Region 1) premium for employees who enroll in Employee Plus Two or More level.
However, if the enrollment levels remained status quo for plan year 2025, the City is anticipating an approximate $163,000 increase.
The costs in FY 2024/25 are expected to be absorbed within existing departmental budgets and the ongoing costs will be incorporated into the FY 2025/26 and FY 2026/27 Biennial Operating Budget.
COORDINATION
This report has been coordinated with the Finance Department and City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email [email protected] <
mailto:[email protected]>, or at the public
information desk at any City of Santa Clara public library.
RECOMMENDATION
1. Authorize the Office of the City Manager to execute a Side Letter Agreement between the City of Santa Clara and Unclassified Miscellaneous Management Employees (Unit 9) in the form presented, extending the employer contribution for medical insurance premiums to 90% of the lowest Kaiser rate for employee plus family coverage, effective January 1, 2025 Reviewed by: Aracely Azevedo, Director of Human Resources Approved by: Jovan D. Grogan, City Manager
ATTACHMENTS
1. Side Letter - Unit 9 Health Insurance
City of Santa Clara Printed on 9/6/2024Page 2 of 2
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SIDE LETTER AGREEMENT
BETWEEN
THE CITY OF SANTA CLARA
AND
UNCLASSIFIED MISCAELANOUS MANAGEMENT EMPLOYEES (UNIT 9) AMENDMENT TO DECEMBER 15, 2019 - DECEMBER 31, 2024
MEMORANDUM OF UNDERSTANDING (MOU)
The City and the Miscellaneous Unclassified Management Employees (hereafter, "Unit 9") agree to amend the current Memorandum of Understanding (hereafter, "MOU"), with a term of December 15, 2019 - December 31, 2024, as follows:
(A) Health Insurance
7. HEALTH INSURANCE PREMIUMS
A For employees 'Nho enroll in a City offered health plan and whose benefits eKceed the total of the City's Health Flex Contribution, /\dditional Health Flex Contribution, and,ior Regular Flex Contribution applicable to tho employee and as described below, the balance of tho benefits shall be paid by a salary deduction from tho pay of the individual empleyee .
The City currently contracts with the California Public Employees' Retirement System (CalPERS) for the purpose of providing medical insurance benefits for active employees and their eligible dependents, eligible retired employees, and eligible survivors of retired employees. Eligibility of a dependent to participate in this program shall be in accordance with the terms of the Public Employees ' Medical and Hospital Care Act (PEMHCA). Eligibility of retired employees and survivors of retired employees to participate in this program shall be in accordance with those provisions of the PEMHCA providing for participation by "annuitants." The City's employer contribution towards medical insurance benefits for each eligible employee shall be the minimum contribution amount required by Government Code Section 22892 . Contributions provided under this Section are required only to the extent mandated by the PEMHCA.
Because CalPERS may change carriers and plans, the City shall not be required to provide a specific insurance coverage and shall only be required to provide those benefits as described in this Section so long as the City contracts for benefits with CalPERS for medical insurance benefits.
Pursuant to the PEMHCA, the City will provide each eligible annuitant. as defined by the PEMHCA, with an employer contribution towards medical insurance benefits that is equal to the PEMHCA minimum contribution provided to an active employee under this Section.
Unit 9 Side Letter Agreement - Health Insurance
September 4, 2024
8. Definitions. For purp6ses of this section:
1) "Full-time employee" refers to an employee whose regular schedule is at least 30 hours per week.
2) "Full-time position" refers to a position in a classification, whether vacant or not vacant, whose regular schedule is at least 30 hours per week.
B. Health flex Contribution
1) The City offeFS full time employees a Health flex Contribution to put toward the payment of a City offered health plan. The City shall modify tRe HealtR flex Contribution each calendar year using tho Rate of Pay Safe Harbor (basod on tho lowest base pay of any fulltimo position covered by this MOU) to ensure the City's offered co1•1erage is "affordable." The City contributes the statutorily required minimum contribution under the Public Employees Medical and Hospital Garo /\ct (PEMHCA) as determined by CalPERS in each calendar year. It is un_derstood and agreed that the Health Flex Contribution described in this paragraph shall be equal to or exceed the City's statutorily required minimum PEMHCA contribution.-4 2) Employees may not receive all or any portion of the Health flex Contribution as cash or any other taxable benefit, and must apply the Health f lox Contribution to City offered health benefits. Employees who do not enroll in City offered health benefits 'Nill not recoi1Je any of tho Health flex Contributions.
C. Additional Health Flex Contribution
1) full time employees who enroll in a City health plan for which tho premium amount is more than $946.86/month shall receive an Additional Health flex Contribution in tho amounts described in this section. 2) Employees may not receive all or any portion of the Additional Health flex Contribution as cash or any other taxable benefit, and must apply the Additional Health flex Contribution to City offered health benefits.
Employees who do not enroll in City offered health benefits will not receive any of the Additional Health Flex Contributions.
3) Effecti'l e January 1, 2020, full time employees who enroll In a City health plan for which tho premium amount is more than $946.86/month shall receive an Additional Health flex Contribution. The Additional Health flex Contribution, when added to tho Health Flex Contribution described in the prier section and the Regular flex Contribution described herein, shall not exceed $200 per month over the Kaiser employee only premium amount for the applioable year. ,.
~A&an example, for 2020, the PEMHCA minimum is approximately $139tmenth and the Health Flex Contribution is $139.00/month, which includes the PEMHCA minimum of $139/month.
Unit 9 Side Letter Agreement- Health Insurance
September 4, 2024
4) effective January 1, 2023, full timo employees:
(a) \fl/ho enroll in a City health plan for employee Only co'.1orago for which tho premium amount is more than $940.86/month shall receive an .l\dditional Health Flex Contribution to be put tO'."iards the premium amount. The City wm provide an Additional Health Flex Contribution amount that, when added to tho Health Flex Contribution described abo•.ie and the Regular Flex Contribution described heroin, shall not exceed $200 per month over the Kaiser employee only premium amount for the applicable year. (b) Who enroll in a City health plan for employoo Plus Ono coverage or employee Plus Family covorago for which the premium amount is more than $940.80/month shall receive an ,ti.dditional Health Flex Contribution to bo put tewards the premium amount. The l\daitional Health Flex ContributieR,WheR added to the Health Flex Contribution described aboYe and the Regular Flm< Contribution desoribed herein, shall not exceed an amount equal to 100% of the Kaiser employee Plus Ono rate for the applicable year.
D. Regular Flex Contribution
1) Tho City will pro1.iide full time employees a Regular Flex Contribution equal to $946.g6 less the Health Flex Contribution . a.Employees may use tho Regular Flex Contribution to pay for health benefits offered under the City's Section 125 plan or may opt to rocoiYe any or all of the Regular Flex Contribution as taxable cash . An employee 1nill receive a Regular Flex Contribution 1,•,«hether or not !=le/she enrolls in City offered health benefits and notwithstanding the pro•Jisions of Seotion 7£ below.
2) employees hired or rehired on or after January 1, 2023, who choose not to enroll in a City health plan are not eligible for a Regular Flex Contribution . ~As an example. for 2020, tho Additional Health Flex Contribution is approximately $23.70.tmonth to those if:ldividuals since $200 over the Kaiser employee only premium amount in 2020 is approximately ~
Unit 9 Side Letter Agreement - Health Insurance
September 4, 2024
C. Health Insurance Contributions
1) Effective January 1, 2025, the City shall make a monthly contribution to the City's flexible benefit plan which, taken together with the mandatory PEMHCA contribution, equals one hundred percent (100%) of'the premium for the lowest priced Kaiser (Region 1) plan for unit members enrolled at the employee and employee plus one levels; and ninety percent (90%) of the premium for the lowest priced Kaiser (Region 1) plan for unit members enrolled at the employee plus two or more level. If the employee enrolls in a plan whose premium exceeds the City contribution, the employee shall pay the difference between the total cost of the selected plan and the City's contribution via salary deduction. In no event shall the City's contributions pursuant to the provisions of this Section, and any statutorily required minimum contribution under the PEMHCA as determined by Ca!PERS in each calendar year, exceed one hundred percent (100%} of the premium cost of the lowest price Kaiser (Region 1) plan at the employee and employee plus one level, or ninety percent (90%) of the premium for the lowest priced Kaiser (Region 1) plan at the employee plus two or more level, in which the employee is enrolled.
There shall be no option to receive all or any portion of the City's Contribution as cash or any other taxable benefit.
€D . Cash In Lieu
1) Full-time employees hired before January 1, 2023, who choose not to enroll in a City health plan for a plan year, and meet the requirements set forth below shall receive a Cash in Lieu amount per month for that plan year equal to $946.86 minus tho Regular Flex Contribution as calculated each calendar year. +_A full time employee hired before January 1, 2023, who enrolls in coverage for a plan year, shall be treated in accordance with Sections 7.A-D and will not receive Cash in Lieu for that plan year.
2) Full-time employees hired or rehired on or after January 1, 2023, who choose not to enroll in a City health plan for a plan year, and meet the requirements set forth below, shall receive a Cash in Lieu amount for that plan year equal to $250/month. A full-time employee hired on or after January 1, 2023, who enrolls in coverage for a plan year, shall be treated in accordance with Sections 7.A-D and will not receive Cash in Lieu for that plan year.
3) For employees whose regular work schedules are 30 or more hours per week but less than 40 hours per week, the Cash in Lieu amount shall be prorated as described in Section 7.F below.
4) Requirements: In order to receive Cash in Lieu of health coverage, an employee must sign a form attesting that the employee and the employee's Tax Family have the Alternative Required Coverage for the Opt Out Period. (a) Tax Family means all individuals for whom the employee intends to claim a personal exemption deduction for the taxable year or years that begin or end in or with the City's plan year to which the opt out applies. (b) Alternative Required Coverage required means minimum essential coverage through another source (other than coverage in the individual market, whether or not obtained through Covered California).
Unit 9 Side Letter Agreement - Health Insurance
September 4, 2024
(c) Opt Out Period means the plan year to which the opt out arrangement applies.
(d) An employee must provide the attestation every plan year and proof of Alternati ve Required Coverage every plan year at open enrollment or within 30 days after the start of the plan year for each plan year the employee would like to receive Cash in Lieu.
(e) The Cash in Lieu payment cannot be made and the City will not in fact make payment if the City knows or has reason to know that the employee or a Tax Family member does not have such altornati•;o Alternative Required G0\•oragoCoverage, or if the conditions in this paragraph are not otherwise satisfied.
(f) An employee who opts out of City-offered health benefits, but cannot provide the attestation, will not receive the Cash in Lieu contribution described in this subsection .
~~ - Flexible Spending Account (IRS Section 125 Plan)
The City has established a Flexible Spending Account benefit (IRS Section 125 Plan) for employees, which provides accounts in which employees may contribute pre-tax dollars for dependent care and un-reimbursed medical expenses.
This Plan will follow the regulations outlined by the Internal Revenue Service. Detailed information will be available in the Summary Plan Document. This Plan is voluntary and participating employees will make pre-tax salary reduction elections to fund the plan.
f G. Proration of Benefits+
For employees who may be eligible for benefits but work less than 40 hours per week, benefits shall be prorated based on the employee's full-time equivalent (FTE) level.
Effective January 1. 2025. the Health Flex Contribution and Regular Flex Contribution shall no longer be in effect.
3-.1\s an example , for 2020 , the Regular Flex Contribl:ltieA-fer. employees who are regular ly scheduled to work 40 hours per week is approximately $807.86/month . 4-/\s an example , for 2020 , the Cash in Lieu amount is approximately $130.00,tmonth for employees who are regularly schedu led to work 40 hol:lf&-POr-week-, Unit 9 Side Letter Agreement - Health Insurance
September 4, 2024
(B) This Side Letter Agreement shall not establish precedent for future agreements and shall not be construed or implied to obligate the City or Unit 9 to enter into any similar agreements in the future.
(C) This Side Letter Agreement that amends the current MOU shall become effective after it is adopted by the City and signed by all parties below.
FOR THE CITY:
~ q/•1/-i~
- an o ' Date
;:nagfil
Charles
Sakai
Charles Sakai
Digitally signed by
Charles Sakal
Date: 2024.09 .04
10:06:13 -07'00'
City of Santa Clara
Date
FOR UNIT9:
Ch • t h Digitally signed by
rlS Op 9 ChristopherJackson
r Jackson Date: 2024.09.04
12:52:58 -07'00'
Chris Jackson
President, Unit 9
Date
City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
24-823 Agenda Date: 9/10/2024
REPORT TO STADIUM AUTHORITY BOARD
SUBJECT
Action on Stadium Authority Bills and Claims for the Month of July 2024
BOARD PILLARS
Enhance Community Engagement and Transparency
Ensure Compliance with Measure J and Manage Levi’s Stadium
BACKGROUND
Disbursements made by the Stadium Authority are based on invoices submitted for payment. Prior to payment, staff reviews all disbursement documents to ensure that the invoiced goods or services have been provided.
The Bills and Claims listing represents the cash disbursements required of normal and usual operations during July 2024. Budget control is set by the Stadium Authority Board through the budget adoption process.
DISCUSSION
At its March 12, 2024 meeting, the Stadium Authority Board adopted the Santa Clara Stadium Authority Fiscal Year 2024-25 Operating, Debt Service, and Capital Budget which runs from April 1, 2024 to March 31, 2025. Significant expenditures (greater than $5,000) paid in July 2024 include:
· Payment totaling $3,654,342.53 to Forty Niners Stadium Management Company, LLC for July 2024 Stadium Manager Expenses, inclusive of Shared Stadium Expenses · Payment totaling $131,666.22 to Blue’s Roofing Co. for CapEx Project - General Areas / Coatings Main Deck
· Payment totaling $43,325.70 to Giant Construction, Inc. for CapEx Project - Women's Locker Room
· Payment totaling $5,108.09 to InTWO, Inc. for Financial Management System Monthly Services (June 2024)
· Payment totaling $98,556.75 to KPMG LLP for Audit Services · Payments totaling $82,582.65 for Legal Services (May 2024) Names of law firms have been redacted from the Bills and Claims report. The Supreme Court of California in Los Angeles County Board of Supervisors v. Superior Court, (2016) 2 Cal.5th 282, held that invoices specifying the amounts billed by a law firm to a client fall within the scope of attorney- client privilege while the matters are active. In accordance with the Supreme Court’s ruling, the names of law firms retained by the Stadium Authority, and the specific amounts billed by each, have been redacted from the public report to maintain the confidentiality of billing records for specific legal services. The aggregate amount spent on legal services in the subject time period has been City of Santa Clara Printed on 9/6/2024Page 1 of 2
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24-823 Agenda Date: 9/10/2024
provided.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to section 15378(b)(4) of Title 14 of the California Code of Regulations in that it is a fiscal activity that does not involve any commitment to any specific project which may result in a potential significant impact on the environment.
FISCAL IMPACT
The fiscal impact to the Stadium Authority is $4,015,581.94.
COORDINATION
This report has been coordinated with the Executive Director and Stadium Authority Counsel’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email [email protected]
or at the public information desk at any
City of Santa Clara public library.
RECOMMENDATION
Approve the list of Stadium Authority Bills and Claims for July 2024.
Reviewed by: Kenn Lee, Treasurer
Approved by: Jovan D. Grogan, Executive Director
ATTACHMENTS
1. July 2024 SCSA Bills and Claims
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Payment Date Vendor Invoice No. Description Fund Amount 7/1/2024 Forty Niners Stadium Management Co, LLC SLS-24555 July 2024 Stadium Manager Expenses - Security Operating 133,473.00$ 7/1/2024 Forty Niners Stadium Management Co, LLC SLS-24555 July 2024 Stadium Manager Expenses - Stadium Ops Operating 281,995.00 7/1/2024 Forty Niners Stadium Management Co, LLC SLS-24555 July 2024 Stadium Manager Expenses - Engineering Operating 327,933.00 7/1/2024 Forty Niners Stadium Management Co, LLC SLS-24555 July 2024 Stadium Manager Expenses - Guest Services Operating 51,714.00 7/1/2024 Forty Niners Stadium Management Co, LLC SLS-24555 July 2024 Stadium Manager Expenses - Groundskeeping Operating 26,374.00 7/1/2024 Forty Niners Stadium Management Co, LLC SLS-24555 July 2024 Stadium Manager Expenses - SBL Sales & Service Operating 203,970.46 7/1/2024 Forty Niners Stadium Management Co, LLC SLS-24555 July 2024 Stadium Manager Expenses - Insurance Operating 2,257,756.16 7/1/2024 Forty Niners Stadium Management Co, LLC SLS-24555 July 2024 Stadium Manager Expenses - Utilities Operating 247,980.35 7/1/2024 Forty Niners Stadium Management Co, LLC SLS-24555 July 2024 Stadium Manager Expenses - StadCo Tenant Improvements Operating 60,831.81 7/1/2024 Forty Niners Stadium Management Co, LLC SLS-24555 July 2024 Stadium Manager Expenses - Other G&A Operating 62,314.75 3,654,342.53$
7/26/2024 Blue's Roofing Co. 31277 CapEx Project - General Areas / Coatings Main Deck CapEx 131,666.22 7/26/2024 Giant Construction, Inc. Application 3 CapEx Project - Women's Locker Room CapEx 43,325.70 7/26/2024 InTWO, Inc. 40495 Financial Management System Monthly Services (June 2024) Operating 350.52 7/26/2024 InTWO, Inc. 40496 Financial Management System Monthly Services (June 2024) Operating 4,757.57 5,108.09
7/5/2024 KPMG LLP 8005234478 Audit Services Operating 7,832.00 7/5/2024 KPMG LLP 8005388321 Audit Services Operating 90,724.75 98,556.75
7/26/2024 1378695 Legal Services (May 2024) Operating 82,582.65 July 2024 Total 4,015,581.94$
Santa Clara Stadium Authority
Bills and Claims
Expenses Paid by Wire or ACH Transfer
For the Month of July 2024
City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
24-761 Agenda Date: 9/10/2024
REPORT TO STADIUM AUTHORITY BOARD
SUBJECT
Action on the Santa Clara Stadium Authority Financial Status Report for Quarter and Fiscal Year Ending March 31, 2024 and Related Budget Amendments
BOARD PILLARS
Ensure Compliance with Measure J and Manage Levi’s® Stadium Enhance Community Engagement and Transparency
BACKGROUND
In Fiscal Year 2014/15 the Stadium Authority Board (Board) requested that staff prepare quarterly Santa Clara Stadium Authority (Stadium Authority) Financial Status Reports. These reports provide an update on the events held at Levi’s
® Stadium, Stadium Authority finances, and the impact of Stadium Authority activity on the City of Santa Clara (City).
This report provides information covering the Stadium Authority’s fourth quarter of the 2023/24 fiscal year (FY) which runs from January 1, 2024 - March 31, 2024.
The Adopted Stadium Authority Budget incorporates the estimated revenues and expenses for all Stadium Authority funds. As a part of the Stadium Authority policy to ensure adherence to the budget, a budget/encumbrance control system is used to ensure proper budgetary control. Budgetary appropriation control for expenditures are maintained at the fund level. The attached Financial Status Report provides the budget to actual revenue and expense summaries for the operating, debt service, and capital funds. Analysis of the financial activity through the fiscal year measures the adherence to the budget and allows the Stadium Authority to monitor and project revenues and expenses. Any significant variances are explained in the report.
DISCUSSION
The attached financial status report provides information covering the Stadium Authority’s fourth quarter (January 1, 2024 - March 31, 2024) of FY 2023/24. The report summarizes National Football League (NFL) and Non-NFL event activity at Levi’s
® Stadium and describes the financial impact of
these events on the Stadium Authority and City since FY 2014/15. The report also provides the budget to actual revenue and expense summaries for the operating, debt service, and capital funds.
Analysis of the financial activity through the fiscal year measures the adherence to the budget and allows the Stadium Authority to monitor and project revenues and expenses. Any significant variances are explained in the report.
NFL Event Revenue and Expenses
There were twelve NFL games held through the fourth quarter of FY 2023/24. Levi’s® Stadium hosted th th
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two pre-season NFL games of the 2023 season on August 19th and 25th, eight regular NFL season games and two NFL play-off games in the 2023 season. This resulted in $12.7 million in NFL ticket surcharge revenues for the Stadium Authority and $250,000 of Senior and Youth Program Fees for the City. Public safety costs for NFL games totaled an estimated $6.4 million which will be fully reimbursed to the City by Forty Niners Stadium Management Company LLC (ManCo).
Non-NFL Event Revenue and Expenses
There were eight ticketed Non-NFL events and 53 special events which are detailed in the report.
The eight ticketed Non-NFL events generated an average net profit of $716,000 per event. Table 1 below summarizes revenues and expenditures for the eight ticketed events.
Table 1
In Millions $
Ticketed Event Revenue Expense Net
Concert 1 2.8$ 1.1$ 1.6$
Concert 2 2.6 1.7 1.0
Concert 3 2.5 1.8 0.8
Concert 4 2.5 1.5 1.0
Concert 5 1.8 0.7 1.1
Sporting Event 1 1.7 1.1 0.6 Sporting Event 2 0.8 0.5 0.3 Sporting Event 3 0.0 0.6 (0.6) Total Ticketed Non-NFL Net Revenue to Date 14.7$ 9.0$ 5.7$ Levi's ® Stadium
Ticketed Non-NFL Events Revenue and Expenditure Summary As of March 31, 2024
The Non-NFL event ticket sales generated $1.6 million in ticket surcharge revenue, half of which will fund the discretionary fund. Public safety costs for these events totaled an estimated $3.5 million which will be fully reimbursed to the City by ManCo on behalf of the Stadium Authority.
When combining ticketed and non-ticketed Non-NFL revenues to date, Table 2 below shows approximately $8.3 million in net revenue (excluding surcharge revenue) through the end of the fourth quarter. This is a decrease of $542,000 from the prior year Non-NFL event net revenue of $8.8 million.
Table 2
Levi’s Stadium
Net Revenue for Non-NFL Events
by Event Type
Historical Year-to-Date Through March 31, 2024
EVENT TYPE
No. of
Events
Net
Revenue
No. of
Events
Net
Revenue
No. of
Events
Net
Revenue
Ticketed Events
Concerts 0 -$ 6 $ 6,097,521 5 $ 5,413,125 Sporting events:
Soccer 0 - 1 423,573 3 318,096
Net Revenue from Ticketed Events 0 -$ 7 6,521,094 $ 8 5,731,221$ 0 -$ 69 2,789,761 $ 53 2,106,060$
Other Operating Income(1) -$ 900,736$ 2,245,051$ Other Operating Expenses(2) -$ (1,402,424)$ (1,815,647)$ Total Net Revenue from Non-NFL Events (3)
0 $ - 76 8,809,167 $ 61 8,266,685$
2021/22 2022/23 2023/24
Net Revenue from Special Events (weddings,
corporate events, etc.)
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24-761 Agenda Date: 9/10/2024
EVENT TYPE
No. of
Events
Net
Revenue
No. of
Events
Net
Revenue
No. of
Events
Net
Revenue
Ticketed Events
Concerts 0 -$ 6 $ 6,097,521 5 $ 5,413,125 Sporting events:
Soccer 0 - 1 423,573 3 318,096
Net Revenue from Ticketed Events 0 -$ 7 6,521,094 $ 8 5,731,221$ 0 -$ 69 2,789,761 $ 53 2,106,060$
Other Operating Income(1) -$ 900,736$ 2,245,051$ Other Operating Expenses(2) -$ (1,402,424)$ (1,815,647)$ Total Net Revenue from Non-NFL Events (3)
0 $ - 76 8,809,167 $ 61 8,266,685$
2021/22 2022/23 2023/24
Net Revenue from Special Events (weddings,
corporate events, etc.)
(1) Other Operating Income are income not attributable to a specific event. Examples are interest income and reimbursements unrelated to a specific event.
(2) Other Operating Expenses are expenses not attributable to a specific event. Examples are event selling expenses, administrative expenses and miscellaneous costs.
(3) Net Revenue from Non-NFL Events does not include Non-NFL Event Ticket Surcharge of $1.6m.
Stadium Builder Licenses (SBLs)
SBLs account for 19% of the Stadium Authority’s annual budgeted revenue in FY 2023/24. There is a total of 64,993 currently active SBLs which is 98.3% of the 66,136 total sellable SBL seats. Through the fourth quarter, since inception, the value of the active SBLs amount to $555.0 million of which $529.4 million has already been collected.
Stadium Authority Budgets
The detailed analysis of Stadium Authority budget to actual financials is provided in the attached Financial Status Reports. In summary, total operating revenues were $76.5 million representing 118% of the overall budget for revenues and total operating expenses were $21.0 million or 89% of the budget. The debt service fund was able to pay down $16.6 million in debt, bringing total Stadium Authority debt down to $228.7 million. Capital expenses were $7.0 million representing 33% of the overall Capital Expense (CapEx) budget.
FY 2024/25 Stadium Authority Budget Adjustments
From time to time, budget adjustments may be necessary to align revenues or expenditures to actual or unexpected activity during the course of a fiscal year, known after the adoption of the Stadium Authority Budget. On March 12, 2024, the Stadium Authority Board adopted the Santa Clara Stadium Authority FY 2024/25 Operating, Debt Service, and Capital Budget. The following technical budget adjustments are recommended to true up fund balances to align the balances with FY 2023/24 actual performance:
Operating Budget:
1) Beginning Fund Balance / Ending Fund Balance Adjustment - The FY 2023/24 year-end actual was completed and fund balance adjustments reconciliation are necessary adjustments to the FY 2024/25 beginning and ending fund balances. Because the adoption City of Santa Clara Printed on 9/6/2024Page 3 of 5
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24-761 Agenda Date: 9/10/2024
of budget is conducted in March, estimates are used to determine the beginning and ending fund balances, including reserve amounts.
Debt Service Budget:
1) Beginning Fund Balance / Ending Fund Balance Adjustment - The FY 2023/24 year-end actual was completed and fund balance adjustments reconciliation are necessary adjustments to the FY 2024/25 beginning and ending fund balances. Because the adoption of budget is conducted in March, estimates are used to determine the beginning and ending fund balances, including reserve amounts.
CapEx Budget:
1) Beginning Fund Balance / Ending Fund Balance Adjustment - The FY 2023/24 year-end actual was completed and fund balance adjustments reconciliation are necessary adjustments to the FY 2024/25 beginning and ending fund balances. Because the adoption of budget is conducted in March, estimates are used to determine the beginning and ending fund balances, including reserve amounts.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is an administrative activity that will not result in direct or indirect physical changes in the environment.
FISCAL IMPACT
The Stadium Authority FY 2023/24 budget appropriation is maintained at the fund level. At the end of FY 2023/24, spend was within budget as there were sufficient savings in the Operating, Debt Service and Capital Budget to cover any overages within each fund.
From time to time, adjustments to the budget are required to reflect new information and align budgets with actual revenues and expenses. Attachment 2 includes adjustments in the FY 2024/25 Operating Budget to adjust the Beginning/Ending Fund Balance to true up fund balances based on actual FY 2023/24 performance. In the FY 2024/25 Debt Service Budget, a technical adjustment to true up the Beginning/Ending Fund Balance based on actual FY 2023/24 performance is recommended. In the FY 2024/25 CapEx Budget a technical adjustment to true up the Beginning/Ending Fund Balance based on actual FY 2023/24 performance is recommended.
COORDINATION
This report was coordinated with the ManCo per section 4.6 of the Management Agreement as well as the Stadium Authority Counsel’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at City of Santa Clara Printed on 9/6/2024Page 4 of 5
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24-761 Agenda Date: 9/10/2024
(408) 615-2220, email [email protected] <mailto:[email protected]> or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
1. Note and file the Santa Clara Stadium Authority Financial Status Report for the Quarter and Fiscal Year Ending March 31, 2024; and
2. Approve the FY 2024/25 Budget Amendments in the Operating Budget in the amount of $3,864,901, Debt Service Budget in the amount of $126,179 and Capital Expense Budget in the amount of $78,024 to make technical actions to true up fund balances based on actual FY 2023/24 performance.
Reviewed by: Kenn Lee, Treasurer
Approved by: Jovan D. Grogan, Executive Director
ATTACHMENTS
1. SCSA Financial Status Report for the Quarter and Fiscal Year Ending March 31, 2024
2. FY 2024/25 Budget Amendments
City of Santa Clara Printed on 9/6/2024Page 5 of 5
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SCSA
Santa Clara Stadium Authority
SANTA CLARA
STADIUM AUTHORITY
FINANCIAL STATUS REPORT
Quarter and Fiscal Year Ending
March 31, 2024
September 10, 2024
=='=' WELCOME TO '==
LEVI ' S ® STADIUM
.L
1 Table of Contents
Introduction ................................................................................................................................... 2 NFL Events ................................................................................................................................... 3 Non-NFL Events ........................................................................................................................... 6 Discretionary Fund ...................................................................................................................... 12 Stadium Builder Licenses ........................................................................................................... 12 Santa Clara Stadium Authority Budget Status Reports .............................................................. 15 Operating Budget .................................................................................................................... 15 Debt Service Budget ............................................................................................................... 20 Capital Improvement Project Budget ....................................................................................... 24 City of Santa Clara Net General Fund Impact ............................................................................ 28 Public Safety and Administrative Cost Reimbursement .......................................................... 28 Rents and Senior and Youth Fee ............................................................................................ 29 Other Revenue Impacts .......................................................................................................... 29 Glossary ...................................................................................................................................... 30
2 Introduction
This Santa Clara Stadium Authority (Stadium Authority) Financial Status Report provides information covering the fourth quarter of the Stadium Authority’s 2023/24 fiscal year (FY) which ended on March 31, 2024. Comparative data from prior fiscal years is also included.
In addition to these quarterl y reports, the Stadium Author ity produces annual financial statements. The FY 2023/24 financial statements were audit ed by an external audit firm and presented to the Stadium Authority’s Audit Committee (Audit Committee) on September 3, 2024. They will be submitted to the Audit Committee on September 17, 2024 for its acceptance and recommendation to the Stadium Authority Board (Board) to note and file the financial statements on Sept ember 24, 2024. The financial statements are published on the Stadium Authority’s website.
The Stadium Authority also pr epares a detailed budget pr ior to the beginning of each fiscal year. The FY 2023/24 budget was adopted by the Board on March 7, 2023.
Stadium Authority finances are structured so that the City of Santa Clara (City) is not liable for the debts or obligations of the Stadium Authority. All services provided by the City, including administrative and public safety , to the Forty Niners Stadium Management Company, LLC (ManCo) or the Stadium Authority are fully reimbursed with Stadium Authority funds.
Methodology
Information provided in this report was bas ed in part on documentation submitted by ManCo. Specifically, National Football Leagu e (NFL) and Non-NFL event statistics and financial information relating to ManCo expens es are provided by ManCo. Stadium Authority staff has access to select financ ial information submitted by ManCo provided through the Stadium Authority’s Financia l Management System and event reports received for Non-NFL events. These reports are received 45 days after each event for events with attendance greater than 25,000. More detailed documents are received within 90 days after the close of the quarter. For all other financial information, a full detailed review and/or audit of source documentati on has not been complet ed by the Stadium Authority for this report.
The information provided reflects the best known and available at the time of the writing of this report and is subject to further revision and review. Revisions may occur based on the timing of revenue and expenditure activity for events in this quarter that continue beyond the timing of this report. Consequently, the Board’s notation and filing of this report should not be considered an approval of the accuracy of the information in the report. 3 NFL Events
This section provides year-to-date and comparative data for NFL games categorized as pre-season and regular season games.
The San Francisco Forty-Niners (49ers) played a total of twelve NFL games (two pre- season games, eight regular season games and two playoff games) at Levi’s® Stadium through the quarter ending March 31, 2024. There was a total of 828,573 tickets sold to these NFL games, an average of 69,048 per gam e. This is down by 535 or 1% when compared to the same period in the prior fiscal year. The ticket sales resulted in $12.7 million in NFL ticket surcharge revenue (10% of ticket sales) to the Stadium Authority.
The average NFL ticket surcharge revenue was $1.1 million per game in the current year which is up by $112,000 or 12% from the same period in the prior fiscal year. A total of $250,000 of Senior and Youth Program Fees , which is based on $0.35 per NFL ticket sold, were collected through the end of the fourth quarter of the fiscal year. These fees were transferred to the City’s General Fund in support of such programs.
A total of 95,106 cars were parked in th e permitted offsite parking lots generating $612,000 in offsite parking fees. The overall number of cars parked in the permitted offsite lots increased by an average of 440 cars per game or 6% when co mpared to the prior fiscal year.
There was an estimated $6.4 million of NFL ev ent public safety costs in the current reporting period which is an average of $530,000 per game. This is an increase from the prior year average (through March 31, 2023) of $54,000. Of the $6. 4 million NFL event public safety costs, $5.4 million or 84% are direct City costs and $1.0 million or 16% are outside agency costs. $613,000 of the total NFL event public safety costs are covered by the offsite parking fees that were collected and the remaining are invoiced to ManCo.
Reimbursements usually take between 3 to 6 months from the event date due to the timing of third-party invoices and payment from ManCo.
Statistics for the NFL games held at Levi’s
® Stadium in the 2023/24 fiscal year are shown
in Table 1 and comparative data from all ten years of operations can be found in Table 2.
4 Table 1
Game 1 vs
Broncos
Game 2 vs
Chargers
Game 3 vs
Giants
Game 4 vs
Cardinals
Game 5 vs
Cowboys
Game 6 vs
Bengals
Game 7 vs
Buccaneers
Game 8 vs
Seahawks
Game 9 vs
Ravens
Game 10 vs
Rams
Game 11 vs
Packers
Game 12 vs
Lions 2023/24
08/19/23 08/25/23 09/21/23 10/01/23 10/08/23 10/29/23 11/19/23 12/10/23 12/25/23 01/07/24 01/20/24 01/28/24 YTD Total No. of Tickets Sold 65,819 62,492 69,726 69,741 70,026 70,008 69,768 70,017 69,855 69,741 70,655 70,725 828,573 NFL Ticket Surcharge
(2)
745,864$ 742,481$ 1,206,732$ 1,190,498$ 2,700,282$ 1,243,625$ 1,211,267$ 1,235,033$ 1,247,574$ 1,193,224$ -$ -$ 12,716,579$ Senior/Youth Program Fees 23,037$ 21,872$ 24,404$ 24,409$ 24,509$ 24,503$ 24,419$ 24,506$ 24,449$ 24,409$ 9,482$ -$ 250,000$ Cars Parked at Offsite Lots 5,901 6,238 5,708 8,016 8,730 8,897 8,475 8,982 7,424 8,757 8,948 9,030 95,106 City Offsite Parking Fee 38,002$ 40,173$ 36,760$ 51,623$ 56,221$ 57,297$ 54,579$ 57,844$ 47,811$ 56,395$ 57,625$ 58,153$ 612,483$ Stadium Public Safety Costs (1)
447,932$ 471,940$ 502,805$ 495,957$ 572,974$ 495,337$ 497,117$ 526,694$ 559,162$ 517,988$ 583,675$ 693,306$ 6,364,886$ Less: Offsite Parking Fee Credit (38,002)$ (40,173)$ (36,760)$ (51,623)$ (56,221)$ (57,297)$ (54,579)$ (57,844)$ (47,811)$ (56,395)$ (57,625)$ (58,153)$ (612,483)$ Reimbursable Stadium Public Safety Cost 409,929$ 431,767$ 466,045$ 444,334$ 516,753$ 438,040$ 442,538$ 468,850$ 511,351$ 461,593$ 526,050$ 635,153$ 5,752,403$ Amount Reimbursed 396,261$ 416,972$ 447,399$ 426,657$ 494,013$ 420,756$ 425,465$ 449,353$ 484,104$ 418,767$ 474,392$ 567,717$ 5,421,856$ (1) Includes estimated stadium public safety costs from outside agencies.
Levi's® Stadium
2023/24 NFL Event Statistics
As of March 31, 2024
(2) NFL Ticket Surcharge excludes NFL Play-Off games as indicated on Article 1 of the Amended and Restated Team Non-Relocation Agreement between Team and SCSA. 5 Table 2
2014/15 Q4 2015/16 Q4 2016/17 Q4 2017/18 Q4 2018/19 Q4 2019/20 Q4 2020/21 Q4 2021/22 Q4 2022/23 Q4 2023/24 Q4 Total Total Total Total Total Total Total Total Total Total No. of NFL Events 10 10 10 10 10 12 5 10 12 12 No. of Tickets Sold 682,095 669,826 655,891 643,189 651,237 803,524 - 674,214 835,001 828,573 NFL Ticket Surcharge 8,366,290$ 8,273,378$ 8,175,462$ 7,806,190$ 8,076,510$ 8,412,291$ -$ 9,809,009$ 11,366,724$ 12,716,579$ Senior/Youth Program Fees 238,734$ 234,439$ 229,562$ 225,116$ 227,933$ 250,000$ -$ 235,975$ 250,000$ 250,000$ Cars Parked at Offsite Lots 90,024 57,166 67,740 54,107 56,390 81,401 - 71,614 89,828 95,106 City Offsite Parking Fee 442,918$ 290,403$ 354,958$ 293,260$ 317,476$ 476,196$ -$ 423,238$ 550,646$ 612,483$ Cars Parked on Tasman Lots 4,983 6,876 5,122 5,530 4,729 6,882 - 4,449 - - Cars Parked on Golf Course 23,306 20,090 - - - - - - - - City Tasman Lot and Golf Course Parking Fee 141,445$ 134,830$ 25,610$ 27,650$ 23,645$ 34,410$ -$ 22,245$ -$ -$ Stadium Public Safety Costs (1)
2,455,404$ 2,437,902$ 3,084,850$ 2,633,295$ 2,994,735$ 5,416,926$ 887,617$ 5,303,491$ 5,716,274$ 6,364,886$ Golf Course Public Safety Costs 180,766$ 81,210$ -$ -$ -$ -$ -$ -$ -$ -$ Subtotal Event Public Safety Costs 2,636,170$ 2,519,111$ 3,084,850$ 2,633,295$ 2,994,735$ 5,416,926$ 887,617$ 5,303,491$ 5,716,274$ 6,364,886$ Less: Offsite Parking Fee Credit (442,918)$ (290,403)$ (354,958)$ (293,260)$ (317,476)$ (476,196)$ -$ (423,238)$ (550,646)$ (612,483)$ Reimbursable Stadium Public Safety Costs 2,193,252$ 2,228,708$ 2,729,892$ 2,340,035$ 2,677,259$ 4,940,730$ 887,617$ 4,880,253$ 5,165,629$ 5,752,403$ Total Amount Reimbursed 2,193,252$ 2,228,708$ 2,729,892$ 2,340,035$ 2,677,259$ 4,940,730$ 887,617$ 4,880,253$ 5,165,519$ 5,421,856$ (1) Includes estimated stadium public safety costs from outside agencies.
Levi's® Stadium
Historical NFL Event Statistics
6 Non-NFL Events
This section provides year to date and comparative data for Non-NFL events categorized as events ranging from high school and colle ge football games, international soccer matches, concerts, wedding fairs, and special events. During the current reporting period, there were a total of 398,314 tickets sold for the eight ticketed Non-NFL events and two ticketed special events that were held, re sulting in $1.6 million Non-NFL event ticket surcharge revenue (from the $4 per ticket Non-NFL event surcharge). This is an increase in ticket surcharge revenue of $313,000 or 24.5% over the same period in the prior year.
There was one additional ticketed Non-NFL event when compared to the same period in the prior year and the ticketed Non-NFL events in the current reporting period were larger-scale events resulting in the increase in the ticket surcharge revenue.
ManCo reports that there were also 53 smaller special events held at Levi’s ® Stadium which is 16 events less than the same period of the prior fiscal year. The attendance at these events increased from 25,867 in the prior period to 28,853 in the current year, a 12% increase. Examples of these specia l events include corporate events of various sizes, weddings, holiday parties, high school dances, etc.
In correlation with the Non-NFL events held during the current r eporting period, there were 38,716 cars parked at these offsite lo ts and the City earned a total of $248,000 in related offsite parking fees, which is derived from the $6.13 per parking space fee for events taking place prior to July 2023 and $6.44 per parking space for all events thereafter. The revenues earned from this offsite parking fee supports public safety costs for Non-NFL events. The offsite parking fee in voices can take up to a few months to be fully paid.
Total Non-NFL event public safety costs were $3.5 million an increase of $828,000 from the prior year. As noted previously, this increase in cost is due to more large-scale events being held in the current year when compared to the prior year. Of t hese costs, $248,000 was covered by the offsite parking fee. The remain ing $3.2 million was invoiced to ManCo which will be reimbursed to the City. Reimbursements usually take between 3 to 6 months from the event date due to the timing of third-party invoices and payment from ManCo.
Statistics for FY 2023/24 events are shown in Table 3 and comparative data from all ten years of operations are shown in Table 4.
7 Table 3
Earthquakes vs
LAFC Soccer
Gold Cup
Tournament
F.C. Barcelona
vs. Juventus
F.C.
(Canceled)
Taylor Swift
Day 1
Taylor Swift
Day 2 Karol G Beyonce Ed Sheeran
2023/24 YTD
05/06/23 07/02/23 07/22/23 07/28/23 07/29/23 08/14/23 08/30/23 09/16/23 Total No. of Scanned Attendees 36,933 56,808 - 61,925 61,286 42,048 49,296 73,167 - 381,463 No. of Tickets Sold 41,737 62,846 - 62,103 61,736 43,691 50,728 75,109 364 398,314 Non-NFL Ticket Surcharge 166,948$ 251,384$ -$ 248,412$ 246,944$ 174,764$ 202,912$ 300,436$ 1,456$ 1,593,256$ No. of Non-NFL Special Events 53 53 Non-NFL Special Event Attendees 28,853 28,853 Cars Parked at Offsite Lots 4,497 7,082 - 5,127 6,053 3,392 4,474 8,091 - 38,716 City Offsite Parking Fee 27,567$ 45,608$ -$ 33,018$ 38,981$ 21,844$ 28,813$ 52,106$ -$ 247,937$ Stadium Public Safety Costs (1)
375,930$ 586,322$ 150,765$ 576,455$ 525,195$ 396,654$ 406,010$ 408,968$ 28,953$ 3,455,253$ Less: Offsite Parking Fee Credit (27,567)$ (45,608)$ -$ (33,018)$ (38,981)$ (21,844)$ (28,813)$ (52,106)$ -$ (247,937)$ Reimbursable Public Safety Costs 348,363$ 540,714$ 150,765$ 543,438$ 486,213$ 374,810$ 377,197$ 356,862$ 28,953$ 3,207,316$ Amount Reimbursed 339,429$ 512,163$ 150,765$ 512,197$ 460,518$ 360,694$ 365,240$ 343,416$ 1,145$ 3,045,567$ (1) Includes estimated stadium public safety costs from outside agencies. 2023/24 YTD
Special Events
Levi's® Stadium
FY 2023/24 Non-NFL Event Statistics
As of March 31, 2024
8 Table 4
2014/15 Q4 2015/16 Q4 2016/17 Q4 2017/18 Q4 2018/19 Q4 2019/20 Q4 2020/21 Q4 2021/22 Q4 2022/23 Q4 2023/24 Q4 Total Total Total Total Total Total Total Total Total Total No. of non-NFL Ticketed Events 9 17 18 13 12 8 - - 7 8 No. of Tickets Sold 377,312 629,004 582,349 384,282 332,600 183,874 - - 319,948 398,314 Non-NFL Ticket Surcharge 1,431,540$ 2,477,084$ 2,329,396$ 1,537,128$ 1,330,400$ 735,496$ -$ -$ 1,279,792$ 1,593,256$ No. of Non-NFL Special Events 186 207 127 113 100 79 - 12 69 53 Non-NFL Special Event Attendees 62,357 105,997 49,151 62,917 35,676 33,535 - 3,698 25,867 28,853 Cars Parked at Offsite Lots 26,156 55,720 60,969 30,734 28,566 17,127 - - 35,302 38,716 City Offsite Parking Fee 128,688$ 278,704$ 313,979$ 165,149$ 158,623$ 98,547$ -$ -$ 215,155$ 247,937$ Cars Parked on Golf Course 12,004 20,661 9,562 - - - - - - - City Golf Course Parking Fee 60,020$ 103,305$ 47,810$ -$ -$ -$ -$ -$ -$ -$ Stadium Public Safety Costs (2)
1,782,821$ 3,083,668$ 3,207,507$ 2,020,343$ 2,421,914$ 1,718,924$ -$ 98,983$ $2,627,394 3,455,253$ Golf Course Public Safety Costs 76,462$ 119,842$ 39,905$ -$ -$ -$ -$ -$ -$ -$ Subtotal Event Public Safety Costs 1,859,283$ 3,203,510$ 3,247,412$ 2,020,343$ 2,421,914$ 1,718,924$ -$ 98,983$ 2,627,394$ 3,455,253$ Less: Offsite Parking Fee Credit (128,688)$ (278,704)$ (313,979)$ (165,149)$ (158,623)$ (98,547)$ -$ -$ (215,155)$ (247,937)$ Reimbursable Public Safety Costs 1,730,595$ 2,924,805$ 2,933,433$ 1,855,194$ 2,263,291$ 1,620,377$ -$ 98,983$ 2,412,239$ 3,207,316$ Amount Reimbursed 1,730,595$ 2,924,805$ 2,933,433$ 1,855,194$ 2,263,291$ 1,620,377$ -$ 98,983$ 2,412,239$ 3,045,567$ (1) The first event at Levi's Stadium was in August 2014 (the second quarter of the 2014/15 Fiscal Year). (2) Additional Public Safety Costs are included for Events taking place in FY 2022/23 subsequent to when the FY 2022/23 report was published.
Levi's® Stadium
Historical Non-NFL Event Statistics(1)
9 Table 5 summarizes ticketed Non-NFL revenues and expenditures by event reported by ManCo as of the report date. There were 8 ticketed Non-NFL events held in FY 2023/24 and generated an average net revenue of $716,000 per event. T he inclusion of this information is to provide a greater level of transparency and provide the overall financial results of the Non-NFL events.
Table 5
In Millions $
Ticketed Event Revenue Expense Net
Concert 1 2.8$ 1.1$ 1.6$
Concert 2 2.6 1.7 1.0
Concert 3 2.5 1.8 0.8
Concert 4 2.5 1.5 1.0
Concert 5 1.8 0.7 1.1
Sporting Event 1 1.7 1.1 0.6 Sporting Event 2 0.8 0.5 0.3 Sporting Event 3 0.0 0.6 (0.6) Total Ticketed Non-NFL Net Revenue to Date 14.7$ 9.0$ 5.7$ Levi's® Stadium
Ticketed Non-NFL Events Revenue and Expenditure Summary As of March 31, 2024
10 Table 6 and 7 show Non-NFL net revenue by event type and event revenue and expenses by category. For FY 2023/24, ManCo anticipated Non-NFL events to result in projected net revenues of $7.8 million, as cited in the documents provided for the FY 2024/25 Proposed Stadium Authority Budget. Through the fourth quarter of FY 2023/24, ticketed events and non-ticketed special events cont ributed $5.7 million and $2.1 million in net revenues, respectively. There was also additional interest income of $2.2 million earned on Non-NFL events cash reserves. Offset by $1.8 million of non-event specific other expenses, ManCo reported a net revenue of $8.3 million for the current reporting period.
Overall FY 2023/24 Non-NFL net revenue dec reased by $542,000 when compared to the prior year. This decrease was made up of ticketed Non-NFL net revenue decreasing by $790,000 due to holding one less concert than the prior year and having to cancel one of the three soccer event s in the current year. When compared to the prior FY, sixteen fewer special events we re held in the current year leading to a decrease of $684,000 in net revenue. Other operating expenses also incr eased by $413,000. This was all offset by an increase in other operating income of $1.3 million largely attributable to bank interest that is earned on the cash that is collected from Non-NFL event ticket sales.
Table 6
EVENT TYPE
No. of
Events Net Revenue
No. of
Events
Net
Revenue
No. of
Events
Net
Revenue
No. of
Events Net Revenue
No. of
Events Net Revenue
Ticketed Events
Concerts 1 $ 856,583 0- $ 0 - $ 6 $ 6,097,521 5 $ 5,413,125 Sporting events:
Soccer 2 (65,295) 0 - 0 - 1 423,573 3 318,096 Net Revenue from Ticketed Events 8 (2,838,247)$ 0 -$ 0 -$ 7 6,521,094$ 8 5,731,221$ 79 1,492,330$ 0 -$ 0 -$ 69 2,789,761$ 53 2,106,060$ Other Operating Income(1)
70,350$ - $ - $ 900,736 $ 2,245,051$ Other Operating Expenses(2)
(1,465,447)$ -$ -$ (1,402,424)$ (1,815,647)$ Total Net Revenue from Non-NFL Events (3)
87 (2,741,014)$ 0 - $ 0 - $ 76 8,809,167$ 61 8,266,685 $ Net Revenue from Special Events (weddings, corporate events, etc.) (2) Other Operating Expenses are expenses not attributable to a specific event. Examples are event selling expenses, administrative expenses and miscellaneous costs. (3) Net Revenue from Non-NFL Events does not include Non-NFL Event Ticket Surcharge of $1.6m. (1) Other Operating Income are income not attributable to a specific event. Examples are interest income and reimbursements unrelated to a specific event. 2019/20 2022/232020/21
Levi's Stadium
Net Revenue for Non-NFL Events
2023/24
by Event Type
Historical Year-to-Date through March 31, 2024
2021/22
11 Table 7
2023/24
YTD Total
REVENUE:
Special Event Revenue 7,182,661$
Ticket Platform Fees 6,391,560
Suite Ticket Revenue 1,421,850
Parking 2,302,876
Food & Beverage - Ticketed Events 3,421,515
Food & Beverage - Special Events 794,457
Miscellaneous(1) 3,420,803
Total Revenue 24,935,722 $
EXPENSE:
Public Safety/Security 5,533,317$
Event Staff 4,866,792
Parking 2,128,551
Catering - Special Events 4,657,944
General Event Related Expenses 5,398,206
Expense Reimbursement from Event Licensee
(2) (7,731,420)
Miscellaneous(3) 1,815,647
Total Expense 16,669,037 $
Total Non-NFL Net Revenue 8,266,685 $
(3) Includes catered events department staff costs, non-event specific staff costs, and other expenses.
Levi's® Stadium
Non-NFL Event Results by Category
As of March 31, 2024
(2) Expenses incurred for Non-NFL events can either be the responsibility of the SCSA or the Event Licensee depending on the nature of the expense. This figure represents the total expenses incurred by the SCSA that were the responsibilty of the Event Licensee for which the SCSA has been reimbursed, net of the Event Licensee's share of ancillary revenues. (1) Includes venue rental fees, net merchandise sales, interest income, and other revenues. 12 Discretionary Fund
The Discretionary Fund is funded by revenue equal to 50% of the Non-NFL event ticket surcharge of $4 per ticket. The eight ti cketed Non-NFL events contributed $797,000 to the Discretionary Fund in the reporting period. This is based on the estimated attendance provided by ManCo. At the time of this report, $797,000 has been collected for the current fiscal year. Table 8 shows the revenues and expenses in the Discretionary Fund since FY 2014/15. The balance at the time of this report is $2.5 million.
Table 8
Stadium Builder Licenses
The total principal value of cu rrently active Stadium Builder Licenses (SBLs) is $555.0 million and, as of March 31, 2024, 95.4% of the total principal value of all SBLs sold (i.e., $529.4 million) had been collected. Payment for the sale of SBL s are financed over 10 years.
SBL holders that finance their purchase pay an annual interest rate of 8.5% and payments are due by March 1 st each year. The majority of SBL holders make their payments on time. For those that do not pay on time, SBL service staff, working for ManCo on the Stadium Authority’s behalf, contact the SBL holders and attempt to collect the full amounts owed. Ultimately, a SBL can be defaulted for non-payment. Once a SBL is defaulted, the SBL holder in default loses their right to buy season tickets as well as their priority rights to tickets to Non-NFL events, and forfei ts any money they had invested in the SBL.
Defaulted SBLs are then available for resale.
There is a total of 64,993 currently active SBLs, or 98.3% of the 66,136 total sellable SBL seats. This is an increase of 1,778 from the total active SBLs at the end of the prior fiscal year (March 31, 2023). The main reasons for the increase are due to sale of new SBLs and customer seat relocation program offset by default buy back. The customer seat relocation program allows cust omers to trade in their SBLs in return for others in a different location as long as the total face va lue of the new seats is equal to or greater than the original seats.
Fiscal Year
Beginning
Balance Revenue Expenses Ending Balance
2014/15 - $ 715,770$ -$ 715,770$ 2015/16 715,770 1,238,542 714,028 1,240,284 2016/17 1,240,284 1,164,698 699,129 1,705,853 2017/18 1,705,853 768,564 1,209,342 1,265,075 2018/19 1,265,075 796,294 101,267 1,960,102 2019/20 1,960,102 367,748 - 2,327,850 2020/21 2,327,850 - 18 2,327,832 2021/22 2,327,832 - (18) 2,327,850 2022/23 2,327,850 639,896 1,300,051 1,667,695 2023/24 1,667,695 796,628 - 2,464,323 Discretionary Fund Reserve
13 During the current reporting peri od, 1,838 SBLs were sold for a total face va lue of $10.6 million. The customer seat relocation program resulted in an increase of $826,000 to the SBL face value, while netting 450 more SBLs. There were also 510 SBL defaulted with a face value of $3.6 million.
Additional details regarding currently active SBLs are noted in Table 9. 14 Table 9
SBL Seats
Available
SBL Seats Sold
as of 3/31/23
New SBL
Sales
Net SBL
Relocations
SBL
Defaults Other SBL Seats
Sold SBL Value SBL Collected % SBL Principal
Collected
100 100 - - - - 100 14,082,625$ 13,895,904$ 98.7% 942 942 - - (4) - 938 75,040,000$ 74,474,161$ 99.2% 2 2 - - - - 2 80,000$ 79,600$ 99.5% 4,945 4,581 93 16 (20) - 4,670 140,100,000$ 134,635,787$ 96.1% 3,475 2,937 126 (11) (22) - 3,030 60,600,000$ 56,574,539$ 93.4% 70 64 2 - (2) - 64 1,120,000$ 884,393$ 79.0% 7 7 - - - - 7 105,000$ 105,000$ 100.0% 2,163 2,216 24 (17) (25) - 2,198 26,376,000$ 24,978,037$ 94.7% 7 7 - - - - 7 70,000$ 69,915$ 99.9% 20,651
20,958 172 (8) (134) - 20,988 125,928,000$ 120,605,508$ 95.8% 14,307 14,371 374 (41) (171) - 14,533 72,665,000$ 66,929,340$ 92.1% 916 924 2 1 - - 927 3,708,000$ 3,683,641$ 99.3% 91 91 - - - - 91 273,000$ 270,836$ 99.2% 40 44 - (3) (1) - 40 100,000$ 99,998$ 100.0% 18,392 15,940 1,045 513 (131) - 17,367 34,734,000$ 32,039,066$ 92.2% 28 31 - - - - 31 31,000$ 30,896$ 99.7% 66,136 63,215 1,838 450 (510) - 64,993 555,012,625$ 529,356,621$ 95.4% Plus: Interest on financed SBLs 65,423,305$
Total Principal & Interest 594,779,926$
(1) This table does not include $36.8 million that has been collected life-to-date from defaulted SBL holders.
Total
10,000
Santa Clara Stadium Authority
Currently Active Stadium Builder License (SBL) Summary (1) Through March 31, 2024
Seat Value
141,392
80,000
40,000
30,000
20,000
15,000
12,000
6,000
5,000
4,000
3,000
2,500
2,000
1,000
17,500
15 Santa Clara Stadium Authority Budget Status Reports
Operating Budget
With FY 2023/24 complete, total operating revenues were $76.5 million representing 118% of the overall budget for revenues. During the current reporting period, the Stadium Authority collected $15.4 million in SBL proceeds or 123% of what was budgeted. All SBL proceeds are to be transferred to the debt service fund per applicable loan agreements.
Stadium Authority also recognized $24.8 million in rent from StadCo, $12.7 million in NFL Ticket Surcharge, $7.6 million in Naming Right s, $4.8 million in interest and $835,000 in sponsorship (STR) revenue. In addition, the Stadium Authority repor ted $8.3 million in net-revenues and $1.6 million in ticket surcharge from Non-NFL events in FY 2023/24.
Total Operating expenses were $21 million, or 89% of the annual budget. Shared Stadium Manager expenses were at 91% of the budget, or $12.7 million of the $13.9 million budgeted amount and SBL Sales and Service expenses were 104% of the budget or $2.4 million. SBL Sales and Service expenses were higher than projected due to increase level of support needed to manage the cu rrent SBL activities. Utilit y costs are 106% of the budget for the year, or $1.5 million. Utility costs were higher than anticipated largely due to a 10% rate increase in January that ManC o had not factored into projections. Use of StadCo Improvements are 104% of the budget or $138,000 for the year. The Stadium Authority is charged fees for the use of StadCo assets during Non-NFL events. Use of StadCo Tenant Improvement expenses incurred were higher than budgeted due to more private events held in FY 2023/24 than projec ted. Transfers out for debt service and capital expenditures fund amounted to $17.3 million and $3.9 million, respectively. Lastly, Stadium Authority G&A costs were below b udgeted levels at $3.1 million or 79% of the budget. As spend for total operating expenses were under budget by $2.5 million, there were sufficient savings to cover any overages mentioned above.
Additional details are shown in Table 10
16 Table 10
Budget to Budget to
Final(1)
Q1 Q2 Q3 Q4 YTD Actual % Final YTD Actual %
Budget Actuals Actuals Actuals Actuals Actuals Difference Received Budget Actuals Difference Received Revenue
NFL Ticket Surcharge 12,178,000$ -$ 2,695,077$ 8,828,278$ 1,193,224$ 12,716,579$ (538,579)$ 104% 11,367,000$ 11,366,724$ 276$ 100% SBL Proceeds 12,589,000 - 10,708,985 1,465,700 3,249,777 15,424,462 (2,835,462) 123% 24,528,000 24,890,317 (362,317) 101% Interest 1,249,000 701,508 1,125,604 1,337,768 1,680,584 4,845,464 (3,596,464) 388% 1,037,000 1,722,940 (685,940) 166% Net Revenues from Non-NFL Events 4,500,000 - - - 8,266,685 8,266,685 (3,766,685) 184% 7,262,000 8,953,450 (1,691,450) 123% Naming Rights 7,602,000 - - 3,744,699 3,857,040 7,601,739 261 100% 11,016,000 11,015,959 41 100% Sponsorship Revenue (STR) 475,000 143,288 81,250 182,985 427,929 835,452 (360,452) 176% 405,000 585,534 (180,534) 145% Rent 24,762,000 6,190,500 7,565,500 6,190,500 4,815,500 24,762,000 - 100% 24,762,000 24,762,000 - 100% Senior & Youth Program Fees 250,000 - 69,313 146,795 33,892 250,000 - 100% 250,000 250,000 - 100% Non-NFL Event Ticket Surcharge 1,296,000 164,000 1,423,128 5,232 896 1,593,256 (297,256) 123% 1,284,000 1,279,792 4,208 100% Other
Revenue - 2,043 - 68,000 97,068 167,111 (167,111) NA - 68,874 (68,874) NA Total Revenue 64,901,000$ 7,201,339$ 23,668,857$ 21,969,957$ 23,622,595$ 76,462,748$ (11,561,748)$ 118% 81,911,000$ 84,895,590$ (2,984,590)$ 104% Budget to Budget to
Final(1)
Q1 Q2 Q3 Q4 YTD Actual % Final YTD Actual %
Budget Actuals Actuals Actuals Actuals Actuals Difference Used Budget Actuals Difference Used Expenses
Shared Stadium Manager Expenses
Stadium Operations 4,550,000$ 1,107,096$ 1,145,010$ 1,145,010$ 433,256$ 3,830,372$ 719,628$ 84% 3,827,196$ 3,495,283$ 331,913$ 91% Engineering 2,694,000 655,630 678,207 678,207 781,050 2,793,094 (99,094) 104% 2,488,872 2,674,884 (186,012) 107% Guest Services 645,000 157,014 162,811 162,811 (55,431) 427,205 217,795 66% 586,968 395,101 191,867 67% Groundskeeping 650,000 158,270 165,337 165,337 (23,820) 465,124 184,876 72% 497,556 447,655 49,901 90% Security 1,564,000 380,730 396,828 396,828 (47,321) 1,127,065 436,935 72% 1,626,828 1,247,867 378,961 77% Insurance 3,327,000 831,793 831,793 831,792 831,794 3,327,172 (172) 100% 3,230,000 3,230,263 (263) 100% Stadium Management Fee 516,515 - 92,855 162,515 435,237 690,607 (174,092) 134% 253,000 253,354 (354) 100% Shared Stadium Mngr Exps Subtotal 13,946,515$ 3,290,533$ 3,472,841$ 3,542,500$ 2,354,765$ 12,660,639$ 1,285,876$ 91% 12,510,420$ 11,744,407$ 766,013$ 94% Other Operating Expenses
SBL Sales and Service 2,333,000$ 568,174$ 1,029,184$ 152,578$ 679,087$ 2,429,023$ (96,023)$ 104% 2,089,000$ 2,157,787$ (68,787)$ 103% Senior & Youth Fees (paid to City) 250,000 - 69,313 146,795 33,892 250,000 - 100% 250,000 250,000 - 100% Ground Rent (paid to City) 495,000 - 495,000 - - 495,000 - 100% 460,000 460,000 - 100% Performance Rent (paid to City) - - - - - - - NA - - - NA Discretionary Fund Expense 250,000 - - - - - 250,000 0% 1,300,000 650,000 650,000 50% Utilities 1,391,000 711,358 215,672 - 545,965 1,472,995 (81,995) 106% 1,444,000 1,225,594 218,406 85% Use of StadCo Tenant Improvements 133,000 30,384 81,353 4,665 22,003 138,405 (5,405) 104% 82,000 82,972 (972) 101% Stadium Authority G&A 3,919,900 507,048 838,093 612,857 1,127,801 3,085,799 834,101 79% 4,205,000 2,274,063 1,930,937 54% Naming Rights Commission 94,000 46,809 - 46,809 - 93,618 382 100% 91,000 90,891 109 100% Legal Contingency - - - - - - - NA 89,011 - 89,011 0% Ot
her Expenses 734,000 184,112 182,682 183,397 (156,849) 393,342 340,658 54% 723,000 426,722 296,278 59% Other Operating Expenses Subtotal 9,599,900$ 2,047,885$ 2,911,297$ 1,147,101$ 2,251,899$ 8,358,182$ 1,241,718$ 87% 10,733,011$ 7,618,029$ 3,114,982$ 71% Total Expenses 23,546,415$ 5,338,418$ 6,384,138$ 4,689,601$ 4,606,664$ 21,018,821$ 2,527,594$ 89% 23,243,431$ 19,362,436$ 3,880,995$ 83% Transfers Out
Debt Service 25,457,000$ -$ 10,678,707$ 6,619,001$ - 17,297,708$ 8,159,292$ 68% 46,341,580$ 46,099,942$ 241,638$ 99% Capital Expenditures Reserve 3,915,000 - - - 3,914,319 3,914,319 681 100% 3,801,000 3,800,310 690 100% Discretionary Fund Reserve - - - - - - - NA 642,000 639,896 2,104 100% Operating Reserve - - - - - - - NA 7,702,000 13,036,663 (5,334,663) 169% Renovation/Demolition Reserve - - - - - - - NA 7,031,000 5,323,390 1,707,610 76% Total Transfers Out 29,372,000$ -$ 10,678,707$ 6,619,001$ 3,914,319$ 21,212,027$ 8,159,973$ 72% 65,517,580$ 68,900,201$ (3,382,621)$ 105% Changes in Reserves
Discr
etionary Fund Reserve 648,000$ -$ -$ -$ 796,628$ 796,628$ (148,628)$ 123% -$ 639,896$ (639,896)$ NA Legal Contingency - - - - - - - NA - - - NA Legal Contingency Reserve - Buffet Costs 1,077,000 - - - 1,254,367 1,254,367 (177,367) 116% 2,075,070 - 2,075,070 0% Legal Contingency Reserve - Public Safety Costs 2,002,500 - - - 3,077,997 3,077,997 (1,075,497) 154% 3,401,000 - 3,401,000 0% Operating Reserve 600,000 - - - 760,076 760,076 (160,076) 127% - - - NA Renovation/Demolition Reserve 5,505,485 - - - 26,117,345 26,117,345 (20,611,860) 474% - - - NA Stadium Funding Trust Reserve (1,742,086) (2,702,252) 13,880,083 (2,472,102) (8,515,682) 190,047 (1,932,133) -11% - - - NA Unrestricted (347,900) 4,565,173 (7,274,071) 13,133,457 (8,389,118) 2,035,441 (2,383,341) -585% (12,326,081)$ -$ (12,326,081)$ 0% Total Change in Reserves 7,742,999$ 1,862,921$ 6,606,012$ 10,661,355$ 15,101,612$ 34,231,900$ (26,488,901)$ NA (6,850,011)$ 639,896$ (7,489,907)$ -9% (1)Adjustments include previously approved budget amendments through March 19, 2024.
Santa Clara Stadium Authority
Operating Budget Status Report
For the Period Ending March 31, 2024 and 2023
Period Ending March 31, 2023Period Ending March 31, 2024 17 Operating Budget – Recommended Budget Adjustments
From time to time, budget adjustments may be necessary to align revenues or expenditures to actual or unexpected activity during the course of a fiscal year, known after the adoption of the Stadium Authority Budget.
On March 12, 2024, the Stadium Authorit y Board adopted the Santa Clara Stadium Authority FY 2024/25 Operating, Debt Service, and Capital Budget. The following technical budget adjustments are recommended to true up fund balances to align the balances with FY 2023/24 actual performance:
1) Beginning Fund Balance / Ending Fund Ba lance Adjustment - The FY 2023/24 year- end actual was completed and fund balance adjustments totaling net $3.9 million, are necessary adjustments to the FY 2024/25 beginning and ending fund balances.
Because the adoption of budget is conducted in March, estimates are used to determine the beginning and ending fund balances, including reserve amounts.
Additional details are shown in Table 11.
18 Table 11
Santa Clara Stadium Authority
2024/25 Operating Budget Adjustment
Item
#
Line Item Source of
Funds
Use of
Funds
Explanation
1 Beginning Fund
Balance – Discretionary
Fund Reserve
$627 This action increases the
Beginning Fund Balances for
Discretionary Fund Reserve
from $2,463,696 to $2,464,323
as a result of FY 2023/24 year-
end actuals reconciliation.
1 Beginning Fund
Balance – Legal
Contingency Reserve -
Public Safety Costs
($481,003) This action decreases the
Beginning Fund Balances for
Legal Contingency Reserve -
Public Safety Costs from
$7,805,725 to $7,324,722 as a
result of FY 2023/24 year-end
actuals reconciliation.
1 Beginning Fund
Balance – Operating
Reserve
$76 This action increases the
Beginning Fund Balances for
Operating Reserve from
$26,095,402 to $26,095,478 as
a result of FY 2023/24 year-
end actuals reconciliation.
1 Beginning Fund
Balance –
Renovation/Demolition
Reserve
$7,370,345 This action increases the
Beginning Fund Balances
Renovation/Demolition
Reserve from $24,070,390 to
$31,440,735 as a result of FY
2023/24 year-end actuals
reconciliation.
1 Beginning Fund
Balance - Stadium
Funding Trust Reserve
($1,803,355) This action decreases the
Beginning Fund Balance for
Stadium Funding Trust
Reserve from $5,414,396 to
$3,611,041 as a result of FY
2023/24 year-end actuals
reconciliation.
1 Beginning Fund
Balance – Unrestricted
($1,221,789) This action decreases the
Beginning Fund Balance –
Unrestricted from $17,137,508
to $15,915,719 as a result of
FY 2023/24 year-end actuals
reconciliation.
1 Ending Fund Balance
Discretionary Fund
Reserve
$627 This action increases the
Ending Fund Balances for
Discretionary Fund Reserve
from $2,788,696 to $2,789,323
as a result of FY 2023/24 year-
19 end actuals reconciliation.
1 Ending Fund Balance –
Operating Reserve
$76 This action increases the
Ending Fund Balances for
Operating Reserve from
$26,878,402 to $26,878,478 as
a result of FY 2023/24 year-
end actuals reconciliation.
1 Ending Fund Balance –
Renovation/Demolition
Reserve
$7,370,345 This action increases the
Ending Fund Balance
Renovation/Demolition
Reserve from $30,178,231 to
$37,548,576 as a result of FY
2023/24 year-end actuals
reconciliation.
1 Ending Fund Balance -
Stadium Funding Trust
Reserve
($1,803,355) This action decreases the
Ending Fund Balance for
Stadium Funding Trust
Reserve from $5,987,000 to
$4,183,645 as a result of FY
2023/24 year-end actuals
reconciliation.
1 Ending Fund Balance –
Unrestricted
($1,702,792) This action decreases the
Ending Fund Balance –
Unrestricted from $15,939,904
to $14,237,112 as a result of
FY 2023/24 year-end actuals
reconciliation for the Legal
Contingency Reserve - Public
Safety Costs and Unrestricted
Fund Balance.
Total $3,864,901 $3,864,901
20 Debt Service Budget
The Stadium Authority’s FY 2023/24 debt service revenue budget of $3.2 million represents anticipated contribut ions from the Community Facilities District (CFD). The CFD levies and collects a special hotel tax on hotel rooms within the CFD. All collections from the special CFD hotel ta xes are contributed to Stadium Authority to pay down the CFD Advance. The CFD Advance is payable solely from amounts received by the Stadium Authority from the CFD. During FY2023/24, $3.5 m illion was contributed by the CFD, or 108% of the annual budget. Of this amount, $2.8 million was collected and used to pay down the CFD Advance.
Total Stadium Authority debt service expenses for the cu rrent reporting period were $28.3 million, or 100% of the budgeted amount. The debt service expenses for the CFD Advance and the Term A Loan were $2.8 million and $25.5 million, respectively.
As of March 31, 2024, the total outstanding amount of Stadium Authority debt had declined to $228.7 million. This is a reduction in principal of $16.6 million from the March 31, 2023 outstanding debt amount of $245.3 million.
Additional details are shown in Tables 12 and 13 and Chart 1.
Table 12
Budget to Budget to
Final(1)
YTD Actual % Final YTD Actual %
Budget Actuals Difference Received Budget Actuals Difference Received Revenue
Contribution from CFD 3,217,000$ 3,467,626$ (250,626)$ 108% 2,323,000$ 2,126,816$ 196,184$ 92% Total Revenues 3,217,000$ 3,467,626$ (250,626)$ 108% 2,323,000$ 2,126,816$ 196,184$ 92% Transfers In
Transfers In from Operating 25,457,000$ 17,297,708$ 8,159,292$ 68% 46,341,580$ 46,099,942$ 241,638$ 99% Total Transfers In 25,457,000$ 17,297,708$ 8,159,292$ 68% 46,341,580$ 46,099,942$ 241,638$ 99% Budget to Budget to
Final(1) YTD Actual Final YTD Actual
Budget Actuals Difference % Used Budget Actuals Difference % Used Expenses
CFD Advance 2,900,000$ 2,849,343$ 50,657$ 98% 2,241,000 $ 2,248,478$ (7,478)$ 100% Term A Loan 25,457,000 25,456,812 188 100% 25,494,000 25,493,763$ 237 100% StadCo Subordinated Loan - - - NA 20,847,580 20,847,039$ 541 100% Total Expenses 28,357,000$ 28,306,155$ 50,845$ 100% 48,582,580 $ 48,589,280$ (6,700)$ 100% (1)Adjustments include previously approved budget amendments through March 19, 2024.
Debt Service Budget Status Report
For the Period Ending March 31, 2024 and 2023
Period Ending March 31, 2023
Santa Clara Stadium Authority
Period Ending March 31, 2024
22 Table 13
Chart 1
$-
$100
$200
$300
$400
$500
$600
$700
Mar 2012 Mar 2013 Mar 2014 Mar 2015 Mar 2016 Mar 2017 Mar 2018 Mar 2019 Mar 2020 Mar 2021 Mar 2022 Mar 2023 Mar 2024 Total Outstanding Debt (in millions)
Construction Loan StadCo Agency Advance Term B Loan
Term A Loan StadCo CFD Advance StadCo Subordinated Loan $41.1
$396.1
$653.4
$561.6
$464.7
$429.8
$382.7
$325.3$340.2
$296.8 $280.3
$245.3 $228.7
Type of Indebtedness Interest Rates
Outstanding as of
March 31, 2023 Net Change
Outstanding as of
March 31, 2024
Stadium Funding Trust Loan:
Term A Loan 5.00% 215,415,240$ (15,459,000)$ 199,956,240$ StadCo CFD Advance 5.73% 29,859,497 (1,147,911) 28,711,586 Total $ 245,274,737 $ (16,606,911) $ 228,667,826 Period Ending March 31, 2024
Santa Clara Stadium Authority
Debt Summary Report
■
■
■
■
■
■
23 Debt Service Budget – Recommended Budget Adjustments From time to time, budget adjustments may be neces sary to align revenues or expenditures to actual or unexpected activity duri ng the course of a fiscal year, known after the adoption of the Stadium Authority Budget. The budget amendment recommended in this report include technical actions to true up fund balances based on actual FY 2023/24 performance.
1) Beginning Fund Balance / E nding Fund Balance Adjustment - The FY 2023/24 year-end actual was completed and fund balance adj ustments reconciliation are necessary adjustments to the FY 2024/25 beginning and ending fund balances. Because the adoption of budget is conducted in March, estimates are used to determine the beginning and ending fund balances, including reserve amounts.
Additional details are shown in Table 14.
Table 14
Santa Clara Stadium Authority
2024/25 Debt Service Budget Adjustment
Item # Line Item Source of
Funds
Use of
Funds
Explanation
1 Beginning Fund
Balance - Debt
Service Reserve
$126,179 This action increases the
Beginning Fund Balance from
$7,996,801 to $8,122,980 as a
result of FY 2023/24 year-end
actuals reconciliation.
1 Ending Fund Balance
- Debt Service
Reserve
$126,179 This action increases the Ending
Fund Balance from $8,562,801 to
$8,688,980 as a result of FY
2023/24 year-end actuals
reconciliation.
Total $126,179 $126,179
24 Capital Improvement Project (CIP) Budget
As part of the Capital Expense (“CapEx”) Plan, the following projects have been completed as of the current reporting period:
Beverage Distribution System
Blackline Combustible Gas Indicators
Broadcast Booth Power
Cooling Towers
Concessions Cart Cabling for Portable Carts
High Voltage (480V Electr ical Power Study, Assessment and Replacement – Phase 2)
High Voltage (Primary Main Switch Gear Transformer, Battery & 12KV Main Circuit Breakers)
High Voltage (12KV Elec trical Power Study, Asse ssment and Replacement at Primary Switch Gear at Quadrant Substations)
Kawasaki Mules
LED Retrofit Project – Exteri or Luminaire Light Fixtures Lucas CPR Assist Device
Medixsafe Narcotics Safe
Mobile Security Closed Circuit Television Pop Up Trailers New Seating – Bowl Padded Se at Replacement Project
PPE Replacement (Nomex Bottoms)
Replacement of end of life IT Network Equipment
Replacement of end of lif e IT End User Equipment
Security Control Situation Room Enhancements
Stadium Event Signage
Stadium Event Power Upgrades & Switchgear Electrical Updated Stadium Wayfinding Signage
Variable Frequency Drive(s)
The following projects were underway during the current reporting period:
Aesthetic Improvements – Premiu m Areas/Special Event Spaces Bowl Camera Upgrade/Refurbishment
CO2 Monitoring & Sensors for Code Compliance
Concrete Replacements
Enhance Stadium Security Coverage
Field Turf Equipment
Fingerprinting Equipment
General Areas/Coating Main Deck
Levi’s Naming Rights Signage Refurbishment
Lighting System – Field / Sport Lighting LED Retrofit Main Kitchen Equipment
Overhead Doors, Motors, Sensors and Track Replacements Plumbing and Plumbing Fixtures
Radio Booth Cabling
25 Replacement of end of life IT Network equipment (2022/23 Carryover) Security General Allowance
Smoke Evacuation System – Fi re Smoke Curtain Replacement Stationary Electric Pressure Washers
Women’s Locker Room
The CIP Budget increased from $20.5 million to $21.3 million in the current reporting period due to adopted budget amendments. A total of $7.0 million has been spent during FY 2023/24, which amounts to 33% of the budge t. The main reason that this is below budget is due to the timing of activity for Capital Expenditure projects. There has also been no activity on warranty work which makes up 7% of the CIP Budget.
Additional details are shown below in Table 15.
26 Table 15
Budget to Budget to
Final(1)
YTD Actual Final YTD Actual
Budget Actuals Difference %
Received Budget Actuals Difference %
Received
Revenue
Interest -$ -$ -$ NA -$ 83,713$ (83,713)$ NA Total Revenue -$ -$ -$ NA -$ 83,713$ (83,713)$ NA Transfers In
Transfers In from Operating 3,915,000$ 3,914,319$ 681$ 100% 3,800,310 $ 3,800,310$ -$ 100% Total Transfers In 3,915,000$ 3,914,319$ 681$ 100% 3,800,310 $ 3,800,310$ -$ 100% Budget to Budget to
Final(1)
YTD Actual Final YTD Actual
Budget Actuals Difference % Used Budget Actuals Difference % Used Expenses
Construction 11,521,424$ 5,621,274$ 5,900,150$ 49% 14,034,892$ 3,001,545$ 11,033,347$ 21% Equipment 7,372,196 1,408,020 5,964,176 19% 6,602,240 903,030 5,699,210 14% Contingency & Misc 903,052 - 903,052 0% 962,743 4,260 958,483 0% Stadium Warranty Related Construction 1,528,202 - 1,528,202 0% 1,528,202 - 1,528,202 0% Total Expenses 21,324,874$ 7,029,294$ 14,295,580$ 33% 23,128,077$ 3,908,835$ 19,219,242$ 17% (1)Adjustments include previously approved budget amendments through March 19, 2024.
CIP Budget Status Report
For the Period Ending March 31, 2024 and 2023
Period Ending March 31, 2023
Santa Clara Stadium Authority
Period Ending March 31, 2024
27 CIP Budget – Recommended Budget Adjustments
From time to time, budget adjustments may be necessary to align revenues or expenditures to actual or unexpected activity during the course of a fiscal year, known after the adoption of the Stadium Authority Budget. The budget amendments recommended in this report include technical actions to true up fund balances based on actual FY 2023/24 performance.
1) Beginning Fund Balance / Ending Fund Balance Adjustment - The FY 2023/24 year- end actual was completed and fund balanc e adjustments rec onciliation are necessary adjustments to the FY 2024/ 25 beginning and ending fund balances.
Because the adoption of budget is conduct ed in March, estimates are used to determine the beginning and ending fund balances, including reserve amounts.
Additional details are shown in Table 16.
Table 16
Santa Clara Stadium Authority
2024/25 CIP Budget Adjustment
Item # Line Item Source of
Funds
Use of Funds Explanation
1 Beginning Fund
Balance
$78,024 This action increases the
Beginning Fund Balance
from $19,784,810 to
$19,862,834 as a result of
FY 2023/24 year-end
actuals reconciliation.
1 Ending Fund
Balance
$78,024 This action increases the
Ending Fund Balance
from $2,859,569 to
$2,937,593 as a result of
FY 2023/24 year-end
actuals reconciliation.
Total $78,024 $78,024
28 City of Santa Clara Net General Fund Impact
During the current reporting period there was a total of $1.6 million that was contributed to the General Fund as shown in Table 17. This section of the report also provides information on General Fund revenue and ex penditure impacts resulting from the stadium.
Table 17
Public Safety and Administrative Cost Reimbursement
As described in earlier sections of this report, costs incurred by the City on NFL and Non- NFL events are tracked and billed to ManCo. Reimbursement is monitored and included in this report. An estimated total of $3.5 m illion in public safety costs were incurred in support of Non-NFL events that were held at Levi’s ® Stadium in the current reporting period. These reimbursements come from a combination of payments from ManCo and the offsite parking fees that were collected. The City has received $3.3 million in reimbursements as of the date of this report.
Public safety costs for NFL events continue to be above the annual public safety cap with a total of $6.4 million spent in FY 2023/24. Pursuant to the Amended and Restated Lease, the Stadium Authority was in discussion with StadCo to adjust the annual public safety cap to reflect the true cost of service, which is higher than the cap. On May 23, 2024, the Stadium Authority entered into a settlem ent agreement with StadCo and ManCo over disputes regarding public safety and buffet costs. As a result of the settlement, the public safety cap will be adjusted to increase t he per game and annual threshold beginning in FY 2024/25. As of the date of this report, ManCo, on behalf of StadCo, has paid outstanding FY 2022/23 NFL public safety costs and $6.0 million of FY 2023/24 NFL public safety costs for NFL events has been reimbursed by a comb ination of offsite parking fees and reimbursements from ManCo. Under the settlement agreement, credits that were issued from public safety costs paid in excess of the annual public safety costs threshold were redefined as Public Safety Costs 2024 Outstanding Balance and will be partially reimbursed to StadCo with litigatio n contingency funds and partially over time through excess revenues.
In addition to public safety costs, administrat ive costs are also tracked and billed to the Stadium Authority. These in clude the cost of providi ng overall stadium management, financial, human resource, legal, and other services to the Stadium Authority. Through Ground Rent 495,000$
Performance Rent -
Senior and Youth Fee 250,000
Sales Tax 839,051
1,584,051$
City of Santa Clara
Net General Fund Impact
For Stadium Authority
Total Net General Fund Impact
Period Ending March 31, 2024
29 the fourth quarter of FY 2023/24 , a total of $2.0 million of administrative costs were incurred by the General Fund, which have been reimbursed to the City.
Rents and Senior and Youth Fee
As noted above, the City’s General Fund collected ground rent of $495,000. Additionally, the Senior and Youth Fee generated $250,000, of which the entire amount was forwarded to the City in support of senior and youth programs. See the Glossary for more information on these revenues and how they are calculated.
Other Revenue Impacts
General Fund sales tax, property tax, and transient occupancy tax (TOT) collections have benefited from the direct and indirect economic activity related to stadium events.
Food and beverage concession sales and merchandise sales at Levi’s ® Stadium are
taxable, resulting in sales tax revenue for the City. The last four quarters of sales tax collections from Levi’s
® Stadium transactions generated $839,000 for the City’s General Fund. In addition to the direct sellers at the Stadium, other businesses in Santa Clara are benefiting from the influx of people coming to attend one or more events at Levi’s® Stadium, resulting in potentially more sales tax collections for the General Fund.
In accordance with State Law, StadCo must pay possessory interest property tax based on their lease of Levi’s® Stadium from the Stadium Authority. This revenue is collected by the county and placed into the Redevelopm ent Property Tax Trust Fund (RPTTF).
Amounts remaining in the RPTTF after payi ng any enforceable obligations of the Successor Agency are distributed to taxing entities in the same proportion as secured property taxes. The City’s proportion is approximately 10%.
Many stadium events bring travelers to the region, resulting in hotel stays which generate TOT collections for the City’s General Fund. Although it is impossible to say exactly what portion of the City’s TOT collections is due to the stadium, it is clear that hotels both inside and outside the City have benefited, resulting in increases in TOT collections in Santa Clara and our neighboring cities.
30 Glossary
This section of the report provides details behind key terms that are used in the body of this report.
Discretionary Fund – This is funded by half of the Non-NFL ticket surcharge (see Non- NFL Event Ticket Surcharge on Page 30) and has been used to cover NFL public safety costs above the public safety cost threshold in the first three fiscal years of operation and other items at the St adium Authority’s discretion. St adium Authority has been building this fund pending the outcome of the ongoing public safety cost litigation. Stadium Authority may transfer up to half of the balance of the Discretionary Fund over $1.0 million from the Discret ionary Fund to the City’s General Fund if (1) adequate provision has been made for the replac ement of and upgrades to capital improvements contemplated under the Public Safety Plan and (2) an equal amount is transferred from the Discretionary Fund to Stadium Authorit y’s operating fund to be included as Stadium Authority Revenue. (Source: The Amended and Restated Stadium Lease Agreement).
Ground Lease –The City has agreed to lease the land under Levi’s® Stadium to Stadium Authority for an initia l term of 40 years. The fixed ground rent schedule is noted on the following page for the 40-year initial te rm. (Source: Ground Lease Agreement).
31 Table 18
Net Non-NFL Event Revenue – ManCo provides managem ent services for Levi’s ® Stadium year-round. As such, ManCo is responsible for booking and scheduling all Non- NFL events on behalf of Stadium Authority. ManCo is required by the agreement to maintain complete and accurate books and reco rds relating to the net income from the Non-NFL events. Those records are reviewed by Stadium Authority staff and/or outside consultants and audited by an independent auditor. After the completion of the fiscal year, the net revenues are paid to Stadium Authority by ManCo. (Source: Stadium Management Agreement)
Lease Year Fiscal Year
Annual Fixed
Ground Rent
Cumulative
Total
1 2014/15 180,000 $ 180,000$
2 2015/16 215,000$ 395,000$
3 2016/17 250,000$ 645,000$
4 2017/18 285,000$ 930,000$
5 2018/19 320,000$ 1,250,000$
6 2019/20 355,000$ 1,605,000$
7 2020/21 390,000$ 1,995,000$
8 2021/22 425,000$ 2,420,000$
9 2022/23 460,000$ 2,880,000$
10 2023/24 495,000$ 3,375,000$
11 2024/25 1,000,000$ 4,375,000$
12 2025/26 1,000,000$ 5,375,000$
13 2026/27 1,000,000$ 6,375,000$
14 2027/28 1,000,000$ 7,375,000$
15 2028/29 1,000,000$ 8,375,000$
16 2029/30 1,100,000$ 9,475,000$
17 2030/31 1,100,000$ 10,575,000$
18 2031/32 1,100,000$ 11,675,000$
19 2032/33 1,100,000$ 12,775,000$
20 2033/34 1,100,000$ 13,875,000$
21 2034/35 1,200,000$ 15,075,000$
22 2035/36 1,200,000$ 16,275,000$
23 2036/37 1,200,000$ 17,475,000$
24 2037/38 1,200,000$ 18,675,000$
25 2038/39 1,200,000$ 19,875,000$
26 2039/40 1,300,000$ 21,175,000$
27 2040/41 1,300,000$ 22,475,000$
28 2041/42 1,300,000$ 23,775,000$
29 2042/43 1,300,000$ 25,075,000$
30 2043/44 1,300,000$ 26,375,000$
31 2044/45 1,400,000$ 27,775,000$
32 2045/46 1,400,000$ 29,175,000$
33 2046/47 1,400,000$ 30,575,000$
34 2047/48 1,400,000$ 31,975,000$
35 2048/49 1,400,000$ 33,375,000$
36 2049/50 1,500,000$ 34,875,000$
37 2050/51 1,500,000$ 36,375,000$
38 2051/52 1,500,000$ 37,875,000$
39 2052/53 1,500,000$ 39,375,000$
40 2053/54 1,500,000$ 40,875,000$
32 NFL Ticket Surcharge – The Forty Niners Football Company, LLC (the Team) collects a 10% NFL ticket surcharge on the price of admission to all NFL games occurring in Levi’s® Stadium on behalf of Stadium Authority. (Source: Amended and Restated Non-Relocation Agreement)
Non-NFL Event Ticket Surcharge – Promoters or sponsors of any ticketed Non-NFL event that is held at Levi’s® Stadium are required to collect a $4 per ticket surcharge on behalf of Stadium Authority. O ne-half of this surcharge that is paid to Stadium Authority covers general stadium operations and the other half funds the Stadium Authority Discretionary Fund. (Source: Amended and Restated Stadium Lease Agreement)
Offsite Parking Fees – Parking lot operators who wish to operate a parking lot for sports or entertainment venues are required to go through the City’ s permitting process. If approved, per the City’s Municipal Fee Schedule, these operators remit an offsite parking fee for each car that is parked for sports or entertainment events. This fee is designed to recover the public safety costs associat ed with these permitted offsite parking lots.
Therefore, when invoicing for NFL or Non-NF L public safety costs for a particular event held at Levi’s® Stadium, the offsite parking fee that is collected for said event partly offsets the total public safety costs owed for that event. In the City’s FY 2023/24 (July 1, 2023 through June 30, 2024) the offsite parking fee is $6.44.
Performance-Based Rent – Stadium Authority pays the City performance-based rent on top of the fixed ground rent. The basic calculation for the performance-based rent is fifty percent (50%) of the net income from Non-NFL events for any given lease year less the sum of Performance-Based Rent Credits. T he Performance-Based Rent Credits include (1) fifty percent (50%) of the fixed ground rent for the current lease year, (2) the amount, if any, that the Public Safety Costs exceed the Public Safety Cost Threshold for the current lease year, (3) following the Tax Allocation Termination Date, the amount of Received Possessory Interest Tax (PIT), and (4) the amount of any credit for Disproportionate Taxes for the current lease year. (Source: Ground Lease Agreement & Amended and Restated Stadium Lease Agreement)
Public Safety Costs – For each NFL and Non- NFL event held at Levi’s ® Stadium, a
public safety plan is developed and implem ented. Multiple City departments provide staffing, materials, and supplies to support the public safety plan. Services are provided through a combination of City staff, contracts with other agencies (California Highway Patrol, County Sheriff’s Office, and City of Sunnyvale) and some vendor provided services.
The Amended and Restated Stadium Lease Agreement section 7.5 states that the tenant is responsible for reimbursing the City for the public safety costs attributed to NFL events at Levi’s® Stadium. Additionally, Article 5 of the Stadium Management Agreement notes that ManCo is responsible for paying Non-NFL event expenses on behalf of the Stadium Authority. Therefore, the cost of providing public safety services are tracked through the City’s financial system and invoices are sent to ManCo. All these costs are reimbursed to the City of Santa Clara.
33 Senior and Youth Program Fees – During the lease terms, StadCo collects City of Santa Clara Senior and Youth Program Fees on behalf of Stadium Au thority. The fee is $0.35 per NFL game ticket up to a maximum of $250,000 pe r lease year. (Source:
Amended and Restated Stadium Lease Agreement)
Stadium Management Fee – ManCo receives an annual base management fee to manage Levi’s® Stadium. The fee was $400,000 in the first lease year and increases by 3% annually. This annual base management fe e is split 50/50 between StadCo and Stadium Authority since ManC o manages the Stadium year-round for bo th entities. In addition to the base management fee, ManCo receives a stadium marketing and booking fee (incentive fee) which is based on a perc entage of the amount t hat the net income from Non-NFL events exceeds the marketing and booking fee benchmark. (Source: The Stadium Management Agreement)
Attachment 2
Line Item Source of
Funds
Use of
Funds
Explanation
Beginning Fund Balance -
Discretionary Fund Reserve
$ 627 This action increases the Beginning Fund Balances for Discretionary Fund Reserve from $2,463,696 to
$2,464,323 as a result of FY 2023/24 year-end actuals
reconciliation.
Beginning Fund Balance – Legal
Contingency Reserve - Public Safety
Costs
$ (481,003) This action decreases the Beginning Fund Balances for Legal Contingency Reserve - Public Safety Costs
from $7,805,725 to $7,324,722 as a result of FY
2023/24 year-end actuals reconciliation.
Beginning Fund Balance - Operating
Reserve
$ 76 This action increases the Beginning Fund Balance for Operating Reserve from $26,095,402 to $26,095,478
as a result of FY 2023/24 year-end actuals
reconciliation.
Beginning Fund Balance –
Renovation/Demolition Reserve
$ 7,370,345 This action increases the Beginning Fund Balance for Renovation/Demolition Reserve from $24,070,390 to
$31,440,735 as a result of FY 2023/24 year-end
actuals reconciliation.
Beginning Fund Balance - Stadium
Funding Trust Reserve
$ (1,803,355) This action decreases the Beginning Fund Balance for Stadium Funding Trust Reserve from $5,414,396 to
$3,611,041 as a result of FY 2023/24 year-end actuals
reconciliation.
Beginning Fund Balance – Unrestricted $ (1,221,789) This action decreases the Beginning Fund Balance – Unrestricted from $17,137,508 to $15,915,719 as a
result of FY 2023/24 year-end actuals reconciliation.
Ending Fund Balance - Discretionary
Fund Reserve
$ 627 This action increases the Ending Fund Balances for Discretionary Fund Reserve from $2,788,696 to
$2,789,323 as a result of FY 2023/24 year-end actuals
reconciliation.
Ending Fund Balance – Operating
Reserve
$ 76 This action increases the Ending Fund Balance for Operating Reserve from $26,878,402 to $26,878,478
as a result of FY 2023/24 year-end actuals
reconciliation.
Ending Fund Balance –
Renovation/Demolition Reserve
$ 7,370,345 This action increases the Ending Fund Balance for Renovation/Demolition Reserve from $30,178,231 to
$37,548,576 as a result of FY 2023/24 year-end
actuals reconciliation.
Ending Fund Balance – Stadium
Funding Trust Reserve
$ (1,803,355) This action decreases the Ending Fund Balance for Stadium Funding Trust Reserve from $5,987,000 to
$4,183,645 as a result of FY 2023/24 year-end actuals
reconciliation.
Ending Fund Balance – Unrestricted $ (1,702,792) This action decreases the Ending Fund Balance – Unrestricted from $15,939,904 to $14,237,112 as a
result of FY 2023/24 year-end actuals reconciliation for the Legal Contingency Reserve - Public Safety Costs
and Unrestricted Fund Balance.
Total 3,864,901$ 3,864,901$
Santa Clara Stadium Authority
2024/25 Operating Budget Adjustment
1 Attachment 2
Line Item Source of
Funds
Use of
Funds
Explanation
Beginning Fund Balance - Debt
Service Reserve
$ 126,179 This action increases the Beginning Fund Balance from $7,996,801 to $8,122,980 as a result of FY
2023/24 year-end actuals reconciliation.
Ending Fund Balance - Debt
Service Reserve
$ 126,179 This action increases the Ending Fund Balance from $8,562,801 to $8,688,980 as a result of FY 2023/24
year-end actuals reconciliation.
Total 126,179$ 126,179$
Santa Clara Stadium Authority
2024/25 Debt Service Budget Adjustment
2 Attachment 2
Line Item Source of
Funds
Use of
Funds
Explanation
Beginning Fund Balance $ 78,024 This action increases the Beginning Fund Balance from $19,784,810 to $19,862,834 as a result of FY
2023/24 year-end actuals reconciliation.
Ending Fund Balance $ 78,024 This action increases the Ending Fund Balance from $2,859,569 to $2,937,593 as a result of FY 2023/24
year-end actuals reconciliation.
Total 78,024$ 78,024$
Santa Clara Stadium Authority
2024/25 CIP Budget Adjustment
3 City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
24-46 Agenda Date: 9/10/2024
REPORT TO COUNCIL
SUBJECT
Action on a Resolution Approving an Electric Revenue Bond Issuance Estimated at $130 Million Plus a 10% Contingency for a Total Amount not to Exceed $143 Million to Finance Capital Costs of the Electric System, Authorizing the Execution and Delivery of Related Documents, and Other Related Actions; and Approval of Related Budget Amendment
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
The City of Santa Clara’s Electric Utility, Silicon Valley Power (SVP), has provided reliable electric service for over 128 years and is experiencing significant continued growth. SVP has developed a City Council approved Capital Improvement Strategy to address near-term and long-term impacts from potential load growth and aged infrastructure to maintain system reliability. In 2021, SVP recorded a peak load of nearly 600 Megawatt (MW) and delivered approximately 4,100 Gigawatt- hours (GWh) to customers. In 2022, SVP’s recorded peak load increased to 702 MW, and energy delivery rose to 4,550 GWh. This represents an approximate 10% increase in energy delivery and represents the largest year-over-year growth in the last 30 years. In July 2024, SVP recorded a new peak load of 705 MW and continues to see increased energy consumption averaging 6% over the last three years since 2021 and delivered nearly 4,590 GWh of energy in 2023.
On September 28, 2021, City Council accepted SVP’s Three-Year System Growth Strategy Plan (RTC #21-871). The Three-Year System Growth Strategy Plan identified $300 million of proposed projects to install new facilities and replace aged infrastructure with higher capacity infrastructure where needed. On November 15, 2022, City Council accepted SVP’s System Expansion Plan report for the California Independent System Operator’s Transmission Planning Process FY2023/24 (RTC #22-1172). This report included a comprehensive list with $200 million of proposed projects for SVP’s System Growth Strategy during the study period, which is in addition to projects proposed in the Three-Year System Growth Strategy Plan. Combined, these reports include over $500 million of proposed projects required to serve a projected load of approximately 1,300 MW by 2032.
SVP evaluated the use of debt financing to fund some of the proposed projects. On May 9, 2023, the City Council adopted Resolution 23-9223 (RTC #23-104) which stated SVP’s intention to issue tax- exempt bonds to fund several capital projects, including:
· Kifer Receiving Station (KRS) Rebuild and Replacement; · Scott Receiving Station (SRS) Rebuild and Replacement; · Northern Receiving Station (NRS) Upgrades and Expansion; City of Santa Clara Printed on 9/6/2024Page 1 of 7
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· Northern Receiving Station (NRS)/Kifer Receiving Station (KRS) 115kV Transmission Line; · Homestead Substation Rebuild; and
· Reconductoring and reconfiguration of transmission lines.
The attached Resolution authorizes documents and actions related to the issuance of Electric Revenue Bonds to finance a portion of the costs of the proposed projects and reimburse SVP for previously incurred costs related to these projects. The estimated proceeds are $130 million plus a 10% for a total amount not to exceed $143 million. Staff will bring a future resolution for Council Consideration in 2025 to finance the rest of the costs.
DISCUSSION
Staff developed a financing plan with the assistance of SVP’s financing team, PFM Financial Advisors LLC (municipal advisor) and Stradling Yocca Carlson & Rauth LLP (bond and disclosure counsel).
This plan contemplates that two debt issuances be considered to complete three of the proposed projects with total current estimated costs of $376 million:
· Kifer Receiving Station (KRS) Rebuild and Replacement - estimated cost: $119 million; · Scott Receiving Station (SRS) Rebuild and Replacement - estimated cost: $110 million; and · Northern Receiving Station (NRS) Upgrades and Expansion - estimated cost: $147 million.
Two debt issuances are proposed based on SVP’s anticipated timeline for funding needs and to avoid carrying costs. Bond Issuance Number 1, which is the subject of this Report to Council, has a projected closing date in 2024 with estimated proceeds of $130 million to be used for design services, project management, material procurement expenses, and contingencies. It is important to note that City Council has approved the following procurement contracts for long-lead time items that were contingent on the approval of debt financing:
· On October 10, 2023, the City Council authorized an agreement with HD Hyundai for the Purchase of High Voltage Transformers (RTC #23-122) with a not to exceed amount of $60.6 million.
· On May 7, 2024, the City Council authorized the City Manager to Negotiate and execute an agreement for the Purchase of High Voltage Circuit Breakers (RTC #24-35) with a not to exceed amount of $38.0 million.
· On May 28, 2024, the City Council authorized the City Manager to Negotiate and execute an agreement for the Purchase of Switches and Transformers (RTC #24-435) with a not to exceed amount of $17.4 million.
Bond Issuance Number 2 will have a projected closing date in 2025 with estimated proceeds of $246 million to be used for construction, testing and commissioning, and close out expenses. The anticipated closing date is contingent upon completion of major design and material procurement milestones within the projects and accounts for unforeseen circumstances. Future Council action will be requested for approval of the second bond issuance.
Authorizing Resolution
. The authorizing resolution (“Authorizing Resolution”) authorizes the City to issue electric revenue bonds (2024 Bonds), approves the related documents described below, and authorizes City staff to execute them; provided that,
1. The final terms of the 2024 Bonds do not exceed a maximum principal amount of $143 million; City of Santa Clara Printed on 9/6/2024Page 2 of 7
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24-46 Agenda Date: 9/10/2024
2. The final maturity of the 2024 Bonds is not later than July 1, 2054;
3. The maximum coupon rate on any of the 2024 Bonds is not greater than 6.00%;
4. The true interest cost of the 2024 Bonds does not exceed 5.50%; and
5. The maximum aggregate net original issue discount at which such Series 2024 A Bonds may be sold shall not exceed 10%.
These amounts are set to provide the City with the flexibility to adjust the structuring of the 2024 Bonds as needed in the days leading up to the sale. The total amount of the bonds, the coupon rate, and the true interest cost may be lower than the authorized amounts.
Fourth Supplemental Electric Revenue Bond Indenture.
In 2011, the City entered into its Electric
Revenue Bond Indenture (Indenture) with the bond trustee that serves as trustee on behalf of the owners of bonds of the City’s Electric enterprise. The Fourth Supplemental Electric Revenue Bond Indenture (Supplemental Indenture) relating to the 2024 Bonds supplements the Indenture and provides the terms of the 2024 Bonds, including the principal and interest payment dates and the interest rates on the new 2024 Bonds. Under the Indenture and Supplemental Indenture, the City is obligated to set rates to provide adjusted net revenues sufficient in each year to cover 1.0 times the annual debt service on the City’s outstanding electric revenue bonds, including the 2024 Bonds, and any other debt of the Electric enterprise payable from adjusted net revenues of the Electric Enterprise in accordance with the Indenture. The Supplemental Indenture also includes amendments to the Indenture that are expected to become effective on or about the date of issuance of the 2024 Bonds.
The amendments include administrative modifications as well as modifications relating to (1) the calculation of the rate covenant under the Indenture and the application of the Rate Stabilization Fund; and (2) the issuance of additional bonds or other debt of the Electric enterprise parity debt.
Continuing Disclosure Agreement.
The Continuing Disclosure Agreement sets out the City’s obligation to provide the 2024 Bond owners and the larger municipal securities marketplace certain annual financial information, operating data, and notices regarding the status of the 2024 Bonds and the City’s Electric enterprise and finances. Under securities laws, the underwriters for the 2024 Bonds are required to obtain this commitment from the City to provide ongoing disclosure in connection with the City’s bonds.
Bond Purchase Contract.
The Authorizing Resolution approves J.P. Morgan Securities LLC, RBC Capital Markets, LLC, and Siebert Williams Shank & Co., LLC as the underwriters (“Underwriters”) in connection with the negotiated sale of the 2024 Bonds by the City. The Bond Purchase Contract provides the terms and conditions under which the Underwriters agree to purchase the 2024 Bonds from the City for reoffering to the public and specifies the circumstances under which the Underwriters’ obligation may be terminated prior to delivery of the 2024 Bonds. The Authorizing Resolution provides that the discount (or compensation paid from the proceeds of the bond sale) to be paid to the Underwriters in connection with their purchase of the 2024 Bonds shall not exceed
0.30% of the aggregate principal amount of the 2024 Bonds to be purchased.
Preliminary Official Statement and Securities Laws.
The attached preliminary official statement
(“Preliminary Official Statement”) is the primary disclosure document for the 2024 Bonds and provides potential investors with information about the City and the Electric enterprise, the security and sources of payment for the 2024 Bonds, financial and operational information regarding the Electric enterprise, and outlines key risk factors for potential investors to consider.
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The distribution of the Preliminary Official Statement by the City is subject to the federal securities laws, including the Securities Act of 1933 and the Securities Exchange Act of 1934. These laws require the Preliminary Official Statement to include all facts that would be material to an investor in the 2024 Bonds. Information is “material information” if there is a substantial likelihood it would have actual significance in the deliberations of a reasonable investor when deciding whether to buy or sell securities. The City’s Authorizing Resolution approves the Preliminary Official Statement, and delegates to staff the ability to (1) make additional changes, if needed, and (2) sign a certificate on behalf of the City that deems the Preliminary Official Statement substantially final for purposes of the federal securities laws. The Securities and Exchange Commission (SEC), the federal agency with regulatory authority over compliance with the federal securities laws, has indicated that, if a member of a legislative body like the City Council has knowledge of any facts or circumstances that an investor would want to know about prior to investing in securities like the 2024 Bonds, whether relating to the City, the electric enterprise and its financial status, undisclosed conflicts of interest with interested parties, or otherwise. The City Council should endeavor to discover whether such facts are adequately disclosed in the Preliminary Official Statement. The steps that a member of the City Council could take to fulfill this obligation include becoming familiar with the Preliminary Official Statement and questioning staff and other members of the financing team about the disclosure of such facts.
All of the documents have been presented for approval as to form and will contain certain blanks related to the terms that will be completed when the 2024 Bonds are priced (such as principal amount, interest rates, amortization, and redemption terms). These terms will be affected by market conditions existing on that day.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act pursuant to section 15378(b)(4) of Title 14 of the California Code of Regulations as it is a fiscal activity which does not involve any commitment to a specific project that may result in a potentially significant physical impact on the environment.
FISCAL IMPACT
The recommended actions approved are part of the ongoing strategy of SVP to maintain reasonable and equitable electric rates. Based on a debt issuance with proceeds estimated at $143 million, inclusive of a 10% contingency, estimating 4.50% as the cost of long-term borrowing, and assuming a 30-year repayment period, annual debt service on this fixed rate issuance is approximately $8.0 million. As an alternative consideration, estimating 4.25% as the cost of long-term borrowing and assuming a 20-year repayment period, the annual debt service on this fixed rate issuance is approximately $9.7 million. Additional consideration will be given closer to issuance of the 2024 Bonds as to which is more favorable to keep stable rate increases. It is important to note the rate or cost of borrowing below are estimates, and actual rates will be market-driven and determined during the pricing of the 2024 Bonds.
Bond Type Rate Annual Payment Lifetime
20-Year Fixed Rate 4.25% $9,736,000 $194,720,000
30-Year Fixed Rate 4.50% $7,981,000 $239,430,000
The amended FY 2024/25 Operating Budget, adopted by the City Council on June 25, 2024 (RTC City of Santa Clara Printed on 9/6/2024Page 4 of 7
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#24-322), assumed proceeds of $143 million with a payment plan allowing for the use of proceeds to cover the first-year debt service payment. This plan provided SVP flexibility to manage and maintain adequate cash levels. Upon further review and coordination with the Finance Department, the plan was revised such that proceeds are not needed to cover the first year’s debt service payment.
A budget amendment is recommended to reflect the revised plan and recommend a transfer $9.8 million from available fund balance in the Electric Utility Operating Fund to the Electric Utility Debt Service Fund as described in the table below:
Budget Amendment
FY 2024/25
Current Increase/
(Decrease)
Revised
Electric Utility Fund (091)
Transfers To
Electric Utility Debt Fund $17,554,002 $9,800,000 $27,354,002 Fund Balance
Unrestricted Ending Fund Balance $108,095,323 ($9,800,000) $98,295,323 Electric Utility Debt Service Fund (491)
Transfers From
Electric Utility Fund $17,554,002 $9,800,000 $27,354,002 Expenditures
Debt Service $17,554,002 $9,800,000 $27,354,002
Debt service payments would be made from net revenues, with the original repayment amounts included in SVP’s 10-year financial forecast. The debt repayments will be updated in the subsequent fiscal years’ budget during the next budget cycle.
COORDINATION
This report has been coordinated with the Finance Department and City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email [email protected] < mailto:[email protected]>
or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
1. That the City Council by Resolution:
a. Authorize issuance of the Electric Revenue Bonds, Series 2024 A subject to the terms set forth in the Authorizing Resolution;
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b. Approve and authorize the City Manager or designee to execute the Fourth Supplemental Electric Revenue Bond Indenture, in substantially the form attached to this Report to Council;
c. Approve the following underwriters in connection with the Electric Revenue Bonds, Series 2024 A: J.P. Morgan Securities LLC, RBC Capital Markets, LLC, and Siebert Williams Shank & Co., LLC; and approve and authorize certain City officers or designees to execute the Bond Purchase Contract, in substantially the form attached to this Report to Council;
d. Approve the Preliminary Official Statement, in substantially the form attached to this Report to Council; and authorize (i) certain City officers or designees to execute a certificate to deem the Preliminary Official Statement substantially final, and (ii) the City Manager or designee to execute a Final Official Statement in substantially the form of the Preliminary Official Statement;
e. Authorize applicable City officers to modify the Fourth Supplemental Electric Revenue Bond Indenture, the Bond Purchase Contract, Preliminary Official Statement, and Final Official Statement to reflect the terms of the sale of the Electric Revenue Bonds, Series 2024 A, subject to any requirements and limitations contained in the Authorizing Resolution;
f. Approve and authorize the City Manager to execute the Continuing Disclosure Agreement, in substantially the form attached to this Report to Council, with such changes as the City Manager or the Director of Finance shall approve subject to any requirements and limitations contained in the Authorizing Resolution; and g. Authorize certain City officers to execute all required agreements, documents, and certificates necessary to effect the sale and delivery of the Electric Revenue Bonds, Series 2024 A by the agreements and documents approved under the Authorizing Resolution; and to do any and all things and to execute and deliver such other agreements, documents and certificates in connection with the issuance and delivery of the Electric Revenue Bonds, Series 2024 A, subject to any requirements and limitations contained in the Authorizing Resolution; and
h. Authorize certain other actions set forth in the Authorizing Resolution, with the understanding that all required agreements and disclosure documents shall be subject to final approval as to form by the City Attorney.
2. Approve the following FY 2024/25 budget amendments:
a. In the Electric Utility Fund, increase the transfer to the Electric Utility Debt Service Fund and decrease the Unrestricted Ending Fund Balance in the amount of $9.8 million (five affirmative Council votes required for the use of unused balances) ; and b. In the Electric Utility Debt Service Fund, increase the transfer from the Electric Utility Fund and increase the Debt Service appropriation in the amount of $9.8 million (five affirmative Council votes required to appropriate additional revenue).
Reviewed by: Manuel Pineda, Chief Electric Utility Officer Approved by: Jovan D. Grogan, City Manager
ATTACHMENTS
1. Authorizing Resolution
2. Fourth Supplemental Electric Revenue Bond Indenture
3. Continuing Disclosure Agreement
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4. Bond Purchase Contract
5. Preliminary Official Statement
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RESOLUTION NO. 24-_____
A RESOLUTION OF THE CITY OF SANTA CLARA, CALIFORNIA
AUTHORIZING AND APPROVING THE ISSUANCE OF CITY OF SANTA CLARA, CALIFORNIA ELECTRIC REVENUE BONDS, SERIES 2024 A IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $143 MILLION;
APPROVING THE FORM OF AND AUTHORIZING CERTAIN
DOCUMENTS IN CONNECTION WITH THE ISSUANCE, SECURING AND SALE OF SUCH BONDS; AND AUTHORIZING CERTAIN OTHER ACTIONS
RELATING THERETO
BE IT RESOLVED BY THE CITY OF SANTA CLARA AS FOLLOWS:
WHEREAS, the City of Santa Clara (the “City”) is a duly constituted charter city of the State of California authorized to exercise the powers granted by its Charter; and WHEREAS, Section 1321(e) of the City’s Charter authorizes the City to issue revenue bonds for the purpose of financing the generation, production, transmission and distribution of electric energy; and
WHEREAS, on May 8, 1984, the City Council adopted its Resolution No. 4796 entitled “A Resolution of the City Council of the City of Santa Clara Establishing Procedures for the Authorization, Issuance and Sale of Electric Utility Revenue Bonds,” as amended by Resolution No. 4804, adopted on May 29, 1984, and as amended by Resolution No. 7313, adopted on April 25, 2006; and on April 30, 1985, the City Council adopted its Resolution No. 4934 entitled “A Resolution of the City Council of the City of Santa Clara Establishing Procedures for the Authorization, Issuance and Sale of Refunding Electric Utility Revenue Bonds,” as amended by Resolution No. 4966, adopted on July 9, 1985, as supplemented by Resolution No. 4967, adopted on July 9, 1985, and as amended by Resolution No. 7314, adopted on April 25, 2006 (collectively, the “Procedural Resolution”); and WHEREAS, pursuant to the City Charter and the Procedural Resolution, and for the purposes of securing the Bonds (as defined below) issued thereunder, the City entered into a Subordinated Electric Revenue Bond Indenture, dated as of March 1, 1998 (the “Original Subordinated Electric Revenue Bond Indenture”), by and between the City and BNY Western Trust Company (which has been succeeded by The Bank of New York Mellon Trust Company, N.A.), as trustee (the “Trustee”), as amended and supplemented by a number of s upplemental subordinated e lectric revenue bond indentures pursuant to which various series of the City’s then subordinated electric revenue bonds were issued; and
WHEREAS, the City amended and restated the Original Subordinated Electric Revenue Bond Indenture by execution and delivery of an Amended and Restated Electric Revenue Bond Indenture, dated as of March 1, 2011 (the “Amended and Restated Electric Revenue Bond Indenture”), by and between the City and The Bank of New York Mellon Trust Company, N.A., as Trustee, in order to reflect that electric revenue bonds (the “Bonds”) issued pursuant thereto were no longer subordinated to certain previously issued bonds of the City, to eliminate the references to “subordinated” contained therein and to reflect certain amendments made thereto pursuant to the fourth and fifth supplemental subordinated electric revenue bond indentures; and
2 WHEREAS, pursuant to the Amended and Restated Electric Revenue Bond Indenture, as amended and supplemented by (i) a First Supplemental Electric Revenue Bond Indenture, dated as of March 1, 2011, by and between the City and the Trustee, the City’s Electric Revenue Refunding Bonds, Series 2011 A were issued (all of which Bonds have been retired); (ii) a Second Supplemental Electric Revenue Bond Indenture, dated as of April 1, 2013, by and between the City and the Trustee, the City’s Electric Revenue Refunding Bonds, Series 2013 A were issued (all of which Bonds have been retired); and (iii) a Third Supplemental Electric Revenue Bond Indenture, dated as of December 1, 2018, by and between the City and the Trustee, the City’s Electric Revenue Refunding Bonds, Series 2018 A were issued; and
WHEREAS, the City has determined to authorize the issuance of an additional series of Bonds pursuant to the Amended and Restated Electric Revenue Bond Indenture, as supplemented by a Fourth Supplemental Electric Revenue Bond Indenture, by and between the City and the Trustee, to be designated “City of Santa Clara, California Electric Revenue Bonds, Series 2024 A” (the “Series 2024 A Bonds”) in a principal amount not to exceed $143 million in order to provide moneys, together with certain other available funds, to fund or reimburse the City for certain costs of improvements to the Electric System of the City, and to pay the costs of issuance associated with the Series 2024 A Bonds; and
WHEREAS, in order to provide a continuing disclosure undertaking pursuant to the requirements promulgated under Rule 15c2-12 of the Securities and Exchange Commission in connection with the Series 2024 A Bonds, the City intends to enter into a Continuing Disclosure Agreement, by and between the City and the Trustee; and WHEREAS, pursuant to a Bond Purchase Contract, by and between the City and J.P. Morgan Securities LLC , as representative of itself, RBC Capital Markets, LLC, and Siebert Williams Shank & Co., LLC, as underwriters (the “Underwriters”), the Underwriters will purchase the Series 2024 A Bonds and the City will deliver the Series 2024 A Bonds to the Underwriters , upon certain conditions; and
WHEREAS, the Underwriters will distribute a preliminary and a final official statement relating to the Series 2024 A Bonds to prospective and actual purchasers of the Series 2024 A Bonds; and
WHEREAS, California Government Code Section 5852.1 requires that the City Council obtain from an underwriter, financial advisor or private lender and disclose, prior to authorization of the issuance of bonds with a term of greater than 13 months, good faith estimates of the following information in a meeting open to the public: (a) the true interest cost of the bonds, (b) the sum of all fees and charges paid to third parties with respect to the bonds, (c) the amount of proceeds of the bonds expected to be received net of the fees and charges paid to third parties and any reserves or capitalized interest paid or funded with proceeds of the bonds, and (d) the sum total of all debt service payments on the bonds calculated to the final maturity of the bonds plus the fees and charges paid to third parties not paid with the proceeds of the bonds; and
WHEREAS, in compliance with California Government Code Section 5852.1, the City Council has obtained from PFM Financial Advisors LLC, the City’s municipal advisor in connection with the Series 2024 A Bonds, the required good faith estimates and such estimates are disclosed and set forth on Exhibit A attached hereto; and
3 WHEREAS, it is desirable that the City Council provide for the issuance, securing and sale of the Series 2024 A Bonds at this time; and
WHEREAS, there has been presented to this meeting proposed forms of certain financing documents relating to the Series 2024 A Bonds and the issuance, sale and delivery thereof; and WHEREAS, the City Council has reviewed all proceedings previously taken relative to the transactions contemplated by the foregoing, and has found as a result of such review, and hereby determines and declares that all conditions, things and acts required by law to exist, happen or be performed precedent to the transactions contemplated by the foregoing do exist, and were performed in due time, form and manner as required by law, and the City Council is now authorized to undertake the transactions contemplated by the foregoing.
NOW THEREFORE, BE IT FURTHER RESOLVED BY THE CITY OF SANTA CLARA AS FOLLOWS:
1. Authorization of Series 2024 A Bonds. The issuance of the Series 2024 A Bonds on the terms and conditions set forth in, and subject to the limitations specified in, the Amended and Restated Electric Revenue Bond Indenture and the Fourth Supplemental Electric Revenue Bond Indenture (as hereinafter approved) is hereby authorized and approved. The Series 2024 A Bonds will be dated, will bear interest at the rates, will mature on the dates, will be issued in the form, may be subject to redemption, and will be as otherwise provided in the Fourth Supplemental Electric Revenue Bond Indenture as the same is completed as provided in this Resolution. The proposed form of the Series 2024 A Bonds, as set forth in such Fourth Supplemental Electric Revenue Bond Indenture, is hereby approved and the Mayor of the City is hereby authorized and directed to execute for and on behalf of the City (by manual or facsimile signature) the Series 2024 A Bonds in substantially such form and the City Clerk of the City or any Acting City Clerk or Assistant City Clerk performing functions of the City Clerk (the “City Clerk”) is authorized and directed to attest thereto (by manual or facsimile signature), and the Trustee is hereby authorized and directed to authenticate and deliver the Series 2024 A Bonds to the Underwriters in accordance with the Bond Purchase Contract, the Amended and Restated Electric Revenue Bond Indenture and the Fourth Supplemental Electric Revenue Bond Indenture; provided, however, that (i) the aggregate principal amount of the Series 2024 A Bonds shall not exceed $143 million, (ii) the final maturity of any of the Series 2024 A Bonds shall not be later than July 1, 2054, (iii) the maximum coupon rate of interest on any Series 2024 A Bond shall not exceed 6.00% per annum, (iv) the true interest cost of the Series 2024 A Bonds shall not exceed 5.50% per annum, and (v) the maximum aggregate net original issue discount at which such Series 2024 A Bonds may be sold shall not exceed 10%.
2. Approval of Fourth Supplemental Electric Revenue Bond Indenture . The City Manager of the City (the “City Manager”) or any duly authorized designee thereof is hereby authorized and directed to execute for and on behalf of the City, and the City Clerk shall attest thereto, the Fourth Supplemental Electric Revenue Bond Indenture, in substantially the form submitted to this meeting, with such changes therein and additions thereto to reflect the terms of sale of the Series 2024 A Bonds as the City Manager or the Director of Finance of the City (the “Director of Finance”) shall approve after consultation with the City Attorney of the City (the “City Attorney”) and Stradling Yocca Carlson & Rauth LLP, the City’s Bond Counsel (“Bond Counsel”) for the Series 2024 A Bonds, such approval to be evidenced by the execution and delivery thereof. The Fourth Supplemental Electric Revenue Bond Indenture, as executed and delivered, is hereinafter referred to as the “Fourth 4 Supplemental Electric Revenue Bond Indenture” and such Fourth Supplemental Electric Revenue Bond Indenture is hereby approved.
3. Approval of Continuing Disclosure Agreement . The City Manager or any duly authorized designee thereof is hereby authorized and directed to execute for and on behalf of the City the Continuing Disclosure Agreement, in substantially the form submitted to this meeting, with such changes therein as the City Manager or the Director of Finance shall approve after consultation with the City Attorney and Bond Counsel, such approval to be evidenced by the execution and delivery thereof. The Continuing Disclosure Agreement, as executed and delivered, is hereinafter referred to as the “Continuing Disclosure Agreement” and such Continuing Disclosure Agreement is hereby approved.
4. Selection of Underwriters; Approval of Bond Purchase Contract. The City Council hereby approves the engagement of J.P. Morgan Securities LLC, RBC Capital Markets, LLC and Siebert Williams Shank & Co., LLC as Underwriters in connection with the negotiated sale of the Series 2024 A Bonds. The City Manager, the Director of Finance or the Chief Electric Utility Officer of the City (the “Chief Electric Utility Officer”) or any duly authorized designee thereof is hereby authorized and directed to execute for and on behalf of the City a Bond Purchase Contract, in substantially the form submitted to this meeting, with such changes therein (and additions thereto to reflect the terms of the sale of the Series 2024 A Bonds) as such officer shall approve after consultation with the City Attorney and Bond Counsel, such approval to be evidenced by the execution and delivery thereof; provided, however, that the Underwriters’ discount (exclusive of any original issue discount) with respect to the Series 2024 A Bonds may not exceed 0.30% of the aggregate principal amount of the Series 2024 A Bonds purchased thereunder. The Bond Purchase Contract, as executed and delivered, is hereinafter referred to as the “Bond Purchase Contract” and such Bond Purchase Contract is hereby approved.
5. Approval of Official Statement. The City Council hereby approves the form of the preliminary official statement of the City relating to the Series 2024 A Bonds, in substantially the form submitted to this meeting, with such additions thereto and changes therein (including such changes and additions to reflect the terms of the Series 2024 A Bonds) as are approved by the City Manager or the Director of Finance after consultation with the City Attorney and Bond Counsel. The Underwriters are hereby authorized to distribute such preliminary official statement in connection with the marketing of the Series 2024 A Bonds. The City Manager, the Director of Finance or the Chief Electric Utility Officer or a duly authorized designee thereof is hereby authorized to certify that the preliminary official statement is as of its date “deemed final” for purposes of Rule 15c2-12 of the Securities and Exchange Commission. The City Manager or any duly authorized designee thereof is hereby authorized to cause the preparation of, and to execute for and on behalf of the City, a final official statement in substantially the form of the preliminary official statement with such additions thereto and changes therein (including such changes and additions to reflect the terms of the Series 2024 A Bonds) and to comply with the applicable federal securities laws as the City Manager or the Director of Finance shall approve after consultation with the City Attorney and Bond Counsel, such approval to be evidenced by the execution and delivery thereof. The City Manager or any duly authorized designee thereof is hereby authorized to authorize the Underwriters to distribute such final official statement to all purchasers of the Series 2024 A Bonds.
6. Additional Actions. The City Manager, any Assistant City Manager, the Director of Finance, any Assistant Director of Finance, the Chief Electric Utility Officer, the City Clerk and any and all other officers of the City are hereby authorized and directed, individually and c ollectively, to 5 take all actions and execute any and all documents necessary: to engage The Bank of New York Mellon Trust Company, N.A., the Trustee under the Amended and Restated Electric Revenue Bond Indenture, as trustee for the Series 2024 A Bonds; to effect the sale and delivery of the Series 2024 A Bonds pursuant to the terms of the Bond Purchase Contract and the Amended and Restated Electric Revenue Bond Indenture, as supplemented by the Fourth Supplemental Electric Revenue Bond Indenture; and to do any and all things and to execute and deliver such other agreements, documents and certificates, including (without limitation) a tax certificate and, upon the advice of Bond Counsel, a tax compliance policy relating to the Series 2024 A Bonds, any investment agreements relating to the investment of the Series 2024 A Bond proceeds, and such amendments to the Amended and Restated Electric Revenue Bond Indenture as shall be requested by any rating agency, the Underwriters or any other entity if such changes are determined by the City Manager or the Director of Finance, after consultation with the City Attorney and Bond Counsel, to be necessary or advisable; and to give any notices, directions, certificates or other documents, and to seek any consents or acknowledgements, in connection with the issuance of the Series 2024 A Bonds, as may be necessary, convenient or advisable in order to consummate the sale, execution and delivery of the Series 2024 A Bonds; and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution, the Series 2024 A Bonds, the Amended and Restated Electric Revenue Bond Indenture, the Fourth Supplemental Electric Revenue Bond Indenture relating to the Series 2024 A Bonds, the Bond Purchase Contract, the Continuing Disclosure Agreement, the preliminary official statement and the final official statement and the transactions herein authorized. All such actions heretofore taken by such officers or their designees are hereby ratified, confirmed and approved.
7. Effective date. This resolution shall become effective immediately.
I HEREBY CERTIFY THE FOREGOING TO BE A TRUE COPY OF A RESOLUTION
PASSED AND ADOPTED BY THE CITY OF SANTA CLARA, CALIFORNIA, AT A REGULAR MEETING THEREOF HELD ON THE 10
th DAY OF SEPTEMBER, 2024, BY THE FOLLOWING
VOTE:
AYES: COUNCILORS:
NOES: COUNCILORS:
ABSENT: COUNCILORS:
ABSTAINED: COUNCILORS:
ATTEST:
NORA PIMENTEL, MMC
ASSISTANT CITY CLERK
CITY OF SANTA CLARA
Attachments incorporated by reference:
1. Exhibit A – Good Faith Estimate
A-1
EXHIBIT A
GOOD FAITH ESTIMATES
The good faith estimates set forth herein are provided with respect to the City of Santa Clara, California Electric Revenue Bonds, Series 2024 A (the “Series 2024 A Bonds”) in compliance with Section 5852.1 of the California Government Code. Such good faith estimates have been provided to the City by PFM Financial Advisors LLC, as municipal advisor to the City (the “Municipal Advisor”) in connection with the Series 2024 A Bonds.
Principal Amount. The Municipal Advisor has informed the City that, based on the City’s financing plan and current market conditions, its good faith estimate of the aggregate principal amount of the Series 2024 A Bonds to be sold is $112,170,000 (the “Estimated Principal Amount”).
True Interest Cost of the Series 2024 A Bonds. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Series 2024 A Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the true interest cost of the Series 2024 A Bonds, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Series 2024 A Bonds, is 3.27%.
Finance Charge of the Series 2024 A Bonds. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Series 2024 A Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the finance charge for the Series 2024 A Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the Series 2024 A Bonds), is $672,293.80.
Amount of Proceeds to be Received. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Series 2024 A Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the amount of proceeds expected to be received by the City for sale of the Series 2024 A Bonds, less the finance charge of the Series 2024 A Bonds, as estimated above, and any reserves or capitalized interest paid or funded with proceeds of the Series 2024 A Bonds, is $130,000,000.
Total Payment Amount. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Series 2024 A Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the total payment amount, which means the sum total of all payments the City will make to pay debt service on the Series 2024 A Bonds, plus the finance charge for the Series 2024 A Bonds, as described above, not paid with the proceeds of the Series 2024 A Bonds, calculated to the final maturity of the Series 2024 A Bonds, is $179,059,295.83.
The foregoing estimates constitute good faith estimates only. The actual principal amount of the Series 2024 A Bonds issued and sold, the true interest cost thereof, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to (a) the actual date of the sale of the Series 2024 A Bonds being different than the date assumed for purposes of such estimates, (b) the actual principal amount of Bonds sold being different from the Estimated Principal Amount, (c) the actual amortization of the Series A-2
2024 A Bonds being different than the amortization assumed for purposes of such estimates, (d) the actual market interest rates at the time of sale of the Series 2024 A Bonds being different than those estimated for purposes of such estimates, (e) other market conditions, or (f) alterations in the City’s financing plan, or a combination of such factors. The actual date of sale of the Series 2024 A Bonds and the actual principal amount of Bonds sold will be determined by the City based on the need for project funds and other factors. The actual interest rates borne by the Series 2024 A Bonds will depend on market interest rates at the time of sale thereof. The actual amortization of the Series 2024 A Bonds will also depend, in part, on market interest rates at the time of sale thereof. Market interest rates are affected by economic and other factors beyond the control of the City. The City Council has approved the issuance of the Series 2024A Bonds with a maximum true interest cost of 5.50%.
[Remainder of Page Intentionally Left Blank]
Stradling – Draft of 08/30/24
4867-6961-2888v6/200891-0003
FOURTH SUPPLEMENTAL ELECTRIC
REVENUE BOND INDENTURE
between
CITY OF SANTA CLARA
SANTA CLARA COUNTY, CALIFORNIA
and
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
as Trustee
Dated as of October 1, 2024
(Supplemental to the Amended and Restated Electric Revenue Bond Indenture dated as of March 1, 2011)
i
4867-6961-2888v6/200891-0003
TABLE OF CONTENTS
Page
ARTICLE XIV SERIES 2024 A BONDS ......................................................................................... 2 Section 14.01. Definitions ................................................................................................................ 2 Section 14.02. Authorization of Series 2024 A Bonds .................................................................... 3 Section 14.03. Book-Entry System .................................................................................................. 4 Section 14.04. Redemption of Series 2024 A Bonds ....................................................................... 6 Section 14.05. Selection of Series 2024 A Bonds for Redemption .................................................. 6 Section 14.06. Notice of Redemption of Series 2024 A Bonds ....................................................... 7 Section 14.07. Partial Redemption of Series 2024 A Bonds ............................................................ 7 Section 14.08. Effect of Redemption of Series 2024 A Bonds ........................................................ 8 Section 14.09. Series 2024 A Sinking Account ............................................................................... 8 Section 14.10. Form of Series 2024 A Bonds .................................................................................. 9 Section 14.11. Issuance of Series 2024 A Bonds ............................................................................. 9 Section 14.12. Application of Proceeds of Series 2024 A Bonds and Other Amounts.................... 9 Section 14.13. Establishment and Application of Series 2024 A Project Fund ............................... 9 Section 14.14. Establishment and Application of Series 2024 A Costs of Issuance Fund ............ 10 Section 14.15. Continuing Disclosure ............................................................................................ 10 Section 14.16. Amendments to the Indenture to Take Effect on the Amendments Effective Date ........................................................................................................................ 11 Section 14.17. Terms of Series 2024 A Bonds Subject to the Indenture ....................................... 13 Section 14.18. Effective Date of Fourth Supplement..................................................................... 13 Section 14.19. Execution in Counterparts ...................................................................................... 13
EXHIBIT A - Form of Series 2024 A Bonds .............................................................................. A-1 EXHIBIT B - Description of the 2024 Electric Project .............................................................. B-1 EXHIBIT C - Form of Requisition ............................................................................................. C-1
---
4867-6961-2888v6/200891-0003
Fourth Supplemental Electric Revenue Bond Indenture
(Supplemental to the Amended and Restated Electric Revenue Bond Indenture dated as of March 1, 2011)
Authorizing the Issuance of
$__________ Aggregate Principal Amount of
City of Santa Clara, California
Electric Revenue Bonds, Series 2024 A
This FOURTH SUPPLEMENTAL ELECTRIC REVENUE BOND INDENTURE, dated as of October 1, 2024 (this “Fourth Supplement”), between the CITY OF SANTA CLARA (the “City”), a municipal corporation and chartered city duly organized and existing under the Constitution and laws of the State of California, and THE BANK OF NEW YORK MELLON TRUST COMP ANY, N.A., as trustee (the “Trustee”),
W I T N E S S E T H :
WHEREAS, this Fourth Supplement is supplemental to the Amended and Restated Electric Revenue Bond Indenture, dated as of March 1, 2011 (the “Indenture”), between the City and the Trustee, providing for the issuance of City of Santa Clara, California Electric Revenue Bonds (the “Bonds”); and
WHEREAS, the Indenture provides that the City may issue Bonds from time to time as authorized by a supplemental indenture; and
WHEREAS, Section 1321 of the City’s Charter authorizes the City to issue revenue bonds for the purpose of financing the generation, production, transmission and distribution of electric energy; and
WHEREAS, on May 8, 1984, the City Council adopted its Resolution No. 4796, entitled “A Resolution of the City Council of the City of Santa Clara Establishing Procedures for the Authorization, Issuance and Sale of Electric Utility Revenue Bonds,” as amended by Resolution No. 4804, adopted by the City Council on May 29, 1984, and as amended by Resolution No. 7313, adopted by the City Council on April 25, 2006, and on April 30, 1985, the City Council adopted its Resolution No. 4934, entitled “A Resolution of the City Council of the City of Santa Clara Establishing Procedures for the Authorization, Issuance and Sale of Refunding Electric Utility Revenue Bonds,” as amended by Resolution No. 4966 of the City Council adopted on July 9, 1985, supplemented by Resolut ion No. 4967 of the City Council adopted on July 9, 1985, and amended by Resolution No. 7314 of the City Council adopted on April 25, 2006 (collectively, the “Procedural Resolution”); and WHEREAS, the City Council has determined that it is in the best interests of the City to issue its City of Santa Clara, California Electric Revenue Bonds, Series 2024 A (the “Series 2024 A Bonds”) to provide for (i) the financing of a portion of the costs of certain improvements to the generation, transmission and distribution facilities of the City’s Electric Utility (the “2024 Electric Project” as defined herein) and (ii) to pay the costs of issuance of the Series 2024 A Bonds; and WHEREAS, the City Council has determined that it is necessary and required that the City enter into this Fourth Supplement in order to establish and declare, in conjunction with the Indenture,
2 4867-6961-2888v6/200891-0003
the terms and conditions upon which the Series 2024 A Bonds shall be issued and secured and to secure the payment of the principal thereof and premium (if any) and interest thereon; and WHEREAS, pursuant to Article VIII of the Indenture, the Indenture and the rights and obligations of the City, the Owners of the Bonds and the Trustee may be modified or amended from time to time and at any time by a Supplemental Indenture entered into by the City and the Trustee in accordance with the terms thereof, including with the written consent (or deemed written consent) of the Owners of a majority in aggregate amount of the Bond Obligation of the Bonds then Outstanding; and
WHEREAS, the City has determined to seek to amend the Indenture in certain respects as set forth in Section 14.16 hereof, such amendments to the provisions of the Indenture to become effective and binding in accordance with Article VIII of the Indenture on the Amendments Effective Date (as defined herein); and
WHEREAS, the City Council has determined that all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and the entering into of this Fourth Supplement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Fourth Supplement; NOW, THEREFORE, the parties hereto agree, as follows:
ARTICLE XIV
SERIES 2024 A BONDS
Section 14.01. De
finitions. The terms defined in this Section shall, for all purposes of this Fourth Supplement and of any certificate, opinion or other document herein mentioned, have the meanings herein specified, to be equally applicable to both the singular and plural forms of any of the terms herein defined. Terms defined in the Indenture not otherwise defined in this Fourth Supplement shall have the meanings specified therein.
“Amendments Effective Date” means the day
next succeeding the date on which the written
consent (or deemed written consent) of the Owners of a majority in aggregate amount of the Bond Obligation of the Bonds then Outstanding has been obtained to the amendments to the Indenture set forth in Section 14.16 of this Fourth Supplement and a written Certificate of the City to such effect shall have been delivered by the City and filed with the Trustee, which Amendments Effective Date shall be specified in such Certificate of the City. The Amendments Effective Date has been determined to be the day next succeeding the date of delivery of the Series 2024 A Bonds. “Beneficial Owner” means any Person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Series 2024 A Bond (including any Person holding a Series 2024 A Bond through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Series 2024 A Bond for federal income tax purposes. “Book-Entry System” means the system maintained by the Securities Depository and described in Section 14.03 hereof.
3 4867-6961-2888v6/200891-0003
“Continuing Disclosure Agreement” shall mean the Continuing Disclosure Agreement dated [Closing Date], 2024, by and between the City and the Trustee, relating to the Series 2024 A Bonds. “DTC” means The Depository Trust Company, New York, New York, and its successors and assigns.
“Representation Letter” means the Letter of Representations from the City to DTC relating to the Book-Entry System for the Series 2024 A Bonds.
“Securities Depository” means DTC or, if applicable, any successor securities depository appointed pursuant to Section 14.03 hereof.
“Securities Depository Participant” means any broker-dealer, bank or other financial institution for which a Securities Depository holds Series 2024 A Bonds as Securities Depository from time to time.
“Series 2024 A Bonds” shall mean the City of Santa Clara, California Electric Revenue Bonds, Series 2024 A, as described in Section 14.02(A) hereof. “Series 2024 A Costs of Issuance Fund” shall mean the fund by that name established pursuant to Section 14.14 hereof.
“Series 2024 A Project Fund” shall mean the fund by that name established pursuant to Section
14.13 hereof.
“2024 Electric Project” shall mean those certain additions and improvements to the electric generation, transmission and distribution facilities of the City’s Electric Utility referenced in Exhibit B hereto, or any other or additional facilities for the generation, transmission or distribution of electricity that the City hereafter determines to substitute therefor.
Section 14.02. Aut
horization of Series 2024 A Bonds.
(A) A Series of Bonds to be issued under the Indenture is hereby created. Such Series shall be known as the “City of Santa Clara, California Electric Revenue Bonds, Series 2024 A” (herein referred to as the “Series 2024 A Bonds”). The Series 2024 A Bonds shall be issued in the aggregate principal amount of $[PAR AMOUNT] in accordance with the Bond Law and the Indenture for the purpose of providing moneys to (i) fund or reimburse the City for certain costs of the 2024 Electric Project; and (ii) pay the Costs of Issuance of the Series 2024 A Bonds. (B) The Series 2024 A Bonds shall be issued in fully registered form and shall be initially issued registered in the name of “Cede & Co.,” as nominee of DTC, in accordance with Section 14.03 hereof. The Series 2024 A Bonds shall be evidenced by one Series 2024 A Bond maturing on each of the maturity dates as set forth in Section 14.02(C) hereof in a denomination corresponding to the total principal amount of the Series 2024 A Bonds of such maturity. Each Series 2024 A Bond may be assigned by the Trustee a disti nctive number or letter and number, and a record of the same shall be maintained by the Trustee. Registered ownership of the Series 2024 A Bonds, or any portion thereof, may not thereafter be transferred except as set forth in Section 14.03 hereof. (C) The Series 2024 A Bonds shall be dated the date of delivery thereof, shall be Bonds which are Current Interest Indebtedness, shall be issued in denominations of $5,000 or any integral
4 4867-6961-2888v6/200891-0003
multiple thereof, and shall bear interest from the date thereof at the following rates per annum (with the following yields) and shall mature on July 1 in the following years in the following amounts:
Maturity Date
(July 1)
Principal
Amount
Interest
Rate Yield
Except as otherwise provided in Section 14.03 hereof, interest on the Series 2024 A Bonds shall be payable on January 1 and July 1 of each year, commencing on [January 1], 2025, by check mailed by first-class mail on each interest payment date to the Owner thereof as of the close of business on the fifteenth (15th) day of the calendar month immediately preceding such interest payment date (each, a “record date”); provided, that upon the written request of an Owner of one million dollars ($1,000,000) or more in aggregate principal amount of Series 2024 A Bonds received by the Trustee prior to the applicable record date (which such request shall remain in effect until rescinded in writing by such Owner), interest shall be paid by wire transfer in immediately available funds. Interest on the Series 2024 A Bonds shall be computed on the basis of a 360-day year of twelve 30-day months. Except as otherwise provided herein, including in Section 14.03 hereof, the principal of and premium, if any, on the Series 2024 A Bonds are payable when due upon presentation thereof at the Corporate Trust Office of the Trustee, in lawful money of the United States of America.
So long as the Series 2024 A Bonds are maintained in book-entry form, payments of principal, premium, if any, and interest shall be made by the Trustee to the Securities Depository by wire transfer.
The Trustee shall provide CUSIP number identification, with appropriate dollar amounts for each CUSIP number, on all redemption payments and interest payments, whether by check or by wire transfer.
Section 14.03. Book-E
ntry System. The Series 2024 A Bonds shall be initially issued registered in the name of “Cede & Co.,” as nominee for DTC and registered Owner of the Series 2024 A Bonds, and held in the custody of the Securities Depository. A single certificate will be issued and delivered to the Securities Depository for each maturity of the Series 2024 A Bonds, and the Beneficial Owners will not receive physical delivery of Series 2024 A Bond certificates except as provided herein. For so long as the Securities Depository shall continue to serve as securities depository for the Series 2024 A Bonds as provided herein, all transfers of beneficial ownership interests will be made by book-entry only, and no investor or other party purchasing, selling or otherwise trans ferring beneficial ownership of Series 2024 A Bonds will receive, hold or deliver any Series 2024 A Bond certificate.
At the written direction of the City, with notice to the Trustee, but without the consent of the Ow
ners of the Series 2024 A Bonds or the Trustee, the City, may appoint a successor Securities Depository and enter into an agreement with the successor Securities Depository, to establish
5 4867-6961-2888v6/200891-0003
procedures with respect to a Book-Entry System for the Series 2024 A Bonds not inconsistent with the provisions of the Indenture. Any successor Securities Depository shall be a “clearing agency” registered under Section 17A of the Securities Exchange Act of 1934, as amended.
The City and the Trustee may rely conclusively upon (i) a certificate of the Securities Depository as to the identity of the Securities Depository Participants in the Book-Entry System with respect to the Series 2024 A Bonds and (ii) a certificate of any such Securities Depository Participant as to the identity of, and the respective principal amount of the Series 2024 A Bonds beneficially owned by, the Beneficial Owners.
Whenever, during the term of the Series 2024 A Bonds, the beneficial ownership thereof is determined by a book-entry at the Securities Depository, the requirements in the Indenture of holding, delivering or transferring the Series 2024 A Bonds shall be deemed modified to require the appropriate person to meet the requirements of the Securities Depository as to registering or transferring the book- entry to produce the same effect. Any provision hereof permitting or requiring delivery of the Series 2024 A Bonds shall, while the Series 2024 A Bonds are in the Book-Entry System, be satisfied by the notation on the books of the Securities Depository in accordance with applicable law.
Except as otherwise specifically provided in the Indenture and the Series 2024 A Bonds with respect to the rights of Securities Depository Participants and Beneficial Owners, when a Book-Entry System is in effect, the City and the Trustee may treat the Securities Depository (or its nominee) as the sole and exclusive Owner of the Series 2024 A Bonds registered in its name for the purposes of payment of the principal of and interest on the Series 2024 A Bonds or portion thereof to be redeemed or purchased, and of giving any notice permitted or required to be given to the Owners of Series 2024 A Bonds under the Indenture, and neither the City nor the Trustee shall be affected by any notice to the contrary. Neither the City nor the Trustee will have any responsi bility or obligations to the Securities Depository, any Securities Depository Participant, any Beneficial Owner or any other Person which is not shown on the registration books required to be maintained by the Trustee, with respect to (i) the accuracy of any records maintained by the Securities Depository or any Securities Depository Participant; (ii) the payment by the Securities Depository or by any Securities Depository Participant of any amount due to any Beneficial Owner in respect of the principal amount or redemption or purchase price of, or interest on, any Series 2024 A Bonds; (iii) the delivery by the Securities Depository or any Securities Depository Participant to any Beneficial Owner of any notice given by the City or the Trustee to the Securities Depository (or its nominee) as the Owner of the Series 2024 A Bonds; (iv) the selection of the Beneficial Owners to receive payment in the event of any partial redemption of the Series 2024 A Bonds; or (v) any consent given or other action taken by the Securities Depository or any Securities Depository Participant. The Trustee shall pay all principal of and interest on the Series 2024 A Bonds registered in the name of Cede & Co. only to or “upon the order of” the Securities Depository, and all such payments shall be valid and effective to fully satisfy and discharge the City’s obligations with respect to the principal of and interest on such Series 2024 A Bonds to the extent of the sum or sums so paid.
The Book-Entry System may be discontinued by the Trustee and the City, at the direction and expense of the City, and the City and the Trustee will cause the delivery of Series 2024 A Bond certificates to such Beneficial Owners of the Series 2024 A Bonds and registered in the names of such Beneficial Owners as shall be specified to the Trustee by the Securities Depository in writing, under the following circumstances:
6 4867-6961-2888v6/200891-0003
(1) The Securities Depository determines to discontinue providing its service with respect to the Series 2024 A Bonds and no successor Securities Depository is appointed as described above. Such a determination may be made at any time by the Securities Depository giving thirty (30) days’ notice to the City and the Trustee and discharging its responsibilities with respect thereto under applicable law; or (2) The City determines not to continue the Book-Entry System through a Securities Depository, upon not less than forty-five (45) days’ prior written notice by the City to the Trustee.
When the Book-Entry System is not in effect, all references herein to the Securities Depository shall be of no further force or effect.
So long as any Series 2024 A Bond is registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of and interest on such Series 2024 A Bond and all notices with respect to such Series 2024 A Bond shall be made and given, respectively, in the manner provided in the Representation Letter.
In the event of a redemption or any other transaction necessitating a reduction in aggregate principal amount of Series 2024 A Bonds Outstanding, DTC in its discretion: (a) may request the City and the Trustee to issue and authenticate a new Series 2024 A Bond certificate, or (b) shall make an appropriate notation on the Series 2024 A Bond certificate indicating the date and amounts of such reduction in principal, except in the case of final maturity, in which case the certificate must be presented to the Trustee prior to payment.
Section 14.04. Rede
mption of Series 2024 A Bonds.
(A) Optional Redemption. The Series 2024 A Bonds maturing on or before July 1, 20___ are not subject to optional redemption prior to maturity. The Series 2024 A Bonds maturing on and after July 1, 20___ are subject to redemption prior to their respective stated maturities, at the option of the City, from any source of available funds, as a whole or in part (by such maturities as may be specified by the City and by lot within a maturity), on any date on or after July 1, 20___, at a redemption price equal to the principal amount of Series 2024 A Bonds called for redemption, plus accrued interest to the date fixed for redemption, without premium.
(B) Mandatory Sinking Account Redemption.
The Series 2024 A Bonds maturing on July 1, 20___ are also subject to redemption prior to their stated maturity, in part, by lot, from Mandatory Sinking Account Payments required by and as specified in Section 14.09, commencing on July 1, 20___, at the principal amount thereof plus accrued interest thereon to the date fixed for redemption, without premium.
The Series 2024 A Bonds maturing on July 1, 20__ are also subject to redemption prior to their stated maturity, in part, by lot, from Mandatory Sinking Account Payments required by and as specified in Section 14.09, commencing on July 1, 20__, at the principal amount thereof plus accrued interest thereon to the date fixed for redemption, without premium.
Section 14.05. Se
lection of Series 2024 A Bonds for Redemption. Whenever provision is made in this Fourth Supplement for the redemption of less than all of the Series 2024 A Bonds, the
7 4867-6961-2888v6/200891-0003
maturities of the Series 2024 A Bonds to be redeemed shall be specified by the City. In the case of partial redemption of less than all of the Series 2024 A Bonds of any maturity, the Trustee shall select the Series 2024 A Bonds of such maturity to be redeemed, from all Series 2024 A Bonds of the respective maturity not previously called for redemption, in authorized denominations, by lot, in any manner which the Trustee in its sole discretion shall deem appropriate and fair. The Trustee shall promptly notify the City in writing of the Series 2024 A Bonds so selected for redemption.
Section 14.06. Not
ice of Redemption of Series 2024 A Bonds . The City shall notify the Trustee at least twenty-five (25) days prior to the redemption date for any Series 2024 A Bonds to be redeemed pursuant to Section 14.04(A) (or such shorter time as may be agreed to by the Trustee).
Notice of redemption shall be given by the Trustee, not less than twenty (20) nor more than sixty (60) days prior to the redemption date, (i) to the respective Owners of any Series 2024 A Bonds designated for redemption at their addresses appearing on the bond registration books of the Trustee by first-class mail (or, if so long as the registered ownership shall be held in the name of the Securities Depository or its nominee such notice may be given in electronic form pursuant to clause (ii) of this Section 14.06), (ii) to the Securities Depository by electronic means of communication or by first -class mail, and (iii) to the Electronic Municipal Market Access System (referred to as “EMMA”), a facility of the Municipal Securities Rulemaking Board, at www.emma.msrb.org, by electronic means of communication, or to such other securities depositories or information services as the City may designate in a Request of the City delivered to the Trustee. Notice of redemption shall be given in the form and otherwise in accordance with the terms of the Indenture and this Fourth Supplement.
With respect to any notice of optional redemption of Series 2024 A Bonds, unless, upon the givi
ng of such notice, such Series 2024 A Bonds shall be deemed to have been paid within the meaning of Article IX of the Indenture, or unless the Trustee has cash or securities meeting the requirements of Section 9.03 of the Indenture sufficient to pay or redeem such Series 2024 A Bonds, such notice may state that a condition of such redemption shall be receipt by the Trustee on or prior to the date fixed for redemption of moneys sufficient to pay the principal or premium, if any, and interest due on such Series 2024 A Bonds, and that if such moneys shall not have been so received, such notice shall be of no force and effect and the Trustee shall not be required to redeem such Series 2024 A Bonds. In the event that such notice of redemption contains such a condition and such moneys are not so received, the redemption shall not be made and the Trustee shall within a reasonable time thereafter give notice, in the manner in which the notice of redemption was given, that such moneys were not so received.
The City may, at its option, on or prior to the date fixed for redemption in any notice of optional redemption, rescind such notice of redemption by written notice of the City to the Trustee, and the Trustee is to give notice of such rescission as soon thereafter as practicable in the same manner, and to the same recipients, as notice of such redemption was given.
Failure by the Trustee to give notice to any one or more of the Information Services or the Securities Depository or failure of any Owner to receive notice or any defect in any such notice shall not affect the sufficiency of the proceedings for redemption.
Section 14.07. Pa
rtial Redemption of Series 2024 A Bonds. Upon surrender of any Series 2024 A Bond redeemed in part only, the City shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the City, a new Series 2024 A Bond of authorized denominations, and of the same maturity and interest rate, equal in aggregate principal amount to the unredeemed portion of the Series 2024 A Bond surrendered.
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Section 14.08. Effe ct of Redemption of Series 2024 A Bonds. If notice of redemption has been duly given pursuant to Section 14.06, and moneys for payment of the Redemption Price of, together with interest accrued to the redemption date on, the Series 2024 A Bonds (or portions thereof) so called for redemption is held by the Trustee, on the redemption date designated in such notice, the Series 2024 A Bonds (or portions thereof) so called for redemption shall become due and payable at the Redemption Price specified in such notice, together with interest accrued thereon to the date fixed for redemption, interest on the Series 2024 A Bonds so called for redemption shall cease to accrue, the Series 2024 A Bonds (or portions thereof) shall cease to be entitled to any benefit or security under the Indenture, and the Owners of the Series 2024 A Bonds shall have no rights in respect thereof except to receive payment of the Redemption Price and accrued interest.
All Series 2024 A Bonds redeemed pursuant to the provisions of this Article shall be cancelled upon surre
nder thereof and destroyed.
Section 14.09. Se ries 2024 A Sinking Account. An Account is hereby established within the Principal Fund created by Section 4.02 of the Indenture to be designated the “Series 2024 A Sinking Account.” On or prior to the following payment dates, from amounts transferred by the City to the Trustee for deposit in the Principal Fund, the Trustee shall set aside in the Series 2024 A Sinking Account therein an amount equal to the Mandatory Sinking Account Payment due on such date as set forth below:
Series 2024 A
Term Bonds Due July 1, 20___
Mandatory
Sinking Account
Payment Dates
(July 1)
Mandatory
Sinking Account
Payments
†
________________
† Final Maturity.
Series 2024 A Term Bonds Due July 1, 20__
Mandatory
Sinking Account
Payment Dates
(July 1)
Mandatory
Sinking Account
Payments
†
________________
† Final Maturity.
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Upon an optional redemption of a portion of any Series 2024 A Term Bonds pursuant to Section 14.04(A), the City shall provide the Trustee with a revised schedule of the foregoing Mandatory Sinking Account Payments which shall provide for a reduction in the amount of one or more of the Mandatory Sinking Account Payments coming due on such Series 2024 A Term Bond after such redemption as specified by the City in such schedule to reflect such redeemed portion.
Moneys in the Series 2024 A Sinking Account shall be applied as provided in Section 4.02(A) and Section 4.04(B) of the Indenture.
Section 14.10. Form of Series 2024 A Bonds. The Series 2024 A Bonds and the certificate of authentication and registration to be executed thereon shall be in substantially the form set forth as Exhibit A hereto. The Series 2024 A Bond designation letters and numbers, maturity dates, principal amounts and interest rates shall be inserted therein in conformity with Section 14.02 hereof.
Section 14.11. Issua
nce of Series 2024 A Bonds. At any time after the execution and delivery of this Fourth Supplement, the City may execute and the Trustee shall authenticate and deliver the Series 2024 A Bonds in the aggregate principal amount of $[PAR AMOUNT] upon the Order of the City. Prior to or simultaneously with the delivery of the Series 2024 A Bonds, there shall be filed with the Trustee an Opinion of Bond Counsel to the effect that the execution of this Fourth Supplement has been duly authorized, executed and delivered by the City in accordance with the Indenture, and the Series 2024 A Bonds when duly executed by the City and authenticated and delivered by the Trustee, will be valid and binding special limited obligations of the City.
Section 14.12. Appli
cation of Proceeds of Series 2024 A Bonds and Other Amounts . The proceeds of the sale of the Series 2024 A Bonds in the amount of $_________ (representing the aggregate principal amount of the Series 2024 A Bonds of $[PAR AMOUNT].00, plus original issue premium of $_________, less an underwriting discount of $______), shall be received by the Trustee on behalf of the City and held in trust and set aside as follows:
(i) The Trustee shall deposit in the Series 2024 A Project Fund $_________ to be a
pplied in accordance with Section 14.13; and
(ii) The Trustee shall deposit the remaining $_________ from the proceeds of the sale of the Series 2024 A Bonds in the Series 2024 A Costs of Issuance Fund, to be applied in accordance with Section 14.14 hereof.
The Trustee may, in its discretion, establish any temporary fund or account to facilitate the foregoing deposits and transfers.
Section 14.13. Es
tablishment and Application of Series 2024 A Project Fund. The Trustee shall establish, maintain and hold in trust for the benefit of the City a separate fund designated as the “Series 2024 A Project Fund,” which fund is hereby created and which fund the City hereby agrees to maintain with the Trustee. The Trustee shall deposit to the Series 2024 A Project Fund the amounts specified in Section 14.12(i) hereof. All money in the Series 2024 A Project Fund shall be used and withdrawn by the Trustee to pay costs of the 2024 Electric Project (or to reimburse the City for the payment of such costs) upon receipt of a Requisition of the City in substantially the form set forth as Exhibit C hereto filed with the Trustee, each of which Requisitions shall be sequentially numbered and shall state the person to whom payment is to be made, the amount to be paid, the purpose for which the obligation was incurred and that such payment is a proper charge against said fund. Each
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Requisition of the City shall be sufficient evidence to the Trustee of the facts stated therein and the Trustee shall have no duty to confirm the accuracy of such facts. As directed by the City pursuant to a Request of the City delivered to the Trustee, moneys on deposit in the Series 2024 A Project Fund may be invested by the Trustee in (i) Investment Securities, (ii) investment agreements with a domestic or foreign bank or corporation (other than a life or property casualty insurance company) the long -term debt of which, or, in the case of a guaranteed corporation the long-term debt of the guarantor of which, or, in the case of a monoline financial guaranty insurance company, the claims paying ability of which, is rated on the date of execution of such investment agreement not lower than the second highest Rating Category by one or more of the Rating Agencies, or (iii) the Local Agency Investment Fund (as that term is defined in Section 16429.1 of the California Government Code, as such section may be amended or recodified from time to time), and with a term so as to provide moneys when needed for payments to be made therefrom. All interest, profit and other income received from the investment of moneys in the Series 2024 A Project Fund shall be credited to such Fund. If any sum shall remain unexpended in the Series 2024 A Project Fund after completion of the 2024 Electric Projec t (such completion to be evidenced by a Certificate of the City delivered to the Trustee), it shall, at the direction of the City, be applied for any lawful purpose with respect to the Enterprise upon such terms and conditions as shall not, in the opinion of Bond Counsel, adversely affect the exclusion from gross income for federal income tax purposes of interest on the Series 2024 A Bonds.
Section 14.14. Es
tablishment and Application of Series 2024 A Costs of Issuance Fund. The Trustee shall establish, maintain and hold in trust for the benefit of the City a separate fund designated as the “Series 2024 A Costs of Issuance Fund,” which fund is hereby created and which fund the Trustee hereby agrees to maintain with the Trustee until [December 31, 2024]. The Trustee shall deposit to the Series 2024 A Costs of Issuance Fund the amounts specified in Section 14.12(ii) hereof.
All money in the Series 2024 A Costs of Issuance Fund shall be used and withdrawn by the Trustee to pay the Costs of Issuance of the Series 2024 A Bonds upon receipt of a Requisition of the City in substantially the form set forth as Exhibit C hereto filed with the Trustee, each of which Requisitions shall be sequentially numbered and shall state the person to whom payment is to be made, the amount to be paid, the purpose for which the obligation was incurred and that such payment is a proper charge against said fund. Each Requisition of the City shall be sufficient evidence to the Trustee of the facts stated therein and the Trustee shall have no duty to confirm the accuracy of such facts. On [December 31, 2024] or upon the earlier Request of the City, any remaining balance in the Series 2024 A Costs of Issuance Fund shall be transferred to the Interest Fund to be credited towards amounts required to be transferred by the City for deposit therein for the payment of interest on the Series 2024 A Bonds pursuant to Section 4.02(A)(1) of the Indenture on January 1 and July 1 of each year.
Section 14.15. Continu
ing Disclosure. The City and the Trustee hereby covenant and agree that they will comply with and carry out all of their respective obligations under the Continuing Disclosure Agreement. Notwithstanding any other provision of the Indenture, failure of the City or the Trustee to comply with the Continuing Disclosure Agreement shall not be considered an Event of Default; however, the Trustee or any Owner or Beneficial Owner may, and at the request of any Participating Underwriter (as defined in the Continuing Disclosure Agreement) or the Owners of at least 25% in aggregate principal amount of Outstanding Series 2024 A Bonds, the Trustee shall, upon receipt of indemnification reasonably satisfactory to it, take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City or the Trustee, as the case may be, to comply with its obligations under this Section.
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Section 14.16. Am endments to the Indenture to Take Effect on the Amendments Effective Date. The Indenture is amended in the following respects effective on the Amendments Effective Date for all Bonds then Outstanding:
(A) The definition of “Adjusted Net Revenues” set forth in Section 1.02 of the Indenture is a
mended in its entirety as follows:
Adjusted Net Revenues
“Adjusted Net Revenues” for any period means the sum of (a) the Revenues for such period plus (b) for purposes of determining compliance with Section 5.10 only, (i) the amounts approved by City Council to be withdrawn from the Rate Stabilization Fund for inclusion in Adjusted Net Revenues for such period in accordance with Section 4.06 , and (ii) the amount of Available Reserves budgeted by the City for the payment of Operating Expenses and/or Debt Service for such period (which amounts, in either case, shall be deposited in the Net Revenue Fund in accordance with Section 4.01(B) hereof to the extent such amounts are to be included in Adjusted Net Revenues for the purpose of determining compliance with Section
5.10), and (c) any interest paid and other income derived from the investment of funds as herein provided, less the sum of (d) all Operating Expenses for such period, (e) moneys received with respect to the sale of assets financed with the proceeds of Bonds or Parity Debt, which amounts shall be applied in accordance with Section 5.06, ( f) moneys received with respect to any Special Facility, and (g) any charges collected by any person to amortize or otherwise relating to the payment of the uneconomic portion of costs associated with assets and obligations (“stranded costs”) of the Electric Utility or of any joint powers agency in which the City participates which the City has dedicated to the payment of obligations other than the Bonds or Parity Debt, the payments of which obligations will be applied to or pledged to or otherwise set aside for the reduction or retirement of outstanding obligations of the City or any joint powers agency in which the City participates relating to such “stranded costs” of the City or of any such joint powers agency to the extent such “stranded costs” are attributable to, or the responsibility of, the City.
(B) Section 1.02 of the Indenture is amended by adding the definition of “Available Reserves” in the appropriate alphabetic position in said Section as follows:
Available Reserves
“Available Reserves” means, as of any date of calculation, the amount of unrestricted funds of the Enterprise determined by the City to be then available to pay Operating Expenses and/or Debt Service, which may include transfers to the Net Revenue Fund from any fund which is legally available to be used for such purpose. (C) The definition of “Rating Confirmation Notice” set forth in Section 1.02 of the Indenture is deleted in its entirety.
(D) Section 4.01(B) of the Indenture is amended and restated in its entirety as follows:
(B) In order to carry out and effectuate the obligations of the City contained herein to pay the Bonds, as long as any Bonds are Outstanding, the City agrees and covenants that all Adjusted Net Revenues received by it shall be deposited when and as received in a special
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fund, separate and apart from other moneys of the City designated the “City of Santa Clara Electric Utility Net Revenue Fund” (the “Net Revenue Fund”). If and to the extent the City has determined that amounts on deposit in the Rate Stabilization Fund or any Available Reserves of the Enterprise are to be included in Adjusted Net Revenues for any Fiscal Year for purposes of complying with Section 5.10 in accordance with the definition of “Adjusted Net Revenues” contained in Section 1.02, such amounts shall be deposited by the City in the Net Revenue Fund at the time of such determination. Investment income on amounts held by the City hereunder (other than amounts held in the Rebate Fund or for which particular instructions are provided in a Supplemental Indenture) shall also be deposited in the Net Revenue Fund.
All moneys at any time held in the Net Revenue Fund shall be held in trust for the benefit of the Owners of the Bonds and Parity Debt and shall be disbursed, allocated and applied solely for the uses and purposes set forth in Section 4.02.
(E) Section 4.06 of the Indenture is amended and restated in its entirety as follows:
SECTION 4.06. Ra
te Stabilization Fund. There is hereby established a City of Santa Clara Electric Utility Rate Stabilization Fund (the “Rate Stabilization Fund”), which fund shall be a continuation of the Rate Stabilization Fund Reserve Account established by the City pursuant to Resolution No. 6106 of the City Council adopted on January 16, 1996 and which fund the City hereby agrees to maintain so long as any Bonds remain unpaid. The City may at any time deposit in the Rate Stabilization Fund from any available Adjusted Net Revenues and/or any other money available to be used therefor such amounts as the City may determine; provided, that notwithstanding the foregoing, no Adjusted Net Revenues shall be deposited in the Rate Stabilization Fund in any Fiscal Year to the extent that such amounts are required for purposes of making the transfers described in Section 4.02(A) for such Fiscal Year. The City may at any time withdraw any or all of the money on deposit in the Rate Stabilization Fund for inclusion in Adjusted Net Revenues for purposes of the calculation set forth in Section 5.10 for any Fiscal Year in such amount as approved by City Council. Any amounts withdrawn from the Rate Stabilization Fund for such purpose shall be transferred to the Net Revenue Fund in accordance with Section 4.01(B). The City may also at any time withdraw or apply amounts on deposit in the Rate Stabilization Fund for any other legal purpose. All interest or other earnings upon deposits in the Rate Stabilization Fund will be accounted for as Adjusted Net Revenues.
(F) Section 5.03 of the Indenture is amended and restated in its entirety as follows:
S
ECTION 5.03. Addi tional Bonds. The City may issue Bonds and/or Parity Debt so long as no Event of Default exists at the time of issuance thereof. (G) Section 5.07 of the Indenture is amended and restated in its entirety as follows:
S
ECTION 5.07. Ac counting Records and Financial Statements. The City will at all times keep, or cause to be kept, proper books of record and account, prepared in accordance with Generally Accepted Accounting Principles Applicable to Governments, in which complete and accurate entries shall be made of all transactions relating to the Adjusted Net Revenues. Such books of record and account shall be available for inspection by the Trustee at reasonable hours and under reasonable circumstances.
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(H) Section 9.02 of the Indenture is amended and restated in its entirety as follows:
SECTION 9.02. Di scharge of Liability on Bonds. Upon the deposit with the Trustee, escrow agent or other fiduciary, in trust, at or before maturity, of money or securities in the necessary amount (as provided in Section 9.03) to pay or redeem any Outstanding Bond (whether upon or prior to its maturity or the redemption date of such Bond), provided that, if such Bond is to be redeemed prior to maturity, notice of such redemption shall have been given as in Article III provided or provision satisfactory to the Trustee shall have been made for the giving of such notice, then all liability of the City in respect of such Bond shall cease, terminate and be completely discharged, provided that the Owner thereof shall thereafter be entitled to the payment of the principal of and premium, if any, and interest on the Bonds, and the City shall remain liable for such payment, but only out of such money or securities deposited with the Trustee as aforesaid for their payment, subject, however, to the provisions of Section 9.04 and the continuing duties of the Trustee hereunder.
The City may at any time surrender to the Trustee for cancellation by it any Bonds previ
ously issued and delivered, which the City may have acquired in any manner whatsoever, and such Bonds, upon such surrender and cancellation, shall be deemed to be paid and retired.
Section 14.17. Te rms of Series 2024 A Bonds Subject to the Indenture . Except as expressly provided in this Fourth Supplement, every term and condition contained in the Indenture shall apply to this Fourth Supplement and to the Series 2024 A Bonds with the same force and effect as if the same were herein set forth at length, with such omissions, variations and modifications thereof as may be appropriate to make the same conform to this Fourth Supplement.
This Fourth Supplement and all the terms and provisions herein contained shall form part of the
Indenture as fully and with the same effect as if all such terms and provisions had been set forth in the Indenture. The Indenture is hereby ratified and confirmed and shall continue in full force and effect in accordance with the terms and provisions thereof, as supplemented and amended hereby, subject to the next sentence.
Section 14.18. Effe
ctive Date of Fourth Supplement. This Fourth Supplement shall take effect upon its execution and delivery.
Section 14.19. Exec ution in Counterparts . This Fourth Supplement may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Fourth Supplement by their officers thereunto duly authorized as of the day and year first written above.
CITY OF SANTA CLARA, CALIFORNIA,
a chartered California municipal corporation
APPROVED AS TO FORM:
GLEN R. GOOGINS
City Attorney
ATTEST:
NORA PIMENTEL, MMC
Assistant City Clerk
JŌVAN D. GROGAN
City Manager
1500 Warburton Avenue
Santa Clara, CA 95050
Telephone: (408) 615-2210
Facsimile: (408) 241-6771
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A.
By
Authorized Officer
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4867-6961-2888v6/200891-0003
EXHIBIT A
(FORM OF SERIES 2024 A BOND)
No. R-___ $__________
CITY OF SANTA CLARA, CALIFORNIA
ELECTRIC REVENUE BOND, SERIES 2024 A
Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the City or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch
as the registered owner hereof, Cede & Co., has an interest herein.
Maturity Date Dated Date
Interest Rate
Per Annum CUSIP
July 1, 20___ [Closing Date], 20__ ______% 801444___
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT:
The CITY OF SANTA CLARA, a municipal corporation and chartered city duly organized and existing under the Constitution and the laws of the State of California (the “City”), for value received, hereby promises to pay (but only out of the Adjusted Net Revenues and funds hereinafter referred to) to the Registered Owner named above or registered assigns, on the Maturity Date specified above (subject to any right of prior redemption or payment as provided in the hereinafter mentioned Indenture), the Principal Am ount specified above together with interest thereon from Dated Date specified above until the principal hereof shall have been paid, at the Interest Rate Per Annum specified above, payable semiannually on January 1 and July 1 in each year, commencing _______ 1, 20__.
Interest hereon is payable (except as otherwise provided in the hereinafter mentioned Indenture) by check mailed by first-class mail on each interest payment date to the registered owner as of the close of business on the 15th day of the calendar month immediately preceding such interest payment date (each a “record date”); provided, that upon the written request of a registered owner of one million dollars ($1,000,000) or more in aggregate principal amount of Series 2024 A Bonds (defined below) received by the Trustee prior to the applicable record date (which such request shall remain in effect until rescinded in writing by such registered owner), interest shall be paid by wire transfer in immediately available funds. The principal hereof and premium, if any, hereon are payable when due upon presentation hereof at the corporate trust office of The Bank of New York Mellon Trust Company, N.A., as trustee (together with any successor as trustee under the hereinafter mentioned Indenture, the
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4867-6961-2888v6/200891-0003
“Trustee”), in Los Angeles, California, or such other or additional office as may be designated by the Trustee, in lawful money of the United States of America.
This bond is one of a duly authorized issue of City of Santa Clara, California Electric Revenue Bonds (the “Bonds”) of the series and designation indicated on the face hereof, issued pursuant to an Amended and Restated Electric Revenue Bond Indenture, dated as of March 1, 2011, between the Trustee and the City, providing for the issuance of such Bonds. Said authorized issue of Bonds is not limited in aggregate principal amount, except as otherwise provided in said Amended and Restated Electric Revenue Bond Indenture, and consists or may consist of one or more series of varying denominations, dates, maturities, interest rates and other provisions, as in said Amended and Restated Electric Revenue Bond Indenture provided, all issued and to be issued pursuant to the provisions of the Bond Law (as defined in said Amended and Restated Electric Revenue Bond Indenture). This Bond is issued pursuant to such Amended and Restated Electric Revenue Bond Indenture, as amended and supplemented, including as amended and supplemented by the Fourth Supplemental Electric Revenue Bond Indenture, dated as of _________ 1, 2024 (the “Fourth Supplement”), between the Trustee and the City, authorizing the issuance of the series of bonds of which this Bond is one, such series being referred to as the “Series 2024 A Bonds” (said Amended and Restated Electric Revenue Bond Indenture as amended and supplemented, including as supplemented by the Fourth Supplement being collectively referred to as the “Indenture”). Reference is hereby made to the Indenture and to the Bond Law for a description of the terms under which the Bonds are issued and to be issued, the provisions with regard to the nature and extent of the Adjusted Net Revenues (as that term is defined in the Indenture), and the rights of the registered owners of the Bonds; and all the terms of the Indenture and the Bond Law are hereby incorporated herein and constitute a contract between the City and the registered owner from time to time of this Bond, and to all the provisions thereof the registered owner of this Bond, by its acceptance hereof, consents and agrees. Additional Bonds and other Parity Debt (as defined in the Indenture) may be issued, and indebtedness may be incurred, on a parity with the Bonds of this authorized issue, subject to the terms and conditions contained in the Indenture.
The Bonds and the interest thereon (to the extent set forth in the Indenture), together with the Parity Debt heretofore or hereafter issued or incurred by the City, and the interest thereon, are payable from, and are secured by a charge and lien on, the Adjusted Net Revenues (as more particularly defined in the Indenture). All of the Bonds and Parity Debt are equally secured by a pledge of, and charge and lien upon, all of the Adjusted Net Revenues, and the Adjusted Net Revenues constitute a trust fund for the security and payment of the interest on and principal of the Bonds; but nevertheless out of Adjusted Net Revenues certain amounts may be applied for other purposes as provided in the Indenture.
The Bonds are limited obligations of the City and are payable, both as to principal and interest, and as to any premiums upon the redemption thereof, out of the Adjusted Net Revenues and certain funds held under the Indenture. The general fund of the City is not liable, and the credit or taxing power of the City is not pledged, for the payment of the Bonds or the interest thereon. The Bonds are not secured by a legal or equitable pledge of, or charge, lien or encumbrance upon, any of the property of the City or any of its income or receipts, except the Adjusted Net Revenues and said funds held under the Indenture. No registered owner of this Bond shall ever have the right to compel any exercise of the taxing power of the City to pay this Bond or the interest hereon.
The Series 2024 A Bonds are being issued by means of a book -entry system with no physical distribution of bond certificates to be made except as provided in the Indenture. One bond certificate with respect to each date on which the Series 2024 A Bonds are stated to mature, registered in the name of the Cede & Co, is being issued and required to be deposited with the Securities Depository and
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immobilized in its custody. The book-entry system will evidence positions held in the Series 2024 A Bonds by the Securities Depository Participants, beneficial ownership of the Series 2024 A Bonds in authorized denominations being evidenced in the records of such Securities Depository Participants.
Transfers of ownership shall be effected on the records of the Securities Depository and its Securities Depository Participants pursuant to rules and procedures established by the Securities Depository and its Securities Depository Participants. The City and the Trustee will recognize Cede & Co., while the registered owner of this Series 2024 A Bond, as the owner of this Series 2024 A Bond for all purposes, including (i) payments of principal of, and redemption premium, if any, and interest on this Series 2024 A Bond and (ii) notices. Transfer of principal, interest and any redemption premium payments to Securities Depository Participants, and transfer of principal, interest and any redemption premium payments to beneficial owners of the Series 2024 A Bonds by Securities Depository Participants will be the responsibility of such Securities Depository Participants and other nominees of such beneficial owners. The City will not be responsible or liable for such transfers of payments or for maintaining, supervising or reviewing the records maintained by the Securities Depository, Cede & Co., its Securities Depository Participants or persons acting through such Securities Depository Participants.
While Cede & Co. is the Owner of this Series 2024 A Bond, notwithstanding any other provision hereof, payments of principal of, redemption premium, if any, and interest on this Series 2024 A Bond shall be made in accordance with existing arrangements between the Trustee or its su ccessors under the Indenture and the Securities Depository.
{Redemption provisions to be revised as applicable upon pricing of the Series 2024A Bonds} [The Series 2024 A Bonds maturing on or before July 1, 20___ are not subject to optional redemption prior to maturity. The Series 2024 A Bonds maturing on and after July 1, 20___ are subject to redemption prior to their respective stated maturities, at the option of the City, from any source of available funds, as a whole or in part (by such maturities as may be specified by the City and by lot within a maturity), on any date on or after July 1, 20___, at a redemption price equal to the principal amount of Series 2024 A Bonds called for redemption, plus accrued interest to the date fixed for redemption, without premium.
The Series 2024 A Bonds maturing on July 1, 20___ are also subject to redemption prior to their stated maturity, in part, by lot, from Mandatory Sinking Account Payments required by and as specified in the Indenture, commencing on July 1, 20___, at the principal amount thereof plus accrued interest thereon to the date fixed for redemption, without premium.
The Series 2024 A Bonds maturing on July 1, 20__ are also subject to redemption prior to their stated maturity, in part, by lot, from Mandatory Sinking Account Payments required by and as specified in the Indenture, commencing on July 1, 20__, at the principal amount thereof plus accrued interest thereon to the date fixed for redemption, without premium.] This Bond may be transferred upon the register required to be kept by the Trustee pursuant to the Indenture by the person in whose name it is registered, in person or by his or her duly authorized attorney, upon surrender of this Bond for cancellation, accompanied by delivery of a written instrument of transfer, duly executed in a form approved by the Trustee, subject to the limitations and upon payment of the charges provided in the Indenture. This Bond may be exchanged at the corporate trust office of the Trustee in Los Angeles, California, or such other or additional office as may be designated by the Trustee, for a like aggregate principal amount of Bonds of other authorized denominations of the same series, tenor, maturity and interest rate but only in the manner, subject to the limitations and upon payment of the charges provided in the Indenture.
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The City, the Trustee and any paying agent may deem and treat the registered owner hereof as the absolute owner hereof for all purposes, and the City, the Trustee and any paying agent shall not be affected by any notice to the contrary.
The rights and obligations of the City and of the registered owners of the Bonds may be modified or amended at any time in the manner, to the extent, and upon the terms provided in the Indenture, which provide, in certain circumstances, for modifications and amendments without the consent of or notice to the registered owners of the Bonds.
It is hereby certified and recited that any and all acts, conditions and things required to exist, to happen and to be performed, precedent to and in the incurring of the indebtedness evidenced by this Bond, and in the issuing of this Bond, do exist, have happened and have been performed in due time, form and manner, as required by the Constitution and statutes of the State of California, and that this Bond, together with all other indebtedness of the City pertaining to the Adjusted Net Revenues, is within every debt and other limit prescribed by the Constitution and the statutes of the State of California, and is not in excess of the amount of Bonds permitted to be issued under the Indenture or the Bond Law.
This Bond shall not be entitled to any benefit under the Indenture, or become valid or obligatory for any purpose, until the certificate of authentication hereon endorsed shall have been signed by the Trustee.
Capitalized terms used but not defined herein shall have the meanings assigned to them in the Indenture.
[Remainder of page intentionally left blank.]
A-5
4867-6961-2888v6/200891-0003
IN WITNESS WHEREOF, THE CITY OF SANTA CLARA has caused this Bond to be executed in its name and on its behalf by the Mayor of the City and countersigned by the A ssistant City Clerk, and the seal of the City to be impressed hereon, and this Bond to be dated as of the ___ th day of ___________, 2024.
CITY OF SANTA CLARA
By:
Mayor
(SEAL)
Attested:
By:
Nora Pimentel, MMC
Assistant City Clerk
A-6
4867-6961-2888v6/200891-0003
[FORM OF CERTIFICATE OF AUTHENTICATION
AND REGISTRATION]
This is one of the Bonds described in the within mentioned Indenture and registered on the date set forth below.
Dated: ___________, 2024
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., as Trustee
By:
Authorized Signatory
A-7
4867-6961-2888v6/200891-0003
[FORM OF ASSIGNMENT]
For value received ______________________________ hereby sell, assign and transfer unto ______________________________ the within Bond and hereby irrevocably constitute and appoint ____________________ attorney, to transfer the same on the books of the City at the office of the Trustee, with full power of substitution in the premises.
NOTE: The signature to this Assignment must
correspond with the name on the face of the
within registered bond in every particular,
without alteration or enlargement or any change
whatsoever.
Dated:
Signature Guaranteed by:
NOTE: Signature must be guaranteed by an
eligible guarantor institution.
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4867-6961-2888v6/200891-0003
EXHIBIT B
DESCRIPTON OF THE 2024 ELECTRIC PROJECT
Proceeds of the Series 2024 A Bonds are expected to be applied primarily to finance a portion of the costs of the following improvement projects of the Electric Utility: (1) Scott Receiving Station Rebuild and Replacement project; (2) Kifer Receiving Station Rebuild and Replacement project; and (3) Northern Receiving Station Upgrades and Expansion project.
The 2024 Electric Project may further include any other or additional facilities for the generation, transmission or distribution of electricity by the E lectric Utility that the City hereafter determines to substitute therefor.
C-1
4867-6961-2888v6/200891-0003
EXHIBIT C
(FORM OF REQUISITION)
CITY OF SANTA CLARA, CALIFORNIA
ELECTRIC REVENUE BOND, SERIES 2024 A
REQUISITION NO. ___
SERIES 2024 A [COSTS OF ISSUANCE FUND][PROJECT FUND]
Dated: ________, 20__
TO: The Bank of New York Mellon Trust Company, N.A., as Trustee The undersigned hereby certifies as follows:
1. I am the [Title] of the City of Santa Clara, California, a municipal corporation and chartered city duly organized and existing under the Constitution and laws of the State of California (the “City”).
2. I am a duly Authorized Officer of the City under the Amended and Restated Electric Revenue Bond Indenture, dated as of March 1, 2011, between the City and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”), as amended and supple mented, including as amended and supplemented by the Fourth Supplemental Electric Revenue Bond Indenture, dated as of October 1, 2024 (the “Fourth Supplement” and as so amended and supplemented, the “Indenture”), and I am delivering this Requisition on behalf of the City.
3. The undersigned hereby authorizes payment of the amounts specified in Attachment 1 hereto to the persons identified in Attachment 1, such amounts to be paid from the Series 2024 A [Costs of Issuance Fund][Project Fund] pursuant to [Section 14.13][Section 14.14] of the Fourth Supplement.
4. The undersigned hereby certifies that: (i) obligations in the amounts stated in Attachment 1 have been incurred by the City and are presently due and payable; (ii) each item is a proper charge against the Series 2024 A [Costs of Issuance Fund][Project Fund] for the general classification indicated in Attachment 1 therefor; and (iii) each item has not been previously paid from the Series 2024 A [Costs of Issuance Fund][Project Fund].
C-2
4867-6961-2888v6/200891-0003
Dated as of the date first written above.
CITY OF SANTA CLARA, CALIFORNIA,
a chartered California municipal corporation
By:
[Title]
Attachment to Requisition
4867-6961-2888v6/200891-0003
ATTACHMENT 1 TO REQUISITION
Series 2024 A [Costs of Issuance Fund][Project Fund]
Payee Amount Purpose
(SEE ATTACHED SUPPORTING DOCUMENTATION)
Stradling – Draft of 08/30/24
4854-1970-3128v6/200891-0003
CONTINUING DISCLOSURE AGREEMENT
This Continuing Disclosure Agreement (the “Disclosure Agreement”), dated [Closing Date], 2024, is executed and delivered by the City of Santa Clara, California (the “City”) and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”) in connection with the issuance of $_________ aggregate principal amount of City of Santa Clara, California Electric Revenue Bonds, Series 2024 A (the “Series 2024 A Bonds”). The Series 2024 A Bonds are being issued pursuant to an Amended and Restated Electric Revenue Bond Indenture, dated as of March 1, 2011, by and between the City and the Trustee, as supplemented and amended from time to time, including by the Fourth Supplemental Electric Revenue Bond Indenture, dated as of October 1, 2024, by and between the City and the Trustee, providing for the issuance of the Series 2024 A Bonds (collectively, the “Indenture”).
In connection therewith the City and the Trustee covenant and agree as follows:
Section 1. Purpose of this Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the City and the Trustee for the benefit of the Holders and Beneficial Owners of the Series 2024 A Bonds and in order to assist the Participating Underwriters (as defined herein) in complying with Securities and Exchange Commission Rule 15c2-12(b)(5).
Section 2. Definitions. In addition to the definitions set forth above and in the Indenture, which apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this section, the following capitalized terms shall have the following meanings:
“Annual Report” shall mean any Annual Report provided by the City pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement. “Beneficial Owner” shall mean any person who (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Series 2024 A Bonds (including persons holding Series 2024 A Bonds through nominees, depositories or other intermediaries); or (b) is treated as the owner of any Series 2024 A Bonds for federal income tax purposes. “Disclosure Representative” shall mean the City Manager or the Director of Finance of the City, or such other officer or employee as the City shall designate in writing to the Trustee from time to time.
“Dissemination Agent” shall mean the Trustee, acting in its capacity as Dissemination Agent hereunder, or any successor Dissemination Agent designated in writing by the City and which has filed with the Trustee a written acceptance of such designation. “Financial Obligation” shall mean a (a) debt obligation; (b) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (c) guarantee of a debt obligation or any such derivative instrument; provided that “financial obligation” shall not include municipal securities as to which a final official statement (as defined in the Rule) has been provided to the MSRB consistent with the Rule. “Holder” shall mean either the registered owners of the Series 2024 A Bonds or, if the Series 2024 A Bonds are registered in the name of The Depository Trust Company or another recognized depository, any applicable participant in such depository system. “Listed Event” shall mean any of the events listed in Section 5(a) of this Disclosure Agreement.
2 4854-1970-3128v6/200891-0003
“MSRB” shall mean the Municipal Securities Rulemaking Board established pursuant to Section 15B(b)(1) of the Securities Exchange Act of 1934 or any other entity designated or authorized by the Securities and Exchange Commission to receive reports pursuant to the Rule. Until otherwise designated by the MSRB or the Securities and Exchange Commission, filings with the MSRB are to be made through the Electronic Municipal Market Access (EMMA) website of the MSRB, currently located at http://emma.msrb.org.
“Official Statement” shall mean the Official Statement for the Series 2024 A Bonds dated ___________, 2024.
“Participating Underwriter” shall mean any underwriter of the Series 2024 A Bonds listed on the cover page of the Official Statement required to comply with the Rule in connection with offering of the Series 2024 A Bonds.
“Rule” shall mean Rule 15c2-12(b)(5) adopted by the SEC under the Securities Exchange Act of 1934, as the same may be amended from time to time.
“SEC” shall mean the United States Securities and Exchange Commission.
Section 3. Provision of Annual Reports.
(a) The City shall, or shall cause the Dissemination Agent to, not later than 210 days after the end of the City’s Fiscal Year (which Fiscal Year presently ends on June 30), commencing with the report for the 2023-24 Fiscal Year, provide to the MSRB an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Agreement. The Annual Report must be submitted in electronic format, accompanied by such identifying information as prescribed by the MSRB. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross -reference other information as provided in Section 4 of this Disclosure Agreement; provided that if the audited financial statements of the City’s Electric Utility Enterprise Fund are not available by the date required above for the filing of the Annual Report, the City shall submit unaudited financial statements in a format similar to the audited financial statements and shall submit the audited financial statements as soon thereafter as available as provided in Section 4(i) of this Disclosure Agreement. If the City’s Fiscal Year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5. (b) If the City is unable to provide to the MSRB an Annual Report by the date required in subsection (a), the City shall, or shall cause the Dissemination Agent to, send to the MSRB a notice in substantially the form attached hereto as Exhibit A. (c) The Dissemination Agent shall:
(i) determine the electronic filing address of, and then-current procedures for submitting Annual Reports to, the MSRB each year prior to the date for providing the Annual Report; and
(ii) file a report with the City and (if the Dissemination Agent is not the Trustee, the Trustee) certifying that the Annual Report has been provided to the MSRB pursuant to this Disclosure Agreement, and stating the date it was provided.
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Section 4. Content of Annual Reports. The City’s Annual Report shall contain or include by reference the following categories or similar categories of information updated to incorporate information for the most recent Fiscal Year (the tables referred to below are those appearing in the Official Statement relating to the Series 2024 A Bonds):
(i) The audited financial statements of the City’s Electric Utility Enterprise Fund (which may be included as a component of the City’s city-wide audited financial statements) for the most recently completed Fiscal Year, prepared in accordance with generally accepted accounting principles for governmental enterprises as prescribed from time to time by any regulatory body with jurisdiction over the City and by the Governmental Accounting Standards Board. If the City’s Electric Utility Enterprise Fund audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements in a format similar to the audited financial statements, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available.
(ii) Updated information comparable to the information in the table entitled “CITY OF SANTA CLARA ELECTRIC UTILITY DEPARTMENT POWER
SUPPLY RESOURCES” as it appears in the Official Statement; (iii) Updated information comparable to the information in the table entitled “CITY OF SANTA CLARA ELECTRIC UTILITY DEPARTMENT CUSTOMERS, SALES, REVENUES AND DEMAND” as it appears in the Official Statement; (iv) Updated information comparable to the information in the table entitled “CITY OF SANTA CLARA ELECTRIC UTILITY DEPARTMENT
OUTSTANDING DEBT OF JOINT POWERS AGENCIES” as it appears in the Official Statement;
(v) Updated information comparable to the information in the table entitled “CITY OF SANTA CLARA ELECTRIC UTILITY DEPARTMENT SUMMARY OF FINANCIAL OPERATING RESULTS” as it appears in the Official Statement; and (vi) Updated information comparable to the information in the table entitled “CITY OF SANTA CLARA RATE COVENANT COMPLIANCE UNDER
ELECTRIC REVENUE BOND INDENTURE” as it appears in the Official Statement.
Financial and operating information relating to the City referenced in items (ii)-(vi) above may be updated from time to time, and such updates may involve displaying data in a different format or eliminating data that is no longer material.
Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the City or related public entities, which have been submitted to the MSRB or the SEC. If any document included by reference is a final official statement, it must be available from the MSRB. The City shall clearly identify each such other document so included by reference.
4 4854-1970-3128v6/200891-0003
Section 5. Reporting of Listed Events.
(a) Pursuant to the provisions of this section, upon the occurrence of any of the following events (in each case to the extent applicable) with respect to the Series 2024 A Bonds, the City shall give, or cause to be given by so notifying the Dissemination Agent in writing and instructing the Dissemination Agent to give, notice of the occurrence of such event, in each case, pursuant to Section 5(c) hereof:
1. principal or interest payment delinquencies;
2. non-payment related defaults, if material;
3. modifications to the rights of the Bondholders, if material;
4. optional, contingent or unscheduled calls, if material, and tender offers;
5. defeasances;
6. rating changes;
7. adverse tax opinions or the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds or other material events affecting the tax status of the Bonds;
8. unscheduled draws on the debt service reserves reflecting financial difficulties;
9. unscheduled draws on the credit enhancements reflecting financial difficulties;
10. substitution of the credit or liquidity providers or their failure to perform;
11. release, substitution or sale of property securing repayment of the Bonds, if material;
12. bankruptcy, insolvency, receivership or similar proceedings of the City, which shall occur as described below;
13. appointment of a successor or additional trustee or the change of name of a trustee, if material;
14. the consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City’s Electric Utility other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material;
15. incurrence of a Financial Obligation of the City with respect to the Electric Utility, if material, or agreement to covenants, events of default, remedies,
5 4854-1970-3128v6/200891-0003
priority rights, or other similar terms of a Financial Obligation of the City with respect to the Electric Utility , any of which affects Holders of the Bonds, if material; or
16. default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the City with respect to the Electric Utility, any of which reflect financial difficulties.
For these purposes, (i) any event described in item 12 of this Section 5(a) is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the City in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City or its Electric Utility, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the City or its Electric Utility; and (ii) the City intends to comply with the provisions hereof for the Listed Events described in subparagraphs (15) and (16) of this Section 5(a), and the definition of the “Financial Obligation” in Section 2, with reference to the Rule, any other applicable federal securities laws and guidance provided by th e SEC in its Release No. 34-83885 dated August 20, 2018 (the “2018 Release”), any further amendments or written guidance provided by the SEC or its staff with respect to the amendments to the Rule effected by the 2018 Release.
(b) Upon receipt of notice from the City and instruction by the City to report the occurrence of any Listed Event, the Dissemination Agent shall provide notice thereof to the MSRB in accordance with Section 5(c) hereof. In the event the Dissemination Agent sha ll obtain actual knowledge of the occurrence of any of the Listed Events, the Dissemination Agent shall, immediately after obtaining such knowledge, contact the Disclosure Representative, inform such person of the event, and request that the City promptly notify the Dissemination Agent in writing whether or not to report the event pursuant to Section 5(c). For purposes of this Disclosure Agreement, “actual knowledge” of the occurrence of such Listed Event shall mean actual knowledge by the Dissemination Agent, if other than the Trustee, and if the Dissemination Agent is the Trustee, then by the officer at the corporate trust office of the Trustee with regular responsibility for the administration of matters related to the Indenture. The Dissemination Agent s hall have no responsibility to determine the materiality, if applicable, of any of the Listed Events. (c) The City, or the Dissemination Agent, if the Dissemination Agent has been instructed by the City to report the occurrence of a Listed Event, shall file a notice of the occurrence of any of the events listed in Section 5(a) hereof with the MSRB in a timely manner not more than ten (10) business days after the occurrence of the event.
Section 6. Termination of Reporting Obligation. The City’s obligations under this Disclosure Agreement shall terminate with respect to all Series 2024 A Bonds upon the maturity, legal defeasance, prior redemption or payment in full of all of the Series 2024 A Bonds and with respect to any Series 2024 A Bonds upon the maturity, defeasance, prior redemption or payment in full of such Series 2024 A Bonds.
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Section 7. Dissemination Agent. The City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. If at any time there is not any other designated Dissemination Agent, the Trustee, upon notice from the City, shall be the Dissemination Agent. The initial Dissemination Agent shall be the Trustee.
The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the City pursuant to this Disclosure Agreement. The Dissemination Agent shall receive compensation for the services provided pursuant to this Disclosure Agreement.
Section 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Agreement, the City and the Dissemination Agent may amend this Disclosure Agreement, (and, to the extent that any such amendment does not materially change or increase its obligations hereunder, the Dissemination Agent shall agree to any amendment so requested by the City), and any provision of this Disclosure Agreement may be waived; provided, that the following conditions are satisfied:
(a) If the amendment or waiver relates to the provisions of Section 3(a), Section 4 or Section 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Series 2024 A Bonds, or the type of business conducted; (b) The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Series 2024 A Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) The amendment or waiver does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Holders or Beneficial Owners of the Series 2024 A Bonds.
In the event of any amendment or waiver of a provision of this Disclosure Agreement, the City shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the City. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a Listed Event under Section 5(c), and (ii) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles.
Section 9. Filings with the MSRB. All information, operating data, financial statements, notices and other documents provided to the MSRB in accordance with this Disclosure Agreement shall be provided in an electronic format prescribed by the MSRB and shall be accompanied by identifying information as prescribed by the MSRB.
Section 10. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which
7 4854-1970-3128v6/200891-0003
is required by this Disclosure Agreement. If the City chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Agreement, the City shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.
Section 11. Default. In the event of a failure of the City or the Dissemination Agent to comply with any provision of this Disclosure Agreement, the Trustee may (and, at the request of any Participating Underwriter or the Holders of at least 25% of the aggregate principal amount of Outstanding Series 2024 A Bonds and upon provision of indemnification satisfactory to the Trustee, shall), or any Holder or Beneficial Owner of the Series 2024 A Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City or the Dissemination Agent, as the case may be, to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of Default under the Indenture, and the sole remedy under this Disclosure Agreement in the event of any failure of the City or the Dissemination Agent to comply with this Disclosure Agreement shall be an action to compel performance hereunder.
Section 12. Duties, Immunities and Liabilities of Trustee and Dissemination Agent. Article VII of the Indenture is hereby made applicable to this Disclosure Agreement as if the Disclosure Agreement were (solely for this purpose) contained in the Indenture. The Dissemination Agent shall receive reasonable compensation for its services provided under this Disclosure Agreement and be entitled to the protections and limitations on liability afforded to the Trustee under Article VII of the Indenture. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement. The Dissemination Agent’s obligation to deliver the information at the times and with the contents described herein shall be limited to the extent that the City has provided such information to the Dissemination Agent as required by this Disclosure Agreement. The Dissemination Agent may conclusively rely upon any Annual Report or notice of a Listed Event provided by the City pursuant to this Disclosure Agreement as satisfying the obligations of the City with respect to the provision thereof, and shall have no duty or obligation to review the content thereof. In performing its duties under this Disclosure Agreement, the Dissemination Agent shall not be deemed to be acting in any fiduciary capacity for the City, the Holders of the Series 2024 A Bonds or any other party. The Dissemination Agent shall not be liable in connection with the performance of its duties under this Disclosure Agreement, except for its own negligence, willful misconduct or breach of the express terms hereof. The City agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys’ fees) of defending against any claim of liability, but excluding any loss, expense and liabilities due to the Dissemination Agent’s negligence or willful misconduct. The obligations of the City under this Section 12 shall survive resignation or removal of the Dissemination Agent and payment of the Series 2024 A Bonds.
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Section 13. Notices. Any notices or communications to or among any of the parties to this Disclosure Agreement may be given as follows:
To the City: To the Dissemination Agent:
City of Santa Clara
1500 Warburton Avenue
Santa Clara, California 95050
Attention: Director of Finance
Phone: (408) 615-2344
E-mail: [email protected]
The Bank of New York Mellon
Trust Company, N.A.
333 South Hope Street, Suite 2525
Los Angeles, California 90071
Phone: (213) 630-6237
E-mail: [email protected]
Section 14. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the City, the Trustee, the Dissemination Agent, the Participating Underwriters and the Holders and Beneficial Owners from time to time of the Series 2024 A Bonds, and shall create no rights in any other person or entity.
Section 15. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.
IN WITNESS WHEREOF, this Disclosure Agreement has been executed on behalf of the City and the Trustee by their duly authorized representatives.
CITY OF SANTA CLARA, CALIFORNIA,
a chartered California municipal corporation
APPROVED AS TO FORM:
GLEN R. GOOGINS
City Attorney
JŌVAN D. GROGAN
City Manager
1500 Warburton Avenue
Santa Clara, CA 95050
Telephone: (408) 615-2210
Facsimile: (408) 241-6771
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A.
By
Authorized Officer
A-1
4854-1970-3128v6/200891-0003
EXHIBIT A
NOTICE TO MSRB OF FAILURE TO FILE ANNUAL REPORT
Name of City: CITY OF SANTA CLARA
Name of Bond Issue: $__________ City of Santa Clara, California Electric Revenue Bonds, Series 2024 A
(the “Series 2024 A Bonds”)
Date of Issuance: _________, 20__
NOTICE IS HEREBY GIVEN that the City of Santa Clara, California (the “City”) has not provided an Annual Report with respect to the above -named Series 2024 A Bonds as required by Section 3(a) of the Continuing Disclosure Agreement, dated [Closing Date], 20__, by and between the City and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”) and in accordance with Section 14.15 of the Fourth Supplemental Electric Revenue Bond Indenture, dated as of October 1, 2024, by and between the City and the Trustee, amending and supplementing the Amended and Restated Electric Revenue Bond Indenture dated as of March 1, 2011, as amended and supplemented from time to time, by and between the City and the Trustee, providing for the issuance of the Series 2024 A Bonds. The City anticipates that the Annual Report will be filed by ___________, 20__.
Dated: ______________, 20__
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., as Trustee on behalf of the City
By:
Authorized Officer
cc: City of Santa Clara, California
OH&S DRAFT – Distributed 08/29/24
4161-8908-1424.6
BOND PURCHASE CONTRACT
$[2024A Par]
City of Santa Clara, California
Electric Revenue Bonds, Series 2024 A
[Pricing Date], 2024
City of Santa Clara
1500 Warburton Avenue
Santa Clara, California 95050
Ladies and Gentlemen:
The undersigned, J.P. Morgan Securities LLC, as representative (the “Representative”), on its own behalf and on behalf of RBC Capital Markets, LLC, and Siebert Williams Shank & Co., LLC ( collectively, the “Underwriters”), hereby offers to enter into this Bond Purchase Contract (this “Bond Purchase Contract”) with the City of Santa Clara, California (the “City”), which, upon acceptance of this offer by the City, will be binding upon the City and the Underwriters. This offer is made subject to the written acceptance hereof by the City on or before 5:00 p.m., California time , on the date hereof . If this offer is not so accepted, this offer will be subject to withdrawal by the Underwriter s upon written notice given to the City by the Representative at any time prior to the acceptance hereof by the City. The Representative hereby confirms that it has been duly authorized by the other Underwriters to execute this Bond Purchase Contract and to take all action hereunder by and on behalf of the Underwriters. Any action taken under this Bond Purchase Contract by the Representative will be binding upon all the Underwriters. Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Official Statement or the Indenture, each as hereinafter defined.
The City acknowledges and agrees that: (i) the Underwriters are not acting as a municipal advisor within the meaning of Section 15B of the Securities Exchange Act, as amended, (ii) the primary role of the Underwriters, as underwriters, is to purchase securities, for resale to investors, in an arm’s length commercial transaction between the City and the Underwriters; (iii) the Underwriters are acting solely as principals and are not acting as an agent or municipal advisors, financial advisors or fiduciaries to the City and have not assumed any advisory or fiduciary responsibility to the City with respect to the transaction contemplated by this Bond Purchase Contract and the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriters have provided other services or are currently providing other services to the City on other matters); (iv) the only obligations the Underwriters have to the City with respect to the transaction contemplated hereby are expressly a s set forth in this Bond Purchase Contract; and (v) the City has consulted its own financial and/or municipal, legal, accounting, tax and other advisors, as applicable, to the extent it has deemed appropriate.
1. Purchase and Sale of the Series 2024 A Bond s. Upon the terms and conditions and upon the basis of the representations and agreements set forth herein, the Underwriter s, jointly and severally, hereby agree to purchase from the City, and the City hereby agrees to sell to the Underwriters, all (but not less than all) of its $ [2024A Par] aggregate principal amount of 2 4161-8908-1424.6
City of Santa Clara, California Electric Revenue Bonds, Series 2024 A (the “Series 2024 A Bonds”).
The Underwriters agree to purchase the Series 2024 A Bonds at the aggregate purchase price of $[Purchase Price] (representing the principal amount of the Series 2024 A Bonds of $[2024A Par] , [plus /less] original issue [premium/discount] of $ [OIP][OID], less an Underwriters’ discount of $[UW Discount] ) (the “Purchase Price”). The Series 2024 A Bonds shall be dated their date of delivery, shall bear interest payable on [January 1], 2025 and thereafter semiannually each July 1 and January 1 at the rates, shall mature on July 1 in each year and in the amounts, and shall be subject to redemption, all as set forth in Exhibit A attached hereto.
It shall be a condition to the City’s obligations to execute, issue and deliver the Series 2024 A Bonds to the Underwriters and to the Underwriters ’ obligation to purchase, to accept delivery of and to pay for the Series 2024 A Bonds that the entire $ [2024A Par] aggregate principal amount of the Series 2024 A Bonds shall be so executed , issued and delivered by the City and purchased, accepted and paid for by the Underwriters at the Closing (as defined in Section 7 hereof ).
2. The Series 2024 A Bond s. The Series 2024 A Bonds will be issued pursuant to Section 1321 of the Charter of the City (the “ Charter”); a number of resolutions adopted pursuant to the Charter; the Revenue Bond Law of 1941, to the extent incorporated by such procedural resolutions; a resolution adopted by the City Council of the City (the “City Council”) on [September 10] , 2024 (the “Bond Resolution ”); and an Amended and Restated Electric Revenue Bond Indenture, dated as of March 1, 2011 (the “Amended and Restated Indenture”), by and between the City and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”), as supplemented and amended, including as supplemented and amended by a Fourth Supplement al Electric Revenue Bond Indenture, dated as of October 1, 2024 (the “Fourth Supplement ” and together with the Amended and Restated Indenture, as previously amended and supplemented, the “Indenture”), by and between the City and the Trustee. The Series 2024 A Bonds will be limited obligations of the City payable solely from and secured by a pledge of Adjusted Net Revenues, and the other funds pledged therefore under the Indenture.
The terms and provisions of the Series 2024 A Bonds are set forth in the Indenture.
The net proceeds from the issuance of the Series 2024 A Bonds will be used to (i) fund or reimburse the City for certain costs of improvements to the Electric System of the City and (ii) pay costs of issuance of the Series 2024 A Bonds.
3. Use and Preparation of Preliminary Official Statement and Official Statement; Continuing Disclosure . The City has heretofore delivered to the Underwriters copies of the Preliminary Official Statement dated [POS Date], 2024, relating to the Series 2024 A Bonds ( including the cover page, the inside cover page and appendices thereto, and any supplements or amendments thereto, the “Preliminary Official Statement”), which the City has deemed final as of its date, except for the omission of such information as i s permitted to be omitted in accordance with paragraph (b)(1) of Rule 15c2- 12 promulgated under the Securities Exchange Act of 1934, as amended ( “Rule 15c2 -12”). The City hereby agrees to deliver or cause to be delivered to the Underwriters, within seven (7) business days from the date hereof 3 4161-8908-1424.6
and, in any case, at least two (2) business days prior to the Closing Date (as defined in Section 7 hereof), copies of a final official statement (such official statement, including the cover page, the inside cover page and appendices thereto, and any supplements or amendments thereto delivered prior to the Closing Date, is herein referred to as the “ Official Statement”), in such quantities and/or electronic format as the Underwriters may reasonably request in order to comply with paragraph (b)(4) of Rule 15c2- 12 and the rules of the Municipal Securities Rulemaking Board (the “MSRB”). The City hereby ratifies, confirms and approves the use and distribution by the Underwriters prior to the date hereof of the Preliminary Official Statement and hereby authorizes the Underwriters to use and distribute the Official Statement, the Indenture and this Bond Purchase Contract in connection with the offer and sale of the Series 2024 A Bonds. The Representative hereby agrees to promptly file the Official Statement, including any supplements prepared by the City, with the MSRB’s Electronic Municipal Market Access (“EMMA”) system.
The City will undertake pursuant to a Continuing Disclosure Agreement, to be dated the date of issuance of the Series 2024 A Bonds (the “ Disclosure Agreement”), to provide certain annual financial and operating information with respect to the Electric Utility and certain specified event notices with respect to the Electric Utility. A description of this undertaking is set forth in the Official Statement.
4. Public Offering . The Underwriters intend to make a bona fide initial public offering of all the Series 2024 A Bonds at prices no higher than, or yields not lower than, those shown in Schedule 1 to Exhibit B hereto and in the Official Statement. The Underwriters reserve the right to lower such initial offering prices from time to time after such initial public offering as they deem necessary in connection with the marketing of the Series 2024 A Bonds.
5. Establishment of Issue Price.
(a) The Representative, on behalf of the Underwriters, agrees to assist the City in establishing the issue price of the Series 2024 A Bonds and shall execute and deliver to the City at Closing an “issue price” or similar certificate substantially in the
form attached hereto as Exhibit B, together with the supporting pricing wires or equivalent communications, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Representative, the City and Stradling Yocca Carlson & Rauth LLP (“ Bond Counsel”), to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Series 2024 A Bonds. If such certificate in the form executed by the Representative is insufficient to assist the City in establishing the issue price of the Series 2024 A Bonds, one or more of the other Underwriters shall, at the request of the City, execute and deliver to the City at Closing a certificate in the form as may be reasonably requested by Bond Counsel to the extent necessary to assist the City in establishing the issue price of the Series 2024 A Bonds. (b) With respect to Series 2024 A Bonds of those maturities as to which at least 10% of the Series 2024 A Bonds of the maturity has been sold to the public (defined in subsection ( f) below) at a single price (the “10% test” or “General Rule”), based on reporting by the Representative to the City on the date hereof and prior to the execution of this Bond Purchase Contract, which maturities are indicated in Schedule 1 to Exhibit B attached hereto as having satisfied the General Rule, the City will treat the first price at 4 4161-8908-1424.6
which 10% of each maturity of the Series 2024 A Bonds was sold to the public as the issue price of that maturity. [As shown on Schedule 1 to Exhibit B, the 10% test has been satisfied as of the date of this Bond Purchase Contract for each maturity of the Series 2024 A Bonds.] [If at th e time of execution of this Bond Purchase Contract, the 10% test has not been satisfied as to any maturity of the Series 2024 A Bonds, the Representative agrees to promptly report to the City the prices at which Series 2024 A Bonds of that maturity have been sold by the Underwriters to the public. That reporting obligation shall continue, whether or not the Closing Date has occurred, until either (i) all Series 2024 A Bonds of that maturity have been sold or (ii) the 10% test has been satisfied as to the Series 2024 A Bonds of that maturity, provided that, the Underwriters’ reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Representative, the City or Bond Counsel.] For purposes of this Section 5, if Series 2024 A Bonds mature on the same date but have different interest rates, each separate CUSIP number within that maturity will be treated as a separate maturity of the Series 2024 A Bonds.
(c) The Representative confirms that the Underwriters have offered the Series 2024 A Bonds to the public on or before the date of this Bond Purchase Contract at the offering price or prices (the “initial offering price”), or at the corresponding yield or yields, set forth in Schedule 1 to Exhibit B attached hereto, except as otherwise set forth therein. Schedule 1 to Exhibit B also sets forth , as of the date of this Bond Purchase Contract, the maturities, if any, of the Series 2024 A Bonds for which the 10% test has not been satisfied and for which the City and the Representative, on behalf of the Underwriters, agree that (i) the Representative will retain all unsold Series 2024 A Bonds of each maturity for which the 10% test has not been satisfied and not allocate any such Series 2024 A Bonds to any other Underwriter and (ii) the restrictions set forth in the next sentence shall apply, which will allow the City to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the “hold-the-offering-price rule”). So long as the hold-the- offering-price rule remains applicable to any maturity of the Series 2024 A Bonds, the Representative will neither offer nor sell unsold Series 2024 A Bonds of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following:
(i) the close of the fifth (5th) business day after the sale date; or (ii) the date on which the Representative has sold at least 10% of that maturity of the Series 2024 A Bonds to the public at a price that is no higher than the initial offering price to the public.
The Representative will advise the City promptly after the close of the fifth (5th) business day after the sale date whether it has sold 10% of that maturity of the Series 2024 A Bonds to the public at a price that is no higher than the initial offering price to the public.
5 4161-8908-1424.6
(d) The Representative confirms that:
(i) any agreement among underwriters, any selling group agreement and each third -party distribution agreement (to which the Representative is a party) relating to the initial sale of the Series 2024 A Bonds to the public, together with the related pricing wires, contains or will contain language obligating each underwriter, each dealer who is a member of the selling group and each broker - dealer that is a party to such third -party distribution agreement, as applicable :
(A)(i) to report the prices at which it sells to the public the unsold Series 2024 A Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Series 2024 A Bonds of that maturity allocated to it have been sold or it is notified by the Representative that the 10% test has been satisfied as to the Series 2024 A Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Representative, and (ii) to comply with the hold- the-offering-price rule, if applicable, if and for so long as directed by the Representative and as set forth in the related pricing wires; (B) to promptly notify the Representative of any sales of Series 2024 A Bonds that, to its knowledge, are made to a purchaser who is a related party to an underwriter participating in the initial sale of the Series 2024 A Bonds to the public (each such term being used as defined below); and (C) to acknowledge that, unless otherwise advised by the Underwriter, dealer or broker -dealer, the Representative shall assume that each order submitted by the Underwriter, dealer or broker-dealer is a sale to the public; and
(ii) any agreement among underwriters or selling group agreement relating to the initial sale of the Series 2024 A Bonds to the public, together with the related pricing wires, contains or will contain language obligating each Underwriter or dealer that is a party to a third -party distribution agreement to be employed in connection with the initial sale of the Series 2024 A Bonds to the public to require each broker -dealer that is a party to such third- party distribution agreement to (A) report the prices at which it sells to the public the unsold Series 2024 A Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Series 2024 A Bonds of that maturity allocated to it have been sold or it is notified by the Representative or such Underwriter or dealer that the 10% test has been satisfied as to the Series 2024 A Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at a reasonable periodic intervals or otherwise upon request of the Representative or such Underwriter or dealer, and (B) comply with the hold-the- offering-price rule, if applicable, if and for so long as directed by the Representative or the Underwriter or the dealer and as set forth in the related pricing wires. (e) The City acknowledges that, in making the representations set forth in this section, the Representative will rely on (i) the agreement of each Underwriter to comply with the requirements for establishing the issue price of the Series 2024 A Bonds, including, but not limited to, its agreement to comply with the hold-the- offering-price rule, if applicable to the Series 2024 A Bonds, as set forth in an agreement among 6 4161-8908-1424.6
underwriters and the related pricing wires, (ii) in the event a selling group has been created in connection with the initial sale of the Series 2024 A Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the requirements for establishing issue price of the Series 2024 A Bonds, including, but not limited to, its agreement to comply with the hold -the-offering-price rule, if applicable to the Series 2024 A Bonds, as set forth in a selling group agreement and the related pricing wires, and (iii) in the event that an Underwriter or dealer who is a member of the selling group is a party to a third- party distribution agreement that was employed in connection with the initial sale of the Series 2024 A Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the requirements for establishing issue price of the Series 2024 A Bonds, including, but not limited to, its agreement to comply with the hold-the- offering-price rule, if applicable to the Series 2024 A Bonds, as set forth in the third- party distribution agreement and the related pricing wires. The City further acknowledges that each Underwriter shall be solely liable for its failure to comply with its agreement regarding the requirements for establishing issue price of the Series 2024 A Bonds, including, but not limited to, its agreement to comply with the hold- the-offering-price rule, if applicable to the Series 2024 A Bonds, and that no Underwriter shall be liable for the failure of any other Underwriter, or of any dealer who is a member of a selling group, or of any broker -dealer that is a party to a third-party distribution agreement, to comply with its corresponding agreement to comply with the requirements for establishing issue price of the Series 2024 A Bonds, including, but not limited to, its agreement to comply with the hold-the- offering-price rule, if applicable to the Series 2024 A Bonds.
(f) The Underwriters acknowledge that sales of any Series 2024 A Bonds to any person that is a related party to an underwriter participating in the initial sale of the Series 2024 A Bonds to the public (each such term being used as defined below) shall not constitute sales to the public for purposes of this section. Further, for purposes of this Section 5:
(i) “public” means any person other than an underwriter or a related party;
(ii) “underwriter” means (A) any person that agrees pursuant to a written contract with the City (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Series 2024 A Bonds to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Series 2024 A Bonds to the public (including a member of a selling group or a party to a third -party distribution agreement participating in the initial sale of the Series 2024 A Bonds to the public); (iii) a purchaser of any of the Series 2024 A Bonds is a “related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (A) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (B) more than 50% common ownership 7 4161-8908-1424.6
of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (C) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other); and (iv) “sale date” means the date of execution of this Bond Purchase Contract by all parties.
6. Representations and Agreements of the City . The City hereby represents and agrees with the Underwriters as follows:
(a) The City is a charter city of the State of California (the “State”) authorized to issue electric revenue bonds pursuant to Section 1321 of its Charter. (b) The City has full legal right, power and authority to issue the Series 2024 A Bonds pursuant to the Charter and the Indenture, to enter into this Bond Purchase Contract, the Indenture and the Disclosure Agreement, and to adopt the Bond Resolution. (c) By all necessary official action of the City prior to or concurrently with the acceptance hereof, the City Council has duly adopted the Bond Resolution and the Bond Resolution is in full force and effect and has not been amended, modified or rescinded.
(d) The City has duly authorized and approved the execution and delivery of, and the performance by the City of its obligations contained in the Series 2024 A Bonds, the Indenture, the Disclosure Agreement and this Bond Purchase Contract and the consummation by it of all other transactions contemplated by this Bond Purchase Contract to have been performed or consummated at or prior to the Closing Date; the City has duly authorized the distribution of the Preliminary Official Statement and the execution, delivery and distribution of the Official Statement; and the City is in compliance in all respects with the terms of the Charter applicable to the issuance of the Series 2024 A Bonds and will be in compliance on the Closing Date in all material respects with its obligations in connection with the issuance of the Series 2024 A Bonds on its part contained in the Series 2024 A Bonds, the Bond Resolution, the Indenture, the Disclosure Agreement and this Bond Purchase Contract.
(e) The Series 2024 A Bonds, the Indenture and the Disclosure Agreement conform in all material respects to the descriptions thereof contained in the Preliminary Official Statement and the Official Statement.
(f) Between the date of this Bond Purchase Contract and the Closing Date, except as referred to in or contemplated by the Official Statement, the City will not without the prior written consent of the Underwriters (which consent shall not be unreasonably withheld), with respect to the Electric Utility, publicly offer or issue any bonds, notes or other obligations for borrowed money, or incur any material liabilities, 8 4161-8908-1424.6
direct or contingent, payable from revenues of the Electric Utility , in either case other than in the ordinary course of business or as discussed in the Official Statement. (g) The City is not in violation of, or in breach of or in default under, any applicable constitutional provision, law or administrative regulation of the State, the United States or the Charter or any applicable court order, judgment or decree or any loan agreement, indenture, bond, note, resolution, or other agreement or instrument to which the City is a party or to which the City is otherwise bound, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or event of default under any such instrument, in any such case to the extent such violation, breach or default would have a material adverse effect on the ability of the City to repay the Series 2024 A Bonds or on the security therefor; and the execution and delivery of this Bond Purchase Contract, the Indenture, the Disclosure Agreement and the Series 2024 A Bonds, the adoption of the Bond Resolution, and compliance with the provisions on the City’s part contained in this Bond Purchase Contract, the Indenture, the Disclosure Agreement, the Bond Resolution and the Series 2024 A Bonds, do not conflict with or constitute a breach of or default under any applicable constitutional provision, law, administrative regulation, court order, judgment, court decree, loan agreement, indenture, bond, note, resolution, agreement, or other instrument to which the City is a party, or by which the City is bound, nor does any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon the Electric Utility under the terms of any such law, regulation or instrument, except as provided by the Series 2024 A Bonds and the Indenture or except to the extent that such conflict, breach or default or the creation or imposition of such lien or charge, would not have a material adverse effect on the security for the Series 2024 A Bonds. (h) Except as otherwise set forth in the Preliminary Official Statement and the Official Statement, there is no action, suit, proceeding, hearing, inquiry or investigation, at law or in equity (with service of process having been accomplished or notice thereof having been delivered), before or by any court, government agency, public board or body, pending or, to the best of the City’s knowledge, threatened against the City (i) in any material respect questioning the existence of the City or the titles of the of ficers of the City to their respective offices in which an adverse decision would affect the validity of the Bond Resolution or the authorizations and approvals effected thereby in connection with this Bond Purchase Contract, the Indenture, the Disclosure Agreement, the Preliminary Official Statement, the Official Statement or the Series 2024 A Bonds; (ii) in any way contesting, affecting or seeking to prohibit, restrain or enjoin the issuance , sale or delivery of the Series 2024 A Bonds, or the collection of revenues pledged to pay the principal of and interest on the Series 2024 A Bonds, or the pledge of such revenues, or the application of the proceeds of the Series 2024 A Bonds for the purposes described in the Preliminary Official Statement and the Official Statement; (iii) in any way contesting or affecting the validity or enforceability of the Series 2024 A Bonds, the Indenture, the Disclosure Agreement or this Bond Purchase Contract, or contesting the power or authority of the City to issue the Series 2024 A Bonds, to adopt the Bond Resolution, or to execute and delivery the Indenture, this Bond Purchase Contract or the Disclosure Agreement, or contesting the tax- exempt status of interest due on the Series 2024 A 9 4161-8908-1424.6
Bonds; (iv) which could reasonably be expected to result in any material adverse change in the ability of the City to pay the principal of and interest on the Series 2024 A Bonds; or (v) contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement or asserting that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (i) The City will furnish such information, execute such instruments and take such other action not inconsistent with law in cooperation with the Underwriter s as the Underwriters may request (i) to qualify the Series 2024 A Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter s may designate and (ii) to determine the eligibility of the Series 2024 A Bonds for investment under the laws of such states and other jurisdictions, and will use its best efforts to continue such qualifications in effect so long as required for the distribution of the Series 2024 A Bonds; provided, however, that in no event shall the City be required to execute a general or special consent to service of process or qualify to do business in connection with any such qualification or determination in any jurisdiction.
(j) The Series 2024 A Bonds, when issued and delivered in accordance with the Indenture and sold to the Underwriters as provided herein, will be the legal, valid and binding limited obligations of the City, enforceable in accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, to the application of equitable principles whether or not sought, to the possible unavailability of specific performance or injunctive relief, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against governmental entities in the State, and (subject to the immediately preceding limitations) the owners of the Series 2024 A Bonds will be entitled to the benefits of the Indenture; upon such issuance and delivery the Indenture will provide, for the benefit of the owners from time to time of the Series 2024 A Bonds, a legally valid and binding pledge of and lien on the Adjusted Net Revenues and the funds and accounts pledged to such Series 2024 A Bonds under the Indenture.
(k) When executed, this Bond Purchase Contract, the Indenture and the Disclosure Agreement (assuming due authorization, execution and delivery by the other parties thereto, if applicable) will constitute the valid and legally binding obligations of the City, enforceable in accordance with their terms, except as such enforceability may be subject to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, to the application of equitable principles whether or not sought, to the possible unavailability of specific performance or injunctive relief, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against governmental entities in the State. (l) All authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission having 10 4161-8908-1424.6
jurisdiction of the matter which are required for the due authorization of, which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by the City of its obligations in connection with the execution, sale and delivery of the Series 2024 A Bonds under this Bond Purchase Contract have been duly obtained, except for such approvals, consents and orders as may be required under the Blue Sky or securities laws of any state in connection with the offering and sale of the Series 2024 A Bonds; and, except as disclosed in the Preliminary Official Statement and Official Statement, all authorizations, approvals, licenses, permits, consents and orders of any governmental authority, board, agency or commission, having jurisdiction of the matter which are required for the due authorization of, which would constitute a condition precedent to, or the absence of which would materially adversely affect the due performance by the City of its respective obligations under the Indenture, the Disclosure Agreement or this Bond Purchase Contract, have been duly obtained. (m) As of the date thereof and (as supplemented or amended through the date hereof) as the date hereof, the Preliminary Official Statement did not and does not contain any untrue statement of a material fact or omit to state a material fact (other than information permitted to be omitted therefrom by Rule 15c2-12) necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (excluding therefrom the information relating to The Depository Trust Company ( “DTC”) and its book- entry system, the initial offering prices and/or yields on the Series 2024 A Bonds as provided by the Underwriters and the information contained under the caption “ UNDERWRITING,” as to all of which no representations are made).
(n) At the time of the City’s acceptance hereof and (unless an event occurs of the nature described in clause ( o) below) at all times during the period from the date of this Bond Purchase Contract to and including the Closing Date, the Official Statement does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (excluding therefrom the information relating to DTC and its book- entry system, the initial offering prices and/or yields on the Series 2024 A Bonds as provided by the Underwriters and the information contained under the caption “UNDERWRITING,” as to all of which no representations are made). (o) If during the period from the date of this Bond Purchase Contract to and including the date which is twenty- five (25) days following the End of the Underwriting Period for the Series 2024 A Bonds (as determined in accordance with Section 14 hereof), any event shall occur or be discovered which might or would cause the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the City shall notify the Underwriter s of any such event of which it has knowledge and, if in the opinion of the City, the Underwriters and their respective counsels such event requires the preparation and publication of a supplement or amendment to the Official Statement, the City will prepare and furnish to the Underwriter s, at the expense of the City (i) a reasonable number of copies of the supplement or amendment to the Official Statement 11 4161-8908-1424.6
in form and substance acceptable to the Representative and (ii) if such notification shall be subsequent to the Closing Date, such legal opinions, certificates, instruments and other documents as the Underwriters may reasonably deem necessary to evidence the truth and accuracy of such supplement or amendment to the Official Statement. (p) If the Official Statement is supplemented or amended pursuant to clause (o) above, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such paragraph) at all times during the period from the date of such supplement or amendment to and including the date which is 25 days following the End of the Underwriting Period, the Official Statement, as so supplemented or amended, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (excluding therefrom the information relating to DTC and its book- entry system, the initial offering prices and/or yields on the Series 2024 A Bonds as provided by the Underwriters and the information contained under the caption “UNDERWRITING,” as to all of which no representations are made).
(q) Any certificate signed by any official or other representative of the City and delivered to the Underwriter s pursuant to this Bond Purchase Contract shall be deemed a representation by the City to the Underwriter s as to the truth of the statements therein made.
(r) The financial statements of, and other financial information regarding, the Electric Utility contained in the Preliminary Official Statement and the Official Statement fairly present the financial position and results of the operations of the Electric Utility as of the dates and for the periods therein set forth, and, to the best of the City’s knowledge, the audited financial statements have been prepared in accordance with generally accepted accounting principles consistently applied and since the date of such audited financial statements, there has been no material adverse change in the financial position or results of operations of the Electric Utility.
(s) The City shall not knowingly take or omit to take any action, which action or omission would cause the interest on the Series 2024 A Bonds to be includable in gross income for federal income tax purposes.
(t) The proceeds received from the sale of the Series 2024 A Bonds shall be used in accordance with the Indenture and as set forth in the Official Statement. (u) Except as otherwise disc losed in the Preliminary Official Statement and Official Statement, the City has not failed during the last five (5) years to comply in all material respects with any previous continuing disclosure undertakings with regard to Rule 15c2-12 to provide annual reports or notices of listed events specified in such rule.
7. Closing. At [8:00] a.m., California time, on [Closing Date], 2024 or at such other time or on such other date as shall have been mutually agreed upon by the City and the Representative (the “Closing Date”), the City will, subject to the terms and conditions hereof, 12 4161-8908-1424.6
deliver or cause to be delivered to the Underwriter s, under the Fast Automated Securities Transfer System of DTC, the Series 2024 A Bonds, in the form of a separate single fully registered bond for each maturity date of the Series 2024 A Bonds duly executed by the City and authenticated by the Trustee, and at such other place or by electronic means, the other documents hereinafter mentioned. The Underwriters will accept such delivery and pay the Purchase Price of the Series 2024 A Bonds as set forth in Section 1 hereof by wire transfer in immediately available funds on the Closing Date.
Payment for the Series 2024 A Bonds, together with delivery of the documents hereinafter mentioned shall be coordinated at the offices of Bond Counsel, or at such other place as shall have been mutually agreed upon by the City and the Representative. Such payment and delivery is herein called the “ Closing.” The Underwriter s shall order CUSIP identification numbers and the City shall cause such CUSIP identification numbers to be printed on the Series 2024 A Bonds, but neither the failure to print such number on any bond nor any error with respect thereto shall constitute cause for a failure or refusal by the Underwriter s to accept delivery of and pay for the Series 2024 A Bond s on the Closing Date in accordance with the terms of this Bond Purchase Contract.
8. Closing Conditions . The Underwriter s have entered into this Bond Purchase Contract in reliance upon the representations of the City contained herein and the performance by the City of its obligations hereunder both as of the date hereof and as of the Closing Date.
The Underwriters’ obligations under this Bond Purchase Contract shall be conditioned upon the performance by the City of its obligations to be performed hereunder and under the other documents and instruments delivered in connection with the execution and delivery of the Series 2024 A Bonds at or prior to the Closing Date, and shall also be subject to the following further conditions:
(a) The representations of the City contained herein shall be true, complete and correct in all material respects on the date hereof and on the Closing Date as if made on the Closing Date;
(b) At the time of the Closing , the Bond Resolution, the Indenture and the Disclosure Agreement and the Official Statement shall have been duly authorized, executed and delivered, in substantially the form s heretofore submitted to the Underwriters, with only such changes as may have been agreed to in writing by the Underwriters ( which agreement shall not be unreasonably withheld), and the Bond Resolution, the Indenture and the Disclosure Agreement shall be in full force and effect , and there shall be in full force and effect such resolutions as, in the opinion of Bond Counsel shall be necessary in connection with the transactions contemplated hereby. (c) At or prior to the Closing, the Underwriter s shall receive the following documents, in each case reasonably satisfactory in form and substance to the Representative and to counsel to the Underwriters, Orrick, Herrington & Sutcliffe LLP (“Underwriters’ Counsel”):
(i) the unqualified approving opinion of Bond Counsel, dated the Closing Date, addressed to the City, substantially in the form set forth as 13 4161-8908-1424.6
Appendix E to the Official Statement, together with a letter to the Underwriters stating that the Underwriters may rely on the same;
(ii) a supplemental opinion of Bond Counsel, dated the Closing Date, addressed to the Representative, substantially in the form set forth as Exhibit C hereto;
(iii) a letter of Stradling Yocca Carlson & Rauth LLP, as Disclosure Counsel to the City, dated the Closing Date, addressed to the City and the Representative, substantially in the form set forth as Exhibit D hereto; (iv) an opinion of the City Attorney, dated the Closing Date, addressed to the Representative, substantially in the form set forth as Exhibit E hereto; (v) an opinion of counsel to the Trustee, dated the Closing Date, addressed to the City and the Underwriters , to the effect that: (A) the Trustee is a national banking association organized and existing under the laws of the United States, having full power and being qualified to enter, accept and administer the trust created under the Indenture, to enter into the Disclosure Agreement and to authenticate and deliver the Series 2024 A Bonds; (B) the Indenture and the Disclosure Agreement have been duly authorized, executed and delivered by the Trustee, and, assuming due authorization, execution and delivery thereof by the City, constitute the legal, valid and binding obligations of the Trustee, enforceable in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, or other laws affecting the enforcement of creditors’ rights generally and by the application of equitable principles if equitable remedies are sought; (C) the Series 2024 A Bonds have been duly authenticated by the Trustee in accordance with the Indenture; and (D) no authorization, approval, consent or order of any governmental agency or any other person is required for the valid authorization, execution and delivery of the Indenture or the Disclosure Agreement by the Trustee, or the authentication of the Series 2024 A Bonds by the Trustee;
(vi) an opinion of Underwriters ’ Counsel, dated the Closing Date and addressed to the Underwriters , in form and substance satisfactory to the Underwriters;
(vii) a certificate, dated the Closing Date, of the City, to the effect that, (A) the representations of the City in this Bond Purchase Contract are true and correct as of the Closing Date, as if made on the Closing Date; and ( B) the Official Statement as of its date and as of the Closing Date did not and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (excluding therefrom the information relating to DTC and its book-entry system, the initial offering prices and/or yields on the Series 2024 A Bonds as provided by the Underwriters and the information 14 4161-8908-1424.6
contained under the caption “UNDERWRITING,” as to all of which no representations are made);
(viii) a certificate of the Trustee, dated the Closing Date, to the effect that: (A) the Trustee is duly organized and existing as a national banking association organized and existing under the laws of the United States of America, having the full power and authority to enter into, accept the trusts created under and perform its duties under the Indenture and the Disclosure Agreement and to authenticate the Series 2024 A Bonds; (B) the Trustee is duly authorized to enter into the Indenture and the Disclosure Agreement, and to authenticate and deliver the Series 2024 A Bonds to the Underwriter s pursuant to the terms of the Indenture; (C) the execution and delivery by the Trustee of the Indenture and the Disclosure Agreement, and compliance with the terms thereof, will not conflict with, or result in a violation or breach of, or constitute a default under, any loan agreement, indenture, bond, note, resolution or any other agreement or instrument to which the Trustee is a party or by which it is bound, or, to its best knowledge, any law or any rule, regulation, order or decree of any court or governmental agency or body having jurisdiction over the Trustee or any of its activities or properties (except that no representation, warranty or agreement is made by the Trustee with respect to any federal or state securities or blue sky laws or regulations); (D) there is no action, suit, proceeding or investigation at law or in equity before or by any court, public board or body, pending or, to the best of the knowledge of the Trustee, threatened against or affecting the existence of the Trustee or in any way contesting or affecting the validity or enforceability of the Series 2024 A Bonds or the Indenture or the Disclosure Agreement or contesting the powers of the Trustee or its authority to enter into and perform its obligations under any of the foregoing, or wherein an unfavorable decision, ruling or finding would adversely affect the Trustee or the transactions contemplated in connection with the issuance and sale of the Series 2024 A Bonds, or which, in any way, would adversely affect the validity of the Series 2024 A Bonds, the Indenture, the Disclosure Agreement or any agreement or instrument to which the Trustee is a party and which is used or contemplated for use in the Indenture or the Disclosure Agreement, or the consummation of the transactions contemplated in connection with the issuance and sale of the Series 2024 A Bonds; and (E) subject to the provisions of the Indenture, the Trustee will apply the proceeds from the Series 2024 A Bonds to the purposes specified in the Indenture; (ix) the Official Statement and each supplement or amendment, if any, thereto, executed on behalf of the City by the City Manager or a duly authorized designee thereof;
(x) a copy of the Bond Resolution, certified by the City Clerk or an Assistant City Clerk as having been duly adopted by the City Council and as being in effect as of the Closing Date, together with a certificate from the City Clerk stating that the Bond Resolution is in effect in the form existing on the date hereof and has not been otherwise amended, modified, supplemented or superseded;
15 4161-8908-1424.6
(xi) an executed copy of the Amended and Restated Indenture, the Fourth Supplement and the Disclosure Agreement;
(xii) an executed copy of the tax certificate of the City with respect to the Series 2024 A Bonds, and evidence of the preparation for filing of IRS Form 8038-G with respect to the Series 2024 A Bonds;
(xiii) a DTC blanket letter of representation, executed by the City and accepted by DTC;
(xiv) a specimen copy of each maturity of the Series 2024 A Bonds; (xv) evidence satisfactory to the Representative that S&P Global Ratings (“S&P”) and Fitch Ratings (“Fitch”) have assigned ratings of “[A+]” and “[AA-],” respectively, to the Series 2024 A Bonds;
(xvi) a copy of the Report of Proposed Debt Issuance and evidence of the preparation for filing of the Report of Final Sale required to be delivered to the California Debt and Investment Advisory Commission; and (xvii) such additional legal opinions, certificates, instruments and other documents as the Underwriter s, Underwriters ’ Counsel or Bond Counsel may reasonably deem necessary to evidence the due execution and delivery of the Series 2024 A Bonds, the truth and accuracy as of the time of the Closing of the City’s representations and agreements contained in Section 6 hereof and the due performance or satisfaction by the City at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the City pursuant to the Indenture and this Bond Purchase Contract.
If the City shall be unable to satisfy the conditions to the Underwriters’ obligations contained in this Bond Purchase Contract, this Bond Purchase Contract shall terminate and neither the City nor the Underwriters shall have any further obligation hereunder, nor any liability to any other party with respect to such termination. If the Underwriters fail (other than for a reason permitted herein) to accept and pay for the Series 2024 A Bonds at the Closing, the amount equal to one percent of the principal amount of the Series 2024 A Bonds set forth in Section 1 hereof shall be full liquidated damages hereunder on the part of the Underwriters. The acceptance of such amounts shall constitute a full release and discharge of all claims and rights of the City against the Underwriters for such failure or default and, except as set forth in Section 10 hereof, no party shall have any further rights against the other hereunder.
9. Termination. The Underwriters shall have the right to cancel their obligation to purchase the Series 2024 A Bonds and to terminate this Bond Purchase Contract by written notice delivered by the Representative to the City if, between the date hereof and the Closing Date, in the Representative’s reasonable judgment any of the following events shall occur (each a “Termination Event”):
16 4161-8908-1424.6
(a) the market price or marketability of the Series 2024 A Bonds, or the ability of the Underwriters to enforce contracts for the sale of the Series 2024 A Bonds, shall be materially adversely affected by any of the following events:
(i) legislation shall have been enacted by the Congress of the United States or the legislature of the State or shall have been favorably reported out of committee of either body or be pending in committee of either body, or shall have been recommended to the Congress for passage by the President of the United States, or a decision shall have been rendered by a court of the United States or the State or the Tax Court of the United States, or a ruling, resolution, regulation or temporary regulation, shall have been made or shall have been proposed to be made by the Treasury Department of the United States or the Internal Revenue Service, or other federal or state authority with appropriate jurisdiction, with respect to federal or state tax exemption of interest received on obligations of the general character of the Series 2024 A Bonds; or
(ii) there shall have occurred (1) an outbreak or escalation of hostilities or the declaration by the United States of a national emergency or war or (2) any other calamity or crisis or escalation thereof affecting the effective operation of the financial markets of the United States; or
(iii) a general suspension of trading on the New York Stock Exchange or other national exchange shall be in force, or minimum or maximum prices for trading shall have been fixed and be in force, or maximum ranges for prices for securities shall have been required and be in force on any national securities exchange, whether by virtue of determination by that exchange or by order of the SEC or any other governmental authority having jurisdiction; or (iv) any new restriction on transactions in securities materially affecting the market for securities (including the imposition of any limitation on interest rates) or the extension of credit by, or a charge to the net capital requirements of, underwriters shall have been established by the New York Stock Exchange, the SEC, any other federal or State agency or the Congress of the United States, or by Executive Order; or
(v) a general banking moratorium shall have been declared by federal or State authorities having jurisdiction and be in force or a material disruption in securities settlement, payment or clearance services affecting the Series 2024 A Bonds shall have occurred; or
(vi) legislation shall have been enacted by the Congress of the United States or shall have been recommended to the Congress for passage by the President of the United States, or a decision by a court of the United States shall be rendered, or a ruling, regulation, proposed regulation or official statement by or on behalf of the SEC or other governmental agency having jurisdiction of the subject matter shall be made, to the effect that any obligations of the general character of the Series 2024 A Bonds are not exempt from the registration 17 4161-8908-1424.6
requirements of the Securities Act of 1933, as amended, or that the Indenture is not exempt from qualification under the Trust Indenture Act of 1939, as amended; or
(vii) the downgrading, suspension or withdraw al of any rating on the Series 2024 A Bonds or any parity bonds issued under the Indenture, by any rating agency then rating the Series 2024 A Bonds; or
(b) any event or circumstance shall exist that either makes untrue or incorrect in any material respect any statement or information in the Official Statement (other than any statement provided by the Underwriters) or is not reflected in the Official Statement but should be reflected therein in order to make the statements therein, in the light of the circumstances under which they were made, not misleading and, in either such event, the City refuses to permit the Official Statement to be supplemented to supply such statement or information, or the effect of the Official Statement as so supplemented is to materially adversely affect the market price or marketability of the Series 2024 A Bonds or the ability of the Underwriters to enforce contracts for the sale of the Series 2024 A Bonds; or
(c) a decision by a court of the United States shall be rendered, or a stop order, release, regulation or no- action letter by or on behalf of the SEC or any other governmental agency having jurisdiction of the subject matter shall have been issued or made, to the effect that the issuance, offering or sale of the Series 2024 A Bonds, is or would be in violation of the federal securities laws at the Closing Date, including the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the Trust Indenture Act of 1939, as amended.
Upon the occurrence of a Termination Event and the termination of this Bond Purchase Contract by the Underwriters, all obligations of the City and the Underwriters under this Bond Purchase Contract shall terminate, without further liability, except that the City and the Underwriters shall pay their respective expenses as set forth in Section 10 herein.
10. Expenses. (a) The Underwriters shall be under no obligation to pay and the City shall pay or cause to be paid the expenses incident to the performance of its obligations hereunder including but not limited to (i) the cost of the preparation, printing, or other reproduction (for distribution on or prior to the date hereof), and delivery of the Indenture; (ii) the fees and disbursements of Bond Counsel, PFM Financial Advisors LLC, as municipal advisor to the City, the Trustee, and any other experts or consultants retained by the City; (iii) the cost of preparation of the Series 2024 A Bonds; (iv) the cost of preparation, printing and delivery of the Preliminary Official Statement and the Official Statement and any supplements or amendments thereto; (v) charges of rating agencies for the ratings of the Series 2024 A Bonds; and (vi) all other costs connected to issuance of the Series 2024 A Bonds except costs specifically described in clause (b) below. The City shall also pay all expenses (whether included in the expense component of the Underwriter s’ discount or not), or reimburse the Underwriters for the payment on behalf of the City of such expenses, as incurred on behalf of the City’s officers and employees that are incidental to the implementation of this Bond Purchase Contract, including, but not limited to, meals, transportation, entertainment, travel, lodging and 18 4161-8908-1424.6
the usual and customary charges incident and ancillary to the carrying out of the act of the marketing and pricing of, and securing ratings for the Series 2024 A Bonds. (b) The Underwriters shall pay (i) the cost of preparation and printing of the Blue Sky memorandum to be used by them and the cost, if any, of printing this Bond Purchase Contract; (ii) all advertising expenses incurred by them in connection with the public offering of the Series 2024 A Bonds; (iii) the fees and disbursements of Underwriters ’ Counsel; and (iv) all other expenses incurred by them in connection with their public offering and distribution of the Series 2024 A Bonds.
11. Notices. Any notice or other communication to be given to the City under this Bond Purchase Contract (other than the acceptance hereof as specified in the first paragraph hereof) may be given by giving the same orally (if permitted hereby) or in writing to City of Santa Clara, California, 1500 Warburton Avenue, Santa Clara, California, 95050 Attention: City Manager and Chief Electric Utility Officer; and any notice or other communication to be given to the Underwriters under this Bond Purchase Contract may be given by delivering the same in writing to the Representative at J.P. Morgan Securities LLC , 560 Mission Street, 3 rd Floor, San
Francisco, CA 94105, Attention: Will Frymann, Executive Director.
12. Governing Law . The validity, interpretation and performance of this Bond Purchase Contract shall be governed by the laws of the State of California, without regard to its conflicts of laws principles.
13. Parties in Interest . This Bond Purchase Contract when executed by the City shall constitute the entire agreement between the City and the Underwriter s with respect to the matters covered herby, and supersedes all prior agreements and understandings between the parties regarding the transaction contemplated by this Bond Purchase Contract and the process leading thereto. It is made solely for the benefit of the City and the Underwriters (including the successors of the Underwriter s but does not include any purchasers of the Series 2024 A Bonds from the Underwriters). No other person shall acquire or have any right hereunder or by virtue hereof. This Bond Purchase Contract shall only be amended, supplemented or modified in a writing signed by both of the parties hereto.
14. Determination of End of the Underwriting Period. For purposes of this Bond Purchase Contract, the End of the Underwriting Period shall mean the earlier of (a) the Closing Date, unless the City has been notified in writing to the contrary by the Underwriter s on or prior to the Closing Date, or (b) the date on which the “end of the underwriting period” for the Series 2024 A Bonds has occurred under Rule 15c2- 12. In any event, the City shall be entitled to treat as the End of the Underwriting Period, the date specified in the notification of the Underwriter s required by Section 15 hereof.
15. Duties of the Underwriters.
(a) Unless the Underwriter s give notice to the City to the contrary on or prior to the Closing Date, the End of the Underwriting Period shall be deemed to be the Closing Date. (b) If the End of the Underwriting Period for the Series 2024 A Bonds does not occur on the Closing Date, then the Underwriter s shall promptly notify the City in writing of the date 19 4161-8908-1424.6
that, in its opinion, the End of the Underwriting Period for the Series 2024 A Bonds under Rule 15c2-12 has occurred which shall be set forth in such notification. In no event, without the prior agreement of the City, shall the end of the underwriting period be a date more than 30 days after the Closing Date.
16. Effective Date . This Bond Purchase Contract shall be effective upon the execution hereof by the Representative and the City.
17. Headings. The headings of the sections of this Bond Purchase Contract are inserted for convenience only and shall not be deemed to be a part hereof.
18. Survival of Representations and Agreement . All representations and agreements of the City set forth in or made pursuant to this Bond Purchase Contract shall remain operative and in full force and effect, regardless of any investigations made by or on behalf of the Underwriters and shall survive the delivery of and payment for the Series 2024 A Bonds.
(Remainder of Page Intentionally Left Blank)
(Signature Page to Bond Purchase Contract)
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19. Execution in Counterparts . This Bond Purchase Contract may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.
Very truly yours,
J.P. MORGAN SECURITIES LLC, as
Representative of the Underwriters
By:
Name:
Title:
The foregoing is confirmed and accepted
as of the date first above written
CITY OF SANTA CLARA, CALIFORNIA
By:
Chief Electric Utility Officer
A-1
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EXHIBIT A
MATURITY SCHEDULE AND REDEMPTION PROVISIONS
$[2024A Par]
City of Santa Clara, California
Electric Revenue Bonds, Series 2024 A
Maturity Schedule
Maturity
Date
(July 1)
Principal
Amount
Interest
Rate Yield Price
Optional Redemption. The Series 2024 A Bonds maturing on or before July 1, 20___ are not subject to optional redemption prior to maturity. The Series 2024 A Bonds maturing on and after July 1, 20___ are subject to redemption prior to their respective stated maturities, at the option of the City, from any source of available funds, as a whole or in part (by such maturities as may be specified by the City and by lot within a maturity), on any date on or after July 1, 20___, at a redemption price equal to the principal amount of Series 2024 A Bonds called for redemption, plus accrued interest to the date fixed for redemption, without premium.
Mandatory Sinking Account Redemption. The Series 2024 A Bonds maturing on July 1, 20____ are subject to redemption prior to their stated maturity, in part, by lot, from Mandatory Sinking Account Payments as specified below, commencing on July 1, 20___, at the principal amount of each Series 2024 A Bond so redeemed plus accrued interest thereon to but not including the date fixed for redemption, without premium.
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Term Series 2024 A Bonds due July 1, 20___
Mandatory Sinking Account
Payment Dates
(July 1)
Mandatory Sinking
Account Payments
$
†
_______________
† Final Maturity.
The Series 2024 A Bonds maturing on July 1, 20____ are subject to redemption prior to their stated maturity, in part, by lot, from Mandatory Sinking Account Payments as specified below, commencing on July 1, 20___, at the principal amount of each Series 2024 A Bond so redeemed plus accrued interest thereon to but not including the date fixed for redemption, without premium.
Term Series 2024 A Bonds due July 1, 20___
Mandatory Sinking Account
Payment Dates
(July 1)
Mandatory Sinking
Account Payments
†
_______________
† Final Maturity.
B-1
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EXHIBIT B
FORM OF ISSUE PRICE CERTIFICATE
$[2024A Par]
City of Santa Clara, California
Electric Revenue Bonds, Series 2024 A
ISSUE PRICE CERTIFICATE
The undersigned, on behalf of J.P. Morgan Securities LLC (the “Representative”) , on behalf of itself and RBC Capital Markets, LLC, and Siebert Williams Shank & Co., LLC (together, the “Underwriting Group”), hereby certifies as set forth below with respect to the sale and issuance of the above-captioned obligations (the “Bonds”).
1. [ {Alternative 1 – All maturities use General Rule:} Sale of the Bonds . As of the date of this certificate, for each Maturity of the Bonds, the first price at which at least 10% of such Maturity of the Bonds was sold to the Public is the respective price listed in Schedule 1 hereto.] [{Alternative 2 – Select Maturities use General Rule:} Sale of the General Rule Maturities. As of the date of this certificate, for each Maturity of the General Rule Maturities, the first price at which at least 10% of such Maturity of the Bonds was sold to the Public is the respective price listed in Schedule 1 hereto.]
2. [ Initial Offering Price of the Hold-the-Offering-Price Maturities. (a) The Underwriting Group offered the Hold-the- Offering-Price Maturities to the Public for purchase at the respective initial offering prices listed in Schedule 1 hereto (the “Initial Offering Prices”) on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule 2. (b) As set forth in the Bond Purchase Contract dated [Pricing Date], 2024, between the Representative and the Issuer, the members of the Underwriting Group have agreed in writing that, (i) for each Maturity of the Hold-the- Offering-Price Maturities, they would neither offer nor sell any of the unsold Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the “hold-the-offering-price rule”), and (ii) any unsold Bonds of each Hold-the- Offering-Price Maturity shall be retained by the Representative and not allocated to any of the other Underwriters. The Representative has retained all of the unsold Bonds of each Hold-the- Offering-Price Maturity of the Bonds , and on behalf of itself, and not on behalf of the Underwriting Group, hereby represents that it has neither offered nor sold any of the unsold Bonds of any Maturity of the Hold-the- Offering-Price Maturities to any person at a price that is higher than the respective Initial Offering Price for that Maturity of such Bonds during the Holding Period for such Maturity.]
3. Defined Terms.
(a) [ General Rule Maturities means those Maturities of the Bonds listed in Schedule 1 hereto as the “General Rule Maturities.”]
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(b) [ Hold-the-Offering-Price Maturities means those Maturities of the Bonds listed in Schedule 1 hereto as the “Hold-the-Offering-Price Maturities.”] [(c) Holding Period means, with respect to a Hold -the-Offering-Price Maturity, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale Date, or (ii) the date on which the Underwriters have sold at least 10% of such Hold-the-Offering-Price Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold-the-Offering-Price Maturity.] (d) Issuer means the City of Santa Clara, California.
(e) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities.
(f) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term “related party” for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (g) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is [Pricing Date], 2024. (h) Underwriter means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a third-party distribution agreement participating in the initial sale of the Bonds to the Public).
B-3
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The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents the Representative’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Stradling Yocca Carlson & Rauth LLP in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of Internal Revenue Service Form 8038- G, and other federal income tax advice it may give to the Issuer from time to time relating to the Bonds.
J.P. Morgan Securities LLC
By: ________________________________
Name: ________________________________
Title: ________________________________
Dated: ___________________
B-4
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SCHEDULE 1 TO EXHIBIT B
SALE PRICES OF THE GENERAL RULE MATURITIES AND
INITIAL OFFERING PRICES OF THE HOLD-THE-OFFERING-PRICE MATURITIES $[2024A Par]
City of Santa Clara, California
Electric Revenue Bonds, Series 2024 A
Maturity
Dat
e
(July 1)
Principal
Amount
Interest
Rate Yield Price
General
Rule
Maturity
Hold-the-
Offering
Price
Maturity
B-5
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[SCHEDULE 2 TO EXHIBIT B
PRICING WIRE OR EQUIVALENT COMMUNICATION]
(to be attached)
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EXHIBIT C
FORM OF SUPPLEMENTAL OPINION OF BOND COUNSEL
[Closing Date], 2024
J.P. Morgan Securities LLC,
as representative of the Underwriters
San Francisco, California
Re: $[PAR AMOUNT] City of Santa Clara, California
Electric Revenue Bonds, Series 2024 A
Ladies and Gentlemen:
We have acted as bond counsel to the City of Santa Clara, California (the “City”) in connection with the issuance, sale and delivery of the City’s Electric Revenue Bonds, Series 2024 A in the aggregate principal amount of $[PAR AMOUNT] (the “Series 2024 A Bonds”), issued pursuant to the Amended and Restated Electric Revenue Bond Indenture, dated as of March 1, 2011, by and between the City and The Bank of New York Mellon Trust Company, N.A., as trustee, as supplemented and amended, including as supplemented and amended by the Fourth Supplemental Electric Revenue Bond Indenture, dated as of October 1, 2024, providing for the issuance of the Series 2024 A Bonds (collectively, the “Indenture”).
The Series 2024 A Bonds are being sold on the date hereof by the City to J.P. Morgan Securities LLC, as Representative of itself, RBC Capital Markets, LLC and Siebert Williams Shank & Co., LLC, as Underwriters, pursuant to a Bond Purchase Contract, dated [PRICING DATE], 2024 (the “Bond Purchase Contract”).
All capitalized terms used herein and not otherwise defined shall have the meaning ascribed to such terms in the Bond Purchase Contract, or if not defined therein, in the Official Statement dated [PRICING DATE], 2024, relating to the Series 2024 A Bonds (the “Official Statement”).
As to questions of fact material to our opinion, we have relied upon the certified proceedings and other certifications of the City and various public officials furnished to us without undertaking to verify the same by independent investigation.
Based upon the foregoing and our review of such other information, documents and matters of law as we considered necessary to render this opinion, we are of the opinion that:
1. The statements contained in the Official Statement on the cover and under the captions “THE SERIES 2024 A BONDS,” “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024 A BONDS,” and “TAX MATTERS,” and in “APPENDIX D – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE,” “APPENDIX F – FORM OF CONTINUING DISCLOSURE AGREEMENT” and “APPENDIX H – AMENDMENTS BEING MADE TO THE MASTER INDENTURE” (excluding the statements under each such caption relating to The Depository Trust Company (“DTC”), Cede & Co. and the book- entry system, as to all of which we express no view); insofar as the statements contained under such captions purport to summarize certain provisions of the Series 2024 A Bonds, the Indenture, the Continuing Disclosure Agreement, and our opinion concerning C-2
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certain federal and state income tax matters related to the Series 2024 A Bonds, present an accurate summary of such provisions for the purpose of use in the Official Statement.
2. The Official Statement and the execution and delivery thereof have been duly approved by the City, and the Bond Purchase Contract and the Continuing Disclosure Agreement have been duly authorized, executed and delivered by the City and (assuming due authorization, execution and delivery by and validity against the other parties thereto) are valid and binding agreements of the City, enforceable against the City in accordance with their respective terms. We call attention to the fact that the rights and obligations under the Bond Purchase Contract and the Continuing Disclosure Agreement and the enforceability thereof are subject to and may be limited by bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other similar laws affecting creditors’ rights, to the application of equitable principles, to the possible unavailability of specific performance or injunctive relief, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against public agencies in the State of California. We express no opinion with respect to any indemnification, contribution, penalty, choice of law, choice of forum or waiver (including, without limitation, waiver of jury trial or consent to nonjury trial) provisions contained in the foregoing documents.
3. The Series 2024 A Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended.
The opinions expressed herein are limited to matters under and governed by the laws of the State of California and the federal securities law of the United States, and we assume no responsibility with respect to the applicability or effect of the laws of any other jurisdiction.
This letter is furnished by us as bond counsel to the City. No attorney client relationship has existed or exists between our firm and yourselves in connection with the Series 2024 A Bonds or by virtue of this letter. We disclaim any obligation to update this letter. This letter is delivered to you as the representative of the Underwriters of the Series 2024 A Bonds, is solely for the benefit of the Underwriters in connection with your purchase of the Series 2024 A Bonds, and is not to be used, circulated, quoted or otherwise referred to or relied upon for any other purpose or by any other person.
This letter is not intended to be relied upon by owners of the Series 2024 A Bonds.
Respectfully submitted,
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EXHIBIT D
FORM OF LETTER OF DISCLOSURE COUNSEL
[Closing Date], 2024
City of Santa Clara
Santa Clara, California
J.P. Morgan Securities LLC,
as representative of the Underwriters
San Francisco, California
Re: $[PAR AMOUNT] City of Santa Clara, California
Electric Revenue Bonds, Series 2024 A
Ladies and Gentlemen:
We have acted as disclosure counsel to the City of Santa Clara, California (the “City”) in connection with the issuance, sale and delivery of the City’s Electric Revenue Bonds, Series 2024 A in the aggregate principal amount of $[PAR AMOUNT] (the “Series 2024 A Bonds”). The Series 2024 A Bonds are being issued pursuant to the Amended and Restated Electric Revenue Bond Indenture, dated as of March 1, 2011, by and between the City and The Bank of New York Mellon Trust Company, N.A., as trustee, as supplemented and amended, including as supplemented and amended by the Fourth Supplemental Electric Revenue Bond Indenture, dated as of October 1, 2024, providing for the issuance of the Series 2024 A Bonds (collectively, the “Indenture”). The Series 2024 A Bonds were sold by the City to J.P. Morgan Securities LLC, as representative of itself, RBC Capital Markets, LLC and Siebert Williams Shank & Co., LLC, as underwriters (the “Underwriters”), pursuant to a Bond Purchase Contract, dated [PRICING DATE], 2024 (the “Bond Purchase Contract”), between the City and the Underwriters.
We have reviewed the Preliminary Official Statement of the City dated [POS DATE], 2024 with respect to the Series 2024 A Bonds (the “Preliminary Official Statement”) and the Official Statement of the City dated [PRICING DATE], 2024 with respect to the Series 2024 A Bonds (the “Official Statement”), the letters, certificates and opinions delivered pursuant to Section 8 of the Bond Purchase Contract and otherwise in connection with the Series 2024 A Bonds on the date hereof, and such other records, opinions and documents, and we have made such investigations of law and fact, as we have deemed appropriate as a basis for the conclusions hereinafter expressed. Capitalized terms used and not otherwise defined herein shall have the meanings ascribed thereto in the Preliminary Official Statement and the Official Statement.
We have assumed, but not independently verified, that the signatures on all documents, letters, opinions and certificates which we have examined are genuine, and that all documents submitted to us are authentic and were duly and properly executed by the parties thereto. We have also assumed, without undertaking to verify, the accuracy of the factual matters represented, warranted or certified in the documents, and of the legal conclusions contained in the opinions, referred to in the second paragraph hereof.
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The conclusions that are expressed herein are based on an analysis of existing laws, regulations, rulings and court decisions and cover certain matters not directly addressed by such authorities. Such conclusions may be affected by actions taken or omitted or events occurring after the date hereof. We have not undertaken to determine, or to inform you or any other person, whether any such actions are taken or omitted or whether such events do occur or any other matters come to our attention after the date hereof.
In our capacity as disclosure counsel, we have rendered certain legal advice and assistance to the City in connection with the preparation of the Preliminary Official Statement and the Official Statement.
Rendering such legal advice and assistance involved, among other things, discussions and inquiries concerning various legal matters, review of certain records, documents and proceedings, and participation in conferences with, among others, representatives of the City, the City Attorney’s Office, PFM Financial Advisors LLC, as municipal advisor to the City, the Underwriters, Orrick, Herrington & Sutcliffe LLP, as counsel to the Underwriters, and others, during which conferences the contents of the Preliminary Official Statement and the Official Statement and related matters were discussed. On the basis of the information made available to us in the course of the foregoing (but without having undertaken to determine or verify independently, or assuming any responsibility for, the accuracy, completeness or fairness of any of the statements contained in the Preliminary Official Statement or the Official Statement), as of the date hereof no facts have come to the attention of the personnel in our firm directly involved in rendering legal advice and assistance in connection with the preparation of the Preliminary Official Statement and the Official Statement that causes us to believe that (a) the Preliminary Official Statement as of its date and as of the date of the Bond Purchase Contract contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading (excluding therefrom the discussions contained in the Preliminary Official Statement of permits, licenses and approvals required for the construction and operation of any projects of the City, and the status thereof, the description of any litigation, any information relating to DTC, Cede & Co., the book- entry system, forecasts, projections, estimates, assumptions and expressions of opinions and the financial and statistical data included therein, as to all of which we express no view), except for such information as is permitted to be excluded from the Preliminary Official Statement pursuant to Rule 15c2 -12 of the Securities Exchange Act of 1934, as amended, including but not limited to information as to pricing, yields, interest rates, maturities, amortization, redemption provisions, debt service requirements, underwriters’ discount, ratings and CUSIP numbers, or (b) the Official Statement as of its date or as of the date hereof contained or contains any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (excluding therefrom the discussions contained in the Official Statement of permits, licenses and approvals required for the construction and operation of any projects of the City, and the status thereof, the description of any litigation, any information relating to DTC, Cede & Co., the book- entry system, forecasts, projections, estimates, assumptions and expressions of opinions and the financial and statistical data included therein, as to all of which we express no view).
We advise you that, other than reviewing the various certificates and opinions regarding the Preliminary Official Statement and the Official Statement delivered on the date hereof, we have not taken any steps since the date of the Official Statement to verify the accuracy of the statements contained in the Preliminary Official Statement or the Official Statement as of the date hereof.
By acceptance of this letter you acknowledge that: (i) the preceding paragraph is neither a legal opinion nor a guarantee regarding the contents of the Preliminary Official Statement or the Official Statement, but rather, it is a statement of negative assurance regarding the absence of factual information that came to the attention of the attorneys in our firm during the limited activities we performed as disclosure counsel to the City on this matter; (ii) the scope of the activities performed by such attorneys in D-3
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our role as disclosure counsel and for purposes of delivering this letter was inherently limited and does not purport to encompass all activities necessary for compliance by you with applicable securities laws; and (iii) the activities performed by us relied in part on representations, warranties, certifications and opinions made by the City and other parties to the transaction. In connection with the Series 2024 A Bonds, we were not requested to, and did not, undertake an independent review on the Electronic Municipal Market Access website of the City’s past compliance with any continuing disclosure undertaking of the City pursuant to Rule 15c2- 12. Our services as disclosure counsel to the City did not involve the rendering of financial or other non- legal advice to the City or any other party to the transaction.
The conclusions expressed in this letter are limited to matters governed by the federal securities law of the United States, and we assume no responsibility with respect to the applicability or effect of the laws of any other jurisdiction.
We are furnishing this letter as disclosure counsel to the City, and not as counsel to the Underwriters. No attorney-client relationship has existed or exists between our firm and the Underwriters in connection with the Series 2024 A Bonds or by virtue of this letter. We note that the Underwriters are represented by separate counsel retained by them in connection with the sale of the Series 2024 A Bonds.
This letter is delivered in connection with such transaction, and may not be used, circulated, quoted or otherwise referred to or relied upon by, any other person, firm, corporation or other entity, or filed with any governmental or other administrative agency for any purpose, without our prior written consent. Our engagement with respect to this matter terminates upon the delivery of this letter to you on the date hereof, and we have no obligation to update this letter.
Respectfully submitted,
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EXHIBIT E
FORM OF OPINION OF CITY ATTORNEY
[Closing Date]
J.P. Morgan Securities LLC,
as Representative of the Underwriters
San Francisco, California
$[2024A Par]
City of Santa Clara, California
Electric Revenue Bonds, Series 2024 A
Ladies and Gentlemen:
As the City Attorney of the City of Santa Clara, California (the “ City”) in connection with the authorization and issuance of the bonds referenced above (the “Series 2024 A Bonds”), I have examined (a) a certified copy of the resolution of the City adopted on [September 10], 2024 (the “Resolution”) approving and authorizing the issuance of the Series 2024 A Bonds and certain financing documents; (b) the Amended and Restated Electric Revenue Bond Indenture, dated as of March 1, 2011, by and between the City and The Bank of New York Mellon Trust Company, N.A., as trustee ( the “Trustee”), as supplemented and amended , including by the Fourth Supplemental Electric Revenue Bond Indenture , dated as of October 1, 2024, providing for the issuance of the Series 2024 A Bonds (collectively, the “Indenture”); (c) the Bond Purchase Contract, dated [Pricing Date], 2024 (the “Bond Purchase Contract ”), by and between J.P. Morgan Securities LLC , as representative on its own behalf and on behalf of RBC Capital Markets, LLC, and Siebert Williams Shank & Co., LLC , as underwriters (collectively, the “Underwriters”) of the Series 2024 A Bonds, and the City; (d) the Continuing Disclosure Agreement, dated [Closing Date], 2024 (the “Disclosure Agreement”), by and between the City and the Trustee; ( e) the Preliminary Official Statement, dated [POS Date], 2024, relating to the Series 2024 A Bonds (the “ Preliminary Official Statement” ); (f) the final Official Statement, dated [Pricing Date], 2024, relating to the Series 2024 A Bonds (the “Official Statement”); and (g) such other documents, instruments and certificates of public officials, officers and representatives of the City, and others, as I have deemed necessary or appropriate to render the opinions hereinafter expressed. The Indenture, the Bond Purchase Contract and the Disclosure Agreement are collectively referred to herein as the “City’s Documents.” In making my examination of documents and instruments executed by parties other than the City, I have assumed that such parties have the power and authority, corporate and otherwise, to enter into and perform all obligations thereunder and have also assumed the due authorization of such documents and instruments by all requisite action, corporate and otherwise, of such parties, proper execution and delivery of such documents and instruments by authorized representatives of such parties and the validity and binding effect thereof on such parties. I have also assumed, with respect to all documents, the genuineness of all signatures, the authenticity of E-2
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all documents submitted to me as originals, and the conformity to original documents of all documents submitted to me as certified or photostatic copies thereof.
As to various questions of fact relevant to this opinion letter, I have made no independent investigation of the accuracy, completeness, or fairness of such factual matters, but have relied instead upon certifications, representations, and warranties made by or on behalf of the City in the City’s Documents and upon other certifications, representations, and warranties of officers or representatives of the City and others.
All capitalized terms not defined herein shall have the respective meanings ascribed thereto in the Bond Purchase Contract.
Based upon and subject to the foregoing, I am of the opinion that:
1. The City is a charter city of the State of California, and has the power and authority to carry out and consummate all transactions contemplated by the City’s Documents and the Series 2024 A Bonds.
2. The Resolution was duly adopted at a meeting of the City Council which was called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout.
3. The City’s Documents have each been duly authorized, executed, and delivered by the City and each constitutes the legal, valid, and binding agreement of the City, enforceable against the City in accordance with its respective terms, subject to the qualifications that (a) the enforceability of such document or instrument may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium, or other similar laws relating to or affecting creditors’ rights generally or by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law), to the possible unavailability of specific performance or injunctive relief, and by limitations on legal remedies against public agencies in the State of California; (b) rights to indemnification or contribution may be limited by applicable law or equitable principles or otherwise unenforceable as against public policy; and (c) I express no opinion as to enforceability of forum selection, waiver of jury trial or choice of law provisions.
4. The execution and delivery of the Official Statement and the distribution and use of the Preliminary Official Statement and the Official Statement by the Underwriter s in connection with the offering and sale of the Series 2024 A Bonds has been duly authorized by the City.
5. All authorizations, consents, approvals and reviews of governmental bodies or regulatory authorities required to be obtained or effected by the City for the City’s execution and delivery of the Series 2024 A Bonds and the City’s Documents have been obtained or effected.
6. Except as otherwise set forth in the Preliminary Official Statement and the Official Statement or otherwise disclosed in writing by the City to the Underwriter s, there is no action, suit, proceeding, hearing, 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 my knowledge, E-3
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threatened against the City (i) in any respect questioning the existence of the City or the titles of the officers of the City to their respective offices in which an adverse decision would affect the validity of the Resolution or the authorizations and approvals effected thereby in connection with the Bond Purchase Contract, the Indenture, the Disclosure Agreement, the Preliminary Official Statement, the Official Statement or the Series 2024 A Bonds; (ii) in any way contesting, affecting or seeking to prohibit, restrain or enjoin the issuance or delivery of any of the Series 2024 A Bonds, or the collection of revenues pledged to pay the principal of and interest on the Series 2024 A Bonds, or the pledge of such revenues, or the application of the proceeds of the Series 2024 A Bonds for the purposes described in the Preliminary Official Statement and the Official Statement; (iii) in any way contesting or affecting the validity or enforceability of the Series 2024 A Bonds, the Indenture, the Disclosure Agreement or the Bond Purchase Contract, or contesting the power or authority of the City to issue the Series 2024 A Bonds, the adoption of the Resolution, or the execution and delivery by the City of the Indenture, the Bond Purchase Contract or the Disclosure Agreement, or contesting the tax- exempt status of interest due on the Series 2024 A Bonds; or (iv) contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement or asserting that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
7. To the best of my knowledge as the City Attorney of the City and based in part upon representations made to me by staff of the City, the execution and delivery of the City Documents and the adoption of the Resolution and compliance with the provisions thereof and hereof, and the approval of the Preliminary Official Statement and the Official Statement, under the circumstances contemplated thereby, do not and will not in any material respect conflict with or constitute on the part of the City a breach of or default under any State of California constitutional provision, law, administrative regulation, court order, judgment, court decree, loan agreement, indenture, bond, note, resolution, agreement, or other instrument to which the City is a party, or by which the City is bound, in any such case to the extent such breach or default would have a material adverse effect on the ability of the City to repay the Series 2024 A Bonds or on the security therefor.
8. Based upon examinations which I have made and my discussions in conferences with certain staff of the City and others with respect to the Preliminary Official Statement and the Official Statement and without having undertaken to determine independently the accuracy, completeness or fairness of the statements contained in the Preliminary Official Statement and the Official Statement (including the Appendices attached thereto), nothing has come to my attention which would lead me to believe that (i) the information contained in the Preliminary Official Statement (other than financial and statistical data therein and incorporated therein by reference, forecasts, projections and assumptions therein and incorporated therein by reference, and other than information relating to DTC, the book- entry system or information provided by the Underwriters for inclusion in the Preliminary Official Statement, as to which no opinion is expressed), and except for such information as is permitted to be excluded from the Preli minary Official Statement pursuant to Rule 15c2 -12 of the Securities Exchange Act of 1934, as amended, including but not limited to information as to offering prices, yields, interest rates, maturities, amortization, redemption provisions, debt service requirements, underwriter s’ discount, ratings and CUSIP numbers), as of its date and the date of the Purchase Contract, E-4
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contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (ii) the information contained in the Official Statement (other than financial and statistical data therein and incorporated therein by reference, forecasts, projections and assumptions therein and incorporated therein by reference, and other than information relating to DTC, the book-entry system or information provided by the Underwriters for inclusion in the Official Statement, as to which no opinion is expressed), as of the date thereof and as of the date hereof, contained or contains an untrue statement of a material fact or omitted or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
I express no opinion with respect to (a) the excludability from gross income or the exemption of interest on the Series 2024 A Bonds for purposes of federal or state income taxation, and (b) the application of or compliance with the securities laws and regulations of the United States of America or the securities laws and regulations of any state or other jurisdiction thereof.
The laws addressed by this opinion letter are limited to the laws of the State of California and the federal laws of the United States of America.
This opinion letter is rendered upon request to the addressee s hereof solely in connection with the transactions contemplated by the Series 2024 A Bonds and the City’s Documents and may not be used or relied upon by any other person or for any other purpose without prior written consent.
Very truly yours,
Stradling – Draft of 08/30/24
4893-9537-9288v9/200891-0003
PRELIMINARY OFFICIAL STATEMENT DATED __________, 202 4
NEW ISSUE - BOOK-ENTRY ONLY Ratings: S&P: “__”
Fitch: “__”
(See “RATINGS” herein.)
In the opinion of Stradling Yocca Carlson & Rauth LLP (“Bond Counsel”), under existing statutes, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and compliance with certain covenants and requirements described in this Official Statement, interest (and original issue discount) on the Series 2024 A Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals. In the further opinion of Bond Counsel, interest (and original issue discount) on the Series 2024 A Bonds is exempt from State of California personal income tax. See “TAX MATTERS” with respect to certain tax consequences relating to the Series 2024 A Bonds, including with respect to the alternative minimum tax imposed on certain large corporations for tax years beginning af ter December 31, 2022.
$_________*
City of Santa Clara, California
Electric Revenue Bonds, Series 2024 A
Dated: Date of Delivery Due: July 1, as shown on the inside cover This cover page contains certain information for general reference only. It is not intended to be a summary of the security or terms of this issue. Potential investors are advised to read the entire Official Statement to obtain information essential to the making of an informed investment decision. Capitalized terms used on this cover page not otherwise defined shall have the meanings s et forth herein.
The Series 2024 A Bonds are being issued pursuant to an Amended and Restated Electric Revenue Bond Indenture, dated as of March 1, 2011, by and between the City of Santa Clara, California (the “City”) and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”), as supplemented and amended , including by a Fourth Supplemental Electric Revenue Bond Indenture, dated as of October 1, 2024 (collectively, the “Indenture”), by and between the City and the Trustee. The Series 2024 A Bonds will be issued in fully registered form only, and, when issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). DTC will act as securities depository for the Series 2024 A Bonds. Individual purchases of Series 2024 A Bonds will be made in book- entry form only in denominations of $5,000 principal amount or any integral multiple thereof. Interest on the Series 2024 A Bonds will be payable semiannually on January 1 and July 1 of each year, commencing [January 1], 2025 . Payments of principal of and interest on the Series 2024 A Bonds will be paid by the Trustee to DTC, which is obligated in turn to remit such principal and interest to its DTC participants for subsequent disbursement to the beneficial owners of the Series 2024 A Bonds as described herein. See “APPENDIX C – DTC AND THE BOOK-ENTRY ONLY SYSTEM” hereto.
The Series 2024 A Bonds are being issued by the City for the purpose of providing moneys to (i) fund or reimburse the City for certain costs of improvements to the e lectric system of the City, and (ii) pay costs of issuance of the Series 2024 A Bonds. See “PLAN OF FINANCE.”
The Series 2024 A Bonds
are subject to redemption prior to maturity as described herein. See “THE SERIES 2024 A Bonds – Redemption.”
The Series 2024 A Bonds are limited obligations of the City payable solely from and secured by a pledge of Adjusted Net Revenues of the Electric Utility (as such terms are defined in the Indenture), and the other funds pledged therefor under the Indentur e. The Series 2024 A Bonds are secured by and payable from such Adjusted Net Revenues on a parity with the City’s senior Electric Revenue Bonds and Parity Debt heretofore or hereafter issued or incurred, as more fully described herein. As of September 1, 2024 , the City had outstanding $18.980 million principal amount of senior Electric Revenue Bonds issued under the Indenture payable from Adjusted Net Revenues. The City has, and may in the future, also issue or incur subordinate obligations payable from Adjusted Net Revenues on a basis junior to the Electric Revenue Bonds and Parity Debt. As of September 1, 202 4, the City had outstanding $75.850 million principal amount of Subordinate Electric Revenue Bonds. Operating Expenses of the Electric Utility (including certain take -or-pay obligations under contracts with joint powers agencies) are payable from Revenues of the Electric Utility prior to the payment of the senior Electric Revenue Bonds and Parity Debt. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024 A BONDS.”
THE SERIES 2024 A BONDS ARE LIMITED OBLIGATIONS OF THE CITY AND ARE PAYABLE, BOTH AS TO
PRINCIPAL AND INTEREST, OUT OF THE ADJUSTED NET REVENUES AND CERTAIN FUNDS HELD UNDER THE INDENTURE. THE GENERAL FUND OF THE CITY IS NOT LIABLE, AND THE CREDIT OR TAXING POWER OF THE CITY IS NOT PLEDGED, FOR THE PAYMENT OF THE SERIES 2024 A BONDS OR THE INTEREST THEREON. THE SERIES 2024 A BONDS ARE NOT SECURED BY A LEGAL OR EQUITABLE PLEDGE OF, OR CHARGE, LIEN OR ENCUMBRANCE
UPON, ANY OF THE PROPERTY OF THE CITY, OR ANY OF ITS INCOME OR RECEIPTS, EXCEPT THE ADJUSTED NET REVENUES AND SAID FUNDS HELD UNDER THE INDENTURE. NO REGISTERED OWNER OF THE SERIES 2024 A
BONDS SHALL EVER HAVE THE RIGHT TO COMPEL ANY EXERCISE OF THE TAXING POWER OF THE CITY TO PAY THE SERIES 2024 A BONDS OR THE INTEREST THEREON.
The Series 2024 A Bonds are offered when, as and if issued by the City and received by the Underwriter s, subject to the approval of validity by Stradling Yocca Carlson & Rauth LLP, Bond Counsel, and subject to certain other conditions. Certain legal matters will be passed upon for the City by the City Attorney of the City, and for the Underwriters by their counsel, Orrick, Herrington & Sutcliffe LLP.
Stradling Yocca Carlson & Rauth LLP, is acting as Disclosure Counsel to the City in connection with the issuance of the Series 2024 A Bonds. PFM Financial Advisors LLC is serving as the City’s Municipal Advisor. It is expected that the Series 2024 A Bonds will be available for delivery through the facilities of DTC in New York, New York, by Fast Automated Securities Transfer (FAST) on o r about __________, 2024.
J.P. Morgan
RBC Capital Markets Siebert Williams Shank & Co., LLC
Dated: ___________, 2024
_______________________
Preliminary, subject to change.
This Preliminary Official Statement and the information contained herein are subject to completion and amendment. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, qualification or filing under the securities laws of any such jurisdiction.
4893-9537-9288v9/200891-0003
MATURITY SCHEDULE*
$_________*
City of Santa Clara, California
Electric Revenue Bonds, Series 2024 A
$________* Serial Series 2024 A Bonds
Maturity Date
(July 1)
Principal
Amount*
Interest
Rate
Price or
Yield
CUSIP†
(Base No. 801444)
$_________* ____% Term Series 2024 A Bonds due July 1, 20__, Yield ______% ; CUSIP†: 801444___ $_________* ____% Term Series 2024 A Bonds due July 1, 20__, Yield ______% ; CUSIP†: 801444___
___________________
* Preliminary, subject to change.
† CUSIP® is a registered trademark of the American Bankers Association. CUSIP data herein are provided by CUSIP Global Services, managed by FactSet Research Systems Inc. on behalf of the American Bankers Association. CUSIP numbers have been assigned by an independent company not affiliated with the City or the Underwriters and are included solely for the convenience of the holders of the Series 2024 A Bonds. Neither the City nor the Underwriters is responsible for the selection or use of these CUSIP numbers and no representation is made as to their correctness on the Series 2024 A Bonds or as indicated above. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Series 2024 A Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of such maturity or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of the Series 2024 A Bonds.
4893-9537-9288v9/200891-0003
CITY OF SANTA CLARA, CALIFORNIA
CITY COUNCIL
Lisa M. Gillmor, Mayor
Anthony J. Becker, Vice Mayor
Raj Chahal, Councilmember
Karen Hardy, Councilmember
Sudhanshu “Suds” Jain, Councilmember
Kevin Park, Councilmember
Kathy Watanabe, Councilmember
ADMINISTRATION
Jōvan D. Grogan, City Manager
Nadine Nader, Chief Operating Officer
Chuck Baker, Assistant City Manager
Cynthia Bojorquez, Assistant City Manager
Kenn Lee, Director of Finance
Glen R. Googins, City Attorney
Hosam Haggag, City Clerk
Nora Pimentel, MMC, Assistant City Clerk
ELECTRIC UTILITY
Manuel Pineda, Chief Electric Utility Officer
Nicolas Procos, Chief Electric Utility Operating Officer DeAnna Hilbrants, Assistant Director, Business Services Kathleen Hughes, Assistant Director, Resources Management and Customer Engagement Chris Karwick, Assistant Director, Utility Operations
Yanmei Qiu, Electric Division Manager–Market Analysis and Pricing Robert Valentukonis, Electric Division Manager–Business Modeling and Debt Administration
SPECIAL SERVICES
MUNICIPAL ADVISOR
PFM Financial Advisors LLC
Los Angeles, California
TRUSTEE
The Bank of New York Mellon
Trust Company, N.A.
Los Angeles, California
BOND COUNSEL AND
DISCLOSURE COUNSEL
Stradling Yocca Carlson & Rauth LLP
Newport Beach, California
4893-9537-9288v9/200891-0003
No dealer, broker, salesperson or other person has been authorized by the City to give any information or to make any representation other than as set forth herein and, if given or made, such other information or representation must not be relied upon as having been authorized by the City. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Series 2024 A Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale. This Official Statement is not to be construed as a contract with the purchasers of the Series 2024 A Bonds.
The information set forth in this Official Statement has been furnished by the City and obtained from official sources and other sources which are believed to be reliable. Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of facts. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall under any circumstances create any implication that there has been no change in the affairs of the City or the Electric Utility since the date hereof.
The Underwriters have provided the following two paragraphs for inclusion in this Official Statement:
The Underwriters have reviewed the information in this Official Statement in accordance with, and as part of, their responsibilities to investors under the federal securities laws as applicable to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information.
IN CONNECTION WITH THE OFFERING OF THE SERIES 2024 A BONDS THE UNDERWRITERS
MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2024 A BONDS AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. _____________________
CAUTIONARY STATEMENTS REGARDING
FORWARD-LOOKING STATEMENTS IN
THIS OFFICIAL STATEMENT
Certain statements included or incorporated by reference in this Official Statement and the Appendices hereto constitute “forward -looking statements.” Such statements are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,” “budget” or other similar words. Such forward -looking statements include, but are not limited to, certain statements contained in the information under the captions “SILICON VALLEY POWER,” “RATE REGULATION,” “and “CERTAIN FACTORS AFFECTING THE ELECTRIC UTILITY INDUSTRY” in this Official Statement. Forward -looking statements in this Official Statement are subject to risks and uncertainties, including particularly those relating to natural gas costs and availability, wholesale and retail electric energy and capacity prices, federal and state legislation and regulations, the impact of weather on the energy market, industry restructuring, changes in consumer electricity demand and use patterns, and the economy of the service area of the City’s Electric Utility.
The achievement of any results or the realization of other expectations contained in such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The City does not plan to issue any updates or revisions to those forward-looking statements.
This Official Statement, including any supplement or amendment hereto, is intended to be deposited with the Municipal Securities Rulemaking Board through the Electronic Municipal Market Access (EMMA) website. The City also maintains a website and certain social media accounts. However, the information presented therein is not part of this Official Statement, is not incorporated by reference herein, and should not be relied upon in making an investment decision with respect to the Series 2024 A Bonds.
References to website addresses presented herein are for informational purposes only and may be in the form of a hyperlink solely for the reader’s convenience. Unless specified otherwise, such websites and the information or links contained therein are not incorporated into, and are not part of, this Official Statement for purposes of, and as that term is defined in, S.E.C. Rule 15c2-12(b)(5).
TABLE OF CONTENTS
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INTRODUCTION ....................................................................................................................................... 1 Purpose .................................................................................................................................................. 1 Authority for Issuance ........................................................................................................................... 1 The City’s Electric Utility ..................................................................................................................... 1 Security for the Series 2024 A Bonds ................................................................................................... 2 Rate Covenant ....................................................................................................................................... 2 No Bond Reserve Fund ......................................................................................................................... 3 Continuing Disclosure ........................................................................................................................... 3 References to Documents ...................................................................................................................... 3 Additional Information .......................................................................................................................... 3 PLAN OF FINANCE ................................................................................................................................... 4 ESTIMATED SOURCES AND USES OF FUNDS ................................................................................... 5 THE SERIES 2024 A BONDS .................................................................................................................... 5 General Description ............................................................................................................................... 5 Redemption............................................................................................................................................ 5 AMENDMENTS TO THE MASTER INDENTURE ................................................................................. 7 SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024 A BONDS ................................ 9 Pledge of Adjusted Net Revenues ......................................................................................................... 9 Rate Covenant ..................................................................................................................................... 11 No Bond Reserve Fund for the Series 2024 A Bonds ......................................................................... 11 Allocation of Adjusted Net Revenues ................................................................................................. 11 Rate Stabilization Fund ....................................................................................................................... 12 Outstanding Electric Revenue Obligations of the City ........................................................................ 13 Additional Electric Revenue Obligations of the City .......................................................................... 13 Investment of Monies in Funds and Accounts Under the Indenture ................................................... 14 Limitations on Remedies ..................................................................................................................... 14 SILIC
ON VALLEY POWER .................................................................................................................... 15 Introduction ......................................................................................................................................... 15 Management ........................................................................................................................................ 15 Power Supply Resources ..................................................................................................................... 17 Fuel Supply .......................................................................................................................................... 30 Transmission Resources ...................................................................................................................... 30 Interconnections and Distribution Facilities ........................................................................................ 32 Renewable Energy ............................................................................................................................... 33 Energy Efficiency Programs ................................................................................................................ 35 Wholesale Resources ........................................................................................................................... 35 Risk Management ................................................................................................................................ 35 Cybersecurity Program ........................................................................................................................ 36 Wildfire Mitigation Measures ............................................................................................................. 37 Impact of COVID-19 Pandemic .......................................................................................................... 37 Rates and Charges ............................................................................................................................... 38 Major Customers ................................................................................................................................. 39 Customers, Energy Sales, Revenues and Demand .............................................................................. 40 Capital Requirements .......................................................................................................................... 40 Indebtedness ........................................................................................................................................ 41 Tr
ansfers to the General Fund ............................................................................................................. 44 ---
TABLE OF CONTENTS
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Employees and Retirement Plans ........................................................................................................ 44 Cash Reserves ...................................................................................................................................... 49 Insurance.............................................................................................................................................. 50 Litigation Affecting the Electric Utility .............................................................................................. 51 Condensed Operating Results and Selected Cash and Investments Information ................................ 51 Rate Covenant Compliance Under Electric Revenue Bond Indenture ................................................ 53 RATE REGULATION .............................................................................................................................. 55 CERTAIN FACTORS AFFECTING THE ELECTRIC UTILITY INDUSTRY ...................................... 55 Federal Energy and Environmental Policies and Legislation .............................................................. 55 State Legislation and Regulatory Proceedings .................................................................................... 58 Changing Laws and Requirements Generally ..................................................................................... 64 General Economic Conditions ............................................................................................................. 65 Other Factors ....................................................................................................................................... 65 CONSTITUTIONAL LIMITATIONS IN CALIFORNIA AFFECTING FEES AND CHARGES ......... 66 Proposition 218 and Proposition 26..................................................................................................... 66 Other Initiatives ................................................................................................................................... 67 TAX MATTERS ........................................................................................................................................ 67 APPROVAL OF LEGALITY .................................................................................................................... 69 ABSENCE OF MATERIAL LITIGATION .............................................................................................. 69 CONTINUING DISCLOSURE ................................................................................................................. 70 RATINGS .................................................................................................................................................. 70 MUNICIPAL ADVISOR ........................................................................................................................... 70 UNDERWRITING .................................................................................................................................... 70 CERTAIN RELATIONSHIPS .................................................................................................................. 71 INDEPENDENT ACCOUNTANTS ......................................................................................................... 71 EXECUTION AND DELIVERY .............................................................................................................. 72
APPENDIX A – CERTAIN INFORMATION ABOUT THE CITY OF SANTA CLARA ................. A-1 APPENDIX B – AUDIT ED FINANCIAL STATEMENTS OF THE CITY OF SANTA
CLARA ELECTRIC UTILITY ENTERPRISE FUND (SILICON VALLEY
POWER) FOR THE FISCAL YEAR ENDED JUNE 30, 2023 ................................ B-1 APPENDIX C – DTC AND THE BOOK-ENTRY ONLY SYSTEM .................................................. C-1 APPENDIX D – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE ........................ D-1 APPENDIX E – PROPOSED FORM OF OPINION OF BOND COUNSEL OPINION .................... E-1 APPENDIX F – FORM OF CONTINUING DISCLOSURE AGREEMENT ..................................... F-1 APPENDIX G – DEBT SERVICE REQUIREMENTS ON THE ELECTRIC REVENUE BONDS ...................................................................................................................... G-1 APPENDIX H – AMENDMENTS BEING MADE TO THE MASTER INDENTURE ...................... H-1
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OFFICIAL STATEMENT
$____________*
City of Santa Clara, California
Electric Revenue Bonds,
Series 2024 A
INTRODUCTION
This Introduction is qualified in its entirety by the more detailed information included and referred to elsewhere in this Official Statement. A full review should be made of the entire Official Statement, including the cover page and attached appendices. The offering of Series 2024 A Bonds to potential investors is made only by means of the entire Official Statement. Capitalized terms used but not defined in this Introduction shall have the meanings given such terms elsewhere in this Official Statement.
Certain definitions of capitalized terms used and not otherwise defined in this Official Statement are set forth in “APPENDIX D – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE.” Purpose
The purpose of this Official Statement, which includes the cover page and the appendices hereto, is to set forth certain information concerning the City of Santa Clara, California (the “City”) and its electric utility (the “Electric Utility” or the “Enterprise”), in connection with the sale and delivery of the City’s $_________
* aggregate principal amount of Electric Revenue Bonds, Series 2024 A (the “Series 2024 A Bonds”). The Series 2024 A Bonds are being issued by the City for the purpose of providing moneys to (i) fund or reimburse the City for certain costs of improvements to the e lectric system of the City, and (ii) pay costs of issuance of the Series 2024 A Bonds. See “PLAN OF FINANCE” and “ESTIMATED SOURCES AND USES OF FUNDS.”
Authority for Issuance
The City is a duly constituted charter city of the State of California authorized to issue electric revenue bonds pursuant to Section 1321 of the City’s Charter (the “Charter”). The Series 2024 A Bonds will be issued under the Charter, a number of resolutions adopted pursuant to the Charter, and the Revenue Bond Law of 1941 (being Chapter 6 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California), to the extent incorporated by such procedural resolutions (collectively, the “Bond Law”), a resolution of the City, adopted ________, 2024, and an Amended and Restated Electric Revenue Bond Indenture, dated as of March 1, 2011 (the “Master Indenture”) , by and between the City and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”), as supplemented and amended, including by a Fourth Supplemental Electric Revenue Bond Indenture, dated as of October 1, 2024 (the “Fourth Supplement”), providing for the issuance of the Series 2024 A Bonds. The Master Indenture, as supplemented and amended, including as supplemented and amended by the Fourth Supplement, is sometimes referred to herein as the “Indenture.” See also “AMENDMENTS TO THE MASTER INDENTURE.”
The City’s Electric Utility
The City provides electric service within the City through its electric utility department (the “Electric Utility”). The City offers its electricity and energy services through the trademarked name of “Silicon Valley Power .” The City owns and operates the Electric Utility, which includes generation,
* Preliminary, subject to change.
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transmission and distribution facilities. The City also purchases power and transmission services from others and participates in other utility -type arrangements. For the Fiscal Year ended June 30, 2024, the Electric Utility served an average of 60,287 customers per month, had total sales of 4,560 gigawatt-hours (“GWh”) and had a peak demand of 6 69.2 megawatts (“MW”). In the Fiscal Year ended June 30, 202 4, approximately 94.1% of the City’s energy sales are made to commercial and industrial customers. See “SILICON VALLEY POWER.”
Security for the Series 2024 A Bonds
The Series 2024 A Bonds are limited obligations of the City payable solely from and secured solely by a pledge of the Adjusted Net Revenues of the Electric Utility (as such terms are defined in the Indenture), and the other funds pledged therefor under the Indenture. The City is obligated to make payments to cert ain joint powers agencies, including (as applicable) payments with respect to bonds issued by such agencies, as Operating Expenses of the Electric Utility which are payable prior to payment of the Series 2024 A Bonds (the “Joint Powers Agency Obligations”).
Upon the issuance of the Series 2024 A Bonds, the Series 2024 A Bonds will be secured by and payable from Adjusted Net Revenues on a parity with $18.980 million aggregate principal amount of outstanding electric revenue bonds of the City, together with any additional electric revenue bonds hereafter issued under the Indenture (collectively, “Electric Revenue Bonds” or the “Bonds”) and with any Parity Debt heretofore or hereafter issued or incurred in accordance with the Indenture. The City has, and may in the future, also issue or incur subordinate obligations payable from Adjusted Net Revenues on a basis junior and subordinate to the Bonds and Parity Debt. As of September 1, 2024, the City ha d outstanding $75.850 million principal amount of subordinated electric revenue bonds (collectively, the “Subordinate Electric Revenue Bonds”) evidencing borrowings of the City made under t wo loan agreements (collectively, the “Loan Agreements”) , between the City and Bank of America, N.A. (“BANA”). The Subordinate Electric Revenue Bonds are payable from Adjusted Net Revenues of the Electric Utility junior in right of payment to the Bonds and Parity Debt.
See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024 A BONDS – Outstanding Electric Revenue Obligations of the City” and “– Additional Electric Revenue Obligations of the City.” See also “SILICON VALLEY POWER – Indebtedness.” The Series 2024 A Bonds are limited obligations of the City and are payable, both as to principal and interest, out of the Adjusted Net Revenues and certain funds held under the Indenture. The general fund of the City is not liable, and the credit or taxing power of the City is not pledged, for the payment of the Series 2024 A Bonds or the interest thereon. The Series 2024 A Bonds are not secured by a legal or equitable pledge of, or charge, lien or encumbrance upon, any of the property of the City or any of its income or receipts, except the Adjusted Net Revenues and said funds held under the Indenture. No registered owner of the Series 2024 A Bonds shall ever have the right to compel any exercise of the taxing power of the City to pay the Series 2024 A Bonds or the interest thereon.
Rate Covenant
The City has covenanted in the Indenture to, at all times while any of the Bonds remain outstanding, fix, prescribe and collect rates, fees and charges in connection with services and facilities furnished by the Electric Utility so as to yield Revenues in each Fiscal Year sufficient so that Adjusted Net Revenues for such year will be at least equal to 1.0 times the amount of Debt Service on all Bonds and Parity Debt for such Fiscal Year. See “APPENDIX D – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE.”
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No Bond Reserve Fund
There is no bond reserve fund being established in connection with the Series 2024 A Bonds.
Amounts held in any other reserve fund under the Indenture for any other Series of Bonds are not available for the payment of, and do not in any manner secure, the Series 2024 A Bonds. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024 A BONDS – No Bond Reserve Fund for the Series 2024 A Bonds.”
Continuing Disclosure
The City will covenant for the benefit of the holders and beneficial owners of the Series 2024 A Bonds to provide certain financial information and operating data relating to the Electric Utility by not later than 210 days following the end of the City’s Fiscal Year (which currently begins on July 1 and ends on June 30 of each year) (the “Annual Report”), commencing with the Annual Report for Fiscal Year 2023-24, and to provide notices of the occurrence of certain enumerated events. The Annual Report and the notices of specified events will be filed by the City or the Trustee on behalf of the City with the Municipal Securities Rulemaking Board through the Electronic Municipal Market Access ( “EMMA”) system. See “CONTINUING DISCLOSURE UNDERTAKING.” These covenants have been made in order to assist the Underwriters in complying with Securities and Exchange Commission Rule 15c2- 12(b)(5) (the “Rule”). See also “APPENDIX F – FORM OF CONTINUING DISCLOSURE AGREEMENT.”
References to Documents
This Official Statement includes summaries of the terms of the Series 2024 A Bonds, the Indenture and certain contracts and other arrangements for the supply of capacity and energy. The summaries of and references to the Indenture and all other documents, statutes, reports and other instruments referred to herein do not purport to be complete, comprehensive or definitive, and each such summary and reference is qualified in its entirety by reference to the respective document, statute, report or instrument. All references to the Series 2024 A Bonds are qualified in their entirety by reference to the forms of the Series 2024 A Bonds set forth in the Indenture. The capitalization of any word not conventionally capitalized, or otherwise defined herein, indicates that such word is defined in a particular agreement or other document and, as used herein, has the meaning given it in such agreement or document.
Additional Information
The Santa Clara Electric Utility department’s main office is located at Santa Clara City Hall, 1500 Warburton Avenue, Santa Clara, California 95050, (408) 615- 6600. The City regularly prepares a variety of publicly available reports, including audits, budgets and related documents. Any Series 2024 A Bondholder may obtain a copy of any such report, as available, from the City. Additional information regarding this Official Statement may be obtained by contacting Manuel Pineda, Chief Electric Utility Officer, at the above address and telephone number.
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PLAN OF FINANCE
The Series 2024 A Bonds are being issued by the City for the purpose of providing moneys to (i) fund or reimburse the City for certain costs of improvements to the electric system of the City, and (ii) pay costs of issuance of the Series 2024 A Bonds.
Proceeds of the Series 2024 A Bonds will be applied primarily to finance a portion of the costs of the improvements described below:
Scott Receiving Station Rebuild and Replacement . The City’s Scott Receiving Station ( “SRS”) was first constructed in 1975 and last upgraded in 2002. The SRS has a name plate capacity of 372 mega volt amp (“MVA”) and will be upgraded to a name plate capacity over 600 MVA in order to serve additional load and maintain system reliability. This project replaces the existing SRS with an air insulated switchgear (“AIS”) substation within the existing station site and will include the installation of two energized 336 MVA 115/60 kV power transformers, with accommodations for one future spare 336 MVA 115/60 kV power transformer. The City has estimated the total construction cost of the STS reconstruction project to be approximately $110 million.
Kifer Receiving Station Rebuild and Replacement. The City’s Kifer Receiving Station (“KRS”) was first constructed in 1955 . The KRS has a name plate capacity of 372 MVA and will be upgraded to over 600 MVA in order to serve additional load and maintain system reliability. This project replaces KRS with an AIS substation within the existing site and will include the installation of two energized 336 MVA 115/60 kV power transformers with accommodations for one future spare 336 MVA 115/60 kV power transformer. Transmission lines will be relocated for the existing 115 kV and 60 kV lines (South, Center, Northeast, and East Loop) to the new AIS substation. The City has estimated the total construction cost of the STS reconstruction project to be approximately $119 million.
Northern Receiving Station Upgrades and Expansion . The City’s Northern Receiving Station (“NRS”) was constructed in 2002. The planned expansion project will use available space within the existing station site to increase station reliability and capacity by installing additional transformers and reconfiguring/expanding the 60kV, 115kV, and 230kV buses and associated AIS. The current capacity of the station will be upgraded to over 900 MVA with the installation of 115kV and 230kV bus and AIS improvements to double-bus double-breaker configurations. The expansion will include up to three 336 MVA 115kV/60kV power transformers and two 560 MVA 230 kV/115 kV power transformers. The City has estimated the total construction cost of the STS reconstruction project to be approximately $147 million.
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ESTIMATED SOURCES AND USES OF FUNDS
The following table sets forth the estimated sources and uses of funds related to the Series 2024 A Bonds (rounded to the nearest dollar).
Sources of Funds:
Par Amount of the Series 2024 A Bonds................................ $ Original Issue [Premium][Discount] ......................................
TOTAL SOURCES ........................................................ $ Uses of Funds:
Deposit to Project Fund(1) ....................................................... $ Costs of Issuance(2) .................................................................
TOTAL USES ................................................................ $
(1) Includes amounts to be reimbursed to the City.
(2) Includes underwriter s’ discount, legal fees, printing costs, fees of the Trustee, fees of the rating agencies, and other miscellaneous expenses.
THE SERIES 2024 A BONDS
General Description
The Series 2024 A Bonds will be issued in the aggregate principal amount, will mature in the respective years and amounts, and will bear interest at the respective rates, all as set forth on the inside front cover page of this Official Statement. The Series 2024 A Bonds will be dated and will bear interest from their date of delivery. Purchases of the Series 2024 A Bonds may be made in authorized denominations of $5,000 or any integral multiple thereof. Interest on the Series 2024 A Bonds will be payable on January 1 and July 1 of each year, commencing [January 1], 202 5. Interest on the Series 2024 A Bonds will be calculated on the basis of a 360- day year of twelve 30 -day months. The Series 2024 A Bonds will be issued as fully registered bonds in book- entry form only and when delivered will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”), which will act as securities depository for the Series 2024 A Bonds. See “APPENDIX C – DTC AND THE BOOK-ENTRY ONLY SYSTEM.”
Redemption*
Optional Redemption. The Series 2024 A Bonds maturing on or before July 1, 20___ are not subject to optional redemption prior to maturity. The Series 2024 A Bonds maturing on and after July 1, 20___ are subject to redemption prior to their respective stated maturities, at the option of the City, from any source of available funds, as a whole or in part (by such maturities as may be specified by the City and by lot within a maturity), on any date on or after July 1, 20___, at a redemption price equal to the principal amount of Series 2024 A Bonds called for redemption, plus accrued interest to the date fixed for redemption, without premium.
Mandatory Sinking Account Redemption. The Series 2024 A Bonds maturing on July 1, 20____ are subject to redemption prior to their stated maturity, in part, by lot, from Mandatory Sinking Account Payments as specified below, commencing on July 1, 20___, at the principal amount of each Series
* Preliminary, subject to change.
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2024 A Bond so redeemed plus accrued interest thereon to but not including the date fixed for redemption, without premium.
Term Series 2024 A Bonds due July 1, 20___
Mandatory Sinking Account
Payment Dates
(July 1)
Mandatory Sinking
Account Payments
$
†
_______________
† Final Maturity.
The Series 2024 A Bonds maturing on July 1, 20____ are subject to redemption prior to their stated maturity, in part, by lot, from Mandatory Sinking Account Payments as specified below, commencing on July 1, 20___, at the principal amount of each Series 2024 A Bond so redeemed plus accrued interest thereon to but not including the date fixed for redemption, without premium.
Term Series 2024 A Bonds due July 1, 20___
Mandatory Sinking Account
Payment Dates
(July 1)
Mandatory Sinking
Account Payments
$
†
_______________
† Final Maturity.
Upon an optional redemption of a portion of any term Series 2024 A Bond, the City shall provide the Trustee with a revised schedule of the foregoing Mandatory Sinking Account Payments which shall provide for a reduction in the amount of one or more of the Mandatory Sinking Account Payments coming due on such term Series 2024 A Bond after such redemption as specified by the City in such schedule to reflect such redeemed portion.
Notice of Redemption. Notice of redemption of the Series 2024 A Bonds shall be given by the Trustee, not less than 20 nor more than 60 days prior to the redemption date, to DTC by electronic means of communication or by first-class mail or, if the book-entry system as described in Appendix E has been discontinued, to the respective Owners of any Series 2024 A Bonds designated for redemption at their addresses appearing on the bond registration books of the Trustee by first -class mail, and to EMMA by electronic means of communication, or to such other securities depositories or information services as the City may designate in a Request of the City delivered to the Trustee. Such notice of redemption will state, among other things, the date of issue of the Series 2024 A Bonds to which such notice relates, the redemption date, the redemption price and in the case of Series 2024 A Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be redeemed, and shall be given in the
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form and otherwise in accordance with the terms of the Indenture. Failure by any Owner to receive notice or any defect in any such notice shall not affect the sufficiency of the proceedings for redemption.
In the event of an optional redemption of Series 2024 A Bonds, if the City shall not have deposited or otherwise made available to the Trustee the money required for the payment of the redemption price of the Series 2024 A Bonds to be redeemed at the time of the mailing of notice of redemption, such notice of redemption may state that the redemption is expressly conditioned upon the timely deposit of sufficient funds therefor with the Trustee, and that if such moneys shall not have been so received, such notice shall be of no force and effect and the Trustee shall not be required to redeem such Series 2024 A Bonds. In the event that such notice of redemption contains such a condition and such moneys are not so received, the redemption shall not be made and the Trustee shall within a reasonable time thereafter give notice, in the manner in which the notice of redemption was given, that such moneys were not so received.
The City may, at its option, on or prior to the date fixed for redemption in any notice of optional redemption, rescind such notice of redemption by written notice of the City to the Trustee, and the Trustee is to give notice of such rescission as soon thereafter as practicable in the same manner, and to the same recipients, as notice of such redemption was given.
Selection of Bonds for Redemption. Whenever provision is made in the Indenture for the redemption of less than all of the Series 2024 A Bonds, the maturities of the Series 2024 A Bonds to be redeemed shall be specified by the City. In the case of partial redemption of less than all of the Series 2024 A Bonds of any maturity, the Trustee will select the Series 2024 A Bonds of such maturity to be redeemed from all Series 2024 A Bonds of such maturity not previously called for redemption, in authorized denominations, by lot, in any manner which the Trustee in its sole discretion deems appropriate and fair.
Effect of Redemption. If notice of redemption is given as provided in the Indenture, and moneys for payment of the redemption price of, together with interest accrued to the redemption date on, the Series 2024 A Bonds (or portions thereof) so called for redemption is held by the Trustee, then on the redemption date designated in such notice, the Series 2024 A Bonds (or portions thereof) so called for redemption will become due and payable at the redemption price specified in the notice of redemption, together with interest accrued thereon to the date fixed for redemption, interest on such Series 2024 A Bonds so called for redemption will cease to accrue, the Series 2024 A Bonds (or portions thereof) will cease to be entitled to any benefit or security under the Indenture and the owners of the Series 2024 A Bonds (or portions thereof) will have no rights in respect thereof except to receive payment of the redemption price plus accrued interest.
AMENDMENTS TO THE MASTER INDENTURE
The City’s $18.980 million outstanding principal amount of Electric Revenue Bonds , consisting of its Electric Revenue Refunding Bonds, Series 2018 A (the “Series 2018 A Bonds”) , were issued pursuant to the Master Indenture, as supplemented and amended by the Third Supplemental Electric Revenue Bond Indenture, dated as of December 1, 2018 (the “Third Supplement”) , by and between the City and the Trustee. The Fourth Supplement, pursuant to which the Series 2024 A Bonds are being issued, includes certain material amendments to the Master Indenture which purchasers of the Series 2024 A Bonds are deemed to consent to by their purchase of the Series 2024 A Bonds. Set forth in “APPENDIX H – AMENDMENTS BEING MADE TO THE MASTER INDENTURE” is a description of the amendments and a marked copy of certain provisions of the Master Indenture which show the amendments and modifications set forth in the Fourth Supplement that the City intends to make to the Master Indenture. Such amendments will become effective on the day next succeeding the date on which the written consent (or deemed written consent) of the Owners of a majority in aggregate principal
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amount of the Bonds then Outstanding has been obtained, and a written certificate of the City to such effect and specifying the amendments effective date has been delivered by the City and filed with the Trustee (the “Amendments Effective Date”).
The City is planning to effectuate the consent of Owners of the Bonds through a “springing consent” process, which means that the City will require the Owners and Beneficial Owners of the Series 2024 A Bonds to be deemed to have consented to the proposed amendments to the Master Indenture in the Fourth Supplement by their purchase and acceptance of the Series 2024 A Bonds. In addition, pursuant to the terms of the City’s Loan Agreements with BANA relating to its outstanding Subordinate Electric Revenue Bonds, the City intends to seek the consent of BANA to such amendments to the Master Indenture in order to make such amendments effective for purposes of the provisions of the Loan Agreements affected thereby. The City will not be requesting separate written consent from the Owners of Bonds for the proposed amendments included in the Fourth Supplement before the Amendments Effective Date. Upon the issuance of the Series 2024 A Bonds as contemplated under “PLAN OF FINANCE” herein, the Series 2024 A Bonds will represent more than [85%] {confirm once preliminary par finalized at POS posting} of the aggregate principal amount of the then Outstanding Bonds under the Indenture and the requisite consent of the Owners of a majority in principal amount of the Bonds will have then been obtained by the City. Thus, the amendments to the Master Indenture set forth in the Fourth Supplement are expected to become effective on or about the day next succeeding the date of delivery of the Series 2024 A Bonds.
The significant amendments to the Master Indenture to be effected by the Fourth Supplemental Indenture include the following:
• modifications to the definition of “Adjusted Net Revenues” relating to the sources of funds that may be included in calculating debt service coverage for purposes of complying with the City’s rate covenant in the Indenture;
• modifications to the provisions relating to the Rate Stabilization Fund created under the Indenture and the transfer and application of amounts to or from the Rate Stabilization Fund for purposes of complying with the City’s rate covenant in the Indenture; • modifications to the provisions allowing for the City to issue additional Bonds or incur other Parity Debt that are payable from Adjusted Net Revenues on a parity with the payment by the City of the Electric Revenue Bonds; and
• the removal of the requirement under the Indenture for the City to furnish its audited financial statements and related certifications to the Trustee for each Fiscal Year (the City remains and will be obligated to furnish its audited financial statements on EMMA under its continuing disclosure undertakings for the Bonds).
See “APPENDIX H – AMENDMENTS BEING MADE TO THE MASTER INDENTURE” for a marked copy of the provisions of the Master Indenture reflecting in additional detail the amendments and modifications set forth in the Fourth Supplement that the City intends to make to the Master Indenture .
These changes to the Master Indenture as to be amended pursuant to the Fourth Supplement are reflected elsewhere in this Official Statement and in the “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE” contained in Appendix D.
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SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024 A BONDS Pledge of Adjusted Net Revenues
The Series 2024 A Bonds are revenue obligations of the City payable solely from and secured solely by a pledge of the Adjusted Net Revenues (as described below) of the Electric Utility and the other funds pledged therefor under the Indenture. Pursuant to the Indenture, the City has pledged all Adjusted Net Revenues and all amounts (including proceeds of the Bonds issued under the Indenture) held by the Trustee under the Indenture (except for amounts held in the Rebate Fund) to secure the payment of the principal of and redemption premium, if any, and interest on the Bonds (including the Series 2024 A Bonds) and any Parity Debt in accordance with their terms, subject only to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth therein. As provided in the Indenture, said pledge constitutes a first lien on the Adjusted Net Revenues and amounts in such funds held by the Trustee and will be valid and binding from and after delivery of the Bonds or Parity Debt, without any physical delivery thereof or further act.
Upon the issuance of the Series 2024 A Bonds, the Series 2024 A Bonds will be secured by and payable from Adjusted Net Revenues on a parity with $18.980 million aggregate principal amount of other Bonds to be outstanding upon such issuance (as described under “ – Outstanding Electric Revenue Obligations of the City – Outstanding Bonds and Parity Debt ” below), together with any additional Bonds hereafter issued under the Indenture, and with any Parity Debt heretofore or hereafter issued or incurred in accordance with the Indenture. See “ – Additional Electric Revenue Obligations of the City – Additional Bonds and Parity Debt; Other Obligations.” As noted below, the City is obligated to make payments to certain joint powers agencies, including payments with respect to bonds issued by such agencies, as Operating Expenses of the Electric Utility which are payable prior to the payment of the Bonds and Parity Debt.
The term “Parity Debt” means any indebtedness, installment sale obligation, lease obligation or other obligation of the City for borrowed money or interest rate swap agreement incurred in connection with the Electric Utility having an equal lien and charge upon the Adjusted Net Revenues and therefore payable on a parity with the Bonds with respect to such Adjusted Net Revenues (whether or not any Bonds are Outstanding).
The term “Adjusted Net Revenues” as to be amended pursuant to the Fourth Supplement means, for any period, the sum of (a) the Revenues of the Electric Utility for such period plus (b) for purposes of determining compliance with the City’s rate covenant only (see “– Rate Covenant”), (i) the amounts approved by City Council to be withdrawn from the Rate Stabilization Fund (see – “Rate Stabilization Fund”) for inclusion in Adjusted Net Revenues for such period, and (ii) the amount of Available Reserves budgeted by the City for the payment of Operating Expenses and/or Debt Service for such period (which amounts, in either case, shall be deposited in the Net Revenue Fund in accordance with the Indenture to the extent such amounts are to be included in Adjusted Net Revenues for the purpose of determining compliance with the rate covenant ), and (c) any interest paid and other income derived from the investment of funds as provided in the Indenture , less the sum of (d) all Operating Expenses for such period, (e) moneys received with respect to the sale of assets financed with the proceeds of Bonds or Parity Debt, which amounts shall be applied in accordance with the Indenture, (f) moneys received with respect to any Special Facility, and (g) any charges collected by any person to amortize or otherwise relating to the payment of the uneconomic portion of costs associated with assets and obligations (“stranded costs”) of the Electric Utility or of any joint powers agency in which the City participates which the City has dedicated to the payment of obligations other than the Bonds or Parity Debt, the payments of which obligations will be applied to or pledged to or otherwise set aside for the reduction or retirement of outstanding obligations of the City or any joint powers agency in which the City participates
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relating to such “stranded costs” of the City or of any such joint powers agency to the extent such “stranded costs” are attributable to, or the responsibility of, the City.
The term “Available Reserves” means, as of any date of calculation, the amount of unrestricted funds of the Electric Utility determined by the City to be then available to pay Operating Expenses and/or Debt Service, which may include transfers to the Net Revenue Fund from any fund which is legally available to be used for such purpose.
The term “Revenues” means, generally, for any period, all gross income and revenue received or receivable by the City from the ownership and operation of the Electric Utility, calculated in accordance with the Generally Accepted Accounting Principles Applicable to Governments, including all rates, fees and charges received by the City from the Electric Utility or arising from the Electric Utility, but excluding any gain or loss on the extinguishment of any debt of the City.
The term “Operating Expenses” means, generally, the reasonable and necessary costs of the City for maintaining and operating the Electric Utility, including the cost of supply and transmission of electric energy under long- term contracts or otherwise and all reasonable and necessary operating expenses, pension charges and proportionate payments to such compensation and other insurance and accident reserve funds as the City or the City Council may establish; expenses of management, maintenance and repair and other expenses to maintain and preserve the Enterprise in good repair and working order, and including all reasonable and necessary administrative costs of the City attributable to the Enterprise and the Bonds and Parity Debt, such as salaries and wages and the necessary contribution to retirement of employees, overhead, insurance, taxes (if any); and all other reasonable and necessary costs of the City or charges required to be paid by it to comply with the terms of the Bonds or the Indenture or of any Parity Debt; but excluding depreciation, amortization, replacement and obsolescence charges or reserves therefor, interest expense and amortization of intangibles or other bookkeeping entries of a similar nature and costs and expenses attributable to Special Facilities. Anything contained in the Indenture to the contrary notwithstanding, “Operating Expenses” include all amounts required to be paid by the City under contract with a joint powers agency for the purchase of capacity, energy, transmission capacity or any other commodity or service in connection with the foregoing, which contract requires payments by the City to be made thereunder to be treated as Operating Expenses. See “– Outstanding Electric Revenue Obligations of the City – Outstanding JPA Obligations. ” In addition to its outstanding joint powers agency obligations, the City may incur future obligations pursuant to its agreements with joint powers agencies in which it now, or in the future may, participate, and such obligations may constitute Operating Expenses of the Electric Utility payable from Revenues of the Electric Utility prior to the payment of the Bonds and Parity Debt.
The Series 2024 A Bonds are limited obligations of the City and are payable, both as to principal and interest, out of the Adjusted Net Revenues and certain funds held under the Indenture. The general fund of the City is not liable, and the credit or taxing power of the City is not pledged, for the payment of the Series 2024 A Bonds or the interest thereon. The Series 2024 A Bonds are not secured by a legal or equitable pledge of, or charge, lien or encumbrance upon, any of the property of the City or any of its income or receipts, except the Adjusted Net Revenues and said funds held under the Indenture. No registered owner of the Series 2024 A Bonds shall ever have the right to compel any exercise of the taxing power of the City to pay the Series 2024 A Bonds or the interest thereon.
See also “APPENDIX H – AMENDMENTS BEING MADE TO THE MASTER INDENTURE.”
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Rate Covenant
The City has covenanted in the Indenture to, at all times while any of the Bonds remain outstanding, fix, prescribe and collect rates, fees and charges in connection with services and facilities furnished by the Electric Utility so as to yield Revenues in each Fiscal Year sufficient so that Adjusted Net Revenues for such year will be at least equal to 1.0 times the amount of Debt Service on all Bonds and Parity Debt for such Fiscal Year. The Indenture, as to be amended pursuant to the Fourth Supplement, provides that if and to the extent that the City has determined that amounts on deposit in the Rate Stabilization Fund or any Available Reserves of the Electric Utility are to be included in Adjusted Net Revenues ( in accordance with the definition thereof as described above) for any Fiscal Year for the purpose of complying with the r ate covenant, such amounts are to be deposited by the City in the Net Revenue Fund at the time of such determination.
The City has covenanted not to permit any use of the Electric Utility free of charge by any private or public person or entity. The Indenture provides that nothing therein will prevent the City, in its sole and exclusive discretion, from permitting other parties from selling electricity to retail customers within the service area of the Electric Utility provided that permitting such sales will not relieve the City of its obligations under the Indenture . See “APPENDIX D – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE.”
No Bond Reserve Fund for the Series 2024 A Bonds
There is no bond reserve fund being established in connection with the Series 2024 A Bonds.
Amounts held in any other reserve fund under the Indenture for any other Series of Bonds are not available for the payment of, and do not in any manner secure, the Series 2024 A Bonds.
Allocation of Adjusted Net Revenues
In order to carry out and effectuate the obligations of the City contained in the Indenture to pay the Bonds, as long as any Bonds are Outstanding, the City agrees and covenants that all Adjusted Net Revenues received by it will be deposited when and as received in a special fund, separate and apart from other moneys of the City designated the “City of Santa Clara Electric Utility Net Revenue Fund” (the “Net Revenue Fund”). All moneys at any time held in the Net Revenue Fund will be held in trust for the benefit of the Owners of the Bonds and Parity Debt and will be disbursed, allocated and applied solely for the uses and purposes set forth in the Indenture as described herein.
So long as any Bonds are Outstanding, the City will transfer the moneys in the Net Revenue Fund into the following respective funds (each of which the Trustee will establish, maintain and hold in trust for the benefit of the Owners of the Bonds) in the following amounts, in the following order of priority, the requirements of each such fund (including the making up of any deficiencies in any such fund resulting from lack of Adjusted Net Revenues sufficient to make any earlier required deposit) at the time of deposit to be satisfied before any deposit is made to any fund subsequent in priority; provided that on a parity with such deposits the Trustee may set aside or transfer amounts with respect to outstanding Parity Debt as provided in the proceedings for such Parity Debt (which will be proportionate in the event such amounts are insufficient to provide for all deposits required as of any date to be made with respect to the Bonds and such Parity Debt):
(1) Interest Fund. The City will transfer to the Trustee and the Trustee will set aside in the Interest Fund on or before the Business Day prior to each interest payment date therefor an amount equal to the interest becoming due and payable on the Outstanding Bonds (excluding any interest for which there are moneys on deposit in the Interest Fund from the proceeds of any Series of Bonds or other source to pay such interest). All amounts in the Interest Fund shall be
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used and withdrawn by the Trustee solely for the purpose of paying interest on the Bonds as it becomes due and payable (including accrued interest on any Bonds purchased or redeemed prior to maturity pursuant to the Indenture) and making payments on interest rate swap agreements, as provided in the Indenture.
(2) Principal Fund; Sinking Accounts . The City will transfer to the Trustee and the Trustee will set aside in the Principal Fund on or before the Business Day prior to each principal or Sinking Account payment date therefor an amount equal to (a) the amount of Bond Obligation becoming due and payable on the Outstanding Serial Bonds, plus (b) the Mandatory Sinking Account Payments to be paid into the respective Sinking Accounts for the Term Bonds; provided that if the City certifies to the Trustee that any principal payments are expected to be refunded on or prior to their respective due dates or paid from excess amounts on deposit in a bond reserve fund upon such payment, no amounts need be set aside towards such principal to be so refunded or paid. All amounts in the Principal Fund will be used and withdrawn by the Trustee solely for the purposes of paying the Bond Obligation of the Bonds when due and payable, except that all amounts in the Sinking Accounts will be used and withdrawn by the Trustee solely to purchase or redeem or pay at maturity Term Bonds, as provided in the Indenture.
Any Adjusted Net Revenues remaining in the Net Revenue Fund after the foregoing transfers, except as otherwise provided in a Supplemental Indenture, will be held free and clear of the Indenture and the City may use and apply such Adjusted Net Revenues for any lawful purpose of the City, including the replenishment of any reserve fund for any Series of Bonds and the redemption of Bonds upon terms and conditions set forth in the Supplemental Indenture relating to such Bonds and the purchase of Bonds as and when and at such prices as the City may determine. The City has incurred certain subordinate electric revenue obligations and has pledged to the payment thereof all Adjusted Net Revenues remaining in each fiscal period less all amounts required to be paid under the Indenture for principal, interest, reserve fund and any other debt service or other requirements on the Electric Revenue Bonds and any Parity Debt as the same shall become due in such fiscal period. See “– Outstanding Electric Revenue Obligations of the City – Outstanding Subordinate Obligations.”
Under the Indenture the City may enter into an interest rate swap agreement corresponding to the interest rate or rates payable on a Series of Bonds or any portion thereof and the amounts received by the City or the Trustee, if any, pursuant to such an interest rate swap agreement may be applied to the deposits required under the Indenture. If the City so designates, amounts payable under the interest rate swap agreement may be secured by Adjusted Net Revenues and other assets pledged under the Indenture to the Bonds on a parity basis therewith.
Rate Stabilization Fund
Pursuant to the Indenture, a Rate Stabilization Fund was created (which is a continuation of the Rate Stabilization Fund Reserve Account established by the City pursuant to Resolution No. 6106 of the City Council adopted on January 16, 1996), and which fund the City agrees to maintain so long as any Bonds remain unpaid under the Indenture. The Indenture, as to be amended by the Fourth Supplement, provides that the City may at any time deposit in the Rate Stabilization Fund from any available Adjusted Net Re venues and /or any other money available to be used therefor such amounts as the City may determine; provided, that notwithstanding the foregoing, no Adjusted Net Revenues will be deposited in the Rate Stabilization Fund in any Fiscal Year to the extent that such amounts are required for purposes of making the transfers specified for the payment of debt service described under “– Allocation of Adjusted Net Revenues” above for such Fiscal Year. The City may at any time withdraw any or all of the money on deposit in the Rate Stabilization Fund for inclusion in Adjuste d Net Revenues for purposes of the calculation set forth in the City’s rate covenant for any Fiscal Year in such amount as approved by City Council. Any amounts withdrawn from the Rate Stabilization Fund for such purpose shall be transferred
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to the Net Revenue Fund in accordance with the Indenture. The City may also at any time withdraw or apply amounts on deposit in the Rate Stabilization Fund for any other legal purpose. All interest or other earnings upon deposits in the Rate Stabilization Fund will be accounted for as Adjusted Net Revenues.
See also “SILICON VALLEY POWER – Cash Reserves” and “– Rate Covenant Compliance Under Electric Revenue Bond Indenture” and “ APPENDIX H – AMENDMENTS BEING MADE TO THE MASTER INDENTURE.”
Outstanding Electric Revenue Obligations of the City
Outstanding JPA Obligations. As of September 1, 202 4, the City had outstanding obligations under agreements with joint powers agencies in which it participates in the aggregate principal amount of approximately $145.9 million related to debt of such joint powers agencies, which obligations constitute an Operating Expense of the Electric Utility payable from Revenues of the Electric Utility prior to the payment of the Series 2024 A Bonds. See “SILICON VALLEY POWER – Indebtedness – Joint Powers Agency Obligations.”
Outstanding Bonds and Parity Debt. Upon the issuance of the Series 2024 A Bonds, the City will have outstanding, in addition to the Series 2024 A Bonds, $18.980 million aggregate principal amount of Bonds issued under the Indenture and payable from Adjusted Net Revenues on parity with the Series 2024 A Bonds, consisting of its Series 2018 A Bonds. See “SILICON VALLEY POWER – Indebtedness – City Electric Revenue Bonds.”
Outstanding Subordinate Obligations . As of September 1, 2024, the City had outstanding $75.850 million principal amount of Subordinate Electric Revenue Bonds evidencing borrowings of the City made under the Loan Agreements between the City and BANA . The Subordinate Electric Revenue Bonds are payable from Adjusted Net Revenues of the Electric Utility on a basis junior and subordinate to the Bonds (including the Series 2024 A Bonds) and Parity Debt. The City’s outstanding Subordinate Electric Revenue Bonds consist of the following: (i) $52.985 million amount of Subordinated Electric Revenue Refunding Bonds, Series 2020- 1 (the “Subordinate 2020- 1 Bonds”); and (ii) $22.865 million amount of Subordinated Electric Revenue Refunding Bonds, Series 2020- 2 (the “Subordinate 2020- 2 Bonds”). See “SILICON VALLEY POWER – Indebtedness – City Electric Revenue Bonds.” Additional Electric Revenue Obligations of the City
Take-or-Pay Power Sales Contracts; Additional JPA Obligations. As described herein, the City has entered into certain contracts for the purchase of capacity, energy, transmission capability and natural gas and certain other agreements for the payment of its share of the costs of certain projects in which it is participating through joint powers agencies, including the M-S-R Public Power Agency (“M-S-R PPA”), the M-S-R Energy Authority (“ M-S-R EA”), the Northern California Power Agency (“NCPA”) and the Transmission Agency of Northern California (“TANC”). See “SILICON VALLEY POWER – Power Supply Resources – Joint Powers Agency Resources” and “– Fuel Supply.” Obligations of the City under its agreements with M-S-R PPA, M-S-R EA, NCPA and TANC constitute Operating Expenses of the Electric Utility, and are payable from Revenues of the Electric Utility prior to the payment of the Bonds (including the Series 2024 A Bonds) and Parity Debt. Such obligations under agreements with joint powers agencies include (except as otherwise described), obligations for the payment of debt service costs on indebtedness issued by such joint powers agencies. The City may incur additional obligations pursuant to its agreements with such joint powers agencies in which it participates and has, and may in the future, enter into other contracts for the purchase of capacity, energy, transmission capacity, natural gas or any other commodity or service in connection with the foregoing, which contracts may require payments by the City to be made thereunder to be treated as Operating Expenses.
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Additional Bonds and Parity Debt; Other Obligations. The City has covenanted in the Indenture that it will not create any pledge, lien or charge upon any of the Adjusted Net Revenues having priority over the lien of the Bonds (including the Series 2024 A Bonds). The Indenture, as to be amended by the Fourth Supplement provides that the City may issue additional Bonds under the Indenture and Parity Debt may be issued or incurred at any time in such principal amounts as is determined by the City so long as no Event of Default exists under the Indenture at the time of issuance thereof. See also “ APPENDIX H – AMENDMENTS BEING MADE TO THE MASTER INDENTURE.”
The Indenture does not restrict the ability of the City to issue or incur subordinate obligations, payable from Adjusted Net Revenues, on a basis junior in right of payment to the Bonds and Parity Debt.
The City may also, from time -to-time, enter into interest rate swap agreements with security and payment provisions as determined by the City and subject to any conditions contained in the Indenture and/or the City’s adopted master bond interest rate swap policy (if any) as in effect at such time.
Investment of Monies in Funds and Accounts Under the Indenture All monies held in any of the funds and accounts held by the Trustee and established pursuant to the Indenture will be invested, as directed by the City, solely in Investment Securities (see “APPENDIX D – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE – Definitions” for the definition of Investment Securities under the Indenture). If and to the extent the Trustee does not receive investment instructions from the City with respect to the monies in such funds and accounts, such monies will be invested in money market funds (including funds for which the Trustee or its affiliates provide investment advisory or other management services).
Unless otherwise provided in the Supplemental Indenture, all interest, profits and other income received from the investment of monies in any fund or account other than the Rebate Fund will be transferred to the Net Revenue Fund when received; provided, however, that an amount of interest received with respect to any Investment Security equal to the amount of accrued interest, if any, paid as part of the purchase price of such Investment Security shall be credited to the fund or account from which such accrued interest was paid.
See “APPENDIX D – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE – Investments.”
Limitations on Remedies
The rights of the owners of the Series 2024 A Bonds are subject to the limitations on legal remedies against cities and other public agencies in the State. Additionally, enforceability of the rights and remedies of the owners of the Series 2024 A Bonds, and the obligations incurred by the City, may become subject to the following: the federal Bankruptcy Code and applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the enforcement of creditor’s rights generally, now or hereafter in effect; equity principles which may limit the specific enforcement under State law of certain remedies; the exercise by the United States of America of the powers delegated to it by the Constitution; and the reasonable and necessary exercise, in certain exceptional situations, of the police powers inherent in the sovereignty of the State and its governmental bodies in the interest of serving a significant and legitimate public purpose. Bankruptcy proceedings, or the exercise of powers by the federal or State government, if initiated, could subject the owners of the Series 2024 A Bonds to judicial discretion and interpretation of their rights in bankruptcy or otherwise, and consequently may entail risks of delay, limitation, or modification of their rights.
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SILICON VALLEY POWER
Introduction
The City is a charter city located in the State of California. Pursuant to its charter, the City has the power to furnish electric utility service within its service area. In connection therewith, the City has the powers of eminent domain, to contract, to construct works, to fix rates and charges for commodities or services it provides and to incur indebtedness.
The City provides electric utility service, including electricity and energy services, through its Electric Utility department operating with the trademarked name of “Silicon Valley Power.” In addition, the City is a full- service city that provides other services including police and fire protection, libraries, parks and recreation, and water and sewer service.
The legal responsibilities and powers of the City, including the establishment of rates and charges for electric service, are exercised by the seven -member Santa Clara City Council. The City Council is made up of the Mayor, elected at large, and six council members. Under the provisions of the City Charter, the members of the City Council have historically been elected city-wide for staggered four-year terms; beginning in 2020, the City has implemented a six-district election process.
The Electric Utility department of the City is under the direction of the Chief Electric Utility Officer who, together with certain other senior managers of the Electric Utility department, is appointed by and reports to the Santa Clara City Manager.
To provide electric service within its service area, the City owns and operates an e lectric system which includes generation, transmission and distribution facilities. The City also purchases power and transmission services from other providers and participates in other utility type arrangements.
Since 1896, the City has provided all electric service within an area coterminous with the City of Santa Clara’s boundaries. As of January 1, 2024, the City had an estimated population of 132,048. For the Fiscal Year ended June 30, 2024, the City served an average of 60,287 customers per month, had total sales of 4, 560 GWh and a peak demand of 669.2 MW. In the Fiscal Year ended June 30, 2024, approximately 94.1% of the City’s energy sales were made to commercial and industrial customers.
Management
Current management of the Electric Utility is as follows:
MANUEL PINEDA is the Chief Electric Utility Officer for Silicon Valley Power. He has served in such position since July 2019. In his role as Chief Electric Utility Officer, Mr. Pineda leads a team of 222 staff members to provide the delivery of reliable power and essential services to the City. He is currently guiding Silicon Valley Power’s $600 million expansion plan over the next five years, a project expected to double the utility’s size and reinforce its commitment to innovation and sustainability. Mr.
Pineda has over 27 years of public sector experience, including having served as an Assistant City Manager of the City from 2017 to 2023, with functional oversight of Silicon Valley Power, the Water and Sewer departments, Parks and Recreation, Community Development and Public Works. Prior to his work in Santa Clara, Mr. Pineda served as the Deputy Director in San Jose’s Department of Transportation, where he managed the City’s $300 million transportation capital budget and some of the city’s largest projects, such as the BART extension and the reconstruction of four freeway interchanges. Mr. Pineda also served as the Director of Public Works in the City of Sunnyvale, where he managed city maintenance and operations and the city’s 20- year billion -dollar capital program. He has worked on major utility
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construction and relocation projects including sanitary and storm sewers, water, gas, and electrical. Mr.
Pineda holds a Civil Engineering degree from San Jose State University.
NICOLAS PROCOS is the Chief Electric Utility Operating Officer for Silicon Valley Power. Mr.
Procos was appointed to such position in 2024. He has 24 years of experience in the electric utility industry. Prior to joining the City, Mr. Procos was the General Manager at Alameda Municipal Power for seven years and had primary management responsibility over the electric utility that provides power to the residents and businesses in the City of Alameda, with a staff of 85 full -time employees. Before that Mr Procos worked at several other municipal utilities in the San Francisco Bay A rea. Mr. Procos began his career in the electric utility industry as a regulator at the California Public Utilities Commission (“CPUC”). Mr. Procos holds a Bachelor of Science degree in Biology from McGill University in Canada.
DEANNA HILBRANTS is the Assistant Director of Business Services. Mrs. Hilbrants was appointed to such position in 2020. She has over 25 years of experience in finance and local government, including over 20 years with local government agencies, most recently as Finance Director and Deputy City Manager for the city of Milbrae, as well as several years working with private companies in the financial sector. In her current capacity, Mrs. Hilbrants is responsible for working closely with the City’s Finance D epartment and City Attorney’s Office to oversee contracting and financial operations of the utility, including budget, accounting, procurement, and contracting. Mrs. Hilbrants obtained a Bachelor of Science degree in Biological Sciences from University of California, Irvine and a Master of Business Administration from University of California, Irvine.
KATHLEEN HUGHES is the Assistant Director of the Electric Utility – Resources Management and Customer Engagement. Ms. Hughes was appointed to such position in 2023. She has over 23 years of experience with the City of Santa Clara. Since joining the City in 2001, Ms. Hughes worked for four years as Senior Division Manager overseeing Customer Engagement, for four years overseeing joint powers agency management, legislative and regulatory policy, and environmental compliance, and for fourteen years in key account and senior key account management. Ms. Hughes oversees resource planning and acquisitions, wholesale purchases and sales, rates and forecasting, customer services and marketing, dark fiber enterprise, communications, energy efficiency, electrification, and renewable energy programs. Ms. Hughes obtained a Bachelor of Science degree in Organizational Management from Illinois State University and served as an officer in the Army Reserves.
CHRIS KARWICK is the Assistant Director of Utility Operations. Mr. Karwick was appointed to this position in 2019. He has over 25 years of experience in electric utility and marine engineering operations. Mr. Karwick joined the City in 2017 as the Division Manager of Generation overseeing the Electric Utility’s fleet of power plants. Prior to joining the City, Mr. Karwick held management and engineering roles with Calpine Corporation, Parsons Corporation, Alaska Tanker Company, Central Gulf Lines and American President Lines. Mr. Karwick holds a Bachelor of Science in Marine Engineering from the California Maritime Academy, and a Master of Business Administration from the University of Phoenix. Mr. Karwick holds certifications from the American Society of Safety Engineers, the Occupational Safety and Health Administration (OSHA), and the National Fire Protection Agency. He holds a U.S. Coast Guard 3rd Assistant Engineer license for Steam, Diesel, and Gas Turbines - Unlimited HP.
YANMEI QIU is the Electric Division Manager – Market Analysis and Pricing. Ms. Qiu oversees wholesale risk management, manages the debt portfolio for the Electric Utility , and is responsible for setting prices and rates, and tracking relevant legislative and regulatory matters for the Electric Utility.
Ms. Qiu joined the Electric Utility as a full -time employee in 2007 as a Risk Control Analyst. Prior to becoming a City employee, Ms. Qiu worked as a risk management consultant for the Electric Utility for six years. She has over 20 years of energy and utility experience, including credit and risk management.
Ms. Qiu obtained a Bachelor of Science degree in Economics from the University of California at
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Berkeley and a Master of Science degree in Finance from Boston College. She is a Chartered Financial Analyst (CFA) charter holder.
ROBERT VALENTUKONIS is the Electric Division Manager – Business Modeling & Debt Administration. Mr. Valentukonis manages the Financial Services group for the Electric Utility that is responsible for budget, accounts payable/receivable, and most financial controls along with business processes. Mr. Valentukonis joined the City in 2012 with the Municipal Services Division of the Finance Department managing delinquent utility accounts. Since then, Mr. Valentukonis has held several manager/analyst financial positions within the City. Previous to the City, he worked as a Financial Services Representative recommending a variety of financial products and held multiple security licenses through Financial Industry Regulatory Authority (FINRA). He has over 14 years of financial experience with over six years working in the Electric Utility department. Mr. Valentukonis obtained a Bachelor of Science Degree in Finance from Devry University and a Master of Accounting and Financial Management (CPA Concentration) from Keller Graduate School of Management.
Power Supply Resources
The following table sets forth information concerning the City’s power supply resources and the energy supplied by each during the Fiscal Year ended June 30, 2024.
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CITY OF SANTA CLARA
ELECTRIC UTILITY DEPARTMENT
POWER SUPPLY RESOURCES
(For the Fiscal Year Ended June 30, 2024
Source
Capacity
Available (MW)
Recorded
Energy (GWh)
Percent of
Total Energy
City-Owned Generating Facilities(1)
Cogeneration(2) 7.0 4.5 0.1%
Stony Creek Hydro System 11.6 32.7 0.7
Gianera Generating Station 49.5 9.5 0.2
Grizzly Project 17.7 29.4 0.6
Donald Von Raesfield Power Plant 147.8 875.8 18.8
Jenny Strand Solar Park 0.1 0.2 0.0
Purchased Power:(3)
Western(4) 136.0 302.5 6.5%
Manzana Wind 50.0 137.3 2.9
G2 (Landfill) 1.5 6.0 0.1
Ameresco (Landfill) 0.8 0.9 0.0
Ameresco FWD (Landfill) 4.2 32.4 0.7
Ameresco VASCO (Landfill) 4.3 31.4 0.7
TriDam-Beardsley 11.5 66.0 1.4
TriDam-Donnells 72.0 285.6 6.1
TriDam-Tulloch 25.9 132.2 2.8
TriDam-Sandbar 16.2 96.9 2.1
Rio Bravo 14.0 35.0 0.8
Rosamond (Recurrent Solar) 20.0 53.2 1.1
Central 40 Solar 40.0 70.6 1.5
Aquamarine 75.0 130.1 2.8
Friant 25.0 109.8 2.4
Quinten Luallen (Friant 2) 7.3 44.3 1.0
Camp Far West 6.8 11.2 0.2
South Feather Water 78.0 247.4 5.3
Santa Clara Tioga Canopy 0.4 0.5 0.0
Joint Power Agencies(3)
NCPA
Geothermal 55.7 241.0 5.2%
Combustion Turbine Project 31.0 2.1 0.0
LEC Combustion Turbine Project 77.9 242.5 5.2
Hydroelectric Project 93.6 222.7 4.8
M-S-R PPA
Big Horn I Wind Project 105.0 250.3 5.4%
Big Horn II Wind Project 17.0 38.8 0.8
Market Purchases 0.0 914.9 19.6
Total(5) 1,202.9 4,657.6 100.0%
(1) Rated or name-plate capacities.
(2) The City’s cogeneration plant was taken out of service in November 2023. (3) Capacity available represents entitlements, firm allocations and contract amounts. (4) The City purchased varying amounts of capacity from Western during the year. (5) Columns may not add to totals due to rounding.
Source: City of Santa Clara.
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Generating Facilities
Cogeneration. The City owns and operated a cogeneration plant which began operation in 1981.
The cogeneration plant provided steam for sale to a paperboard plant within the City and delivered power to the City’s electric distribution system. The City upgraded this plant to obtain a name-plate rating of 7.0 MW, effective July 1995. Fuel for the cogeneration plant (natural gas) has generally been acquired under term contracts at prices fixed for the contract term. On November 11, 2023 the plant was taken out of service. For the Fiscal Year ended June 30, 2024, prior to the cessation of plant operations, the cogeneration plant generated approximately 4.5 GWh of energy. The City will be reviewing future power options for the plant site.
Stony Creek Hydroelectric System. The City owns and operates three hydroelectric plants consisting of (i) a 4.9 MW hydroelectric generating plant located at the United States Bureau of Reclamation Stony Gorge Dam near Willows, California, which was completed in 1985, (ii) a 6.2 MW hydroelectric generating plant located at the United States Army Corps of Engineers’ Black Butte Dam near Orland, California, which was completed in late 1988, and (iii) a 0.53 MW hydroelectric generating plant located at the Orland Unit Water Users’ Association High Line Canal/South Side Canal drop near the Black Butte dam, which was completed in late 1988. For the Fiscal Year ended June 30, 2024, the Stony Creek hydroelectric plants generated approximately 32.7 GWh of energy.
Gianera Generating Station. The City owns and operates a nominal 49.5 MW dual fuel (natural gas and fuel -oil) combustion turbine generating plant consisting of two 24.75 MW units, which were completed in 1986 and 1987, respectively. This generation station is used to help meet the City’s peak load and resource adequacy requirements. For the Fiscal Year ended June 30, 202 4, the Gianera Generating Station generated approximately 9.5 GWh of energy.
PG&E Grizzly Project. Pursuant to a 1990 settlement agreement with PG&E, the City agreed to finance and own 100% of a 20 MW hydroelectric facility (the “Grizzly Project”) located on Grizzly Creek above the North Fork of the Feather River in Plumas County, California. The Grizzly Project operates in combination with the hydroelectric facilities of PG&E’s Bucks Creek project. The construction of the Grizzly Project was financed through the issuance by the City of electric revenue bonds. Pursuant to the settlement agreement, PG&E constructed and operates the Grizzly Project, which was placed into operation in November 1993, and the City became a joint licensee in PG&E’s Bucks Creek project. In June 2022, PG&E and the City completed the re -licensing process and FERC issued a new license for a 50-year term.
Until the date the City’s ownership of the Grizzly Project is terminated (as described below), the City
will own and receive all energy generated by the Grizzly Project, less transmission losses, as described in the settlement agreement, which reflects a contract capacity amount of 17.66 MW.
The Grizzly Project facilities include a tunnel intake structure, surge tank, steel penstock, powerhouse, turbine, an approximately 4.2 mile transmission line (nominally rated at 115 kV) for interconnection with PG&E’s transmission system, and certain additional switchyard equipment and related facilities . The Grizzly Project was connected to the electric grid via the project’s 115 kV transmission line (referred to as the Grizzly T ie Line), at PG&E’s 115 kV Caribou- Palermo transmission line. Due to damage c aused by the 2018 Camp Fire to PG&E’s Caribou- Palermo line, the Caribou- Palermo 115 kV line was de-energized in November 2018, and no energy was generated at the Grizzly Project beginning in December 2018. The Grizzly Project was subsequently interconnected to the 230-kV Bucks Creek -Cresta transmission line via a new 115 kV -230 kV transformer owned by PG&E and installed at PG&E’s Bucks Creek substation. PG&E has been undertaking a re -build of the 4.2 mile Grizzly Tie Line as a result of damage that occurred during the 2021 Dixie Fire. The cause of the fire was
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found to be unrelated to the Grizzly Tie Line or any City assets. PG&E completed the first phase of the transmission line re-build that included the installation of three miles of light duty steel poles along the ridge of the 4.2 mile 115 kV transmission line. Upon completion of this first phase of work, the transmission line was temporarily re-energized beginning on December 23, 2023, and Grizzly powerhouse operations resumed. The final phase of the transmission line re -build project includes installing 1.2 miles of larger tubular steel poles on the steep grade to the Bucks Creek substation, and is expected to be completed in December 2024. As a result of this work, the transmission line was de-energized beginning in July 2024, which is expected to continue while the final phase of the re -build project is being completed (expected to be in December 2024 ). While the transmission line is de-energized, the Grizzly Project will not operate. During normal operations, annual energy generation of the Grizzly Project is estimated at 39.4 GWh in an average water year and 26.2 GWh in dry years. For the Fiscal Year ended June 30, 2024, the Grizzly Project generated approximately 29.4 GWh of energy.
Pursuant to the settlement agreement, the City’s interest in the Grizzly Project may revert to PG&E under certain limited circumstances. In the event of such reversion, the City will be reimbursed by PG&E for the depreciated value of the City’s capital investment in the project as provided in the settlement agreement. The earliest possible reverter date under the settlement agreement is November 18, 2027.
Donald Von Raesfeld Power Plant . The City constructed and placed into commercial operation in March 2005, a 122 MW nominal/147.8 MW peak, natural gas -fired, combined cycle power plant known as the “Donald Von Raesfeld Power Plant” (initially designated by the City Council as the Pico Power Plant). The Donald Von Raesfeld Power Plant is located in an industrial area of the City, on the site of the City’s Kifer Receiving Station. The Donald Von Raesfeld Power Plant includes its own switchyard and connects to an existing 115 kV transmission line that currently crosses the plant site.
Natural gas for the Donald Von Raesfeld Power Plant is delivered through an approximately two mile gas pipeline from the local transmission main of PG&E. The City has long -term agreements in place with EDF Trading North America and M-S-R EA for a significant portion of the plant’s fuel requirements, and actively manages the quantity and price risks associated with fuel supply quantities not under long- term agreement. See “ – Fuel Supply” below. For the Fiscal Year ended June 30, 2024, the Donald Von Raesfeld Power Plant generated approximately 875.8 GWh of energy. If it were fully baseloaded, the Donald Von Raesfeld Power Plant could generate approximately 1,000 GWh of energy per year.
However, the City substitutes market purchases when it is economical to do so.
Jenny Strand Solar Park. The City originally entered into an agreement with MiaSole, a California corporation, in December 2011 for the purpose of having MiaSole donate 1,000 solar modules to the City at no cost to the City. On February 1, 2015, the original party “MiaSole” transferred ownership to MiaSole Hi-Tech Corp. MiaSole Hi-Tech Corp subsequently provided 1,121 solar modules to the City, at no cost to the City, to further the City’s ability to provide renewable power. For the Fiscal Year ended June 30, 2024, the City received approximately 0.2 GWh of energy from the solar modules.
Joint Powers Agency Resources
The City, together with the cities of Alameda, Biggs, Gridley, Healdsburg, Lodi, Lompoc, Palo Alto, Redding, Roseville, Shasta Lake, and Ukiah, the Plumas- Sierra Rural Electric Cooperative, the Truckee-Donner Public Utility District, the San Francisco Bay Area Rapid Transit District (“BART”) and the City of Oakland, acting by and through its Board of Port Commissioners (the “Port of Oakland”), is a member of the California joint powers agency known as the Northern California Power Agency (“NCPA”).
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NCPA Geothermal Project . NCPA developed a geothermal project (the “Geothermal Project”) located on federal land in certain areas of Sonoma and Lake Counties, California. In addition to the geothermal leasehold, wells, gathering system and related facilities, the Geothermal Project consists of two electric generating stations (Geothermal Plant 1 and Geothermal Plant 2), with combined 165 MW (nameplate rating) turbine generating units utilizing low pressure, low temperature geothermal steam, associated electrical, mechanical and control facilities, a heat dissipation system, a steam gathering system, a transmission tapline, and other related facilities. NCPA formed two not -for-profit corporations controlled by its members to own the generating plants of the Geothermal Project. NCPA manages the Geothermal Project for the corporations and is entitled to all the capacity and energy generated by the Geothermal Project. Geothermal Plant 1 and Geothermal Plant 2 were originally developed and operated as separate projects referred to as “Geothermal Project Number 2” and “Geothermal Project Number 3,” respectively. Geothermal Plant 1 and Geothermal Plant 2 are now operated together as a single project pursuant to the terms of the NCPA Amended and Restated Geothermal Operating Agreement. NCPA financed the Geothermal Project with Geothermal Project Number 3 Revenue Bonds, a ll of which bonds were retired as of July 1, 2024.
Steam for NCPA’s geothermal plants comes from lands in the Geysers Area, which are leased by NCPA from the federal government. NCPA operates these steam -supply areas. Operation of the geothermal plants at high generation levels, together with high steam usage by others in the same area, resulted in a decline in the steam production from the steam wells at a rate greater -than-originally expected. As a result, an operating plan has been developed that encompasses steam field management, water injection pressure operation and additional water source development, and includes a detailed steam well monitoring system that has enabled a more efficient utilization of the existing steam field resources.
NCPA, along with other producers in the Geysers Area, also constructed a pipeline to deliver treated wastewater from Lake County Sanitation District’s treatment plant near the project for injection into the steam field. This wastewater is pumped to the steam field to continue to regenerate its capacity.
NCPA has sold the capacity of the Geothermal Project to some of its members, including the City, pursuant to a “take-or-pay” power sales contract which requires payments to be made whether or not the project is operable. Each participant is responsible under the power sales contract for paying its capacity share of all of NCPA’s costs of the Geothermal Project, including debt service on the aforementioned NCPA bonds, and subject to a “step- up” obligation of up to 25% upon the unremedied default of another NCPA Geothermal Project participant. The City has purchased from NCPA, pursuant to power sales contracts, 54.65% and 34.13% entitlement shares, respectively, in the capacity of NCPA’s Geothermal Project Plant 1 and Plant 2 and is obligated to pay 44.39% of the debt service and operating costs associated with such plants and steam field. The City is currently taking delivery of its share of the capacity and associated energy from the Geothermal Project. The City’s share of the current California Independent System Operator Corporation (“CAISO”) maximum rated capacity of the project is 58.4 MW. For the Fiscal Year ended June 30, 202 4, the City received approximately 241.0 GWh of electric energy from the Geothermal Project. Current expectations are that the output from the plant will decrease gradually over time. These anticipated decreases are not material to the City’s supply and can be replaced by additional short-term purchases, additional generation or reduced wholesale sales.
Under terms of the federal geothermal leasehold agreements, which became effective August 1, 1974, the leasehold had a 10- year primary term with provision for renewal as long thereafter as geothermal steam is produced or utilized, but not longer than 40 years. At the expiration of that period, if geothermal steam was still being produced, NCPA had a preferential right to renew the leasehold for a second term. In 2013, NCPA renewed the leasehold. The leasehold also requires NCPA to remove its leasehold improvements including the geothermal plants and steam gathering system when and if NCPA abandons the leasehold. Based upon a decommission study obtained by NCPA in December 2016, these decommissioning costs are estimated to total approximately $71.7 million as of June 30, 2023. NCPA has
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been collecting monies to pay the expected decommissioning costs since 2007 and held $28.5 million in a reserve for such purpose as of June 30, 2023.
NCPA Combustion Turbine Project No. 1. NCPA has developed its Combustion Turbine Project Number One (CT 1) (the “Combustion Turbine Project”), originally consisting of five combustion turbine units, each nominally rated at 25 MW, with two of the units located in the City of Roseville, two in the City of Alameda and one in the City of Lodi. Sale of the two units located in Roseville to the city of Roseville was effective on September 1, 2010. The City purchased a 25% entitlement share in NCPA’s Combustion Turbine Project pursuant to a power sales contract with NCPA, which has been amended to reflect that the City’s 25% share comes specifically from the two Alameda plants and the one Lodi plant.
The Combustion Turbine Project provides capacity (i) that is economically dispatched during the peak load period to the extent permitted by air quality restrictions and (ii) to be used to meet the capacity reserve requirements (e.g., resource adequacy requirements). This resource provides the capacity below current spot market prices for capacity but as is typical of this type of technology, the average cost for power per kWh of power delivered to the participants in the Combustion Turbine Project is comparatively expensive. Such reserve capacity is operated only during emergency periods and when other resources are unexpectedly out of service.
The City uses its NCPA Combustion Turbine Project entitlement for resource adequacy purposes and to meet peak load requirements. The City delivers this entitlement to its electric system in accordance with CAISO tariffs. For the Fiscal Year ended June 30, 2024, the City received approximately 2.1 GWh of electric energy from the Combustion Turbine Project.
NCPA Hydroelectric Project. NCPA’s Hydroelectric Project Number One (the “Hydroelectric Project”) consists of (a) three diversion dams, (b) the 246.86-MW Collierville Powerhouse, (c) the Spicer Meadow Dam with a 6.0- MW powerhouse, and (d) associated tunnels located essentially on the North Fork Stanislaus River in Alpine, Tuolumne and Calaveras Counties, California, together with required transmission and related facilities.
The Hydroelectric Project, with the exception of certain transmission facilities, is owned by the Calaveras County Water District (“CCWD”) and is licensed by the Federal Energy Regulatory Commission (“FERC”) pursuant to a 50- year License Project No. 2409 (issued in 1982) to CCWD.
Pursuant to a power purchase contract, NCPA (i) is entitled to the electric output of the Hydroelectric Project until February 2032, (ii) managed the construction of the Hydroelectric Project, and (iii) operates the generating and recreational facilities of the Hydroelectric Project. Under a separate FERC -issued license with an expiration date coterminous with the Project No. 2409 license (Project No. 11197), NCPA holds the license and owns the 230 kV Collierville -Bellota and the 21 kV Spicer Meadows -Cabbage Patch transmission lines for Project No. 2409. NCPA also has a separate FERC license for Project No. 11563 (Upper Utica Project), which consists of three storage reservoirs that mainly feed the New Spicer Meadow Reservoir. This license expires in 2033. After the present FERC License for Project No. 2409 expires in the year 2032, NCPA has the option to continue to purchase Hydroelectric Project capacity and energy during a subsequent license renewal period. The purchase option includes all capacity and energy which is surplus to CCWD’s needs for power within the boundaries of Calaveras County.
In February 1990, the operating portions of the Hydroelectric Project were declared substantially complete and commercially operable. As with any hydroelectric generation project, the operation of the Hydroelectric Project is determined by consideration of its storage capacity, hydrology conditions, and available stream flows and requirements. Based upon historical hydrology conditions and the demonstrated generation record, the Hydroelectric Project’s average production is estimated to be approximately 369 GWh annually. The Hydroelectric Project is optimized together with NCPA’s other
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resources as determined by NCPA to economically meet the load requirements of the respective project participants. The load-following characteristics of the Hydroelectric Project give NCPA a great degree of flexibility in meeting the hourly and daily variations which occur in the project participants’ loads.
NCPA financed the Hydroelectric Project through the issuance of Hydroelectric Project Number One Revenue Bonds, of which approximately $122.3 million principal amount was outstanding as of September 1, 2024 (the “NCPA Hydroelectric Revenue Bonds”). NCPA has sold the capacity of the Hydroelectric Project to certain of its project participants, including the City, pursuant to “take-or- pay” power sales contracts which require payments to be made whether or not the Hydroelectric Project is operable. Each purchaser is responsible under its power sales contract for paying its entitlement share in the Hydroelectric Project of all of NCPA’s costs of the Hydroelectric Project, including debt service on the aforementioned bonds as well as a “step -up” of up to 25% in the event of the unremedied default of another project participant.
Pursuant to a power sales contract, the City has purchased from NCPA a 37.02% entitlement share in NCPA’s Hydroelectric Project (including a 1.16% entitlement share laid off to the City from the cities of Biggs and Gridley). The City is using its Hydroelectric Project entitlement to serve peak load and to provide capacity to support non- firm purchases of energy at market prices. For the Fiscal Year ended June 30, 2024, the City received approximately 2 22.7 GWh of electric energy from the NCPA Hydroelectric Project. The City receives this entitlement to its system by using transmission service available under its Metered Subsystem Agreement (“MSS Agreement”) with the CAISO.
NCPA Lodi Energy Center. Through NCPA, the City is a participant in the Lodi Energy Center.
The Lodi Energy Center is a natural gas -fired, combined-cycle power generation plant located in the City of Lodi, San Joaquin County, California (“Lodi”), which was placed into commercial operation in November 2012. The electric generation components of the Lodi Energy Center consist of one gas -fired Siemens STG6 -5000F combustion turbine -generator, a heat recovery steam generator, a selective catalytic reduction and carbon monoxide catalyst, one Siemens SST -900RH condensing steam turbine generator, a natural gas- fired auxiliary boiler, an evaporative cooling tower, and associated support equipment. The costs of construction of the Lodi Energy Center were approximately $385.7 million. To provide funding for a portion of the costs of the Lodi Energy Center, in June 2010, NCPA issued two series of revenue bonds, its Lodi Energy Center Revenue Bonds, Issue One, issued on behalf of eleven of the thirteen participants in the Lodi Energy Center (being all of the below -named LEC Project Participants other than Modesto Irrigation District (“MID”) and the California Department of Water Resources (“CDWR”), such eleven participants hereinafter referred to the “Indenture Group A Participants”) and its Lodi Energy Center Revenue Bonds, Issue Two, issued on behalf of CDWR. See “ – Indebtedness – Joint Powers Agency Obligations .” MID provided its own financing for its share of the estimated costs of construction of the Lodi Energy Center.
Pursuant to the Lodi Energy Center Power Sales Agreement (the “LEC Power Sales Agreement”), by and among NCPA and (i) the NCPA Member project participants: The City, the cities of Biggs, Gridley, Healdsburg, Lodi, Lompoc, Plumas -Sierra, Ukiah and BART; and (ii) the non- NCPA Member project participants: the city of Azusa, MID, the Power and Water Resources Pooling Authority and CDWR (such entities other than NCPA, collectively the “LEC Project Participants”), NCPA has sold the capacity and energy of the Lodi Energy Center to the thirteen LEC Project Participants, in accordance with their respective generation entitlement shares to the capacity and energy of the Lodi Energy Center.
Pursuant to the LEC Power Sales Agreement, the City has purchased from NCPA a 25.75% generation entitlement share of the capacity and energy of the Lodi Energy Center on an unconditional take-or-pay basis, and is obligated to pay 25.75% of NCPA’s Lodi Energy Center operating and maintenance expenses and 46.16% of the debt service for the Lodi Energy Center Revenue Bonds, Issue One, of which approximately $184.5 million principal amount was outstanding as of September 1, 2024.
The City’s obligations to make payments to NCPA under the LEC Power Sales Agreement are not
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dependent upon the operation of the Lodi Energy Center and are not subject to reduction. Upon an unremedied default by one Indenture Group A Participant (being all of the LEC Project Participants other than MID and CDWR) in making a payment required under the LEC Power Sales Agreement, the nondefaulting Indenture Group A Participants are required (except as lay- offs are made pursuant to the LEC Power Sales Agreement) to increase pro -rata their participation percentage by the amount of the defaulting Indenture Group A Participant’s entitlement share, provided that no such increase can result in a greater than 35% increase in the participation percentage of the nondefaulting Indenture Group A Participants.
The Lodi Energy Center plant has a registered Pmax of 302 MW. The Pmax is a measure of the maximum normal capability of a generating unit that is utilized by the CAISO in determining the amount of capacity that can be counted toward meeting resource adequacy requirements. For the Fiscal Year ended June 30, 2024, the City received approximately 242.5 GWh of electric energy from the Lodi Energy Center. The City received this entitlement to its system by using transmission service available under its MSS Agreement with the CAISO.
M-S-R PPA Purchased Power –Big Horn Project . The City, along with MID and the City of Redding (“Redding”), is a member of a California joint powers agency known as the M-S-R Public Power Agency (as defined above, referred to herein as M -S-R PPA). In 2005, M-S-R PPA entered into a series of power purchase agreements with Avangrid Renewables LLC (originally PPM Energy, Inc. and formerly Iberdrola Renewables, Inc.) (“Avangrid”), certain of which agreements have been assigned to Avangrid’s subsidiary, Big Horn I, LLC, for the purchase of energy from the Big Horn I wind energy project (the “Big Horn I Project”) located near the town of Bickleton, in Klickitat County, Washington.