St. Helena City Council
May 28, 2024

1 __________________________________

OFFICIAL STATEMENT
__________________________________

$________*
ST. HELENA FINANCING AUTHORITY
2024 WATER REVENUE BONDS

INTRODUCTION
This introduction is not a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement, including the cover page and appendices hereto, and the documents summarized or described herein. A full review should be made of the entire Official Statement.

Capitalized terms used but not defined in this Official Statement have the meanings given in the Indenture (as defined below). See “APPENDIX A – Summary of Certain Provisions of the Principal Legal Documents.”
The Authority and the City. The St. Helena Financing Authority (the “Authority”) is a joint exercise of powers authority established by the City of St. Helena (the “City”) and the California Statewide Communities Development Authority pursuant to a Joint Exercise of Powers Agreement, dated as of December 14, 2021, for the purpose, among others, of having the Authority issue its bonds to finance the acquisition, construction and improvement of certain public capital improvements in the City. The City is a general law city located in the County of Napa (the “County”) in the San Francisco Bay Area. For background, demographic and economic information regarding the City and the County, see APPENDIX D.

Authority for Issuance. The bonds captioned above (the “2024 Bonds”) are being issued by the Authority under a resolution adopted by the governing body of the Authority, the provisions of Article 4 of Chapter 5, Division 7, Title 1 of the Government Code of the State of California (the “Bond Law”), and an Indenture of Trust dated as of July 1, 2024 (the “Indenture”), by and between the Authority and U.S. Bank Trust Company, National Association, as trustee.

See “THE 2024 BONDS – Authority for Issuance.”
Purpose of the 2024 Bonds. The 2024 Bonds are being issued to provide funds to (i) assist the City with financing certain improvements to the City’s water system (as further defined herein, the “Water System”), and (ii) pay the costs of issuing the 2024 Bonds. See “FINANCING PLAN.”
_________________________
* Preliminary; subject to change.

Agenda Item #5.1.

2 Security for the 2024 Bonds. The 2024 Bonds are special obligations of the Authority, payable from the “Revenues” pledged under the Indenture, which consist primarily of installment payments (the “Installment Payments”) payable by the City to the Authority under an Installment Sale Agreement, dated as of July 1, 2024 (the “Installment Sale Agreement”) pursuant to which the City is purchasing the Water System improvements being financed. Repayment of the Installment Payments is secured by a pledge of the “Net Revenues” of the Water System. “Net Revenues” are generally defined as the “Gross Revenues” received from the Water System, less the amount of “Operations and Maintenance Costs” of the Water System (as those terms are defined in the Indenture). See “SECURITY FOR THE 2024 BONDS.” Parity Debt. The City currently has two long-term debt obligations payable from Net Revenues on parity with the Installment Payments, and may incur additional parity obligations (“Parity Debt”) in the future, subject to the conditions set forth in the Installment Sale Agreement.

See “SECURITY FOR THE 2024 BONDS – Parity Debt.”
The existing Parity Debt consists of:
 “2012 Installment Purchase Agreement,” which means the Installment Sale Agreement, dated June 1, 2012, between the City and the California Statewide Communities Development Authority, together with any amendments thereof and supplements thereto, currently outstanding in the principal amount of $___________; and
 “2019 Loan Agreement,” which means the Loan Agreement, dated March 14, 2019, between the City and JPMorgan Chase Bank, N.A., together with any amendments thereof and supplements thereto, currently outstanding in the principal amount of $_____________.

See “THE WATER SYSTEM – Outstanding Indebtedness” for additional details on the 2012 Installment Purchase Agreement and the 2019 Loan Agreement.

Rate Covenants. Under the Installment Sale Agreement, the City is obligated to fix, prescribe, revise, and collect rates and charges for the Water System during each Fiscal Year that are sufficient, after making allowances for contingencies and error in the estimates, to produce Net Revenues of at least 120% of the Installment Payments and debt service on any Parity Debt.

Under the Installment Sale Agreement, the City must also fix, prescribe, revise and collect rates and charges for the Water System during each Fiscal Year which are at least sufficient, after making allowances for contingencies and error in the estimates, to produce Gross Revenues which will be sufficient to pay the following amounts: (i) all Operations and Maintenance Costs of the Water System estimated by the City to become due and payable in such Fiscal Year; (ii) the Installment Payments and debt service on any Parity Debt; (iii) all other payments required for compliance with this Agreement, the Indenture and the Parity Debt Instruments; and (iv) all payments required to meet any other obligations of the City that are charges, liens, encumbrances upon or payable from the Gross Revenues of the Water System or the Net Revenues of the Water System.

The rate covenants in the 2012 Installment Purchase Agreement and 2019 Loan Agreement require the City to maintain Net Revenues of at least 125% of the Installment Agenda Item #5.1.

3 Payments and debt service on any Parity Debt. So, the City will be required to meet that higher standard for so long as that Parity Debt is outstanding.

See “SECURITY FOR THE 2024 BONDS – Rate Covenants.”
Bond Insurance and Reserve Fund Insurance. [To come]
Risks of Investment. The 2024 Bonds are repayable from the Revenues, which are primarily secured by the Installment Payments payable by the City from the Net Revenues of the Water System. For a discussion of some of the risks associated with the purchase of the 2024 Bonds, see “BOND OWNERS’ RISKS.”
THE 2024 BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE

SOLELY FROM AND SECURED BY THE REVENUES, WHICH CONSIST PRIMARILY OF THE INSTALLMENT PAYMENTS. NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY IS PLEDGED TO THE PAYMENT OF THE INSTALLMENT PAYMENTS.

THE 2024 BONDS ARE NOT SECURED BY A LEGAL OR EQUITABLE PLEDGE OF, OR

CHARGE, OR LIEN, OR ENCUMBRANCE UPON, ANY OF THE PROPERTY OF THE

AUTHORITY OR ANY OF ITS INCOME OR RECEIPTS, EXCEPT THE REVENUES AS DESCRIBED HEREIN.

Agenda Item #5.1.

4 FINANCING PLAN
The 2024 Bonds are being issued to provide funds to (i) assist the City with financing certain improvements to the Water System (as described herein, the “Project”), and (ii) pay the costs of issuing the 2024 Bonds.

The Project
The Project is expected to consist primarily of projects identified in the Water System’s capital improvement program, including but not limited to the following:
 Water Main Replacement
 Water Tank
 Condition Assessment
 Design and Construction with Napa intertie pump station  Risk and resilience assessment
 Cybersecurity implementation
 Smart Water Meters
Preliminary design work for each of the components of the Project is either underway or complete. The Project is anticipated to be completed within three years. For additional information on the projects identified in the capital improvement program and expected to be funded by the 2024 Bonds, see “THE WATER SYSTEM – Capital Improvement Program.” As provided in the Indenture and the Installment Sale Agreement, amounts not used for the above-described projects may be expended for other improvements to the Water System approved by the City Council.

Sources and Uses of Funds
The estimated sources and uses of funds relating to the 2024 Bonds are as follows:

Sources:

Principal Amount of 2024 Bonds $
Plus/Less [Net] Original Issue Premium/Discount
Total Sources $

Uses:

Project Fund
Costs of Issuance(1)
Total Uses $

(1) Costs of Issuance include legal fees, Municipal Advisor’s fee, Underwriter’s discount, printing costs, rating agency fees, [bond insurance and reserve fund insurance premiums,] and other expenses related to the issuance of the 2024 Bonds.

Agenda Item #5.1.

5 THE 2024 BONDS
This section provides summaries of the 2024 Bonds and certain provisions of the Indenture. See APPENDIX A for a more complete summary of the Indenture. Capitalized terms used but not defined in this section have the meanings given in APPENDIX A.

Authority for Issuance
The 2024 Bonds are being issued by the Authority under a resolution adopted by the governing body of the Authority on ______, 2024, the Bond Law, and the Indenture. The City, pursuant to a resolution adopted by the City Council of the City on _____, 2024, has also approved of the issuance of the Bonds and the distribution of the Official Statement.

General Bond Terms
Bond Terms. The 2024 Bonds will be dated their date of delivery and issued in fully registered form without coupons in denominations of $5,000 or any integral multiple of $5,000, so long as no 2024 Bond has more than one maturity date. The 2024 Bonds will mature in the amounts and on the dates, and bear interest at the rates per annum, set forth on the inside cover page of this Official Statement.

Payments. Interest on the 2024 Bonds will be payable on April 1 and October 1 of each year to maturity (each an “Interest Payment Date”), commencing October 1, 2024.

Interest on the 2024 Bonds will be payable on each Interest Payment Date to the person whose name appears on the Bond Registration Books as the Owner thereof as of the Record Date immediately preceding each such Interest Payment Date, such interest to be paid by check or draft of the Trustee mailed by first class mail to the Owner or, at the option of any Owner of at least $1,000,000 aggregate principal amount of the 2024 Bonds with respect to which written instructions have been filed with the Trustee prior to the applicable Record Date, by wire transfer, at the address of such Owner as it appears on the Bond Registration Books.

If there exists a default in payment of interest due on such Interest Payment Date, such interest will be payable on a payment date established by the Trustee to the persons in whose names the 2024 Bonds are registered at the close of business on a special record date for the payment of such defaulted interest established by notice mailed by the Trustee to the registered Owners of the 2024 Bonds not less than 15 days preceding such special record date.

Principal of and premium (if any) on any 2024 Bond will be paid upon presentation and surrender thereof at the Principal Corporate Trust Office of the Trustee. Both the principal of and interest and premium (if any) on the 2024 Bonds will be payable in lawful money of the United States of America.

However, as long as Cede & Co. is the registered owner of the 2024 Bonds, as described below, payments of the principal of, premium, if any, and interest on the 2024 Bonds will be made directly to DTC, or its nominee, Cede & Co.

Calculation of Interest. The 2024 Bonds will be dated the Closing Date and bear interest based on a 360-day year comprised of twelve 30-day months from the Interest Payment Date next preceding the date of authentication thereof, unless said date of authentication is an Interest Payment Date, in which event such interest is payable from such date of authentication, and Agenda Item #5.1.

6 unless said date of authentication is prior to October 1, 2024, in which event such interest is payable from the Closing Date; provided, however, that if, as of the date of authentication of any 2024 Bond, interest thereon is in default, such 2024 Bond will bear interest from the date to which interest has previously been paid or made available for payment thereon in full.

Record Date. The Indenture defines the “Record Date” for the 2024 Bonds as the 15th calendar day of the month preceding an Interest Payment Date.

Book-Entry Only System. The 2024 Bonds will be registered in the name of Cede & Co., as nominee of the Depository Trust Company (“DTC”), New York, New York, as the initial securities depository for the 2024 Bonds. Ownership interests in the 2024 Bonds may be purchased in book-entry form only. Purchasers of the 2024 Bonds will not receive physical bonds representing their ownership interests in the 2024 Bonds purchased.

Principal and interest payments with respect to the 2024 Bonds are payable directly to DTC by the Trustee. Upon receipt of payments of principal and interest, DTC will in turn distribute such payments to the beneficial owners of the 2024 Bonds. See “APPENDIX F – DTC and the Book-Entry Only System.”
So long as the 2024 Bonds are registered in the name of Cede & Co., as nominee of DTC, references in this Official Statement to the “owners” mean Cede & Co., and not the purchasers or Beneficial Owners of the 2024 Bonds. See “APPENDIX F – DTC and the Book-Entry Only System.”
Redemption*
Optional Redemption. The 2024 Bonds maturing on or before October 1, 20__, are not subject to optional redemption prior to their respective stated maturity dates. The 2024 Bonds maturing on or after October 1, 20__, are subject to redemption in whole, or in part at the Written Request of the Authority among maturities on such basis as the Authority may designate and by lot within a maturity, at the option of the Authority, on any date on or after October 1, 20__, from any available source of funds, at a redemption price equal to the principal amount of the 2024 Bonds to be redeemed, plus accrued interest to the date of redemption, without premium Special Mandatory Redemption from Insurance and Sale Proceeds. The 2024 Bonds are subject to mandatory redemption, on any date, in whole, or in part on a pro rata basis among maturities, from the net proceeds of insurance, sale or condemnation credited towards the prepayment of the Installment Payments by the City under the Installment Sale Agreement, at a redemption price equal to the principal amount represented thereby to be prepaid, without premium, together with accrued interest represented thereby to the redemption date.

Mandatory Sinking Fund Redemption. The 2024 Bonds maturing on October 1, 20__ and October 1, 20__ (the “2024 Term Bonds”) are also be subject to redemption, by lot, on October 1 in each of the years as set forth in the following tables, from deposits made for such purpose pursuant to the Indenture, at a redemption price equal to the principal amount thereof to be redeemed together with accrued interest thereon to the redemption date, without premium, or in lieu thereof may be purchased, in the aggregate respective principal amounts and on the respective dates as set forth in the following tables; provided, however, that if some but not all of the 2024 Term Bonds have been redeemed pursuant to paragraphs described above, the total * Preliminary; subject to change.

Agenda Item #5.1.

7 amount of all future payments with respect to such 2024 Term Bonds shall be reduced by the aggregate principal amount of such 2024 Term Bonds so redeemed, to be allocated among such payments in integral multiples of $5,000 as determined by the Authority (written notice of which determination shall be given by the Authority to the Trustee). 2024 Term Bonds Maturing October 1, 20__
Sinking Fund
Redemption Date
(October 1)
Principal
Amount To Be
Redeemed

2024 TERM BONDS Maturing April 1, 20__
Sinking Fund
Redemption Date
(October 1)
Principal
Amount To Be
Redeemed

In lieu of mandatory sinking fund redemption of the 2024 Term Bonds, amounts on deposit in the Bond Fund (to the extent not required to be deposited by the Trustee in the Interest Account or the Principal Account pursuant to the Indenture during the current Bond Year) may also be used and withdrawn by the Authority, upon the Written Request of the Authority delivered to the Trustee, at any time for the purchase of such 2024 Term Bonds at public or private sale as and when and at such prices (including brokerage and other charges and including accrued interest) as the Authority may in its discretion determine. The par amount of any of such Term Bonds so purchased by the Authority in any twelve-month period ending on October 1 in any year shall be credited towards and shall reduce the par amount of such Term Bonds required to be redeemed pursuant to this provision on the next succeeding October 1.

Notice of Redemption. The Trustee shall mail notice of redemption of the 2024 Bonds by first class mail, postage prepaid, not less than 20 nor more than 60 days before any redemption date, to the respective Owners of any 2024 Bonds designated for redemption at their addresses appearing on the Bond Registration Books and to one or more Securities Depositories and to the Information Services. Each notice of redemption shall state the date of the notice, the redemption date, the place or places of redemption, whether less than all of the 2024 Bonds (or all 2024 Bonds of a single maturity) are to be redeemed, the CUSIP numbers and (in the event that not all 2024 Bonds within a maturity are called for redemption) 2024 Bond numbers of the 2024 Bonds to be redeemed and the maturity or maturities of the 2024 Bonds to be redeemed, and in the case of 2024 Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be redeemed. Each such notice shall also state that on the redemption date there will become due and payable on each of said 2024 Bonds the redemption price thereof, and that from and after such redemption date interest thereon shall cease to accrue, and shall require that such Bonds be then surrendered.

Agenda Item #5.1.

8 Each notice relating to a redemption pursuant to the optional redemption or special mandatory redemption provisions described above shall further state that such redemption may be rescinded by the Authority on or prior to the date set for redemption. Neither the failure to receive any notice nor any defect therein shall affect the sufficiency of the proceedings for such redemption or the cessation of accrual of interest from and after the redemption date. Notice of redemption of 2024 Bonds shall be given by the Trustee, at the expense of the Authority, for and on behalf of the Authority.

Notwithstanding the foregoing, while the 2024 Bonds are subject to DTC’s book-entry system, the Trustee will be required to give notice of redemption only to DTC as provided in the letter of representations executed by the City and received and accepted by DTC. DTC and the Participants will have sole responsibility for providing any such notice of redemption to the beneficial owners of the 2024 Bonds to be redeemed. Any failure of DTC to notify any Participant, or any failure of Participants to notify the Beneficial Owner of any 2024 Bonds to be redeemed, of a notice of redemption or its content or effect will not affect the validity of the notice of redemption, or alter the effect of redemption set forth in the Indenture.

Rescission of Redemption and Cancellation of Redemption Notice. The Authority shall have the right to rescind any redemption pursuant to the optional redemption or special mandatory redemption provisions described above by written notice to the Trustee on or prior to the date fixed for redemption. Any notice of redemption shall be cancelled and annulled if for any reason funds are not available on the date fixed for redemption for the payment in full of the 2024 Bonds then called for redemption, and such cancellation shall not constitute an Event of Default under the Indenture. The Trustee shall mail notice of rescission of redemption in the same manner notice of redemption was originally provided.

Selection of 2024 Bonds for Redemption. With respect to the 2024 Bonds, whenever less than all of the 2024 Bonds of a maturity are to be selected for redemption, the Trustee shall determine, by lot, the numbers of the 2024 Bonds of such maturity to be redeemed, and shall notify the City thereof.

Partial Redemption of 2024 Bonds. Whenever provision is made in the Indenture for the redemption of less than all of the 2024 Bonds of a single maturity of the same issue, the Trustee shall select the 2024 Bonds of that maturity to be redeemed by lot in any manner which the Trustee in its sole discretion deems appropriate. For purposes of such selection, the Trustee shall treat each 2024 Bond as consisting of separate $5,000 portions and each such portion shall be subject to redemption as if such portion were a separate 2024 Bond.

Registration, Transfer and Exchange
Bond Registration Books. The Trustee will keep or cause to be kept at its trust office sufficient Bond Registration Books for the registration and transfer of the Bonds, which will at all times during regular business hours, and upon reasonable notice, be open to inspection by the Authority; and, upon presentation for such purpose, the Trustee will, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said books, Bonds as provided in the Indenture.

Transfer. Any 2024 Bond may, in accordance with its terms, be transferred, upon the Bond Registration Books, by the person in whose name it is registered, in person or by a duly authorized attorney of such person, upon surrender of such 2024 Bond to the Trustee at its Agenda Item #5.1.

9 Principal Corporate Trust Office for cancellation, accompanied by delivery of a written instrument of transfer in a form acceptable to the Trustee, duly executed. The Trustee shall collect any tax or other governmental charge on the transfer of any 2024 Bonds under the Indenture. Whenever any 2024 Bond or 2024 Bonds shall be surrendered for transfer, the Authority shall execute and the Trustee shall authenticate and deliver to the transferee a new 2024 Bond or 2024 Bonds of like series, interest rate, maturity and aggregate principal amount. The Authority shall pay the cost of printing 2024 Bonds and any services rendered or expenses incurred by the Trustee in connection with any transfer of 2024 Bonds.

Exchange. The 2024 Bonds may be exchanged at the Principal Corporate Trust Office of the Trustee for a like aggregate principal amount of 2024 Bonds of other authorized denominations and of the same series, interest rate and maturity. The Trustee shall collect any tax or other governmental charge on the exchange of any 2024 Bonds. The Authority shall pay the cost of printing 2024 Bonds and any services rendered or expenses incurred by the Trustee in connection with any exchange of 2024 Bonds.

Limitations. The Trustee may refuse to transfer or exchange, under the provisions of the Indenture, any 2024 Bonds selected by the Trustee for redemption under the Indenture, or any 2024 Bonds during the period established by the Trustee for the selection of 2024 Bonds for redemption.

Agenda Item #5.1.

10 DEBT SERVICE SCHEDULE
Debt Service on 2024 Bonds. Annual debt service on the 2024 Bonds is presented below, assuming no early redemptions of the 2024 Bonds.

Period Ending
October 1 Principal Interest
Annual
Debt Service
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2050
2051
2052
2053
2054
Total:
_____________
Source: Underwriter.

Agenda Item #5.1.

1 Debt Service on Parity Debt. Annual debt service on the 2024 Bonds and other outstanding Parity Debt is presented below, assuming no early redemptions.

Period Ending
October 1
2012 Install. Pur
Agreement
2019 Loan
Agreement
2024 Bonds
Debt Service
Total Parity
Debt Service
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2050
2051
2052
2053
2054
Total:
________________________________________________
Source: City of St. Helena; Underwriter for 2024 Bonds.

Agenda Item #5.1.

2 SECURITY FOR THE 2024 BONDS
This section provides summaries of the security for the 2024 Bonds, and certain provisions of the Indenture and the Installment Sale Agreement. Unless the context otherwise requires, “Bonds” refers to the 2024 Bonds and any future Parity Debt outstanding under the Indenture.

See APPENDIX A for a more complete summary of the Indenture. Capitalized terms used but not defined in this section have the meanings given in APPENDIX A.

General; Limited Obligation
The 2024 Bonds are special limited obligations of the Authority and will be payable from and secured by a charge and lien on the Revenues, consisting primarily of the Installment Payments to be made by the City under the Installment Sale Agreement, and all amounts held in any fund or account established and held by the Trustee under the Indenture (other than the Project Fund and the Cost of Issuance Fund). Neither the faith and credit nor the taxing power of the Authority, the City, the State of California or any political subdivision thereof is pledged to the payment of the Installment Payments or the principal or redemption price of or interest on the 2024 Bonds. Neither the payment of the principal of or interest on the 2024 Bonds nor the obligation of the City to make Installment Payments under the Installment Sale Agreement constitutes a debt of the City, the Authority, the State of California or any political subdivision thereof in contravention of the Constitution or the laws of the State of California.

Installment Payments; Pledge of Net Revenues
All of the Net Revenues are irrevocably pledged, charged and assigned to the punctual payment of the Installment Payments. Such pledge, charge and assignment constitutes a lien on the Net Revenues and such other moneys for the payment of the Installment Payments in accordance with the terms of the Installment Sale Agreement, which lien is on a parity with the pledge and lien which secures any future Parity Debt. For a description of existing and potential future Parity Debt see “– Parity Debt” below. As used in the Installment Sale Agreement and in the Indenture, the following terms have the following respective meanings:

Net Revenues. The Indenture defines “Net Revenues” as any Fiscal Year or other period of computation, Gross Revenues for such period, less the Operations and Maintenance Costs attributable to such period.

Gross Revenues. The Indenture defines “Gross Revenues” as, for each Fiscal Year, all gross income and revenue received or receivable by the City from the ownership or operation of the Water System, determined in accordance with generally accepted accounting principles, including all rates, fees, and charges (including connection fees and charges) as received by the City for the services of the Water System, and all other income and revenue howsoever derived by the City from the ownership or operation of the Water System or arising from the Water System, including all income from the deposit or investment of any money in the Water Fund or any rate stabilization fund of the City or held on the City’s behalf, and any refundable deposits made to establish credit, and advances or contributions in aid of construction.

Operations and Maintenance Costs. The Indenture defines “Operations and Maintenance Costs” as the reasonable and necessary costs paid or incurred by the City for maintaining and operating the Water System, determined in accordance with generally accepted accounting principles, including all reasonable expenses of management and repair and all other expenses necessary to maintain and preserve the Water System in good repair and working Agenda Item #5.1.

3 order, and including all reasonable and necessary administrative costs of the City that are charged directly or apportioned to the operation of the Water System, such as salaries and wages of employees, overhead, taxes (if any), the cost of permits, licenses, and charges to operate the Water System and insurance premiums; but excluding, in all cases depreciation, replacement, and obsolescence charges or reserves therefor, amortization of intangibles and other non-cash charges (for example, OPEB and pension accruals).

Water System. The Indenture defines “Water System” as the entire system of the City for the treatment, production, storage and distribution of water within the service area of the City, including but not limited to all facilities, properties, lands, rights, entitlements and other property useful in connection therewith, together with all extensions thereof and improvements thereto at any time acquired, constructed or installed by the City and determined to be part of the Water System by the City.

Receipt and Use of Gross Revenues under Installment Sale Agreement Flow of Funds. The City has previously established the Water Fund, which the City will continue to hold and maintain for the purposes and uses set forth in the Installment Sale Agreement. The City shall deposit all of the Gross Revenues in the Water Fund immediately upon receipt. The City shall apply amounts in the Water Fund as set forth in the Installment Sale Agreement and any resolution, trust indenture or installment sale agreement adopted, entered into or executed and delivered by the City under which Parity Debt may be issued (collectively, “Parity Debt Instruments”). Amounts on deposit in the Water Fund shall be applied by the City to pay when due the following amounts in the following order of priority:
(i) all Operations and Maintenance Costs (including amounts reasonably required to be set aside in contingency reserves for Operations and Maintenance Costs) as such Operations and Maintenance Costs become due and payable; (ii) to the Trustee (or other recipient set forth in a Parity Debt Instrument) the amount needed to pay the Installment Payments and principal of, and interest on, any Parity Debt;
(iii) to the Trustee (or other recipient set forth in a Parity Debt Instrument) the amount of any deficiency in any reserve fund established for any Bonds or Parity Debt, the notice of which deficiency has been given to the City in accordance with the Indenture and the related Parity Debt Instruments, on a pro rata basis; and (iv) as long as all of the foregoing payments, allocations and transfers are made at the times and in the manner set forth above, any moneys remaining in the Water Fund may at any time be treated as surplus and applied for any lawful purpose.

No Preference or Priority. Payment of the Installment Payments and the principal of and interest on any Parity Debt shall be made without preference or priority among the Installment Payments and such Parity Debt. If the amount of Net Revenues on deposit in the Water Fund is at any time insufficient to enable the City to pay when due the Installment Payments and the principal of and interest on any Parity Debt, such payments shall be made on a pro rata basis.

Agenda Item #5.1.

4 Receipt and Use of Revenues under Indenture
Assignment to Trustee. Under the Indenture, the Authority irrevocably transfers, assigns and sets over to the Trustee, without recourse to the Authority, all of its rights in the Installment Sale Agreement (excepting only the Authority’s rights relating to indemnification and related matters), including but not limited to all of the Authority’s rights to receive and collect all of the Installment Payments. The Trustee is entitled to collect and receive all of the Installment Payments, and any Installment Payments collected or received by the Authority shall be deemed to be held, and to have been collected or received, by the Authority as the agent of the Trustee and shall forthwith be paid by the Authority to the Trustee. The Trustee is also entitled to and shall, subject to the provisions of the Indenture, take all steps, actions and proceedings which the Trustee determines to be reasonably necessary in its judgment to enforce, either jointly with the Authority or separately, all of the rights of the Authority and all of the obligations of the City under the Installment Sale Agreement.

Deposit and Use of Revenues in Bond Fund. All Revenues (consisting, primarily, of the Installment Payments) shall be promptly deposited by the Trustee upon receipt in a special fund designated as the “Bond Fund” which the Trustee shall establish, maintain and hold in trust; except that all moneys received by the Trustee and required under the Indenture or under the Installment Sale Agreement to be deposited in the Redemption Fund shall be promptly deposited in such fund. All Revenues deposited with the Trustee shall be held, disbursed, allocated and applied by the Trustee only as provided in the Indenture. Any surplus remaining in the Bond Fund, after payment in full of (i) the principal of and interest on the Bonds or provision therefore under the Indenture, and (ii) any applicable fees and expenses of the Trustee, shall be withdrawn by the Trustee and remitted to the City.

On or before each Interest Payment Date, the Trustee shall transfer from the Bond Fund and deposit into the following respective accounts (each of which the Trustee shall establish and maintain within the Bond Fund), the following amounts in the following order of priority:

Interest Account. The Trustee shall deposit in the Interest Account an amount required to cause the aggregate amount on deposit in the Interest Account to be at least equal to the amount of interest becoming due and payable on such Interest Payment Date on all Bonds then Outstanding. All amounts in the Interest Account shall be used and withdrawn by the Trustee solely for the purpose of paying interest on the Bonds as it comes due and payable (including accrued interest on any Bonds purchased or redeemed prior to maturity).

Principal Account. The Trustee shall deposit in the Principal Account an amount required to cause the aggregate amount on deposit in the Principal Account to equal the principal amount of the Bonds coming due and payable on each April 1, including the aggregate principal amount of the Term Bonds (if any) which are subject to mandatory sinking fund redemption on such April 1 pursuant to the Indenture. All amounts in the Principal Account shall be used and withdrawn by the Trustee solely to pay the principal amount of the Bonds on their respective maturity dates, including the aggregate principal amount of the Term Bonds (if any) which are subject to mandatory sinking fund redemption on such April 1 pursuant to the Indenture.

Deposit and Use of Revenues in Redemption Fund. The Trustee shall establish and maintain the Redemption Fund, into which the Trustee shall deposit a portion of the Revenues received representing optional prepayments of the Installment Payments, in accordance with a Agenda Item #5.1.

5 Written Request of the Authority. Amounts on deposit in the Redemption Fund shall be used and withdrawn by the Trustee solely for the purpose of paying the principal and premium (if any) of the Bonds to be redeemed under the optional redemption or special mandatory redemption provisions of the Indenture; provided, however, that at any time prior to the selection of Bonds for redemption, the Trustee may apply such amounts to the purchase of Bonds at public or private sale, when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Interest Account) as shall be directed under a Written Request of the Authority, except that the purchase price (exclusive of accrued interest) may not exceed the redemption price then applicable to the Bonds.

Reserve Fund
[On the closing date for the 2024 Bonds, the City will deposit the reserve fund insurance policy with the Trustee. The reserve fund insurance policy will be issued in the amount of the Reserve Requirement, and be available to be drawn on in the event of deficiency in the payment of debt service on the 2024 Bonds.]
Rate Stabilization Fund
The City has previously established a rate stabilization fund for the Water System (the “Rate Stabilization Fund”). From time to time the City may deposit amounts in the Rate Stabilization Fund, from any source of legally available funds, including but not limited to Net Revenues that are released from the pledge and lien, which secures the Installment Payments and any Parity Debt, as the City may determine.

The City may, but is not required to, withdraw from any amounts on deposit in a Rate Stabilization Fund and deposit such amounts in the Water Fund within 210 days following the end of any Fiscal Year for the purpose of paying Debt Service coming due and payable in such Fiscal Year. Amounts so transferred from a Rate Stabilization Fund to the Water Fund will constitute Gross Revenues for the applicable Fiscal Year (except to the extent of amounts transferred into the Rate Stabilization Fund from Gross Revenues received by the City in such Fiscal Year), and will be applied for the purposes of the Water Fund. Amounts on deposit in a Rate Stabilization Fund will not be pledged to or otherwise secure the Installment Payments or any Parity Debt. All interest or other earnings on deposits in a Rate Stabilization Fund will be withdrawn therefrom at least annually and accounted for as Gross Revenues in the Water Fund. The City has the right at any time to withdraw any or all amounts on deposit in a Rate Stabilization Fund and apply such amounts for any lawful purposes of the City.

The City does not currently have any amounts set aside in a rate stabilization fund, but does maintain other reserves related to the Water System. See “THE WATER SYSTEM – Funds and Reserves.”
Rate Covenants
Sum Sufficient Based on Gross Revenues. Under the Installment Sale Agreement, the City will fix, prescribe, revise and collect charges for the Water System during each Fiscal Year that are at least sufficient, after making allowances for contingencies and error in the estimates, to produce Gross Revenues which will be sufficient to pay the following amounts:
(a) all Operations and Maintenance Costs of the Water System estimated by the City to become due and payable in such Fiscal Year; Agenda Item #5.1.

6 (b) the Installment Payments and Debt Service on any Parity Debt; (c) all other payments required for compliance with the Installment Sale Agreement, the Indenture and the Parity Debt Instruments; and (d) all payments required to meet any other obligations of the City that are charges, liens, encumbrances upon or payable from the Gross Revenues of the Water System or the Net Revenues of the Water System.

Debt Service Coverage Based on Net Revenues (120%). In addition, under the Installment Sale Agreement, the City will fix, prescribe, revise and collect Charges for the Water System during each Fiscal Year which are sufficient to yield Net Revenues at least equal to 120% of the Installment Payments and debt service on Parity Debt in such Fiscal Year. For purposes of this paragraph, the amount of Net Revenues for a Fiscal Year will be computed on the basis that any transfers into the Water Fund in such Fiscal Year from the Rate Stabilization Fund are included in the calculation of Net Revenues (except to the extent of amounts transferred into the Rate Stabilization Fund from Gross Revenues received by the City in such Fiscal Year), as provided in the Installment Sale Agreement.

Parity Debt Rate Covenants. The rate covenants in the 2012 Installment Purchase Agreement and 2019 Loan Agreement require the City to maintain Net Revenues of at least 125% of the Installment Payments and debt service on any Parity Debt. So, the City will be required to meet that higher standard for so long as that Parity Debt is outstanding.

Parity Debt
The City currently has two outstanding long-term debts payable from the Net Revenues on a parity basis with the Installment Payments: (i) the 2012 Installment Purchase Agreement, and (ii) the 2019 Loan Agreement.

In addition to the Installment Payments, the 2012 Installment Purchase Agreement, and the 2019 Loan Agreement, the City may issue or incur other loans, advances or indebtedness payable from the Net Revenues on a parity basis in the future, subject to the following specific conditions that are made conditions precedent to the issuance and delivery of such Parity Debt:
(a) The City will be in compliance with all covenants set forth in the Installment Sale Agreement and in the Indenture.
(b) The Net Revenues of the Water System, calculated on generally accepted accounting principles, as shown by the books of the City for the latest Fiscal Year or any more recent 12-month period selected by the City ending not more than 60 days prior to the adoption of the Parity Debt Instrument pursuant to which such Parity Debt are issued, as shown by the books of the City, plus, at the option of the City, any or all of the items hereinafter in this paragraph designated (i) and (ii), must at least equal 120% of Maximum Annual Debt Service, with Maximum Annual Debt Service calculated on all bonds and other obligations to be outstanding immediately subsequent to the issuance of such Parity Debt which have a lien on Net Revenues of the Water System. The items any or all of which may be added to such Net Revenues for the purpose of issuing or incurring Parity Debt under the Indenture are the following:

Agenda Item #5.1.

7 (i) An allowance for Net Revenues from any additions to or improvements or extensions of the Water System to be made with the proceeds of such Parity Debt, and also for Net Revenues from any such additions, improvements or extensions which have been made from moneys from any source but in any case which, during all or any part of such Fiscal Year or such 12-month period, were not in service, all in an amount equal to 90% of the estimated additional average annual Net Revenues to be derived from such additions, improvements and extensions for the first 36-month period in which each addition, improvement or extension is respectively to be in operation, all as shown in the written report of an Independent Consultant engaged by the City; and (ii) An allowance for revenues projected to arise from any increase in the Charges which has been approved by the City Council prior to the incurring of such additional indebtedness but which, during all or any part of such Fiscal Year or such 12-month period, was not in effect, in an amount equal to the amount by which the Net Revenues would have been increased if such increase in Charges had been in effect during the whole of such Fiscal Year or such 12-month period, all as shown in the written report of an Independent Consultant engaged by the City. For the avoidance of doubt, a Charge shall be considered to have been approved by the City Council and may be considered in the calculation of the allowance described in the previous sentence if the Charge is part of a multi-year rate increase that has been approved by the City Council, even if the specific Charge will not take effect until a subsequent Fiscal Year. (c) The Parity Debt Instrument providing for the issuance of such Parity Debt under the Installment Sale Agreement shall:
(i) Provide that the proceeds of such Parity Debt will be applied to the acquisition, construction, improvement, financing or refinancing of additional facilities, improvements or extensions of existing facilities within the Water System, or otherwise for facilities, improvements or property which the City determines are of benefit to the Water System, or for the purpose of refunding any Parity Debt in whole or in part, including all costs (including costs of issuing such Parity Debt and including capitalized interest on such Parity Debt during any period which the City deems necessary or advisable) relating thereto;
(ii) Specify the date on which interest on such Parity Debt will be payable; and
(iii) Specify the date on which principal on such Parity Debt will be payable.
(d) Notwithstanding the foregoing, Parity Debt proposed to be issued for the purpose of refunding any Parity Debt may be issued without compliance with subsection (b) and (c)(i), so long as such refunding results in lower Debt Service in each Fiscal Year after such refunding and the final maturity (or termination) date of the refunding Parity Debt is no later than the final maturity (or termination) date of the refunded Parity Debt.

Agenda Item #5.1.

8 As used above, “Maximum Annual Debt Service” means, as of the date of calculation, the maximum amount of Debt Service for the current or any future Fiscal Year. The calculation of “Debt Service” is set forth in APPENDIX A.

No Senior Debt
The City covenants in the Installment Sale Agreement to not issue or incur any additional bonds or other obligations during the term thereof having any priority in payment of principal or interest out of the Net Revenues over the Installment Payments. However, this covenant does not limit or affect the ability of the City to issue, enter into or incur additional Parity Debt as described above, or obligations which are either unsecured or which are secured on a basis which is junior and subordinate to the pledge of and lien upon the Net Revenues established under the Installment Sale Agreement.

Casualty Insurance and Eminent Domain Proceeds
Covenant to Maintain Insurance. The City covenants that it will at all times maintain such insurance on the Water System as is customarily maintained with respect to works and properties of like character against accident to, loss of or damage to such works or properties.

Insurance Proceeds. All amounts collected from insurance against accident to or destruction of any portion of the Water System shall be used to repair or rebuild such damaged or destroyed portion of the Water System, and to the extent not so applied, shall be applied to redeem Bonds or any Parity Debt in accordance with the Indenture and applicable Parity Debt Instruments.

Eminent Domain Proceeds. If all or any part of the Water System is taken by eminent domain proceedings, the Net Proceeds realized by the City therefrom will be deposited by the City in a special fund in trust and applied by the City to the cost of acquiring or constructing or financing Improvements to the Water System, or to redeem Bonds or any Parity Debt in accordance with the Indenture and applicable Parity Debt Instruments.

Agenda Item #5.1.

9 THE AUTHORITY AND THE CITY
The Authority
The Authority was created by the City and the California Statewide Communities Development Authority pursuant to a Joint Exercise of Powers Agreement, dated as of December 14, 2021, for the purpose, among others, of having the Authority issue its bonds to finance the acquisition, construction and improvement of certain public capital improvements in the City. The members of the City Council serve as the governing board of the Authority, and certain City staff serve as the officers of the Authority. The Joint Exercise of Powers Agreement was entered into under Article 1 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California. The Authority is a separate entity constituting a public instrumentality of the State of California.

The City
The City is located in the County of Napa (the “County”) in the State of California (the “State”). The City is in the center of the world famous wine growing Napa Valley, 65 miles north of San Francisco. The area was settled in 1834, first incorporated as a City on March 24, 1876 and reincorporated on May 14, 1889. The City serves a population of approximately 5,355 residents.

The City is a full-service city, providing water, sewer, police and fire services to a community that encompasses an area of 4 square miles. The City is a general law city and operates under the Council-City Manager form of government. The City Council is the governing body of the City, and has the power to make and enforce all laws and set all policy related to municipal affairs. For background, demographic and economic information regarding the City and the County, see APPENDIX D.

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

The comprehensive annual financial reports of CalPERS are available on its Internet website at www.calpers.ca.gov. The CalPERS website also contains CalPERS’ most recent actuarial valuation reports and other information concerning benefits and other matters. Such information is not incorporated by reference in this Official Statement. None of the Authority, City or Underwriter can guarantee the accuracy of such information. Actuarial assessments are “forward-looking” statements that reflect the judgment of the fiduciaries of the pension plans, and are based upon a variety of assumptions, one or more of which may not materialize or may be changed in the future. Actuarial assessments will change with the future experience of the pension plans.

Plan Descriptions. All qualified permanent and probationary employees are eligible to participate in the Public Agency Cost-Sharing Multiple-Employer Defined Benefit Pension Plan (the “Plan”) administered by CalPERS. The Plan consists of individual rate plans (benefit tiers) within a safety risk pool (police and fire) and a miscellaneous risk pool. Plan assets may be used Agenda Item #5.1.

10 to pay benefits for any employer rate plan of the safety and miscellaneous pools. Accordingly, rate plans within the safety or miscellaneous pools are not separate plans under GASB Statement No. 68. Individual employers may sponsor more than one rate plan in the miscellaneous or safety risk pools. The City sponsors eight rate plans (three miscellaneous and five safety). Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the Plan regarding benefit provisions, assumptions, and membership information that can be found on the CalPERS website.

Benefits Provided. The Plan is a cost-sharing multiple-employer defined benefit pension plan administered by CalPERS. A full description of the Plan benefit provisions, assumptions for funding purposes but not accounting purposes, and membership information is listed in the June 30, 2021 Annual Actuarial Valuation Report. Details of the benefits provided can be obtained in Appendix B of the June 30, 2021 actuarial valuation report. This report is a publicly available valuation report that can be obtained at CalPERS’ website under Forms and Publications.

The Plan provisions and benefits in effect at June 30, 2023, are summarized as follows:

Miscellaneous
Prior to
December 18, 2012
On or after
December 18, 2012
On or after
January 1, 2013
Benefit Formula 2.0% @ 55 2.0% @ 60 2.0% @ 62
Benefit Vesting Schedule 5 years service 5 years service 5 years service Benefit Payments Monthly for life Monthly for life Monthly for life Retirement Age 55 60 62
Monthly Benefits, As a % of Eligible Comp. (1) (1) (1)
Required Employee Contribution Rates 7.00% 7.00% 6.75%
Required Employer Contributions Rates 10.221% + $646,074 8.081% + $3,758 6.985% + $11,627 Safety Police Plan
Prior to
June 16, 2012
On or after
December 18, 2012
On or after
January 1, 2013
Benefit Formula 3.0% @ 50 3.0% @ 55 2.7% @ 57
Benefit Vesting Schedule 5 years service 5 years service 5 years service Benefit Payments Monthly for life Monthly for life Monthly for life Retirement Age 50 55 57
Monthly Benefits, As a % of Eligible Comp. (1) (1) (1)
Required Employee Contribution Rates 9.00% 9.00% 12.0%
Required Employer Contributions Rates 21.927% + $272,257 20,073% + $2,243 13.034% + $1,402 Safety Fire Plan
Prior to
January 1, 2013
On or after
January 1, 2013
Benefit Formula ½ Pay @ 55 2.0% @ 57
Benefit Vesting Schedule 5 years service 5 years service Benefit Payments Monthly for life Monthly for life
Retirement Age 55 57
Monthly Benefits, As a % of Eligible Comp. (1) (1)
Required Employee Contribution Rates 10.1% 10.0%
Required Employer Contributions Rates 10.363% + $1,208 10.216% + $1,634

(1) Depending on years of service
Source: St. Helena Annual Comprehensive Financial Report for the Fiscal Year ended June 30, 2023.

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

Funding contributions for the Plan are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the fiscal year, with an additional amount to finance Agenda Item #5.1.

11 any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.

Beginning in fiscal year 2016, CalPERS collects employer contributions for the Plan as a percentage of payroll for the normal cost portion as noted in the rates above and as a dollar amount for contributions toward the unfunded accrued liability. The dollar amounts are billed on a monthly basis. The City’s required contribution for the unfunded accrued liability was $1,709,579 in fiscal year 2023. The City’s contributions to the Plan for the fiscal year ended June 30, 2023, were $1,709,579.

Net Pension Liability. As of June 30, 2023, the City reported a liability of $13,986,941 for its proportionate share of the net pension liability. The City’s net pension liability for the Plan is measured as of June 30, 2022, and the total pension liability for the Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2021, rolled forward to June 30, 2022, using standard update procedures.

For the fiscal year ended June 30, 2023, the City recognized pension expense of $331,140.

See Note 2 Section G to the City’s audited financial statements for the fiscal year ending June 30, 2023, attached hereto as Appendix B.

Agenda Item #5.1.

12 THE WATER SYSTEM
Overview
The City utility department provides water and wastewater service to a population of roughly 5,355 residents through about 2,600 metered water connections and approximately 1,700 sewer connections. All of the City’s wastewater customers are located within city limits.; however, the Water System extends beyond City limits into areas that include Meadowood Napa Valley Resort, as well as the area between Chaix Lane and Zinfandel Lane along Main Street. The Water System consists of roughly 47 miles of active water distribution pipelines up to 24 inches in diameter, three main supply sources (Louis Stralla Water Treatment Plant, Stonebridge wells, and an interconnection with the City of Napa, as described below), five pressure zones, and six booster pump stations.

Most water distributed by the Water System is treated to drinking water standards by the City at the Louis Stralla Water Treatment Plant (“LSWTP”), located adjacent to the Bell Canyon Reservoir. The LSWTP is a conventional water treatment facility with coagulation, sedimentation and filtration that treats water sourced from the reservoir. The City’s two groundwater wells provide water to a smaller treatment facility for iron and manganese removal. The Water System also has a 10-inch supply connection with the City of Napa, which provides an outside source of water as needed from time to time. The water transmission pipelines from the LSWTP to the City range in size from 10-inch to 24-inch.

In addition to its treatment facilities, the Water System has six storage tanks, which hold approximately 5 million gallons of water: three tanks at Meadowood (which are filled by the Madrone Knoll booster pump station), the Holmes tank (filled by a booster pump) and Tank 2 (the West Side tank). One tank (Tank 1) at the LSWTP is filled by a booster pump at the plant. The Water System also includes the Dean York Pressure Zone pump station serving a remote group of customers, and the Rutherford pump station for the Napa line.

Sources of Water Supply
The City has three separate sources of supply and considers its water supply to be adequate for its needs. The Water System’s primary water source is surface water from the Bell Canyon Reservoir owned by the City. Bell Canyon Reservoir has a 2,400 acre foot capacity and, in an average year, 1,600 acre-feet of Bell Canyon water is treated and distributed.

The Water System’s secondary water source consists of two groundwater wells that can deliver an amount of water in excess of the maximum of the 365 acre feet of water per year that is permitted under the City’s General Plan.

The Water System’s third water source is water delivered through an interconnection with the City of Napa. This water is purchased from the City of Napa through a long-term Water Supply Agreement, originally executed in 2006 and amended several times to date (the “Napa Agreement”). The Napa Agreement currently provides the City a minimum delivery of 600 acrefeet annually and a maximum delivery of 800 acre-feet annually. The Napa Agreement has a “take-or-pay” component, which means that the City must pay for a minimum of 600 acre-feet of water annually, even if not put to beneficial use by the City. In prior years, due to various conditions, the City did not always use the required minimum allocation of water, resulting in “unused water” available for the City to obtain in subsequent fiscal years.

Agenda Item #5.1.

13 The City of Napa obtains the water supplied to the City under the Napa Agreement from the State Water Project. In past years, contractors in the State Water Project, including the City of Napa, have not received 100% of their allocation of water from the State Water Project due to drought conditions. There can be no assurance drought conditions will not return in the future, having an adverse impact on the City and its Water System. See “BOND OWNERS’ RISKS.” Use of the surface water from Bell Canyon Reservoir is by far the least expensive to supply (averaging approximately $0.46/hundred cubic feet (HCF) in Fiscal Year 2023-24), while the groundwater wells ($6.00/HCF in Fiscal Year 2023-24) and City of Napa water ($6.86/HCF in Fiscal Year 2023-24) are considerably higher. The three supply costs are factored into the City’s new rate structure for the Water System, as described herein.

Service Area and Customers
The Water System has a current firm capacity of approximately 2.2 million gallons of water per day (“mgd”), currently delivers an annual average of approximately 1.75 mgd and serves an area of approximately 5.2 square miles within the City limits and an estimated 4 square miles outside. Additional details regarding the customers of the Water System are set forth below.

Billing and Collections
The City bills for water and wastewater on the same bi-monthly bill. The City has not experienced any significant uncollected delinquencies exceeding approximately 5% of its annual service charge revenues. Procedures for collection of delinquencies generally include discontinuing service, placing a lien on the property and employing a collection agency. Under current law, the City may not place a lien on a property owner for a tenant’s delinquency. Tenants represent approximately 13.5% of all accounts. The City currently requires a $60 deposit from all tenants.

Permits and Regulatory Compliance
The City operates the Water System under a permit from the California Department of Health Services as Water System No. 2810004. Permit No. 2810004 has no stated expiration date. The City believes that it is in compliance with all permits and licenses in all material respects The applicable drinking water standards for the Water System are provided in the California Domestic Water Quality and Monitoring Regulations, Title 22 of the California Administrative Code. These regulations incorporate the requirements of the U.S. Environmental Protection Agency in conformance with the Safe Drinking Water Act (PL 93- 523). The standards specify water quality sampling frequencies and location as well as maximum concentrations of chemical constituents and are continuously revised and amended.

The State regulations contain requirements for both primary and secondary drinking water standards. The primary standards relate to those contaminants that, if exceeding the maximum contaminant levels (“MCL”), would present a health risk if used for drinking or culinary purposes.

The secondary standards relate to contaminants that, if in excess of MCL, may be objectionable, but generally do not present a health risk.

The water quality of the Water System meets all existing standards, and the Water System is in compliance with all current Federal and State requirements.

Agenda Item #5.1.

14 Water Supplies
The Water System obtains water from the Bell Canyon Reservoir, two groundwater wells and an interconnection with the City of Napa. Treated water is then delivered to customers. The following table shows sources of the City’s water production, and the sources of such production, for the past five fiscal years.

Table 1
Water Production
Fiscal Years 2018-19 through 2022-23 (Acre Feet)
Fiscal
Year
Surface Water
(Bell Canyon Reservoir)
Groundwater
Wells
City of Napa
Interconnection Total
2022-23 401 283 562 1,246
2021-22 379 466 393 1,238
2020-21 601 576 487 1,664
2019-20 702 363 625 1,690
2018-19 836 240 612 1,688

Source: City of St. Helena.

Customer Accounts
The number of active water accounts for the past 5 fiscal years, by customer class, is set forth in the following table.

Table 2
Historical Revenues and Number of Accounts by Customer Class Fiscal Years 2018-19 through 2022-23
Fiscal
Year Residential Industrial Hotel/Spa Commercial Other Total 2022-23 $3,714,378 $708,455 $154,613 $988,790 $150,225 $5,716,461 2,190 20 8 251 140 2,609

2021-22 $3,587,736 $805,605 $154,370 $988,457 $160,498 $5,696,666 2,168 20 8 256 110 2,562

2020-21 $4,397,909 $907,116 $114,077 $940,607 $182,404 $6,542,113 2,164 20 7 256 113 2,560

2019-20 $3,810,576 $750,786 $179,050 $882,929 $292,809 $5,916,150 2,190 19 9 256 138 2,612

2018-19 $3,733,920 $768,495 $211,957 $992,817 $142,439 $5,849,628 2,202 21 9 261 132 2,625

Source: City of St. Helena.

Agenda Item #5.1.

15 Top Ten Customers
The following table shows the top ten water users in the City based on revenue received during Fiscal Year 2022-23.

Table 3
Top Ten Customers by Total Revenue
Fiscal Year 2022-23
No. Account Name Type of Use
Total Usage
(in gallons) Revenues
% of
Revenues(1)
1 Sutter Home Industrial 25,508,573 $308,258 6.3%
2 Vineyard Valley Multi-Family 13,098,391 177,194 3.6%
3 C. Mondavi & Sons Industrial 11,068,177 141,977 2.9%
4 Meadowood Associates Commercial 8,147,782 102,828 2.1% 5 City of St. Helena Commercial 7,470,795 70,547 1.5%
6 Hall Winery Commercial 5,843,034 66,322 1.4%
7 Harvest Inn Commercial 5,382,982 46,796 1.0%
8 Woodbridge Village Apts Multi-Family 4,422,483 44,598 0.9% 9 Culinary Institute of America Commercial 2,980,239 40,412 0.8% 10 Louis M Martini Commercial 2,872,520 39,678 0.8%
$1,038,610 21.3%

(1) Based on estimated Water System charges of $4,861,913.

Source: City of St. Helena.

Water Rates and Charges
General. Customers of the Water System are billed bi-monthly for two primary charges:
(1) Water Service Charges and (2) Water Volume Rates per HCF of water delivered. The Water Service Charge is a fixed bi-monthly charge that varies based on meter size. Additionally, customers with private fire lines are subject to a fixed bi-monthly Fire Line Service Charge. All customer classes are charged a fixed charge based on meter size that is billed bi-monthly. All customer classes are also charged a Water Volume Rate (volumetric charge) per HCF that is based on a peak or off peak and drought or non-drought basis.

Overview of Recent Rate Study. Public water and wastewater utilities in California typically perform a cost of service analysis every five to ten years to ensure that customers are appropriately charged for service commensurate with the cost to provide service. The City engaged Raftelis to conduct an updated water and wastewater cost of service study to establish an additional five-year schedule of water and wastewater rates. Proposed rates cannot be implemented until formally adopted by City Council after a public hearing, and absent a majority protest by parcels served by the City’s water and wastewater system. Proposition 218 requires that City customers be postmarked a notice of the proposed rates and their rights to protest no fewer than 45 days before the public hearing. See “RISK FACTORS – Proposition 218” for additional information on Proposition 218.

The major objectives of the study undertaken by Raftelis for the Water were to:
 Develop a ten-year financial plan that sufficiently funds the City’s water and wastewater operations and maintenance (O&M) expenses, debt service Agenda Item #5.1.

16 payments, and capital expenditures, while adequately funding reserves and achieving debt coverage requirements.
 Conduct cost of service analyses that establish a nexus between the cost to serve water and wastewater customers and the rates charged, per Proposition 218 and industry standards.
 Review the City’s existing water and wastewater rate structures and recommend changes and rate alternatives to ensure that proposed rates achieve the financial and policy objectives of the agency to the greatest degree possible.  Develop a five-year schedule of water and wastewater rates that are fair, costjustified, provide full revenue recovery, and align with Proposition 218.  Develop a five-year schedule of drought surcharge rates that consider the City’s Water Emergency Plan.

Current and Projected Water Rates. The City’s previous water rate structure consisted of fixed Water Service Charges (based on meter size), fixed Fireline Service Charges (based on fireline size), and variable Water Volume Rates (per hundred cubic feet (hcf) of water delivered).

Raftelis worked closely with the City to evaluate alternatives to the existing water rate structure.

Based on the Raftelis study, a new rate structure was adopted by the City Council, which included “Base Condition Rates” as well as “Water Shortage Surcharges,” which are designed to recover net revenue shortfalls during periods of reduced water sales by the Water System as a result of mandatory water conservation measures. The new rates, which were adopted in June 2023 and initially became effective September 1, 2023, follow.

Table 4A
Adopted Five-Year Water Rate Schedule – Base Condition Rates Effective Effective Effective Effective Effective
Bi-Monthly Charges (Previous Rates) 9/1/2023 7/1/2024 7/1/2025 7/1/2026 7/1/2027

Meter Size
5/8" $139.78 $135.50 $146.34 $158.05 $170.70 $184.36
3/4" $139.78 $135.50 $146.34 $158.05 $170.70 $184.36
SFR 1" $139.78 $135.50 $146.34 $158.05 $170.70 $184.36
1" $256.44 $288.70 $311.80 $336.75 $363.69 $392.79
1 1/2" $451.28 $544.05 $587.58 $634.59 $685.36 $740.19
2" $648.00 $850.46 $918.50 $991.98 $1,071.34 $1,157.05
3" $1,309.44 $1,820.76 $1,966.43 $2,123.75 $2,293.65 $2,477.15 4" $2,023.96 $3,250.68 $3,510.74 $3,791.60 $4,094.93 $4,422.53 6" $3,963.26 $7,182.95 $7,757.59 $8,378.20 $9,048.46 $9,772.34 Fireline Size
4" $26.66 $116.78 $126.13 $136.23 $147.13 $158.91
6" $77.46 $285.71 $308.57 $333.26 $359.93 $388.73
8" $165.06 $586.82 $633.77 $684.48 $739.24 $798.38
Volumetric Charges
All Classes
Tier 1; 1-11 HCF* $6.50 $5.99 $6.47 $6.99 $7.55 $8.16
Tier 2; 12-15 HCF* $7.23 $12.06 $13.03 $14.08 $15.21 $16.43 Tier 3; >16 HCF* $12.91 $13.95 $15.07 $16.28 $17.59

* HCF: Hundred Cubic Feet = 748.05 Gallons. The allotment in each tier is per connection or residential dwelling unit where master-metered.

Source: City of St. Helena.

Agenda Item #5.1.

17 Table 4B
Adopted Five-Year Schedule of Water Shortage Surcharges Drought Rates Phase I Phase II Phase III
9/1/2023
Tier 1 $0.89 $2.99 $5.97
Tier 2 $1.79 $6.01 $12.02
Tier 3 $1.92 $6.43 $12.87
7/1/2024
Tier 1 $0.97 $3.23 $6.45
Tier 2 $1.94 $6.50 $12.99
Tier 3 $2.08 $6.95 $13.90
7/1/2025
Tier 1 $1.05 $3.49 $6.97
Tier 2 $2.10 $7.02 $14.03
Tier 3 $2.25 $7.51 $15.02
7/1/2026
Tier 1 $1.14 $3.77 $7.53
Tier 2 $2.27 $7.59 $15.16
Tier 3 $2.43 $8.12 $16.23
7/1/2027
Tier 1 $1.24 $4.08 $8.14
Tier 2 $2.46 $8.20 $16.38
Tier 3 $2.63 $8.77 $17.53

Source: City of St. Helena.

Comparison to Surrounding Communities. Set forth in the following tables are the average bi-monthly water charges for customers of the Water System for Fiscal Year 2022-23 and a comparison to surrounding communities.

Table 5
Fiscal Year 2022-23 Comparative Bi-Monthly Charges (Base Fee Only) (Single-Family Residential – 5/8-inch meter)
Agency Bi-Monthly Rate(1)
City of St. Helena $139.58
Town of Yountville 119.68
City of Calistoga 100.24
City of American Canyon 53.12
City of Napa 48.58
(1) Based on fixed charge for 5/8” meter (base fee only).

Source: City of St. Helena.

Capital Improvement Program
General. The City adopts comprehensive muti-year plans for capital improvements. The most recent Capital Improvement Program (“CIP”) covers Fiscal Years 2023-24 to 2026-27.

These are set forth in the following table, together with the expected sources of payment for the items in the CIP. The following contains estimated projects and project costs, which may vary considerable from actual results.

Agenda Item #5.1.

18 Table 6
Capital Improvement Program for Water System
Water Improvement Projects and Available Funding Sources Fiscal Years 2023-24 through 2027-28
PROJECT 2023-24 2024-25 2025-26 2026-27 Total
W-109 Bell Canyon Intake Tower Replacement - $361,004 $3,372,495 - $3,733,499 W-80 Dwyer Road Booster Pump Station - 986,580 - - 986,580 W18-113 SCADA Improvements - 175,392 364,114 375,765 915,271 W86 Spring Mountain Pressure Zone Improv. - - 346,470 1,609,005 1,955,475 W25-01 PWTM-1 Napa Intertie Pipeline Replace - 1,252,957 2,601,138 2,684,374 6,538,469 W24-04 Smart Water Meters - 431,903 896,630 925,322 2,253,855 W21-01 Kearney & Andrea Water Main Replace $919,940 - - - 919,940 W-101 Rehabilitate Tank 2 Lower Reservoir 987,000 - - - 987,000 W18-111 WTP Condition Assessment 210,000 - - - 210,000
W24-02 Napa Intertie Pump Station (Const.) - - 227,571 117,427 344,998 W24-02 Napa Intertie Pump Station (Design) 420,000 2,082,782 - - 2,502,780 W25-02 PWTM-2 WTP Transmission Main - 1,743,835 3,620,201 3,736,048 9,100,084 W18-118 Water Main Annual Replace Program 302,400 315,706 327,702 338,189 1,283,997 W24-05 PFAS Sampling Project 26,250 - - - 26,250
W24-06 Risk & Resilience Assessment 78,750 82,215 - - 160,965 W24-07 Cyber-Security Implementation 26,520 27,405 - - 53,655 W24-08 Disinfection By Products Project 52,500 - - 379,288 431,788 W26-02 Asset Management Program Dev. - - 56,893 - 56,893 W26-02 Asset Management Software - - 17,068 - 17,068
W26-02 CMMS Purchase & Setup - - - 58,713 58,713
W24-03 ArcGIS Purchase & Setup 36,750 16,443 - - 53,193 S24-04 Allocated RW CIP 262,500 - - - 262,500
Tottals $3,321,890 $7,476,220 $11,830,282 $10,224,131 $32,852,523 Summary of Available Financing Sources
2023-24 2024-25 2025-26 2026-27 Total
GO Bond Funded $328,650 $315,706 $327,702 $338,189 $1,310,247 Water Bond Funded(1) 2,993,240 7,160,514 11,502,580 9,885,942 31,542,276 Rate Funded - - - - -
TOTAL AVAILABLE $3,321,890 $7,476,220 $11,830,282 $10,224,131 $32,852,523 (1) Additional series of water revenue bonds are anticipated to be issued in 2026 and 2029. These are anticipated to constitute “Parity Debt” to the Installment Payments/2024 Bonds. The General Obligation Bonds would be payable solely from ad valorem property taxes and not constitute Parity Debt. See Table 7 for additional details.

Source: City of St. Helena.

Historical and Projected Debt Service Coverage
The table on the following page provides a pro forma statement of debt service coverage developed by the City, based on the definitions of Gross Revenues and Operations and Maintenance Costs set forth in the legal documents governing the 2024 Bonds (which excludes depreciation and other non-cash items).

Agenda Item #5.1.

19 Table 7
St. Helena Water System
Historical and Projected Debt Service Coverage –
Fiscal Years 2018-19 through 2022-23 (Actual) and 2023-24 through 2028-29 (Projected) (1) WATER FUND Revenues and Expenses ($000)
2019
Actual
2020
Actual
2021
Actual
2022
Actual
2023
Actual
2024
Projected
2025
Projected
2026
Projected
2027
Projected
2028
Projected
2029
Projected
Revenue Revenue from Existing Rates $5,891 $6,474 $7,292 $8,021 $4,714 $6,873 $7,237 $7,261 $7,286 $7,311 $7,336 Water Penalty Adjustments / Written Off(1) - - (672) (2,275) 1,061 - - - - - - Adjusted Revenue from Existing Rates $5,891 $6,474 $6,620 $5,746 $5,775 $6,873 $7,237 $7,261 $7,286 $7,311 $7,336 Revenue from Approved Rates - - - - - 2,020 2,768 3,580 4,462 5,420 6,078 Other Revenues 35 3 73 103 21 34 34 34 34 34 34 Capital Contributions 174 176 57 20 127 22 36 36 36 37 37 Interest Income 63 120 16 21 33 118 152 227 267 298 324 Total Revenue $6,163 $6,773 $6,766 $5,890 $5,956 $9,067 $10,227 $11,138 $12,085 $13,100 $13,809 Operating Expenses $4,592 $4,114 $5,087 $5,225 $6,218 $6,623 $7,040 $7,349 $7,664 $7,993 $8,337 Net System Revenue $1,571 $2,659 $1,679 $665 ($262) $2,444 $3,187 $3,789 $4,421 $5,107 $5,472 Debt Service (See Accompanying Table) Series 2006A $592 - - - - - - - - - - Series 2012 407 408 406 408 407 406 405 405 402 402 403 Series 2019 (Refunded 2006A) - 530 531 531 529 530 530 529 527 529 527 Proposed Series 2024 - - - - - - 352 513 513 513 513 Proposed Series 2026 - - - - - - - - 1,331 1,331 1,331 Proposed Series 2029 - - - - - - - - - - 1,390 Total Debt Service $999 $938 $937 $939 $936 $936 $1,287 $1,447 $2,773 $2,775 $4,164 Debt Service Coverage (Minimum 1.20x/1.25x) (2)(3) 1.57 2.83 1.79 0.71 (0.28) 2.61 2.48 2.62 1.59 1.84 1.31 * Preliminary; subject to change. (1) Certain Water System customers were charged water penalties during Fiscal Years 2019-20, 2020-21 and 2021-22, which amounts were booked as revenues in accordance with generally accepted accounting principals (GAAP). After appeals were made, the City Council waived the water penalties, resulting in a “write-off” of revenues in those fiscal years and adjustments to revenues in the amounts shown. (2) The Installment Sale Agreement and 2012 Installment Purchase Agreement require 1.20x coverage, while the 2019 Loan Agreement requires 1.25x coverage. (3) Debt service coverage was not met in Fiscal Years 2021-22 and 2022-23. During that time, the City was undertaking a comprehensive rate study for the Water System and a Proposition 218 process to implement new water rates. These rates have now been adopted, and were effective starting September 1, 2023. See “– Water Rates and Charges,” above. Source: City of St. Helena.

Agenda Item #5.1.

20 Additional Information Regarding Projections. The table above reflects a number of assumptions regarding projected debt service coverage for the period shown, including the following:
 Growth in new single-family residential (SFR) customers during the projection period of 0.50% annually and 0.90% with respect to multi-family residential (MFR) customers.
 Interest earnings rate of 2.00%.
 Rate increases during the projection period consistent with the previously adopted rates described in the Ratfelis rate study, consisting of increases of 8.00%/year, effective September 1, 2023 (implemented), July 1, 2024 (projected), July 1, 2025 (projected), July 1, 2026 (projected) and July 1, 2027 (projected).  Expenses, including for purchased water, salaries and benefits, supplies and other general costs, increasing by 2.80% to 7.00% per year during the projection period.  Additional debt during the projection period, as shown in 2026 and 2029.

With respect to capital costs associated with the Water System, the City’s current CIP identifies several projects for planning purposes. All future years’ projects and their related funding require annual review and approval by the City Council and are therefore subject to change. The City records its infrastructure capital costs, including Water System capital costs as capital assets. Because capital costs are not included in the definition of Operations and Maintenance Costs, they will not affect the availability of Net Revenues to make the Installments Payments. Should the City decide to finance any of these capital costs through the issuance of Parity Debt within the projection period, projected debt service coverage could decrease without a corresponding increase in rates.

Agenda Item #5.1.

21 BOND OWNERS’ RISKS
The following describes certain special considerations and risk factors affecting the payment of and security for the 2024 Bonds. The following discussion is not meant to be an exhaustive list of the risks associated with the purchase of any 2024 Bonds and the order presented does not necessarily reflect the relative importance of the various risks. Potential investors in the 2024 Bonds are advised to consider the following special factors along with all other information in this Official Statement in evaluating the 2024 Bonds. There can be no assurance that other considerations will not materialize in the future.

Revenues; Rate Covenant
The Revenues securing the 2024 Bonds consist primarily of Installment Payments payable by the City, which, in turn, are secured by the Net Revenues of the Water System. Net Revenues are dependent upon the demand for water usage, which can be affected by population factors and climactic conditions such as droughts. There can be no assurance that demand for water usage will be consistent with the levels contemplated in this Official Statement. A decrease in the demand for water could require an increase in rates or charges in order to comply with the rate covenants contained in the Installment Sale Agreement. The City’s ability to meet its rate covenants is dependent upon its capacity to increase rates without driving down demand to a level insufficient to meet debt service on the Installment Payments and Parity Debt.

Operations and Maintenance Costs; Third-Party Sources of Water Supply There can be no assurance that expenses of the Water System will be consistent with the levels contemplated in this Official Statement. In particular, the City currently obtains a portion of its potable water from the City of Napa, and therefore the City may have less control over the expenses attributable to its water supply than if the City directly controlled its water. The wholesale rates for water charged by the City of Napa are not passed-through to customers of the Water System, rather they are incorporated into the rates and charges that the City must establish in order to operate the Water System and to pay debt service on the Water System’s long-term obligations, including the 2024 Bonds.

In addition to its purchased water expenses, changes in technology, changes in quality standards, and increases in the cost of operation or other expenses could require substantial increases in rates or charges in order to comply with the rate covenants in the Installment Sale Agreement. Until such rates can be implemented, Net Revenues may be reduced, increasing the possibility of nonpayment of the Installment Payments and, in turn, the 2024 Bonds.

Limitations on Remedies Available to Bond Owners
The ability of the City to comply with its covenants under the Installment Sale Agreement and to generate Net Revenues sufficient to pay principal of and interest on the Installment Payments and Parity Debt may be adversely affected by actions and events outside of the control of the City, and may be adversely affected by actions taken (or not taken) by voters, property owners, taxpayers or payers of assessments, fees and charges. Furthermore, any remedies available to the owners of the 2024 Bonds upon the occurrence of an event of default under the Indenture are in many respects dependent upon judicial actions, which are often subject to discretion and delay and could prove both expensive and time consuming to obtain.

Agenda Item #5.1.

22 In addition to the limitations on Bondholder remedies contained in the Indenture, the rights and obligations of the Authority under the Indenture may be subject to the following: the United States Bankruptcy Code and applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the enforcement of creditors’ rights generally, now or hereafter in effect; usual 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 Federal Constitution; and the reasonable and necessary exercise, in certain exceptional situations, of the police power 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 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.

Seismic and other Natural Disasters
General. The City is located in a seismically active area of California. If there were to be an occurrence of severe seismic activity in the area of the City, there could be an interruption in the service provided by the Water System, resulting in a temporary reduction in the amount of Net Revenues available to timely pay the Installment Payments.

Other natural disasters, such as flooding, landslides or wildfires, could also affect or interrupt the service provided by the Water System, resulting in a temporary reduction in the amount of Net Revenues available to timely pay the Installment Payments. Climate change, resulting in hotter drier conditions, may be exasperating other types of natural disasters such as wildfires and droughts.

Wildfires. Areas in and near the City are susceptible to damage from wildfires. For example, the Glass Fire was a wildfire in Northern California, that started on September 27, 2020 and was active for 23 days. The fire was named due to its origin nearby Glass Mountain Road in Deer Park, Napa County, and it extended also into Sonoma County. Initially a single 20-acre brush fire, it rapidly grew and merged with two smaller fires that expanded to 11,000 acres.

Numerous structures were destroyed or damaged, including the Foothills Adventist Elementary School and 31 wineries, restaurants, and lodges in the region, including the famous 41-year-old Chateau Boswell Winery near the City.

Droughts. California is subject to droughts from time-to-time. For example, the Governor issued a State of Emergency Proclamation on April 21, 2021, for Mendocino and Sonoma counties due to drought conditions in the Russian River watershed. Then on May 10, 2021, the emergency declaration was expanded to include 39 additional counties, including Napa County, due to drought conditions within those counties. On July 8, 2021, the Governor further expanded the drought emergency and requested all Californians to reduce water use by 15 percent to help protect water reserves if drought conditions continue. The heavy rain in early 2023 has significantly helped drought conditions. On March 24, 2023, Governor Newsom ended the 15 percent water conservation target and requirement for water agencies to implement level 2 of their drought contingency plans. However, there can be no assurance that drought conditions would not re-appear in the future, leading to decreased demand and usage of the Water System, and a potential decline in Net Revenues available to timely pay the Installment Payments.

Agenda Item #5.1.

23 Loss of Tax-Exemption
As discussed under the caption “TAX MATTERS,” interest on the 2024 Bonds could become includable in gross income for purposes of federal income taxation retroactive to the date the 2024 Bonds were issued, as a result of future acts or omissions of the Authority or City in violation of its covenants in the Installment Sale Agreement and Indenture. Should such an event of taxability occur, the 2024 Bonds are not subject to special redemption and will remain outstanding until maturity or until redeemed under other provisions set forth in the Indenture.

Proposition 218
General. On November 5, 1996, California voters approved Proposition 218, the so-called “Right to Vote on Taxes Act.” Proposition 218 added Articles XIIIC and XIIID to the State Constitution, which affect the ability of local governments to levy and collect both existing and future taxes, assessments, and property-related fees and charges. Proposition 218, which generally became effective on November 6, 1996, limited local governments’ authority to impose or increase property-related “fee” or “charge,” which is defined as “any levy other than an ad valorem tax, a special tax or an assessment, imposed by a local government upon a parcel or upon a person as an incident of property ownership, including user fees or charges for a property related service” (and referred to in this section as a “property-related fee or charge”).

Specifically, under Article XIIID, before a municipality may impose or increase any property-related fee or charge, the entity must give written notice to the record owner of each parcel of land affected by that fee or charge. The municipality must then hold a hearing upon the proposed imposition or increase at least 45 days after the written notice is mailed, and, if a majority of the property owners of the identified parcels present written protests against the proposal, the municipality may not impose or increase the property-related fee or charge.

Further, under Article XIIID, revenues derived from a property-related fee or charge may not exceed the funds required to provide the “property-related service” and the entity may not use such fee or charge for any purpose other than that for which it imposed the fee or charge. The amount of a property-related fee or charge may not exceed the proportional cost of the service attributable to the parcel, and no property-related fee or charge may be imposed for a service unless that service is actually used by, or is immediately available to, the owner of the property in question.

In addition, Article XIIIC states that “the initiative power shall not be prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or charge. The power of initiative to affect local taxes, assessments, fees and charges shall be applicable to all local governments and neither the Legislature nor any local government charter shall impose a signature requirement higher than that applicable to statewide statutory initiatives.” Judicial Interpretation of Proposition 218. After Proposition 218 was enacted in 1996, appellate court cases and an Attorney General’s opinion initially indicated that fees and charges for water and wastewater services, which are based on the amount of services consumed, would not be considered property-related fees and charges, and thus not subject to the requirements of Article XIIID. However, numerous subsequent court cases have held that certain types of water and wastewater charges could be subject to the requirements of Proposition 218. These cases include, for example, Capistrano Taxpayers Assoc., Inc. v. City of San Juan Capistrano (186 Cal.

Rptr. 3d 362 (Cal. App. 4th Distr. 2015)), Bighorn-Desert View Water Agency v. Verjil (46 Cal.

Agenda Item #5.1.

24 Rptr. 3d 73 (Cal. 2006)), and Howard Jarvis Taxpayers Assoc. v. City of Fresno (26 Cal. Rptr. 3d 153 (Cal. App. 5th Distr. 2005)).

Under the Bighorn case, for example, the court held that under Article XIIIC, local voters could adopt an initiative measure that could reduce or repeal a local agency’s rates and charges, though it is not clear whether (and California courts have not decided whether) any such reduction or repeal by initiative would be enforceable in a situation in which such rates and charges are pledged to the repayment of bonds or other indebtedness, as is the case with respect to the Installment Payments securing the 2024 Bonds.

Under the City of San Juan Capistrano case, the court held that tiered or inclined rates that go up progressively in relation to usage must correspond to the actual cost of providing water service at each tier (level of usage), and accordingly the pricing for any tier cannot exceed the cost of service to that tier.

City’s Current Practice Regarding Rates and Charges. The City’s practice in implementing increases in water rates and charges has been to comply with the requirements of Article XIIID, including the practice of providing property owners with a 45-day mailed notice and public hearing before the City Council approves rate increases.

Conclusion. It is not possible to predict how courts will further interpret Article XIIIC and Article XIIID in future judicial decisions, and what, if any, further implementing legislation will be enacted. As noted above, under the Bighorn case, local voters could adopt an initiative measure that reduces or repeals the City’s rates and charges, though it is not clear whether (and California courts have not decided whether) any such reduction or repeal by initiative would be enforceable in a situation in which such rates and charges are pledged to the repayment of bonds or other indebtedness, as is the case with respect to the Installment Payments securing the 2024 Bonds.

There can be no assurance that the courts will not further interpret, or the voters will not amend, Article XIIIC and Article XIIID to limit the ability of local agencies to impose, levy, charge and collect increased fees and charges for water, or to call into question previously adopted water rate increases.

Environmental Regulation
The supply of water by the City through the Water System is regulated, to a large extent, by the federal government and the State. Water treatment standards set forth in federal and State law control the operations of the Water System (and the wholesale water providers that supply water to the Water System) and mandate its use of technology. If the federal government, acting through the Environmental Protection Agency, or the State, acting through the Department of Health Services, or additional federal or State legislation, should impose stricter standards upon the Water System, the City’s expenses related to the Water System could increase accordingly and rates and charges would have to be increased to offset those expenses. See “–Operations and Maintenance Costs; Third Party Sources of Water Supply” above.” It is not possible to predict the direction which federal or State regulation will take with respect to water standards, although it is likely that both will impose more stringent standards with attendant higher costs.

Agenda Item #5.1.

25 Cybersecurity
The City, like many other public and private entities, relies on computer and other digital networks and systems to conduct its operations. As a recipient and provider of personal, private or other sensitive electronic information, the City is potentially subject to multiple cyber threats, including without limitation hacking, viruses, ransomware, malware and other attacks. No assurance can be given that the City’s efforts to manage cyber threats and attacks will be successful in all cases, or that any such attack will not materially impact the operations or finances of the City or the Water System, or the administration of the 2024 Bonds.

The City is also reliant on other entities and service providers in connection with the operation of the Water System and the administration of the 2024 Bonds, including without limitation, the City’s wholesale water provider, the Trustee and the dissemination agent. No assurance can be given that the City and these other entities will not be affected by cyber threats and attacks in a manner that may affect the Bond owners.

Secondary Market for Bonds
There can be no guarantee that there will be a secondary market for the 2024 Bonds or, if a secondary market exists, that any 2024 Bonds can be sold for any particular price.

Occasionally, because of general market conditions or because of adverse history or economic prospects connected with a particular issue, secondary marketing practices in connection with a particular issue are suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon then-prevailing circumstances. Such prices could be substantially different from the original purchase price.

Future Parity Debt
As described in “SECURITY FOR THE 2024 BONDS – Parity Debt” above, the Installment Sale Agreement permits the City to issue Parity Debt in the future that is secured and payable on parity with the payment of the Installment Payments securing the 2024 Bonds. In the event of a decline in Net Revenues available to pay the Installment Payments securing the 2024 Bonds, the existence of additional Parity Debt could adversely affect the City’s ability to timely pay the Installment Payments securing the 2024 Bonds.

TAX MATTERS
Federal Tax Status. In the opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, subject, however to the qualifications set forth below, under existing law, the interest on the 2024 Bonds is excluded from gross income for federal income tax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax. Interest on the 2024 Bonds may be subject to the corporate alternative minimum tax.

The opinions set forth in the preceding paragraph are subject to the condition that the Authority and the City comply with all requirements of the Internal Revenue Code of 1986, as amended (the “Tax Code”) that must be satisfied subsequent to the issuance of the 2024 Bonds in order that the interest thereon be, and continue to be, excludable from gross income for federal income tax purposes. The Authority and City have made certain representations and covenants in order to comply with each such requirement. Inaccuracy of those representations, or failure to Agenda Item #5.1.

26 comply with certain of those covenants, may cause the inclusion of such interest in gross income for federal income tax purposes, which may be retroactive to the date of issuance of the 2024 Bonds.

Tax Treatment of Original Issue Discount and Premium. If the initial offering price to the public at which a 2024 Bond is sold is less than the amount payable at maturity thereof, then such difference constitutes “original issue discount” for purposes of federal income taxes and State of California personal income taxes. If the initial offering price to the public at which a 2024 Bond is sold is greater than the amount payable at maturity thereof, then such difference constitutes “original issue premium” for purposes of federal income taxes and State of California personal income taxes. De minimis original issue discount and original issue premium are disregarded.

Under the Tax Code, original issue discount is treated as interest excluded from federal gross income and exempt from State of California personal income taxes to the extent properly allocable to each owner thereof subject to the limitations described in the first paragraph of this section. The original issue discount accrues over the term to maturity of the 2024 Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight-line interpolations between compounding dates). The amount of original issue discount accruing during each period is added to the adjusted basis of such 2024 Bonds to determine taxable gain upon disposition (including sale, redemption, or payment on maturity) of such 2024 Bond. The Tax Code contains certain provisions relating to the accrual of original issue discount in the case of purchasers of the 2024 Bonds who purchase the 2024 Bonds after the initial offering of a substantial amount of such maturity. Owners of such 2024 Bonds should consult their own tax advisors with respect to the tax consequences of ownership of 2024 Bonds with original issue discount, including the treatment of purchasers who do not purchase in the original offering to the public at the first price at which a substantial amount of such 2024 Bonds is sold to the public.

Under the Tax Code, original issue premium is amortized on an annual basis over the term of the 2024 Bond (said term being the shorter of the 2024 Bond's maturity date or its call date). The amount of original issue premium amortized each year reduces the adjusted basis of the owner of the 2024 Bond for purposes of determining taxable gain or loss upon disposition.

The amount of original issue premium on a 2024 Bond is amortized each year over the term to maturity of the 2024 Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight-line interpolations between compounding dates).

Amortized bond premium is not deductible for federal income tax purposes. Owners of premium 2024 Bonds, including purchasers who do not purchase in the original offering, should consult their own tax advisors with respect to State of California personal income tax and federal income tax consequences of owning such 2024 Bonds.

California Tax Status. In the further opinion of Bond Counsel, interest on the 2024 Bonds is exempt from California personal income taxes.

Other Tax Considerations. Current and future legislative proposals, if enacted into law, clarification of the Tax Code or court decisions may cause interest on the 2024 Bonds to be subject, directly or indirectly, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent beneficial owners from realizing the full current benefit of the tax status of such interest. The introduction or enactment of any such legislative proposals, clarification of the Tax Code or court decisions may also affect the market price for, or marketability of, the 2024 Bonds. It cannot be predicted whether or in what form any such Agenda Item #5.1.

27 proposal might be enacted or whether, if enacted, such legislation would apply to bonds issued prior to enactment.

The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of such opinion, and Bond Counsel has expressed no opinion with respect to any proposed legislation or as to the tax treatment of interest on the 2024 Bonds, or as to the consequences of owning or receiving interest on the 2024 Bonds, as of any future date. Prospective purchasers of the 2024 Bonds should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel expresses no opinion.

Owners of the 2024 Bonds should also be aware that the ownership or disposition of, or the accrual or receipt of interest on, the 2024 Bonds may have federal or state tax consequences other than as described above. Other than as expressly described above, Bond Counsel expresses no opinion regarding other federal or state tax consequences arising with respect to the 2024 Bonds, the ownership, sale or disposition of the 2024 Bonds, or the amount, accrual or receipt of interest on the 2024 Bonds.

CERTAIN LEGAL MATTERS
Jones Hall, A Professional Law Corporation, Bond Counsel, will render an opinion with respect to the validity of the 2024 Bonds, the form of which opinion is set forth in APPENDIX E.

Certain legal matters will also be passed upon for the City by Jones Hall, as Disclosure Counsel and by the City Attorney. Certain legal matters will be passed upon for the Underwriter by its counsel, Kutak Rock LLP, Irvine, California. The fees of Bond Counsel, Disclosure Counsel and Underwriter’s counsel are contingent on the sale and closing of the 2024 Bonds.

NO MATERIAL LITIGATION
No litigation is pending or threatened concerning the validity of the 2024 Bonds. Neither the Authority nor the City is aware of any litigation pending or threatened questioning the political existence of the Authority or the City or contesting the City’s power to fix water rates and charges, or the power of the governing body of the Authority or the City Council or in any way questioning or affecting: (i) the proceedings under which the 2024 Bonds are to be issued; (ii) the validity of any provision of the 2024 Bonds, the Installment Sale Agreement or the Indenture; (iii) the pledge of Net Revenues under the Installment Sale Agreement or the pledge of Revenues under the Indenture; or (iv) the titles to office of the present members of the governing body of the Authority or the City Council.

There are a number of suits and claims pending against the City, which may include personal injury, wrongful death and other suits and claims against which the City may self-insure.

The aggregate amount of the self-insured liabilities of the City which may result from such suits and claims will not, in the opinion of the City, materially impair the ability of the City to pay the Installment Payments securing the 2024 Bonds as they become due.

There is no litigation pending, with service of process having been accomplished, against the City which if determined adversely to the City would, in the opinion of the City, materially impair the ability of the City to pay the Installment Payments securing the 2024 Bonds as they become due.

Agenda Item #5.1.

28 RATING[S]
S&P Global Ratings, a division of Standard & Poor’s Financial Services LLC (“S&P”) has assigned its municipal bond rating of “___” to the 2024 Bonds. This rating reflects only the views of S&P, and an explanation of the significance of this rating, and any outlook assigned to or associated with this rating, should be obtained from S&P. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. The Authority has provided certain additional information and materials to S&P (some of which does not appear in this Official Statement). There is no assurance that this rating will continue for any given period of time or that this rating will not be revised downward or withdrawn entirely by S&P, if in the judgment of S&P, circumstances so warrant. Any such downward revision or withdrawal of any rating on the 2024 Bonds may have an adverse effect on the market price or marketability of the 2024 Bonds.

CONTINUING DISCLOSURE
The City will covenant for the benefit of owners of the 2024 Bonds to provide certain financial information and operating data by not later than nine months after the end of the City’s fiscal year, or March 31, of each year (based on the City’s current fiscal year-end of June 30), commencing March 31, 2025, with the report for the 2023-24 fiscal year (the “Annual Report”) and to provide notices of the occurrence of certain listed events.

These covenants have been made in order to assist the Underwriter in complying with Securities Exchange Commission Rule 15c2-12(b)(5) (the “Rule”). The specific nature of the information to be contained in the Annual Report or the notices of listed events by the City is set forth in “APPENDIX C – Form of Continuing Disclosure Certificate.” The City has previously entered into continuing disclosure undertakings under the Rule in connection with the issuance of long-term obligations. [During the past five years, the City has not failed to comply, in all material respects, with its undertakings under the Rule.]

UNDERWRITING
Oppenheimer & Co. Inc., as underwriter of the 2024 Bonds (the “Underwriter”), has agreed to purchase the 2024 Bonds from the Authority at a purchase price of $______________ which represents the aggregate principal amount of the 2024 Bonds, plus/less [net] original issue premium/discount of $___________, less underwriter’s discount of $_________.

The purchase contract under which the Underwriter is purchasing the 2024 Bonds provides that the Underwriter will purchase all of the 2024 Bonds if any are purchased. The obligation of the Underwriter to make such purchase is subject to certain terms and conditions set forth in the purchase contract.

The public offering prices of the 2024 Bonds may be changed from time to time by the Underwriter. The Underwriter may offer and sell the 2024 Bonds to certain dealers and others at a price lower than the offering price stated on the cover page of this Official Statement.

MUNICIPAL ADVISOR
Agenda Item #5.1.

29 The Authority has retained Del Rio Advisors, LLC of Modesto, California, as municipal advisor (the “Municipal Advisor”) in connection with the offering of the 2024 Bonds. All financial and other information presented in this Official Statement has been provided by the Authority, the City and others from their records. Unless otherwise footnoted, the Municipal Advisor takes no responsibility for the accuracy or completeness of the data provided by the Authority, the City or others and has not undertaken to make an independent verification or does not assume responsibility for the accuracy, completeness, or fairness of the information contained in this Official Statement. The Municipal Advisor has assisted the Authority and the City with the structure, timing and terms for the sale of the 2024 Bonds. The Municipal Advisor provides municipal advisory services only and does not engage in the underwriting, marketing, or trading of municipal securities or other negotiable instruments. The fee of the Municipal Advisor is contingent upon the successful closing of the 2024 Bonds.

EXECUTION
The execution of this Official Statement and its delivery have been authorized by the governing body of the Authority and the City Council of the City.

ST. HELENA FINANCING AUTHORITY
By:

Executive Director
CITY OF ST. HELENA
By:

City Manager
Agenda Item #5.1.

APPENDIX A

SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS Agenda Item #5.1.

APPENDIX B

AUDITED FINANCIAL STATEMENTS OF THE CITY
FOR FISCAL YEAR ENDED JUNE 30, 2023
Agenda Item #5.1.

C-1

APPENDIX C

FORM OF CONTINUING DISCLOSURE CERTIFICATE
$__________
St. Helena Financing Authority
2024 Water Revenue Bonds
This Continuing Disclosure Certificate (this “Disclosure Certificate”) is executed and delivered by the City of St. Helena (the “City”) in connection with the issuance of the abovecaptioned bonds (the “2024 Bonds”). The 2024 Bonds are being issued by the St. Helena Financing Authority (the “Authority”) under an Indenture of Trust dated as of ______, 2024 (the “Indenture”) by and between the Authority and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). The City covenants and agrees as follows:

Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the City for the benefit of the holders and beneficial owners of the 2024 Bonds and in order to assist the Participating Underwriter in complying with the Rule (defined herein).

Section 2. Definitions. In addition to the definitions set forth in the Indenture, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:
“Annual Report” means any Annual Report provided by the City pursuant to, and as described in, Sections 3 and 4.
“Annual Report Date” means the date that is nine months after the end of the City’s fiscal year (currently March 31 based on the City’s fiscal year end of June 30). “Dissemination Agent” means, initially, _______________, or any successor Dissemination Agent designated in writing by the City and which has filed with the City a written acceptance of such designation.
“Listed Events” means any of the events listed in Section 5(a). “MSRB” means the Municipal Securities Rulemaking Board, which has been designated by the Securities and Exchange Commission as the sole repository of disclosure information for purposes of the Rule, or any other repository of disclosure information that may be designated by the Securities and Exchange Commission as such for purposes of the Rule in the future. “Official Statement” means the final official statement dated ___________, 2024, executed by the City in connection with the issuance of the 2024 Bonds. “Participating Underwriter” means any original underwriter of the 2024 Bonds required to comply with the Rule in connection with offering of the 2024 Bonds. “Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as it may be amended from time to time.

Agenda Item #5.1.

C-2
Section 3. Provision of Annual Reports.
(a) The City shall, or shall cause the Dissemination Agent to, not later than the Annual Report Date, commencing March 31, 2025, with the report for the 2023-24 fiscal year, provide to the MSRB, in an electronic format as prescribed by the MSRB, an Annual Report that is consistent with the requirements of Section 4. Not later than 15 Business Days prior to the Annual Report Date, the City shall provide the Annual Report to the Dissemination Agent (if other than the City).

If by 15 Business Days prior to the Annual Report Date the Dissemination Agent (if other than the City) has not received a copy of the Annual Report, the Dissemination Agent shall contact the City to determine if the City is in compliance with the previous sentence. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4; provided that the audited financial statements of the City may be submitted separately from the balance of the Annual Report, and later than the Annual Report Date, if not available by that date. If the City’s fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(c).

The City shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by the City hereunder.
(b) If the City does not provide (or cause the Dissemination Agent to provide) an Annual Report by the Annual Report Date, the City shall provide (or cause the Dissemination Agent to provide) to the MSRB, in a timely manner as required by the Rule, in an electronic format as prescribed by the MSRB, a notice of such event.
(c) With respect to each Annual Report, the Dissemination Agent shall:
(i) determine each year prior to the Annual Report Date the then-applicable rules and electronic format prescribed by the MSRB for the filing of annual continuing disclosure reports; and
(ii) if the Dissemination Agent is other than the City, file a report with the City certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, and stating the date it was provided.

Section 4. Content of Annual Reports. The City’s Annual Report shall contain or incorporate by reference the following:
(a) Audited Financial Statements of the City prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the City’s audited financial statements are not available by the 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 financial statements contained in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available. (b) To the extent not contained in the audited financial statements filed under the preceding clause (a), the Annual Report shall contain information showing the following:
(i) Water production / sources of water supply, in substantially the form of Table 1 in the Official Statement;
Agenda Item #5.1.

C-3
(ii) Historical water revenues and number of accounts by customer class, in substantially the form of Table 2 in the Official Statement; (iii) Top ten customers by total revenue, in substantially the form of Table 3 in the Official Statement;
(iv) A schedule of water rates then in effect, in substantially the form of Table 4A and Table 4B in the Official Statement; and
(v) Net Revenues during the preceding fiscal year and the amount by which such Net Revenues provides coverage for the payments of debt service coming due in such fiscal year with respect to the Installment Payments securing the 2024 Bonds and any other Parity Debt, in substantially the form of Table 7 in the Official Statement. (c) In addition to any of the information expressly required to be provided under this Disclosure Certificate, the City shall provide such further material information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading.
(d) Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the City or related public entities, which are available to the public on the MSRB’s Internet web site or filed with the Securities and Exchange Commission. The City shall clearly identify each such other document so included by reference.

Section 5. Reporting of Significant Events.
(a) The City shall give, or cause to be given, notice of the occurrence of any of the following Listed Events with respect to the 2024 Bonds:
(1) Principal and interest payment delinquencies.
(2) Non-payment related defaults, if material.
(3) Unscheduled draws on debt service reserves reflecting financial difficulties.
(4) Unscheduled draws on credit enhancements reflecting financial difficulties.
(5) Substitution of credit or liquidity providers, or their failure to perform. (6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security. (7) Modifications to rights of security holders, if material. (8) Bond calls, if material, and tender offers.
(9) Defeasances.

Agenda Item #5.1.

C-4
(10) Release, substitution, or sale of property securing repayment of the securities, if material.
(11) Rating changes.
(12) Bankruptcy, insolvency, receivership or similar event of the City.

Note: For the purposes of the event identified in subparagraph (12), the event 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 U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or 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. (13) The consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material.
(14) Appointment of a successor or additional trustee or the change of name of a trustee, if material.
(15) Incurrence of a financial obligation of the City, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the City, any of which affect security holders, if material (for definition of “financial obligation,” see clause (c)). (16) Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the City, any of which reflect financial difficulties (for definition of “financial obligation,” see clause (c)).
(b) Whenever the City obtains knowledge of the occurrence of a Listed Event, and, if the Listed Event is described in subsections (a)(2), (a)(6), (a)(7), (a)(8) (if the event is a bond call), (a)(10), (a)(13), (a)(14) and (a)(15) above, the City determines that knowledge of the occurrence of that Listed Event would be material under applicable Federal securities law, the City shall, or shall cause the Dissemination Agent (if not the City) to, file a notice of such occurrence with the MSRB, in an electronic format as prescribed by the MSRB, in a timely manner not in excess of 10 business days after the occurrence of the Listed Event. Notwithstanding the foregoing, notice of Listed Events described in subsection (a)(8) above need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to holders of affected 2024 Bonds under the Indenture.

Agenda Item #5.1.

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

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

Section 7. Termination of Reporting Obligation. The City’s obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the 2024 Bonds. If such termination occurs prior to the final maturity of the 2024 Bonds, the City shall give notice of such termination in the same manner as for a Listed Event under Section 5(c).

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

Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of Sections 3(a), 4 or 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 the City with respect to the 2024 Bonds, or type of business conducted; (b) the undertakings herein, as proposed to be amended or waived, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the primary offering of the 2024 Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) the proposed amendment or waiver either (i) is approved by holders of the 2024 Bonds in the manner provided in the Indenture for amendments to the Indenture with the consent of holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the holders or beneficial owners of the 2024 Bonds.

If the annual financial information or operating data to be provided in the Annual Report is amended pursuant to the provisions hereof, the first Annual Report filed pursuant hereto containing the amended operating data or financial information shall explain, in narrative form, the reasons for the amendment and the impact of the change in the type of operating data or financial information being provided.

If an amendment is made to this Disclosure Certificate modifying the accounting principles to be followed in preparing financial statements, the Annual Report for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the Agenda Item #5.1.

C-6
former accounting principles. The comparison shall include a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information, in order to provide information to investors to enable them to evaluate the ability of the City to meet its obligations. To the extent reasonably feasible, the comparison shall be quantitative.

A notice of any amendment made pursuant to this Section 9 shall be filed in the same manner as for a Listed Event under Section 5(c).

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

Section 11. Default. If the City fails to comply with any provision of this Disclosure Certificate, the Participating Underwriter or any holder or beneficial owner of the 2024 Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Indenture, and the sole remedy under this Disclosure Certificate in the event of any failure of the City to comply with this Disclosure Certificate shall be an action to compel performance.

Section 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the City, the Dissemination Agent (if other than the City), the Participating Underwriter and the holders and beneficial owners from time to time of the 2024 Bonds, and shall create no rights in any other person or entity.

Agenda Item #5.1.

C-7
Section 13. Counterparts. This Disclosure Certificate may be executed in several counterparts, each of which shall be regarded as an original, and all of which shall constitute one and the same instrument.

Date: __________, 2024
CITY OF ST. HELENA
By
Name:_____________
Title:_____________
ACCEPTED AND AGREED:
_________________,
As Dissemination Agent
By
Authorized Representative
Agenda Item #5.1.

D-1

APPENDIX D
GENERAL INFORMATION ABOUT THE CITY OF ST. HELENA

AND THE COUNTY OF NAPA
The following information concerning the County of Napa (the “County”) and the City of St. Helena (the “City”) is included only for the purpose of supplying general information regarding the region in which the Water System is located. The 2024 Bonds are not a debt of the County, the City, the State of California (the “State”) or any of its political subdivisions, and neither the County, the City, the State nor any of its political subdivisions is liable therefor. The City and the Underwriter take no responsibility for the accuracy or completeness of such information.

General
The City. The City is located in the center of the world-famous wine growing Napa Valley, 65 miles north of San Francisco. The area was settled in 1834 as part of General Vallejo's land grant. The City was incorporated as a City on March 24, 1876 and reincorporated on May 14, 1889. The City from its inception has served as a rural agricultural center. Over the years, with the growth and development of the wine industry, the City has become an important business and banking center for the wine industry. The City also receives many visitors as a result of the wine industry and the area's scenic qualities. The main goal of the City is to maintain a small-town atmosphere and to provide quality services to its citizens.

The City is a full service city and encompasses an area of 4 square miles. The City of St.

Helena is a General Law City and operates under the Council-City Manager form of government.

The City Council is the governing body and has the power to make and enforce all laws and set policy related to municipal affairs. The City Manager is responsible for carrying out the policies of the City Council and for the proper and efficient management of municipal activities. The City Manager directs and manages the various departments and municipal services through appointed Department Heads who directly supervise and administer the various City programs, services, and activities.

The County. The County is located in Northern California about fifty miles northeast of San Francisco, was incorporated in 1850 as one of the original 27 California counties. The County encompasses an area of approximately 794 square miles and includes five incorporated cities.

The County is bordered on the west by Sonoma County, on the northeast by Yolo County, on the north by Lake County, and on the southeast by Solano County. The County is characterized by northwest to southeast mountain ranges and valleys, the major valley being that of the Napa River. The topography is also marked by Lake Berryessa, an approximately 25 mile long, manmade lake in the northeastern part of the County, and Mt. Saint Helena, approximately 4,444 feet high, to the northwest.

The County is governed by a five-member Board of Supervisors. The County is one of three counties in California to establish a separate department to deal with corrections pursuant to California Government Code §23013, along with Santa Clara County and Madera County.

Agenda Item #5.1.

D-2
Population
The following table lists population estimates for the City, the County and the State for the last five years, as of January 1 each year.

CITY OF ST. HELENA, COUNTY OF NAPA, STATE OF CALIFORNIA Population Estimates
Years 2020 through 2024, as of January 1
Year
City of
St. Helena
Napa
County
State of
California
2020 5,454 138,019 39,538,223
2021 5,393 137,128 39,327,868
2022 5,299 135,564 39,114,785
2023 5,284 134,508 39,061,058
2024 5,314 135,029 39,128,162

Source: California Department of Finance, Demographic Research Unit.

Agenda Item #5.1.

D-3
Industry and Employment
The unemployment rate in the Napa County was 4.2 percent in March 2024, down from a revised 4.6 percent in February 2024, and above the year-ago estimate of 3.6 percent. This compares with an unadjusted unemployment rate of 5.3 percent for California and 3.9 percent for the nation during the same period. The table below list employment by industry group for the years 2019 through 2023.

NAPA COUNTY
Annual Average Civilian Labor Force, Employment and Unemployment, Employment by Industry
Calendar Years 2019 through 2023
(March 2023 Benchmark)
2019 2020 2021 2022 2023
Civilian Labor Force (1) 73,200 68,900 68,400 70,500 72,000 Employment 71,100 62,700 64,300 68,100 69,400
Unemployment 2,100 6,200 4,200 2,300 2,500
Unemployment Rate 2.9% 8.9% 6.1% 3.3% 3.5%
Wage and Salary Employment(2)
Agriculture 5,200 5,000 5,300 5,600 6,000
Mining, Logging and Construction 4,700 4,100 4,500 4,400 4,400 Manufacturing 13,700 12,800 13,300 14,500 15,100
Wholesale Trade 1,800 1,600 1,500 1,500 1,500
Retail Trade 6,400 6,200 6,200 6,200 6,200
Transportation, Warehousing, Utilities 2,100 1,800 2,100 2,400 2,400 Information 300 200 300 300 300
Financial Activities 2,300 2,100 2,100 2,100 2,100
Professional and Business Services 7,200 6,700 6,500 6,700 6,800 Educational and Health Services 10,300 9,900 9,900 10,100 10,600 Leisure and Hospitality 13,700 9,100 10,200 12,700 13,300 Other Services 2,100 1,700 1,800 2,100 2,200
Federal Government 200 200 200 200 200
State Government 3,600 3,600 3,600 3,400 3,300
Local Government 6,400 5,900 5,700 5,800 5,900
Total, All Industries (3) 79,900 70,800 73,000 78,100 80,300

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

Source: State of California Employment Development Department.

Agenda Item #5.1.

D-4
Principal Employers
The following table lists the principal employers within the City for fiscal year 2022-23.

CITY OF ST. HELENA
Principal Employers
Fiscal Year 2022-23
Employer Name Industry
No. of
Employees
Sutter Home Winery Hospitality 272
Beringer (Treasury Wine Estates) Hospitality 143
Charles King Winery Hospitality 102
Farmstead LLC Restaurant 97
City of St. Helena Government 92
Sunshine Food Partners Grocery 85
Culinary Institute Restaurant 81
Harvest Inn Hotel/Motel 74
Safeway Inc. Grocery 71
Gott’s Roadside Tray Gourmet Restaurant 64

Source: City of St. Helena.

Agenda Item #5.1.

D-5
The following table lists, in alphabetical order, the largest manufacturing and nonmanufacturing employers within the County as of May 2024.

COUNTY OF NAPA
Major Employers
As of May 2024
(In Alphabetical Order)
Employer Name Location Industry
Adventist Health St Helena St Helena Hospitals
Allied Universal Napa Security Guard & Patrol Service
Auberge Du Soleil Rutherford Hotels & Motels
California Odd Fellows Napa Retirement Communities & Homes City of Napa Napa Legal Services
Culinary Institute-Amer St Helena Schools-Cooking
Domaine Chandon Yountville Wineries (mfrs)
Duckhorn Portfolio Inc St Helena Wineries (mfrs)
Four Seasons Resrt-Residences Calistoga Hotels & Motels Health & Human Svc Napa Health & Welfare Agencies
Meadows of Napa Valley Retire Napa Non-Profit Organizations Meritage Resort & Spa Napa Resorts
Napa County & Community School Napa Schools
Napa County Public Works Napa Government Offices-County Napa State Hospital Napa Hospitals
Napa Valley College Napa Junior-Community College-Tech Institutes Pavilion-Vintage Estate Yountville Wedding Chapels
Providence Queen-The Vly Med Napa Hospitals
Silverado Resort-Spa A Dolce Napa Hotels & Motels
Sutter Home Winery St Helena Wineries (mfrs)
Trinchero Family Estates St Helena Wineries (mfrs)
Veteran's Home of California Yountville Government-Specialty Hosp Ex Psychiatric Veterans Home Yountville Veterans' & Military Organizations Walmart Supercenter Napa Department Stores
Yolano Engineers Inc Napa Surveyors-Land

Source: State of California Employment Development Department, extracted from The America's Labor Market Information System (ALMIS) Employer Database, 2024 2nd edition.

Agenda Item #5.1.

D-6
Effective Buying Income
“Effective Buying Income” is defined as personal income less personal tax and nontax payments, a number often referred to as “disposable” or “after-tax” income. Personal income is the aggregate of wages and salaries, other labor-related income (such as employer contributions to private pension funds), proprietor’s income, rental income (which includes imputed rental income of owner-occupants of non-farm dwellings), dividends paid by corporations, interest income from all sources, and transfer payments (such as pensions and welfare assistance).

Deducted from this total are personal taxes (federal, state and local), nontax payments (fines, fees, penalties, etc.) and personal contributions to social insurance. According to U.S. government definitions, the resultant figure is commonly known as “disposable personal income.” The following table summarizes the total effective buying income for the City, the County, the State, and the United States for the period 2020 through 2024.

CITY OF ST. HELENA, NAPA COUNTY,

STATE OF CALIFORNIA AND UNITED STATES

EFFECTIVE BUYING INCOME
As of January 1, 2020 through 2024
Year Area
Total Effective
Buying Income
(000’s Omitted)
Median Household
Effective
Buying Income

2020 City of St. Helena $266,657 $79,019
Napa County 2,701,513 73,719
California 1,243,564,816 65,870
United States 9,487,165,436 55,303

2021 City of St. Helena $259,604 $72,840
Napa County 4,934,709 75,241
California 1,290,894,604 67,956
United States 9,809,944,764 56,790

2022 City of St. Helena $322,823 $88,542
Napa County 5,853,719 87,550
California 1,452,426,153 77,058
United States 11,208,582,541 64,448

2023 City of St. Helena $352,317 $96,345
Napa County 6,068,197 88,670
California 1,461,799,662 77,175
United States 11,454,846,397 65,326

2024 City of St. Helena $336,434 $94,765
Napa County 5,945,614 91,019
California 1,510,708,521 80,973
United States 11,987,185,826 67,876

Source: Claritas, LLC.

Agenda Item #5.1.

D-7
Commercial Activity
A summary of historic taxable sales within the City and the County during the past five years in which data is available is shown in the following tables.

Total taxable sales during calendar year 2023 in the City were reported to be $280,649,363, a 8.32% decrease in the total taxable sales of $306,108,615 reported during the calendar year 2022.

CITY OF ST. HELENA
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions (Dollars in Thousands)
Retail Stores Total All Outlets
Number
of Permits
Taxable
Transactions

Number
of Permits
Taxable
Transactions
2019 224 $165,678 535 $262,848
2020 230 124,705 551 202,343
2021 214 177,254 534 267,155
2022 208 205,617 549 306,109
2023 208 184,378 581 280,649

Source: State Department of Tax and Fee Administration.

Total taxable sales calendar year 2023 in the County were reported to be $4,590,541,223, a 1.41% decrease in the total taxable sales of $4,656,019,916 reported during calendar year 2022.

COUNTY OF NAPA
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions (Dollars in Thousands)
Retail Stores Total All Outlets
Number
of Permits
Taxable
Transactions

Number
of Permits
Taxable
Transactions
2019 3,099 2,235,101 7,290 3,774,339
2020 3,203 1,967,686 7,740 3,275,193
2021 2,948 2,463,898 7,412 4,155,804
2022 2,930 2,730,510 7,635 4,656,020
2023 2,837 2,721,714 7,577 4,590,541

Source: State Department of Tax and Fee Administration.

Agenda Item #5.1.

D-8
Construction Activity
Construction activity in the City and the County for the past five years for which data is available is shown in the following tables.

CITY OF ST. HELENA
Building Permit Valuation
(Dollars in Thousands)(1)
2018 2019 2020 2021 2022
Permit Valuation
New Single-family $6,888.3 $10,970.1 $6,397.0 $4,825.7 $8,438.2 New Multi-family 1,600.0 0.0 0.0 0.0 0.0
Res. Alterations/Additions 5,848.1 6,425.7 2,927.3 12,545.8 10,770.2 Total Residential 14,336.4 17,395.8 9,324.3 17,371.5 19,208.4

New Commercial 4,747.5 3,277.8 3,794.5 949.6 410.0
New Industrial 0.0 0.0 0.0 0.0 0.0
New Other 7,861.8 815.2 694.4 1,663.2 1,506.0
Com Alterations/Additions 4,822.0 1,899.7 1,876.0 3,802.0 1,008.3 Total Nonresidential 17,431.3 5,992.7 6,364.9 6,414.8 2,924.3

New Dwelling Units
Single Family 11 20 9 14 15
Multiple Family 8 0 0 0 0
TOTAL 19 20 9 14 15

(1) Totals may not foot due to rounding.

Source: Construction Industry Research Board, Building Permit Summary.

NAPA COUNTY
Building Permit Valuation
(Dollars in Thousands)(1)
2018 2019 2020 2021 2022
Permit Valuation
New Single-family $270,768.0 $128,284.0 $90,632.6 $128,200.7 $151,884.1 New Multi-family 132,152.4 3,773.5 0.0 24,376.3 56,848.6 Res. Alterations/Additions 49,694.0 55,059.9 70,236.5 80,298.5 113,783.1 Total Residential 452,614.4 187,117.4 160,869.1 232,875.5 322,515.8

New Commercial 54,781.8 116,909.6 71,686.1 52,403.0 82,058.8 New Industrial 13,363.3 24,645.8 39,950.0 0.0 14,864.6
New Other 32,031.6 21,119.3 17,109.4 21,624.4 40,494.1
Com Alterations/Additions 50,924.3 29,822.9 40,025.1 40,340.8 60,368.4 Total Nonresidential 151,101.0 192,497.6 168,770.6 114,368.2 197,785.9

New Dwelling Units
Single Family 339 232 228 322 389
Multiple Family 730 17 0 86 399
TOTAL 1,069 249 228 408 788

(1) Totals may not foot due to rounding.

Source: Construction Industry Research Board, Building Permit Summary.

Agenda Item #5.1.

E- 1

APPENDIX E

FORM OF OPINION OF BOND COUNSEL
[Closing Date]
St. Helena Financing Authority
1572 Railroad Avenue
St. Helena, CA 94574
OPINION: $___________ St. Helena Financing Authority
2024 Water Revenue Bonds
Members of the Authority:

We have acted as bond counsel to the St. Helena Financing Authority (the “Authority”) in connection with the issuance by the Authority of its St. Helena Financing Authority 2024 Water Revenue Bonds in the aggregate principal amount of $___________ (the “Bonds”), under an Indenture of Trust dated as of July 1, 2024 (the “Indenture”), between the Authority and U.S. Bank Trust Company, National Association, as trustee, and under the provisions of Article 4 of Chapter 5, Division 7, Title 1 of the Government Code of the State of California, commencing with Section 6584 of said Code (the “Bond Law”). The Bonds are secured by Revenues as such term is defined in the Indenture, including installment payments (the “Installment Payments”) made by the City of St. Helena (the “City”) under an Installment Sale Agreement dated as of July 1, 2024 (the “Installment Sale Agreement”) between the Authority and the City.

We have examined such certified proceedings and other papers as we deem necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon representations of the Authority and the City contained in the Indenture, the Installment Sale Agreement and in the certified proceedings, and upon other certifications furnished to us, without undertaking to verify the same by independent investigation.

Based upon our examination we are of the opinion, under existing law, that:

1. The Authority is a joint powers agency duly organized and existing under the laws of the State of California, with power to enter into the Indenture, to perform the agreements on its part contained therein and to issue the Bonds.

2. The Bonds have been duly issued by the Authority and constitute legal, valid and binding special obligations of the Authority enforceable in accordance with their terms.

3. The Indenture and the Installment Sale Agreement have been duly authorized, executed and delivered by the Authority and constitute legal, valid and binding obligations of the Authority enforceable against the Authority in accordance with their respective terms.

Agenda Item #5.1.

E- 2

4. The Indenture establishes a valid lien on and security interest in the Revenues and other funds pledged thereby for the security of the Bonds, in accordance with the terms of the Indenture.

5. The City is a municipal corporation duly organized and existing under the laws of the State of California, with power to enter into the Installment Sale Agreement and to perform the agreements on its part contained therein. The Installment Sale Agreement has been duly approved by the City and constitutes a legal, valid and binding obligation of the City enforceable against the City in accordance with its terms. The Installment Sale Agreement establishes a valid lien on and security interest in the Net Revenues of the Water System and other funds pledged thereby for the security of the Installment Payments, in accordance with the terms of the Installment Sale Agreement.

6. Interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax. The opinions set forth in the preceding sentence are subject to the condition that the Authority and the City comply with all requirements of the Internal Revenue Code of 1986, as amended, which must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The Authority and the City have covenanted in the Indenture, the Installment Sale Agreement and in other instruments relating to the Bonds to comply with each of such requirements, and the Authority and the City have full legal authority to make and comply with such covenants. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds. We express no opinion regarding other federal tax consequences arising with respect to the ownership, sale or disposition of the Bonds, or the amount, accrual or receipt of interest on the Bonds.

7. Interest on the Bonds is exempt from California personal income taxation.

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

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

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

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

Agenda Item #5.1.

E- 3
Respectfully submitted,
A Professional Law Corporation
Agenda Item #5.1.

F-1

APPENDIX F

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

Neither the issuer of the Bonds (the “Issuer”) nor the trustee, fiscal agent or paying agent appointed with respect to the Bonds (the “Agent”) take any responsibility for the information contained in this Appendix.

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

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

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

Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust Agenda Item #5.1.

F-2
companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. The information contained on this Internet site is not incorporated herein by reference.

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

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

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

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

7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC’s MMI Agenda Item #5.1.

F-3
Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).

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

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

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

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

Agenda Item #5.1.

$______
ST. HELENA FINANCING AUTHORITY
2024 WATER REVENUE BONDS

BOND PURCHASE AGREEMENT
_______, 2024
St. Helena Financing Authority
1088 College Avenue
St. Helena, CA 94574
City of St. Helena
1088 College Avenue
St. Helena, CA 94574
Ladies and Gentlemen:

Oppenheimer & Co. Inc. (the “Underwriter”) hereby offers to enter into this Bond Purchase Agreement (the “Purchase Agreement”) with you, the St. Helena Financing Authority (the “Authority”) and the City of St. Helena (the “City”), for the purchase by the Underwriter and the delivery by the Authority of the above-referenced Bonds (the “Bonds”). The proceeds of the Bonds will be used to: (i) finance certain capital improvements to the City’s water system; (ii) purchase a municipal bond insurance policy to guarantee payment of the principal of and interest on the Bonds (the “Policy”); (iii) purchase a municipal bond debt service reserve insurance policy for deposit in the Reserve Fund (the “Reserve Policy”); and (iv) pay costs incurred in connection with the issuance of the Bonds. This offer is subject to your acceptance prior to 11:59 p.m., California time, on the date hereof and if not so accepted will be subject to withdrawal by the Underwriter upon written notice delivered to the Authority and the City at any time prior to the acceptance thereof by the Authority and the City. Upon such acceptance, this Purchase Agreement shall be in full force and effect in accordance with its terms and shall be binding upon you and the Underwriter. All terms not defined herein shall have the meanings set forth in the Indenture and the Installment Sale Agreement (each defined below).

The Authority and the City acknowledge and agree that: (i) the purchase and sale of the Bonds pursuant to this Purchase Agreement is an arm’s-length commercial transaction among the City, the Authority and the Underwriter in which the Underwriter is acting solely as a principal and not as an agent of the Authority or the City and the Underwriter is not acting as a municipal advisor, financial advisor or fiduciary to the Authority or the City; (ii) the Underwriter has not assumed any advisory or fiduciary responsibility to the Authority or the City with respect to the transaction contemplated by this Purchase Agreement and the discussions, undertakings or procedures leading thereto (irrespective of whether the Underwriter, or any affiliate of the Underwriter has provided other services or is currently providing other services to the Authority or the City on other matters); (iii) the only obligations the Underwriter has to the Authority and the City with respect to the transaction contemplated by this Purchase Agreement are expressly set forth in this Purchase Agreement; (iv) the Underwriter has financial and other interests that differ from those of the Authority and the City; and EXHIBIT 6
Agenda Item #5.1.

2 (v) the Authority and the City have consulted their own financial and/or municipal, legal, accounting, tax and other advisors, as applicable, to the extent the Authority and the City have deemed appropriate.

The Authority acknowledges that it has previously provided the Underwriter with an acknowledgement of receipt of the required Underwriter disclosure under Rule G-17 of the Municipal Securities Rulemaking Board (the “MSRB”).

1. Upon the terms and conditions and upon the basis of the representations herein set forth, the Underwriter hereby agrees to purchase from the Authority for offering to the public, and the Authority hereby agrees to sell and deliver to the Underwriter, all (but not less than all) of the $______ aggregate principal amount of the Bonds to be dated the Closing Date, at a price of $______, being the principal amount of the Bonds, plus original issue premium of $_______, less an Underwriter’s discount of $_______.

The Bonds shall mature in the amounts and on the dates, and bear interest at the rates, set forth in Exhibit A hereto. The Bonds shall be as described in and shall be secured under and pursuant to an Indenture of Trust, dated as of July 1, 2024 (the “Indenture”), between the Authority and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), substantially in the form previously submitted to the Underwriter with only such changes therein as shall be mutually agreed upon by the Authority, the City, the Trustee and the Underwriter.

The obligation of the Authority to pay the principal of and interest on the Bonds is a special obligation of the Authority, payable solely from Revenues (as defined in the Indenture), and certain other amounts held under the Indenture. Revenues consist primarily of Installment Payments (referred to herein as “Installment Payments”) made by the City to the Authority pursuant to the Installment Sale Agreement (as defined below). The principal of and interest on the Bonds are not required to be paid from any other funds of the Authority, including any proceeds of any taxes, and the Bonds do not constitute a debt or pledge of the faith and credit of the Authority or the State of California (the “State”) or any political subdivision thereof in contravention of any constitutional or statutory debt limitation or restriction.

The obligation of the City to make Installment Payments under the Installment Sale Agreement is a special obligation of the City payable solely from and secured by a pledge of Net Revenues of the City’s water system (the “Water System”) on a parity with (i) the 2012 Installment Purchase Agreement; and (ii) the 2019 Loan Agreement. The 2012 Installment Purchase Agreement and the 2019 Loan Agreement are collectively referred to herein as the “Parity Obligations.” The scheduled payment of principal of and interest on the Bonds when due will be guaranteed under the Policy to be issued concurrently with the delivery of the Bonds by _______ (the “Insurer”).

The Insurer will also issue the Reserve Policy concurrently with the delivery of the Bonds.

The Authority and the City hereby ratify the use by the Underwriter of the Preliminary Official Statement, dated _______, 2024 relating to the Bonds (together with the cover page and all appendices thereto, and any supplements thereof, the “Preliminary Official Statement”), and authorize the Underwriter to use and distribute the Preliminary Official Statement, the Official Statement (as defined below), the Indenture, the Installment Sale Agreement, dated as of July 1, 2024, between the Authority and the City (the “Installment Sale Agreement”), the Continuing Disclosure Certificate as required by Securities and Exchange Commission Rule 15c2-12 (“Rule 15c2-12”), dated the Closing Date relating to the Bonds (the “Continuing Disclosure Certificate”), and substantially in the form attached as an appendix to the Official Statement, executed by the City and this Purchase Agreement, and all Agenda Item #5.1.

3 information contained therein, and all other documents, certificates and statements furnished by the Authority and the City to the Underwriter in connection with the offer and sale of the Bonds by the Underwriter. The Authority and the City have heretofore “deemed final” the Preliminary Official Statement within the meaning of Rule 15c2-12.

The City will undertake pursuant to the Continuing Disclosure Certificate to provide certain annual financial and operating information and notices of the occurrence of certain events. A description of this undertaking is set forth in the Preliminary Official Statement and will also be set forth in the final Official Statement. This undertaking will be entered into in order to assist the Underwriter in complying with Rule 15c2-12.

2. The Underwriter agrees to offer all the Bonds to the public initially at the prices (or yields) set forth on the inside cover page of the Official Statement of the Authority pertaining to the Bonds, dated ______, 2024 (together with all appendices thereto, and with such changes therein and supplements thereto and as are consented to in writing by the Underwriter, and with the Preliminary Official Statement, are herein called the “Official Statement”). Subsequent to the initial public offering of the Bonds, the Underwriter reserves the right to change the public offering prices (or yields) as it deems necessary in connection with the marketing of the Bonds subject to Section 5 hereof. The Bonds may be offered and sold to certain dealers at prices lower than such initial public offering prices.

The Underwriter agrees that prior to the time the final Official Statement relating to the Bonds is available, the Underwriter will send to any potential purchaser of the Bonds, upon the request of such potential purchaser, a copy of the most recent Preliminary Official Statement. Such Preliminary Official Statement shall be sent by first class mail or electronic distribution (or other equally prompt means) not later than the first business day following the date upon which each such request is received.

3. The Authority shall also deliver a sufficient number of copies of the Official Statement to enable the Underwriter to distribute a single copy of each Official Statement to any potential customer of the Underwriter requesting an Official Statement during the time period beginning when the Official Statement becomes available and ending on the End Date (defined below). The Authority shall deliver these copies to the Underwriter no later than the earlier of (i) seven (7) business days after the execution of this Purchase Agreement or (ii) one (1) business day prior to the Closing Date in order to permit the Underwriter to comply with Rule 15c2-12, and the applicable rules of the MSRB, with respect to distribution of the Official Statement. The Authority and City shall prepare the Official Statement, including any amendments thereto, in word-searchable PDF format as described in the MSRB’s Rule G-32 and shall provide the electronic copy of the word-searchable PDF format of the Official Statement to the Underwriter no later than one (1) business day prior to the Closing Date to enable the Underwriter to comply with MSRB Rule G-32. The Underwriter shall inform the City in writing of the End Date, and covenants to file the Official Statement with the MSRB on a timely basis.

The Official Statement, as of its date, as of the Closing Date (as defined herein) and as of the date of any update, amendment or supplement thereto as required hereby subsequent to the Closing, up to and including the date which is twenty-five (25) days following the end (the “End Date”) of the Underwriting Period (as hereinafter defined), will be correct and complete in all material respects 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.

If, after the date of this Purchase Agreement and until the earlier of (i) ninety (90) days after the end of the “underwriting period” (as defined in Rule 15c2-12) (the “Underwriting Period”), or Agenda Item #5.1.

4 (ii) twenty-five (25) days following the end of the Underwriting Period if the Official Statement is available to any person from the MSRB as contemplated by Rule 15c2-12(b)(4), any event shall occur or circumstance shall exist of which the Authority or the City have knowledge that would cause the Official Statement 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 Authority or the City, as the case may be, shall notify the Underwriter (and for the purpose of this Section provide the Underwriter with such information as it may from time to time reasonably request), and, if in the opinion of the City, the Authority or the Underwriter such event or circumstance requires the preparation and publication of a supplement or amendment to the Official Statement, the Authority and the City will, at their expense, supplement or amend the Official Statement in a form and manner jointly approved by the City, the Authority and the Underwriter and furnish to the Underwriter a reasonable number of copies of such supplement or amendment provided that the Underwriter agrees that it will promptly notify the Authority and the City of the end of the Underwriting Period.

4. At 8:30 a.m., Pacific Time, on ________, 2024, or at such other time or date as shall be agreed upon by the Underwriter, Authority and the City (such time and date being herein referred to as the “Closing Date”), the Authority will deliver to the Underwriter, at a location or locations to be designated by the Underwriter, the Bonds in book-entry form (all Bonds having had the CUSIP numbers assigned to them thereon), duly executed by an authorized officer of the Trustee as provided in the Indenture, and the other documents herein mentioned; and the Underwriter will accept such delivery and pay the purchase price of the Bonds as set forth in Section 1 of this Purchase Agreement in immediately available funds (such delivery and payment being herein referred to as the “Closing”).

Upon initial issuance, the ownership of such Bonds shall be registered in the registration books kept by the Trustee in the name of Cede & Co., as the nominee of The Depository Trust Company.

It is anticipated that CUSIP numbers will be printed on the Bonds, but neither the failure to provide such numbers nor any error with respect thereto shall constitute a cause for failure or refusal by the Underwriter to accept delivery of the Bonds in accordance with the terms of this Purchase Agreement.

5. A. The Underwriter agrees to assist the Authority in establishing the issue price of the Bonds and shall execute and deliver to the Authority at Closing an “issue price” or similar certificate, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit B, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the Authority and Bond Counsel (as defined herein), to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds.

B. Except as otherwise set forth in Exhibit A attached hereto, the Authority will treat the first price at which 10% of each maturity of the Bonds (the “10% test”) is sold to the public as the issue price of that maturity. At or promptly after the execution of this Purchase Agreement, the Underwriter shall report to the Authority the price or prices at which it has sold to the public each maturity of Bonds. If at that time the 10% test has not been satisfied as to any maturity of the Bonds, the Underwriter agrees to promptly report to the Authority the prices at which it sells the unsold Bonds of that maturity to the public. That reporting obligation shall continue, whether or not the Closing Date has occurred, until either (i) the Underwriter has sold all Bonds of that maturity or (ii) the 10% test has been satisfied as to the Bonds of that maturity, provided that, the Underwriter’s reporting obligation Agenda Item #5.1.

5 after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Authority or Bond Counsel. For purposes of this Section, if Bonds mature on the same date but have different interest rates, each separate CUSIP number within that maturity will be treated as a separate maturity of the Bonds.

C. The Underwriter confirms that it has offered the Bonds to the public on or before the date of this Purchase Agreement at the offering price or prices (the “initial offering price”), or at the corresponding yield or yields, set forth in Exhibit A attached hereto. Exhibit A also sets forth, as of the date of this Purchase Agreement, the maturities, if any, of the Bonds for which the Underwriter represents that (i) the 10% test has been satisfied (assuming orders are confirmed by the close of the business day immediately following the date of this Purchase Agreement) and (ii) the 10% test has not been satisfied and for which the Authority and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the Authority to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the “hold-theoffering-price rule”). So long as the hold-the-offering-price rule remains applicable to any maturity of the Bonds, the Underwriter will neither offer nor sell unsold Bonds of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following:
a. the close of the fifth (5th) business day after the sale date; or b. the date on which the Underwriter has sold at least 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public.

The Underwriter will advise the Authority promptly after the close of the fifth (5th) business day after the sale date whether it has sold 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public.

D. The Underwriter confirms that:
(i) any selling group agreement and any third-party distribution agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer who is a member of the selling group and each broker-dealer that is a party to such third-party distribution agreement, as applicable:
(A)(i) to report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter that the 10% test has been satisfied as to the 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 Underwriter and (ii) to comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter, (B) to promptly notify the Underwriter of any sales of 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 Bonds to the public (each such term being used as defined below), and (C) to acknowledge that, unless otherwise advised by the dealer or broker-dealer, the Underwriter shall assume that each order submitted by the dealer or broker-dealer is a sale to the public.

Agenda Item #5.1.

6 (ii) any selling group agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer that is a party to a third-party distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require each broker-dealer that is a party to such third-party distribution agreement to (A) report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter or the dealer that the 10% test has been satisfied as to the 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 Underwriter or the dealer, and (B) comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter or the dealer and as set forth in the related pricing wires.

E. The Authority acknowledges that, in making the representation set forth in this section, the Underwriter will rely on (i) in the event a selling group has been created in connection with the initial sale of the Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the requirements for establishing the issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, as set forth in a selling group agreement and the related pricing wires, and (ii) in the event that a third-party distribution agreement was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the requirements for establishing the issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, as set forth in the thirdparty distribution agreement and the related pricing wires. The Authority further acknowledges that the Underwriter shall not be liable for the failure of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a third-party distribution agreement, to comply with its corresponding agreement to comply with the requirements for establishing the issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds.

F. The Underwriter acknowledges that sales of any Bonds to any person that is a related party to an underwriter participating in the initial sale of the 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:
a. “public” means any person other than an underwriter or a related party; b. “underwriter” means (A) any person that agrees pursuant to a written contract with the Authority (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a third-party distribution agreement participating in the initial sale of the Bonds to the public);
c. a purchaser of any of the Bonds is a “related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (A) 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 of their capital interests or profits interests, if both entities are partnerships Agenda Item #5.1.

7 (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
d. “sale date” means the date of execution of this Purchase Agreement by all parties.

6. The Underwriter represents to and agrees with the Authority and the City that, as of the date hereof and as of the Closing Date:
(i) The Underwriter is duly authorized to execute this Purchase Agreement and to take any action under this Purchase Agreement required to be taken by it; (ii) The Underwriter is in compliance with MSRB Rule G-37 with respect to the Authority and the City, and is not prohibited thereby from acting as the underwriter with respect to securities of the Authority and the City; and
(iii) The Underwriter has, and has had, no financial advisory relationship, as that term is defined in California Government Code Section 53590 (c) or MSRB Rule G-32, with the City or the Authority with respect to the Bonds, and no investment firm controlling, controlled by or under common control with such Underwriter have or has had any such financial advisory relationship; and

7. The Authority represents, warrants and covenants to the Underwriter that:
(a) The Authority is a joint powers authority duly organized and validly existing pursuant to the laws of the State of California and has all necessary power and authority to enter into and perform its duties under the Indenture, the Installment Sale Agreement and this Purchase Agreement (collectively, the “Authority Documents”) and, when executed and delivered by the respective parties thereto, the Authority Documents will constitute the legal, valid and binding obligations of the Authority in accordance with their respective terms. (b) Neither the execution and delivery of the Authority Documents, or the approval of the Preliminary Official Statement or the approval and execution of the Official Statement, and compliance with the provisions on the Authority’s part contained therein, nor the consummation of any other of the transactions herein and therein contemplated, nor the fulfillment of the terms hereof and thereof, conflicts with or constitutes a breach of or default under nor contravenes any law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Authority is a party or is otherwise subject, nor does any such execution, delivery, adoption or compliance result in a security interest in or encumbrance of any nature whatsoever upon any of the properties or assets of the Authority under the terms of any such law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument, except as provided by the Authority Documents. (c) Except as may be required under blue sky or other securities laws of any state, there is no consent, approval, authorization or other order of, or filing with, or certification by, any regulatory authority having jurisdiction over the Authority required for the execution and delivery of Agenda Item #5.1.

8 the Bonds or the consummation by the Authority of the other transactions contemplated by the Preliminary Official Statement, the Official Statement and this Purchase Agreement. (d) To the best of the knowledge of the Authority, there is, and on the Closing there will be, no action, suit, proceeding or investigation at law or in equity before or by any court or governmental agency or body pending or threatened against the Authority to restrain or enjoin the delivery of any of the Bonds, or the payments to be made pursuant to the Indenture, or in any way contesting or affecting the validity of the Authority Documents or of the Authority to enter into the Authority Documents or contesting the powers of the Authority to perform its obligations under any of the foregoing or in any way contesting the powers of the Authority in connection with any action contemplated by this Purchase Agreement, or in any way questioning or challenging the tax status of interest on the Bonds.
(e) As of its date and as of the date hereof, the information relating to the Authority and the Bonds contained in the Preliminary Official Statement was and is true and correct in all material respects and such information did not and does not contain any untrue or misleading statement of a material fact or omitted or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (f) As of the date thereof and at all times subsequent thereto up to and including the End Date, the information relating to the Authority contained in the Official Statement will be complete and will not contain any untrue or misleading statement of a material fact or omit to state any material fact (unless an event occurs of the nature described in Section 7(j) below) necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

As of its date and as of the date hereof, the information relating to the Authority and the Bonds contained in the Official Statement is true and correct in all material respects and such information does not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(g) The Authority agrees to cooperate with the Underwriter in endeavoring to qualify the Bonds for offering and sale under the securities or blue sky laws of such jurisdictions of the United States as the Underwriter may request; provided, however, that the Authority will not be required to execute a special or general consent to service of process in any jurisdiction in which it is not now so subject or to qualify to do business as a foreign agency in any jurisdiction where it is not so qualified.
(h) By official action of the Authority prior to or concurrently with the execution hereof, the Authority has duly approved the distribution of the Preliminary Official Statement and the Official Statement, and has duly authorized and approved the execution and delivery of, and the performance by the Authority of the obligations on its part contained in the Authority Documents and the consummation by it of all other transactions contemplated by the Preliminary Official Statement, the Official Statement and this Purchase Agreement.
(i) The Authority is not in breach of or default under any applicable law or administrative regulation of the State of California or the United States or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Authority is a party or is otherwise subject, and no event has occurred and is continuing which, Agenda Item #5.1.

9 with the passage of time or the giving of notice, or both, would constitute a default or an event of default under any such instrument.
(j) The Authority is not in default, nor has been in default at any time, as to the payment of principal or interest with respect to an obligation issued by the Authority or with respect to an obligation guaranteed by the Authority as guarantor. (k) If between the date of this Purchase Agreement and the End Date an event occurs, of which the Authority has knowledge, which might or would cause the information relating to the Authority or the Authority’s functions, duties and responsibilities contained in the Official Statement, as then supplemented or amended, to contain an untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary to make such information therein, in the light of the circumstances under which it was presented, not misleading, the Authority will notify the Underwriter, and if, in the opinion of the Underwriter, such event requires the preparation and publication of a supplement or amendment to the Official Statement, the Authority will cooperate with the Underwriter in the preparation of an amendment or supplement to the Official Statement in a form and in a manner approved by the Underwriter, provided all expenses thereby incurred will be paid for by the Authority.
(l) If the information relating to the Authority, its functions, duties and responsibilities contained in the Official Statement is amended or supplemented pursuant to the immediately preceding subsection, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such subsection) at all times subsequent thereto up to and including the End Date, the portions of the Official Statement so supplemented or amended (including any financial and statistical data contained therein) will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make such information therein, in the light of the circumstances under which it was presented, not misleading.
(m) No consent, approval, authorization or other action by a governmental or regulatory authority that has not been obtained is or will be required of the Authority for the delivery and sale of the Bonds or the consummation of the other transactions contemplated by this Purchase Agreement, the Preliminary Official Statement and the Official Statement, except as may be required under the state securities or blue sky laws in connection with the sale of the Bonds by the Underwriter. (n) At or prior to the Closing, the Authority will deliver all opinions, Bonds, letters and other instruments and documents reasonably required by the Underwriter and this Purchase Agreement.
(o) Any certificate of the Authority delivered to the Underwriter shall be deemed a representation and warranty by the Authority to the Underwriter as to the statements made therein. (p) Other than as described in the Preliminary Official Statement and the Official Statement, as of the time of acceptance hereof and as of the Closing the Authority does not and will not have outstanding any indebtedness which is secured by a lien on the Installment Payments superior to or on a parity with the lien of the Bonds thereon.
(q) Between the date of this Purchase Agreement and the date of Closing, the Authority will not, without the prior written consent of the Underwriter, and except as disclosed in the Agenda Item #5.1.

10 Preliminary Official Statement and the Official Statement, offer or issue any bonds, notes or other obligations for borrowed money, or incur any material liabilities, direct or contingent. (r) The Authority is not presently and as a result of the execution of the Authority Documents and the sale of the Bonds will not be in violation of any debt limitation, appropriation limitation or any other provision of the California Constitution or statutes or any additional debt or similar provision of any bond, note, contract or other evidence of indebtedness to which the Authority is a party or to which the Authority is bound.
(s) The Authority will not knowingly take or omit to take any action, which action or omission will in any way cause the proceeds from the sale of the Bonds to be applied in a manner other than as provided in the Authority Documents, unless otherwise required by law.

8. The City represents, warrants and covenants to the Underwriter that:
(a) The City is a general law city duly organized under the laws of the State of California, and has all necessary power and authority to enter into and perform its duties under the Installment Sale Agreement, the Continuing Disclosure Certificate, and this Purchase Agreement (collectively, the “City Documents”) and, when executed and delivered by the respective parties thereto, the City Documents will constitute the legal, valid and binding obligations of the City in accordance with their respective terms.
(b) Neither the execution and delivery of the City Documents, or the approval of the Preliminary Official Statement or the approval and execution of the Official Statement, and compliance with the provisions on the City’s part contained therein, nor the consummation of any other of the transactions herein and therein contemplated, nor the fulfillment of the terms hereof and thereof, conflicts with or constitutes a breach of or default under nor contravenes any law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party or is otherwise subject, nor does any such execution, delivery, adoption or compliance result in a security interest in or encumbrance of any nature whatsoever upon any of the properties or assets of the City under the terms of any such law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument, except as provided by the City Documents.
(c) Except as may be required under blue sky or other securities laws of any state, there is no consent, approval, authorization or other order of, or filing with, or certification by, any regulatory authority having jurisdiction over the City required for the execution and delivery of the Bonds or the consummation by the City of the other transactions contemplated by the Preliminary Official Statement, the Official Statement and this Purchase Agreement. (d) To the best of the knowledge of the City, there is, and on the Closing there will be, no action, suit, proceeding or investigation at law or in equity before or by any court or governmental agency or body pending or threatened against the City to restrain or enjoin the delivery of any of the Bonds, or the payments to be made pursuant to the Installment Sale Agreement and Indenture, or in any way contesting or affecting the validity of the City Documents or of the City to approve or enter into the City Documents, or in any way questioning or challenging the tax status of interest on the Bonds.

Agenda Item #5.1.

11 (e) As of its date and as of the date hereof, the information relating to the City, the Bonds and the Water System contained in the Preliminary Official Statement was and is true and correct in all material respects and such information did not and does not contain any untrue or misleading statement of a material fact or omitted or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (f) As of the date thereof and at all times subsequent thereto up to and including the End Date, the information relating to the City, the Bonds and the Water System contained in the Official Statement will be complete and will not contain any untrue or misleading statement of a material fact or omit to state any material fact (unless an event occurs of the nature described in Section 8(j) below) necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. As of its date and as of the date hereof, the information relating to the City, the Bonds and the Water System contained in the Official Statement is true and correct in all material respects and such information does not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (g) The City agrees to cooperate with the Underwriter in endeavoring to qualify the Bonds for offering and sale under the securities or blue sky laws of such jurisdictions of the United States as the Underwriter may request; provided, however, that the City will not be required to execute a special or general consent to service of process in any jurisdiction in which it is not now so subject or to qualify to do business as a foreign agency in any jurisdiction where it is not so qualified. (h) By official action of the City prior to or concurrently with the execution hereof, the City has duly approved the distribution of the Preliminary Official Statement and the Official Statement, and has duly authorized and approved the execution and delivery of, and the performance by the City of the obligations on its part contained in the City Documents and the consummation by it of all other transactions contemplated by the Preliminary Official Statement, the Official Statement and this Purchase Agreement.
(i) The City is not in breach of or default under any applicable law or administrative regulation of the State of California or the United States or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party or is otherwise subject, 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 an event of default under any such instrument.
(j) The City is not in default, nor has been in default at any time, as to the payment of principal or interest with respect to an obligation issued by the City or with respect to an obligation guaranteed by the City as guarantor.
(k) If between the date of this Purchase Agreement and the End Date an event occurs, of which the City has knowledge, which might or would cause the information relating to the City, the Water System or the City’s functions, duties and responsibilities contained in the Official Statement, as then supplemented or amended, to contain an untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary to make such information therein, in the light of the circumstances under which it was presented, not misleading, the City will notify the Underwriter, and if, in the opinion of the Underwriter, such event requires the preparation and publication of a supplement or amendment to the Official Statement, the City will cooperate with the Agenda Item #5.1.

12 Underwriter in the preparation of an amendment or supplement to the Official Statement in a form and in a manner approved by the Underwriter, provided all expenses thereby incurred will be paid for by the City.
(l) If the information relating to the Water System, the City, its functions, duties and responsibilities contained in the Official Statement is amended or supplemented pursuant to the immediately preceding subsection, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such subsection) at all times subsequent thereto up to and including the End Date, the portions of the Official Statement so supplemented or amended (including any financial and statistical data contained therein) will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make such information therein, in the light of the circumstances under which it was presented, not misleading.
(m) The City covenants that it will comply with all tax covenants relating to it in the City Documents and the Tax Certificate of the City. (n) The written information supplied by the City to the Underwriter with respect to the financial information relating to the Water System is true, correct and complete in all material respects for the purposes for which it was supplied.
(o) No consent, approval, authorization or other action by a governmental or regulatory agency that has not been obtained is or will be required of the City for the delivery and sale of the Bonds or the consummation of the other transactions contemplated by this Purchase Agreement, the Preliminary Official Statement and the Official Statement, except for such licenses, certificates, approvals, variances or permits which may be necessary for the construction or operation of the Water System which the City has applied for (or will apply for in the ordinary course of business) and expects to receive, and except as may be required under the state securities or blue sky laws in connection with the sale of the Bonds by the Underwriter.
(p) The City will not take or omit to take any action which action or omission will in any way cause the proceeds from the sale of the Bonds to be applied in a manner contrary to that provided in the Indenture and as described in the Preliminary Official Statement and Official Statement, unless otherwise required by law.
(q) At or prior to the Closing, the City will deliver all opinions, certificates, letters and other instruments and documents reasonably required by the Underwriter and this Purchase Agreement.
(r) Any certificate of the City delivered to the Underwriter shall be deemed a representation and warranty by the City to the Underwriter as to the statements made therein. (s) Other than as described in the Preliminary Official Statement and the Official Statement, as of the time of acceptance hereof and as of the Closing, the City does not and will not have outstanding any indebtedness which is secured by a lien on the Net Revenues superior to or on a parity with the lien thereon established under the Indenture. (t) Between the date of this Purchase Agreement and the date of Closing, the City will not, without the prior written consent of the Underwriter, and except as disclosed in the Agenda Item #5.1.

13 Preliminary Official Statement and the Official Statement, offer or issue any bonds, notes or other obligations for borrowed money, or incur any material liabilities, direct or contingent payable from the Net Revenues.
(u) The City is not presently and as a result of the execution of the City Documents and the sale of the Bonds will not be in violation of any debt limitation, appropriation limitation or any other provision of the California Constitution or statutes or any additional debt or similar provision of any bond, note, contract or other evidence of indebtedness to which the City is a party or to which the City is bound.
(v) Based on a review of its previous undertakings, the City has not, in the last five years, failed to comply in any material respect with its obligations under any continuing disclosure undertaking entered into pursuant to Rule 15c2-12 except as disclosed in the Preliminary Official Statement and the Official Statement. The City will undertake, pursuant to the Continuing Disclosure Certificate to provide annual reports and notices of certain events in accordance with the requirements of Rule 15c2-12.

9. The Underwriter has entered into this Purchase Agreement in reliance upon the representations, warranties and agreements of the Authority and the City contained herein, and the opinions of Bond Counsel, Counsel to the Trustee, City Attorney to the City and Counsel to the Authority required hereby. The Underwriter’s obligations under this Purchase Agreement are and shall be subject to the following further conditions:
(a) At the time of Closing, this Purchase Agreement, the Indenture, the Installment Sale Agreement, and the Continuing Disclosure Certificate (collectively the “Legal Documents”), all as described in the Preliminary Official Statement and the Official Statement, shall be in full force and effect as valid and binding agreements between or among the various parties thereto, and the Legal Documents and the Official Statement shall not have been amended, modified or supplemented except as may have been agreed to in writing by the Underwriter, and there shall be in full force and effect such resolutions as, in the opinion of Jones Hall, A Professional Law Corporation (“Bond Counsel”), shall be necessary in connection with the transactions contemplated hereby. (b) At or prior to the Closing, the Underwriter shall receive the following documents, in each case satisfactory in form and substance to them:
(1) The unqualified approving opinion of Bond Counsel, dated the date of Closing, addressed to the Authority, the City, the Trustee and the Underwriter (or a reliance letter to the Trustee and the Underwriter), in substantially the form attached as Appendix E to the Official Statement.
(2) A supplemental opinion of Bond Counsel, dated as of the date of Closing addressed to the Underwriter, in form and substance to the effect that:
(a) The statements and information contained in the Official Statement on the cover page relating to tax exemption, the description of the Bonds and security for the Bonds, and statements under the captions “INTRODUCTION,” “THE 2024 BONDS,” “SECURITY FOR THE 2024 BONDS,” “TAX MATTERS” and APPENDICES A, C and E to the extent they purport to summarize information concerning the Bonds and certain provisions of the Legal Documents and the opinion Agenda Item #5.1.

14 of such counsel, present a fair and accurate summary of such information and such provisions;
(b) The Bonds are exempt from registration under the Securities Act of 1933, as amended, and the Indenture is exempt from qualification as an Indenture pursuant to the Indenture Act of 1939, as amended; and (c) The Purchase Agreement has been duly authorized, executed and delivered by the Authority and the City, and, assuming due authorization, execution and delivery by the other parties thereto, constitutes legal, valid and binding agreement of the Authority and the City enforceable against each in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors’ rights generally and equitable remedies if equitable remedies are sought, and except no opinion need be expressed as to the enforceability of the indemnification, waiver, choice of law or contributions provisions contained in the Purchase Agreement.
(3) A letter from Jones Hall, A Professional Law Corporation, Disclosure Counsel, dated the date of Closing and addressed to the Authority, the City and the Underwriter, to the effect that, based upon the information made available to them in the course of their participation in the preparation of the Preliminary Official Statement and the Official Statement and without passing on and without assuming any responsibility for the accuracy, completeness and fairness of the statements in the Preliminary Official Statement and the Official Statement, and having made no independent investigation or verification thereof, no facts have come to their attention that lead them to believe that the Preliminary Official Statement as of its date and as of the date of this Purchase Agreement and the Official Statement, as of its date and as of the date of Closing, (except for any CUSIP data, financial or statistical data or forecasts, numbers, charts, estimates, projections, assumptions or expressions of opinion, any appendices thereto, or any information about the Insurer, the Policy, the Reserve Policy, DTC and its book-entry only system), as to which no opinion or view need be expressed) contained or contains any untrue statement of a material fact or omitted or omits 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.
(4) An opinion of Best Best & Krieger LLP, as counsel to the Authority, dated the date of Closing in form and substance satisfactory to the Underwriter and Bond Counsel, addressed to the City and the Underwriter, to the effect that:
(i) the Authority is a joint powers authority duly organized and validly existing under the laws of the State of California; (ii) the preparation and distribution of the Preliminary Official Statement and Official Statement and the Authority Documents have been duly approved by the Authority;
(iii) the resolution of the Authority approving the Preliminary Official Statement and approving and authorizing the execution and delivery Agenda Item #5.1.

15 of the Official Statement and the Authority Documents has been duly adopted at a regular meeting of the governing body of the Authority 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 and such resolution has not been amended or modified and is in full force and effect;
(iv) to the best knowledge of such firm, there is no action, suit, proceeding or investigation at law or in equity before or by any court, public board or body, pending or, threatened against or affecting the Authority, which would adversely impact the Authority’s ability to complete the transactions described in and contemplated by the Preliminary Official Statement and the Official Statement, to restrain or enjoin the payments under, or in any way contesting or affecting the validity of the Authority Documents, or the transactions described and defined in the Preliminary Official Statement and the Official Statement wherein an unfavorable decision, ruling or finding would adversely affect the validity and enforceability of the Authority Documents;
(v) the execution and delivery of the Authority Documents and the approval of the Preliminary Official Statement and the Official Statement, and compliance with the provisions thereof and hereof, under the circumstances contemplated thereby, do not and will not in any material respect conflict with or constitute on the part of the Authority a breach of or default under any agreement or other instrument to which the Authority is a party or by which it is bound or any existing law, regulation, court order or consent decree to which the Authority is subject;
(vi) the Authority Documents and the Official Statement have been duly authorized, executed and delivered by the Authority, and, assuming due authorization, execution and delivery by the other parties thereto, the Authority Documents constitute legal, valid and binding agreements of the Authority enforceable in accordance with their respective 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 sought and by the limitations on legal remedies imposed on actions against public agencies in the State of California; (vii) no authorization, approval, consent, or other order of the State of California or any other governmental authority or agency within the State of California is required for the valid authorization, execution and delivery of the Authority Documents and the approval of the Preliminary Official Statement and the Official Statement.
(5) An opinion of Best Best & Krieger LLP, as counsel to the City, dated the date of Closing in form and substance satisfactory to the Underwriter and Bond Counsel, addressed to the Authority and the Underwriter, to the effect that:
(i) the City is a general law city created in accordance with the laws of the State of California;
Agenda Item #5.1.

16 (ii) the preparation and distribution of the Preliminary Official Statement and the Official Statement and the City Documents have been duly approved by the City;
(iii) the resolutions of the City approving the Preliminary Official Statement and approving and authorizing the execution and delivery of the Official Statement and the City Documents have been duly adopted at meetings of the governing body of the City which were called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout and such resolutions have not been amended or modified and are in full force and effect;
(iv) to the best knowledge of such firm, there is no action, suit, proceeding or investigation at law or in equity before or by any court, public board or body, pending or, threatened against or affecting the City, which would adversely impact the City’s ability to complete the transactions described in and contemplated by the Official Statement, to restrain or enjoin the payments under, or in any way contesting or affecting the validity of the City Documents, or the transactions described and defined in the Official Statement wherein an unfavorable decision, ruling or finding would adversely affect the validity and enforceability of the City Documents; (v) the execution and delivery of the City Documents and the approval of the Preliminary Official Statement and the Official Statement, and compliance with the provisions thereof and hereof, 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 agreement or other instrument to which the City is a party or by which it is bound or any existing law, regulation, court order or consent decree to which the City is subject;
(vi) the City Documents and the Official Statement have been duly authorized, executed and delivered by the City, and, assuming due authorization, execution and delivery by the other parties thereto, the City Documents constitute legal, valid and binding agreements of the City enforceable in accordance with their respective 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 sought and by the limitations on legal remedies imposed on actions against public agencies in the State of California; (vii) no authorization, approval, consent, or other order of the State of California or any other governmental authority or agency within the State of California is required for the valid authorization, execution and delivery of the City Documents and the approval of the Preliminary Official Statement and the Official Statement;
Agenda Item #5.1.

17 (viii) the City’s charges and fees with respect to the Water System were duly approved and adopted by the City and are valid and enforceable at the current levels levied by the City.
(6) The opinion of counsel to the Trustee, dated the date of Closing in form and substance satisfactory to the Underwriter and Bond Counsel, and addressed to the Authority, the City and the Underwriter, to the effect that:
(i) the Trustee is a national banking association duly organized and validly existing under the laws of the United States; (ii) the Trustee has duly authorized the execution and delivery of the Indenture;
(iii) the Indenture has been duly entered into and delivered by the Trustee and assuming due, valid and binding authorization, execution and delivery by the other parties thereto, constitutes the legal, valid and binding obligation of the Trustee enforceable against the Trustee in accordance with its terms, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency or other similar laws affecting the enforcement of creditors’ rights generally, or by general principles of equity; (iv) the Trustee has duly authenticated and delivered the Bonds in its capacity as trustee under the Indenture;
(v) acceptance by the Trustee of the duties and obligations under the Indenture and compliance with provisions thereof will not conflict with or constitute a breach of or default under any law or administrative regulation to which the Trustee is subject; and
(vi) all approvals, consents and orders of any governmental authority or agency having jurisdiction in the matter which would constitute a condition precedent to the performance by the Trustee of its duties and obligations under the Indenture have been obtained and are in full force and effect.
(7) An opinion dated the date of the Closing and addressed to the Underwriter, of Kutak Rock LLP, counsel to the Underwriter (“Underwriter’s Counsel”), in such form as may be acceptable to the Underwriter. (8) A certificate, dated the date of Closing, signed by a duly authorized official of the Authority satisfactory in form and substance to the Underwriter and Bond Counsel, (a) confirming as of such date the representations and warranties of the Authority contained in this Purchase Agreement; (b) certifying that the Authority has complied with all agreements, covenants and conditions to be complied with by the Authority at or prior to the Closing under the Authority Documents; and (c) certifying that to the best of such official’s knowledge, no event affecting the Authority has occurred since the date of the Official Statement which either makes untrue or incorrect in any material respect as of the Closing the statements or information contained in the Agenda Item #5.1.

18 Official Statement or is not reflected in the Official Statement but should be reflected therein in order to make the statements and information therein not misleading in any material respect.
(9) A certificate or certificates, dated the date of Closing, signed by a duly authorized official of the City satisfactory in form and substance to the Underwriter and Bond Counsel, (a) confirming as of such date the representations and warranties of the City contained in this Purchase Agreement; (b) certifying that the City has complied with all agreements, covenants and conditions to be complied with by the City at or prior to the Closing under the City Documents; and (c) certifying that to the best of such official’s knowledge, no event affecting the City has occurred since the date of the Official Statement which either makes untrue or incorrect in any material respect as of the Closing the statements or information contained in the Official Statement or is not reflected in the Official Statement but should be reflected therein in order to make the statements and information therein not misleading in any material respect.
(10) A certificate, dated the date of the Preliminary Official Statement, signed by a duly authorized official of the Authority deeming the Preliminary Official Statement “final” for purposes of Rule 15c2-12.
(11) A certificate, dated the date of the Preliminary Official Statement, signed by a duly authorized official of the City deeming the Preliminary Official Statement “final” for purposes of Rule 15c2-12.
(12) An executed or certified copy of each of the Legal Documents. (13) One counterpart original or copy certified by a duly authorized officer of the City of a complete transcript of all proceedings of the City relating to the approval of the City Documents and the authorization, issuance, sale and delivery of the Bonds, together with a certificate dated as of the date of Closing of a duly authorized officer of the City to the effect that each included resolution is a true, correct and complete copy of the one duly adopted by the Board of Directors of the City and that none have been amended, modified or rescinded since adoption (except as reflected in said transcript or as may have been agreed to in writing by the Underwriter) and is in full force and effect as of the date of Closing.
(14) One counterpart original or copy certified by a duly authorized officer of the Authority of a complete transcript of all proceedings of the Authority relating to the approval of the Authority Documents and the authorization, issuance, sale and delivery of the Bonds, together with a certificate dated as of the date of Closing of a duly authorized officer of the Authority to the effect that each included resolution is a true, correct and complete copy of the one duly adopted by the Board of Directors of the Authority and that none have been amended, modified or rescinded since adoption (except as reflected in said transcript or as may have been agreed to in writing by the Underwriter) and is in full force and effect as of the date of Closing. (15) An executed copy of the Official Statement.

Agenda Item #5.1.

19 (16) A certified copy of the general resolution of the Trustee authorizing the execution and delivery of certain documents by certain officers of the Trustee, which resolution authorizes the execution and delivery of documents such as the Bonds and the Indenture.
(17) A certificate of the City with respect to the Water System evidencing that the insurance required by the Installment Sale Agreement has been procured and is in full force and effect.
(18) A Tax Certificate of the Authority and the City in form and substance acceptable to Bond Counsel.
(19) A certificate of the Trustee, dated the Closing Date to the effect that:
(i) the Trustee is duly organized and existing as a national banking association in good standing under the laws of the United States, having the full power and authority to accept and perform its duties under the Indenture; (ii) subject to the provisions of the Indenture, the Trustee will apply the proceeds from the Bonds to the purposes specified in the Indenture; (iii) the Trustee has duly authorized and executed the Indenture; and (iv) the Trustee has duly authenticated and delivered the Bonds in its capacity as trustee under the Indenture.
(20) Evidence that the Bonds have been given the rating set forth in the Official Statement and that such rating continues in effect as of the date of Closing. (21) The Policy, duly executed by the Insurer.
(22) The Reserve Policy, duly executed by the Insurer.
(23) An opinion of counsel to the Insurer, dated the Closing Date, addressed to the Authority and the Underwriter, in form and substance satisfactory to the Underwriter and Bond Counsel.
(24) A certificate or certificates of the Insurer, dated the Closing Date, as to the accuracy of the information relating to the Insurer, the Policy and the Surety included in the Official Statement and such other matters reasonably requested by the Underwriter and Bond Counsel
(25) A certificate and/or legal opinion as required by each of the respective legal documents for the Parity Obligations regarding the Bonds issued as parity bonds. (26) Evidence that a federal tax information form 8038-G has been prepared for filing with respect to the Bonds.

Agenda Item #5.1.

20 (27) A copy of the Notice of Final Sale required to be delivered to the California Debt and Investment Advisory Commission pursuant to Section 8855 of the California Government Code.
(28) Such additional legal opinions, certificates, proceedings, instruments and other documents as Bond Counsel, the Underwriter and Underwriter’s Counsel may reasonably request to evidence compliance with legal requirements, the truth and accuracy, as of the time of Closing, of the representations contained herein and in the Official Statement and the due performance or satisfaction by the Trustee and the Authority at or prior to such time of all agreements then to be performed and all conditions then to be satisfied.
(c) All matters relating to this Purchase Agreement, the Bonds and the sale thereof, the Legal Documents and the consummation of the transactions contemplated by this Purchase Agreement shall have been approved by the Underwriter, such approval not to be unreasonably withheld.

If the conditions to the Underwriter’s obligations contained in this Purchase Agreement are not satisfied or if the Underwriter’s obligations shall be terminated for any reason permitted by this Purchase Agreement, this Purchase Agreement shall terminate and none of the Underwriter, the City nor the Authority shall have any further obligation hereunder.

10. The Underwriter shall have the right to terminate this Purchase Agreement, without liability therefore, by written notification to the Authority and the City if at any time at or prior to the Closing:
(i) Legislation shall be enacted by or introduced in the Congress of the United States or recommended to the Congress for passage by the President of the United States, or the Treasury Department of the United States or the Internal Revenue Service or favorably reported for passage to either House of the Congress by any committee of such House to which such legislation has been referred for consideration, a decision by a court of the United States or of the State or the United States Tax Court shall be rendered, or an order, ruling, regulation (final, temporary or proposed), press release, statement or other form of notice by or on behalf of the Treasury Department of the United States, the Internal Revenue Service or other governmental agency shall be made or proposed, the effect of any or all of which would be to alter, directly or indirectly, federal income taxation upon interest received on obligations of the general character of the Bonds, or the interest on the Bonds as described in the Official Statement, or other action or events shall have transpired which may have the purpose or effect, directly or indirectly, of changing the federal income tax consequences of any of the transactions contemplated herein; or
(ii) Legislation introduced in or enacted (or resolution passed) by the Congress or an order, decree, or injunction issued by any court of competent jurisdiction, or an order, ruling, regulation (final, temporary, or proposed), press release or other form of notice issued or made by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter, to the effect that obligations of the general character of the Bonds are not exempt from registration under or other requirements of the Securities Act of 1933, as amended, or that the Indenture is not exempt from qualification under or other requirements of the Trust Indenture Act of 1939, as amended, or that the Agenda Item #5.1.

21 issuance, offering, or sale of obligations of the general character of the Bonds, as contemplated hereby or by the Official Statement or otherwise, is or would be in violation of the federal securities law as amended and then in effect; or
(iii) A general suspension of trading on the New York Stock Exchange or other major 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 such exchange, whether by virtue of determination by that exchange or by order of the Securities and Exchange Commission or any other governmental authority having jurisdiction, the establishment of material restrictions (not in force as of the date hereof) upon trading securities generally by any governmental authority or any national securities exchange, or any material increase of restrictions now in force (including, with respect to the extension of credit by, or the charge to the net capital requirements of, the Underwriter); or
(iv) A general banking moratorium shall have been established by federal, New York or California authorities; or
(v) 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 Bonds, including the underlying obligations as contemplated by this Purchase Agreement or by the Official Statement, or any document relating to the issuance, offering or sale of the Bonds, is or would be in violation of any provision of the federal securities laws at the Closing Date, including the Securities Act of 1933, as amended, the Exchange Act of 1934, as amended and the Trust Indenture Act of 1939, as amended; or
(vi) Establishment of any new restrictions in securities materially affecting the free market for securities of the same nature as the Bonds (including the imposition of any limitations on interest rates) or the charge to the net capital requirements of the Underwriter established by the New York Stock Exchange, the Securities and Exchange Commission, any other Federal or state agency or the Congress of the United States, or by Executive Order; or
(vii) A material disruption in securities settlement, payment or clearance services affecting the Bonds shall have occurred; or (viii) Any amendment to the federal or California Constitution or action by any federal or California court, legislative body, regulatory body or other authority materially adversely affecting the tax status of the Authority or the City, its property, income or securities (or interest thereon), or the ability of the City to execute the Installment Sale Agreement or the Authority to issue the Bonds and pledge the Revenues as contemplated by the Indenture and the Official Statement; or
(ix) 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 in the financial markets of the United States or elsewhere or the escalation of such calamity or crisis; or
Agenda Item #5.1.

22 (x) There shall have occurred any materially adverse change in the affairs or financial position, results of operations or condition, financial or otherwise, of the Authority or the City, other than changes in the ordinary course of business or activity or in the normal operation of the Authority or the City, except as described in the Preliminary Official Statement and the Official Statement; or
(xi) Any event shall occur or facts are discovered which causes any statement contained in the Official Statement to be materially misleading or results in a failure of the Official Statement to state a material fact necessary in order to make the statements in the Official Statement, in the light of the circumstances under which they were made, not misleading, provided, however, the Underwriter shall not terminate this Purchase Agreement if prior to the Closing and prior to the distribution of the Official Statement to any public investor the Authority, the City and the Underwriter agree to and shall have amended or supplemented the Official Statement so that the Official Statement as so amended or supplemented will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made in the light of the circumstances in which they were made, not misleading, and, in the sole judgment of the Underwriter, such amendment or supplement would not have a material adverse effect on the marketability or market price of the Bonds on the terms and conditions contemplated by this Purchase Agreement or the ability of the Underwriter to enforce contracts with investors for the sale of Bonds; or (xii) An event described in Section 7(j) or 8(j) hereof shall have occurred which, in the reasonable professional judgment of the Underwriter, requires the preparation and publication of a supplement or amendment to the Official Statement; or (xiii) The marketability of the Bonds or the market price thereof, in the opinion of the Underwriter, has been materially and adversely affected by disruptive events, occurrences or conditions in the securities or debt markets; or (xiv) The suspension by the SEC of the trading in the outstanding bonds of the Authority or the City; or
(xv) Other material disruptive events, occurrences or conditions in the securities or debt markets; or
(xvi) Any rating of the Bonds or other obligations of the Insurer by a national rating agency shall have been withdrawn or downgraded or placed on negative outlook or negative watch; or
(xvii) Any rating of the Bonds or other obligations of the Authority or the City by a national rating agency shall have been withdrawn, suspended or downgraded or placed on negative outlook or negative watch.

11. Performance by the Authority and the City of their respective obligations under this Purchase Agreement is conditioned upon (i) performance by the Underwriter of its obligations hereunder, and (ii) receipt by the Underwriter of all opinions and certificates to be delivered at Closing by persons and entities other than the Authority or the City.

Agenda Item #5.1.

23 12. After the Closing and until the End Date (a) neither the Authority nor the City will adopt any amendment of or supplement to the Official Statement to which the Underwriter shall object in writing or which shall be disapproved by the Underwriter, and (b) if any event relating to or affecting the Bonds, the Authority or the City shall occur as a result of which it is necessary, in the opinion of the Underwriter, to amend or supplement the Official Statement in order to make the Official Statement not misleading in the light of the circumstances existing at the time it is delivered to an initial purchaser of the Bonds, and the Authority will forthwith prepare and furnish to the Underwriter a reasonable number of copies of an amendment of or supplement to the Official Statement (in form and substance satisfactory to the Underwriter) which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time the Official Statement is delivered to an initial purchaser of the Bonds, not misleading. The costs of preparing any necessary amendment or supplement to the Official Statement to be utilized until the End Date shall be borne by the Authority and any costs incurred thereafter incident to amending or supplementing the Official Statement shall be borne by the Underwriter. For the purposes of this Section, the Authority will furnish such information with respect to itself as the Underwriter may from time to time request.

13. (a) The Underwriter shall be under no obligation to pay, and the City or Authority shall pay or cause to be paid out of the proceeds of the Bonds, all expenses incident to the performance of the Authority’s and City’s obligations hereunder, including but not limited to: the cost of photocopying and delivering the Bonds to the Underwriter; the cost of preparing, printing (and/or word processing and reproducing), distributing and delivering the City Documents and the Authority Documents, and the cost of printing, distributing and delivering the Preliminary Official Statement and the Official Statement in such reasonable quantities as requested by the Underwriter; and the fees and disbursements of Bond Counsel, Disclosure Counsel, the Authority’s and City’s municipal advisor, any accountants, financial advisors or other engineers or experts or consultants the Authority or the City have retained in connection with the Bonds and expenses (included in the expense component of the Underwriter’s spread) incurred on behalf of the Authority or City officers or employees which are incidental to implementing this Purchase Agreement, including, but not limited to, meals, transportation, and lodging of those officers or employees. (b) Whether or not the Bonds are delivered to the Underwriter as set forth herein, neither the Authority nor the City shall be under any obligation to pay, and the Authority and City shall not pay, any expenses incurred by the Underwriter in connection with its public offering and distribution of the Bonds (except those specifically enumerated in subsection (a) of this section), including any advertising expenses and the fees of the California Debt and Investment Advisory Commission, the cost of preparation of any “blue sky” or legal investment memoranda, and the fees and disbursements of Underwriter’s Counsel. The Authority and the City acknowledge that some or all of the expenses to be paid by the Underwriter may be included as part of the expense component of the underwriting discount or may be reimbursed to the Underwriter as out-of-pocket expenses.

14. Any notice or other communication to be given to the Underwriter may be given by delivering the same to Oppenheimer & Co. Inc., 135 Main Street, Suite 1700, San Francisco, California 94105, Attention: Municipal Capital Markets Group. Any notice or other communication to be given to the Authority or the City may be given by delivering the same to addresses initially provided herein, Attention: Executive Director with respect to the Authority and Attention: City Manager with respect to the City. The approval of the Underwriter when required hereunder or the determination of satisfaction as to any document referred to herein shall be in writing signed by the Underwriter and delivered to you.

Agenda Item #5.1.

24 15. This Purchase Agreement is made solely for the benefit of the Authority, the City and the Underwriter (including the successors or assigns thereof) and no other person shall acquire or have any right hereunder or by virtue hereof.

16. This Purchase Agreement may be executed by the parties hereto in separate counterparts, each of which such counterparts shall together constitute but one and the same instrument.

17. The representations and warranties of the Authority and the City set forth in or made pursuant to this Purchase Agreement shall not be deemed to have been discharged, satisfied or otherwise rendered void by reason of the Closing or termination of this Purchase Agreement and regardless of any investigations made by or on behalf of the Underwriter (or statements as to the results of such investigations) concerning such representations and warranties of the Authority and the City and regardless of delivery of and payment for the Bonds.

18. The primary role of the Underwriter, as underwriter, is to purchase the Bonds for resale to investors in an arms-length commercial transaction among the City, the Authority and the Underwriter. The Underwriter, as underwriter, has financial and other interests that differ from those of the Authority and the City.

19. This Purchase Agreement shall become effective and binding upon the respective parties hereto upon the execution of the acceptance hereof by the Authority, the City and the Underwriter, and shall be valid and enforceable as of the time of such acceptance.

20. This Purchase Agreement shall be governed by the laws of the State of California. This Purchase Agreement shall not be assigned by either party hereto.

21. This Purchase Agreement supersedes and replaces all prior negotiations, agreements and understandings between the parties hereto in relation to the sale of Bonds by the Authority and the City and represents the entire agreement of the parties as to the subject matter herein. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Agenda Item #5.1.

S-1

22. Any provision of this Purchase Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Purchase Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

OPPENHEIMER & CO. INC.

By:

Managing Director
The foregoing is hereby agreed to and accepted as of the date first above written:

ST. HELENA FINANCING

AUTHORITY
By:

Authorized Officer
Time of Execution: _____________ p.m. California time
CITY OF ST. HELENA
By:

Authorized Officer
Time of Execution: _____________ p.m. California time
[EXECUTION PAGE OF BOND PURCHASE AGREEMENT – ST. HELENA FINANCING AUTHORITY 2024 WATER REVENUE BONDS]
Agenda Item #5.1.

Exhibit A

EXHIBIT A
$_______
ST. HELENA FINANCING AUTHORITY
2024 WATER REVENUE BONDS
Maturity
(October 1)
Principal
Amount
Interest
Rate Yield Price
10% Test
Satisfied*
10% Test
Not
Satisfied
Subject to
Hold-TheOfferingPrice Rule
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
20__(T)
20__(T)
20__(T)
_________________
(T) Term Bond.
(C) Priced to optional call at [par] on October 1, 20__. * At the time of execution of this Purchase Agreement and assuming orders are confirmed by the close of the business day immediately following the date of this Purchase Agreement.

Agenda Item #5.1.

Exhibit B

EXHIBIT B
$______
ST. HELENA FINANCING AUTHORITY
2024 WATER REVENUE BONDS

FORM OF ISSUE PRICE CERTIFICATE
The undersigned, on behalf of Oppenheimer & Co. Inc. (“Oppenheimer”), hereby certifies as set forth below with respect to the sale and issuance of the above-captioned obligations (the “Bonds”) based upon the information available to it.

1. Sale of the 10% Maturities. As of the date of this certificate, for each Maturity of the 10% 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 A.

2. Initial Offering Price of the Undersold Maturities.

Oppenheimer offered the Undersold Maturities to the Public for purchase at the respective initial offering prices listed in Schedule A (the “Initial Offering Prices”) on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this Certificate as Schedule B.

As set forth in the Bond Purchase Agreement, Oppenheimer has agreed in writing that, for each Maturity of the Undersold Maturities, it would neither offer nor sell any of the Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Offering Period for such Maturity, nor would it permit a related party to do so. Pursuant to such agreement, Oppenheimer has neither offered nor sold any Maturity of the Undersold Maturities at a price that is higher than the respective Initial Offering Price for that Maturity of the Bonds during the Offering Period.

3. Defined Terms.
(a) 10% Maturities means those Maturities of the Bonds shown in Schedule A hereto as the “10% Maturities.”
(b) Issuer means St. Helena Financing Authority.
(c) 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.
(d) Offering Period means, with respect to an Undersold 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 Oppenheimer has sold a Substantial Amount of such Undersold Maturity to the Public at a price that is no higher than the Initial Offering Price for such Undersold Maturity. (e) 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.

Agenda Item #5.1.

Exhibit B
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. (f) 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 _______, 2024. (g) Substantial Amount means ten percent.
(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 retail distribution agreement participating in the initial sale of the Bonds to the Public). (i) Undersold Maturities means those Maturities of the Bonds shown in Schedule A hereto as the “Undersold Maturities.”
The Issuer may rely on the statements made herein in connection with making the representations set forth in the Tax Certificate to which this Issue Price Certificate is attached and in its efforts to comply with the conditions imposed by the Internal Revenue Code of 1986, as amended (the “Code”). Jones Hall, A Professional Law Corporation may also rely on this Issue Price Certificate for purposes of its opinion regarding the treatment of interest on the Bonds as excludable from gross income for federal income tax purposes. Except as expressly set forth above, the certifications set forth herein may not be relied upon or used by any third party or for any other purpose. Notwithstanding anything set forth herein, Oppenheimer is not engaged in the practice of law. Accordingly, Oppenheimer makes no representation as to the legal sufficiency of the factual matters set forth herein.

OPPENHEIMER & CO. INC.

By:____________________________________
Name:_________________________________
Dated: ______, 2024
Agenda Item #5.1.

SCHEDULE A

SALE PRICES OF THE ACTUALLY SOLD MATURITIES AND

INITIAL OFFERING PRICES OF THE OFFERED MATURITIES
(To Be Attached)

Agenda Item #5.1.

SCHEDULE B

PRICING WIRE OR EQUIVALENT COMMUNICATION
(To Be Attached)
Agenda Item #5.1.

2024 Water Revenue Bonds (the “2024 Bonds”)
City Council / St. Helena Financing Authority May 28, 2024 "Independent Registered Municipal Advisor"
EXHIBIT 7
Agenda Item #5.1.

1 Existing Debt Obligations of the Water Enterprise Fund California Statewide Communities Development Authority
Water and Wastewater Revenue Bonds, Series 2012B (the “Series 2012B”) Principal Payments: October 1, 2024 to October 1, 2032Remaining Amount: $3,251,738Interest Rates: 3.25% to 5.00% (2024 to 2032)Purpose: Funded $5,599,565 of Water System Improvements____________________________________________________________________________________ City of St. Helena / St. Helena Financing Authority
2019 Loan Agreement (JPMorgan Chase Bank, N.A.) (the “2019 Loan”) Principal Payment: October 1, 2024 to October 1, 2031Remaining Amount: $3,809,700Interest Rates: 2.62% (2024 to 2031) Purpose: Use to refund bonds Water Revenue Bonds issued in 2006_________________________________________________________________ • The 2024 Bonds are being issued to fund capital improvement projects for the Water System of the City including, but not limited to, the Bell Canyon Intake tower Replacement, Kearney and Andrea Water Main Replacement and the SMART meters project. • The 2024 Bonds will be on parity with both the 2019 Loan and the Water System portion of the Series 2012B.
• The 2024 Bonds will be amortized over 30-years solving around the existing obligations• The 2024 Bonds are the first of three proposed series of bonds anticipated in the Water and Wastewater Rate Study (the “Rate Study”) approved by Resolution No. 2023-80 on June 27, 2023.

Agenda Item #5.1.

2 Estimated Financing Summary(*)
(*) Based on estimated interest rates as of May 6, 2024 Principal Amount $10,265,000“Not-To-Exceed” Amount $12,000,000Project Fund / Proceeds $10,500,000Fixed Costs of Issuance $191,270Underwriter’s Discount $92,385 Bond Insurance / Surety Premiums $108,677Total “Finance Charge” $392,332Total Interest $11,117,022 Total Debt Service $21,382,022“All-In” TIC 4.823651%Final Maturity October 1, 2054 (FY 55) Agenda Item #5.1.

3 Estimated Sources and Uses of Funds
Sources and Uses of Funds
City of St. Helena
2024 Water Revenue Bonds
Sources:Bond Proceeds:

Par Amount 10,265,000.00Premium 627,331.60
10,892,331.60
Uses:Project Fund Deposits:

Project Fund 10,500,000.00
Delivery Date Expenses:

Cost of Issuance 190,000.00Underwriter's Discount 92,385.00Insurance 85,528.09Surety 23,148.75 391,061.84
Other Uses of Funds:

Additional Proceeds 1,269.76
10,892,331.60
Agenda Item #5.1.

4 Estimated Costs of Issuance
Role Party TotalBond Counsel Jones Hall $60,000.00 Bond Counsel Expenses (NTE) Jones Hall 1,500.00 Disclosure Counsel Jones Hall 40,000.00 Municipal Advisor Del Rio Advisors, LLC 52,500.00 Municipal Advisor Expenses (NTE) Del Rio Advisors, LLC 750.00 Rating Fee Standard & Poor's Corporation 17,500.00 Trustee (Acceptance Fee) U.S. Bank 1,000.00 Trustee (Annual Fee) U.S. Bank 3,000.00 Trustee (Counsel Fee) U.S. Bank 3,000.00 Printing of Official Statement TBD 3,000.00 Rounding Adjustment / Miscellaneous Misc. 9,019.76Total Estimated Costs $191,269.76 Agenda Item #5.1.

5 Estimated Amortization
FYE Principal Debt Service
4/1/2025 352,1474/1/2026 513,2504/1/2027 513,2504/1/2028 513,2504/1/2029 513,2504/1/2030 513,2504/1/2031 513,2504/1/2032 513,2504/1/2033 513,2504/1/2034 265,000 771,6254/1/2035 275,000 768,1254/1/2036 290,000 769,0004/1/2037 305,000 769,1254/1/2038 320,000 768,5004/1/2039 335,000 767,1254/1/2040 355,000 769,8754/1/2041 375,000 771,6254/1/2042 390,000 767,5004/1/2043 410,000 767,5004/1/2044 435,000 771,3754/1/2045 455,000 769,1254/1/2046 480,000 770,7504/1/2047 500,000 766,2504/1/2048 530,000 770,5004/1/2049 555,000 768,3754/1/2050 585,000 769,8754/1/2051 615,000 769,8754/1/2052 645,000 768,3754/1/2053 680,000 770,2504/1/2054 715,000 770,3754/1/2055 750,000 768,750 10,265,000 21,382,022
Agenda Item #5.1.

6 Estimated Debt Service (“All Obligations”)
City of St. HelenaWater Enterprise FundTotal Debt Service (Combined Series) Par Amount 10,265,000 26,615,000 27,790,000
Project Fund 10,500,000 23,000,000 24,000,000
Issue Date 7/24/2024 6/30/2026 6/30/2028
Fiscal Proposed Proposed Proposed Fiscal Year
Year Series 2006A Series 2012 Series 2019 Series 2024 Series 2026 Series 2028 Debt Service 2024 - 406,252.10 530,077.71 - - - 936,329.81
2025 - 405,391.15 529,905.16 352,146.53 - - 1,287,442.84 2026 - 405,214.94 528,750.96 513,250.00 - - 1,447,215.90 2027 - 401,986.57 526,732.14 513,250.00 1,330,750.00 - 2,772,718.71 2028 - 401,987.39 529,292.37 513,250.00 1,330,750.00 - 2,775,279.76 2029 - 402,887.20 527,421.17 513,250.00 1,330,750.00 1,389,500.00 4,163,808.37 2030 - 404,765.28 529,121.16 513,250.00 1,330,750.00 1,674,500.00 4,452,386.44 2031 - 402,182.54 525,506.75 513,250.00 1,330,750.00 1,680,250.00 4,451,939.29 2032 - 402,964.98 525,393.66 513,250.00 1,330,750.00 1,680,000.00 4,452,358.64 2033 - 403,121.34 - 513,250.00 1,775,750.00 1,759,000.00 4,451,121.34 2034 - - - 771,625.00 1,918,500.00 1,763,250.00 4,453,375.00 2035 - - - 768,125.00 1,923,000.00 1,761,250.00 4,452,375.00 2036 - - - 769,000.00 1,920,750.00 1,763,250.00 4,453,000.00 2037 - - - 769,125.00 1,922,000.00 1,764,000.00 4,455,125.00 2038 - - - 768,500.00 1,921,500.00 1,763,500.00 4,453,500.00 2039 - - - 767,125.00 1,924,250.00 1,761,750.00 4,453,125.00 2040 - - - 769,875.00 1,920,000.00 1,763,750.00 4,453,625.00 2041 - - - 771,625.00 1,919,000.00 1,764,250.00 4,454,875.00 2042 - - - 767,500.00 1,921,000.00 1,763,250.00 4,451,750.00 2043 - - - 767,500.00 1,925,750.00 1,760,750.00 4,454,000.00 2044 - - - 771,375.00 1,918,000.00 1,761,750.00 4,451,125.00 2045 - - - 769,125.00 1,923,250.00 1,761,000.00 4,453,375.00 2046 - - - 770,750.00 1,920,750.00 1,763,500.00 4,455,000.00 2047 - - - 766,250.00 1,925,750.00 1,759,000.00 4,451,000.00 2048 - - - 770,500.00 1,917,750.00 1,762,750.00 4,451,000.00 2049 - - - 768,375.00 1,922,250.00 1,764,250.00 4,454,875.00 2050 - - - 769,875.00 1,923,500.00 1,758,500.00 4,451,875.00 2051 - - - 769,875.00 1,921,500.00 1,760,750.00 4,452,125.00 2052 - - - 768,375.00 1,921,250.00 1,765,500.00 4,455,125.00 2053 - - - 770,250.00 1,922,500.00 1,757,500.00 4,450,250.00 2054 - - - 770,375.00 1,920,000.00 1,762,250.00 4,452,625.00 2055 - - - 768,750.00 1,923,750.00 1,759,000.00 4,451,500.00 2056 - - - - 2,693,250.00 1,758,000.00 4,451,250.00
2057 - - - - - 4,454,000.00 4,454,000.00
2058 - - - - - 4,452,000.00 4,452,000.00
Totals 1,180,750.00 6,479,080.25 6,874,517.21 21,382,021.53 54,729,500.00 48,706,000.00 139,351,868.99 Agenda Item #5.1.

7 Estimated Debt Service Profile (“All Obligations”)
0 500,000
1,000,0001,500,0002,000,0002,500,0003,000,0003,500,0004,000,0004,500,0005,000,000 Fiscal Year
City of St. Helena
Water System Debt Service
Series 2012 Series 2019 Series 2024 Series 2026 Series 2028 Agenda Item #5.1.

8 Cash Flow and Coverage
Pro Forma Cash Flow and Debt Service Coverage ($000)
Line Item FY 2024 FY 2029
Revenue
Rates and Charges $6,873 $7,336 (1)
Charges for Services (Additional Rates) $2,020 $6,078 (1)(2) Other Revenue $34 34 (1)
Capital Contributions $22 $37Interest Earnings $118 $324 (3) Total Revenue $9,067 $13,809
Less: O&M
Operations and Maintenance Expenses $6,623 $8,337
Net Revenue $2,444 $5,472
Less: Parity Debt Service ($936) ($4,164)
Available for Capital / $1,508 $1,308OtherOperating Reserve (EOY) $4,998 $16,877Reserve % of O&M 75.5% 202.2%Debt Service Coverage 2.61x 1.31x Agenda Item #5.1.

9 Proposed Financing, Financing Team and Recommended Action Proposed Financing $10.265 million public offering Proposed 30-year amortization, no reserve fund or reserve fund provided by a surety Fixed costs of issuance of $191,270 Bond Insurance and Surety Premium of $108,677 (if needed, dependent on rating)Financing Team Bond / Disclosure Counsel: Jones Hall Municipal Advisor: Del Rio Advisors, LLC Underwriter: Oppenheimer & Co. Inc. Trustee: U.S. Bank Trust Company, National AssociationRecommended ActionCity Council adopt the Resolution approving: (1) installment sale financing to provide financing of watersystem improvements, and (2) financing documents and related official actions.St. Helena Financing Authority adopt the Resolution approving: (1) installment sale financing toprovide financing of water system improvements, and (2) financing documents and relatedofficial actions.

Agenda Item #5.1.

10 Questions and Discussion
Agenda Item #5.1.

Water Audit California

A PUBLIC BENEFIT CORPORATION
952 SCHOOL STREET #316 NAPA CA 94559
VOICE: (707) 681-5111
EMAIL: [email protected]
May 28, 2024
City of St. Helena City Council
Sent via email to: [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected] Re: City of St. Helena City Council Meeting May 28, 2024; Agenda Items 5.1, 12.1,

12.6, and 12.11
Agenda Item 5.1
City Council Resolution approving: (1) installment sale financing to provide financing of water system improvements, and (2) financing documents and related official actions.

St. Helena Financing Authority Resolution approving: (1) installment sale financing to provide financing of water system improvements, and (2) financing documents and related official actions.

Agenda Item 12.1
Review of the 2023 St. Helena Annual Housing Element Progress Report (APR).

CEQA Determination: Not a CEQA project. Prepared By: Aaron Hecock, Senior Planner Recommendation: It is recommended that the City Council review, consider, and file this report recognizing that staff submitted the information to HCD and OPR in keeping with the April 1, 2024 mandate.

Agenda Item #5.1.

Water Audit California Comment Letter to City Council
May 28, 2024

WATER AUDIT CALIFORNIA
A California Public Benefit Corporation
952 School Street, #316
Napa, CA 94559
Voice: (707) 681-5111
Email: [email protected]
Agenda Item 12.6
Approve a resolution: (1) establishing Capital Improvement Project W24-11 Bell Canyon Dam DSOD Analysis/Improvements with a budget of $860,000; (2) allocating $860,000 from the 2024 Water Bonds Issuance; (3) authorizing the City Manager to enter into a Professional Services Agreement (PSA) with Haley Aldrich Inc for engineering and project management services to provide a high-quality geotechnical exploration of Bell Canyon Dam for a not-to-exceed total of $781,900; and (4) authorize the Public Works Director to approve amendments to the Agreement to increase the not-to-exceed amount by up to 10% of the original PSA amount.

CEQA Determination: Categorically Exempt, Section 15323 Prepared By: Lesley Milton, Interim Assistant Director of Public Works – Operations Recommendation: Approve the attached Resolution.

Agenda Item 12.11
April 2024 Review and Forecasting of City Water Supply Availability.

CEQA Determination: Not a CEQA project Prepared By: Ian Dale, Environmental Services Tech.

Recommendation: Receive and file.
____________________________________________________
To all it may concern:

Agenda Item #5.1.

Water Audit California Comment Letter to City Council
May 28, 2024

WATER AUDIT CALIFORNIA
A California Public Benefit Corporation
952 School Street, #316
Napa, CA 94559
Voice: (707) 681-5111
Email: [email protected]
Water Audit California (Water Audit) hereby comments on the above four agenda items, each of which is based upon gross fraud and misrepresentation. Each of the following comments is to be read as pertaining to each agenda item.

In addition to the following comments which apply generally, Water Audit notes the false statement in Agenda Item 12.1 that the Hunter project contains low income housing, which requirement was removed from the project subsequent to approval by the Planning Commission, the omission of mention of ongoing litigation to misstate the schedule of the Hunter project, and the ongoing controversy of whether the Stonebridge wells can be operated so as to cause continuing and increasing environmental injury.

Setting aside the tangible reality that the City of St. Helena (City) has inadequate water for its existing beneficial uses, the overt misrepresentations contained in the Agenda Report preclude any rational examination of the recommended decisions by the public. The misrepresentations in these agenda items put the lives and property of the City’s residents in unnecessary danger. The purpose of this comment is to put the burden of potential loss of life clearly on the shoulder of the City’s elected representatives.

To be clear, in the event of a catastrophe, Water Audit promises to send this comment to every news organization in the nation together with names of all complicit.

As a public interest organization, we want no part of the responsibility for a disaster while we are on watch.

1. All representations that assign the contents of Agenda Report Exhibit 1 to the Bell Canyon Reservoir are false.

The forgoing agenda items are accompanied by a staff prepared Agenda Report to the City Council. The staff reports at page 333:
“The Division of Safety of Dams (DSOD) provided notice to the City of St.

Helena on July 5, 2023 of outstanding compliance for the Bell Canyon Dam (BCD) (Attachment 1).”
Agenda Item #5.1.

Water Audit California Comment Letter to City Council
May 28, 2024

WATER AUDIT CALIFORNIA
A California Public Benefit Corporation
952 School Street, #316
Napa, CA 94559
Voice: (707) 681-5111
Email: [email protected]
That statement and all like following are false. Staff has taken comments pertaining to one dam, the St Helena Lower Dam (aka the Lower York Reservoir) and attributed them to another dam built nearly a century later, the Bell Canyon Dam. This can be confirmed by comparing the excerpts of the DSOD listing of jurisdiction dams exhibited below.

The Department of Water Rights letter exhibited as Exhibit 1 pertains to “St.

Helena Lower Dam, No. 16-2,” which in the DSOD database is expressed as 16-002, California jurisdictional dam CA-00148. Note in the DODS records that the “year built” is 1878, and the condition as “fair.” Both comments are correct and appropriate for the Lower York Reservoir, which was built by horse and wagon, not by modern heavy equipment.

Compare and contrast with the record for Bell Canyon Dam, dam no. 16.003 (aka 16-3), California jurisdictional dam CA-00149, the Bell Canyon Dam, built in 1958 with modern methods and rated in satisfactory condition.

The City Council and staff know the difference between the two dams, which implies that the staff’s misrepresentation was as the result of calculation, not incompetence. The January 20, 2017, Geotechnical Investigation Report by Kleinfelder engineering referenced in Exhibit 1, but not attached as an exhibit, clearly concerned the St. Helena Lower Dam, not the Bell Canyon Dam. Although the report is strangely Agenda Item #5.1.

Water Audit California Comment Letter to City Council
May 28, 2024

WATER AUDIT CALIFORNIA
A California Public Benefit Corporation
952 School Street, #316
Napa, CA 94559
Voice: (707) 681-5111
Email: [email protected]
not attached and is unavailable in publicly posted records, the 2016 resolution that authorized Kleinfelder’s employment reads in part:

The Lower York Creek Reservoir was constructed in 1878. The dam at the Lower York Creek Reservoir, known as the St. Helena Lower Dam … The St. Helena Lower Dam, like all municipally owned dams in the state, is regulated under the jurisdiction of the State Water Resources Divisions of Safety of Dam (DSOD).

DSOD regularly inspects St. Helena Lower Dam as well as Bell Canyon Dam and keeps extensive records on both facilities. Under the regulatory program, DSOD has presented a number of concerns to the City of St. Helena for approximately over the last 10 years. Concerns include the stability of the St. Helena Lower Dam during a seismic event. DSOD believes that under a seismic event, the St. Helena Lower Dam could be subject to liquefaction and experience a catastrophic failure. As such the DSOD has restricted the amount of water storage capacity the City is permitted to store in the Lower York Creek Reservoir and directed the city to perform a geotechnical analysis. If the city continues to , not address DSOD's concerns, they can further restrict storage capacity and levy other requirements on the City if necessary. (Emphasis added.) An additional July 2016 staff report in support of a $150,000 addition to the Kleinfelder contact which emphasized the danger of the dam and uncertainty of the present condition:

DSOD believes that under a seismic event, the St. Helena Lower Dam could be subject to liquefaction and experience a catastrophic failure. … The contingencies provide insurance to the Project that will allow staff to navigate changing conditions if unpredicted field conditions or other issues arise during the project. Not having a contingency budget could cause the Project drilling to be halted if changing conditions arise in the field … Postponing or not addressing the required work will result in restrictions to the capacity of the City's reservoir, and possible fines from regulators. For these reasons, City Staff recommends City Council approve the First Amendment augmenting Kleinfelder Incorporated's Professional Services Agreement. (Emphasis added)
In short, the representation that the Bell Canyon Dam is in dire need of structural repair to prevent failure is prima facie false. There is no such evidence. The St. Helena Lower Dam is in a potentially catastrophic condition, but nothing is being done or proposed to remediate it.

While the City has represented to the Department of Water Resources that it is operating the St. Helena Lower Dam at reduced capacity until sufficient funds can be Agenda Item #5.1.

Water Audit California Comment Letter to City Council
May 28, 2024

WATER AUDIT CALIFORNIA
A California Public Benefit Corporation
952 School Street, #316
Napa, CA 94559
Voice: (707) 681-5111
Email: [email protected]
secured for removal, that representation is also false. The maximum storage may have been reduced1, but there are no present plans for the removal of this potentially deadly dam, only deferred plans for its maintenance.

The council cannot shelter behind its usual shield of ignorance. On June 13, 2023, council deferred any rehabilitation of the Lower Reservoir in 2026/27, and even then, it assigned a budget of only $50,000. (See City of St. Helena, Agenda 12.1, Water 5 Year Capital improvements Program) This is a trivial sum considering the problem and risks, and completely contradictory to the concurrent representation to the Water Board that the City is seeking funds to remove the dam.

The 2017 Kleinfelder report was last seen by the City Council in May 2023, when a decision was made to ignore public trust impacts of the dam’s operation and enter into a five-year water contract with Spring Mountain Vineyards to supply water at a fraction of the cost paid by City residents. There is no public record of any efforts made to secure funds for dam removal.

In short, staff has misrepresented the Bell Canyon Dam to be in the dangerous condition of the St. Helena Lower dam so as to obtain funds for the benefit of the Bell Canyon dam which is in satisfactory condition, and as a consequence, leave the dangerous Lower York dam unfunded and unrepaired. This is a shocking disregard of the duty of candor on the part of a public employees, and a callous disregard of the potential risk to human life. By this series of misrepresentations, the City Council is intentionally putting its residents’ lives at risk.

2. Staff has misrepresented the contribution of Bell Canyon Reservoir to the City’s water supply.

Staff has grossly misrepresented the contribution of the Bell Canyon Reservoir to the City’s water needs. “The Bell Canyon Dam is part of the City's critical infrastructure, as it provides 80% of the supplied potable water for the City of St. Helena.” This statement is 1 The City’s ability to control the water level in the Lower Dam have on occasion been overwhelmed by heavy rain events that have exceeded the ability to discharge flows downstream.

Agenda Item #5.1.

Water Audit California Comment Letter to City Council
May 28, 2024

WATER AUDIT CALIFORNIA
A California Public Benefit Corporation
952 School Street, #316
Napa, CA 94559
Voice: (707) 681-5111
Email: [email protected]
false, contradicted both by other statements both within and external to the Agenda Report.

In November 2021 the City wrote to the State Water Resources Control Board seeking permission to store early rain. Although obviously intending to emphasize the importance of the reservoir to the total water supply, the City’s report of the contribution of Bell Canyon is 30% less than asserted in the Agenda Report:

The City submits these petitions due to severe drought conditions and low storage levels. As of September 31, 2021, Bell Canyon Reservoir, which has historical served nearly 50% of the City's water demand, had depleted to 28% capacity. With 25% of the reservoir's capacity reserved for fire suppression support, only 3% of its capacity, or less than 100 acre-feet of water, remained for municipal use in the City's service area.

Further, at Agenda Report page 137, again contradicting the 80% representation, it is reported that the historical contributions of the different sources of the city’s water supply have been:

The actual contribution of Bell Canyon reservoir to the total has been:
2022-23 - 32%; 2021-22 – 31%; 2020-21 – 36%; 2019-20 – 41%; 2018-19 – 49%, or on average one half of the assertion of staff.

Agenda Item #5.1.

Water Audit California Comment Letter to City Council
May 28, 2024

WATER AUDIT CALIFORNIA
A California Public Benefit Corporation
952 School Street, #316
Napa, CA 94559
Voice: (707) 681-5111
Email: [email protected]

3. Staff representations of the relative costs of water production are unsupported by facts and prima facie unbelievable.

At page 136 of the Agenda Report representation is made of the relative costs of production of water from the three sources available to the City of St. Helena:

Use of the surface water from its Bell Canyon Reservoir is by far the least expensive to supply (averaging approximately $0.46/hundred cubic feet (HCF) in Fiscal Year 2023-24), while the groundwater wells ($6.00/HCF in Fiscal Year 2023-24) and City of Napa water ($6.86/HCF in Fiscal Year 2023-24) are considerably higher. The three supply costs are factored into the City’s new rate structure for the Water System, as described herein.

While the staff report is bulked with numerous estimates of future capital expenditures and anticipated revenues, there is no statement of the actual historical costs of operating the Bell Canyon Reservoir and Louis Stella water treatment facility.

The reader is asked to accept on faith the summary representations made by staff, which considering the foregoing is much more than should be asked.

The public deserves to know the economic and other consequences of years of outside contractor operation of the Louis Stralla treatment plant, and of thoughtless operations and maintenance, which has resulted in payroll costs approximately three times greater than market rate for staff. Clearly the cost of operation has changed during the subject five-year window, but there is no evidence of how, or by how much.

Finally, it is represented by the city that critical operating data is not available to the public as it is retained within a proprietary data base owned and controlled by a private contractor. In essence, the city has intentionally circumvented the Public Records Act by hiding its data in private hands, and now it seeks funding to continue this unlawful conduct. This cannot be tolerated.

Conclusion
The above captioned agenda items are based on inadequate and false data and must be rejected without hesitation. That is not to deny the potential needs of the Bell Canyon reservoir, or the City of St. Helena water system in general, but it is axiomatic that falsehoods multiply and require further falsehoods to sustain them, leading to a Agenda Item #5.1.

Water Audit California Comment Letter to City Council
May 28, 2024

WATER AUDIT CALIFORNIA
A California Public Benefit Corporation
952 School Street, #316
Napa, CA 94559
Voice: (707) 681-5111
Email: [email protected]
complete loss of trust and credibility. Consider the implication of continuing down this path.

Further, we urge the City of St. Helena to recognize and plan immediate remediation of the serious risk to its citizens from the St. Helena Lower Dam. Finally, Water Audit respectfully submits that the City of St. Helena call to account all staff persons responsible for this disgraceful presentation.

Respectfully,
William McKinnon
General Counsel
Direct Dial: 530.575.5335
Agenda Item #5.1.

MINUTES
City of St. Helena
Regular City Council Meeting
Tuesday, May 14, 2024 @ 6:00 PM
Vintage Hall Board Room - Second Floor
465 Main Street, St. Helena
A complete video recording of this meeting, except for closed session, can be found at https://sthelena.civicweb.net/Portal/ or by calling the City Clerk at (707) 968-2742. The City Council video is the official record of the Council meeting.

Present: Mayor Paul Dohring, Vice Mayor Eric Hall, Council Member Anna Chouteau, Council Member Patrick Kenealy, and Council Member Billy Summers

Absent:

1. CALL TO ORDER

2. ROLL CALL

3. PLEDGE OF ALLEGIANCE

4. ADOPTION OF THE AGENDA

4.1 Council Member Anna Chouteau moved to adopt the agenda. The motion was seconded by Council Member Patrick Kenealy and on roll call carried by the following vote:

AYES: Mayor Paul Dohring, Council Member Anna Chouteau, Council Member Patrick Kenealy, and Council Member Billy Summers
NOES: None
ABSENT: Vice Mayor Eric Hall
ABSTAIN: None
RECUSE: None

5. 5.1 Consideration and proposed approval of Regular Meeting Minutes of April 23, 2024
Council Member Anna Chouteau moved to adopt the minutes. The motion was seconded by Council Member Billy Summers and on roll call carried by the following vote:

AYES: Mayor Paul Dohring, Council Member Anna Chouteau, Council Member Patrick Kenealy, and Council Member Billy Summers
Agenda Item #7.1.

Regular City Council
May 14, 2024
NOES: None
ABSENT: Vice Mayor Eric Hall
ABSTAIN: None
RECUSE: None

6. PUBLIC FORUM:

No public comment was received.

7. REPORTS BY STAFF AND CITY COUNCIL, FUTURE AGENDA ITEMS, and AB 1234 REPORTS:

Ethan Walsh, City Attorney noted that there was no reportable action from the May 14, 2024 special City Council closed session meeting.

Reports were made by staff and City Council.

8. PRESENTATIONS AND PUBLIC RECOGNITIONS

8.1 Proclamation for National Public Works Week, May 19-25, 2024 presented to Director of Public Works, Joseph Leach
CEQA Determination: Not a CEQA project
Prepared By: Rebecca White, Administrative Assistant

8.2 Proclamation for National Police Week presented to Police Chief Chris Hartley

9. STAFF BRIEFING
None.

10. CONSENT ITEMS
Members of the Council or the public may ask that any items be considered individually for purposes of considering alternative action, for extended discussion, or for public comment. Unless that is done, one motion may be used to adopt all recommended actions. (Roll Call Vote)

10.1 Waiver of second reading and approval of an Ordinance approving General Plan Amendments (GPAs 2024-001, 002, 003, 004, 005, 006) to update the General Plan’s Land Use Map (Figure 2.1) and Zoning Map Amendments (ZMAs 2024-001, 002, 003, 004, 005, 006) referenced in St. Helena Municipal Code Section 17.01.070, to bring these maps into conformance with the City’s adopted 2023-2031 Housing Element, and find that the proposed changes are consistent with the adopted Addendum to the General Plan Environmental Impact Report prepared for the Housing Element.

CEQA Determination: General Plan Environmental Impact Report Addendum pursuant to CEQA Guidelines Section 15164
Agenda Item #7.1.

Regular City Council
May 14, 2024
Prepared By: Aaron Hecock, Senior Planner
Recommendation:

Waive the second reading and adopt the proposed Ordinance to:

1. Find that the proposed changes to General Plan Figure 2.1 and the City’s Zoning Map are consistent with adopted Addendum to the General Plan Environmental Impact Report prepared for the Housing Element and in compliance with the California Environmental Quality Act; and

2. Adopt an Ordinance approving General Plan Amendments (GPAs 2024- 001, 002, 003, 004, 005, 006) Updating General Plan Figure 2.1 and Adopt Zoning Map Amendments (ZMAs 2024-001, 002, 003, 004, 005, 006) to identify zone changes for the designated Housing Opportunity Sites to be consistent with the 2023-2031 Housing Element, and incorporating these changes into the General Plan and Zoning Maps; and

3. Direct staff to explore an overlay and other options including other sites and units to replace Site 10 after adoption of the Ordinance and recertification of the Housing Element by HCD; and

4. Conduct a City Council study session focused on housing in the near future.

10.2 Adopt Resolution authorizing City Manager to execute an agreement with Websoft for Mobile Maintenance Management System software to track and maintain underground utility assets as part of Capital Improvement Program (CIP) Projects W26-02 & S26-02 Asset Management and Computerized Maintenance and Management System Development and Implementation for a three-year period and a total not-to-exceed cost of $86,100.00.

CEQA Determination: Not a CEQA project
Prepared By: Lesley Milton, Asst. to the City Manager
Recommendation:

Approve the attached Resolution.

10.3 Consideration and approval of a resolution authorizing a temporary closure of Adams Street on Sunday, June 16, 2024, from 6:00 a.m. to 6:00 p.m.; mobile food vendors to park and operate on Library Lane during the car show event; and allowing the possession of open alcoholic beverages on the closed portion of Adams Street during the Rianda House Car Show Event scheduled for June 16, 2024.

CEQA Determination: Categorically Exempt, Section 15323 Prepared By: Rebecca White, Administrative Assistant
Recommendation:

Staff recommends approval of the attached resolution.

10.4 Approve a resolution authorizing the City Manager to enter into a Professional Services Agreement with Haley Aldrich Inc. for engineering services and Agenda Item #7.1.

Regular City Council
May 14, 2024
project management support to procure and replace all city utility smart meters as part of CIP Project W24-04 SMART Meter Deployment for a not-to-exceed cost of $406,000.

CEQA Determination: Not a CEQA project
Prepared By: Lesley Milton, Asst. to the City Manager
Recommendation:

Approve the attached Resolution.

10.5 Approval of a Resolution Authorizing execution of a contract with On-Call Engineering firm Haley Aldrich for engineering, design, project and construction management services for Capital Improvement Program (CIP) Project S24-05 Del Campo Gravity Sanitary Sewer Main Replacement Project for a not to exceed cost of $239,095.50.

CEQA Determination: Exempt
Prepared By: Lesley Milton, Asst. to the City Manager
Recommendation:

Approve the attached Resolution.

10.6 Authorization to pay invoices from Rain For Rent for a cost not-to-exceed $40,069.42 and Herc Rentals for a cost not-to-exceed $69,114.15 for emergency pump rentals at the Water Treatment Plant and the Wastewater Treatment Plant for high flow events due to extended rain season CEQA Determination: Not a CEQA project
Prepared By: Lesley Milton, Asst. to the City Manager
Recommendation:

Authorization to issue payment for pump rentals needed for inflow & influent (I&I) and Sanitary Sewer overflow (SSO) mitigation.

10.7 Consideration and proposed approval of a resolution: 1) Duly approving and adopting a publicly available pay schedule in accordance with the requirement of California Code of Regulations, Title 2, Section 570.5, which includes a revised salary schedule for the St. Helena Employee Association to include the Public Works Financial Analyst and Recreation Coordinator classifications; and 2) Authorizing an amendment to the St. Helena Employee Association Memorandum of Understanding to include the Public Works Financial Analyst and Recreation Coordinator classifications.

CEQA Determination: Not a CEQA project
Prepared By: Mandy Kellogg, Administrative Services Director Recommendation:

Staff recommends approval of the attached resolution.

10.8 Consideration to adopt a resolution authorizing (1) the City Manager to enter into an Agreement with We Care Animal Rescue for animal shelter and adoption services for the City of St. Helena; and (2) authorize the City Manager Agenda Item #7.1.

Regular City Council
May 14, 2024
to execute the Agreement on behalf of the City and make non-substantive amendments to the form of agreement
CEQA Determination: Not a CEQA project
Prepared By: Justin Tharp, Lieutenant
Recommendation:

Approve the attached Resolution.

10.9 Authorization for a purchase of MicroC Processing Chemicals for the Micro Bioreactor (MBR) facility testing for a not to exceed cost $72,950.00.

CEQA Determination: Not a CEQA project
Prepared By: Lesley Milton, Asst. to the City Manager
Recommendation:

Authorization to purchase process chemicals MicroC for the MBR Facility.

10.10 Approval of a resolution authorizing the City Manager to execute a contract with Kimley-Horn, Inc. for Civil Engineering Services to provide engineering documentation and bid specifications to assist with completion of the Capital Improvement Program (CIP) Project W25-01 Napa Intertie Water Pipeline Replacement for a not-to-exceed cost of $446,200.

CEQA Determination: Not a CEQA project
Prepared By: Lesley Milton, Asst. to the City Manager
Recommendation:

Approval of the Professional Services Agreement with Kimley-Horn

10.11 Approval of a resolution authorizing the purchase of an Asphalt Crack Sealer for $73,365 from Cimline Inc.

CEQA Determination: Not a CEQA project
Prepared By: Lesley Milton, Asst. to the City Manager
Recommendation:

Approve the attached Resolution.

Council Member Anna Chouteau moved to approve items 10.1 - 10.11 with Council Member Kenealy voting no on item 10.1.

The motion was seconded by Council Member Billy Summers and on roll call carried by the following vote:

AYES: Mayor Paul Dohring, Council Member Anna Chouteau, Council Member Patrick Kenealy, and Council Member Billy Summers
NOES: None
ABSENT: Vice Mayor Eric Hall
ABSTAIN: None
RECUSE: None
Agenda Item #7.1.

Regular City Council
May 14, 2024

10.12 This item was pulled.

Approving a revision to the recommended alignment of a section of the Vine Trail to include a bike boulevard along Railroad Avenue between Adams Street and Fulton Lane.

10.12 Approving a revision to the recommended alignment of a section of the Vine Trail to include a bike boulevard along Railroad Avenue between Adams Street and Fulton Lane.

CEQA Determination: Not a CEQA project
Prepared By: Eric Janzen, Assistant Public Works Director Recommendation:

Approve Resolution of the City Council of the City of St. Helena approving a revision to the recommended the Vine Trail alignment Through the City of St.

Helena.

Director of Public Works, Joe Leach reported on the item.

Public Comment was received by representative of Mr. and Mrs. Capp and Dan Capp
Council Member Anna Chouteau moved to approve item 10.12. The motion was seconded by Council Member Billy Summers and on roll call carried by the following vote:

AYES: Mayor Paul Dohring, Council Member Anna Chouteau, and Council Member Billy Summers
NOES: None
ABSENT: Vice Mayor Eric Hall
ABSTAIN: Council Member Patrick Kenealy
RECUSE: None

11. PUBLIC HEARINGS

11.1 Second Public Hearing of the Proposed Adoption of a City Charter.

CEQA Determination: Not a CEQA project
Prepared By: April Mitts, Assistant City Manager
Recommendation:

Provide direction to City staff on any amendments to the proposed City Charter.

April Mitts, Assistant City Manager reported on the item.

Agenda Item #7.1.

Regular City Council
May 14, 2024
No public comment was received.

Council held the second Public Hearing of the proposed City Charter and provided direction to staff to move forward with placing the item on the November 5, 2024 ballot.

11.2 Proposed approval of a Resolution approving the issuance of the California Municipal Finance Authority multifamily housing revenue bonds in an aggregate principal amount not to exceed $27,000,000 for the purpose of financing or refinancing the acquisition, rehabilitation, improvement and equipping of Hunt's Grove apartments and certain other matters relating thereto.

CEQA Determination: Exempt
Prepared By: Mandy Kellogg, Administrative Services Director Recommendation:

Staff recommends approval of the attached resolution.

Administrative Services Director, Mandy Kellogg reported on item.

No public comment was received.

Council Member Anna Chouteau moved to approve resolution. The motion was seconded by Council Member Patrick Kenealy and on roll call carried by the following vote:

AYES: Mayor Paul Dohring, Council Member Anna Chouteau, Council Member Patrick Kenealy, and Council Member Billy Summers
NOES: None
ABSENT: Vice Mayor Eric Hall
ABSTAIN: None
RECUSE: None

12. OLD BUSINESS

12.1 Proposed approval of a resolution authorizing the City Manager to execute the Final Loan Extension and Ground Lease for BRIDGE Housing Corporation and Napa Valley Community Housing related to the Hunt's Grove Apartments located at 548 Hunt Avenue.

CEQA Determination: Not a CEQA project
Prepared By: Mandy Kellogg, Administrative Services Director Recommendation:

Staff recommends approval of the attached resolution.

Agenda Item #7.1.

Regular City Council
May 14, 2024
Administrative Services Director, Mandy Kellogg and Bridge Housing representative, Caylin Bullock reported on the item.

No public comment was received.

Council Member Anna Chouteau moved to approve the resolution. The motion was seconded by Council Member Billy Summers and on roll call carried by the following vote:

AYES: Mayor Paul Dohring, Council Member Anna Chouteau, Council Member Patrick Kenealy, and Council Member Billy Summers
NOES: None
ABSENT: Vice Mayor Eric Hall
ABSTAIN: None
RECUSE: None

12.2 Presentation of Opinion Research Data Related to the Proposed November 2024 Real Property Transfer Tax Revenue Measure and Direction to Staff.

CEQA Determination: Not a CEQA project
Prepared By: April Mitts, Assistant City Manager
Recommendation:

Direct staff to continue working to place both the Charter City and Real Property Transfer Tax on the ballot for the November 2024 Election and provide direction to staff on the City Council's desired Real Property Transfer Tax structure.

Assistant City Manager, April Mitts reported on the item.

No public comment was received.

City Council directed staff to move forward with a Real Property Transfer Tax for the November 5, 2024 ballot with the graduated tax structure of 1.5% on property sales between $1 - $5 million, and 3% tax on total sales price over $5 million resulting in an estimated annual revenue of $5.3 million. Council further directed there would be no sunset and would be in place until ended by voters.

Council took a brief recess at 8:00 p.m. and returned at 8:10 p.m.

13. NEW BUSINESS
Agenda Item #7.1.

Regular City Council
May 14, 2024

13.1 Proposed approval of a resolution awarding Non-Profit Grant Application funding through the Non-Profit Grant Program in the Fiscal Year (FY) 2024-25 Operations Budget in the amount of $120,000.

CEQA Determination: Not a CEQA project
Prepared By: Mandy Kellogg, Administrative Services Director Recommendation:

Staff recommends approval of the attached resolution.

Administrative Services Director Mandy Kellogg reported on the item.

Ed Smith, Jenny Ocon and Ann Costelloe addressed the Council.

Council Member Patrick Kenealy moved to approve the resolution as presented with a friendly amendment from Council Member Chouteau to have the subcommittee consider including the Farmers Market in next year's selection.

The motion was seconded by Council Member Anna Chouteau and on roll call carried by the following vote:

AYES: Mayor Paul Dohring, Council Member Anna Chouteau, Council Member Patrick Kenealy, and Council Member Billy Summers
NOES: None
ABSENT: Vice Mayor Eric Hall
ABSTAIN: None
RECUSE: None

14. CITY COUNCIL REPORTS:

14.1 A. Association of Bay Area Governments (ABAG) - Executive Board B. Association of Bay Area Governments (ABAG) - General Assembly C. Napa Valley Tourism Corporation (Umbrella for Napa County) D. League of California Cities – North Bay Division
E. Napa County City Selection Committee
F. Napa County Flood Control and Water Conservation District G. Youth Opportunities Commission
Agenda Item #7.1.

Regular City Council
May 14, 2024
H. Napa County Local Agency Formation Commission (LAFCO) I. Napa Valley Transportation Authority (NVTA)
J. Napa County Watershed Information Center & Conservancy (WICC) K. Upper Valley Waste Management Agency
L. Napa County Groundwater Sustainability Plan Advisory Committee M. Napa County Regional Climate Action Committee
N. Council Ad Hoc and Standing Committee Reports

15. ADJOURNMENT
Mayor Dohring adjourned the meeting at 8:38 p.m.

CHALLENGING DECISIONS OF CITY ENTITIES
APPROVED:
______________________________
Paul Jamison Dohring, Mayor
ATTEST:
_________________________
Cindy Tzafopoulos, City Clerk
Agenda Item #7.1.

Agenda Report to the City Council
Agenda Section: REPORTS BY STAFF AND CITY COUNCIL, FUTURE AGENDA ITEMS, and AB 1234 REPORTS:

Department: Public Works
DATE: May 28, 2024
FROM: Joseph Leach, Public Works Director and City Engineer SUBJECT: Update on Pedestrian Improvements for Intersection of Kearney Street and Madrona Avenue per Active
Transportation & Sustainability Committee engagement on 5/22/24.

RECOMMENDED
ACTION:

PREVIOUS COUNCIL
ACTION:

STATEMENT OF THE
PURPOSE:

FINANCIAL IMPACT:

Agenda Item #9.1.

Andrea & Kearney
Watermain Project
Curb Ramp Design Update
May 28, 2024
Agenda Item #9.1.