Agenda packet — City Council and Concurrent Authorities, September 13, 2022 (part 1 of 9)

City Council/Successor Agency to the
Redevelopment Agency/Public
Financing Authority/Parking Authority
Concurrent
City of Stockton
Meeting Agenda - Final
City Council/Successor
Agency of the
Redevelopment
Agency/Public Financing
Authority/Parking Authority
Concurrent Agenda
Kevin J. Lincoln II (At Large) Mayor/Chair
Christina Fugazi (District 5) Vice Mayor/Vice Chair
Sol Jobrack (District 1)
Daniel R. Wright (District 2)
Paul Canepa (District 3)
Susan Lenz (District 4)
Kimberly Warmsley (District 6)
Council Chamber, City Hall, 425 N. El Dorado
Street, Stockton CA
Tuesday, September 13, 2022 4:00 PM
Closed Session 4:00 PM :: Regular Session 5:30 PM

1. CLOSED SESSION CALL TO ORDER/ROLL CALL

2. ADDITIONS TO CLOSED SESSION AGENDA

3. ANNOUNCEMENT OF CLOSED SESSION

3.1 22-0811 CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION Number of Cases: Two
Name of Case: Fire Fighter Engineer Robert Forster, (Workers’ Compensation Appeals Board Case No. ADJ
unassigned)
Name of Case: Kurt Wilson v. City Council of Stockton, et al. (San Joaquin County Superior Court Case No.

STK-CV-UVM-2019-12404)
This Closed Session is authorized pursuant to section 54956.9(d) (1) of the Government Code.

Department: City Attorney

3.2 22-0812 CONFERENCE WITH LABOR NEGOTIATOR
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Meeting Agenda - Final
Recommended Action: Agency Designated Representative: City Manager Harry Black Employee Organizations: Unrepresented Units, Stockton City Employees' Association, Operating Engineer's Local 3, Mid-Management/Supervisory Level Unit, Unrepresented Management/Confidential, Law Department, Stockton Police Management Association, Stockton Firefighters Local 456 International Association of Firefighters, Stockton Fire Management, Stockton Police Officers' Association (SPOA)
This Closed Session is authorized pursuant to section 54957.6(a) of the Government Code.

Department: City Attorney

3.3 22-0813 PUBLIC EMPLOYEE PERFORMANCE EVALUATION:

Recommended Action: City Manager
This Closed Session is authorized pursuant to Government Code section 54957.

Department: City Attorney

3.4 22-0814 PUBLIC EMPLOYEE PERFORMANCE EVALUATION:

Recommended Action: City Attorney
This Closed Session is authorized pursuant to Government Code section 54957.

Department: City Attorney

3.5 22-0815 PUBLIC EMPLOYEE PERFORMANCE EVALUATION:

Recommended Action: City Clerk
This Closed Session is authorized pursuant to Government Code section 54957.

Department: City Attorney

3.6 22-0837 PUBLIC EMPLOYEE APPOINTMENT:

Recommended Action: City Attorney
This Closed Session is authorized pursuant to Government Code section 54957.

Department: City Attorney

3.7 22-0816 CONFERENCE WITH LEGAL COUNSEL - POTENTIAL LITIGATION Number of Cases: One
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Meeting Agenda - Final
Based on existing facts and circumstances, there is significant exposure to litigation pursuant to Government Code section 54956.9(d)(2).

Department: City Attorney

4. CLOSED SESSION PUBLIC COMMENT*

5. RECESS TO CLOSED SESSION

6. REGULAR SESSION CALL TO ORDER/ROLL CALL

7. INVOCATION/PLEDGE TO FLAG

8. REPORT OF ACTION TAKEN IN CLOSED SESSION

9. ADDITIONS TO REGULAR SESSION AGENDA***

10. RECOGNITIONS, ANNOUNCEMENTS, OR REPORTS

10.1 22-0807 PROCLAMATION: NATIONAL FORENSIC SCIENCE WEEK - SEPTEMBER 18-24, 2022
Department: Office of the Mayor

11. PUBLIC COMMENTS* – MATTERS NOT ON THE AGENDA

12. CONSENT AGENDA

12.1 22-0732 ACCEPT THE QUARTERLY INVESTMENT REPORT FOR QUARTER ENDED JUNE 30, 2022
Recommended Action: RECOMMENDATION
It is recommended that the City Council accept by motion the Quarterly Investment Report for the quarter ended June 30, 2022.

Department: Administrative Services
Attachment A - Quarterly Investment Report 6-30-2022
Attachment B - Certification of Quarterly Investment Report Attachments:

12.2 22-0839 ADOPT A RESOLUTION APPOINTING LORI M. ASUNCION AS CITY

ATTORNEY FOR THE CITY OF STOCKTON, AUTHORIZING MAYOR

TO EXECUTE THE EMPLOYMENT CONTRACT, AND AUTHORIZE

STAFF TO AMEND CITY OF STOCKTON SALARY SCHEDULE TO

REFLECT INCREASE IN CITY ATTORNEY BASE SALARY
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Recommended Action: RECOMMENDATION
It is recommended that the City Council adopt a resolution confirming the appointment of Lori M. Asuncion as City Attorney for the City of Stockton and authorize Mayor, on behalf of the City Council, to execute an employment contract setting forth the terms and conditions of employment with Lori M. Asuncion, effective September 13, 2022, and authorize staff to amend City of Stockton salary schedule to reflect increase in City Attorney base salary.

Department: City Attorney
Proposed Resolution
Exhibit 1
Attachments:

12.3 22-0875 APPROVAL OF CITY COUNCIL MINUTES
Recommended Action: RECOMMENDATION
Approve the minutes from the City Council meetings of July 12, 2022 and July 26, 2022
Department: City Clerk
Attachment A – 2022-07-12 Minutes
Attachment B - 2022-07-26 Minutes
Attachments:

12.4 22-0738 APPROVE RESPONSES TO THE 2021-22 SAN JOAQUIN COUNTY GRAND JURY REPORT ON CYBERSECURITY, CASE NO. 0321
Recommended Action: RECOMMENDATION
It is recommended that the City Council adopt by motion the City's responses to the 2021-22 Civil Grand Jury Report titled "San Joaquin County and Its Seven Cities: Cybersecurity: Local Defense Against a Global Threat," Case No. 0321, and direct the City Manager to sign the response on behalf of the City Council and transmit the response to the Presiding Judge of the San Joaquin County Superior Court.

Department: City Manager
Attachment A - Grand Jury Report on Cybersecurity
Attachment B - City of Stockton Response Letter
Attachment C - Ransomware Attack Response Policy
Attachments:

12.5 22-0750 APPROVE A RESOLUTION ADOPTING A CITY COUNCIL POLICY

REGARDING SINGLE-USE PLASTICS
Recommended Action: RECOMMENDATION
It is recommended that the City Council approve a resolution adopting a City Council Policy establishing rules to restrict, promote, and encourage environmentally sustainable practices regarding purchase and distribution of single-use plastics by City representatives and contractors.

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Meeting Agenda - Final
Department: City Manager
Proposed Resolution - Single-Use Plastics Policy
Exhibit 1 - Council Policy 2.08 - Single-Use Plastics
Attachments:

12.6 22-0539 RESOLUTION AUTHORIZING AN AGREEMENT WITH ELEVATOR TECHNOLOGY, INC., TO REPAIR AND UPGRADE ELEVATORS

WITHIN THE FIVE PARKING FACILITIES IN DOWNTOWN

STOCKTON
Recommended Action: RECOMMENDATION
It is recommended that the Board of the Parking Authority of the City of Stockton adopt a Resolution:

1. Authorizing the Executive Director, or designee, to execute an agreement with Elevator Technology, Inc. (ETI), to repair and upgrade the elevators within the five (5) parking facilities (garages) located in downtown Stockton.

2. Authorizing the Executive Director, or designee, to take all appropriate actions to carry out the purpose and intent of this Resolution.

Department: Economic Development
Attachment A - Parking Facilities Map
Attachment B - Resolution PFA 2019-12-17-1501
Proposed Resolution - Elevator Project
Exhibit 1 - Elevator Technology, Inc. Contract
Attachments:

12.7 22-0757 APPROVE A RESOLUTION TO APPOINT THE CITY MANAGER AS THE PLAN ADMINISTRATOR OF THE CITY’S DEFINED

CONTRIBUTION PLANS
Recommended Action: RECOMMENDATION
It is recommended that the City Council approve a resolution to appoint the City Manager as the Plan Administrator of the City's Defined Contribution Plans.

It is also recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of this action.

Department: Human Resources
Attachments: Proposed Resolution

12.8 22-0764 APPROVE A MEMORANDUM OF UNDERSTANDING WITH SAN

JOAQUIN COUNTY PUBLIC HEALTH SERVICES TO PROVIDE
WASTEWATER INFLUENT SAMPLES FOR COVID-19 VIRUS

ANALYSIS BY BIOBOT ANALYTICS
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Recommended Action: RECOMMENDATION
It is recommended that the City Council approve by resolution a memorandum of understanding with the San Joaquin County Public Health Services for sampling wastewater influent for COVID-19 testing by Biobot Analytics.

It is also recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of this action.

Department: Municipal Utilities
Proposed Resolution
Exhibit 1 - Memorandum of Understanding
Attachments:

12.9 22-0758 APPROVE RESOLUTION ACCEPTING THE STATE OF CALIFORNIA,

CALIFORNIA HIGHWAY PATROL, CANNABIS TAX FUND GRANT

PROGRAM AWARD FROM THE STATE OF CALIFORNIA,
CALIFORNIA HIGHWAY PATROL, IN THE AMOUNT OF $138,499.30 Recommended Action: RECOMMENDATION
It is recommended that the City Council approve a resolution to:

1. Authorize the City Manager, or designee, to accept a California Highway Patrol, Cannabis Tax Fund Grant Program grant award from the State of California, California Highway Patrol in the amount of $138,499.30;

2. Authorize the City Manager, or designee, to execute Grant Agreement 9631 and all related documents to carry out the purpose and intent of the grant award;

3. Amend the Fiscal Year 2022-23 Annual Budget to increase the Police Grants & Special Programs revenue and expenditure appropriation by $138,499.30; and

4. Authorize the City Manager, or designee, to take appropriate and necessary actions to carry out the purpose and intent of this resolution.

Department: Police
Proposed Resolution
Exhibit 1 - Grant Agreement 9631
Attachments:

12.10 22-0739 APPROVE MOTION TO AWARD A CONSTRUCTION CONTRACT

FOR THE VAN BUSKIRK COMMUNITY CENTER GYM FLOOR

REPLACEMENT PROJECT
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Recommended Action: RECOMMENDATION
It is recommended that the City Council approve a motion to:

1. Award a Construction Contract in the amount not to exceed $190,604 to H.Y. Floor and Gameline Painting, Inc. of San Carlos, CA, for the Van Buskirk Community Center Gym Floor Replacement, Project No.

WC22003.

2. Approve findings pursuant to Stockton Municipal Code section 3.68.070 in support of an exception to the competitive bidding process.

It is also recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of this motion.

Department: Public Works
Attachments: Attachment A - Construction Contract

12.11 22-0817 ADOPT RESOLUTION TO PURCHASE ONE FIRE ENGINE Recommended Action: RECOMMENDATION
It is recommended that the City Council adopt a resolution to:

1. Approve findings pursuant to Stockton Municipal Code section 3.68.070 in support of an exception to the competitive bidding process.

2. Approve the use of a Cooperative Purchasing Agreement through Sourcewell Contract No. 113021 to provide the City access to preferential pricing of firefighting apparatus from Pierce Manufacturing, Inc.

3. Authorize the City Manager to execute a contract in the amount of $776,401.10 with Pierce Manufacturing, Inc. through affiliated vendor, Golden State Fire Apparatus of Sacramento, CA, to purchase one fire engine.

It is also recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of this resolution.

Department: Public Works
Proposed Resolution - Purchase of One Fire Engine
Exhibit 1 - Cooperative Agreement
Attachments:

12.12 22-0556 ADOPT RESOLUTION TO AUTHORIZE THE COUNTY-CITY

AGREEMENTS FOR THE OPERATION AND MAINTENANCE OF THE

TRAFFIC SIGNALS AT THE INTERSECTIONS OF AUSTIN ROAD

AND ARCH ROAD, AND AUSTIN ROAD AND MARIPOSA ROAD
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Meeting Agenda - Final
Recommended Action: RECOMMENDATION
It is recommended that the City Council adopt a resolution authorizing the City Manager to execute two agreements with San Joaquin County to share with the City the cost to operate and maintain the traffic signals at the intersections of Austin Road and Arch Road, and Austin Road and Mariposa Road.

It is also recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of this resolution.

Department: Public Works
Attachment A - Austin Road/Arch Road
Attachment B - Austin Road/Mariposa Road
Proposed Resolution
Exhibit 1 - Austin/Arch Road Agreement
Exhibit 2 - Austin/Mariposa Road Ageement
Attachments:

12.13 22-0570 APPROVE MOTION TO AWARD A PROFESSIONAL SERVICES

CONTRACT FOR THE STOCKTON SAFE ROUTES TO SCHOOL

SAFETY AND CONNECTIVITY IMPROVEMENTS PROJECT
Recommended Action: RECOMMENDATION
It is recommended that the City Council approve a motion to:

1. Award a Professional Services Contract to Siegfried Engineering, Inc. of Stockton, CA, in the amount of $300,000, for the design of the Stockton Safe Routes to School Safety and Connectivity Improvements, Project No.

WT19005/Federal Project No. ATPSB1L-5008(189).

2. Approve findings pursuant to Stockton Municipal Code section 3.68.070 in support of an exception to the competitive bidding process.

It is also recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of this motion.

Department: Public Works
Attachment A - Vicinity Map
Attachment B - Professional Services Contract
Attachments:

12.14 22-0665 ADOPT RESOLUTION TO AUTHORIZE THE LINCOLN STREET AND

EIGHTH STREET ROUNDABOUT PROJECT
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Recommended Action: RECOMMENDATION
It is recommended that the City Council adopt a resolution to:

1. Approve Notice of Exemption No. NOE42-20 under the California Environmental Quality Act for the Lincoln Street and Eighth Street Roundabout, Project No. WT17021/Federal Project No. CML-5008(176).

2. Approve the plans and specifications for the Lincoln Street and Eighth Street Roundabout, Project No. WT17021/Federal Project No.

CML-5008(176).

3. Appropriate funds in the amount of $265,000 from the Measure K Maintenance Fund Balance to the Lincoln Street and Eighth Street Roundabout, Project No. WT17021/Federal Project No. CML-5008(176).

4. Award a Construction Contract in the amount of $1,045,569.50 to George Reed, Inc. of Modesto, CA, for the Lincoln Street and Eighth Street Roundabout, Project No. WT17021/Federal Project No. CML-5008(176).

It is also recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of this resolution.

Department: Public Works
Attachment A - Vicinity Map
Proposed Resolution
Exhibit 1 - Notice of Exemption
Exhibit 2 - Construction Contract
Attachments:

12.15 22-0675 APPROVE MOTION TO AWARD A PROFESSIONAL SERVICES CONTRACT FOR THE HSIP 10 - LEFT-TURN POCKETS PROJECT
Recommended Action: RECOMMENDATION
It is recommended that the City Council approve a motion to:

1. Award a Professional Services Contract to Siegfried Engineering, Inc. of Stockton, CA, in the amount of $141,700, for the design of the HSIP 10 - Left-Turn Pockets, Project No. WT22046/Federal Project No.

HSIPSL-5008(195).

2. Approve findings pursuant to Stockton Municipal Code section 3.68.070 in support of an exception to the competitive bidding process.

It is also recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of this motion.

Department: Public Works
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Attachment A - Vicinity Map
Attachment B - Professional Services Contract
Attachments:

12.16 22-0689 ADOPT RESOLUTION TO AUTHORIZE THE SIDEWALK, CURB, AND GUTTER REPAIRS PROGRAM FY 2021-22 SB1 PROJECT
Recommended Action: RECOMMENDATION
It is recommended that the City Council adopt a resolution to:

1. Approve Notice of Exemption No. NOE6-22 under the California Environmental Quality Act for the Sidewalk, Curb, and Gutter Repairs Program FY 2021-22 SB1, Project No. WD22004.

2. Approve the plans and specifications for the Sidewalk, Curb, and Gutter Repairs Program FY 2021-22 SB1, Project No. WD22004.

3. Award a Construction Contract in the amount of $1,265,240 to United Pavement Maintenance, Inc. of Hughson, CA, for the Sidewalk, Curb, and Gutter Repairs Program FY 2021-22 SB1, Project No. WD22004.

It is also recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of this resolution.

Department: Public Works
Attachment A - Location List
Attachment B - Project Map
Proposed Resolution
Exhibit 1 - Notice of Exemption
Exhibit 2 - Construction Contract
Attachments:

12.17 22-0701 ADOPT RESOLUTION TO AUTHORIZE THE SIDEWALK

REPLACEMENT PROJECT
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Recommended Action: RECOMMENDATION
It is recommended that the City Council adopt a resolution to:

1. Approve Notice of Exemption No. NOE14-22 under the California Environmental Quality Act for the Sidewalk Replacement, Project No.

WD22017.

2. Approve the plans and specifications for the Sidewalk Replacement, Project No. WD22017.

3. Award a Construction Contract in the amount of $150,040 to United Pavement Maintenance, Inc. of Hughson, CA, for the Sidewalk Replacement, Project No. WD22017.

It is also recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of this resolution.

Department: Public Works
Attachment A - Vicinity Map
Proposed Resolution
Exhibit 1 - NOE14-22
Exhibit 2 - Construction Contract
Attachments:

12.18 22-0704 ADOPT RESOLUTION TO AUTHORIZE THE CITY STREET RE-STRIPING FY 2021-22 SB1 PROJECT
Recommended Action: RECOMMENDATION
It is recommended that the City Council adopt a resolution to:

1. Approve Notice of Exemption No. NOE20-22 under the California Environmental Quality Act for the City Street Re-Striping FY 2021-22 SB1, Project No. WD22009.

2. Approve the plans and specifications for the City Street Re-Striping FY 2021-22 SB1, Project No. WD22009.

3. Award a Construction Contract in the amount of $297,315 to Chrisp Company of Stockton, CA, for the City Street Re-Striping FY 2021-22 SB1, Project No. WD22009.

It is also recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of this resolution.

Department: Public Works
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Attachment A - Vicinity Map
Proposed Resolution
Exhibit 1 - NOE20-22
Exhibit 2 - Construction Contract
Attachments:

12.19 22-0712 ADOPT RESOLUTION TO AUTHORIZE THE SMITH CANAL

FOOTBRIDGE FENCING REPLACEMENT PROJECT
Recommended Action: RECOMMENDATION
It is recommended that the City Council adopt a resolution to:

1. Approve Notice of Exemption No. NOE7-22 under the California Environmental Quality Act for the Smith Canal Footbridge Fencing Replacement, Project No. WC21014.

2. Approve the plans and specifications for the Smith Canal Footbridge Fencing Replacement, Project No. WC21014.

3. Award a Construction Contract in the amount of $127,314.40 to Stockton Fence & Material Co., of Stockton, CA, for the Smith Canal Footbridge Fencing Replacement, Project No. WC21014.

It is also recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of this resolution.

Department: Public Works
Attachment A - Vicinity Map
Proposed Resolution
Exhibit 1 - NOE 7-22
Exhibit 2 - Construction Contract
Attachments:

12.20 22-0713 APPROVE MOTION TO AWARD SERVICE CONTRACT FOR THE

ROOF MAINTENANCE AND ON-CALL LEAK RESPONSE PROJECT
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Recommended Action: RECOMMENDATION
It is recommended that the City Council approve a motion to:

1. Award a multi-year Service Contract through June 30, 2027, in the amount not to exceed $1,099,966, to D.K. Enterprises, Inc. DBA King's Roofing of Patterson, CA, for Roof Maintenance and On-Call Leak Response, Project No. OM-22-040.

2. Approve findings pursuant to Stockton Municipal Code section 3.68.070 in support of an exception to the competitive bidding process.

It is also recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of this motion.

Department: Public Works
Attachment A - Service Contract with King's Roofing
Attachment B - Financial Breakdown
Attachments:

12.21 22-0715 ADOPT RESOLUTION TO AUTHORIZE THE ADA CURB RAMP

INSTALLATION PROJECT
Recommended Action: RECOMMENDATION
It is recommended that the City Council adopt a resolution to:

1. Approve Notice of Exemption No. NOE21-22 under the California Environmental Quality Act for the ADA Curb Ramp Installation, Project No.

WD22004.

2. Approve the plans and specifications for the ADA Curb Ramp Installation, Project No. WD22004

3. Transfer funds in the amount of $102,324.45 from the Sidewalk, Curb, and Gutter Repairs Program FY 2019-20, Project No. WD19015 (formerly PW1915), to the ADA Curb Ramp Installation, Project No. WD22004.

4. Appropriate funds in the amount of $170,000 from the Measure K Maintenance Fund to the ADA Curb Ramp Installation, Project No.

WD22004.

5. Award a Construction Contract in the amount of $450,000 to BGS Builders, Inc. of Stockton, CA, for the ADA Curb Ramp Installation, Project No. WD22004.

It is also recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of this resolution.

Department: Public Works
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Attachment A - Location List
Attachment B - Vicinity Map
Proposed Resolution
Exhibit 1 - Notice of Exemption
Exhibit 2 - Construction Contract with BGS Builders
Attachments:

12.22 22-0716 ADOPT RESOLUTION TO AUTHORIZE THE LOCAL STREET RESURFACING PROGRAM FY 2021-22 SB1 - MICRO-SURFACING

PROJECT
Recommended Action: RECOMMENDATION
It is recommended that the City Council adopt a resolution to:

1. Approve Notice of Exemption No. NOE18-22 under the California Environmental Quality Act for the Local Street Resurfacing Program FY 2021-22 SB1 - Micro-Surfacing, Project No. WT22003.

2. Approve the plans and specifications for the Local Street Resurfacing Program FY 2021-22 SB1 - Micro-Surfacing, Project No. WT22003.

3. Award a Construction Contract in the amount of $709,288 to Pavement Coatings, Co. of Sacramento, CA, for the Local Street Resurfacing Program FY 2021-22 SB1 - Micro-Surfacing, Project No. WT22003.

It is also recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of this resolution.

Department: Public Works
Attachment A - Vicinity Map
Attachment B - VSS International, Inc. Bid Protest Letter Attachment C - Pavement Coatings, Co. Bid Protest Letter Attachment D - City Bid Protest Determination Letter
Proposed Resolution
Exhibit 1 - NOE18-22
Exhibit 2 - Construction Contract with Pavement Coatings Co.

Attachments:

13. ADMINISTRATIVE MATTERS

14. UNFINISHED BUSINESS

15. NEW BUSINESS

15.1 22-0709 CONSIDER A MEMORANDUM OF UNDERSTANDING ALLOWING STOCKTON UNIFIED SCHOOL DISTRICT’S FAMILY RESOURCE
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PROGRAM USE OF CITY MICRO LIBRARY SPACE AT ARNOLD

RUE AND STRIBLEY COMMUNITY CENTERS
Recommended Action: RECOMMENDATION
It is recommended that the City Council approve a motion to enter into a memorandum of understanding (MOU) providing Stockton Unified School District's (SUSD) Family Resource Program space to operate in the City's Micro Libraries at Stribley and Arnold Rue Community Centers.

This action will also authorize the City Manager to take appropriate and necessary actions to carry out the purpose and intent of this motion.

Department: Community Services
Attachments: Attachment A - Facility Use Agmt Stribley and Arnold Rue Micro Libraries

15.2 22-0763 APPROVE A MARKETING AGREEMENT FOR THE NATIONAL

LEAGUE OF CITIES SERVICE LINE WARRANTY PROGRAM
Recommended Action: RECOMMENDATION
It is recommended that the City Council approve a motion to:

1. Authorize the City to enter into a Marketing Agreement with Utility Service Partners Inc. to offer the National League of Cities Service Line warranty program to homeowners in the City of Stockton's Service Area over an initial term of five (5) years; and

2. Authorize the City Manager, or designee, to take appropriate and necessary actions to carry out the purpose and intent of this motion.

Department: Municipal Utilities
Attachment A - Updated Brand Fee Agreement

15.2 - PPT - NLC Service Line Program
Attachments:

15.3 22-0767 AUTHORIZE PURCHASE OF AN OMNI CATAMARAN

MULTI-PURPOSE WORKBOAT AND ACCESSORIES FROM
ELASTEC INC. FOR THE MCLEOD LAKE MAINTENANCE

PROGRAM
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Recommended Action: RECOMMENDATION
It is recommended that the City Council adopt a resolution to:

1. Approve findings pursuant to Stockton Municipal Code section 3.68.070 in support of an exception to the competitive bidding process.

2. Authorize the City Manager to execute the purchase of an Omni Catamaran multi-purpose workboat and proprietary accessories from Elastec Inc. of Carmi, Illinois for $133,276.71.

It is also recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of this resolution.

Department: Municipal Utilities
Attachment A - Quote
Proposed Resolution

15.3 - PPT - Omni Catamaran for McLeod Lake
Attachments:

15.4 22-0805 APPROVE A RESOLUTION AND ORDINANCE TO AUTHORIZE THE CITY OF STOCKTON’S MEMBERSHIP IN THE EAST BAY

COMMUNITY ENERGY AUTHORITY AND PARTICIPATION IN ITS

COMMUNITY CHOICE AGGREGATION PROGRAM
Recommended Action: RECOMMENDATION
It is recommended that the City Council:

1. Adopt a resolution approving the agreement titled "East Bay Community Energy Authority - Joint Powers Agreement" in order to participate with other signatories in a Community Choice Aggregation JPA for regional municipalities and authorizing the City Manager to execute the agreement.

2. Adopt an ordinance approving the East Bay Community Energy Authority Joint Powers Agreement and Authorizing Implementation of its Community Choice Aggregation Program
It is also recommended that the City Manager be authorized to take all appropriate and necessary actions to carry out the purpose and intent of the resolution and ordinance.

Department: City Manager
Attachment A - EBCE Letter to City 5.12.2022
Attachment B - CCA Feasibility Study
Attachment C - EBCE Joint Powers Agreement
Proposed Resolution
Proposed Ordinance

15.4 - PPT - Community Choice Aggregation
Attachments:

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15.5 22-0770 ADOPT AN ORDINANCE AMENDING THE STOCKTON MUNICIPAL CODE BY ADDING CHAPTER 8.94, RELATING TO THE FLYING OF

UNMANNED AIRCRAFT SYSTEMS IN THE PORT OF STOCKTON

ZONING DISTRICT
Recommended Action: RECOMMENDATION
It is recommended that the City Council:

1. Adopt an ordinance amending the Stockton Municipal Code by adding Chapter 8.94, relating to the flying of unmanned aircraft systems (UAS/drones) in the Port of Stockton (PT) zoning district.

2. Authorize the City Manager, or designee, to take all appropriate and necessary actions to carry out the purpose and intent of the ordinance.

Department: Police
Proposed Ordinance

15.5 - PPT - Unmanned Aircraft Flight
Attachments:

15.6 22-0804 APPOINTMENT TO THE STOCKTON CIVIL SERVICE/EQUAL

EMPLOYMENT COMMISSION
Recommended Action: RECOMMENDATION
Adopt a resolution appointing one member to the Civil Service Commission/Equal Employment Commission for a term commencing immediately and ending December 31, 2025.

Department: City Clerk
Attachment A - Redacted Applications
Proposed Resolution - CSC Appointment
Attachments:

15.7 22-0876 DISCUSSION ON YOUTH PILOT PROGRAM
Department: Office of the Mayor

15.8 22-0877 ADOPT A RESOLUTION RENAMING BROOKVIEW COURT AS FMF

DOC GNEM COURT
Recommended Action: RECOMMENDATION
It is recommended that the City Council adopt a resolution:

1. Authorizing the City Manager to process a street name change to rename "Brookview Court" as "FMF DOC GNEM Court" with the next 30 days.

2. Authorizing the City Manager to take other actions which are necessary and appropriate to carry out the purpose and intent of this Resolution.

City of Stockton Page 17 Printed on 9/7/2022
17 City Council/Successor Agency to September 13, 2022
the Redevelopment Agency/Public
Financing Authority/Parking
Authority Concurrent
Meeting Agenda - Final
Department: Office of the Mayor
Attachments: Proposed Resolution

16. HEARINGS**

16.1 22-0702 ADOPT A RESOLUTION TO ESTABLISH A NEW FEE TO FILE A

COMMERCIAL CANNABIS LOTTERY APPLICATION
Recommended Action: RECOMMENDATION
It is recommended that City Council adopt a resolution to:

1. Approve the amendment of Fiscal Year (FY) 2022-23 Fee Schedule to create a new fee to file an application for the Commercial Cannabis Lottery program in the amount of $200.00, commencing on 10/01/2022; and

2. Authorize the City Manager to take appropriate and necessary actions to carry out the purpose and intend of the resolution.

Department: Community Development
Proposed Resolution - New Application Processing Fee
Exhibit 1 - Proposed Fee

16.1 - PPT - Cannabis Lottery Application
Attachments:

16.2 22-0605 CONDUCT A PUBLIC HEARING FOR THE FORMATION OF THE

MIRACLE MILE COMMUNITY IMPROVEMENT DISTRICT
City of Stockton Page 18 Printed on 9/7/2022
18 City Council/Successor Agency to September 13, 2022
the Redevelopment Agency/Public
Financing Authority/Parking
Authority Concurrent
Meeting Agenda - Final
Recommended Action: RECOMMENDATION
It is recommended that the City Council conduct a Public Hearing to consider public comment and testimony regarding the approval and adoption for the formation of the Miracle Mile Community Improvement District (MMCID).

At the conclusion of the public input portion of the public hearing, it is recommended that the City Clerk tabulate all ballots received.

If after tabulation of the ballots, the ballots in favor of the MMCID formation exceed the opposition (weighted by the amount of the assessment), it is recommended that the City Council adopt a resolution to:

1. Approve the formation of the Miracle Mile Community Improvement District authorized under the City of Stockton's Community Improvement District Ordinance 2022-03-12-211 (Attachment A - SMC Ordinance) and designated as the "Miracle Mile Community Improvement District No. 2022-01," with separate benefit zones designated "Zone 1," "Zone 2," "Zone 3," and "Zone 4," the boundaries of which are shown in the Boundary Map (Exhibit 1 to the Resolution);

2. Approve the assessment formula and levying of the assessments;

3. Declare the assessment is lawfully authorized and direct the Clerk to cause the Boundary Map to be filed in the Office of the San Joaquin County Recorder and, concurrently therewith, to record a Notice of Assessment with respect to the properties in the Office of the County Recorder of the County of San Joaquin;

4. Approve and adopt the final Management District Plan and Engineer's Report (Exhibit 2 to the Resolution); and

5. Authorize the City Manager to take necessary and appropriate actions to carry out the purpose and intent of the resolution.

Department: Economic Development
Attachment A - SMC Ordinance #2022-03-22-1211
Proposed Resolution - MMCID 2022
Exhibit 1 - MMCID Map
Exhibit 2 - Management District Plan & Engineer's Report

16.2 - PPT - MMID
Attachments:

17. CITY MANAGER'S UPDATE

18. COUNCIL COMMENTS

19. ADJOURNMENT
City of Stockton Page 19 Printed on 9/7/2022
19 City Council/Successor Agency to September 13, 2022
the Redevelopment Agency/Public
Financing Authority/Parking
Authority Concurrent
Meeting Agenda - Final

INFORMATIONAL ITEMS
22-0861 COUNCIL COMMITTEE/BOARD AND COMMISSION MINUTES
Recommended Action: RECOMMENDATION
Information item only. No action required.

Department: City Clerk
CSC 2021-11-12
CSC 2022-01-20
MTF 2022-01-07
MTF 2022-02-02
MTF 2022-02-18
Attachments:

CERTIFICATE OF POSTING
I declare, under penalty of perjury, that I am employed by the City of Stockton and that I caused this agenda to be posted in the City Hall notice case on September 8, 2022 in compliance with the Brown Act.

Eliza R. Garza, CMC
City Clerk
By: ________________________________
Deputy
City of Stockton Page 20 Printed on 9/7/2022
20 City Council/Successor Agency to September 13, 2022
the Redevelopment Agency/Public
Financing Authority/Parking
Authority Concurrent
Meeting Agenda - Final
*Citizens may comment on any subject within the jurisdiction of the City Council/Successor Agency to the Redevelopment Agency/Public Finance Authority/Parking Authority, including items on the Agenda. Each speaker is limited to three minutes. Speakers must submit “Request to Speak” cards to the City Clerk, and be prepared to speak when called. No speaker cards will be received after the close of the Citizen’s Comments portion of the meeting.
**Speakers should hold comments on items listed as a Hearing until the Hearing is opened. If a large number of people desire to speak at a Hearing, the Mayor/Chair may reduce the amount of time allocated to each speaker to three (3) minutes.
***Additions to the Agenda - Government Code Section 54954.2(b)(2), allows members of the City Council present at the meeting to take immediate action, with either a two-thirds or unanimous vote, to place an item on the agenda that action must be taken and that the item came to the attention of the City subsequent to the agenda being posted.

All proceedings before this meeting body are conducted in English. The City of Stockton does not furnish language interpreters and, if one is needed, it shall be the responsibility of the person needing one.

In accordance with the Americans With Disabilities Act and California Law, it is the policy of the City of Stockton to offer its public programs, services and meetings in a manner that is readily accessible to everyone, including those with disabilities. If you are a person with a disability and require a copy of a public hearing notice, or an agenda and/or agenda packet in an appropriate alternative format; or if you require other accommodation, please contact the Office of the City Clerk located at 425 North El Dorado Street, Stockton, California 95202 during normal business hours or by calling (209) 937-8458, at least 5 days in advance of the hearing/meeting. Advance notification within this guideline will enable the City/Agency to make reasonable arrangements to ensure accessibility.

Materials related to an item on this agenda submitted to City Council after distribution of the agenda packet are available for public inspection in the City Clerk's Office at 425 North El Dorado Street, Stockton, California 95202, during normal business hours. Such documents are also available on the City's website at www.stocktongov.com subject to staff's ability to post the documents before the meeting.

CHALLENGING CITY DECISIONS: The time limit within which to commence any lawsuit or legal challenge to any quasi-adjudicative decision made by the City is governed by Section 1094.6 of the Code of Civil Procedure, unless a shorter limitation period is specified by any other provision. Under Section 1094.6, any lawsuit or legal challenge to any quasi-adjudicative decision made by the City must be filed no later than the 90th day following the date on which such decision becomes final. Any lawsuit or legal challenge, which is not filed within that 90-day period, will be barred. If a person wishes to challenge the nature of the above section in court, they may be limited to raising only those issues they or someone else raised at the meeting described in this notice, or in written correspondence delivered to the City of Stockton, at or prior to the meeting. In addition, judicial challenge may be limited or barred where the interested party has not sought and exhausted all available administrative remedies.

City of Stockton Page 21 Printed on 9/7/2022
21 City of Stockton
Legislation Text
File #: 22-0807, Version: 1
PROCLAMATION: NATIONAL FORENSIC SCIENCE WEEK - SEPTEMBER 18-24, 2022 City of Stockton Page 1 of 1 Printed on 9/7/2022
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22 City of Stockton
Legislation Text
File #: 22-0732, Version: 1
ACCEPT THE QUARTERLY INVESTMENT REPORT FOR QUARTER ENDED JUNE 30, 2022

RECOMMENDATION
It is recommended that the City Council accept by motion the Quarterly Investment Report for the quarter ended June 30, 2022.

Summary
Pursuant to California Government Code section 53646 and the City’s Investment Policy (Policy No.

17.01.030), the City Treasurer (Chief Financial Officer) is required to provide a quarterly report and certification to the City Council, City Manager, and City Auditor. The Quarterly Investment Report shall include a complete description of the portfolio, the type of investments, the issuers, maturity dates, par value, and dollar amounts invested in all securities, investments, or programs that are under the management of contracted parties, including lending programs. The certification must provide assurances that investments were made consistent with the City’s Investment Policy and that the City will meet its expenditure obligations for the next six months.

The Quarterly Investment Report and Certification for the quarter ending June 30, 2022, are provided as required (Attachments A and B). This report is presented as required and will bring the City current on its reporting requirements. The report has also been posted to the City’s website:
<http://www.stocktongov.com/government/departments/adminServices/finInv.html> The City’s consolidated investment portfolio (market value) was approximately $913.3 million as of June 30, 2022; this includes the City’s liquidity position, short-term investments and the reserve portfolio (as shown on page 12, Attachment A). The total market value-based earnings for the most recent quarter were ($4,402,456), or -0.48 percent. The market value-based earnings are comprised of interest earned of $1,788,558, a market value decrease of ($6,404,900), and the City’s liquid portfolio earnings of $213,886, for the quarter ended June 30, 2022.

DISCUSSION
Background
To comply with state law and city policy, the City is required to present quarterly investment reports detailing the City’s investment portfolio to the City Council, City Manager, and City Auditor. The City also posts monthly transaction reports to the City’s website. The authority of the Council to invest, reinvest funds, sell or exchange securities is delegated to the City’s Chief Financial Officer, who also serves as City Treasurer (Resolution #2021-06-22-1602). Pursuant to the Investment Policy, the City Treasurer may and does delegate some fiduciary responsibility to an outside investment management firm. An investment manager’s fiduciary responsibility is a legal requirement related City of Stockton Page 1 of 3 Printed on 9/7/2022
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23 File #: 22-0732, Version: 1
to registration with the Securities and Exchange Commission under the Investment Advisor Act of 1940.

Due to the specialized services and expertise required to assist the City in the varied investment options available, the City contracted with an experienced investment manager, PFM Asset Management LLC (PFM).

Present Situation
The attached report (Attachment A) details the activities of the quarter ended June 30, 2022, and includes detailed information on the holdings of the City’s portfolio on that date. It consists of a certification (Attachment B) that the assets comply with the requirements of State law and City policy and that there is sufficient liquidity to cover the subsequent six months of budgeted activities.

The attached quarterly investment report has been published online along with monthly reports:
<http://www.stocktongov.com/government/departments/adminServices/finInv.html> Portfolio Balances and Performance
The City divides its investment portfolio into Reserve and Liquid portions with a consolidated market value of approximately $913.3 million as of June 30, 2022. The Reserve portion represents the longterm assets managed by PFM Asset management and the Liquid part represents funds invested in several accounts (State of California Local Agency Investment Fund, California Asset Management Program, Dreyfus Treasury Money Market) to maintain adequate liquidity and optimize returns. The total returns on the consolidated portfolio for the fourth quarter of the fiscal year were ($4,402,456) or -0.48%, which includes the change in market value for the reserve portfolio, interest income, (Attachment A, page 24), and the liquid portfolio’s earnings of $213,886. The market value changes in the City’s portfolio are not realized losses. The reduced market value is attributable to the rising interest rate environment, and we will likely continue to see the impacts of that in the portfolio.

However, to minimize realized losses from the interest rate changes, City staff works closely with our investment advisors to ensure that securities in our portfolio are held until maturity, only trading them when doing so involves minimal realized losses, and better positions the portfolio to lock-in future realized gains. The quarterly return valuation includes funds from all activities, restricted and unrestricted, and includes changes in fair market value (unrealized gains/losses). The return is not netted with the expenses of the pool.

The performance of the reserve portion of the portfolio managed by PFM through June 30, 2022, is benchmarked against the Bank of America Merrill Lynch index of 1-5-year government and U.S. issued corporate securities rated A- or better. The benchmark generally reflects the portfolio’s strategy and composition. City staff works closely with PFM to monitor the status of the City’s investment portfolio and its returns. Over the last quarter, the reserve portion of the City’s portfolio outperformed the performance of the benchmark by 0.12%. For the year, the City’s portfolio return was -4.51%, but with the differing composition (described above), outperformed the benchmark by

0.23% (Attachment A, page 24).

During the quarter, the U.S. economy was characterized by high inflation, a strong labor market, depressed consumer confidence, and growing potential for an economic recession. To combat City of Stockton Page 2 of 3 Printed on 9/7/2022
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24 File #: 22-0732, Version: 1
sustained high inflation, the Federal Reserve continued to tighten monetary policy, bringing the Fed Funds target rate to a new range of 1.50% to 1.75% at their June 15 Federal Open Market Committee meeting. The three-quarters of one percent rate hike at that meeting was the largest in almost 28 years, and interest rates across the yield curve reacted. While the largest increase came for maturities under one year, interest rates also moved higher on maturities beyond 1 year, with the 2-year, 5-year, and 10-year Treasuries increasing by 0.62%, 0.58%, and 0.67%. The interest rate movement during the quarter resulted in a yield curve that remains very flat from 2-years to 30-years.

Rising interest rates once again resulted in negative total returns for most fixed income indices and portfolios, including the City’s Reserve portfolio and its benchmark, as unrealized losses resulting from rising interest rates were greater than realized earnings. While rising interest rates have had a negative impact on the portfolio’s existing holdings, they have created good opportunities for new purchases. During the fourth quarter of fiscal year 2021-22, new investments were purchased for the Reserve portfolio at yields that reflect the highest levels experienced in almost 15 years.

The City’s investment portfolio complies with California Government Code 53601. It is invested solely in fixed-income securities (no stock holdings) that, while earning certain rates of interest, gain in market value when interest rates fall and lose market value when interest rates rise. The portfolio’s earnings on a market value basis were negative, as unrealized market value losses due to rising rates were greater than realized earnings. The reserve portfolio yield at cost is 1.19% (Attachment A, page 18) while realizing $1,694,308 of earnings during the quarter (Attachment A, page 25) on an amortized cost basis (this excludes unrealized gains/losses).

Given the likely path of continued aggressive Fed rate hikes, interest rates are expected to continue to move higher throughout the year, and reinvestment of holdings into higher yielding investments will continue to increase earnings going forward. New investments will continue to be evaluated and purchased for the City’s portfolio to balance the capture of higher yields against the risk of potentially higher rates to come and the possibility of any recession that may be caused by the Fed’s tightening cycle, and the lower rates that such a recession might bring.

FINANCIAL SUMMARY
There is no financial impact related to the presentation of these reports.

Attachment A - Quarterly Investment Report for the Quarter Ended 6-30-2022 Attachment B - Certification of Quarterly Investment Report for the Quarter Ended 6-30-2022 City of Stockton Page 3 of 3 Printed on 9/7/2022
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25 Investment Performance Review
For the Quarter Ended June 30, 2022
Client Management Team PFM Asset Management LLC
Monique Spyke, Managing Director
Allison Kaune, Senior Analyst
Joseph Creason, Portfolio ManagerRachael Miller, Client Consultant 213 Market Street
Harrisburg, PA 17101-2141
717-232-2723
1 California Street Ste. 1000
San Francisco, CA 94111-5411
415-393-7270
NOT FDIC INSURED : NO BANK GUARANTEE : MAY LOSE VALUE
For Institutional Investor or Investment Professional Use Only - This material is not for inspection by, distribution to, or quotation to the general public

CITY OF STOCKTON

ATTACHMENT A
26 © PFM Asset Management LLC pfmam.com |
Market Update
27 PFM Asset Management LLC
For the Quarter Ended June 30, 2022
California Affiliated Risk Management Authorities CLIENT NAME Market Update For the Quarter Ended June 30, 2022
Market Update
© PFM Asset Management LLC | pfmam.com
Current Market Themes
▸ The U.S. economy is characterized by:
▹ High inflation▹ A strong labor market▹ Depressed consumer confidence▹ Growing potential for economic recession ▸ The Federal Reserve is tightening monetary policy
▹ More aggressive rate hikes to battle persistent inflation▹ Short-term fed funds rate projected to reach 3.25% to 3.75% by year-end▹ Start of balance sheet reduction; pace to double beginning in September ▸ Asset prices have fallen sharply in 2022 as a result of:
▹ The impact of higher rates on bond prices and equity valuations▹ Wider credit spreads▹ High commodity prices, rising labor costs, and the continuing conflict in Ukraine▹ High levels of volatility and uncertainty

CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Market Update
© PFM Asset Management LLC pfmam.com |

ATTACHMENT A
28 1
PFM Asset Management LLC
For the Quarter Ended June 30, 2022
California Affiliated Risk Management Authorities CLIENT NAME Market Update For the Quarter Ended June 30, 2022
Market Update
© PFM Asset Management LLC | pfmam.com
Consumers Expect High Inflation in the Near Term, But Moderation Longer Term Source: Bloomberg, as of June 2022.
0%1%2%3%4%5%6%
2017 2018 2019 2020 2021 2022
Median Price Increase
University of Michigan Survey of Consumers
Expected Change in Prices
Next 5-10 Years Next Year
A disparity exists
between consumer’s
short and long-term
inflation expectations

CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Market Update
© PFM Asset Management LLC pfmam.com |

ATTACHMENT A
29 2
PFM Asset Management LLC
For the Quarter Ended June 30, 2022
California Affiliated Risk Management Authorities CLIENT NAME Market Update For the Quarter Ended June 30, 2022
Market Update
© PFM Asset Management LLC | pfmam.com
Strong Labor Market and Spending Provide Momentum Against Signs of Economic Slowing Source: Bloomberg, as of June 2022.

Tailwinds Headwinds
$400$450$500$550$600$650$700
2017 2018 2019 2020 2021 2022
Billions
Retail Sales (Monthly)
20406080
100120
2017 2018 2019 2020 2021 2022
Index of Consumer Sentiment
34567
2017 2018 2019 2020 2021 2022
Millions
Existing Home Sales
April 20

14.7%
June 22

3.6%
0%4%8%
12%16%
2017 2018 2019 2020 2021 2022
U.S. Unemployment Rate

CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Market Update
© PFM Asset Management LLC pfmam.com |

ATTACHMENT A
30 3
PFM Asset Management LLC
For the Quarter Ended June 30, 2022
California Affiliated Risk Management Authorities CLIENT NAME Market Update For the Quarter Ended June 30, 2022
Market Update
© PFM Asset Management LLC | pfmam.com
Uncertainty Grows Around Economic Outlook
Source: Bloomberg, as of June 2022.

GDP Contributors Q2 2021 Q3 2021 Q4 2021 Q1 2022
U.S. Real GDP 6.7% 2.3% 6.9% -1.6%
Personal Consumption 7.9% 1.4% 1.8% 1.2%
Fixed Investment 0.6% -0.2% 0.5% 1.3%
Private Inventories -1.3% 2.2% 5.3% -0.4%
Net Exports -0.2% -1.3% -0.2% -3.2%Gov’t Expenditures -0.3% 0.2% -0.5% -0.5% Following a negative Q1 reading, economists
expect positive yet decelerating growth amid an
increasingly cautious consumer
33%
0%
20%40%
60%80%
100%
2012 2014 2016 2018 2020 2022
U.S. 1-Year Recession Probability
(Bloomberg Median Economist Forecast)

CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Market Update
© PFM Asset Management LLC pfmam.com |

ATTACHMENT A
31 4
PFM Asset Management LLC
For the Quarter Ended June 30, 2022
California Affiliated Risk Management Authorities CLIENT NAME Market Update For the Quarter Ended June 30, 2022
Market Update
© PFM Asset Management LLC | pfmam.com
Fed’s Updated Projections Show More Expected Inflation, Lower Growth Source: Federal Reserve, latest economic projections as of June 2022.

1.7% 1.7% 1.9% 1.8%
0%1%2%3%
2022 2023 2024 Longer
Run
Change in Real GDP
March Projections June Projections

3.7% 3.9% 4.1% 4.0%
0%1%2%3%4%5%
2022 2023 2024 Longer
Run
Unemployment Rate
March Projections June Projections

4.3%

2.7% 2.3%
0%2%4%6%
2022 2023 2024
Core PCE Inflation
March Projections June Projections

3.4%

3.8%

3.4%

2.5%
0%1%2%3%4%
2022 2023 2024 Longer
Run
Federal Funds Rate
March Projections June Projections

CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Market Update
© PFM Asset Management LLC pfmam.com |

ATTACHMENT A
32 5
PFM Asset Management LLC
For the Quarter Ended June 30, 2022
California Affiliated Risk Management Authorities CLIENT NAME Market Update For the Quarter Ended June 30, 2022
Market Update
© PFM Asset Management LLC | pfmam.com
Treasury Yields Move Higher Across the Curve; Curve Remains Flat Beyond 2-Years
Source: Bloomberg, as of 6/30/2022.

0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%
3 M
1 Y
2 Y
3 Y
4 Y
5 Y
10 Y
30 Y
Maturity
U.S. Treasury Yield Curve
June 30, 2022March 31, 2022December 31, 2021
2Q2022
6/30/22
1Q2022
3/31/22
QoQ
Change
3-month 1.63% 0.48% +1.15%
1-year 2.74% 1.60% +1.14%2-year 2.95% 2.33% +0.62%3-year 3.01% 2.51% +0.50%5-year 3.04% 2.46% +0.58% 10-year 3.01% 2.34% +0.67%30-year 3.18% 2.45% +0.73%

CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Market Update
© PFM Asset Management LLC pfmam.com |

ATTACHMENT A
33 6
For the Quarter Ended June 30, 2022
California Affiliated Risk Management Authorities Market Update Surging Yields Give Back Pandemic Gains

CLIENT NAME
For the Quarter Ended June 30, 2022
Market Update
© PFM Asset Management LLC | pfmam.com
Source: ICE BofAML Indices via Bloomberg, as of 6/30/2022; PFMAM calculations. 2022 Price, income, and total return is YTD as of 6/30/2022.

ICE BofA 1-5 Year Treasury Index
-8%-6%-4%-2%
0%2%4%6%8%
10%12%
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
Annual Price & Income Returns
Income Return Price Return Total Return
$100$120$140$160$180$200$220$240
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
Growth of $100
(1/1/2000 - 6/30/2022)

CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Market Update
© PFM Asset Management LLC pfmam.com |

ATTACHMENT A
34 7
PFM Asset Management LLC
For the Quarter Ended June 30, 2022
California Affiliated Risk Management Authorities CLIENT NAME Market Update For the Quarter Ended June 30, 2022
Market Update
© PFM Asset Management LLC | pfmam.com
Sector Yield Spreads Widened in Q2 2022
Source: ICE BofAML 1-5 year Indices via Bloomberg, MarketAxess and PFMAM as of 6/30/2022. Spreads on ABS and MBS are option-adjusted spreads of 0-5 year indices based on weighted average life; spreads on agencies are relative to comparable maturity Treasuries. CMBS is Commercial Mortgage-Backed Securities. 1-5 Year Indices
-0.10%-0.05%

0.00%0.05%0.10%0.15%0.20%
Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22
Federal Agency Yield Spreads

0.0%0.2%0.4%0.6%0.8%1.0%1.2%
Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22
Corporate Notes A-AAA Yield Spreads
-0.5%

0.0%0.5%1.0%1.5%2.0%
Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22
Mortgage-Backed Securities Yield Spreads
Agency MBS AAA CMBS Index

0.0%0.4%0.8%1.2%1.6%
Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22
Asset-Backed Securities AAA Yield Spreads

CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Market Update
© PFM Asset Management LLC pfmam.com |

ATTACHMENT A
35 8
PFM Asset Management LLC
For the Quarter Ended June 30, 2022
California Affiliated Risk Management Authorities CLIENT NAME Market Update For the Quarter Ended June 30, 2022
Market Update
© PFM Asset Management LLC | pfmam.com
Source: ICE BofAML Indices. ABS indices are 0-5 year, based on weighted average life. As of 6/30/2022.

Rising Rates and Wider Spreads Hurt Fixed-Income Returns in Q2 2022 1-5 Year Indices

0.89% 0.87%

1.23%

1.86%

2.41%

0.0%0.5%1.0%1.5%2.0%2.5%3.0%
U.S. Treasury
Agency
ABS
Corp A-AAA
Corp BBB
10-Year Average
-0.81% -0.90% -0.68% -1.66%
-2.21%
-5.0%-4.0%-3.0%-2.0%-1.0%

0.0%
U.S. Treasury
Agency
ABS
Corp A-AAA
Corp BBB
Q2 2022

CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Market Update
© PFM Asset Management LLC pfmam.com |

ATTACHMENT A
36 9
PFM Asset Management LLC
For the Quarter Ended June 30, 2022
California Affiliated Risk Management Authorities CLIENT NAME Market Update For the Quarter Ended June 30, 2022
Market Update
© PFM Asset Management LLC | pfmam.com
Fixed-Income Sector Commentary — 2Q 2022
▸ U.S. Treasury securities posted negative returns for
more than two quarters. Yields continued to move higher on surging inflation data and expectations for aggressive Fed rate hikes over the course of 2022. ▸ The Federal Agency sector generated modest
incremental returns over Treasuries in Q2 but continue to offer narrow yield spreads and limited value. ▸ Supranational spreads are elevated for shorter
maturities but remained historically tight further out the curve. Issuance has been relatively light year-todate which has helped keep downward pressure on yield spreads. ▸ Investment grade Corporates appear to have priced
in a recession on the horizon, however, fundamentals and ratings are expected to stabilize while also carrying a low default rate. Yield spreads have been driven wider to historically attractive levels as uncertainties persist. ▸ Asset-Backed yield spreads widened after a volatile
start to the year. Some measures of collateral performance are trending worse, but overall are in a good position from a historical perspective and remain within rating agency expectations. ▸ Mortgage-Backed Securities were hampered by
soaring mortgage rates and the looming reduction to the Fed’s balance sheet. The sector will likely remain under pressure for the foreseeable future as it faces a myriad of headwinds. ▸ Taxable Municipals were one of the few investment
grade sectors that performed well during the quarter. But while issuance has slowed despite appearing at attractive levels, deals remain heavily oversubscribed, pressuring spreads lower. ▸ Commercial Paper and CD spreads remain elevated
and attractive, particularly on maturities near nine months which have heightened value and a steeper curve.

CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Market Update
© PFM Asset Management LLC pfmam.com |

ATTACHMENT A
37 10
© PFM Asset Management LLC pfmam.com |
Account Summary

ATTACHMENT A
38 11
PFM Asset Management LLC

CITY OF STOCKTON
Consolidated Summary
Account Summary
PFMAM Managed Account $650,630,830
BoW Main Account $187,622,665
CAMP Pool $82,050
Local Agency Investment Fund $75,000,000
Total Program $913,335,545

29.0%

1.0% 0.8% 1.5%

11.4%

14.1%

20.2% 19.8%

1.3% 0.3% 0.5%
$0
$50
$100
$150
$200
$250
$300
Under 30
days
31 to 60
days
61 to 90
days
91 to 180
days
181 days
to 1 year
1 to 2
years
2 to 3
years
3 to 4
years
4 to 5
years
5 to 7
years
7 to 10
years
Over 10
years
Millions
Maturity Distribution
(Weighted Average Maturity: 591 days)

0.0%

1. PFMAM Managed Account value includes market values, accrued interest, cash and cash equivalents. Maturity distribution includes market values and excludes accrued interest.

For the Quarter Ended June 30, 2022
Account Summary
ATTACHMENT A 39 12
© PFM Asset Management LLC pfmam.com

CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Account Summary
|
Account Summary

1. Yield at market, yield on cost, and portfolio duration only include investments held within the separately managed account(s), excludes balances invested in overnight funds.

CITY OF STOCKTON RESERVE PORTFOLIO
Portfolio Values June 30, 2022PFMAM Managed Account $568,136,381 Amortized Cost $595,275,416
Market Value $568,136,381
Accrued Interest $1,808,904
Cash $1,626,761
Analytics¹ June 30, 2022Yield at Market 3.05%
Yield on Cost 1.19%Portfolio Duration 2.36

CITY OF STOCKTON SHORT-TERM PORTFOLIO
Portfolio Values June 30, 2022PFMAM Managed Account $78,875,444 Amortized Cost $79,420,192
Market Value $78,875,444
Accrued Interest $183,342
Cash $0
Analytics¹ June 30, 2022Yield at Market 3.65%
Yield on Cost 2.83%Portfolio Duration 0.79

ATTACHMENT A
40 13
© PFM Asset Management LLC pfmam.com

CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Account Summary
|
Ratings shown are calculated by assigning a numeral value to each security rating, then calculating a weighted average rating for each security type / issuer category using all available security ratings,excluding Not-Rated (NR) ratings. For security type / issuer categories where a rating from the applicable NRSRO is not available, a rating of NR is assigned. Includes accrued interest and excludes balancesinvested in overnight funds.

Issuer Diversification
Security Type / Issuer Market Value (%) S&P / Moody's / FitchU.S. Treasury 38.5% UNITED STATES TREASURY 38.5% AA / Aaa / AAA
Federal Agency 22.3%
FANNIE MAE 15.0% AA / Aaa / AAA
FEDERAL FARM CREDIT BANKS 0.9% AA / Aaa / AAAFEDERAL HOME LOAN BANKS 1.2% AA / Aaa / NRFREDDIE MAC 5.1% AA / Aaa / AAA Agency CMBS 0.6%
FANNIE MAE 0.3% AA / Aaa / AAA
FREDDIE MAC 0.3% AA / Aaa / AAA
Supranational 1.8%
INTER-AMERICAN DEVELOPMENT BANK 1.2% AAA / Aaa / AAA
INTL BANK OF RECONSTRUCTION AND DEV 0.6% AAA / Aaa / AAA Municipal 2.5%

CALIFORNIA DEPARTMENT OF WATERRESOURCES

0.0% AAA / Aa / NR
CALIFORNIA STATE UNIVERSITY 0.2% AA / Aa / NRFLORIDA STATE BOARD OF ADMIN FIN CORP 0.5% AA / Aa / AALOS ANGELES COMMUNITY COLLEGEDISTRICT

0.3% AA / Aaa / NR
NEW JERSEY TURNPIKE AUTHORITY 0.2% AA / A / ASAN DIEGO COMMUNITY COLLEGE DISTRICT 0.2% AAA / Aaa / NRSTATE OF CALIFORNIA 0.7% AA / Aa / AASTATE OF MARYLAND 0.2% AAA / Aaa / AAAUNIVERSITY OF CALIFORNIA 0.2% AA / Aa / AA Negotiable CD 10.9%
BARCLAYS PLC 0.9% A / Aa / A
CREDIT SUISSE GROUP RK 0.6% A / Aa / A
Security Type / Issuer Market Value (%) S&P / Moody's / FitchNegotiable CD 10.9% DNB ASA 0.6% AA / Aa / NRMITSUBISHI UFJ FINANCIAL GROUP INC 3.1% A / Aa / A NATIXIS NY BRANCH 2.3% A / Aa / ASKANDINAVISKA ENSKILDA BANKEN AB 1.1% A / Aa / AA SUMITOMO MITSUI FINANCIAL GROUP INC 2.3% A / Aa / A
Commercial Paper 5.6%
BANK OF AMERICA CO 1.5% A / NR / AABNP PARIBAS 1.5% A / Aa / AA COLLAT COMM PAPER FLEX CO 0.6% A / Aa / AACOLLAT COMM PAPER V CO 1.5% A / Aa / AALIBERTY STREET FUNDING LLC 0.5% A / Aa / NR Corporate 15.7%
3M COMPANY 0.4% A / A / NR
AMAZON.COM INC 1.2% AA / A / AAAMERICAN HONDA FINANCE 0.5% A / A / A BANK OF AMERICA CO 1.1% A / A / AACITIGROUP INC 0.4% BBB / A / ADEERE & COMPANY 0.7% A / A / AGOLDMAN SACHS GROUP INC 0.6% BBB / A / AHONEYWELL INTERNATIONAL 0.6% A / A / AJP MORGAN CHASE & CO 0.9% A / A / AAMASTERCARD INC 0.7% A / A / NRMERCK & CO INC 0.7% A / A / AMICROSOFT CORP 0.8% AAA / Aaa / AAAMORGAN STANLEY 0.4% A / A / ANOVARTIS AG 1.1% AA / A / AA

ATTACHMENT A
41 14
© PFM Asset Management LLC pfmam.com

Issuer Diversification
Security Type / Issuer Market Value (%) S&P / Moody's / FitchCorporate 15.7% PACCAR FINANCIAL CORP 0.1% A / A / NR
PFIZER INC 1.0% A / A / ASTATE STREET CORPORATION 0.1% A / A / AA TARGET CORP 0.6% A / A / ATHE BANK OF NEW YORK MELLONCORPORATION

1.1% A / A / AA
TOYOTA MOTOR CORP 0.6% A / A / AUS BANCORP 0.8% A / A / AWAL-MART STORES INC 1.3% AA / Aa / AA ABS 2.1%
CAPITAL ONE FINANCIAL CORP 0.0% AAA / Aaa / AAA
CARMAX AUTO OWNER TRUST 0.6% AAA / NR / AAADISCOVER FINANCIAL SERVICES 0.2% AAA / Aaa / NRHONDA AUTO RECEIVABLES 0.3% NR / Aaa / AAA HYUNDAI AUTO RECEIVABLES 0.3% AAA / NR / AAANISSAN AUTO RECEIVABLES 0.2% AAA / Aaa / AAATOYOTA MOTOR CORP 0.6% AAA / Aaa / NR Total 100.0%

ATTACHMENT A
42 15
© PFM Asset Management LLC pfmam.com

CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Compliance
|
Note: Pre- and post-trade compliance for the account(s) managed by PFM Asset Management is provided via Bloomberg Asset and Investment Management ("AIM").

Certificate of Compliance
During the reporting period for the quarter ended June 30, 2022, the account(s) managed by PFM Asset Management ("PFMAM")were in compliance with the applicable investment policy and guidelines as furnished to PFMAM.

Acknowledged : PFM Asset Management LLC

ATTACHMENT A
43 16
© PFM Asset Management LLC pfmam.com |
Portfolio Review:

CITY OF STOCKTON RESERVE PORTFOLIO

ATTACHMENT A
44 17
© PFM Asset Management LLC pfmam.com

CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Portfolio Snapshot
|
Yield and duration calculations exclude cash and cash equivalents. Sector allocation includes market values and accrued interests.The portfolio’s benchmark is the ICE BofAML 1-5 Year U.S. Government/Corp A or Better, U.S. issuers only Index. Source: Bloomberg.

An average of each security’s credit rating was assigned a numeric value and adjusted for its relative weighting in the portfolio.

1. Portfolio Snapshot - CITY OF STOCKTON RESERVE PORTFOLIO¹ Credit Quality - S&P
13%
26%
28% 29%
2% <1% <1% 1% 5%
33%
28%
21%
13%
0% 0% 0%
0%5%
10%15%20%25%30%35%
0-1 Yr 1-2
Yrs
2-3
Yrs
3-4
Yrs
4-5
Yrs
5-6
Yrs
6-7
Yrs
> 7
Yrs
Portfolio Benchmark
Duration Distribution
U.S. Treasury | 44%Federal Agency | 25%Corporate | 18%Negotiable CD | 4%Municipal | 3% ABS | 2%
Supranational | 2%Commercial Paper | 1%
Agency CMBS | 1%
Sector Allocation
AAA | 5%AA+ | 70%AA | 4%AA- | 2%A-1+ | 1%A+ | 5%A | 3%A- | 3%A-1 | 4% BBB+ | 1%Not Rated | <1%
Portfolio Statistics
Portfolio Effective Duration 2.36 years
Benchmark Effective Duration 2.53 yearsPortfolio Credit Quality AA Yield At Market 3.05%
Yield At Cost 1.19%
Total Market Value $571,572,045.14
Securities Sub-Total $568,136,380.86Cash $1,626,760.73
Accrued Interest $1,808,903.55

ATTACHMENT A
45 18
© PFM Asset Management LLC pfmam.com

CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Portfolio Summary
|
Ratings shown are calculated by assigning a numeral value to each security rating, then calculating a weighted average rating for each security type / issuer category using all available security ratings,excluding Not-Rated (NR) ratings. For security type / issuer categories where a rating from the applicable NRSRO is not available, a rating of NR is assigned. Includes accrued interest and excludes balancesinvested in overnight funds.

Issuer Diversification - CITY OF STOCKTON RESERVE PORTFOLIO Security Type / Issuer Market Value (%) S&P / Moody's / FitchU.S. Treasury 43.9% UNITED STATES TREASURY 43.9% AA / Aaa / AAA
Federal Agency 25.4%
FANNIE MAE 17.1% AA / Aaa / AAAFEDERAL FARM CREDIT BANKS 1.0% AA / Aaa / AAAFEDERAL HOME LOAN BANKS 1.4% AA / Aaa / NRFREDDIE MAC 5.9% AA / Aaa / AAA Agency CMBS 0.7%
FANNIE MAE 0.3% AA / Aaa / AAAFREDDIE MAC 0.4% AA / Aaa / AAA Supranational 2.0%
INTER-AMERICAN DEVELOPMENT BANK 1.4% AAA / Aaa / AAAINTL BANK OF RECONSTRUCTION AND DEV 0.6% AAA / Aaa / AAA Municipal 2.8%

CALIFORNIA DEPARTMENT OF WATERRESOURCES

0.0% AAA / Aa / NR
CALIFORNIA STATE UNIVERSITY 0.2% AA / Aa / NRFLORIDA STATE BOARD OF ADMIN FIN CORP 0.6% AA / Aa / AALOS ANGELES COMMUNITY COLLEGEDISTRICT

0.3% AA / Aaa / NR
NEW JERSEY TURNPIKE AUTHORITY 0.2% AA / A / ASAN DIEGO COMMUNITY COLLEGE DISTRICT 0.3% AAA / Aaa / NRSTATE OF CALIFORNIA 0.8% AA / Aa / AASTATE OF MARYLAND 0.2% AAA / Aaa / AAAUNIVERSITY OF CALIFORNIA 0.2% AA / Aa / AA Negotiable CD 3.7%
BARCLAYS PLC 1.0% A / Aa / A
Security Type / Issuer Market Value (%) S&P / Moody's / FitchNegotiable CD 3.7% CREDIT SUISSE GROUP RK 0.7% A / Aa / ADNB ASA 0.6% AA / Aa / NRSKANDINAVISKA ENSKILDA BANKEN AB 1.3% A / Aa / AA Commercial Paper 1.2%
COLLAT COMM PAPER FLEX CO 0.7% A / Aa / AA
LIBERTY STREET FUNDING LLC 0.6% A / Aa / NR
Corporate 17.9%
3M COMPANY 0.5% A / A / NR
AMAZON.COM INC 1.4% AA / A / AAAMERICAN HONDA FINANCE 0.6% A / A / A BANK OF AMERICA CO 1.3% A / A / AA
CITIGROUP INC 0.4% BBB / A / ADEERE & COMPANY 0.8% A / A / AGOLDMAN SACHS GROUP INC 0.6% BBB / A / AHONEYWELL INTERNATIONAL 0.7% A / A / AJP MORGAN CHASE & CO 1.0% A / A / AA MASTERCARD INC 0.8% A / A / NRMERCK & CO INC 0.8% A / A / AMICROSOFT CORP 0.9% AAA / Aaa / AAAMORGAN STANLEY 0.5% A / A / ANOVARTIS AG 1.3% AA / A / AAPACCAR FINANCIAL CORP 0.1% A / A / NRPFIZER INC 1.1% A / A / ASTATE STREET CORPORATION 0.1% A / A / AATARGET CORP 0.7% A / A / ATHE BANK OF NEW YORK MELLONCORPORATION

1.2% A / A / AA

ATTACHMENT A
46 19
© PFM Asset Management LLC pfmam.com

Issuer Diversification - CITY OF STOCKTON RESERVE PORTFOLIO Security Type / Issuer Market Value (%) S&P / Moody's / FitchCorporate 17.9% TOYOTA MOTOR CORP 0.6% A / A / AUS BANCORP 0.9% A / A / AWAL-MART STORES INC 1.5% AA / Aa / AA ABS 2.4%
CAPITAL ONE FINANCIAL CORP 0.0% AAA / Aaa / AAACARMAX AUTO OWNER TRUST 0.7% AAA / NR / AAADISCOVER FINANCIAL SERVICES 0.3% AAA / Aaa / NRHONDA AUTO RECEIVABLES 0.3% NR / Aaa / AAA HYUNDAI AUTO RECEIVABLES 0.4% AAA / NR / AAANISSAN AUTO RECEIVABLES 0.2% AAA / Aaa / AAATOYOTA MOTOR CORP 0.6% AAA / Aaa / NR Total 100.0%

ATTACHMENT A
47 20
© PFM Asset Management LLC pfmam.com

CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Portfolio Characteristics
|
$0.0
$118.0
$236.0$354.0$472.0$590.0
Millions
June 2022
$0.0
$118.0
$236.0$354.0$472.0$590.0
Millions
March 2022
$0.0
$118.0
$236.0$354.0$472.0$590.0
Millions
December 2021
$0.0
$118.0
$236.0$354.0$472.0$590.0
Millions
September 2021
Sector Allocation Review - CITY OF STOCKTON RESERVE PORTFOLIO U.S. TreasuryFederal Agency
Agency CMBS Supranational Municipal Negotiable CD Commercial Paper Corporate ABS Market values, excluding accrued interest. Only includes fixed-income securities held within the separately managed account(s) and LGIPs managed by PFMAM. Detail may not add to total due to rounding.

Security Type Sep-21 % of Total Dec-21 % of Total Mar-22 % of Total Jun-22 % of Total U.S. Treasury $202.3 35.5% $244.5 41.4% $239.5 41.7% $249.5 44.0%Federal Agency $168.5 29.6% $160.0 27.2% $146.7 25.6% $144.3 25.4% Agency CMBS $12.6 2.2% $8.4 1.4% $7.2 1.3% $4.0 0.7%
Supranational $12.1 2.1% $12.0 2.0% $11.6 2.0% $11.5 2.0%Municipal $17.1 3.0% $16.9 2.9% $16.2 2.8% $16.0 2.8%Negotiable CD $25.3 4.4% $25.1 4.3% $30.8 5.4% $20.8 3.7%Commercial Paper $0.0 0.0% $0.0 0.0% $0.0 0.0% $7.1 1.2%Corporate $109.8 19.3% $102.5 17.4% $105.0 18.3% $101.3 17.8% ABS $22.1 3.9% $19.8 3.4% $16.4 2.9% $13.7 2.4%
Total $569.9 100.0% $589.3 100.0% $573.4 100.0% $568.1 100.0%

ATTACHMENT A
48 21
© PFM Asset Management LLC pfmam.com

CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Portfolio Activity
|
Portfolio Activity - CITY OF STOCKTON RESERVE PORTFOLIO Net Activity by Sector
($ millions)
Negotiable CD
Agency CMBS
ABS
Corporate
Federal AgencyCommercial PaperU.S. Treasury
Negotiable CD
Agency CMBS
ABS
Corporate
Federal Agency
Commercial Paper
U.S. Treasury
($15.0) ($10.0) ($5.0) $0.0 $5.0 $10.0 $15.0 $20.0
Based on total proceeds (principal and accrued interest) of buys, sells, maturities, and principal paydowns. Detail may not add to total due to rounding.

Sector Net ActivityU.S. Treasury $12,975,671Commercial Paper $7,061,919Federal Agency ($1,033,132)Corporate ($2,296,482) ABS ($2,607,654)Agency CMBS ($3,156,130)
Negotiable CD ($9,937,041)Total Net Activity $1,007,151 Sales/Maturities Purchases

ATTACHMENT A
49 22
© PFM Asset Management LLC pfmam.com

CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Portfolio Performance
|

1. Performance on trade-date basis, gross (i.e., before fees), in accordance with the CFA Institute’s Global Investment Performance Standards (GIPS).2. Income returns calculated as interest earned on investments during the period.3. Price returns calculated as the change in market value of each security for the period.4. Returns are presented on a periodic basis.

Total Return by Sector Contribution to Total Return
Cash
ABS
Corporate
Commercial Paper
Negotiable CD
Municipal
Supranational
Agency CMBS
Federal Agency
U.S. Treasury
-0.80%-0.60%-0.40%-0.20%

0.06%

0.25%

0.57%

0.00%

0.35%

0.37%

0.11%

0.76%

0.20%

0.27%

0.00%
-0.63%
-1.47%

0.06%
-0.41%
-0.95%
-0.63%
-0.89%
-0.97%
-1.21%
-3.0% -1.8% -0.6% 0.6% 1.8% 3.0%
Return
Quarterly Sector Performance - CITY OF STOCKTON RESERVE PORTFOLIO

ATTACHMENT A
50 23
© PFM Asset Management LLC pfmam.com

CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Portfolio Performance
|

1. The lesser of 10 years or since inception is shown. Since inception returns for periods one year or less are not shown. Performance inception date is June 30, 2017.2. Interest earned calculated as the ending accrued interest less beginning accrued interest, plus net interest activity.3. Returns for periods one year or less are presented on a periodic basis. Returns for periods greater than one year are presented on an annualized basis.4. The portfolio’s benchmark is the ICE BofAML 1-5 Year U.S. Government/Corp A or Better, U.S. issuers only Index. Source: Bloomberg. -6.0%-4.0%-2.0%

0.0%2.0%
Return
Portfolio Benchmark Net of Fees
Portfolio Performance CITY OF STOCKTON RESERVE PORTFOLIO Market Value Basis Earnings 3 Months 1 Year 3 Years 5 Years Since Inception¹ Interest Earned² $1,788,558 $7,447,682 $27,178,982 $42,648,574 $42,648,574 Change in Market Value ($6,404,900) ($34,600,508) ($27,068,148) ($21,051,489) ($21,051,489) Total Dollar Return ($4,616,342) ($27,152,826) $110,834 $21,597,085 $21,597,085 Total Return³
Portfolio -0.80% -4.51% 0.28% 1.16% 1.16%Benchmark⁴ -0.92% -4.74% 0.08% 0.97% 0.97%Basis Point Fee 0.01% 0.06% 0.06% 0.05% 0.05%Net of Fee Return -0.81% -4.57% 0.22% 1.11% 1.11% 3 Months 1 Year 3 Years 5 Years Since Inception

ATTACHMENT A
51 24
© PFM Asset Management LLC pfmam.com

CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Portfolio Performance
|

1. The lesser of 10 years or since inception is shown. Performance inception date is June 30, 2017.2. Interest earned calculated as the ending accrued interest less beginning accrued interest, plus net interest activity.3. Realized gains / (losses) are shown on an amortized cost basis.

Accrual Basis Earnings - CITY OF STOCKTON RESERVE PORTFOLIO Accrual Basis EarningsInterest Earned²Realized Gains / (Losses)³Change in Amortized CostTotal Earnings 3 Months
$1,788,558
($2,479)
($91,770)
$1,694,308
1 Year
$7,447,682
$819,316
($780,998)
$7,486,000
3 Years
$27,178,982
$7,996,747
($1,665,454)
$33,510,275
5 Year
$42,648,574
$5,469,118
$340,556
$48,458,247
Since Inception¹
$42,648,574
$5,469,118
$340,556
$48,458,247

ATTACHMENT A
52 25
© PFM Asset Management LLC pfmam.com

CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Portfolio Holdings
|
Managed Account Detail of Securities Held
Security Type/DescriptionDated Date/Coupon/Maturity CUSIP Par S&P
Rating
Moody's
Rating
Settle
Date
Original
Cost
Trade
Date
YTM
at Cost
Accrued
Interest
Market
Value
Amortized
Cost
U.S. Treasury
US TREASURY NOTESDTD 08/01/2016 1.250% 07/31/2023
912828S92 1,615,000.00 AA+ Aaa 4/2/2019 4/4/2019 1,546,614.84 2.28 8,420.75 1,597,892.88 1,585,980.39 US TREASURY NOTESDTD 09/30/2016 1.375% 09/30/2023
912828T26 5,000,000.00 AA+ Aaa 8/7/2019 8/8/2019 4,983,007.81 1.46 17,281.42 4,994,882.14 4,901,562.50 US TREASURY NOTESDTD 11/15/2020 0.250% 11/15/2023
91282CAW1 3,145,000.00 AA+ Aaa 10/4/2021 10/6/2021 3,141,560.16 0.30 1,004.18 3,142,757.40 3,029,519.37 US TREASURY NOTESDTD 11/15/2013 2.750% 11/15/2023
912828WE6 10,925,000.00 AA+ Aaa 3/6/2019 3/8/2019 11,035,530.27 2.52 38,371.09 10,957,391.24 10,889,152.89 US TREASURY NOTESDTD 11/30/2016 2.125% 11/30/2023
912828U57 8,515,000.00 AA+ Aaa 1/7/2019 1/9/2019 8,362,661.33 2.52 15,325.84 8,470,901.96 8,415,214.42 US TREASURY NOTESDTD 12/31/2018 2.625% 12/31/2023
9128285U0 460,000.00 AA+ Aaa 1/30/2019 1/31/2019 461,365.62 2.56 32.81 460,416.91 457,556.25 US TREASURY NOTESDTD 02/28/2019 2.375% 02/29/2024
9128286G0 763,000.00 AA+ Aaa 8/11/2021 8/12/2021 802,521.02 0.33 6,056.83 788,809.65 755,608.44 US TREASURY NOTESDTD 02/28/2019 2.375% 02/29/2024
9128286G0 2,656,000.00 AA+ Aaa 8/11/2021 8/12/2021 2,792,846.25 0.35 21,083.81 2,745,368.98 2,630,270.00 US TREASURY NOTESDTD 03/31/2017 2.125% 03/31/2024
912828W71 5,930,000.00 AA+ Aaa 1/5/2022 1/6/2022 6,093,075.00 0.88 31,675.27 6,057,858.80 5,841,976.27 US TREASURY N/B NOTESDTD 04/15/2021 0.375% 04/15/2024
91282CBV2 3,140,000.00 AA+ Aaa 10/4/2021 10/6/2021 3,138,282.81 0.40 2,477.25 3,138,781.95 2,997,227.97 US TREASURY NOTESDTD 05/01/2017 2.000% 04/30/2024
912828X70 4,515,000.00 AA+ Aaa 6/3/2019 6/5/2019 4,535,458.59 1.90 15,213.59 4,522,641.99 4,435,282.26 US TREASURY NOTESDTD 06/30/2017 2.000% 06/30/2024
912828XX3 11,430,000.00 AA+ Aaa 7/1/2019 7/3/2019 11,547,871.88 1.78 621.20 11,477,174.60 11,212,115.63 US TREASURY NOTESDTD 07/31/2017 2.125% 07/31/2024
9128282N9 2,500,000.00 AA+ Aaa 8/7/2019 8/8/2019 2,578,906.25 1.47 22,159.88 2,533,011.36 2,455,859.50 US TREASURY N/B NOTESDTD 08/15/2021 0.375% 08/15/2024
91282CCT6 6,020,000.00 AA+ Aaa 8/19/2021 8/20/2021 6,012,004.69 0.42 8,481.22 6,014,313.14 5,693,602.82 US TREASURY NOTESDTD 08/31/2017 1.875% 08/31/2024
9128282U3 7,500,000.00 AA+ Aaa 11/25/2020 11/27/2020 7,952,050.78 0.26 47,002.38 7,760,760.54 7,321,875.00

ATTACHMENT A
53 26
© PFM Asset Management LLC pfmam.com

CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Portfolio Holdings
|
Security Type/DescriptionDated Date/Coupon/Maturity CUSIP Par S&P
Rating
Moody's
Rating
Settle
Date
Original
Cost
Trade
Date
YTM
at Cost
Accrued
Interest
Market
Value
Amortized
Cost
U.S. Treasury
US TREASURY NOTESDTD 08/31/2017 1.875% 08/31/2024
9128282U3 6,775,000.00 AA+ Aaa 9/3/2019 9/5/2019 6,951,520.50 1.33 42,458.81 6,851,731.19 6,614,093.75 US TREASURY N/B NOTESDTD 09/15/2021 0.375% 09/15/2024
91282CCX7 3,155,000.00 AA+ Aaa 10/4/2021 10/6/2021 3,143,538.48 0.50 3,472.21 3,146,395.86 2,976,545.31 US TREASURY NOTESDTD 10/31/2017 2.250% 10/31/2024
9128283D0 3,400,000.00 AA+ Aaa 11/1/2019 11/5/2019 3,511,164.06 1.57 12,888.59 3,452,043.33 3,341,562.50 US TREASURY NOTESDTD 10/31/2019 1.500% 10/31/2024
912828YM6 2,120,000.00 AA+ Aaa 1/12/2021 1/13/2021 2,212,087.50 0.35 5,357.61 2,176,633.48 2,047,787.50 US TREASURY NOTESDTD 11/30/2017 2.125% 11/30/2024
9128283J7 2,140,000.00 AA+ Aaa 12/2/2019 12/4/2019 2,183,970.31 1.69 3,851.71 2,161,297.74 2,095,193.75 US TREASURY NOTESDTD 11/30/2017 2.125% 11/30/2024
9128283J7 8,775,000.00 AA+ Aaa 1/3/2020 1/7/2020 8,978,264.65 1.63 15,793.80 8,875,325.70 8,591,273.44 US TREASURY NOTESDTD 02/29/2020 1.125% 02/28/2025
912828ZC7 3,085,000.00 AA+ Aaa 10/4/2021 10/6/2021 3,139,108.01 0.60 11,600.19 3,127,423.12 2,935,570.31 US TREASURY NOTESDTD 02/29/2020 1.125% 02/28/2025
912828ZC7 5,860,000.00 AA+ Aaa 8/19/2021 8/20/2021 5,982,235.94 0.53 22,034.71 5,952,341.28 5,576,156.25 US TREASURY NOTESDTD 04/30/2020 0.375% 04/30/2025
912828ZL7 5,995,000.00 AA+ Aaa 4/5/2021 4/7/2021 5,916,783.98 0.70 3,787.60 5,940,501.78 5,562,235.94 US TREASURY NOTESDTD 06/30/2020 0.250% 06/30/2025
912828ZW3 3,195,000.00 AA+ Aaa 10/4/2021 10/6/2021 3,142,207.62 0.70 21.71 3,152,587.93 2,940,897.82 US TREASURY NOTESDTD 08/31/2020 0.250% 08/31/2025
91282CAJ0 5,565,000.00 AA+ Aaa 8/17/2021 8/20/2021 5,480,220.70 0.63 4,650.10 5,498,363.01 5,094,583.87 US TREASURY NOTESDTD 08/31/2020 0.250% 08/31/2025
91282CAJ0 6,095,000.00 AA+ Aaa 8/19/2021 8/20/2021 6,004,527.34 0.62 5,092.97 6,023,888.00 5,579,782.34 US TREASURY NOTESDTD 08/31/2020 0.250% 08/31/2025
91282CAJ0 1,840,000.00 AA+ Aaa 8/2/2021 8/6/2021 1,819,443.75 0.53 1,537.50 1,823,994.90 1,684,462.59 US TREASURY NOTESDTD 08/31/2020 0.250% 08/31/2025
91282CAJ0 4,140,000.00 AA+ Aaa 8/2/2021 8/3/2021 4,094,071.88 0.53 3,459.38 4,104,312.40 3,790,040.83 US TREASURY NOTESDTD 10/31/2020 0.250% 10/31/2025
91282CAT8 7,000,000.00 AA+ Aaa 10/4/2021 10/6/2021 6,851,796.88 0.78 2,948.37 6,878,525.30 6,377,656.60 US TREASURY NOTESDTD 11/30/2020 0.375% 11/30/2025
91282CAZ4 10,350,000.00 AA+ Aaa 11/1/2021 11/2/2021 10,070,226.56 1.05 3,287.40 10,115,508.90 9,452,460.42 US TREASURY NOTESDTD 11/30/2020 0.375% 11/30/2025
91282CAZ4 3,195,000.00 AA+ Aaa 10/4/2021 10/6/2021 3,138,713.09 0.81 1,014.80 3,148,663.55 2,917,933.43

ATTACHMENT A
54 27
© PFM Asset Management LLC pfmam.com

CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Portfolio Holdings
|
Security Type/DescriptionDated Date/Coupon/Maturity CUSIP Par S&P
Rating
Moody's
Rating
Settle
Date
Original
Cost
Trade
Date
YTM
at Cost
Accrued
Interest
Market
Value
Amortized
Cost
U.S. Treasury
US TREASURY NOTESDTD 12/31/2020 0.375% 12/31/2025
91282CBC4 7,100,000.00 AA+ Aaa 1/11/2021 1/13/2021 7,059,230.47 0.49 72.35 7,071,238.70 6,468,765.98 US TREASURY NOTESDTD 12/31/2020 0.375% 12/31/2025
91282CBC4 5,700,000.00 AA+ Aaa 5/6/2021 5/10/2021 5,606,707.03 0.73 58.08 5,629,645.22 5,193,234.66 US TREASURY NOTESDTD 01/31/2021 0.375% 01/31/2026
91282CBH3 8,475,000.00 AA+ Aaa 1/4/2022 1/6/2022 8,174,402.34 1.27 13,256.82 8,210,004.75 7,704,304.69 US TREASURY NOTESDTD 01/31/2021 0.375% 01/31/2026
91282CBH3 9,000,000.00 AA+ Aaa 7/2/2021 7/7/2021 8,827,031.25 0.80 14,078.04 8,864,236.63 8,181,562.50 US TREASURY NOTESDTD 01/31/2019 2.625% 01/31/2026
9128286A3 3,415,000.00 AA+ Aaa 2/4/2021 2/4/2021 3,780,111.52 0.46 37,392.83 3,677,511.58 3,365,375.95 US TREASURY NOTESDTD 01/31/2021 0.375% 01/31/2026
91282CBH3 5,425,000.00 AA+ Aaa 4/21/2021 4/22/2021 5,325,824.22 0.77 8,485.93 5,350,547.12 4,931,664.06 US TREASURY NOTESDTD 01/31/2021 0.375% 01/31/2026
91282CBH3 7,635,000.00 AA+ Aaa 2/18/2022 2/22/2022 7,215,969.73 1.83 11,942.87 7,253,533.94 6,940,692.19 US TREASURY NOTESDTD 01/31/2021 0.375% 01/31/2026
91282CBH3 4,075,000.00 AA+ Aaa 2/26/2021 2/26/2021 3,990,634.77 0.80 6,374.22 4,013,600.86 3,704,429.69 US TREASURY NOTESDTD 02/28/2021 0.500% 02/28/2026
91282CBQ3 6,035,000.00 AA+ Aaa 8/19/2021 8/20/2021 5,981,015.04 0.70 10,085.67 5,991,302.56 5,499,393.75 US TREASURY NOTESDTD 02/28/2021 0.500% 02/28/2026
91282CBQ3 10,690,000.00 AA+ Aaa 2/2/2022 2/3/2022 10,249,872.66 1.55 17,865.08 10,293,707.68 9,741,262.50 US TREASURY NOTESDTD 02/28/2021 0.500% 02/28/2026
91282CBQ3 8,615,000.00 AA+ Aaa 12/3/2021 12/7/2021 8,382,798.83 1.15 14,397.35 8,413,779.04 7,850,418.75 US TREASURY N/B NOTESDTD 05/31/2021 0.750% 05/31/2026
91282CCF6 3,155,000.00 AA+ Aaa 10/4/2021 10/6/2021 3,133,186.13 0.90 2,004.20 3,136,629.07 2,886,332.19 US TREASURY N/B NOTESDTD 05/31/2021 0.750% 05/31/2026
91282CCF6 4,360,000.00 AA+ Aaa 6/6/2022 6/8/2022 3,995,871.88 2.99 2,769.67 4,001,635.78 3,988,718.96 US TREASURY N/B NOTESDTD 05/31/2021 0.750% 05/31/2026
91282CCF6 5,065,000.00 AA+ Aaa 6/2/2021 6/4/2021 5,053,920.32 0.79 3,217.52 5,056,304.09 4,633,683.85 US TREASURY N/B NOTESDTD 05/31/2021 0.750% 05/31/2026
91282CCF6 4,060,000.00 AA+ Aaa 6/7/2021 6/7/2021 4,050,801.56 0.80 2,579.10 4,052,768.68 3,714,265.83 US TREASURY N/B NOTESDTD 09/30/2021 0.875% 09/30/2026
91282CCZ2 7,400,000.00 AA+ Aaa 4/5/2022 4/7/2022 6,813,492.19 2.77 16,275.96 6,843,946.17 6,758,280.88 US TREASURY NOTESDTD 01/31/2021 0.750% 01/31/2028
91282CBJ9 1,080,000.00 AA+ Aaa 3/14/2022 3/15/2022 996,764.06 2.15 3,378.73 1,000,949.11 951,075.00

ATTACHMENT A
55 28
© PFM Asset Management LLC pfmam.com

CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Portfolio Holdings
|
Security Type/DescriptionDated Date/Coupon/Maturity CUSIP Par S&P
Rating
Moody's
Rating
Settle
Date
Original
Cost
Trade
Date
YTM
at Cost
Accrued
Interest
Market
Value
Amortized
Cost
U.S. Treasury
US TREASURY N/B NOTESDTD 09/30/2021 1.250% 09/30/2028
91282CCY5 1,050,000.00 AA+ Aaa 3/14/2022 3/15/2022 991,183.59 2.17 3,299.18 993,840.29 940,406.25 US TREASURY NOTESDTD 02/15/2019 2.625% 02/15/2029
9128286B1 1,000,000.00 AA+ Aaa 3/21/2022 3/22/2022 1,018,867.19 2.33 9,861.88 1,018,111.60 973,437.50 US TREASURY NOTESDTD 08/15/2019 1.625% 08/15/2029
912828YB0 1,040,000.00 AA+ Aaa 3/21/2022 3/22/2022 993,037.50 2.29 6,349.17 994,792.30 946,725.00 US TREASURY NOTESDTD 02/15/2020 1.500% 02/15/2030
912828Z94 1,085,000.00 AA+ Aaa 4/6/2022 4/11/2022 996,080.86 2.66 6,114.36 998,593.05 974,465.63 US TREASURY NOTESDTD 08/15/2020 0.625% 08/15/2030
91282CAE1 1,175,000.00 AA+ Aaa 4/6/2022 4/11/2022 997,510.74 2.65 2,758.98 1,002,227.48 974,148.44 US TREASURY NOTESDTD 02/15/2021 1.125% 02/15/2031
91282CBL4 1,130,000.00 AA+ Aaa 4/6/2022 4/11/2022 996,209.77 2.63 4,775.97 999,562.80 970,740.63 US TREASURY N/B NOTESDTD 08/15/2021 1.250% 08/15/2031
91282CCS8 1,125,000.00 AA+ Aaa 4/6/2022 4/11/2022 997,031.25 2.63 5,283.15 1,000,068.31 968,378.85 Security Type Sub-Total 265,689,000.00 263,231,193.45 1.23 581,142.09 262,961,037.82 249,462,804.09 Supranational
INTL BK RECON & DEVELOP NOTESDTD 11/24/2020 0.250% 11/24/2023 459058JM6 3,740,000.00 AAA Aaa 11/17/2020 11/24/2020 3,731,959.00 0.32 960.97 3,736,247.53 3,601,492.84 INTER-AMERICAN DEVEL BK NOTESDTD 09/23/2021 0.500% 09/23/2024 4581X0DZ8 8,380,000.00 AAA Aaa 9/15/2021 9/23/2021 8,373,798.80 0.52 11,406.11 8,375,388.71 7,922,267.64 Security Type Sub-Total 12,120,000.00 12,105,757.80 0.46 12,367.08 12,111,636.24 11,523,760.48 Negotiable CD
SKANDINAV ENSKILDA BANK LT CDDTD 09/03/2019 1.860% 08/26/2022 83050PDR7 7,365,000.00 A-1 P-1 8/29/2019 9/3/2019 7,365,000.00 1.85 47,565.62 7,365,000.00 7,363,873.16 DNB BANK ASA/NY LT CDDTD 12/06/2019 2.040% 12/02/2022
23341VZT1 3,620,000.00 A-1+ P-1 12/5/2019 12/6/2019 3,620,000.00 2.03 5,948.87 3,620,000.00 3,609,947.26 BARCLAYS BANK PLC NY CERTDEPOSDTD 02/03/2022 1.050% 02/01/2023 06742TG34 5,885,000.00 A-1 P-1 2/2/2022 2/3/2022 5,885,000.00 1.05 25,403.58 5,885,000.00 5,797,013.66

ATTACHMENT A
56 29
© PFM Asset Management LLC pfmam.com

CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Portfolio Holdings
|
Security Type/DescriptionDated Date/Coupon/Maturity CUSIP Par S&P
Rating
Moody's
Rating
Settle
Date
Original
Cost
Trade
Date
YTM
at Cost
Accrued
Interest
Market
Value
Amortized
Cost
Negotiable CD
CREDIT SUISSE NEW YORK CERTDEPOSDTD 03/23/2021 0.590% 03/17/2023 22552G3C2 4,065,000.00 A-1 P-1 3/19/2021 3/23/2021 4,065,000.00 0.59 7,061.81 4,065,000.00 3,985,858.52 Security Type Sub-Total 20,935,000.00 20,935,000.00 1.42 85,979.88 20,935,000.00 20,756,692.60 Municipal
CA ST TXBL GO BONDSDTD 10/24/2019 2.400% 10/01/2023
13063DRJ9 4,385,000.00 AA- Aa2 10/16/201 10/24/201 4,472,743.85 1.87 26,310.00 4,412,885.22 4,340,623.80 MD ST TXBL GO BONDSDTD 08/05/2020 0.510% 08/01/2024
574193TQ1 1,295,000.00 AAA Aaa 7/23/2020 8/5/2020 1,294,637.40 0.52 2,751.88 1,294,810.36 1,231,027.00 SAN DIEGO CCD, CA TXBL GO BONDSDTD 10/16/2019 2.046% 08/01/2024 797272QP9 1,450,000.00 AAA Aaa 9/18/2019 10/16/201 1,450,000.00 2.05 12,361.25 1,450,000.00 1,416,345.50 CA ST UNIV TXBL REV BONDSDTD 09/17/2020 0.685% 11/01/2024 13077DNC2 1,250,000.00 AA- Aa2 8/27/2020 9/17/2020 1,250,000.00 0.69 1,427.08 1,250,000.00 1,181,562.50 CA ST DEPT WTR RES WTR SYS TXBLREV BNDSDTD 08/06/2020 0.560% 12/01/2024 13067WRB0 155,000.00 AAA Aa1 7/30/2020 8/6/2020 155,000.00 0.56 72.33 155,000.00 144,804.10 UNIV OF CAL TXBL REV BONDSDTD 07/16/2020 0.883% 05/15/2025 91412HGE7 1,060,000.00 AA Aa2 7/10/2020 7/16/2020 1,060,000.00 0.88 1,195.97 1,060,000.00 985,005.00 UNIV OF CAL TXBL REV BONDSDTD 07/16/2020 0.883% 05/15/2025 91412HGE7 460,000.00 AA Aa2 7/14/2020 7/16/2020 461,665.20 0.81 519.01 460,978.57 427,455.00 FL ST BOARD OF ADMIN TXBL REVBONDSDTD 09/16/2020 1.258% 07/01/2025 341271AD6 1,050,000.00 AA Aa3 9/3/2020 9/16/2020 1,057,423.50 1.11 6,604.50 1,054,651.89 984,165.00 FL ST BOARD OF ADMIN TXBL REVBONDSDTD 09/16/2020 1.258% 07/01/2025 341271AD6 2,700,000.00 AA Aa3 9/3/2020 9/16/2020 2,700,000.00 1.26 16,983.00 2,700,000.00 2,530,710.00 LOS ANGELES CCD, CA TXBL GOBONDSDTD 11/10/2020 0.773% 08/01/2025 54438CYK2 1,930,000.00 AA+ Aaa 10/30/202 11/10/2020 1,930,000.00 0.77 6,216.21 1,930,000.00 1,786,794.00

ATTACHMENT A
57 30
© PFM Asset Management LLC pfmam.com

CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Portfolio Holdings
|
Security Type/DescriptionDated Date/Coupon/Maturity CUSIP Par S&P
Rating
Moody's
Rating
Settle
Date
Original
Cost
Trade
Date
YTM
at Cost
Accrued
Interest
Market
Value
Amortized
Cost
Municipal
NJ TURNPIKE AUTHORITY TXBL REVBONDSDTD 02/04/2021 1.047% 01/01/2026 646140DP5 1,115,000.00 AA- A1 1/22/2021 2/4/2021 1,115,000.00 1.05 5,837.03 1,115,000.00 1,018,117.65 Security Type Sub-Total 16,850,000.00 16,946,469.95 1.28 80,278.26 16,883,326.04 16,046,609.55 Federal Agency
FREDDIE MAC NOTESDTD 05/07/2020 0.375% 05/05/2023
3137EAER6 830,000.00 AA+ Aaa 6/15/2020 6/16/2020 831,394.40 0.32 484.17 830,407.86 813,525.33 FREDDIE MAC NOTESDTD 05/07/2020 0.375% 05/05/2023
3137EAER6 6,430,000.00 AA+ Aaa 8/3/2020 8/4/2020 6,461,507.00 0.20 3,750.83 6,439,665.49 6,302,370.93 FANNIE MAE NOTESDTD 05/22/2020 0.250% 05/22/2023
3135G04Q3 7,600,000.00 AA+ Aaa 5/20/2020 5/22/2020 7,577,124.00 0.35 2,058.33 7,593,210.32 7,429,904.40 FREDDIE MAC NOTESDTD 06/26/2020 0.250% 06/26/2023
3137EAES4 6,905,000.00 AA+ Aaa 6/24/2020 6/26/2020 6,884,837.40 0.35 239.76 6,898,371.20 6,728,439.15 FANNIE MAE NOTESDTD 07/10/2020 0.250% 07/10/2023
3135G05G4 8,570,000.00 AA+ Aaa 7/8/2020 7/10/2020 8,551,574.50 0.32 10,176.88 8,563,706.72 8,339,946.92 FREDDIE MAC NOTESDTD 08/21/2020 0.250% 08/24/2023
3137EAEV7 4,585,000.00 AA+ Aaa 8/19/2020 8/21/2020 4,580,323.30 0.28 4,043.72 4,583,215.36 4,445,973.63 FANNIE MAE NOTESDTD 09/14/2018 2.875% 09/12/2023
3135G0U43 12,325,000.00 AA+ Aaa 11/29/2018 11/30/2018 12,272,249.00 2.97 107,287.41 12,311,774.51 12,312,810.58 FANNIE MAE NOTESDTD 11/25/2020 0.250% 11/27/2023
3135G06H1 2,180,000.00 AA+ Aaa 11/25/2020 11/27/2020 2,179,498.60 0.26 514.72 2,179,764.64 2,097,868.50 FANNIE MAE NOTESDTD 11/25/2020 0.250% 11/27/2023
3135G06H1 3,915,000.00 AA+ Aaa 1/25/2021 1/26/2021 3,920,950.80 0.20 924.38 3,917,955.28 3,767,502.38 FREDDIE MAC NOTESDTD 12/04/2020 0.250% 12/04/2023
3137EAFA2 4,445,000.00 AA+ Aaa 12/2/2020 12/4/2020 4,440,599.45 0.28 833.44 4,442,906.22 4,274,667.60 FEDERAL HOME LOAN BANKS NOTESDTD 12/09/2013 3.375% 12/08/2023 3130A0F70 3,425,000.00 AA+ Aaa 1/30/2019 1/31/2019 3,527,407.50 2.71 7,385.16 3,455,340.82 3,442,035.95 FEDERAL FARM CREDIT BANK NOTESDTD 04/08/2020 0.875% 04/08/2024 3133ELVX9 1,500,000.00 AA+ Aaa 4/7/2020 4/8/2020 1,500,000.00 0.88 3,026.04 1,500,000.00 1,444,615.50 FANNIE MAE NOTESDTD 01/10/2020 1.625% 01/07/2025
3135G0X24 8,760,000.00 AA+ Aaa 3/4/2020 3/5/2020 9,085,346.40 0.84 68,802.50 8,929,386.11 8,453,724.12

ATTACHMENT A
58 31
© PFM Asset Management LLC pfmam.com

CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Portfolio Holdings
|
Security Type/DescriptionDated Date/Coupon/Maturity CUSIP Par S&P
Rating
Moody's
Rating
Settle
Date
Original
Cost
Trade
Date
YTM
at Cost
Accrued
Interest
Market
Value
Amortized
Cost
Federal Agency
FEDERAL HOME LOAN BANK NOTESDTD 04/16/2020 0.500% 04/14/2025 3130AJHU6 4,920,000.00 AA+ Aaa 4/15/2020 4/16/2020 4,895,596.80 0.60 5,261.67 4,906,380.23 4,582,369.92 FANNIE MAE NOTESDTD 04/24/2020 0.625% 04/22/2025
3135G03U5 525,000.00 AA+ Aaa 5/21/2020 5/26/2020 526,727.25 0.56 628.91 525,988.93 489,911.10 FANNIE MAE NOTESDTD 04/24/2020 0.625% 04/22/2025
3135G03U5 3,035,000.00 AA+ Aaa 4/29/2020 4/30/2020 3,041,343.15 0.58 3,635.68 3,038,579.80 2,832,152.74 FANNIE MAE NOTESDTD 04/24/2020 0.625% 04/22/2025
3135G03U5 11,600,000.00 AA+ Aaa 6/2/2020 6/3/2020 11,673,892.00 0.49 13,895.84 11,642,496.18 10,824,702.40 FANNIE MAE NOTESDTD 04/24/2020 0.625% 04/22/2025
3135G03U5 6,600,000.00 AA+ Aaa 4/22/2020 4/24/2020 6,586,404.00 0.67 7,906.25 6,592,352.25 6,158,882.40 FANNIE MAE NOTESDTD 06/19/2020 0.500% 06/17/2025
3135G04Z3 4,150,000.00 AA+ Aaa 10/2/2020 10/5/2020 4,167,720.50 0.41 806.94 4,161,173.42 3,842,568.00 FANNIE MAE NOTESDTD 06/19/2020 0.500% 06/17/2025
3135G04Z3 7,645,000.00 AA+ Aaa 6/17/2020 6/19/2020 7,629,174.85 0.54 1,486.53 7,635,612.49 7,078,658.40 FANNIE MAE NOTESDTD 06/19/2020 0.500% 06/17/2025
3135G04Z3 1,490,000.00 AA+ Aaa 9/17/2020 9/18/2020 1,495,304.40 0.42 289.72 1,493,311.81 1,379,620.80 FREDDIE MAC NOTESDTD 07/23/2020 0.375% 07/21/2025
3137EAEU9 4,620,000.00 AA+ Aaa 7/21/2020 7/23/2020 4,596,992.40 0.48 7,700.00 4,605,922.98 4,256,983.50 FANNIE MAE NOTESDTD 08/27/2020 0.375% 08/25/2025
3135G05X7 3,075,000.00 AA+ Aaa 10/22/202 10/23/202 3,057,780.00 0.49 4,035.94 3,063,783.12 2,826,266.32 FANNIE MAE NOTESDTD 08/27/2020 0.375% 08/25/2025
3135G05X7 4,915,000.00 AA+ Aaa 8/25/2020 8/27/2020 4,891,997.80 0.47 6,450.94 4,900,484.91 4,517,430.57 FREDDIE MAC NOTESDTD 09/25/2020 0.375% 09/23/2025
3137EAEX3 7,090,000.00 AA+ Aaa 9/23/2020 9/25/2020 7,068,659.10 0.44 7,237.71 7,076,193.94 6,507,131.10 FEDERAL FARM CREDIT BANK(CALLABLE)DTD 09/29/2020 0.530% 09/29/2025 3133EMBH4 4,530,000.00 AA+ Aaa 10/7/2020 10/9/2020 4,522,072.50 0.57 6,135.63 4,524,822.68 4,170,395.01 FANNIE MAE NOTESDTD 11/12/2020 0.500% 11/07/2025
3135G06G3 5,475,000.00 AA+ Aaa 11/19/2020 11/24/2020 5,472,919.50 0.51 4,106.25 5,473,591.15 5,025,403.95 FANNIE MAE NOTESDTD 11/12/2020 0.500% 11/07/2025
3135G06G3 4,625,000.00 AA+ Aaa 11/9/2020 11/12/2020 4,608,442.50 0.57 3,468.75 4,613,861.65 4,245,204.25

ATTACHMENT A
59 32
© PFM Asset Management LLC pfmam.com

AMERICAN HONDA FINANCE
DTD 01/10/2020 1.950% 05/10/2023
02665WDH1 3,550,000.00 A- A3 1/7/2020 1/10/2020 3,548,686.50 1.96 9,806.88 3,549,661.90 3,511,926.25 PACCAR FINANCIAL CORPCORPORATE NOTESDTD 08/11/2020 0.350% 08/11/2023 69371RQ90 485,000.00 A+ A1 8/4/2020 8/11/2020 484,364.65 0.39 660.14 484,764.43 469,564.39 BANK OF NY MELLON CORP CORPNOTESDTD 08/13/2018 3.450% 08/11/2023 06406RAJ6 6,735,000.00 A A1 1/30/2019 1/31/2019 6,814,742.40 3.17 90,361.25 6,754,585.85 6,756,087.29 US BANK NA CINCINNATI CORPNOTES (CALLABDTD 02/04/2019 3.375% 02/05/2024 91159HHV5 2,125,000.00 A+ A2 4/2/2019 4/4/2019 2,171,197.50 2.89 29,085.94 2,139,707.67 2,129,035.38 MERCK & CO INC (CALLABLE) CORPNOTESDTD 03/07/2019 2.900% 03/07/2024 58933YAU9 4,625,000.00 A+ A1 11/19/2021 11/23/2021 4,839,183.75 0.85 42,472.92 4,780,721.68 4,595,598.88 PFIZER INC CORP NOTESDTD 03/11/2019 2.950% 03/15/2024
717081ES8 6,400,000.00 A+ A2 6/3/2019 6/5/2019 6,562,752.00 2.38 55,591.11 6,456,337.23 6,375,955.20 MASTERCARD INC CORP NOTESDTD 03/31/2014 3.375% 04/01/2024 57636QAB0 4,250,000.00 A+ A1 4/2/2019 4/4/2019 4,388,762.50 2.67 35,859.38 4,298,688.60 4,253,055.75 MORGAN STANLEY CORP NOTES(CALLABLE)DTD 04/22/2021 0.731% 04/05/2024 61772BAA1 670,000.00 A- A1 4/19/2021 4/22/2021 670,000.00 0.73 1,170.01 670,000.00 653,349.16 MORGAN STANLEY CORP NOTES(CALLABLE)DTD 04/22/2021 0.731% 04/05/2024 61772BAA1 1,995,000.00 A- A1 4/20/2021 4/22/2021 1,997,513.70 0.69 3,483.82 1,995,980.10 1,945,420.26 AMAZON.COM INC CORPORATE
NOTESDTD 05/12/2021 0.450% 05/12/2024
023135BW5 3,085,000.00 AA A1 5/10/2021 5/12/2021 3,080,495.90 0.50 1,889.56 3,082,201.38 2,932,798.44 WALMART INC CORPORATE NOTESDTD 04/23/2019 2.850% 07/08/2024 931142EL3 8,200,000.00 AA Aa2 5/12/2020 5/14/2020 8,837,386.00 0.94 112,305.83 8,372,201.85 8,158,163.60

ATTACHMENT A
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CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Portfolio Holdings
|
Security Type/DescriptionDated Date/Coupon/Maturity CUSIP Par S&P
Rating
Moody's
Rating
Settle
Date
Original
Cost
Trade
Date
YTM
at Cost
Accrued
Interest
Market
Value
Amortized
Cost
Corporate
US BANCORP NOTES (CALLABLE)DTD 07/29/2019 2.400% 07/30/2024 91159HHX1 3,300,000.00 A+ A2 8/1/2019 8/5/2019 3,302,739.00 2.38 33,220.00 3,301,114.58 3,218,305.20 JPMORGAN CHASE & COCORPORATE NOTES (CALDTD 09/16/2020 0.653% 09/16/2024 46647PBS4 2,935,000.00 A- A2 9/9/2020 9/16/2020 2,935,000.00 0.65 5,589.95 2,935,000.00 2,820,579.03 BANK OF AMERICA CORP(CALLABLE) CORPORATDTD 10/21/2020 0.810% 10/24/2024 06051GJH3 3,815,000.00 A- A2 10/16/202 10/21/202 3,815,000.00 0.81 5,751.11 3,815,000.00 3,638,453.25 JOHN DEERE CAPITAL CORPCORPORATE NOTESDTD 01/10/2022 1.250% 01/10/2025 24422EVY2 4,715,000.00 A A2 3/8/2022 3/10/2022 4,596,134.85 2.17 27,995.31 4,609,087.37 4,464,718.37 MICROSOFT CORP (CALLABLE)NOTESDTD 02/12/2015 2.700% 02/12/2025 594918BB9 5,350,000.00 AAA Aaa 3/4/2021 3/8/2021 5,727,763.50 0.87 55,773.75 5,592,948.27 5,306,953.90 TOYOTA MOTOR CREDIT CORP CORPNOTESDTD 02/13/2020 1.800% 02/13/2025 89236TGT6 1,595,000.00 A+ A1 5/21/2020 5/26/2020 1,616,692.00 1.50 11,005.50 1,607,053.91 1,520,464.06 TOYOTA MOTOR CREDIT CORP CORPNOTESDTD 02/13/2020 1.800% 02/13/2025 89236TGT6 2,180,000.00 A+ A1 5/20/2020 5/26/2020 2,201,298.60 1.58 15,042.00 2,191,835.30 2,078,126.42 NOVARTIS CAPITAL CORPDTD 02/14/2020 1.750% 02/14/2025
66989HAP3 7,360,000.00 AA- A1 5/8/2020 5/12/2020 7,619,513.60 0.99 49,015.56 7,501,000.36 7,097,130.24 AMAZON.COM INC CORPORATE
NOTESDTD 04/13/2022 3.000% 04/13/2025
023135CE4 5,135,000.00 AA A1 4/11/2022 4/13/2022 5,126,835.35 3.06 33,377.50 5,127,423.86 5,090,397.39 3M COMPANY (CALLABLE)CORPORATE NOTESDTD 03/27/2020 2.650% 04/15/2025 88579YBM2 2,900,000.00 A+ A1 4/21/2022 4/25/2022 2,845,190.00 3.32 16,223.89 2,848,571.46 2,829,237.10 CITIGROUP INC (CALLABLE)CORPORATE NOTESDTD 05/04/2021 0.981% 05/01/2025 172967MX6 1,400,000.00 BBB+ A3 4/28/2021 5/4/2021 1,403,710.00 0.91 2,289.00 1,402,274.20 1,311,203.60 CITIGROUP INC (CALLABLE)CORPORATE NOTESDTD 05/04/2021 0.981% 05/01/2025 172967MX6 1,310,000.00 BBB+ A3 4/27/2021 5/4/2021 1,310,000.00 0.98 2,141.85 1,310,000.00 1,226,911.94

ATTACHMENT A
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© PFM Asset Management LLC pfmam.com

CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Portfolio Holdings
|
Security Type/DescriptionDated Date/Coupon/Maturity CUSIP Par S&P
Rating
Moody's
Rating
Settle
Date
Original
Cost
Trade
Date
YTM
at Cost
Accrued
Interest
Market
Value
Amortized
Cost
Corporate
GOLDMAN SACHS GROUP INCCORPORATE NOTESDTD 05/22/2015 3.750% 05/22/2025 38148LAE6 3,635,000.00 BBB+ A2 2/12/2021 2/17/2021 4,060,949.30 0.94 14,767.19 3,915,963.83 3,589,457.09 HONEYWELL INTL CORP NOTES(CALLABLE)DTD 05/18/2020 1.350% 06/01/2025 438516CB0 4,000,000.00 A A2 9/3/2021 9/8/2021 4,078,320.00 0.82 4,500.00 4,060,902.48 3,771,984.00 JPMORGAN CHASE & COCORPORATE NOTESDTD 08/10/2021 0.768% 08/09/2025 46647PCM6 3,360,000.00 A- A2 8/3/2021 8/10/2021 3,360,000.00 0.77 10,178.56 3,360,000.00 3,120,536.16 STATE STREET CORP (CALLABLE)CORPORATE NDTD 02/07/2022 1.746% 02/06/2026 857477BR3 875,000.00 A A1 2/2/2022 2/7/2022 875,000.00 1.75 6,111.00 875,000.00 840,473.38 BANK OF AMERICA CORP NOTES(CALLABLE)DTD 03/22/2022 3.384% 04/02/2026 06051GKM0 3,750,000.00 A- A2 3/17/2022 3/22/2022 3,750,000.00 3.38 34,897.50 3,750,000.00 3,634,995.00 TARGET CORP CORPORATE NOTESDTD 01/24/2022 1.950% 01/15/2027 87612EBM7 780,000.00 A A2 1/19/2022 1/24/2022 778,674.00 1.99 6,633.25 778,789.30 722,184.06 TARGET CORP CORPORATE NOTESDTD 01/24/2022 1.950% 01/15/2027 87612EBM7 3,500,000.00 A A2 1/27/2022 1/31/2022 3,497,865.00 1.96 29,764.58 3,498,043.11 3,240,569.50 Security Type Sub-Total 104,015,000.00 106,295,770.10 1.71 746,964.34 105,064,858.72 101,303,634.29 Commercial Paper
COLLAT CP FLEX CO LLC COMMPAPERDTD 05/13/2022 0.000% 09/12/2022 19423KJC9 3,850,000.00 A-1 P-1 5/25/2022 5/31/2022 3,831,870.78 1.64 0.00 3,837,274.68 3,832,382.40 LIBERTY STREET FDG LLC COMMPAPERDTD 06/16/2022 0.000% 09/16/2022 53127UJG6 3,250,000.00 A-1 P-1 6/17/2022 6/17/2022 3,232,337.15 2.16 0.00 3,235,054.51 3,234,452.00 Security Type Sub-Total 7,100,000.00 7,064,207.93 1.88 0.00 7,072,329.19 7,066,834.40 Agency CMBS
FHLMC MULTIFAMILY STRUCTURED PDTD 12/01/2012 2.307% 08/01/2022 3137AWQH1 1,718,729.45 AA+ Aaa 9/4/2019 9/9/2019 1,744,107.57 1.78 3,304.26 1,719,473.75 1,714,412.12

ATTACHMENT A
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© PFM Asset Management LLC pfmam.com

CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Portfolio Holdings
|
Security Type/DescriptionDated Date/Coupon/Maturity CUSIP Par S&P
Rating
Moody's
Rating
Settle
Date
Original
Cost
Trade
Date
YTM
at Cost
Accrued
Interest
Market
Value
Amortized
Cost
Agency CMBS
FHLMC SERIES K721 A2DTD 12/01/2015 3.090% 08/01/2022
3137BM6P6 288,272.24 AA+ Aaa 4/4/2018 4/9/2018 290,727.06 2.88 742.30 288,320.56 287,776.14 FANNIEMAE-ACESDTD 04/01/2014 3.346% 03/01/2024
3136AJB54 1,911,720.85 AA+ Aaa 12/13/201 12/18/201 2,004,618.55 2.14 5,330.51 1,948,577.33 1,902,643.31 FHMS KJ27 A1DTD 11/01/2019 2.092% 07/01/2024
3137FQ3V3 102,663.57 AA+ Aaa 11/20/2019 11/26/2019 102,661.10 2.09 178.98 102,662.49 102,412.58 Security Type Sub-Total 4,021,386.11 4,142,114.28 2.04 9,556.05 4,059,034.13 4,007,244.15 ABS
HAROT 2019-2 A3DTD 05/29/2019 2.520% 06/21/2023
43815MAC0 215,902.20 NR Aaa 5/21/2019 5/29/2019 215,894.15 2.52 151.13 215,900.27 216,035.15 NAROT 2019-A A3DTD 02/13/2019 2.900% 10/15/2023
65479KAD2 181,815.61 NR Aaa 2/5/2019 2/13/2019 181,788.07 2.90 234.34 181,808.00 181,944.41 NAROT 2019-B A3DTD 05/28/2019 2.500% 11/15/2023
65479HAC1 364,137.15 NR Aaa 5/21/2019 5/28/2019 364,054.81 2.51 404.60 364,111.82 364,113.04 COPAR 2019-1 A3DTD 05/30/2019 2.510% 11/15/2023
14042WAC4 99,526.97 AAA Aaa 5/21/2019 5/30/2019 99,506.81 2.51 111.03 99,520.76 99,587.51 CARMX 2019-2 A3DTD 04/17/2019 2.680% 03/15/2024
14316LAC7 282,044.13 AAA NR 4/9/2019 4/17/2019 282,015.30 2.68 335.95 282,034.12 282,224.69 TAOT 2020-A A3DTD 02/12/2020 1.660% 05/15/2024
89232HAC9 1,708,265.48 AAA Aaa 2/4/2020 2/12/2020 1,708,142.14 1.66 1,260.32 1,708,211.19 1,698,788.71 NAROT 2020-B A3DTD 06/30/2020 0.550% 07/15/2024
65479CAD0 499,855.89 AAA Aaa 6/23/2020 6/30/2020 499,842.20 0.55 122.19 499,848.98 495,047.03 CARMX 2020-1 A3DTD 01/22/2020 1.890% 12/16/2024
14315XAC2 988,471.68 AAA NR 1/14/2020 1/22/2020 988,277.73 1.89 830.32 988,374.27 981,914.55 HAROT 2021-1 A3DTD 02/24/2021 0.270% 04/21/2025
43813GAC5 1,445,000.00 NR Aaa 2/17/2021 2/24/2021 1,444,973.56 0.27 108.38 1,444,982.14 1,411,115.47 HART 2021-A A3DTD 04/28/2021 0.380% 09/15/2025
44933LAC7 1,145,000.00 AAA NR 4/20/2021 4/28/2021 1,144,879.55 0.38 193.38 1,144,911.83 1,108,957.46 CARMX 2021-1 A3DTD 01/27/2021 0.340% 12/15/2025
14316NAC3 860,000.00 AAA NR 1/20/2021 1/27/2021 859,830.06 0.34 129.96 859,879.62 838,332.30 TAOT 2021-C A3DTD 09/27/2021 0.430% 01/15/2026
89239BAC5 2,000,000.00 AAA Aaa 9/21/2021 9/27/2021 1,999,840.60 0.43 382.22 1,999,868.71 1,904,893.60

ATTACHMENT A
63 36
© PFM Asset Management LLC pfmam.com

1.19 1.19%
Total Investments $569,945,284.41

ATTACHMENT A
64 37
© PFM Asset Management LLC pfmam.com

CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Portfolio Activity
|
Quarterly Portfolio Transactions
Trade
Date
Settle
Date Par ($) CUSIP
Maturity
Date
Transact
Coupon Amount ($)
Yield
at Market
Realized
Security Description G/L (BV)
BUY4/5/2022 4/7/2022 7,400,000.00 91282CCZ2 US TREASURY N/B NOTES 0.87% 9/30/2026 6,814,730.58 2.77%4/6/2022 4/11/2022 1,125,000.00 91282CCS8 US TREASURY N/B NOTES 1.25% 8/15/2031 999,167.82 2.63%4/6/2022 4/11/2022 1,085,000.00 912828Z94 US TREASURY NOTES 1.50% 2/15/2030 998,553.58 2.66%4/6/2022 4/11/2022 1,130,000.00 91282CBL4 US TREASURY NOTES 1.12% 2/15/2031 998,141.23 2.63%4/6/2022 4/11/2022 1,175,000.00 91282CAE1 US TREASURY NOTES 0.62% 8/15/2030 998,626.50 2.65%4/11/2022 4/13/2022 5,135,000.00 023135CE4 AMAZON.COM INC CORPORATE NOTES 3.00% 4/13/2025 5,126,835.35 3.06%4/21/2022 4/25/2022 2,900,000.00 88579YBM2 3M COMPANY (CALLABLE) CORPORATE NOTES 2.65% 4/15/2025 2,847,324.72 3.32%4/29/2022 4/29/2022 1,625,000.00 912828ZR4 US TREASURY NOTES 0.12% 5/31/2022 1,625,519.67 0.35%5/2/2022 5/3/2022 2,035,000.00 53127UFH8 LIBERTY STREET FDG LLC COMM PAPER 0.00% 6/17/2022 2,032,710.63 0.90%5/25/2022 5/31/2022 3,850,000.00 19423KJC9 COLLAT CP FLEX CO LLC COMM PAPER 0.00% 9/12/2022 3,831,870.78 1.64%6/6/2022 6/8/2022 4,360,000.00 91282CCF6 US TREASURY N/B NOTES 0.75% 5/31/2026 3,996,586.63 2.99%6/17/2022 6/17/2022 3,250,000.00 53127UJG6 LIBERTY STREET FDG LLC COMM PAPER 0.00% 9/16/2022 3,232,337.15 2.16% Total BUY 35,070,000.00 33,502,404.64 0.00
INTEREST4/1/2022 4/25/2022 734,026.19 3137BLUR7 FHLMC MULTIFAMILY STRUCTURED P 2.71% 6/1/2022 1,651.814/1/2022 4/25/2022 2,340,048.09 3136AJB54 FANNIEMAE-ACES 3.34% 3/1/2024 7,682.644/1/2022 4/25/2022 2,240,000.00 3137AWQH1 FHLMC MULTIFAMILY STRUCTURED P 2.30% 8/1/2022 4,306.40

ATTACHMENT A
65 38
© PFM Asset Management LLC pfmam.com

CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Portfolio Activity
|
Quarterly Portfolio Transactions
Trade
Date
Settle
Date Par ($) CUSIP
Maturity
Date
Transact
Coupon Amount ($)
Yield
at Market
Realized
Security Description G/L (BV)
INTEREST4/1/2022 4/25/2022 328,447.20 3137FQ3V3 FHMS KJ27 A1 2.09% 7/1/2024 572.594/1/2022 4/25/2022 1,534,994.72 3137BM6P6 FHLMC SERIES K721 A2 3.09% 8/1/2022 3,952.614/1/2022 4/1/2022 MONEY0002 MONEY MARKET FUND 104.904/1/2022 4/1/2022 4,385,000.00 13063DRJ9 CA ST TXBL GO BONDS 2.40% 10/1/2023 52,620.004/1/2022 4/1/2022 4,250,000.00 57636QAB0 MASTERCARD INC CORP NOTES 3.37% 4/1/2024 71,718.754/5/2022 4/5/2022 2,665,000.00 61772BAA1 MORGAN STANLEY CORP NOTES (CALLABLE) 0.73% 4/5/2024 9,740.584/8/2022 4/8/2022 1,500,000.00 3133ELVX9 FEDERAL FARM CREDIT BANK NOTES 0.87% 4/8/2024 6,562.504/14/2022 4/14/2022 4,920,000.00 3130AJHU6 FEDERAL HOME LOAN BANK NOTES 0.50% 4/14/2025 12,300.004/15/2022 4/15/2022 1,145,000.00 44933LAC7 HART 2021-A A3 0.38% 9/15/2025 362.584/15/2022 4/15/2022 1,260,020.97 14315XAC2 CARMX 2020-1 A3 1.89% 12/16/2024 1,984.534/15/2022 4/15/2022 2,346,174.90 89232HAC9 TAOT 2020-A A3 1.66% 5/15/2024 3,245.544/15/2022 4/15/2022 860,000.00 14316NAC3 CARMX 2021-1 A3 0.34% 12/15/2025 243.674/15/2022 4/15/2022 2,000,000.00 89239BAC5 TAOT 2021-C A3 0.43% 1/15/2026 716.674/15/2022 4/15/2022 1,725,000.00 14314QAC8 CARMX 2021-2 A3 0.52% 2/17/2026 747.504/15/2022 4/15/2022 475,387.60 65479KAD2 NAROT 2019-A A3 2.90% 10/15/2023 1,148.854/15/2022 4/15/2022 168,392.71 44932NAD2 HYUNDAI AUTO RECEIVABLES TRUST 2.66% 6/15/2023 373.274/15/2022 4/15/2022 990,000.00 44935FAD6 HART 2021-C A3 0.74% 5/15/2026 610.50

ATTACHMENT A
66 39
© PFM Asset Management LLC pfmam.com

CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Portfolio Activity
|
Quarterly Portfolio Transactions
Trade
Date
Settle
Date Par ($) CUSIP
Maturity
Date
Transact
Coupon Amount ($)
Yield
at Market
Realized
Security Description G/L (BV)
INTEREST4/15/2022 4/15/2022 681,845.47 65479CAD0 NAROT 2020-B A3 0.55% 7/15/2024 312.514/15/2022 4/15/2022 3,140,000.00 91282CBV2 US TREASURY N/B NOTES 0.37% 4/15/2024 5,887.504/15/2022 4/15/2022 474,906.07 14316LAC7 CARMX 2019-2 A3 2.68% 3/15/2024 1,060.624/15/2022 4/15/2022 660,815.93 65479HAC1 NAROT 2019-B A3 2.50% 11/15/2023 1,376.704/15/2022 4/15/2022 246,769.58 14042WAC4 COPAR 2019-1 A3 2.51% 11/15/2023 516.164/15/2022 4/15/2022 1,595,000.00 254683CP8 DCENT 2021-A1 A1 0.58% 9/15/2026 770.924/18/2022 4/18/2022 128,060.95 43814WAC9 HAROT 2019-1 A3 2.83% 3/20/2023 302.014/21/2022 4/21/2022 505,298.51 43815MAC0 HAROT 2019-2 A3 2.52% 6/21/2023 1,061.134/21/2022 4/21/2022 1,445,000.00 43813GAC5 HAROT 2021-1 A3 0.27% 4/21/2025 325.134/22/2022 4/22/2022 21,760,000.00 3135G03U5 FANNIE MAE NOTES 0.62% 4/22/2025 68,000.004/24/2022 4/24/2022 3,815,000.00 06051GJH3 BANK OF AMERICA CORP (CALLABLE) CORPORAT 0.81% 10/24/2024 15,450.754/30/2022 4/30/2022 2,120,000.00 912828YM6 US TREASURY NOTES 1.50% 10/31/2024 15,900.004/30/2022 4/30/2022 4,515,000.00 912828X70 US TREASURY NOTES 2.00% 4/30/2024 45,150.004/30/2022 4/30/2022 3,400,000.00 9128283D0 US TREASURY NOTES 2.25% 10/31/2024 38,250.004/30/2022 4/30/2022 7,000,000.00 91282CAT8 US TREASURY NOTES 0.25% 10/31/2025 8,750.004/30/2022 4/30/2022 5,995,000.00 912828ZL7 US TREASURY NOTES 0.37% 4/30/2025 11,240.635/1/2022 5/1/2022 2,710,000.00 172967MX6 CITIGROUP INC (CALLABLE) CORPORATE NOTES 0.98% 5/1/2025 13,292.55

ATTACHMENT A
67 40
© PFM Asset Management LLC pfmam.com

CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Portfolio Activity
|
Quarterly Portfolio Transactions
Trade
Date
Settle
Date Par ($) CUSIP
Maturity
Date
Transact
Coupon Amount ($)
Yield
at Market
Realized
Security Description G/L (BV)
INTEREST5/1/2022 5/1/2022 1,250,000.00 13077DNC2 CA ST UNIV TXBL REV BONDS 0.68% 11/1/2024 4,281.255/1/2022 5/25/2022 327,157.20 3137FQ3V3 FHMS KJ27 A1 2.09% 7/1/2024 727.995/1/2022 5/25/2022 2,200,951.17 3136AJB54 FANNIEMAE-ACES 3.34% 3/1/2024 7,472.195/1/2022 5/25/2022 136,241.29 3137BLUR7 FHLMC MULTIFAMILY STRUCTURED P 2.71% 6/1/2022 308.365/1/2022 5/25/2022 2,068,256.31 3137AWQH1 FHLMC MULTIFAMILY STRUCTURED P 2.30% 8/1/2022 3,976.225/1/2022 5/25/2022 975,399.94 3137BM6P6 FHLMC SERIES K721 A2 3.09% 8/1/2022 2,511.655/2/2022 5/2/2022 MONEY0002 MONEY MARKET FUND 112.975/5/2022 5/5/2022 7,260,000.00 3137EAER6 FREDDIE MAC NOTES 0.37% 5/5/2023 13,612.505/7/2022 5/7/2022 16,290,000.00 3135G06G3 FANNIE MAE NOTES 0.50% 11/7/2025 40,725.005/10/2022 5/10/2022 3,550,000.00 02665WDH1 AMERICAN HONDA FINANCE 1.95% 5/10/2023 34,612.505/12/2022 5/12/2022 3,085,000.00 023135BW5 AMAZON.COM INC CORPORATE NOTES 0.45% 5/12/2024 6,941.255/15/2022 5/15/2022 2,107,945.27 89232HAC9 TAOT 2020-A A3 1.66% 5/15/2024 2,915.995/15/2022 5/15/2022 614,409.59 65479CAD0 NAROT 2020-B A3 0.55% 7/15/2024 281.605/15/2022 5/15/2022 1,520,000.00 91412HGE7 UNIV OF CAL TXBL REV BONDS 0.88% 5/15/2025 6,710.805/15/2022 5/15/2022 860,000.00 14316NAC3 CARMX 2021-1 A3 0.34% 12/15/2025 243.675/15/2022 5/15/2022 552,422.43 65479HAC1 NAROT 2019-B A3 2.50% 11/15/2023 1,150.885/15/2022 5/15/2022 1,595,000.00 254683CP8 DCENT 2021-A1 A1 0.58% 9/15/2026 770.92

ATTACHMENT A
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CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Portfolio Activity
|
Quarterly Portfolio Transactions
Trade
Date
Settle
Date Par ($) CUSIP
Maturity
Date
Transact
Coupon Amount ($)
Yield
at Market
Realized
Security Description G/L (BV)
INTEREST5/15/2022 5/15/2022 10,925,000.00 912828WE6 US TREASURY NOTES 2.75% 11/15/2023 150,218.755/15/2022 5/15/2022 192,848.84 14042WAC4 COPAR 2019-1 A3 2.51% 11/15/2023 403.385/15/2022 5/15/2022 2,000,000.00 89239BAC5 TAOT 2021-C A3 0.43% 1/15/2026 716.675/15/2022 5/15/2022 3,145,000.00 91282CAW1 US TREASURY NOTES 0.25% 11/15/2023 3,931.255/15/2022 5/15/2022 365,697.37 65479KAD2 NAROT 2019-A A3 2.90% 10/15/2023 883.775/15/2022 5/15/2022 990,000.00 44935FAD6 HART 2021-C A3 0.74% 5/15/2026 610.505/15/2022 5/15/2022 1,158,278.89 14315XAC2 CARMX 2020-1 A3 1.89% 12/16/2024 1,824.295/15/2022 5/15/2022 1,725,000.00 14314QAC8 CARMX 2021-2 A3 0.52% 2/17/2026 747.505/15/2022 5/15/2022 404,456.88 14316LAC7 CARMX 2019-2 A3 2.68% 3/15/2024 903.295/15/2022 5/15/2022 1,145,000.00 44933LAC7 HART 2021-A A3 0.38% 9/15/2025 362.585/15/2022 5/15/2022 88,169.06 44932NAD2 HYUNDAI AUTO RECEIVABLES TRUST 2.66% 6/15/2023 195.445/18/2022 5/18/2022 81,352.66 43814WAC9 HAROT 2019-1 A3 2.83% 3/20/2023 191.865/21/2022 5/21/2022 401,762.81 43815MAC0 HAROT 2019-2 A3 2.52% 6/21/2023 843.705/21/2022 5/21/2022 1,445,000.00 43813GAC5 HAROT 2021-1 A3 0.27% 4/21/2025 325.135/22/2022 5/22/2022 7,600,000.00 3135G04Q3 FANNIE MAE NOTES 0.25% 5/22/2023 9,500.005/22/2022 5/22/2022 3,635,000.00 38148LAE6 GOLDMAN SACHS GROUP INC CORPORATE NOTES 3.75% 5/22/2025 68,156.255/24/2022 5/24/2022 3,740,000.00 459058JM6 INTL BK RECON & DEVELOP NOTES 0.25% 11/24/2023 4,675.00

ATTACHMENT A
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CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Portfolio Activity
|
Quarterly Portfolio Transactions
Trade
Date
Settle
Date Par ($) CUSIP
Maturity
Date
Transact
Coupon Amount ($)
Yield
at Market
Realized
Security Description G/L (BV)
INTEREST5/27/2022 5/27/2022 6,095,000.00 3135G06H1 FANNIE MAE NOTES 0.25% 11/27/2023 7,618.755/31/2022 5/31/2022 12,280,000.00 91282CCF6 US TREASURY N/B NOTES 0.75% 5/31/2026 46,050.005/31/2022 5/31/2022 8,515,000.00 912828U57 US TREASURY NOTES 2.12% 11/30/2023 90,471.885/31/2022 5/31/2022 10,915,000.00 9128283J7 US TREASURY NOTES 2.12% 11/30/2024 115,971.885/31/2022 5/31/2022 13,545,000.00 91282CAZ4 US TREASURY NOTES 0.37% 11/30/2025 25,396.886/1/2022 6/1/2022 155,000.00 13067WRB0 CA ST DEPT WTR RES WTR SYS TXBL REV BNDS 0.56% 12/1/2024 434.006/1/2022 6/1/2022 MONEY0002 MONEY MARKET FUND 1,372.006/1/2022 6/1/2022 4,000,000.00 438516CB0 HONEYWELL INTL CORP NOTES (CALLABLE) 1.35% 6/1/2025 27,000.006/1/2022 6/25/2022 835,426.32 3137BM6P6 FHLMC SERIES K721 A2 3.09% 8/1/2022 2,151.226/1/2022 6/25/2022 2,008,651.77 3137AWQH1 FHLMC MULTIFAMILY STRUCTURED P 2.30% 8/1/2022 3,861.636/1/2022 6/25/2022 1,984,652.64 3136AJB54 FANNIEMAE-ACES 3.34% 3/1/2024 5,902.816/1/2022 6/25/2022 281,882.62 3137FQ3V3 FHMS KJ27 A1 2.09% 7/1/2024 491.426/2/2022 6/2/2022 3,620,000.00 23341VZT1 DNB BANK ASA/NY LT CD 2.04% 12/2/2022 37,334.276/4/2022 6/4/2022 4,445,000.00 3137EAFA2 FREDDIE MAC NOTES 0.25% 12/4/2023 5,556.256/8/2022 6/8/2022 3,425,000.00 3130A0F70 FEDERAL HOME LOAN BANKS NOTES 3.37% 12/8/2023 57,796.886/15/2022 6/15/2022 273,485.74 65479KAD2 NAROT 2019-A A3 2.90% 10/15/2023 660.926/15/2022 6/15/2022 15,839.53 44932NAD2 HYUNDAI AUTO RECEIVABLES TRUST 2.66% 6/15/2023 35.11

ATTACHMENT A
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CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Portfolio Activity
|
Quarterly Portfolio Transactions
Trade
Date
Settle
Date Par ($) CUSIP
Maturity
Date
Transact
Coupon Amount ($)
Yield
at Market
Realized
Security Description G/L (BV)
INTEREST6/15/2022 6/15/2022 1,725,000.00 14314QAC8 CARMX 2021-2 A3 0.52% 2/17/2026 747.506/15/2022 6/15/2022 990,000.00 44935FAD6 HART 2021-C A3 0.74% 5/15/2026 610.506/15/2022 6/15/2022 557,488.55 65479CAD0 NAROT 2020-B A3 0.55% 7/15/2024 255.526/15/2022 6/15/2022 1,595,000.00 254683CP8 DCENT 2021-A1 A1 0.58% 9/15/2026 770.926/15/2022 6/15/2022 2,000,000.00 89239BAC5 TAOT 2021-C A3 0.43% 1/15/2026 716.676/15/2022 6/15/2022 860,000.00 14316NAC3 CARMX 2021-1 A3 0.34% 12/15/2025 243.676/15/2022 6/15/2022 1,145,000.00 44933LAC7 HART 2021-A A3 0.38% 9/15/2025 362.586/15/2022 6/15/2022 1,074,110.39 14315XAC2 CARMX 2020-1 A3 1.89% 12/16/2024 1,691.726/15/2022 6/15/2022 456,368.04 65479HAC1 NAROT 2019-B A3 2.50% 11/15/2023 950.776/15/2022 6/15/2022 145,064.19 14042WAC4 COPAR 2019-1 A3 2.51% 11/15/2023 303.436/15/2022 6/15/2022 1,906,468.63 89232HAC9 TAOT 2020-A A3 1.66% 5/15/2024 2,637.286/15/2022 6/15/2022 342,240.00 14316LAC7 CARMX 2019-2 A3 2.68% 3/15/2024 764.346/17/2022 6/17/2022 13,285,000.00 3135G04Z3 FANNIE MAE NOTES 0.50% 6/17/2025 33,212.506/18/2022 6/18/2022 38,471.22 43814WAC9 HAROT 2019-1 A3 2.83% 3/20/2023 90.736/21/2022 6/21/2022 1,445,000.00 43813GAC5 HAROT 2021-1 A3 0.27% 4/21/2025 325.136/21/2022 6/21/2022 305,588.10 43815MAC0 HAROT 2019-2 A3 2.52% 6/21/2023 641.746/26/2022 6/26/2022 6,905,000.00 3137EAES4 FREDDIE MAC NOTES 0.25% 6/26/2023 8,631.25

ATTACHMENT A
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CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Portfolio Activity
|
Quarterly Portfolio Transactions
Trade
Date
Settle
Date Par ($) CUSIP
Maturity
Date
Transact
Coupon Amount ($)
Yield
at Market
Realized
Security Description G/L (BV)
INTEREST6/30/2022 6/30/2022 3,195,000.00 912828ZW3 US TREASURY NOTES 0.25% 6/30/2025 3,993.756/30/2022 6/30/2022 11,430,000.00 912828XX3 US TREASURY NOTES 2.00% 6/30/2024 114,300.006/30/2022 6/30/2022 460,000.00 9128285U0 US TREASURY NOTES 2.62% 12/31/2023 6,037.506/30/2022 6/30/2022 12,800,000.00 91282CBC4 US TREASURY NOTES 0.37% 12/31/2025 24,000.00 Total INTEREST 314,551,276.34 1,409,531.00 0.00
MATURITY4/11/2022 4/11/2022 4,000,000.00 458140BB5 INTEL CORP NOTES (CALLED, OMD 05/11/2022 2.35% 4/11/2022 4,039,166.675/1/2022 5/1/2022 2,000,000.00 437076BG6 HOME DEPOT INC CORP NOTES (CALLED, OMD 6 2.62% 5/1/2022 2,021,875.005/11/2022 5/11/2022 165,000.00 037833CQ1 APPLE INC CORP (CALLABLE) NOTE 2.30% 5/11/2022 166,897.505/31/2022 5/31/2022 1,625,000.00 912828ZR4 US TREASURY NOTES 0.12% 5/31/2022 1,626,015.636/17/2022 6/17/2022 2,035,000.00 53127UFH8 LIBERTY STREET FDG LLC COMM PAPER 0.00% 6/17/2022 2,035,000.00 Total MATURITY 9,825,000.00 9,888,954.80 0.00
PAYDOWNS4/1/2022 4/25/2022 4,211.88 3137BLUR7 FHLMC MULTIFAMILY STRUCTURED P 2.71% 6/1/2022 4,211.884/1/2022 4/25/2022 593,573.02 3137BLUR7 FHLMC MULTIFAMILY STRUCTURED P 2.71% 6/1/2022 593,573.024/1/2022 4/25/2022 1,290.00 3137FQ3V3 FHMS KJ27 A1 2.09% 7/1/2024 1,290.004/1/2022 4/25/2022 139,096.92 3136AJB54 FANNIEMAE-ACES 3.34% 3/1/2024 139,096.92

ATTACHMENT A
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CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Portfolio Activity
|
Quarterly Portfolio Transactions
Trade
Date
Settle
Date Par ($) CUSIP
Maturity
Date
Transact
Coupon Amount ($)
Yield
at Market
Realized
Security Description G/L (BV)
PAYDOWNS4/1/2022 4/25/2022 559,594.78 3137BM6P6 FHLMC SERIES K721 A2 3.09% 8/1/2022 559,594.784/1/2022 4/25/2022 171,743.69 3137AWQH1 FHLMC MULTIFAMILY STRUCTURED P 2.30% 8/1/2022 171,743.694/15/2022 4/15/2022 109,690.23 65479KAD2 NAROT 2019-A A3 2.90% 10/15/2023 109,690.234/15/2022 4/15/2022 53,920.74 14042WAC4 COPAR 2019-1 A3 2.51% 11/15/2023 53,920.744/15/2022 4/15/2022 238,229.63 89232HAC9 TAOT 2020-A A3 1.66% 5/15/2024 238,229.634/15/2022 4/15/2022 67,435.88 65479CAD0 NAROT 2020-B A3 0.55% 7/15/2024 67,435.884/15/2022 4/15/2022 70,449.19 14316LAC7 CARMX 2019-2 A3 2.68% 3/15/2024 70,449.194/15/2022 4/15/2022 108,393.50 65479HAC1 NAROT 2019-B A3 2.50% 11/15/2023 108,393.504/15/2022 4/15/2022 80,223.65 44932NAD2 HYUNDAI AUTO RECEIVABLES TRUST 2.66% 6/15/2023 80,223.654/15/2022 4/15/2022 101,742.08 14315XAC2 CARMX 2020-1 A3 1.89% 12/16/2024 101,742.084/18/2022 4/18/2022 46,708.29 43814WAC9 HAROT 2019-1 A3 2.83% 3/20/2023 46,708.294/21/2022 4/21/2022 103,535.70 43815MAC0 HAROT 2019-2 A3 2.52% 6/21/2023 103,535.705/1/2022 5/25/2022 216,298.53 3136AJB54 FANNIEMAE-ACES 3.34% 3/1/2024 216,298.535/1/2022 5/25/2022 59,604.54 3137AWQH1 FHLMC MULTIFAMILY STRUCTURED P 2.30% 8/1/2022 59,604.545/1/2022 5/25/2022 139,973.62 3137BM6P6 FHLMC SERIES K721 A2 3.09% 8/1/2022 139,973.625/1/2022 5/25/2022 136,241.29 3137BLUR7 FHLMC MULTIFAMILY STRUCTURED P 2.71% 6/1/2022 136,241.295/1/2022 5/25/2022 45,274.58 3137FQ3V3 FHMS KJ27 A1 2.09% 7/1/2024 45,274.58

ATTACHMENT A
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CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Portfolio Activity
|
Quarterly Portfolio Transactions
Trade
Date
Settle
Date Par ($) CUSIP
Maturity
Date
Transact
Coupon Amount ($)
Yield
at Market
Realized
Security Description G/L (BV)
PAYDOWNS5/15/2022 5/15/2022 47,784.65 14042WAC4 COPAR 2019-1 A3 2.51% 11/15/2023 47,784.655/15/2022 5/15/2022 96,054.39 65479HAC1 NAROT 2019-B A3 2.50% 11/15/2023 96,054.395/15/2022 5/15/2022 84,168.50 14315XAC2 CARMX 2020-1 A3 1.89% 12/16/2024 84,168.505/15/2022 5/15/2022 201,476.64 89232HAC9 TAOT 2020-A A3 1.66% 5/15/2024 201,476.645/15/2022 5/15/2022 62,216.88 14316LAC7 CARMX 2019-2 A3 2.68% 3/15/2024 62,216.885/15/2022 5/15/2022 72,329.53 44932NAD2 HYUNDAI AUTO RECEIVABLES TRUST 2.66% 6/15/2023 72,329.535/15/2022 5/15/2022 92,211.63 65479KAD2 NAROT 2019-A A3 2.90% 10/15/2023 92,211.635/15/2022 5/15/2022 56,921.04 65479CAD0 NAROT 2020-B A3 0.55% 7/15/2024 56,921.045/18/2022 5/18/2022 42,881.44 43814WAC9 HAROT 2019-1 A3 2.83% 3/20/2023 42,881.445/21/2022 5/21/2022 96,174.71 43815MAC0 HAROT 2019-2 A3 2.52% 6/21/2023 96,174.716/1/2022 6/25/2022 289,922.32 3137AWQH1 FHLMC MULTIFAMILY STRUCTURED P 2.30% 8/1/2022 289,922.326/1/2022 6/25/2022 547,154.08 3137BM6P6 FHLMC SERIES K721 A2 3.09% 8/1/2022 547,154.086/1/2022 6/25/2022 179,219.05 3137FQ3V3 FHMS KJ27 A1 2.09% 7/1/2024 179,219.056/1/2022 6/25/2022 72,931.79 3136AJB54 FANNIEMAE-ACES 3.34% 3/1/2024 72,931.796/15/2022 6/15/2022 45,537.22 14042WAC4 COPAR 2019-1 A3 2.51% 11/15/2023 45,537.226/15/2022 6/15/2022 60,195.87 14316LAC7 CARMX 2019-2 A3 2.68% 3/15/2024 60,195.876/15/2022 6/15/2022 198,203.15 89232HAC9 TAOT 2020-A A3 1.66% 5/15/2024 198,203.15

ATTACHMENT A
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CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Portfolio Activity
|
Quarterly Portfolio Transactions
Trade
Date
Settle
Date Par ($) CUSIP
Maturity
Date
Transact
Coupon Amount ($)
Yield
at Market
Realized
Security Description G/L (BV)
PAYDOWNS6/15/2022 6/15/2022 91,670.13 65479KAD2 NAROT 2019-A A3 2.90% 10/15/2023 91,670.136/15/2022 6/15/2022 57,632.66 65479CAD0 NAROT 2020-B A3 0.55% 7/15/2024 57,632.666/15/2022 6/15/2022 15,839.53 44932NAD2 HYUNDAI AUTO RECEIVABLES TRUST 2.66% 6/15/2023 15,839.536/15/2022 6/15/2022 85,638.71 14315XAC2 CARMX 2020-1 A3 1.89% 12/16/2024 85,638.716/15/2022 6/15/2022 92,230.89 65479HAC1 NAROT 2019-B A3 2.50% 11/15/2023 92,230.896/18/2022 6/18/2022 38,471.22 43814WAC9 HAROT 2019-1 A3 2.83% 3/20/2023 38,471.226/21/2022 6/21/2022 89,685.90 43815MAC0 HAROT 2019-2 A3 2.52% 6/21/2023 89,685.90 Total PAYDOWNS 5,763,783.67 5,763,783.67 0.00
SELL4/5/2022 4/7/2022 6,060,000.00 65558TLL7 NORDEA BANK ABP NEW YORK CERT DEPOS 1.85% 8/26/2022 6,087,279.43 14,822.764/11/2022 4/12/2022 1,050,000.00 3137EAER6 FREDDIE MAC NOTES 0.37% 5/5/2023 1,033,132.19 -19,234.984/11/2022 4/13/2022 4,000,000.00 911312BC9 UNITED PARCEL SERVICE (CALLABLE) NOTES 2.35% 5/16/2022 4,042,703.33 4,297.774/21/2022 4/25/2022 760,000.00 912828S92 US TREASURY NOTES 1.25% 7/31/2023 751,635.67 -1,152.834/21/2022 4/25/2022 1,090,000.00 912828S92 US TREASURY NOTES 1.25% 7/31/2023 1,078,003.79 301.506/6/2022 6/8/2022 3,840,000.00 86565CKU2 SUMITOMO MITSUI BANK NY CERT DEPOS 0.70% 7/8/2022 3,849,761.13 -1,513.54 Total SELL 16,800,000.00 16,842,515.54 -2,479.32

ATTACHMENT A
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Portfolio Review:

CITY OF STOCKTON SHORT-TERM PORTFOLIO

ATTACHMENT A
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Source: Bloomberg.An average of each security’s credit rating was assigned a numeric value and adjusted for its relative weighting in the portfolio.

1. Portfolio Snapshot - CITY OF STOCKTON SHORT-TERM PORTFOLIO¹ Credit Quality - S&P
100%
0%
20%40%60%80%
100%120%
0-1 Yr
Portfolio
Duration Distribution
Negotiable CD | 63%Commercial Paper | 37%
Sector Allocation
A-1 | 100%
Portfolio Statistics
Portfolio Effective Duration
Yield At CostYield At MarketPortfolio Credit Quality
Total Market Value
Securities Sub-TotalCash
$79,058,785.21
$78,875,443.55
$183,341.66
$0.00

0.79 years

2.83%3.65%
A
Accrued Interest

ATTACHMENT A
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Issuer Diversification CITY OF STOCKTON SHORT-TERM PORTFOLIO Security Type / Issuer Market Value (%) S&P / Moody's / FitchNegotiable CD 62.8% MITSUBISHI UFJ FINANCIAL GROUP INC 25.1% A / Aa / ANATIXIS NY BRANCH 18.9% A / Aa / ASUMITOMO MITSUI FINANCIAL GROUP INC 18.9% A / Aa / A Commercial Paper 37.2%
BANK OF AMERICA CO 12.3% A / NR / AA
BNP PARIBAS 12.4% A / Aa / AACOLLAT COMM PAPER V CO 12.5% A / Aa / AA Total 100.0%

ATTACHMENT A
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CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Portfolio Characteristics
|
$0.0
$15.8$31.6$47.4$63.2$79.0
Millions
$0.0
$15.8$31.6$47.4$63.2$79.0
Millions
$0.0
$15.8$31.6$47.4$63.2$79.0
Millions
June 2022
$0.0
$15.8$31.6$47.4$63.2$79.0
Millions
March 2022
Sector Allocation Review - CITY OF STOCKTON SHORT-TERM PORTFOLIO Negotiable CD Commercial Paper
Market values, excluding accrued interest. Only includes fixed-income securities held within the separately managed account(s) and LGIPs managed by PFMAM. Detail may not add to total due to rounding.

Security Type Mar-22 % of Total Jun-22 % of Total % of Total % of Total Negotiable CD $0.0 0.0% $49.5 62.7% $0.0 0.0% $0.0 0.0%Commercial Paper $29.9 100.0% $29.4 37.3% $0.0 0.0% $0.0 0.0%Total $29.9 100.0% $78.9 100.0% $0.0 0.0% $0.0 0.0%

ATTACHMENT A
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CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Portfolio Activity
|
Portfolio Activity - CITY OF STOCKTON SHORT-TERM PORTFOLIO Net Activity by Sector
($ millions)
Commercial PaperNegotiable CD
Commercial Paper
Negotiable CD
($40.0) ($20.0) $0.0 $20.0 $40.0 $60.0
Based on total proceeds (principal and accrued interest) of buys, sells, maturities, and principal paydowns. Detail may not add to total due to rounding.

Sector Net ActivityNegotiable CD $50,000,000Commercial Paper ($610,719)Total Net Activity $49,389,281 Sales/Maturities Purchases

ATTACHMENT A
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CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Portfolio Performance
|

1. Interest earned calculated as the ending accrued interest less beginning accrued interest, plus net interest activity.2. Realized gains / (losses) are shown on an amortized cost basis.

Accrual Basis Earnings - CITY OF STOCKTON SHORT-TERM PORTFOLIO Accrual Basis EarningsInterest Earned¹Realized Gains / (Losses)²Change in Amortized CostTotal Earnings 3Q2021---- 4Q2021---- 1Q2022---- 2Q2022 $183,342- $57,953 $258,794

ATTACHMENT A
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2.83 2.83%
Total Investments $79,058,785.21

ATTACHMENT A
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CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Portfolio Activity
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Quarterly Portfolio Transactions
Trade
Date
Settle
Date Par ($) CUSIP
Maturity
Date
Transact
Coupon Amount ($)
Yield
at Market
Realized
Security Description G/L (BV)
BUY5/13/2022 5/13/2022 20,000,000.00 55380T2B5 MUFG BANK LTD/NY CERT DEPOS 2.61% 5/12/2023 20,000,000.00 2.61%5/13/2022 5/13/2022 15,000,000.00 86565FLW0 SUMITOMO MITSUI BANK NY CERT DEPOS 2.75% 5/8/2023 15,000,000.00 2.75%5/13/2022 5/13/2022 15,000,000.00 63873QTU8 NATIXIS NY BRANCH CERT DEPOS 2.75% 5/11/2023 15,000,000.00 2.75%6/10/2022 6/10/2022 10,000,000.00 19424JLW4 COLLAT COMM PAPER V CO COMM PAPER 0.00% 11/30/2022 9,888,030.56 2.36%6/16/2022 6/16/2022 10,000,000.00 09659CQD3 BNP PARIBAS NY BRANCH COMM PAPER 0.00% 3/13/2023 9,756,250.00 3.33%6/27/2022 6/27/2022 10,000,000.00 06054PQQ2 BOFA SECURITIES INC COMM PAPER 0.00% 3/24/2023 9,745,000.00 3.49% Total BUY 80,000,000.00 79,389,280.56 0.00
MATURITY6/6/2022 6/6/2022 10,000,000.00 56274MF64 MANHATTAN ASSET FDG CO COMM PAPER 0.00% 6/6/2022 10,000,000.006/16/2022 6/16/2022 10,000,000.00 67983UFG3 OLD LINE FUNDING LLC COMM PAPER 0.00% 6/16/2022 10,000,000.006/27/2022 6/27/2022 10,000,000.00 53944RFT0 LMA AMERICAS LLC COMM PAPER 0.00% 6/27/2022 10,000,000.00 Total MATURITY 30,000,000.00 30,000,000.00 0.00

ATTACHMENT A
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CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Appendix
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Important Disclosures
This material is for general information purposes only and is not intended to provide specific advice or a specific recommendation, as it was prepared without regard to any specific objectives or financial circumstances.Investment advisory services are provided by PFM Asset Management LLC ("PFMAM"), an investment adviser registered with the U.S. Securities and Exchange Commission and a subsidiary of U.S. Bancorp Asset Management, Inc. ("USBAM"). USBAM is a subsidiary of U.S. Bank National Association ("U.S. Bank"). U.S. Bankis a separate entity and subsidiary of U.S. Bancorp. U.S. Bank is not responsible for and does not guarantee the products, services or performance of PFMAM. The information contained is not an offer to purchase or sell any securities. Additional applicable regulatory information is available upon request.PFMAM professionals have exercised reasonable professional care in the preparation of this performance report. Information in this report is obtained from sourcesexternal to PFMAM and is generally believed to be reliable and available to the public; however, we cannot guarantee its accuracy, completeness or suitability. We rely on the client's custodian for security holdings and market values. Transaction dates reported by the custodian may differ from money manager statements. While efforts are made to ensure the data contained herein is accurate and complete, we disclaim all responsibility for any errors that may occur. References to particular issuers arefor illustrative purposes only and are not intended to be recommendations or advice regarding such issuers. Fixed income manager and index characteristics are gathered from external sources. When average credit quality is not available, it is estimated by taking the market value weights of individual credit tiers on the portion ofthe strategy rated by a NRSRO.It is not possible to invest directly in an index. The index returns shown throughout this material do not represent the results of actual trading of investor assets.

Third-party providers maintain the indices shown and calculate the index levels and performance shown or discussed. Index returns do not reflect payment of any salescharges or fees an investor would pay to purchase the securities they represent. The imposition of these fees and charges would cause investment performance to belower than the performance shown.The views expressed within this material constitute the perspective and judgment of PFMAM at the time of distribution and are subject to change. Any forecast,projection, or prediction of the market, the economy, economic trends, and equity or fixed-income markets are based upon certain assumptions and current opinion asof the date of issue and are also subject to change. Some, but not all assumptions are noted in the report. Assumptions may or may not be proven correct as actualevents occur, and results may depend on events outside of your or our control. Changes in assumptions may have a material effect on results. Opinions and datapresented are not necessarily indicative of future events or expected performance.For more information regarding PFMAM's services or entities, please visit www.pfmam.com.© 2022 PFM Asset Management LLC. Further distribution is not permitted without prior written consent.

ATTACHMENT A
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CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Appendix
|
Important Disclosures
Market values that include accrued interest are derived from closing bid prices as of the last business day of the month as supplied by Refinitiv, Bloomberg, or Telerate. Where prices are not available from generally recognized sources, the securities are priced using a yield-based matrix system to arrive at an estimatedmarket value.

In accordance with generally accepted accounting principles, information is presented on a trade date basis; forward settling purchases are included in the monthly balances, and forward settling sales are excluded.

Performance is presented in accordance with the CFA Institute's Global Investment Performance Standards (GIPS). Unless otherwise noted, performance is showngross of fees. Quarterly returns are presented on an unannualized basis. Returns for periods greater than one year are presented on an annualized basis. Past performance is not indicative of future returns.

Bank of America/Merrill Lynch Indices provided by Bloomberg Financial Markets.Money market fund/cash balances are included in performance and duration computations.Standard & Poor's is the source of the credit ratings. Distribution of credit rating is exclusive of money market fund/LGIP holdings.Callable securities in the portfolio are included in the maturity distribution analysis to their stated maturity date, although, they may be called prior to maturity.MBS maturities are represented by expected average life.

ATTACHMENT A
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CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Appendix
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Glossary
Accrued Interest: Interest that is due on a bond or other fixed income security since the last interest payment was made.Agencies: Federal agency securities and/or Government-sponsored enterprises.Amortized Cost: The original cost of the principal of the security is adjusted for the amount of the periodic reduction of any discount or premium from the purchase date until the date of the report. Discount or premium with respect to short-term securities (those with less than one year to maturity at time of issuance) is amortized on a straight line basis. Such discount or premium with respect to longer-term securities is amortized using the constant yield basis.

Asset-Backed Security: A financial instrument collateralized by an underlying pool of assets – usually ones that generate a cash flow from debt, such as loans, leases, credit card balances, and receivables.

Bankers’ Acceptance: A draft or bill or exchange accepted by a bank or trust company. The accepting institution guarantees payment of the bill as well as the insurer.Commercial Paper: An unsecured obligation issued by a corporation or bank to finance its short-term credit needs, such as accounts receivable and inventory.Contribution to Total Return: The weight of each individual security multiplied by its return, then summed for each sector to determine how much each sector addedor subtracted from the overall portfolio performance.Effective Duration: A measure of the sensitivity of a security’s price to a change in interest rates, stated in years.Effective Yield: The total yield an investor receives in relation to the nominal yield or coupon of a bond. Effective yield takes into account the power of compoundingon investment returns, while nominal yield does not.FDIC: Federal Deposit Insurance Corporation. A federal agency that insures bank deposits to a specified amount.Interest Rate: Interest per year divided by principal amount and expressed as a percentage.Market Value: The value that would be received or paid for an investment in an orderly transaction between market participants at the measurement date.Maturity: The date upon which the principal or stated value of an investment becomes due and payable.Negotiable Certificates of Deposit: A CD with a very large denomination, usually $1 million or more, that can be traded in secondary markets.Par Value: The nominal dollar face amount of a security.Pass-through Security: A security representing pooled debt obligations that passes income from debtors to its shareholders. The most common type is themortgage-backed security.

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CITY OF STOCKTON
For the Quarter Ended June 30, 2022
Appendix
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Glossary
Repurchase Agreements: A holder of securities sells these securities to an investor with an agreement to repurchase them at a fixed price on a fixed date.Settle Date: The date on which the transaction is settled and monies/securities are exchanged. If the settle date of the transaction (i.e., coupon payments andmaturity proceeds) occurs on a non-business day, the funds are exchanged on the next business day.Supranational: A multinational union or association in which member countries cede authority and sovereignty on at least some internal matters to the group, whosedecisions are binding on its members.Trade Date: The date on which the transaction occurred; however, the final consummation of the security transaction and payment has not yet taken place.Unsettled Trade: A trade which has been executed; however, the final consummation of the security transaction and payment has not yet taken place.U.S. Treasury: The department of the U.S. government that issues Treasury securities.Yield: The rate of return based on the current market value, the annual interest receipts, maturity value, and the time period remaining until maturity, stated as a percentage on an annualized basis.

YTM at Cost: The yield to maturity at cost is the expected rate of return based on the original cost, the annual interest receipts, maturity value, and the time periodfrom purchase date to maturity, stated as a percentage on an annualized basis.YTM at Market: The yield to maturity at market is the rate of return based on the current market value, the annual interest receipts, maturity value, and the timeperiod remaining until maturity, stated as a percentage on an annualized basis.

ATTACHMENT A
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City of Stockton
Legislation Text
File #: 22-0839, Version: 1
ADOPT A RESOLUTION APPOINTING LORI M. ASUNCION AS CITY ATTORNEY FOR THE CITY

OF STOCKTON, AUTHORIZING MAYOR TO EXECUTE THE EMPLOYMENT CONTRACT, AND

AUTHORIZE STAFF TO AMEND CITY OF STOCKTON SALARY SCHEDULE TO REFLECT

INCREASE IN CITY ATTORNEY BASE SALARY

RECOMMENDATION
It is recommended that the City Council adopt a resolution confirming the appointment of Lori M.

Asuncion as City Attorney for the City of Stockton and authorize Mayor, on behalf of the City Council, to execute an employment contract setting forth the terms and conditions of employment with Lori M.

Asuncion, effective September 13, 2022, and authorize staff to amend City of Stockton salary schedule to reflect increase in City Attorney base salary.

DISCUSSION
On March 31, 2022, City Attorney John M. Luebberke resigned from the position.

Lori M. Asuncion has served as the Acting City Attorney since April 1, 2022 and has done a wonderful job for the City of Stockton.

On August 10, 2022, City Council conducted City Attorney interviews. Subsequently, City Council voted to appoint Lori M. Asuncion as the City Attorney for the City of Stockton, contingent upon an employment contract being presented for approval at the September 13, 2022 meeting.

Lori M. Asuncion has accepted the Council’s offer of appointment and has agreed to the terms of her employment as City Attorney, subject to Council approve.

FINANCIAL SUMMARY
Sufficient funds are available in the Fiscal 2022-23 budget.

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89 Resolution No.

STOCKTON CITY COUNCIL
RESOLUTION APPOINTING LORI M. ASUNCION AS CITY ATTORNEY FOR THE

CITY OF STOCKTON, AUTHORIZING THE MAYOR TO EXECUTE THE

EMPLOYMENT CONTRACT, AND AUTHORIZE STAFF TO AMEND CITY OF

STOCKTON SALARY SCHEDULE TO REFLECT INCREASE IN CITY ATTORNEY

BASE SALARY
John M. Luebberke retired from the City of Stockton as City Attorney on March 31, 2022. City Council appointed Lori M. Asuncion as Acting City Attorney on April 1, 2022, to maintain continuity of day-to-day management and administration of the City Attorney’s Office until the position was filled; and On August 10, 2022, the City Council met in closed session, conducted interviews, and voted to appoint Lori M. Asuncion as the City Attorney for the City of Stockton, contingent upon the employment contract being presented to the City Council for approval at a public meeting; now, therefore,

BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF STOCKTON, AS FOLLOWS:

1. The appointment of Lori M. Asuncion to serve as City Attorney for the City of Stockton is hereby confirmed. The Mayor is authorized, on behalf of the Council, to execute the attached employment contract with Lori Asuncion marked as Exhibit 1, setting forth the terms and conditions of employment effective September 13, 2022, and authorize staff to amend City of Stockton salary schedule to reflect increase in City Attorney base salary.

2. The Mayor is hereby authorized and directed to take whatever actions are necessary and appropriate to carry out the purpose and intent of this Resolution.

PASSED, APPROVED, and ADOPTED: September 13, 2022 .

KEVIN J. LINCOLN II
Mayor of the City of Stockton
ATTEST:

ELIZA R. GARZA, CMC
City Clerk of the City of Stockton
90 _____________________________________________________________________________________________ EMPLOYMENT AGREEMENT BETWEEN CITY OF STOCKTON AND CITY ATTORNEY LORI M. ASUNCION

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EMPLOYMENT AGREEMENT BETWEEN
CITY OF STOCKTON AND LORI M. ASUNCION AS CITY ATTORNEY
(AT-WILL AND NON-CLASSIFIED POSITION)
This Agreement is made and entered into this 13th day of September 2022, by and between the City of Stockton, a California charter city and municipal corporation (“CITY”) and Lori M. Asuncion (“EMPLOYEE”) (collectively referred to as PARTIES), both of whom understand and agree to the following:

RECITALS
Under City of Stockton Charter 1302, the City Council voted to appoint EMPLOYEE as its City Attorney on September 13, 2022, at its regularly scheduled meeting; and
City Council finds EMPLOYEE possesses the specialized skills necessary and required for the position of City Attorney.

CITY and EMPLOYEE agree as follows:

1. CHARTER RULES. EMPLOYEE agrees to abide by ARTICLE XIII DEPARTMENT OF LAW of CITY CHARTER SECTIONS 1300-1306, to include the prohibition of outside employment.

2. AT-WILL DEFINITION. EMPLOYEE is at will and serves at the pleasure of City Council and can be terminated at any time with or without cause. EMPLOYEE’s at-will status means there is no guarantee as to length of time for employment. No CITY representative has authority to agree to anything contrary to employee at-will status unless it is specific, in writing, and signed by City Council.

3. DURATION OF AGREEMENT. The effective date of this agreement shall begin September 13, 2022. This agreement governing benefits shall remain in effect for five (5) years unless otherwise terminated pursuant to provision in Provision 6:

TERMINATION OF RELATIONSHIP. At the end of the initial term of five (5) years, this agreement may be extended upon mutual written agreement between the Parties.

4. COMPENSATION and COST OF LIVING INCREASES. CITY shall compensate EMPLOYEE with an annual salary of $270,000 (two hundred seventy thousand dollars) payable in same manner and time as all other employees of City of Stockton. EMPLOLYEE shall be entitled to any approved cost of living increases applicable to employees under City’s Unrepresented Management/Confidential and Law Employee’s Compensation Plan (“UNREP COMP PLAN.”) EXHIBIT 1 91
_____________________________________________________________________________________________ EMPLOYMENT AGREEMENT BETWEEN CITY OF STOCKTON AND CITY ATTORNEY LORI M. ASUNCION

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5. FRINGE BENEFITS. CITY agrees to provide EMPLOYEE with benefits that are consistent with benefits provided under UNREP COMP PLAN with either the exception or addition of the following:

Vacation. EMPLOYEE shall be credited with thirty (30) days of vacation as of the commencement of employment of as City Attorney and shall receive thirty (30) days annual vacation. Maximum vacation accrual is ninety (90) days.

Sick Leave. EMPLOYEE shall be credited with fifteen (15) days of sick leave as of the commencement of employment as City Attorney and shall accrue fifteen (15) days of sick leave annually with unlimited accumulation.

Sick leave may be used in accordance with policies applicable to executives of CITY.

Professional Development. CITY shall pay for EMPLOYEE’s State of California Annual Bar Dues, costs for minimum legal education requirements, and costs for attendance at the League of California City Attorney’s Spring Conference and Annual Conference.

Vehicle Allowance. EMPLOYEE will receive a monthly vehicle allowance of $500.

Technology Allowance. EMPLOYEE will receive a monthly technology allowance of $400.

Deferred Compensation. CITY agrees to contribute to EMPLOYEE’s 401 (a) or equivalent, deferred compensation plan an amount equal to twelveand one-half (12.5%) percent of EMPLOYEE’s annual salary.

6. TERMINATION OF RELATIONSHIP. EMPLOYEE understands and agrees that City Council may terminate EMPLOYEE at any time for any reason. a. If Council terminates EMPLOYEE without cause, the following is required:
i. EMPLOYEE agrees to immediately surrender the position of City Attorney and any and all writings containing information relating to the conduct of the City’s business prepared, owned, used, or retained by EMPLOYEE regardless of physical form or
characteristics, and any and all equipment, tools, or other materials of whatever nature provided to EMPLOYEE by CITY in her capacity of City Attorney.
ii. EMPLOYEE shall be entitled to receive payment for all hours worked, any holiday pay due and owing, all vacation hours accrued to the day of contributions by the CITY on behalf of EMPLOYEE.

EXHIBIT 1 92
_____________________________________________________________________________________________ EMPLOYMENT AGREEMENT BETWEEN CITY OF STOCKTON AND CITY ATTORNEY LORI M. ASUNCION

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iii. City Council agrees to provide EMPLOYEE with six (6) months-worth of severance pay.
b. If Council terminates EMPLOYEE for cause, the following governs benefits owed under this agreement:
i. No severance payment shall be owed.
ii. For cause is defined as: willful misconduct, gross negligence, illegal conduct, refusal or unwillingness to perform duties, failure to adequately perform job duties, dishonesty; violation of Charter obligations, insubordination, and violation of fiduciary duties. c. If EMPLOYEE resigns, the following is required:
i. EMPLOYEE agrees to provide City Council with two (2) weeks advance written notice.

7. ENTIRE AGREEMENT. This agreement contains the entire understanding between the PARTIES. No promise, representation, warrant or covenant not included in this agreement has been or is relied on by any party hereto.

8. SEVERABILTY. If any portion of this agreement is deemed invalid or unenforceable, the remainder of this agreement shall not be affected and shall remain in full force and effect to the greatest extent permitted by law.

9. AMENDMENTS. This agreement may be amended only in writing and duly authorized and executed by both parties.

EMPLOYEE CITY OF STOCKTON

LORI M. ASUNCION KEVIN J. LINCOLN II
MAYOR
ATTEST: APPROVED AS TO FORM:

ELIZA R. GARZA, CMC MARCI A. ARREDONDO

CITY CLERK DEPUTY CITY ATTORNEY
EXHIBIT 1 93
City of Stockton
Legislation Text
File #: 22-0875, Version: 1

APPROVAL OF CITY COUNCIL MINUTES

RECOMMENDATION
Approve the minutes from the City Council meetings of July 12, 2022 and July 26, 2022 Attachment A - 2022-07-12 Minutes
Attachment B - 2022-07-26 Minutes
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City of Stockton
Legislation Text
File #: 22-0738, Version: 1
APPROVE RESPONSES TO THE 2021-22 SAN JOAQUIN COUNTY GRAND JURY REPORT ON CYBERSECURITY, CASE NO. 0321

RECOMMENDATION
It is recommended that the City Council adopt by motion the City’s responses to the 2021-22 Civil Grand Jury Report titled “San Joaquin County and Its Seven Cities: Cybersecurity: Local Defense Against a Global Threat,” Case No. 0321, and direct the City Manager to sign the response on behalf of the City Council and transmit the response to the Presiding Judge of the San Joaquin County Superior Court.

Summary
Each year it is the duty of the San Joaquin Civil Grand Jury to examine and investigate the activities of local governments within San Joaquin County. The 2021-22 Civil Grand Jury of San Joaquin County conducted three new investigations, of which one investigation requires a response from the City. California Penal Code sections 933 and 933.05 require a response to the Presiding Judge of San Joaquin County Superior Court by September 15, 2022, to comply with the 90 days allotted to the City as a response time. A letter has been prepared for Council consideration that is responsive to the investigation.

DISCUSSION
Background
The 2021-22 Civil Grand Jury Report Investigation Case No. 0321 on Cybersecurity included several countywide findings and recommendations. Two findings and one recommendation were assigned to the City of Stockton. This report was received by the City of Stockton on June 16, 2022 (Attachment A). The Grand Jury Report evaluates the current state of digital security and disaster preparedness of the Information Technology systems of San Joaquin County and the seven incorporated cities within the county.

Present Situation
Pursuant to California Penal Code 933 and 933.05, written responses have been prepared for submittal to the Presiding Judge of the Superior Court of San Joaquin County (Attachment B).

The Information Technology Department has reviewed the Grand Jury findings and recommendation related to the report on Cybersecurity, Case No. 0321. The Grand Jury found that the City met all cybersecurity expectations except for the presence of a documented internal policy and procedure for response to a ransomware attack, but acknowledged that the City has a Cybersecurity Incident City of Stockton Page 1 of 2 Printed on 9/7/2022
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133
File #: 22-0738, Version: 1
Response Book detailing response procedures for other cyber events. Staff agree with the findings and recommendation as published, and a formal Ransomware Attack Response Policy for the City was subsequently developed and approved by the City Manager on September 1, 2022 (Attachment C), which complies with the Grand Jury Report’s deadline of November 1, 2022. The adopted policy will be transmitted to the Grand Jury along with the City’s response letter.

FINANCIAL SUMMARY
There is no financial impact in submitting this response letter to the Presiding Judge of the San Joaquin Superior Court.

Attachment A - Grand Jury Report on Cybersecurity, Case No. 0321 Attachment B - City of Stockton Response Letter, Case No. 0321 Attachment C - City of Stockton Ransomware Attack Response Policy City of Stockton Page 2 of 2 Printed on 9/7/2022
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2021−2022 San Joaquin County Grand Jury
Working Title 1: Working Title 2 (Case No. xx20)
San Joaquin County and Its Seven Cities:

Cybersecurity: Local Defense Against a Global Threat
Case #0321
Summary
We hear reports on a daily basis of cyberattacks occurring around the world. These attacks are becoming increasingly sophisticated, disruptive and expensive. Attacks on government agencies can disrupt essential services, crippling communities. Agencies small and large are equally vulnerable. There is an ever-growing demand for stolen data in an underground market.

Compromise of information has proven to be a serious threat on the cyber battleground, both domestically and internationally. Bad actors hack intelligence, media and essential service systems.

Other disasters such as floods, fires, storms or prolonged power outages can interrupt essential services if providers’ information systems are not adequately secure. According to one expert witness interviewed by the 2021-2022 Grand Jury, “World War III will be fought in cyberspace, not on the battlefield.”
Grand Jury members are not technical experts but sought to understand the cybersecurity landscape and local governments’ management of their cybersecurity risks and vulnerabilities. In this investigation of information security of San Joaquin County and its seven cities, the 2021-2022 Grand Jury made a “point in time” assessment of each entity’s Information Systems Department (ISD), focusing primarily on cybersecurity. The Grand Jury considered nine elements of any ISD and, through research of relevant literature and input from industry experts, established an expected standard for each of those elements. The Grand Jury then evaluated each of the agencies with respect to those expectations.

The Grand Jury concluded that San Joaquin County (SJC) has mature and robust security policies and systems. The County’s security architecture provided a model in evaluating each city’s systems.

The Grand Jury determined that Escalon, Lodi and Stockton met a lay person’s expectations for cybersecurity but were lacking either a formal Business Continuity Plan (BCP) or Disaster ATTACHMENT A 135
2 Preparedness Plan (DPP). Lathrop, Manteca and Tracy were found to have adequate security systems in place but lack documented plans for both Business Continuity and Disaster Preparedness. Ripon was found to need improvement in meeting several of the Grand Jury’s expectations, with lack of personnel being their greatest challenge.

The Grand Jury recommends that the County and affected cities:
• develop, adopt and implement a Business Continuity Plan; • develop, adopt and implement an IT Disaster Preparedness Plan; • remedy specific cybersecurity risks found in this investigation; and • the City of Ripon undergo a data system security review by an expert third party to assess the City’s IT systems and protocols.

The Grand Jury recognizes that cybersecurity is a dynamic process, a continually moving target which needs constant monitoring and updating.

Glossary
• Access: The ability and means to communicate with or otherwise interact with a system; to use system resources to manage information; to gain knowledge of the information the system contains; to control system components and functions.
• Actor, bad actor, threat actor or attacker: An individual, group, organization or government that attempts or executes an attack.
• Attack: An intentional attempt to gain unauthorized access to system services, resources or information; an attempt to compromise system integrity. • Authentication: The process of verifying the identity or other attributes of an entity (user, process or device).
• Authorization: A process of determining, by evaluating applicable access control information, whether a subject is allowed to have the specified types of access to a particular resource. • BCP: Business Continuity Plan. A document that sets forth procedures for the continued performance of core capabilities, critical operations and user services during any disruption or potential disruption.
• CCISDA: California County Information Services Directors Association. This is the official organization of the county IT directors and chief information officers throughout the state of California. CCISDA represents all 58 California counties in the area of information technology in county government.
• CIO: Chief Information Officer.
• Computer Aided Dispatch Systems: Used by dispatchers, call-takers, and 911 operators to prioritize and record incident calls, identify the status and locations of responders in the field and effectively dispatch responders.
• Confidentiality: A property of information that is not disclosed to users, processes or devices unless they have been authorized to access the information. • Cyber event or incident: An occurrence that actually or potentially results in adverse consequences to an information system or the information that the system processes, stores or transmits and that may require a response action to mitigate the consequences. An occurrence that constitutes a violation or imminent threat of violation of security policies, security procedures or acceptable use policies.

ATTACHMENT A 136
3 • Cybersecurity: The activity, process, ability, capability or state whereby information and communications systems and the information contained therein are protected from and/or defended against damage, unauthorized use, modification or exploitation. • DPP: Disaster Preparedness Plan. A document that sets forth policies and procedures for restoration of information systems after a critical incident or event from any source. The plan addresses interim restoration of information operations in the short and medium term and full restoration of all capabilities in the longer term.
• Data integrity: The property that data is complete, intact and trusted and has not been modified or destroyed in an unauthorized or accidental manner.
• Data security policy: A rule or set of rules that governs the acceptable use of an organization's information and services to a level of acceptable risk and the means for protecting the organization's information assets.
• Encryption: The process of converting data into a form that cannot be easily understood by unauthorized people or agents.
• Firewall: A capability to limit network traffic between networks and/or information systems. A hardware/software device, or a software program, that limits network traffic according to a set of rules of what access is and is not allowed or authorized. • Hacker: An unauthorized user who attempts to or gains access to an information system. • ISD: Information Systems Department.
• IT: Information Technology.
• KnowB4: A proprietary security awareness training platform. KnowB4 is used by agencies for simulated phishing activities and other email compromise tests, as well as for other IT security training needs.
• Malware: Software that compromises the operation of a system by performing an unauthorized function or process.
• Mobile device management tool: A security software tool designed to help organizations secure, manage and monitor mobile devices such as smartphones and tablets. • Multi-factor authentication: An electronic authentication mechanism in which a user is granted access to an application only after presenting two or more pieces of evidence (factors or keys only the authentic user knows or possesses).
• Multi-layer security access: Multi-layer security refers to a system that uses numerous components to shield the IT infrastructure. It is a defense mechanism that mitigates, delays or prevents threats.
• Network or cyber infrastructure: The information and communication systems and services composed of all hardware and software that process, store and communicate information; any combination of all these elements.
• Next-generation systems: Security systems consisting of both firewall and intrusion prevention systems built in, rather than as add-ons, along with the features of basic firewalls. • Phishing: A digital form of social engineering to deceive individuals into providing sensitive information.
• Phishing test: A security training exercise designed to test users’ vulnerability and reinforce vigilance.
• Presidential Executive Order 14028: “Improving the Nation’s Cybersecurity” (issued May 12, 2021) requires agencies to enhance their cybersecurity system integrity.

ATTACHMENT A 137
4 • Ransomware: A type of malicious software designed to block access to a computer system until a sum of money is paid.
• Ransomware attack response plan: A set of predetermined and documented procedures to detect and respond to a cyber incident involving demand for ransom for recovery and restoration of data or systems.
• Records Management System: The management of records for an organization throughout the records’ life cycle.
• Redundancy: Additional or alternative systems, sub-systems, assets or processes that maintain a degree of overall functionality in case of loss or failure of another system, sub-system, asset or process. Typically applied to power supplies and data backup systems. • Vulnerability: A characteristic or specific weakness that renders an organization or asset (such as information or an information system) open to exploitation by a given threat or susceptible to a given hazard.

Wi-Fi network: A family of wireless network protocols used for local area networking of devices and internet access, allowing nearby digital devices to exchange data by radio waves.

Background
The 2008-2009 San Joaquin County Grand Jury reported on information technology security, finding that several County departments and two of the seven cities in the county met expectations for Information Technology (IT) security, while some County departments and five cities did not.

Recommendations were made and generally accepted in agency responses. In terms of technology, 2008-2009 was at least a generation ago. Government agencies use and store vast amounts of sensitive data on their residents and their employees, including personal identification data, financial data, health data and legal data. Additionally, these agencies provide services essential to our day-to-day lives, including public safety (police and fire), public works, health services, water services and community development. The Grand Jury recognizes that we are lay people, hardly experts, in the field of IT. It was the intent of the 2021-2022 Grand Jury to examine how the county and city governments within San Joaquin County are exercising due diligence to protect information, defend against future cyberattacks, maintain current disaster plans and provide ongoing training to employees in these matters.

Reason for Investigation
As stated in Presidential Executive Order 14028, “…the prevention, detection, assessment and remediation of cyber incidents is a top priority and essential to national economic security.” San Joaquin County has experienced ransomware and cybersecurity attacks firsthand. School districts, municipalities and county agencies have been victimized in recent years. Given the rise in complexity of IT, the current sophistication of cybercrime, and the essential nature of government services provided, the 2021-2022 Grand Jury undertook an investigation into the current state of security and disaster preparedness of the IT systems of San Joaquin County and the seven incorporated cities within the county.

ATTACHMENT A 138
5 Method of Investigation
The 2021-2022 Grand Jury surveyed six San Joaquin County IT department heads and the City Manager or City Administrator of each of the seven cities in the county; each responded to the survey. Subsequently, an agency IT department head or staff member, an IT consultant or a city administrator was interviewed to clarify responses and to provide additional material when applicable. The Grand Jury also interviewed independent cybersecurity experts. The expert witnesses have collectively more than 50 years’ experience at diverse levels of government ranging from county to state to national information systems and cybersecurity. IT executives from one school district were also interviewed. For this investigation, the Grand Jury interviewed 16 individuals and attended cybersecurity presentations.

The Grand Jury also reviewed numerous websites and newspaper and magazine articles relevant to this investigation. Additionally, the Grand Jury reviewed documents provided, including network diagrams, ransomware insurance policies and other items.

Materials Reviewed
• 2021-2022 San Joaquin County Grand Jury surveys
• Biden, Joseph. Executive Order on Improving the Nation’s Cybersecurity. 12 May 2021.

Executive Order#14028
• California Joint Cyber Incident Response Guide. California Office of Emergency Services Cyber Security Integration Center, 2 Aug. 2021
• Cyber Atack Preparedness in Contra Costa County. Contra Costa County Civil Grand Jury, 2021. Report 2104
• Digital Services and Innovation Strategy. San Joaquin County, 19 Nov. 2020 • How to Develop a Ransomware Remediation Plan. Rubrik, 2021 • Information Technology Security. 2018-2019 Santa Barbara County Grand Jury, 2019 • Information Technology Security: Cities and San Joaquin County. 2008/2009 San Joaquin County Grand Jury, 2009. Report No.03-08
• Ransomware Defense for Dummies--2nd Edition. 2nd ed., Cisco Umbrella, 2021 Websites Visited
• Cybersecurity & Infrastructure Security Agency. “CYBERSECURITY | CISA.” Cisa.gov, Cybersecurity and Infrastructure Security Agency, 2019, www.cisa.gov/cybersecurity. Accessed 6 May 2022.
• Federal Trade Commission, and Alvaro Puig. “Cybersecurity Advice to Protect Your Connected Devices and Accounts.” Sjgov.org, 24 Mar. 2022, www.sjgov.org/department/da/consumeralerts/consumer-alerts/2022/03/24/cybersecurity-advice-to-protect-your-connected-devices-andaccounts. Accessed 6 May 2022. • Kuykendall, By Kristal. “Cybersecurity Experts Call for More Transparency and Immediate Resources for Schools -.” The Journal, 17 Mar. 2022,
thejournal.com/Articles/2022/03/17/Cybersecurity-Experts-Call-For-More-Transparency-andImmediate-Resources-for-Schools.aspx?Page=1. Accessed 6 May 2022.

ATTACHMENT A 139
6 • Marcum Accounts Advisors. “What Is a SOC 2?” The SSAE 18 Reporting Standard - SOC 1 - SOC 2 - SOC 3 (Formerly SSAE 16), 8 Jan. 2022, www.ssae-16.com/faq/what-is-a-soc-2/.

Accessed 30 Apr. 2022.
• National Institute for Cybersecurity Careers and Studies. “Cybersecurity Glossary | National Initiative for Cybersecurity Careers and Studies.” Niccs.cisa.gov, niccs.cisa.gov/aboutniccs/cybersecurity-glossary. Accessed 6 May 2022. • Unisys. “Cyber Attacks--What You Need to Know.” Unisys, 2022, www.unisys.com. Accessed 6 May 2022.

Discussions, Findings and Recommendations
General Discussion
The Grand Jury recognizes cybersecurity is an extremely complicated topic. Specialized knowledge, experience and expertise are required for a deep understanding of what is necessary for adequate policies, systems and architecture. Lacking such specialized knowledge, the Grand Jury researched numerous sources, including recognized experts in this field to determine the following elements of any ISD and to define the following expectations for adequate cybersecurity in today’s environment.

Expectations
• Organization: Each organization should have a detailed Organization Chart demonstrating the structure of its independent IT department. Cities lacking an independent IT department should have a chart showing where IT resides in their overall structure. • Network Diagram: Each organization should have a detailed network diagram indicating the relationships between all IT architectural elements. Best-practice guidelines suggest that this diagram be confidential.
• Data Confidentiality: Each organization should have an organization-wide policy determining data confidentiality and access control. Policy for data access should be clearly defined and deskspecific or station-specific. • Data Security: Each organization should have next-generation systems and controls to ensure both physical and cyber security for all IT assets. Next-generation firewalls and endpoint management systems provide protection against ever-evolving means of cyberattack. Data should be protected with daily or continuous backup and archival systems. Backups should be protected against corruption, external encryption and/or destruction. Agencies should require multi-factor authentication for access to network systems. • Business Continuity Plan (BCP): Each organization should have a detailed, current, comprehensive plan for restoring services in the event of disruption from any source. • Disaster Preparedness Plan (DPP): Each organization should have a formal, detailed plan to prepare for various possible IT disruptions. This plan should be tested frequently and updated regularly.
• Ransomware Policy: Each organization should have an internal (confidential) documented policy for agency response to a ransomware attack.

ATTACHMENT A 140
7 • Cyber Event Insurance: Each organization should have insurance coverage to help offset economic losses from cyber events.
• Ongoing Employee Training: Each organization should provide rigorous, frequent training and ongoing testing of all employees as an integral part of its cybersecurity profile.

Survey Results:

The table below indicates whether an agency met (M), did not meet (NM) or was in the process of meeting (IP) the nine defined expectations.

Org
Chart
Network
Diagram
Data
Confidentiality
Data
Security
BCP DPP Ransomware
Policy
Cyber
Insurance
Training

SJC M M M M M M NM M M
Escalon M M M M NM M M M M
Lathrop M M M M NM M NM NM M
Lodi M M M M IP M M M M
Manteca M M M M M M IP IP M
Ripon M M M M NM NM NM M M
Stockton M M M M M M NM M M
Tracy M M M M IP IP NM M M

1.0 San Joaquin County−Discussion
In November 2020, San Joaquin County released a three-year (2020-2023) strategic plan for ensuring continuing security, efficacy, cost-effectiveness and best-service outcomes to all end-users of County services and systems. The plan document “San Joaquin County Digital Services and Innovation Strategy” established goals for County digital service systems. These goals— Modernizing and Leveraging Our Technology Environment—address objectives for a security posture:

1. Acquire and implement cybersecurity technology to enable SJC to develop industry-leading capabilities to help mitigate and address cybersecurity risk.

2. Develop and mature security governance and processes to meet or exceed industry standards, enhance security enforcement partnerships, and strengthen County practices.

3. Develop a robust security training program for the County workforce, including enhanced training and development for the security workforce.

Excerpt from “San Joaquin County Digital Services and Innovation Strategy,” November 19, 2020 (page 6) San Joaquin County has met these objectives and continues to update and enhance these processes as the cybersecurity landscape continues to evolve.

ATTACHMENT A 141
8 San Joaquin County ISD oversees all County departments, making it one of the largest county ISDs in California. San Joaquin County ISD is an active participant in the California County Information Systems Department Association (CCISDA). This association provides opportunities for counties to share information and experiences and offers guidance, such as standards for best-practice policies.

Several large and specialized departments within the County have their own IT departments and department chiefs who report to the County’s Chief Information Officer. Additionally, SJC has a dedicated Information Security Officer. All these IT executives form a cybersecurity governance committee which meets monthly, with subgroups meeting more frequently as needed.

County ISD and Human Resource Departments conduct frequent and on-going employee training and testing using proprietary software. In addition to these County departments, several Independent Special Districts in SJC use County IT services through various memoranda of understanding.

The only element of the defined expectations not met by SJC is having an internal documented policy for response to a ransomware attack.

San Joaquin County is a model agency in the realm of information technology and maintenance of cybersecurity.

Findings
F1.1 San Joaquin County does not have a formal internal policy concerning payments or procedures in ransomware attacks. This absence of policy could cause confusion, delay and greater loss of security in the event of such an attack.

F1.2 San Joaquin County has an exemplary profile regarding cybersecurity and should serve as a model for other government agencies within San Joaquin County.

Recommendations
R1.1 By November 1, 2022, the San Joaquin County Board of Supervisors, in conjunction with San Joaquin County ISD, develop, adopt and implement a formal internal policy and procedure for response to a ransomware attack.

2.0 City of Escalon−Discussion
The City of Escalon does not have an independent IT department but has a contract agreement with Mid Valley IT to provide all IT services. In the City organization, IT functions report to the Finance and HR Directors. Each employee is given a level of access according to assigned responsibilities within their department. All employees receive information security training specific to their responsibilities as well as general security awareness training. The IT consultant employs an aggressive multi-layered approach to mitigate security threats through software and hardware protection measures. Critical or confidential data is stored in multiple cloud-based locations and systems employing numerous safeguards, including use of multi-factor authentication for access.

IT functions are protected with a standby generator and redundant backups in case of a system failure. The generator is tested periodically for functionality.

ATTACHMENT A 142
9 The City of Escalon met all but one of the expectations for adequate cybersecurity. Escalon is by far the smallest city in San Joaquin County, but by using a contracted IT service provider, Escalon is meeting its cybersecurity needs. The City of Escalon does not have a documented Business Continuity Plan.

Findings
F2.1 The City of Escalon does not have a documented Business Continuity Plan, leaving the City relatively unprepared to restore essential services in a disruptive event.

Recommendations
R2.1 By January 1, 2023, the Escalon City Council, in conjunction with Mid Valley IT, develop, adopt and implement a Business Continuity Plan.

3.0 City of Lathrop−Discussion
The City of Lathrop met six of the expectations for the nine elements considered in this investigation. Lathrop’s IT organization includes a Director of Information Technology at the cabinet leadership level, a policy strongly recommended by an IT expert for maximum IT security. Including the Director of IT in frequent, regular meetings with other department heads allows effective communication of IT security needs to all City departments.

Expectations for data confidentiality and data security were met. However, use of multi-factor authentication for system access was not universal at the time of this investigation, leaving Lathrop at higher risk of attack. Lathrop provides an unsecured public Wi-Fi network, separate from the City’s secure business network and accessible to any user. Hackers or other bad actors could take advantage of the unsecured network, possibly resulting in compromise of log-in credentials from that network and possibly exposing the City to costly liability suits. Lathrop was in the process of developing and approving a BCP and DPP plan at the time of this investigation. Similarly, the City was updating an internal policy for response to a ransomware attack. At the time of this investigation, Lathrop lacked insurance against losses incurred in a cybersecurity incident.

Findings
F3.1 The City of Lathrop does not employ multi-factor authentication universally, leaving City systems more vulnerable to the activities of bad actors.

F3.2 The City of Lathrop provides an unsecured public Wi-Fi network. Misuse of this unsecured network could expose the City to liability risks.

F3.3 The City of Lathrop does not have an approved Business Continuity Plan, rendering the City relatively unprepared to restore essential services in a disruptive event.

ATTACHMENT A 143
10 F3.4 The City of Lathrop does not have a formal internal policy or procedure to address ransomware attacks. This absence of policy could cause confusion, delay and greater loss of security in the event of such an attack.

F3.5 The City of Lathrop does not have an insurance policy covering financial losses from a cyberattack, possibly exposing City financial resources.

Recommendations
R3.1 By November 1, 2022, the Lathrop City Council, in conjunction with the City’s IT department, develop, adopt and implement a procedure for universal multi-factor authentication for access to City data.

R3.2 By November 1, 2022, the Lathrop City Council, in conjunction with the City’s IT department, provide a secure public Wi-Fi network.

R3.3 By January 1, 2023, the Lathrop City Council, in conjunction with the City’s IT department, develop, adopt and implement a Business Continuity Plan.

R3.4 By November 1, 2022, the Lathrop City Council, in conjunction with the City’s IT department, develop, adopt and implement a formal internal policy and procedure for a ransomware attack.

R3.5 By January 1, 2023, the Lathrop City Council, in conjunction with the City’s IT department, obtain an insurance policy to mitigate fiscal impact resulting from cyberattack or other critical information system loss.

4.0 City of Lodi−Discussion
The City of Lodi has a large IT division, responsible for all IT functions of the City. The division is responsible for the integrity of the City’s cyber infrastructure, maintenance and support of all hardware and software, and assuring secure access to all network resources. Lodi fell victim to a ransom attack in April 2019. That unfortunate event caused the City to change its management of cybersecurity, significantly elevating the importance of vigilance by all City staff. Lodi has implemented a robust cyber awareness training program for all City employees, incorporating education in tactics used by bad actors both inside and outside the City’s network. Monthly training is followed by testing in topics covered. Citywide campaigns occur quarterly to test employee response to phishing and other email-based attacks. The IT division head reports directly to the Deputy City Manager and meets regularly with all City department heads. The City of Lodi met all expectations for cybersecurity except for having a completed, up-to-date Business Continuity Plan.

The City has contracted a business consulting firm to create a BCP, projected to be completed and implemented by the end of June 2022.

ATTACHMENT A 144
11 Findings
F4.1 The City of Lodi does not have an approved Business Continuity Plan, rendering the City relatively unprepared to restore essential services in a disruptive event.

F4.2 The City of Lodi has implemented an excellent cyber awareness training program for all employees minimizing risk to damage from cyberattack.

Recommendations
R4.1 By January 1, 2023, the Lodi City Council, in conjunction with the City’s IT division, develop, adopt and implement a Business Continuity Plan.

5.0 City of Manteca−Discussion
The City of Manteca met seven of the nine expectations considered in this investigation. Manteca’s Information Technology department is independent in the City’s organization. The department director reports directly to the City Manager and meets weekly with other City department heads.

User level of access is determined by position, background and other departmental factors.

Employees are trained on a regular basis. The training is mandatory for all employees. Hard drives are encrypted, and a Mobile Device Management tool is used for tablets, laptops and phones.

Manteca’s ISD is currently updating its Information Technology Security Policy. This comprehensive policy has not been updated since 2010. Manteca’s Department of Information Technology and Innovation is collaborating with City administration and the City Attorney to update all policies relating to information technology security. Similarly, the City is in the process of bringing both hardware and software systems up to next-generation standards with new firewall, malware, user access, backup systems and applications in place. Employee training is executed through KnowB4, an industry-standard cybersecurity training program which includes phishing and other email compromise testing.

Regarding firewalls and switches, roughly 60% still operate off single rather than dual or redundant power supplies. Over the next five years, the City is phasing out older devices as they reach end-oflife.

Findings
F5.1 The City of Manteca has an Information Technology Security Policy which has not been updated since 2010, leaving the City relatively unprepared for a cyber event.

F5.2 The City of Manteca lacks a policy and procedure for ransomware attacks. This absence of policy could cause confusion, delay, and greater loss of security in the event of such an attack.

F5.3 The City of Manteca has a significant number of security devices with single power supplies.

This lack of redundant power presents vulnerability in major or prolonged power outages.

ATTACHMENT A 145
12 Recommendations
R5.1 By January 1, 2023, the Manteca City Council, in conjunction with the City’s ISD, develop, approve and implement an updated Information Technology Security Policy.

R5.2 By January 1, 2023, the Manteca City Council, in conjunction with the City’s ISD, develop, approve and implement a confidential policy and procedure for response to a ransomware attack.

R5.3 By March 1, 2023, the Manteca City Council, in conjunction with the City’s ISD, develop, approve and adopt an updated timeline to replace single-powered units with dual-powered or redundant-powered units in their network architecture.

6.0 City of Ripon−Discussion
The City of Ripon has experienced turnover and vacancies in the IT Department in the past year.

The Director of IT resigned in early 2021. Subsequently, another IT Director was hired but resigned within three months. The City has contracted with a former IT employee as a temporary IT Director and is currently updating the job description for a permanent director of the IT functions.

The City’s organization chart does not include an IT department or department head. The only IT position shown is within the Police Department.

Data confidentiality is maintained through a three-tiered access structure. Management supervisors for each City department determine who has access to appropriate information.

Sensitive data is held within a Computer Aided Dispatch Program or a Records Management System within the IT division of the Ripon Police Department. The sensitivity of data with all other City departments is determined by supervisors.

Findings
F6.1 It is unclear in the City of Ripon’s Organization Chart where responsibilities for IT and IT security lie, creating confusion over who is responsible to act in a disruptive event.

F6.2 The City of Ripon has a rudimentary network diagram outlining the City’s router and firewall relationship with networks used, but the diagram lacks detail, leaving uncertainty about data security.

F6.3 Although the City of Ripon met expectations in the areas of data confidentiality and security, lack of IT staff and leadership leaves these areas vulnerable to cyberattack.

F6.4 The City of Ripon lacks a Business Continuity Plan, rendering the City relatively unprepared to restore essential services in a disruptive event.

F6.5 The City of Ripon does not have a Disaster Preparedness Plan, leaving the City at risk for significant delay and cost to restore IT systems in the event of a disaster.

F6.6 The City of Ripon does not have a formal policy or procedure to address ransomware attacks. This absence of policy could cause confusion, delay and greater loss of security in the event of an attack.

ATTACHMENT A 146
13 Recommendations
R6.1 By January 1, 2023, the Ripon City Council develop and make public an updated City Organization chart showing details of the City’s IT functions, including all IT positions.

R6.2 By January 1, 2023, the Ripon City Council develop and adopt a detailed Network Diagram to decrease security vulnerabilities.

R6.3 By January 1, 2023, the Ripon City Council obtain a third-party security review of the City’s IT department assets, positions, and policies and an evaluation of data confidentiality, security systems and protocols.

R6.4 By January 1, 2023, the Ripon City Council develop, adopt and implement a formal Business Continuity Plan.

R6.5 By January 1, 2023, the Ripon City Council develop, adopt and implement a formal Disaster Preparedness Plan for IT functions.

R6.6 By January 1, 2023, the Ripon City Council develop, adopt and implement a formal internal policy and procedure for response to a ransomware attack.

7.0 City of Stockton−Discussion
The City of Stockton has a large IT department that oversees IT functions for all the City’s other departments. Data confidentiality and user access are determined departmentally, following uniform standards. Information is protected by many safeguards aiming not only to minimize risk of penetration but also to detect any breach that might occur. Stockton has both a BCP and a DPP.

Stockton is one of very few cities having license to use a cybersecurity tool integrating the City with the State of California’s Office of Emergency Services. Stockton’s IT Director meets weekly with other department heads, updating them on all matters related to cybersecurity.

Stockton met each of the cybersecurity expectations except for the presence of a documented internal policy and procedure for response to a ransomware attack. However, the City does have a Cybersecurity Response Book detailing response procedures for other cyber events. Employee security awareness training is required every six months.

Findings
F7.1 The City of Stockton does not have a formal internal policy concerning payments or procedures in ransomware attacks. This absence of policy could cause confusion, delay and greater loss of security in the event of an attack.

F7.2 The City of Stockton has a large IT Department which places cybersecurity and disaster preparedness at a high priority, minimizing risk to the City’s information and service systems.

ATTACHMENT A 147
14 Recommendations
R7.1 By November 1, 2022, the Stockton City Council, in conjunction with the City’s IT department, develop, adopt and implement a formal internal policy and procedure for response to a ransomware attack.

8.0 City of Tracy−Discussion
The City of Tracy met all expectations for cybersecurity or was in the process of meeting them when surveyed. The City has an Information Technology Division, which is part of the Finance Department. This division supports all departments and functions of the City except water treatment. Data confidentiality and security are guaranteed with industry-leading, next-generation firewalls and network access controls. Data storage, backup and cybersecurity are monitored continually. The IT Manager meets every two weeks with all other City department heads to address IT issues, including cybersecurity.

Tracy does not require encryption of thumb drives used on City devices, a requirement that is considered a “best practice” by an expert witness.

Tracy does not have either a formal Business Continuity Plan or Disaster Preparedness Plan in place but is in the process of developing both. The BCP was scheduled to be complete in April 2022.

Completion date for the DPP was not specified by the City.

Findings
F8.1 Lacking a requirement for encryption of thumb drives used on City devices exposes the City of Tracy to potential data theft and contamination.

F8.2 The City of Tracy lacks a completed Business Continuity Plan, rendering Tracy relatively unprepared to restore essential services in a disruptive event.

F8.3 The City of Tracy lacks a completed Disaster Preparedness Plan, leaving Tracy at risk for delay and cost to restore IT systems in the event of a disaster.

Recommendations
R8.1 By November 1, 2022, the Tracy City Council, in conjunction with the IT division, develop, adopt and implement a policy requiring encryption of thumb drives used on City devices.

R8.2 By January 1, 2023, the Tracy City Council, in conjunction with the IT division, develop, adopt and implement a formal Business Continuity Plan.

R8.3 By January 1, 2023, the Tracy City Council provide the Grand Jury with an updated formal Disaster Preparedness Plan.

ATTACHMENT A 148
15 Conclusion
San Joaquin County is well protected regarding cybersecurity. The seven cities in the county vary with respect to Grand Jury expectations, most being well secured but lacking defined plans for Business Continuity and IT Disaster Preparedness. Cybersecurity is an evolving concern and requires ongoing efforts by government entities to remain current and vigilant against risks to their Information Systems.

In this investigation the Grand Jury learned from cybersecurity experts that three key elements lead to maximum agency cybersecurity:
• a dedicated information security position within each organization, • a “seat at the table” with other agency department heads in regular meetings, and • a rigorous employee education and training program in cybersecurity matters.

Disclaimers
Grand Jury reports are based on documentary evidence and the testimony of sworn or admonished witnesses, not on conjecture or opinion. However, the Grand Jury is precluded by law from disclosing such evidence except upon the specific approval of the Presiding Judge of the Superior Court, or another judge appointed by the Presiding Judge (Penal Code Section 911. 924.1 (a) and 929). Similarly, the Grand Jury is precluded by law from disclosing the identity of witnesses except upon an order of the court for narrowly defined purposes (Penal Code Sections 924.2 and 929).

Response Requirements
California Penal Code Sections 933 and 933.05 require that specific responses to all findings and recommendations contained in this report be submitted to the Presiding Judge of the San Joaquin County Superior Court within 90 days of receipt of the report.

The San Joaquin County Board of Supervisors and the City Councils of each city addressed shall respond to all findings and recommendations specific to their city.

Mail or hand deliver a hard copy of the response to:

Honorable Michael D. Coughlan, Presiding Judge
San Joaquin County Superior Court
180 E Weber Ave, Suite 1306J
Stockton, California 95202
Also, please email a copy of the response to Ms. Trisa Martinez, Staff Secretary to the Grand Jury, at [email protected]
ATTACHMENT A 149

ATTACHMENT B
September 14, 2022
Honorable Michael D. Coughlan, Presiding Judge
San Joaquin County Superior Court
180 E. Weber Avenue, Suite 1306J
Stockton, CA 95202
CITY OF STOCKTON RESPONSE TO SAN JOAQUIN COUNTY GRAND JURY 2021- 2022 CASE NO. 0321 SAN JOAQUIN COUNTY AND ITS SEVEN CITIES:

CYBERSECRUITY: LOCAL DEFENSE AGAINST A GLOBAL THREAT___________ The City of Stockton received the Grand Jury Report on June 16, 2022, regarding findings and recommendations related to Cybersecurity in San Joaquin County and the seven incorporated cities within the county. In general, the City agrees with the findings and is providing additional information in the below responses to the findings and recommendations.

In accordance with Sections 933 and 933.05 of the California Penal Code, the City Council of the City of Stockton offers the following responses to the Grand Jury Report on the above-referenced case. As referenced under Response Requirements, the Stockton City Council is responding to the Findings and Recommendations F7.1, F7.2, and R7.1.

Findings:

F7.1 The City of Stockton does not have a formal internal policy concerning payments or procedures in ransomware attacks. This absence of policy could cause confusion, delay and greater loss of security in the event of an attack.

RESPONSE:

The City agrees with this finding.

OFFICE OF THE CITY MANAGER
City Hall  425 N. El Dorado Street  Stockton, CA 95202-1997  209 / 937-8212  Fax 209 / 937-7149 www.stocktonca.gov
150
Honorable Michael D. Coughlan, Presiding Judge ATTACHMENT B September 14, 2022

Page 2 ends

F7.2 The City of Stockton has a large IT Department which places cybersecurity and disaster preparedness at a high priority, minimizing risk to the City’s information and service systems.

RESPONSE:

The City agrees with this finding.

Recommendations:

R7.1 By November 1, 2022, the Stockton City Council, in conjunction with the City’s IT department, develop, adopt and implement a formal internal policy and procedure for response to a ransomware attack.

RESPONSE:

A formal internal policy and procedure for response to a ransomware attack was approved by the City Manager on September 1, 2022, and presented to the City Council at its September 13, 2022 public meeting. The approved policy is attached.

HARRY BLACK

CITY MANAGER
Attachment
151
RANSOMWARE ATTACK RESPONSE POLICY 14.01.020
SUBJECT: RANSOMWARE ATT ACK, INFORMATON

SECURITY
NUMBER: 14.01 .020
RESPONSIBLE OFF ICER:

City Manager
EFFECTIVE DATE:
09/01 /2022 ,
POLICY OWNER:

Director of IT, Information Technology
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POLICY CONT ACT:

Director of IT, Information Technology
APPRO /ED:
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POLICY
The purpose of this policy is to provide direction on the appropriate ransomware response if the City is faced with a ransomware attack.

Upon discovery that a ransomware attack is occurring or has occurred the Information Technology Department will take the following action:

Notify City Manager's Office
Notify City Attorney's Office
Notify the City Council
Contact appropriate Federal and State Law Enforcement agencies.

Contact Cyber Insurance Provider
If the attackers demand payment to recover files or to refrain from disseminating captured files to the public or by any other means tarnish the reputation or disrupt city operations, then the City Manager or designee in consultation with the stakeholders mentioned above will decide, based on the information and circumstances available, on what the appropriate response is to get the best outcome for the City.

RESPONSIBILITIES
Director of Information Technology
@ Notify the City Manager's and the City Attorney's Offices * Notify the appropriate Federal and State law enforcement agencies * Contact the City's Cyber Insurance provider
* Provide situational updates to the City Manager
City Manager
* Notify the City Council
* In consultation with stakeholders, formulate the ransomware response plan.

City Council
* Provide the City Manager with the authority to enact the ransomware response plan.

ATTACHMENT C
152
City Attorney
@ Consult with City Manager and City Council on legal aspects of ransomware response. * Work with Public Information Officer and law enforcement on press releases.

Public Information Officer
* Work with City Attorney and law enforcement on information provided in press releases Information Technology Department
* Work with cyber insurance providers experts to assist with containment and recovery * Work with law enforcement agencies on evidence gathering * Work with other third parties assisting with the ransomware incident, as defined in the Information Technology's document titled, Cybersecunty Incident Response Playbook

RELEV ANT AUTHORITY

RELATED CITY POLICIES
Information Technoloqy Manaqement and Security Policy 44. 01. 010 RELATED aTY PROCEDURES
Cybersecunty Incident Response Playbook

RELATED FORMS, DOCUMENTS, OR LINKS
N/A

FREQUENTLY ASKED QUESTIONS
N/A

UPDATE HISTORY
09/01/2022 - Established
ATTACHMENT C 153
City of Stockton
Legislation Text
File #: 22-0750, Version: 1

APPROVE A RESOLUTION ADOPTING A CITY COUNCIL POLICY REGARDING SINGLE-USE

PLASTICS

RECOMMENDATION
It is recommended that the City Council approve a resolution adopting a City Council Policy establishing rules to restrict, promote, and encourage environmentally sustainable practices regarding purchase and distribution of single-use plastics by City representatives and contractors.

Summary
At its meeting on July 20, 2022, the Legislation and Environmental Committee approved a recommendation to forward the attached draft City Council Policy regarding single-use plastics (Exhibit 1 to the Resolution) to the City Council for approval.

DISCUSSION
Background
On June 22, 2022, the Legislation and Environmental Committee discussed potential regulations for the reduction of single-use plastics. At the conclusion of that meeting, it directed Staff to return with a City Council Policy to address the prevalence and waste of single-use plastics in the City of Stockton.

Specifically, the Committee sought to set an industry example by establishing rules restricting, promoting, and encouraging environmentally sustainable practices for the purchase and distribution of single-use plastics by City representatives and contractors.

Present Situation
On July 20, 2022, the Committee adopted a resolution recommending that the draft policy presented by Staff be forwarded to the full Council for consideration with a few minor revisions. As revised, the draft policy restricts, promotes, and encourages environmentally sustainable practices for the purchase and distribution of single-use plastics by City representatives and contractors, including the purchase, sale, or distribution of single-use plastic foodware accessories, single-use plastic water bottles, or polystyrene products.

FINANCIAL SUMMARY
This resolution and the associated Council policy are ambiguous and will likely lead to an increase in the cost of goods and services to the City. This resolution will also make the City less attractive and less competitive in the solicitation of goods and services, thereby creating a potential impact on operations and service delivery. There may also be an adverse public health impact associated with this policy.

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Resolution No.

STOCKTON CITY COUNCIL
RESOLUTION ADOPTING CITY COUNCIL POLICY 2.08 REGARDING SINGLE-USE

PLASTICS
The City Council of the City of Stockton recognizes that plastic pollution is a persistent and growing worldwide problem; and
Pervasive plastic pollution is destructive to waterways, poisons the environment, and blights our landscapes and communities; and
The City Council seeks to promote environmentally sustainable practices in the City of Stockton through a reduction of single-use plastics, now, therefore,

BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF STOCKTON, AS FOLLOWS:

1. The above recitals are true and correct and are incorporated into, and form the basis of, the affirmations and actions included in the adoption of this Resolution.

2. The City Council adopts City Council Policy 2.08 entitled “Single-Use Plastics,” attached hereto as Exhibit 1 and incorporated by this reference.

3. The City Manager is hereby authorized to take appropriate and necessary actions to carry out the purpose and intent of this Resolution.

PASSED, APPROVED and ADOPTED: September 13, 2022 .

KEVIN J. LINCOLN II
Mayor of the City of Stockton
ATTEST:

ELIZA R. GARZA, CMC
City Clerk of the City of Stockton
155
SUBJECT: SINGLE-USE PLASTICS NUMBER: 12.08
ADOPTED DATE:
<Date>
RESOLUTION NUMBER:
<XX-#>
LAST AMENDED:
<Date>
RESOLUTION NUMBER:
<XX-#>
COUNCIL POLICY CONTACT:

City Council, Chair, Legislative Committee
CITY DEPARTMENT CONTACT:

City Manager

PURPOSE
The purpose of this policy is to promote environmentally sustainable practices in the City of Stockton through a reduction of single-use plastics.

POLICY

1. No City officer, official, or employee shall purchase, sell, or distribute any single-use plastic foodware accessories, single-use plastic water bottles, or polystyrene products while acting on behalf of the City.

2. City representatives, agents, and contractors who are acting pursuant to any contract or agreement with the City are encouraged to refrain from the purchase, sale, or distribution of any single-use plastic foodware accessories, single-use plastic water bottles, or polystyrene products while acting pursuant to such contract or agreement.

3. The products identified above may be provided as an accommodation to any person with a disability who requests such in order to enjoy equal access to the food or beverages.

4. This policy will not be applied where prohibited by local, state, or federal regulations or where the application would constitute a risk to health and safety.

DEFINITIONS
“Polystyrene” means a synthetic resin which is a polymer of styrene, used chiefly as lightweight rigid foams and films. Polystyrene foam sometimes called Styrofoam™ is generally used to make cups, bowls, plates, trays, meat trays, and egg cartons. “Single-use” means designed to be used once and then discarded, and not designed for repeated use and sanitizing.
“Foodware accessory” means all items provided alongside ready-to-eat food, including all of the following:
(1) Utensils, which is defined as forks, knives, spoons, and sporks; SINGLE-USE PLASTICS 2.08
EXHIBIT 1 156
(2) Chopsticks;
(3) Condiment cups and packets;
(4) Straws;
(5) Stirrers;
(6) Splash sticks;
(7) Cocktail sticks.

RESPONSIBILITIES
Locally Elected Officials
Promote environmentally sustainable practices in the City of Stockton through a reduction of single-use plastics.

Staff and Agents of the City
Promote environmentally sustainable practices in the City of Stockton through a reduction of single-use plastics.

RELEVANT AUTHORITY
None applicable

RELATED ADMINISTRATIVE DIRECTIVE, CITY POLICY, CITY PROCEDURE Administrative Directive: 12.02 – Standards of Conduct and Safety

17.05 – Procurement and Contract Management

17.06 – Grant Administration

RELATED FORMS, DOCUMENTS, OR LINKS
None applicable

FREQUENTLY ASKED QUESTIONS
None applicable

UPDATE HISTORY
<Date> – Major Revisions
EXHIBIT 1 157
City of Stockton
Legislation Text
File #: 22-0539, Version: 1
RESOLUTION AUTHORIZING AN AGREEMENT WITH ELEVATOR TECHNOLOGY, INC., TO

REPAIR AND UPGRADE ELEVATORS WITHIN THE FIVE PARKING FACILITIES IN DOWNTOWN

STOCKTON

RECOMMENDATION
It is recommended that the Board of the Parking Authority of the City of Stockton adopt a Resolution:

2. Authorizing the Executive Director, or designee, to take all appropriate actions to carry out the purpose and intent of this Resolution.

Summary
This action will authorize the Parking Authority’s Executive Director to execute an agreement (attached as Exhibit 1 to the Resolution) with ETI, to upgrade the elevators within the five (5) parking facilities located in the downtown Stockton area (Attachment A - Parking Facilities Map).

DISCUSSION
Background
In 2019, City Council approved Resolution No. PFA 2019-12-17-1501 (Attachment B - Resolution PFA 2019-12-17-1501), which authorized the issuance and sale of a Parking Authority Revenue Bonds, Series 2020. The new bond generated a savings of $3 million, which was allocated to the Parking Authority to fund capital projects, including elevator upgrades and the installment of a new revenue control system for its parking garages.

The five (5) parking garages in the downtown area range in construction date from 1976 to 2005. The garages each contain two (2) elevators, with the exception of the Channel Garage which has one; for a total of nine (9) elevators. All elevators are original to their buildings and require improved customer features, mechanical, and system upgrades. To determine the overall condition and requirements of the elevator upgrades, the City contracted with Kitchell CEM, Inc. (Kitchell), to conduct a full elevator assessment of the nine elevators. Kitchell assessed the elevators’ equipment and functionality to determine proper component replacement/reuse within the elevator machine rooms, hoistways, and pits. When the assessment concluded, the Garage and Passenger Elevator Site Evaluation Report (was used to specify requirements in the project solicitation.

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File #: 22-0539, Version: 1
Present Situation
On February 24, 2022, a Request for Sealed Bids (no. PUR 22-005) was issued to identify a qualified contractor with experience to repair and upgrade the existing elevators, as identified in the Kitchell evaluation report; and to provide a multi-year elevator service/maintenance agreement. One proposal was received from ETI on April 21, 2022, which met the bid requirements.

Installation of the new elevator equipment is anticipated to take 8-10 weeks per car, depending on project scope and manufacturing of required components. The project will be completed in phases, by garage, to support customer service and garage operation. An operable elevator in each garage will be maintained for public use, throughout the duration of the project. Accommodation will be made for patrons of Channel garage, as needed, while the only elevator is upgraded.

ETI was founded in 1991, by a team of experienced elevator professionals. For more than 20 years, ETI’s mission has been to provide the highest standard of excellence, reliability, and effective service, repair, modernization and installation, in Northern California. ETI is the current elevator maintenance contractor, used by the City’s parking operator, LAZ, who is supportive of the upgrade and continued service.

FINANCIAL SUMMARY
The contract amount with ETI is $957,370, which includes a twelve percent (12%) contingency to cover reimbursables and unknown issues, which may arise as some of the work must be done in the basement levels.

There is no negative financial impact to the City’s General Fund (GF) because of this action, as bond savings proceeds within the Parking Authority Enterprise Fund have sufficient funding and have been committed to this project. Funding was appropriated and budgeted in the Parking Authority fund, Parking Capital sub-fund, Parking Division account (6030-000-800007-630-631-00-60-000-000) and allocated to Capital Improvement Project EW21003.

Attachment A - Parking Facilities Map
Attachment B - Resolution_PFA_2019-12-17-1501
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Parking Facilities Map

SITE LOCATION ELEVATORS TOTAL
SPACES

YEAR BUILT
Arena Garage 310 W. Fremont
Street
2 591 2004
Market Garage 430 E. Market
Street
2 782 1988
Channel Garage 350 E. Channel
Street
1 331 1976
Coy Garage 130 N. Hunter
Street
2 569 2005
Steward Eberhardt
Garage (SEB)
15 N. El Dorado
Street
2 721 2001
COY
Garage
Channel Garage
Arena Garage
SEB Garage
Market Garage

ATTACHMENT A
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PFA 2019-12-17-1501
ATTACHMENT B 161
ATTACHMENT B 162
ATTACHMENT B 163
ATTACHMENT B 164
EXHIBIT 1
_____________________________________________________________________________ _____________________________________________________________________________

INDENTURE
by and between the

STOCKTON PUBLIC FINANCING AUTHORITY
And

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Trustee
Relating to the
$_________

STOCKTON PUBLIC FINANCING AUTHORITY
PARKING REVENUE BONDS, SERIES 2020
Dated as of February 1, 2020
_____________________________________________________________________________ _____________________________________________________________________________ ATTACHMENT B 165

TABLE OF CONTENTS
Page

ARTICLE I
DEFINITIONS: EQUAL SECURITY
Section 1.01 Definitions........................................................................................................ 4 Section 1.02 Equal Security................................................................................................ 13

ARTICLE II
ISSUANCE OF 2020 BONDS
Section 2.01 Authorization and Purpose of 2020 Bonds .................................................... 14 Section 2.02 Terms of 2020 Bonds..................................................................................... 14 Section 2.03 Redemption of 2020 Bonds ........................................................................... 15 Section 2.04 Form of 2020 Bonds ...................................................................................... 18 Section 2.05 Execution of 2020 Bonds............................................................................... 18 Section 2.06 Transfer and Payment of 2020 Bonds............................................................ 18 Section 2.07 Exchange of 2020 Bonds ............................................................................... 19 Section 2.08 2020 Bonds Registration Books .................................................................... 19 Section 2.09 Mutilated, Destroyed, Stolen or Lost 2020 Bonds......................................... 19 Section 2.10 [Reserved]...................................................................................................... 20 Section 2.11 Use of Book-Entry System for 2020 Bonds .................................................. 20

ARTICLE III
ISSUANCE OF 2020 BONDS AND APPLICATION OF PROCEEDS
Section 3.01 Procedure for the Issuance of 2020 Bonds .................................................... 21 Section 3.02 Acquisition and Construction Fund ............................................................... 22 Section 3.03 Costs of Issuance Fund .................................................................................. 23 Section 3.04 Validity of 2020 Bonds.................................................................................. 23

ARTICLE IV

REVENUES
Section 4.01 Pledge of Revenues........................................................................................ 23 Section 4.02 Receipt and Deposit of Revenues in the 2020 Installment Payment Fund ............................................................................................................... 24 Section 4.03 Establishment and Maintenance of Accounts for Use of Money in the 2020 Installment Payment Fund .................................................................... 24

ARTICLE V

COVENANTS OF THE FINANCING AUTHORITY
Section 5.01 Punctual Payment and Performance .............................................................. 26 Section 5.02 Against Encumbrances................................................................................... 27 Section 5.03 Tax Covenants ............................................................................................... 27 Section 5.04 Accounting Records and Reports................................................................... 28 Section 5.05 Prosecution and Defense of Suits .................................................................. 28 Section 5.06 Amendments to 2020 Installment Purchase Agreement................................ 28 Section 5.07 Continuing Disclosure ................................................................................... 29 ATTACHMENT B 166

TABLE OF CONTENTS
(Continued) Page
- ii -
Section 5.08 Further Assurances......................................................................................... 29

ARTICLE VI

THE TRUSTEE
Section 6.01 The Trustee .................................................................................................... 29 Section 6.02 Liability of Trustee ........................................................................................ 30 Section 6.03 Compensation and Indemnification of Trustee.............................................. 32 Section 6.04 Notice to the Trustee...................................................................................... 32

ARTICLE VII

AMENDMENT OF THE INDENTURE
Section 7.01 Amendment of the Indenture ......................................................................... 33 Section 7.02 Disqualified 2020 Bonds................................................................................ 34 Section 7.03 Endorsement or Replacement of 2020 Bonds After Amendment ................. 34 Section 7.04 Amendment by Mutual Consent .................................................................... 34

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES OF OWNERS
Section 8.01 Events of Default ........................................................................................... 35 Section 8.02 Application of Funds Upon Default............................................................... 35 Section 8.03 Institution of Legal Proceedings by Trustee .................................................. 36 Section 8.04 Non-Waiver.................................................................................................... 36 Section 8.05 Actions by Trustee as Attorney-in-Fact......................................................... 37 Section 8.06 Remedies Not Exclusive................................................................................ 37 Section 8.07 Limitation on 2020 Owners’ Right to Sue..................................................... 37

ARTICLE IX

DEFEASANCE
Section 9.01 Discharge of 2020 Bonds,.............................................................................. 38 Section 9.02 Unclaimed Money.......................................................................................... 39

ARTICLE X

MISCELLANEOUS
Section 10.01 Liability of Authority Limited to Revenues and Certain Other Funds .......... 39 Section 10.02 Benefits of the Indenture Limited to Parties and Beneficiaries ..................... 40 Section 10.03 Successor Is Deemed Included In All References To Predecessor................ 40 Section 10.04 Execution of Documents by Owners ............................................................. 40 Section 10.05 Waiver of Personal Liability.......................................................................... 41 Section 10.06 Deposit or Investment of Money in Accounts and Funds.............................. 41 Section 10.07 [Reserved]...................................................................................................... 41 Section 10.08 Destruction of Cancelled 2020 Bonds ........................................................... 41 Section 10.09 Content of Certificates ................................................................................... 42 Section 10.10 Accounts and Funds; Business Days ............................................................. 42 Section 10.11 Notices ........................................................................................................... 42 Section 10.12 CUSIP Numbers............................................................................................. 43 ATTACHMENT B 167

TABLE OF CONTENTS
(Continued) Page
- iii -
Section 10.13 Article and Section Headings and References............................................... 43 Section 10.14 Partial Invalidity............................................................................................. 43 Section 10.15 Governing Law .............................................................................................. 43 Section 10.16 Execution in Several Counterparts................................................................. 43 EXHIBIT A – FORM OF 2020 BONDS................................................................................... A-1 EXHIBIT B – FORM OF ACQUISITION AND CONSTRUCTION FUND REQUISITION B-1 EXHIBIT C – FORM OF COSTS OF ISSUANCE FUND REQUISITION ............................ C-1 ATTACHMENT B 168

INDENTURE
This Indenture (this “Indenture”), dated as of February 1, 2020, by and between the STOCKTON PUBLIC FINANCING AUTHORITY, a joint exercise of powers entity duly organized and existing under and by virtue of the laws of the State of California (the “Financing Authority”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association duly organized and existing under and by virtue of the laws of the United States of America, as trustee (the “Trustee”);
WITNESSETH:

WHEREAS, The City of Stockton (the “City”) and the former Redevelopment Agency of the City of Stockton entered into a Joint Exercise of Powers Agreement, dated as of June 18, 1990 (the “Joint Powers Agreement”), establishing the Financing Authority; WHEREAS, the Financing Authority is a joint exercise of powers entity duly organized and existing under and pursuant to Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California, as amended (the “Act”); WHEREAS, the Act authorizes and empowers the Financing Authority to issue revenue bonds to assist the Parking Authority of the City of Stockton (the “Parking Authority”) in financing and refinancing public capital improvements; WHEREAS, the Parking Authority is a local agency as defined and provided in the Act;
WHEREAS, pursuant to that certain Site and Facilities Lease, dated as of June 1, 2004 (the “Site and Facilities Lease”), the City, as lessor, leased to the Financing Authority, as lessee, certain parcels of real property situated in the City (the “Site”), and the City’s Market Street Parking Garage, the Edmund S. Coy Parking Garage, and the Stockton Events Center Parking Structure, respectively, to the Site and Facilities Lease (collectively, the “Leased Parking Facilities”);
WHEREAS, the Financing Authority issued and sold its $32,785,000 Stockton Public Financing Authority Lease Revenue Bonds, Series 2004 (Parking and Capital Projects) (the “2004 Parking Bonds”), pursuant to an Indenture of Trust (the “2004 Bonds Indenture”), dated as of June 1, 2004, by and between the Financing Authority and Wells Fargo Bank, National Association, as trustee (the “2004 Trustee”);
WHEREAS, to provide for repayment of the 2004 Parking Bonds, the Financing Authority leased the Site and the Leased Parking Facilities to the City pursuant to a Lease Agreement, dated as of June 1, 2004 (the “Lease Agreement”), by and between the Financing Authority and the City, pursuant to which the City agreed to make certain lease payments to the Financing Authority (the “Lease Payments”);
WHEREAS, pursuant to the terms of the 2004 Bonds Indenture and a Memorandum of Assignment of Lease, dated as of June 1, 2004, by and between the Financing Authority and the 2004 Trustee, the Financing Authority assigned, transferred and set over to the ATTACHMENT B 169
- 2 -
2004 Trustee, all of the Financing Authority's rights under the Lease Agreement (other than certain retained rights), including the right to receive such Lease Payments; WHEREAS, following the City’s default on certain Lease Payments due under the Lease Agreement, the 2004 Trustee sought and, on April 19, 2012, the Superior Court for the County of San Joaquin (the “Superior Court”) awarded the 2004 Trustee possession of the Leased Parking Facilities (the “2004 Parking Bonds Proceeding”); WHEREAS, the City was the debtor in a bankruptcy case under chapter 9 of Title 11 of the United States Code, Case No. 2012-32118 in the United States Bankruptcy Court for the Eastern District of California, Sacramento Division, styled In re City of Stockton, California (the “Bankruptcy Case”);
WHEREAS, the 2004 Indenture provides that, for all purposes of the 2004 Indenture provisions governing events of default and remedies, except the giving of notice of default to owners of the Bonds, National Public Finance Guarantee Corporation (“NPFG”), as the insurer of the 2004 Parking Bonds (as successor to Financial Guaranty Insurance Company) shall be deemed to be the sole owner of the 2004 Parking Bonds it has insured for so long as it has not failed to comply with its payment obligations under its policy securing payment of principal of and interest on the 2004 Parking Bonds;
WHEREAS, in connection with the Bankruptcy Case, the City agreed to a settlement (the “Settlement”) of the claims of the 2004 Trustee, on behalf of holders of the 2004 Parking Bonds, and NPFG with respect to the 2004 Parking Bonds; WHEREAS, pursuant to the terms of the Settlement, NPFG and the 2004 Trustee agreed, subject to compliance by the City, the Financing Authority and the Parking Authority with certain terms of the Settlement, to forbear enforcement of certain of their rights relating to payment of the 2004 Parking Bonds and related obligations, and to cause the 2004 Trustee to transfer to the Parking Authority all of its possessory rights, title and interest in the Site and the Leased Parking Facilities granted to it in the 2004 Bonds Parking Proceeding in exchange for, among other things, certain payments from the Parking Authority to the Trustee for the benefit of NPFG and the owners of the 2004 Parking Bonds;
WHEREAS, pursuant to the terms of the Settlement, the City Council of the City passed Resolution No. 2013-12-17-1209 on December 17, 2013 (the “Parking Authority Resolution”) authorizing the activation of the Parking Authority, and authorizing it to operate within boundaries described in the Parking Authority Resolution; WHEREAS, in furtherance of the Settlement, the City entered into a Forbearance Agreement, dated as of February 25, 2015 (the “Forbearance Agreement”), by and among the City, the 2004 Trustee, the Parking Authority, the Financing Authority and NPFG, setting forth certain terms of the Settlement, including an agreement by NPFG and the 2004 Trustee to forbear enforcement of certain of their rights relating to payment on the 2004 Parking Bonds and related obligations, subject to the compliance by the City and the Parking Authority with their obligations under the Forbearance Agreement and the 2015 Installment Sale Agreement (as defined herein);
ATTACHMENT B 170
- 3 -
WHEREAS, under the Forbearance Agreement, the City, among other things, transferred to the Parking Authority all of its rights, title and interest in the City’s Parking Facilities (as defined herein) and assigned to the Parking Authority all of the City’s rights, title and interest, as lessee, pursuant to the Site Lease, and as lessor, pursuant to the Lease Agreement, and the Parking Authority assumed all of the City’s obligation under the Site Lease and the Lease Agreement;
WHEREAS, pursuant to the terms of the Settlement, the Parking Authority entered into an Installment Sale Agreement (Parking Garages and Downtown Parking District Facilities), dated as of February 25, 2015 (the “2015 Installment Sale Agreement”), with the 2004 Trustee and NPFG, pursuant to which the Parking Authority is required to make installment payments to the 2004 Trustee for the benefit of NPFG and the owners of the 2004 Parking Bonds; and
WHEREAS, the Parking Authority now desires to prepay the 2015 Installment Sale Agreement;
WHEREAS, the Parking Authority has also identified the need to make certain capital improvements to the Parking Facilities, including the improvement of certain elevators located in the Parking Facilities (the “Improvements”); WHEREAS, the Financing Authority and the Parking Authority have determined that providing funds to prepay 2015 Installment Sale Agreement and finance the Improvements by the issuance of revenue bonds of the Financing Authority will result in demonstrable savings in borrowing costs of the Parking Authority and will result in significant public benefits to the Parking Authority;
WHEREAS, the Parking Authority will be obligated to make installment payments to the Financing Authority for the prepaying of the 2015 Installment Sale Agreement and the financing of the Improvements;
WHEREAS, by virtue of the prepayment of the 2015 Installment Sale Agreement, a portion of the 2004 Parking Bonds shall be defeased and redeemed; and WHEREAS, the Parking Authority’s obligation to make the installment payments under the Installment Purchase Agreement are secured by a pledge of certain net revenues of the Parking Facilities;
WHEREAS, in order to achieve the foregoing, the Financing Authority has authorized the issuance of its Parking Revenue Bonds, Series 2020 (the “2020 Bonds”) pursuant to the Act in an aggregate principal amount of _______ dollars ($______); WHEREAS, in order to provide for the authentication and delivery of the 2020 Bonds and to establish and declare the conditions and terms upon which the 2020 Bonds are to be issued and secured and to secure the payment of the interest on and principal of and ATTACHMENT B 171
- 4 -
redemption premiums, if any, on the 2020 Bonds, the Financing Authority has authorized the execution and delivery of the Indenture;
WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed necessary to make the 2020 Bonds, when executed by the Financing Authority and authenticated and delivered by the Trustee, valid and binding obligations of the Financing Authority payable in accordance with their terms, and to constitute the Indenture a valid and binding agreement of the parties hereto for the uses and purposes herein set forth in accordance with its conditions and terms, do exist, have happened and have been performed in the time, form and manner required by law, and the execution and delivery of the Indenture by the parties hereto has been in all respects duly authorized; NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the payment of the interest on and principal of and redemption premiums, if any, on the 2020 Bonds at any time issued and outstanding hereunder according to their tenor, and to secure the performance and observance of all the agreements, conditions, covenants and terms therein and herein set forth, and to declare the conditions and terms upon and subject to which the 2020 Bonds are to be issued and received, and in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the 2020 Bonds by the registered owners thereof, and for other valuable considerations, the receipt whereof is hereby acknowledged, the Financing Authority does hereby covenant and agree with the Trustee, for the benefit of the respective holders from time to time of the 2020 Bonds, as follows:

ARTICLE I
DEFINITIONS: EQUAL SECURITY
SECTION 1.01 Definitions. Unless the context otherwise requires, the terms defined in this section shall for all purposes hereof and of any Supplemental Indenture and of any certificate, opinion, request or other document herein or therein mentioned have the meanings herein specified:
2015 Installment Sale Agreement
“2015 Installment Sale Agreement” means the Installment Sale Agreement (Parking Garages and Downtown Parking District Facilities), dated as of February 25, 2015, by and between National Public Finance Guarantee Corporation, Wells Fargo Bank, National Association and the Parking Authority.
2020 Bonds
“2020 Bonds” means the Financing Authority’s Parking Revenue Bonds, Series 2020, authorized, issued and delivered hereunder in accordance with Article II that are at any time Outstanding pursuant hereto.

ATTACHMENT B 172
- 5 -
2020 Installment Purchase Agreement
“2020 Installment Purchase Agreement” means that certain 2020 Installment Purchase Agreement, dated as of February 1, 2020, by and between the Parking Authority and the Financing Authority, as originally executed and as it may from time to time be amended in accordance therewith.
2020 Installment Payment Fund
“2020 Installment Payment Fund” means the Stockton Public Financing Authority 2020 Installment Payment Fund established pursuant to Section 3.02. 2020 Installment Payments
“2020 Installment Payments” shall have the meaning given in the 2020 Installment Purchase Agreement.
2020 Reserve Account
“2020 Reserve Account” means the account within the 2020 Installment Payment Fund by that name established pursuant to Section 3.03.
2020 Reserve Requirement
“2020 Reserve Requirement” means, as of any date of determination, the least of (a) ten percent (10%) of the proceeds of the 2020 Bonds (or, if there is less than 2% net original issue discount or premium, 10% of the original stated principal amount of the 2020 Bonds), or (b) the maximum annual 2020 Installment Payments payable under the 2020 Installment Agreement in the then current or any future one-year period ending on March 1, or (c) one hundred twenty-five per cent (125%) of the average annual 2020 Installment Payments payable under the 2020 Installment Agreement in the then current and all future one-year periods ending on March 1, all as computed by the Parking Authority under the Code and specified in writing to the Trustee.

Acquisition and Construction Fund
“Acquisition and Construction Fund” means the Stockton Public Financing Authority Parking Revenue Bonds, Series 2020 Acquisition and Construction Fund established pursuant to Section 3.02.

Act
“Act” means the Joint Exercise of Powers Act (being Chapter 5 of Division 7 of Title 1 of the Government Code of the State, as amended) and all laws amendatory thereof or supplemental thereto.

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Business Day
“Business Day” means any day (other than a Saturday, a Sunday or a legal holiday) on which banks in New York, New York, are open for business and on which the Trustee is open for business at its Principal Corporate Trust Office.

Certificate of the Financing Authority
“Certificate of the Financing Authority” means an instrument in writing signed by the Treasurer, or by any other officer of the Financing Authority duly authorized by the Financing Authority for that purpose.

Closing Date
“Closing Date” means February 2020, being the date of delivery of the 2020 Bonds to the Original Purchaser.

City
“City” means the City of Stockton, a municipal corporation and chartered city duly organized and existing under and by virtue of the Constitution and laws of the State and its charter.

Code
“Code” means the Internal Revenue Code of 1986, as amended.

Costs of Issuance
“Costs of Issuance” means all items of expense directly or indirectly payable by or reimbursable to the Financing Authority or the Parking Authority related to the authorization, execution and delivery of the 2020 Installment Purchase Agreement, the Indenture and the sale of the 2020 Bonds, including, but not limited to, costs of preparation and reproduction of documents, costs of rating agencies and costs to provide information required by rating agencies, filing and recording fees, initial charges and fees of the Trustee, legal charges and fees, fees and disbursements of consultants and professionals, fees and expenses of the underwriter of the 2020 Bonds, and charges and fees for preparation, execution and safekeeping of the 2020 Bonds, and any other charge, cost or fee in connection with the original execution and delivery of the 2020 Bonds.

Costs of Issuance Fund
“Costs of Issuance Fund” means the Stockton Public Financing Authority Parking Revenue Bonds, Series 2020 Costs of Issuance Fund established pursuant to Section 3.03.

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Escrow Agent
“Escrow Agent” means a bank or trust company doing business and having a corporate trust office in Los Angeles or San Francisco, California, having a combined capital (exclusive of borrowed capital) and surplus of at least one hundred million dollars ($100,000,000), subject to supervision or examination by a federal or state banking authority, and having the corporate power and authority to accept the trusts created by a deposit made pursuant to Section 9.01(c). If such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purpose of this definition the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.

Event of Default
“Event of Default” means an event defined as such in Section 8.01.

Financing Authority
“Financing Authority” means the Stockton Public Financing Authority, a joint exercise of powers entity duly organized and existing under and by virtue of the Act.

Fiscal Year
“Fiscal Year” means the twelve-month period terminating on June 30 of each year, or any other annual accounting period hereafter selected and designated by the Financing Authority as its Fiscal Year in accordance with applicable law.

Improvements
The term “Improvements” shall have the meaning ascribed thereto in the recitals hereof.

Indenture
“Indenture” means this Indenture dated as of February 1, 2020, by and between the Financing Authority and the Trustee, as originally executed and as it may from time to time be amended or supplemented by all Supplemental Indentures executed pursuant to the provisions hereof.

Independent Certified Public Accountant
“Independent Certified Public Accountant” means any firm of certified public accountants duly licensed and entitled to practice and practicing as such under the laws of the State, appointed and paid by the Financing Authority, and each of whom -- (1) is in fact independent and not under the domination of the Financing Authority; ATTACHMENT B 175
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(2) does not have a substantial financial interest, direct or indirect, in the operations of the Financing Authority; and
(3) is not connected with the Financing Authority as a member, officer or employee of the Financing Authority, but which firm may be regularly retained by the Financing Authority to audit the accounting records of the Financing Authority and make reports thereon to the Financing Authority.

Information Services
“Information Services” means Electronic Municipal Market Access System (referred to as “EMMA”), a facility of the Municipal Securities Rulemaking Board, at www.emma.msrb.org; provided, however, in accordance with then current guidelines of the Securities and Exchange Commission, Information Services shall mean such other organizations providing information with respect to called Notes as the Financing Authority may designate in writing to the Trustee.

Interest Account
“Interest Account” means the account within the 2020 Installment Payment Fund by that name established pursuant to Section 4.03.

Interest Payment Date
“Interest Payment Date” means a date on which interest is due on the 2020 Bonds, being March 1 and September 1 of each year to which reference is made, commencing on [September 1, 2020].

Moody’s
“Moody’s” means Moody’s Investors Service, and its successors or assigns, but only to the extent that such entity is then rating any Parity Obligations at the request of the Financing Authority.

Opinion of Counsel
“Opinion of Counsel” means a written opinion of counsel of recognized national standing in the field of law relating to municipal bonds, retained by the Financing Authority.

Original Purchaser
“Original Purchaser” means the original purchaser of the 2020 Bonds upon their delivery by the Trustee on the Closing Date.

Outstanding
“Outstanding” means, when used with reference to 2020 Bonds and subject to the provisions of Section 7.02, all 2020 Bonds except --
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(1) 2020 Bonds theretofore cancelled by the Trustee or surrendered to the Trustee for cancellation;
(2) 2020 Bonds paid or deemed to have been paid within the meaning of Section

9.01; and
(3) 2020 Bonds in lieu of or in substitution for which other 2020 Bonds shall have been executed, issued and delivered by the Financing Authority pursuant hereto.

Owner
“Owner” means any person who shall be the registered owner of any Outstanding 2020 Bonds.

Parking Facilities
“Parking Facilities” means the parking facilities (including, without limitation, surface parking lots, parking meters, metered spaces, and other parking garages) owned, leased, or licensed by the Parking Authority or in which the Parking Authority holds a direct or indirect interest (other than liens, encumbrances or assessments) existing on the date hereof and including all additions, betterments, extensions and improvements to such parking facilities or any part thereof and hereafter acquired or constructed.

Permitted Investments
“Permitted Investments” means any of the following obligations to the extent then authorized by law for the investment of money of the Financing Authority:
(1) Direct obligations (including obligations issued or held in book-entry form on the books of) the Department of the Treasury of the United States of America; (2) Direct obligations of any of the following federal agencies, which obligations represent the full faith and credit of the United States of America:
∑ Export-Import Bank
∑ Farm Credit System Financial Assistance Corporation
∑ Rural Economic Community Development Administration (formerly the Farmers Home Administration)
∑ General Services Administration
∑ U.S. Maritime Administration
∑ Small Business Administration
∑ Government National Mortgage Association (GNMA)
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∑ U.S. Department of Housing & Urban Development (PHA’s) ∑ Federal Housing Administration
∑ Federal Financing Bank;
(3) Direct obligations of any of the following federal agencies, which obligations are not fully guaranteed by the full faith and credit of the United States of America:
∑ Senior debt obligations rated “Aaa” by Moody’s and “AAA” by S&P issued by the Federal National Mortgage Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC)
∑ Obligations of the Resolution Funding Corporation (REFCORP) ∑ Senior debt obligations of the Federal Home Loan Bank System ∑ Senior debt obligations of other Government Sponsored Agencies; (4) U.S. dollar denominated deposit accounts, federal funds and bankers’ acceptances with domestic commercial banks which have a rating on their short-term certificates of deposit on the date of purchase of “A-l” or “A-1+” by S&P and “P-1” by Moody’s and maturing no more than three hundred sixty (360) days after the date of purchase. (Ratings on holding companies are not considered as the rating of the bank);
(5) Commercial paper which is rated at the time of purchase in the single highest classification, “A-1+” by S&P and “P-1” by Moody’s and which matures not more than two hundred seventy (270) days after the date of purchase;
(6) Investments in a money market fund rated “AAAm” or “AAAm-G” by S&P, including any such fund managed, advised or sponsored by the Trustee or any of its affiliates; (7) Pre-refunded municipal obligations defined as follows: Any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and
(A) which are rated, based on an irrevocable escrow account or fund (the “escrow”), in the highest rating category of S&P and Moody’s or any successors thereto; or (B) (i) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or obligations described in paragraph (1) above, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (ii) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or ATTACHMENT B 178
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other obligations described in this paragraph on the maturity date or dates specified in such irrevocable instructions, as appropriate;
(8) General obligations of states with a rating of at least “A2/A” or higher by both Moody’s and S&P;
(9) Investment agreements (supported by appropriate opinions of counsel) with notice to S&P;
(10) Shares in the California Asset Management Program (established pursuant to Title 1, Division 7, Chapter 5 of the Government Code of the State) that invests exclusively in investments permitted by Section 53635 of the Government Code of the State, as now existing and as it may be amended from time to time;
(11) The Local Agency Investment Fund (established under Sections 5360053609 of the California Government Code, as amended or supplemented from time to time); and (12) Other forms of investment agreements (including repurchase agreements) with notice to S&P.

Unless otherwise provided in this Indenture, the value of the above investments shall be determined at fair market value.

The Trustee shall have no responsibility to monitor the ratings of Permitted Investments after the initial purchase of an investment in such Permitted Investments.

Principal Corporate Trust Office
“Principal Corporate Trust Office” means the corporate trust office of the Trustee in Los Angeles, California, or such other office designated by the Trustee from time to time.

Principal Subaccount
“Principal Subaccount” means the subaccount within the Redemption Account by that name established pursuant to Section 4.03.

Qualified Reserve Fund Credit Instrument
“Qualified Reserve Fund Credit Instrument” means an irrevocable standby or direct-pay letter of credit or surety bond issued by a commercial bank or insurance company and deposited with the Trustee pursuant to Section 4.03(c) provided that all of the following requirements are met: (i) the long-term credit rating of such bank or insurance company at the time of delivery of such letter of credit or surety bond is rated in one of the two highest rating categories by Moody’s or S&P; (ii) such letter of credit or surety bond has a term of at least twelve (12) months; (iii) such letter of credit or surety bond has a stated amount at least equal to the portion of the 2020 Reserve Requirement with respect to which funds are proposed to be released pursuant to Section 4.03(c); and (iv) the Trustee is authorized pursuant to the terms of such letter of credit or surety bond to draw thereunder an amount equal to any deficiencies which may exist ATTACHMENT B 179
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from time to time in the amounts available to repay the principal of and interest on the 2020 Bonds.

Record Date
“Record Date” means, with respect to any Interest Payment Date, the day of the month that is the fifteenth (15th) day of the month prior to such Interest Payment Date.

Redemption Account
“Redemption Account” means the account within the 2020 Installment Payment Fund by that name established pursuant to Section 4.03.

Representation Letter
“Representation Letter” means the blanket letter of representation from the Financing Authority to The Depository Trust Company, New York, New York, relating to its book-entry securities.

Requisition of the Financing Authority
“Requisition of the Financing Authority” means an instrument in writing signed by the Chairperson, Vice-Chairperson, Executive Director or Treasurer of the Financing Authority, or by any other officer of the Financing Authority duly authorized by the Financing Authority for that purpose.

Requisition of the Parking Authority
“Requisition of the Parking Authority” means an instrument in writing signed by the Chairperson, the Executive Director, or the Treasurer of the Parking Authority, or by any other officer of the Parking Authority duly authorized by the Parking Authority for that purpose.

Revenues
“Revenues” means all 2020 Installment Payments paid by the Parking Authority and received by the Financing Authority, its successors and assigns under the 2020 Installment Purchase Agreement, together with all income from any investment pursuant to Section 10.06 of any money in any account or fund established pursuant hereto.

Securities Depositories
“Securities Depositories” means The Depository Trust Company, New York, New York, and its successors and assigns or if (a) the then Depository resigns from its functions as securities depository of the Notes, or (b) the Financing Authority discontinues use of the Depository pursuant to Section 2.15 hereof, any other securities depository which agrees to follow the procedures requested to be followed by a securities depository in connection with the Notes and which is selected by the Financing Authority with the consent of the Trustee.

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S&P
“S&P” means S&P Global Ratings, a Standard and Poor’s Financial Services LLC business, and its successors or assigns, but only to the extent that such entity is then rating any Parity Obligations at the request of the Financing Authority.

State
“State” means the State of California.

Supplemental Indenture
“Supplemental Indenture” means any indenture, duly executed and delivered by the Financing Authority and the Trustee and in full force and effect, which is amendatory hereof or supplemental hereto; but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder.

Tax Certificate
“Tax Certificate” means the Tax Certificate dated as of __________, 2020, concerning certain matters pertaining to the use and investment of proceeds of the 2020 Bonds, executed by the Financing Authority and the Parking Authority, including any and all exhibits attached thereto.

Treasurer
“Treasurer” means the Treasurer of the Financing Authority.

Trustee
“Trustee” means Wells Fargo Bank National Association, a national banking association duly organized and existing under and by virtue of the laws of the United States of America, at its Principal Corporate Trust Office, or any successor Trustee which may at any time be substituted in place of the original or any successor Trustee hereunder as provided in Section

6.01. Written Request of the Financing Authority
“Written Request of the Financing Authority” means an instrument in writing signed by the Chairperson, Vice-Chairperson, Executive Director or Treasurer of the Financing Authority, or by any other officer of the Financing Authority duly authorized by the Financing Authority for that purpose.

SECTION 1.02 Equal Security. In consideration of the acceptance of the 2020 Bonds by the Owners thereof, this Indenture shall be deemed to be and shall constitute a contract by and among the Financing Authority, the Trustee and the Owners from time to time of all 2020 Bonds authorized, executed, authenticated and delivered hereunder and then Outstanding to secure the full and final payment of the interest on and principal of and redemption premiums, if ATTACHMENT B 181
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any, on all 2020 Bonds which may from time to time be authorized, executed, authenticated and delivered hereunder, subject to the agreements, conditions, covenants and terms contained herein; and all agreements and covenants set forth herein to be performed by or on behalf of the Financing Authority shall be for the equal and proportionate benefit, protection and security of all Owners of the 2020 Bonds without distinction, preference or priority as to security or otherwise of any 2020 Bonds over any other 2020 Bonds by reason of the number or date thereof or the time of authorization, sale, execution, authentication or delivery thereof or for any cause whatsoever, except as expressly provided herein or therein.

ARTICLE II
ISSUANCE OF 2020 BONDS
SECTION 2.01 Authorization and Purpose of 2020 Bonds. The Financing Authority has reviewed all proceedings heretofore taken relative to the authorization of the 2020 Bonds and has found, as a result of such review, and hereby finds and determines that, as of the date of issuance of the 2020 Bonds, all acts, conditions and things required by law to exist, happen and be performed precedent to and in the issuance of the 2020 Bonds do exist, have happened and have been performed in due time, form and manner as required by law, and the Financing Authority is now authorized, pursuant to the Act and each and every requirement of law, to issue the 2020 Bonds in the form and manner provided herein for the purpose of providing funds to prepay the 2015 Installment Sale Agreement and to finance the Improvements, as provided under the 2020 Installment Purchase Agreement, and that the 2020 Bonds shall be entitled to the benefit, protection and security of the provisions hereof.

SECTION 2.02 Terms of 2020 Bonds. The 2020 Bonds shall be designated the “Stockton Public Financing Authority Parking Revenue Bonds, Series 2020” and shall be issued in the aggregate principal amount of _____ dollars ($_____).

The 2020 Bonds shall be dated the date of their original delivery, shall be issued in fully registered form in denominations of five thousand dollars ($5,000) or any integral multiple of five thousand dollars ($5,000) (not exceeding the principal amount of 2020 Bonds maturing at any one time), and shall mature on the dates and in the principal amounts and shall bear interest at the annual interest rates as set forth in the following schedule:

Maturity Date
(March 1) Principal Amount Interest Rate
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The 2020 Bonds shall bear interest payable in lawful money of the United States of America at the annual interest rates (based on a 360-day year of twelve, 30-day calendar months) set forth above, payable semiannually on each Interest Payment Date. Each 2020 Bond shall bear interest from the Interest Payment Date next preceding the date of authentication thereof, unless such date of authentication is an Interest Payment Date or is during the period from the day after the Record Date preceding an Interest Payment Date to such Interest Payment Date, both dates inclusive, in which event it shall bear interest from such Interest Payment Date, or unless such date of authentication is prior to the first Record Date, in which event it shall bear interest from its date; provided, that if at the time of authentication of any 2020 Bonds interest is then in default on the Outstanding 2020 Bonds, such 2020 Bonds shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment on the Outstanding 2020 Bonds. Payment of interest on the 2020 Bonds due on any Interest Payment Date on or before the maturity or prior redemption thereof shall be made only to the person whose name appears in the bond registration books kept by the Trustee pursuant to Section 2.08 as the registered owner thereof as of the close of business on the Record Date for such Interest Payment Date, whether or not such Record Date is a Business Day, and shall be paid by check mailed on such Interest Payment Date by first class mail to such registered owner at the address as it appears in such books; provided, that upon the written request of any Owner of one million dollars ($1,000,000) or more in aggregate principal amount of 2020 Bonds received by the Trustee prior to the applicable Record Date (which request shall remain in effect until rescinded in writing by such Owner), interest shall be paid on each Interest Payment Date by wire transfer of immediately available funds to an account maintained in any bank or trust company in the United States of America that is a member of the Federal Reserve System designated in writing by such Owner.

The principal of the 2020 Bonds shall be payable in lawful money of the United States of America upon the surrender thereof at maturity or on redemption prior to maturity at the Principal Corporate Trust Office of the Trustee.

SECTION 2.03 Redemption of 2020 Bonds.
(a) The 2020 Bonds maturing on or after March 1, 20__, are subject to optional redemption by the Financing Authority prior to their respective stated maturity dates, upon notice as hereinafter provided, from any source of funds other than sinking account payments, on any date on or after March 1, 20__, as a whole or in part, in either case at a redemption price equal to the sum of the principal amount thereof to be redeemed plus accrued interest thereon to the redemption date, without premium. (b) The Series 2020 Bonds maturing on March 1, 20__ and March 1, 20__ (together, the “Term Bonds”) are also subject to mandatory redemption prior to their respective stated maturities, commencing March 1, _____, and March 1, _____, respectively, and on March 1 in each year thereafter to and including March 1, _____, and March 1, _____, respectively, in part by lot, from mandatory sinking account payments at a redemption price equal to the principal amount thereof, plus accrued interest, if any, to the redemption date, without premium, as set forth below 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 such Series 2020 ATTACHMENT B 183
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Bonds have been redeemed pursuant to optional redemption provisions of this Indenture, the total amount of all future sinking fund payments shall be reduced by the aggregate principal amount of such Bonds so redeemed, to be allocated among such sinking fund payments on a pro rata basis in integral multiples of $5,000. The Parking Authority shall provide the Trustee with a revised sinking fund schedule.

Redemption Date
(March 1)
Principal
Amount
_______
* Maturity.

Redemption Date
(March 1)
Principal
Amount
_______
* Maturity.
(c) If less than all Outstanding 2020 Bonds are to be redeemed at any one time, the Financing Authority shall select the maturity date or dates of the 2020 Bonds to be redeemed, and if less than all the Outstanding 2020 Bonds maturing by their terms on any one maturity date are to be redeemed at any one time, the Trustee shall select by lot the 2020 Bonds or the portions thereof of such maturity date, and the Trustee shall promptly notify the Financing Authority in writing of the numbers of the 2020 Bonds so selected by it for redemption, and for purposes of such selection, 2020 Bonds shall be deemed to be composed of five thousand dollars ($5,000) multiples and any such multiple may be separately redeemed. (d) The Financing Authority shall notify the Trustee of an optional redemption at least forty-five (45) days prior to the date fixed for optional redemption (unless the Trustee shall agree to some lesser number of days for notice of optional redemption), and each notice of redemption shall be mailed by first class mail by the Trustee, not less than twenty (20) nor more than sixty (60) days prior to the redemption date, to (i) the respective Owners of the 2020 Bonds designated for redemption at their addresses appearing on the registration books kept by the Trustee pursuant to Section 2.08 as the registered owners thereof, (ii) the Information Services and (iii) the Securities Depositories. Each notice of redemption shall state the date of such notice, the 2020 Bonds to be redeemed, the date of the 2020 Bonds, the redemption date, the redemption price, the place of redemption (including the name and address of the Principal ATTACHMENT B 184
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Corporate Trust Office of the Trustee), the CUSIP number (if any) of the maturity or maturities, and, if less than all of the 2020 Bonds of any one maturity are to be redeemed, the distinctive numbers of the 2020 Bonds of such maturity to be redeemed and, in the case of 2020 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, subject to the rescission of such redemption as provided in the Indenture, on such redemption date there will become due and payable on each of the 2020 Bonds to be redeemed the redemption price thereof and, in the case of a 2020 Bonds to be redeemed in part only, the specified portion of the principal amount thereof to be redeemed, and that from and after such redemption date interest on such 2020 Bonds shall cease to accrue, and each such notice shall require that such 2020 Bonds be then surrendered at the Principal Corporate Trust Office of the Trustee specified in the redemption notice for payment of the redemption price thereof; provided, that neither failure to receive any such notice nor any defect contained therein shall invalidate any of the proceedings taken in connection with any such redemption.
(e) If notice of redemption has been duly given as aforesaid and money for the payment of the redemption price of the 2020 Bonds called for redemption is held by the Trustee, then, on the redemption date designated in such notice the 2020 Bonds so called for redemption shall become due and payable, and from and after the date so designated interest on such 2020 Bonds shall cease to accrue, and the Owners of such 2020 Bonds shall have no rights in respect thereof except to receive payment of the redemption price thereof. (f) Any notice of optional redemption may be rescinded by Written Request of the Financing Authority given to the Trustee not later than five days prior to the date fixed for redemption. Upon receipt of such Written Request of the Financing Authority, the Trustee shall promptly mail notice of such rescission to the same parties that were mailed the original notice of redemption.
(g) With respect to any notice of optional redemption of 2020 Bonds delivered pursuant to this Section 2.03, unless, upon the giving of such notice, such 2020 Bonds are deemed to have been paid within the meaning of Article VIII, such notice shall state (1) that redemption will be conditional upon the receipt by the Trustee on or before the date fixed for redemption of amounts sufficient to pay the principal of, and premium (if any) and interest on, such 2020 Bonds to be redeemed and (2) that if such amounts are not so received, then the notice shall be of no force and effect and the Financing Authority shall not be required to redeem such 2020 Bonds. The Financing Authority may also instruct the Trustee to provide conditional notice of optional redemption, which may be conditioned on the occurrence of any other event if such notice states that if such event does not occur then the notice shall be of no force and effect and the Financing Authority shall not be required to redeem such 2020 Bonds. If a notice of optional redemption contains such a condition and such amounts are not so received or such event does not occur, then the optional redemption shall not be made, and the Trustee shall, within a reasonable time thereafter, give notice to the Owners to the effect that such amounts were not so received or such event did not occur and such redemption was not made, such notice to be given by the Trustee in the manner in which the notice of redemption was given. Such failure to optionally redeem such 2020 Bonds shall not constitute an Event of Default.

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SECTION 2.04 Form of 2020 Bonds. The 2020 Bonds (and the certificate of authentication and assignment to appear thereon) shall be substantially in the form set forth in Exhibit A hereto attached and by this reference incorporated herein.

SECTION 2.05 Execution of 2020 Bonds. The Chairperson or Executive Director of the Financing Authority is hereby authorized and directed to execute each of the 2020 Bonds on behalf of the Financing Authority and the Secretary of the Financing Authority is hereby authorized and directed to countersign each of the 2020 Bonds on behalf of the Financing Authority, which signatures of such Chairperson or Executive Director and Secretary may be manually subscribed or may be copied, printed, lithographed or engraved by facsimile reproduction; provided, that in case any officer whose signature appears on the 2020 Bonds shall cease to be such officer before the delivery of the 2020 Bonds to the purchaser thereof, such signature shall nevertheless be valid and sufficient for all purposes as if such officer had remained in office until such delivery of the 2020 Bonds.

Only those 2020 Bonds bearing thereon a certificate of authentication in the form hereinbefore referred to, executed manually and dated by the Trustee, shall be entitled to any benefit, protection or security hereunder or be valid or obligatory for any purpose, and such certificate of authentication of the Trustee shall be conclusive evidence that the 2020 Bonds so authenticated have been duly authorized, executed, issued and delivered hereunder and are entitled to the benefit, protection and security hereof.

SECTION 2.06 Transfer and Payment of 2020 Bonds. Any 2020 Bonds may, in accordance with its terms, be transferred in the books required to be kept by the Trustee pursuant to the provisions of Section 2.08 by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such 2020 Bonds for cancellation accompanied by delivery of a duly executed written instrument of transfer in a form acceptable to the Trustee.

Whenever any 2020 Bonds shall be surrendered for transfer, the Financing Authority shall execute, and the Trustee shall authenticate and deliver to the transferee a new 2020 Bond or 2020 Bonds and aggregate principal amount of the same maturity date and of the same or other authorized denominations. All costs of printing 2020 Bonds and any services rendered or expenses incurred by the Trustee in connection with any such exchange shall be paid by the Financing Authority; provided, that the Trustee shall require the payment by the Owner requesting such transfer of any tax or other governmental charge required to be paid with respect to such transfer as a condition precedent to the exercise of such privilege.

The Financing Authority and the Trustee may deem and treat the registered owner of any 2020 Bonds as the absolute owner of such 2020 Bonds for the purpose of receiving payment thereof and for all other purposes, whether such 2020 Bonds shall be overdue or not, and neither the Financing Authority nor the Trustee shall be affected by any notice or knowledge to the contrary; and payment of the interest on and principal of and redemption premium, if any, on such 2020 Bonds shall be made only to such registered owner thereof, which payments shall be valid and effectual to satisfy and discharge liability on such 2020 Bonds to the extent of the sum or sums so paid.

The Trustee shall not be required to register the transfer of any 2020 Bonds during the period established by the Trustee for the selection of 2020 Bonds for redemption or to ATTACHMENT B 186
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register the transfer of any 2020 Bonds which has been selected for redemption in whole or in part from and after the day of mailing a notice of redemption of such 2020 Bonds selected for redemption in whole or in part as provided in Section 2.03(d).

The transferor shall also provide or cause to be provided to the Trustee all information necessary to allow the Trustee to comply with any applicable tax reporting obligations, including without limitation any cost basis reporting obligations under Internal Revenue Code Section 6045. The Trustee may rely on the information provided to it and shall have no responsibility to verify or ensure the accuracy of such information.

SECTION 2.07 Exchange of 2020 Bonds. Any 2020 Bond may be exchanged at the Principal Corporate Trust Office of the Trustee for a new 2020 Bond and aggregate principal amount of the same maturity date and of the same or other authorized denominations. All costs of printing 2020 Bonds and any services rendered or expenses incurred by the Trustee in connection with any such exchange shall be paid by the Financing Authority; provided. that the Trustee shall require the payment by the Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange as a condition precedent to the exercise of such privilege. The Trustee shall not be required to exchange any 2020 Bonds during the period established by the Trustee for the selection of 2020 Bonds for redemption or to exchange any 2020 Bonds which has been selected for redemption in whole or in part from and after the day of mailing of a notice of redemption of such 2020 Bonds selected for redemption in whole or in part as provided in Section 2.03(d).

SECTION 2.08 2020 Bonds Registration Books. The Trustee will keep at its Principal Corporate Trust Office sufficient books for the registration and transfer of the 2020 Bonds which shall during normal business hours be open to inspection by the Financing Authority, and upon presentation for such purpose the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer the 2020 Bonds in such books as hereinabove provided.

SECTION 2.09 Mutilated, Destroyed, Stolen or Lost 2020 Bonds. If any 2020 Bonds shall become mutilated the Trustee at the expense of the Owner shall thereupon authenticate and deliver a new 2020 Bonds of like tenor and principal amount of authorized denominations in exchange and substitution for the 2020 Bonds so mutilated, but only upon surrender to the Trustee at its Principal Corporate Trust Office of the 2020 Bonds so mutilated, and every mutilated 2020 Bonds so surrendered to the Trustee shall be cancelled and destroyed by the Trustee in accordance with its retention policy then in effect.

If any 2020 Bonds shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee at its Principal Corporate Trust Office and, if such evidence be satisfactory to the Trustee and indemnity satisfactory to the Trustee shall be given, the Trustee, at the expense of the Owner, shall thereupon authenticate and deliver a new 2020 Bonds of like tenor and principal amount of authorized denominations in lieu of and in substitution for the 2020 Bonds so lost, destroyed or stolen.

The Trustee may require payment of the expenses which shall be incurred by the Financing Authority and the Trustee in connection with the issuance of each new 2020 Bonds ATTACHMENT B 187
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under this section. Any 2020 Bond issued under the provisions of this section in lieu of any 2020 Bonds alleged to be lost, destroyed or stolen shall be equally and proportionately entitled to the benefits hereof with all other 2020 Bonds secured hereby, and neither the Financing Authority nor the Trustee shall be required to treat both the original 2020 Bonds and any replacement 2020 Bonds as being Outstanding for the purpose of determining the principal amount of 2020 Bonds which may be issued hereunder or for the purpose of determining any percentage of 2020 Bonds Outstanding hereunder, but both the original and replacement 2020 Bonds shall be treated as one and the same.

SECTION 2.10 [Reserved]
SECTION 2.11 Use of Book-Entry System for 2020 Bonds. The 2020 Bonds shall be initially issued and registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”), or such other nominee as DTC shall request pursuant to the Representation Letter, and the ownership of such 2020 Bonds shall be registered in the registration records maintained by the Trustee pursuant to Section 2.08 in the name of Cede & Co., as nominee of DTC, or such other nominee as DTC shall request pursuant to the Representation Letter, and payment of the interest on the 2020 Bonds registered in the name of Cede & Co. shall be made on each Interest Payment Date to the account, in the manner and at the address indicated in or pursuant to the Representation Letter, and the 2020 Bonds shall be issued in the form of a single 2020 Bond for each stated maturity of the 2020 Bonds, representing the aggregate principal amount of the 2020 Bonds of such maturity. The Financing Authority and the Trustee may treat DTC (or its nominee) as the sole and exclusive owner of the 2020 Bonds registered in its name for the purposes of payment of the interest on or principal of or redemption premiums, if any, on such 2020 Bonds, for selecting the 2020 Bonds or portions thereof to be redeemed, for giving any notice permitted or required to be given to Owners hereunder, for registering the transfer of 2020 Bonds, for obtaining any consent or other action to be taken by Owners of the 2020 Bonds and for all other purposes whatsoever; and neither the Financing Authority nor the Trustee shall be affected by any notice to the contrary, and neither the Financing Authority nor the Trustee shall have any responsibility or obligation to any Participant (which shall mean, for purposes of this section, securities brokers and dealers, banks, trust companies, clearing corporations and other entities, some of whom directly or indirectly own DTC), any person claiming a beneficial ownership interest in the 2020 Bonds under or through DTC or any Participant, or any other person whom is not shown on the registration records as being a Owner of 2020 Bonds, with respect to (i) the accuracy of any records maintained by DTC or any Participant, (ii) the payment by DTC or any Participant of any amount in respect of the interest on or principal of or redemption premium, if any, on the 2020 Bonds, (iii) any notice which is permitted or required to be given to Owners of 2020 Bonds hereunder, (iv) the selection by DTC or any Participant of any person to receive payment in the event of a partial redemption of the 2020 Bonds, or (v) any consent given or other action taken by DTC as a Owner of 2020 Bonds. The Trustee shall pay the interest on and principal of and redemption premiums, if any, on the 2020 Bonds at the times, to the accounts, at the addresses and otherwise in accordance with the Representation Letter, and all such payments shall be valid and effective to satisfy fully and discharge the Financing Authority’s obligations with respect to the interest on or principal of and redemption premiums, if any, on the 2020 Bonds to the extent of the sum or sums so paid.

Upon delivery by DTC to the Trustee of written notice to the effect that DTC has determined to ATTACHMENT B 188
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substitute a new nominee in place of its then existing nominee, the 2020 Bonds will be transferable to such new nominee in accordance with the last paragraph of this section.

In the event that the Financing Authority determines that it is in the best interests of the beneficial owners of the 2020 Bonds that they be able to obtain definitive 2020 Bonds, the Trustee shall, upon receipt of a Written Request of the Financing Authority, so notify DTC, whereupon DTC shall notify the Participants of the availability through DTC of definitive 2020 Bonds, and in such event, the 2020 Bonds will be transferable in accordance with the last paragraph of this section. DTC may determine to discontinue providing its services with respect to the 2020 Bonds at any time by giving written notice of such discontinuance to the Financing Authority or the Trustee and discharging its responsibilities with respect thereto under applicable law, and in such event the 2020 Bonds will be transferable in accordance with the last paragraph of this section. Whenever DTC requests the Financing Authority and the Trustee to do so, the Financing Authority and the Trustee will cooperate with DTC in taking appropriate action after reasonable notice to arrange for another securities depository to maintain custody of all certificates evidencing the 2020 Bonds then Outstanding, and in such event, the 2020 Bonds will be transferable to such securities depository in accordance with the last paragraph of this section, and thereafter all references herein to DTC or its nominee shall be deemed to refer to such successor securities depository and its nominee, as appropriate.

So long as all 2020 Bonds Outstanding are registered in the name of any nominee of DTC, all payments with respect to the interest on and principal of and redemption premiums, if any, on the 2020 Bonds and all notices with respect to the 2020 Bonds shall be made and given to DTC as provided in the Representation Letter.

The Trustee is hereby authorized and requested to execute and deliver the Representation Letter and, in connection with any successor nominee of DTC or any successor depository, enter into comparable arrangements, and shall have the same rights with respect to its actions thereunder as it has with respect to its actions hereunder.

If any transfer or exchange of 2020 Bond is authorized under the first or second paragraphs of this section, such transfer or exchange shall be accomplished upon receipt by the Trustee from the registered owner thereof of the 2020 Bonds to be transferred or exchanged and appropriate instruments of transfer to the permitted transferee, all in accordance with the applicable provisions of Sections 2.06 and 2.07. In the event that definitive 2020 Bonds are issued to Owners other than Cede & Co., its successor as nominee of DTC as Owner of all the 2020 Bonds, another securities depository as Owner of all the 2020 Bonds, or the nominee of such successor securities depository, the provisions of Sections 2.06 and 2.07 shall also apply to, among other things, the registration, exchange and transfer of the 2020 Bonds and the method of payment of the interest on and principal of and redemption premiums, if any, on the 2020 Bonds.

ARTICLE III
ISSUANCE OF 2020 BONDS AND APPLICATION OF PROCEEDS
SECTION 3.01 Procedure for the Issuance of 2020 Bonds. At any time after the sale of the 2020 Bonds in accordance with the Act, the Financing Authority shall execute the ATTACHMENT B 189
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2020 Bonds for issuance hereunder and shall deliver them to the Trustee, and thereupon the 2020 Bonds shall be authenticated and delivered by the Trustee to the purchaser thereof upon receipt of a Written Request of the Financing Authority and upon receipt of payment therefor from such purchaser. Upon receipt of payment of the purchase price of the 2020 Bonds by the purchaser thereof, the Trustee shall set aside and deposit in or transfer such net purchase price of the 2020 Bonds received from such sale to the following respective accounts or funds:
(a) The Trustee shall transfer to Wells Fargo Bank, National Association the amount of $______, for the prepayment of the 2015 Installment Sale Agreement pursuant to the terms of the 2015 Installment Sale Agreement;
(b) The Trustee shall deposit in the “Stockton Public Financing Authority Parking Revenue Bonds, Series 2020 Acquisition and Construction Fund” an amount equal to $_______.
(c) The Trustee shall deposit in the “Stockton Public Financing Authority Parking Revenue Bonds, Series 2020 Costs of Issuance Fund,” the sum of $_______. (d) The Trustee shall deposit $_____ in the 2020 Reserve Account.

SECTION 3.02 Acquisition and Construction Fund. The Trustee shall establish, maintain and hold in trust a separate fund to be known as the “Stockton Public Financing Authority Water Revenue Bonds, Series 2020 Acquisition and Construction Fund.” Except as otherwise provided herein, moneys in the Acquisition and Construction Fund shall be used solely for the payment of Acquisition and Construction Costs, as defined in the 2020 Installment Agreement. Before any payment from the Acquisition and Construction Fund shall be made, the Parking Authority shall file or cause to be filed with the Trustee, a Requisition of the Parking Authority which shall be substantially in the form attached hereto as Exhibit B. The Trustee shall be entitled to rely on the representations of the Parking Authority contained in such Requisition of the Parking Authority and shall not be required to independently verify the contents of such Requisition of the Parking Authority.

Within five (5) Business Days following receipt of each such Requisition of the Parking Authority, the Trustee shall pay the amount set forth in such Requisition of the Parking Authority as directed by the terms thereof out of the Acquisition and Construction Fund. Upon the Written Request of the Financing Authority accompanied by a written certificate of the Parking Authority stating that all Acquisition and Construction Costs have been paid or provision made for their payment, any unexpended moneys in the Acquisition and Construction Fund may be used to pay the costs associated with any other improvements to the Parking Facilities, provided that in the Opinion of Counsel such use of the proceeds of the 2020 Bonds shall not adversely affect the exclusion of interest on the 2020 Bonds from gross income of the owners thereof. Any unexpended moneys in the Acquisition and Construction Fund subsequent to the payment of all Acquisition and Construction Cost which are not used to pay the cost of other improvements to the Parking Facilities shall be transferred to the Installment Payment Fund and applied to the payment of the 2020 Bonds upon receipt by the Trustee of a Written Request of the Financing Authority accompanied by a written certificate of the Parking ATTACHMENT B 190
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Authority stating that all Acquisition and Construction Costs have been paid or provision made for their payment.

SECTION 3.03 Costs of Issuance Fund. The Trustee shall establish, maintain and hold in trust a separate fund to be known as the “Stockton Public Financing Authority Parking Revenue Bonds, Series 2020 Costs of Issuance Fund.” Except as otherwise provided herein, moneys in the Costs of Issuance Fund shall be used solely for the payment of the Costs of Issuance of the 2020 Bonds. The Trustee shall disburse moneys in the Costs of Issuance Fund from time to time to pay Costs of Issuance (or to reimburse the Financing Authority for payment of Costs of Issuance) upon receipt by the Trustee of a Requisition of the Financing Authority, substantially in the form attached hereto as Exhibit C. Upon the earlier of 180 days from the Closing Date or the filing with the Trustee of a Certificate of the Financing Authority stating that all Costs of Issuance have been paid, the Trustee shall withdraw all amounts then on deposit in the Costs of Issuance Fund and transfer such amounts to the Installment Payment Fund and the Costs of Issuance Fund shall then be closed.

SECTION 3.04 Validity of 2020 Bonds. The validity of the issuance of the 2020 Bonds shall not be dependent on or affected in any way by the proceedings taken by the Financing Authority with respect to or in connection with the 2020 Installment Purchase Agreement. The recital contained in the 2020 Bonds that the same are issued pursuant to the Act and pursuant hereto shall be conclusive evidence of their validity and of the regularity of their issuance, and all 2020 Bonds shall be incontestable from and after their issuance. The 2020 Bonds shall be deemed to be issued, within the meaning hereof, whenever the definitive 2020 Bonds (or any temporary 2020 Bonds exchangeable therefor) shall have been delivered to the purchaser thereof and the proceeds of sale thereof received.

ARTICLE IV

REVENUES
SECTION 4.01 Pledge of Revenues. All Revenues received by the Financing Authority are hereby assigned by the Financing Authority to the Trustee for the benefit of the Owners of the 2020 Bonds, and are hereby irrevocably pledged to the payment of the interest on and principal of and redemption premiums, if any, on the 2020 Bonds as provided herein, and the Revenues shall not be used for any other purpose while any of the 2020 Bonds remain Outstanding; provided, that out of the Revenues there may be applied such sums for such purposes as are permitted hereunder and in the 2020 Installment Purchase Agreement. This pledge shall constitute a first and exclusive pledge of and charge and lien upon the Revenues and all money on deposit in the accounts and funds established hereunder for the payment of the interest on and principal of and redemption premiums, if any, on the 2020 Bonds in accordance with the terms hereof and thereof. The Financing Authority (to the extent of its rights, if any, in the 2020 Installment Payment Fund and all money on deposit in the accounts and funds established hereunder, although it is the intent of the parties hereto that the Financing Authority not have any right, title or interest in or to the 2020 Installment Payment Fund or such money) hereby pledges and grants a lien on and a security interest in the 2020 Installment Payment Fund and such money to the Trustee for the benefit of the Owners. The Financing Authority and the Trustee agree to take such action (including, if required under applicable law, the filing of ATTACHMENT B 191
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financing statements and continuation statements) as may be necessary from time to time to perfect or otherwise preserve the priority of the pledge set forth herein.

In order to secure the pledge of the Revenues hereunder, the Financing Authority hereby transfers, conveys and assigns to the Trustee, for the benefit of the Owners, all of the Financing Authority’s rights under the 2020 Installment Purchase Agreement (excepting its right to indemnification thereunder), including the right to receive 2020 Installment Payments from the City, and the right to exercise any remedies provided therein in the event of a default by the City thereunder. The Trustee hereby accepts such assignment for the benefit of the Owners subject to the provisions of this Indenture.

SECTION 4.02 Receipt and Deposit of Revenues in the 2020 Installment Payment Fund. In order to carry out and effectuate the pledge, charge and lien contained herein, the Financing Authority agrees and covenants that all Revenues when and as received by the Financing Authority will be forthwith transferred by the Financing Authority to the Trustee for deposit in the “Stockton Public Financing Authority 2020 Installment Payment Fund,” which fund is hereby created and which fund the Financing Authority hereby agrees and covenants to maintain with the Trustee so long as any 2020 Bonds are Outstanding hereunder. All money in the 2020 Installment Payment Fund shall be accounted for through and held in trust in the 2020 Installment Payment Fund by the Trustee, and the Financing Authority shall have no beneficial right or interest in any money in the 2020 Installment Payment Fund except only as herein provided. All Revenues, whether received by the Financing Authority or deposited with the Trustee as herein provided, shall nevertheless be allocated, applied and disbursed solely to the purposes and uses hereinafter in this article set forth, and shall be accounted for separately and apart from all other accounts, funds, money or other resources of the Financing Authority.

SECTION 4.03 Establishment and Maintenance of Accounts for Use of Money in the 2020 Installment Payment Fund. All money in the 2020 Installment Payment Fund shall be set aside by the Trustee in the following respective special accounts within the 2020 Installment Payment Fund (each of which is hereby created and each of which the Trustee hereby covenants and agrees to cause to be maintained) in the following order of priority:

Interest Account,
Redemption Account, and
2020 Reserve Account.

All money in each of such accounts shall be held in trust by the Trustee and shall be applied, used and withdrawn only for the purposes hereinafter authorized in this section. (a) Interest Account. On March 1 and September 1 of each year, beginning on [September 1, 2020], the Trustee shall set aside from the 2020 Installment Payment Fund and deposit in the Interest Account an amount of money which is equal to the amount of interest becoming due and payable on all Outstanding 2020 Bonds on such March 1 or September 1, as the case may be; provided, that no such deposit need be made in the Interest Account if the amount contained therein is at least equal to the aggregate amount of interest becoming due and payable on all Outstanding 2020 Bonds on such Interest Payment Date. All money in the Interest ATTACHMENT B 192
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Account shall be used and withdrawn by the Trustee solely for the purpose of paying the interest on the 2020 Bonds as it shall become due and payable (including accrued interest on any 2020 Bonds purchased or redeemed prior to maturity).
(b) Redemption Account. On March 1 of each year, beginning on March 1, 20__, the Trustee shall set aside from the 2020 Installment Payment Fund and deposit in the Principal Subaccount of the Redemption Account an amount of money equal to the principal amount of all Outstanding 2020 Bonds maturing on such March 1 and any mandatory sinking account payments relating to the Term Bonds coming due and payable on such March 1 by operation of mandatory sinking fund redemption pursuant to Section 2.03(b), provided, that no such deposit need be made in the Principal Subaccount on March 1 of any year if the amount contained in the Principal Subaccount therein is at least equal to the aggregate amount of the principal of all Outstanding 2020 Bonds maturing by their terms on such March 1 and any mandatory sinking account payments relating to the Term Bonds coming due and payable on such March 1 by operation of mandatory sinking fund redemption pursuant to Section 2.03(b).

All money in the Principal Subaccount in the Redemption Account shall be used and withdrawn by the Trustee solely for the purpose of paying the principal of the 2020 Bonds as they shall become due and payable, whether at maturity or on prior redemption. (c) 2020 Reserve Account.
(i) On March 1 of each year, beginning on March 1, 20__, the Trustee shall set aside from the 2020 Installment Payment Fund and deposit in the 2020 Reserve Account the amount of money necessary to restore the 2020 Reserve Account to the 2020 Reserve Requirement, and for this purpose all investments in each such account on March 1 of each year (beginning on March 1, 20__) shall be valued at the face value thereof if such investments mature within twelve (12) months from the date of such valuation, or if such investments mature more than twelve (12) months after the date of such valuation, at the price at which such investments are redeemable by the Owner, at his option, if so redeemable, or if not so redeemable, at the then current market value of such investments.
(ii) Any moneys in the 2020 Reserve Account shall be used solely for the purpose of paying the principal of and interest on the 2020 Bonds, if the moneys in the Installment Payment Fund are insufficient therefor. If the amount on deposit in the Installment Payment Fund on any date is insufficient to enable the Trustee to pay in full the aggregate amount of principal of and interest on the 2020 Bonds coming due and payable, the Trustee shall withdraw the amount of such insufficiency from the 2020 Reserve Account and transfer such amount to the Installment Payment Fund. (iii) If the amount on deposit in the 2020 Reserve Account exceeds the 2020 Reserve Requirement on the fifteenth (15th) calendar day of the month preceding any Interest Payment Date, the amount of such excess shall be withdrawn therefrom by the Trustee and transferred to the Installment Payment Fund and credited against the Installment Payment or Installment Payments next due from the City.

ATTACHMENT B 193
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(iv) The Financing Authority may fund all or a portion of the 2020 Reserve Requirement with one or more Qualified Reserve Fund Credit Instruments. Upon deposit of any future Qualified Reserve Fund Credit Instrument with the Trustee, the Trustee shall transfer any excess amounts then on deposit in the 2020 Reserve Account into a segregated account of the Installment Payment Fund, which monies shall be applied at the written direction of the Financing Authority either (i) to the payment within one year of the date of transfer of capital expenditures of the Financing Authority permitted by law, or (ii) to the redemption of 2020 Bonds on the earliest succeeding date on which such redemption is permitted hereby, and pending such application shall be held either not invested in investment property (as defined in section 148(b) of the Code), or invested in such property to produce a yield that is not in excess of the yield on the 2020 Bonds; provided, however, that the Financing Authority may by written direction to the Trustee cause an alternative use of such amounts if the Financing Authority shall first have obtained an Opinion of Counsel substantially to the effect that such alternative use will not adversely affect the exclusion pursuant to section 103 of the Code of interest on the 2020 Bonds from the gross income of the owners thereof for federal income tax purposes.

In any case where the 2020 Reserve Account is funded with a combination of cash and a Qualified Reserve Fund Credit Instrument, the Trustee shall deplete all cash balances before drawing on the Qualified Reserve Fund Credit Instrument. With regard to replenishment, any available moneys provided by the Financing Authority shall be used first to reinstate the Qualified Reserve Fund Credit Instrument and second, to replenish the cash in the 2020 Reserve Account. If the Qualified Reserve Fund Credit Instrument is drawn upon, the Financing Authority shall make payment of interest on amounts advanced under the Qualified Reserve Fund Credit Instrument after making any payments pursuant to subsections (a) and (b) of this Section 4.3.

If the Qualified Reserve Fund Credit Instrument will lapse or expire, the Trustee shall draw upon such Qualified Reserve Fund Credit Instrument prior to its lapsing or expiring in the full amount of such Qualified Reserve Fund Credit Instrument, make deposits from available Revenues to the 2020 Reserve Account to increase the amount on deposit therein to the 2020 Reserve Requirement or substitute such Qualified Reserve Fund Credit Instrument with a Qualified Reserve Fund Credit Instrument that satisfies the requirements of this subsection (c).

ARTICLE V

COVENANTS OF THE FINANCING AUTHORITY
SECTION 5.01 Punctual Payment and Performance. The Financing Authority will punctually pay the interest on and principal of and redemption premium, if any, to become due on every 2020 Bond issued hereunder from the Revenues in strict conformity with the terms hereof and of the 2020 Bonds, and will faithfully observe and perform all the agreements, conditions, covenants and terms to be observed or performed by it contained herein and in the 2020 Bonds.

ATTACHMENT B 194
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SECTION 5.02 Against Encumbrances. The Financing Authority will not make any pledge of or place any charge or lien upon the Revenues except as provided herein, and will not issue any bonds, notes or obligations payable from the Revenues or secured by a pledge of or charge or lien upon the Revenues except the 2020 Bonds.

SECTION 5.03 Tax Covenants.
(a) General. The Financing Authority hereby covenants with the owners of the 2020 Bonds that, notwithstanding any other provisions of this Indenture, it shall not take any action, or fail to take action, if any such action or failure to take action would adversely affect the exclusion from gross income of interest on the 2020 Bonds under Section 103 of the Code. The Financing Authority shall not, directly or indirectly, use or permit the use of proceeds of the 2020 Bonds or any of the property financed or refinanced with proceeds of the 2020 Bonds, or any portion thereof, by any person other than a governmental person (as such term is used in Section 141 of the Code and applicable Treasury Regulations), in such manner or to such extent as would result in the loss of exclusion from gross income for federal income tax purposes of interest on the 2020 Bonds.
(b) Use of Proceeds. The Financing Authority shall not take any action, or fail to take action, if any such action or failure to take action would cause the 2020 Bonds to be “private activity bonds” within the meaning of Section 141 of the Code and applicable Treasury Regulations, and in furtherance thereof, shall not make any use of the proceeds of the 2020 Bonds or any of the property financed or refinanced with proceeds of the 2020 Bonds, or any portion thereof, that would cause the 2020 Bonds to be “private activity bonds” within the meaning of Section 141 of the Code. To that end, so long as any 2020 Bonds are outstanding, the Financing Authority, with respect to such proceeds and property, will comply with the requirements of the Code and the Treasury Regulations, to the extent such requirements are, at the time, applicable and in effect. The Financing Authority shall establish reasonable procedures necessary to ensure continued compliance with Section 141 of the Code and the continued qualification of the 2020 Bonds as “governmental bonds.” (c) Arbitrage. The Financing Authority shall not, directly or indirectly, use or permit the use of any proceeds of any 2020 Bonds, or of any property financed or refinanced thereby, or of other funds of the Financing Authority, that would cause the 2020 Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Code and applicable Treasury Regulations, and shall not otherwise take any action, or fail to take action, if such action or failure to take action would cause the 2020 Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Code and applicable Treasury Regulations. To that end, the Financing Authority shall comply with all requirements of Section 148 of the Code and the Treasury Regulations to the extent such requirements are, at the time, in effect and applicable to the 2020 Bonds.
(d) Federal Guarantee. The Financing Authority shall not make any use of the proceeds of the 2020 Bonds, or of any other funds of the Financing Authority, that would cause the 2020 Bonds to be “federally guaranteed” within the meaning of Section 149(b) of the Code, and shall not otherwise take any action, or fail to take action, when such action or failure to take ATTACHMENT B 195
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action would cause the 2020 Bonds to be “federally guaranteed” within the meaning of Section 149(b) of the Code.
(e) Compliance with Tax Certificate. In furtherance of the foregoing tax covenants of this Section 5.03, the Financing Authority covenants that it will comply with the provisions of the Tax Certificate, which is incorporated herein as if fully set forth herein. These covenants shall survive payment in full or defeasance of the 2020 Bonds.

SECTION 5.04 Accounting Records and Reports. The Financing Authority will keep or cause to be kept proper books of record and accounts in which complete and correct entries shall be made of all transactions relating to the receipts, disbursements, allocation and application of the Revenues, and such books shall be available for inspection by the Trustee at reasonable hours and under reasonable conditions. Not later than March 31 following the close of each Fiscal Year, the Financing Authority will furnish or cause to be furnished to the Trustee audited financial statements for such Fiscal Year prepared by an Independent Certified Public Accountant. The Financing Authority will also keep or cause to be kept such other information as required under the Tax Certificate, and the Trustee shall have no duty to review or examine such statements.

SECTION 5.05 Prosecution and Defense of Suits. The Financing Authority will defend against every suit, action or proceeding at any time brought against the Trustee upon any claim to the extent arising out of the receipt, application or disbursement of any of the Revenues or to the extent involving the failure of the Financing Authority to fulfill its obligations hereunder; provided, that the Trustee or any affected Owner at its election may appear in and defend any such suit, action or proceeding. The Financing Authority will indemnify and hold harmless the Trustee against any and all liability claimed or asserted by any person to the extent arising out of any such failure by the Financing Authority, and will indemnify and hold harmless the Trustee against any attorney’s fees or other expenses which it may incur in connection with any litigation to which it may become a party by reason of its actions hereunder, except for any loss, cost, damage or expense resulting from the active or passive negligence, willful misconduct or breach of duty by the Trustee.

SECTION 5.06 Amendments to 2020 Installment Purchase Agreement. The Financing Authority will not supplement, amend, modify or terminate any of the terms of the 2020 Installment Purchase Agreement, or consent to any such supplement, amendment, modification or termination, without the prior written consent of the Trustee, which consent shall be given only if (a) such supplement, amendment, modification or termination will not materially adversely affect the interests of the Owners or result in any material impairment of the security hereby given for the payment of the 2020 Bonds, or (b) the Trustee first obtains the written consent of the Owners of a majority in aggregate principal amount of the 2020 Bonds then Outstanding to such supplement, amendment, modification or termination; provided, that no such supplement, amendment, modification or termination shall reduce the amount of 2020 Installment Payments to be made to the Financing Authority by the City pursuant to the 2020 Installment Purchase Agreement, or extend the time for making such 2020 Installment Payments, or permit the creation of any lien prior to the lien created by the 2020 Installment Purchase Agreement on the Net System Revenues without the written consent of the Owners of all the 2020 Bonds then Outstanding.

ATTACHMENT B 196
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SECTION 5.07 Continuing Disclosure. Pursuant to the 2020 Installment Purchase Agreement and the Continuing Disclosure Certificate (as defined in the 2020 Installment Purchase Agreement) the City has undertaken all responsibility for compliance with continuing disclosure requirements related to the 2020 Bonds. Notwithstanding any other provisions hereof, failure of the City to comply with the Continuing Disclosure Certificate shall not be considered an Event of Default hereunder; provided, the Trustee may (and, at the request of any Participating Underwriter or the Owners of at least twenty-five per cent (25%) in aggregate principal amount of Outstanding 2020 Bonds, shall) or any Owner or Beneficial Owner 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 section.

SECTION 5.08 Further Assurances. Whenever and so often as reasonably requested to do so by the Trustee or any Owner, the Financing Authority will promptly execute and deliver or cause to be executed and delivered all such other and further assurances, documents or instruments, and promptly do or cause to be done all such other and further things as may be necessary or reasonably required in order to further and more fully vest in the Owners all rights, interests, powers, benefits, privileges and advantages conferred or intended to be conferred upon them hereby.

ARTICLE VI

THE TRUSTEE
SECTION 6.01 The Trustee. Wells Fargo Bank, National Association at its Principal Corporate Trust Office, is hereby appointed Trustee for the purpose of receiving all money which the Financing Authority is required to transfer to it hereunder and for applying and using such money as provided herein for the purpose of paying the interest on and principal of and redemption premiums, if any, on the 2020 Bonds
The Financing Authority may remove the Trustee initially appointed and any successor thereto and may appoint a successor or successors thereto by an instrument in writing; provided, that any such successor shall be a bank or trust company doing business and having a corporate trust office in Los Angeles or San Francisco, California, having a combined capital (exclusive of borrowed capital) and surplus of at least one hundred million dollars ($100,000,000) and subject to supervision or examination by a federal or state banking authority.

If such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purpose of this section the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. The Trustee may at any time resign by giving thirty (30) days written notice of such resignation to the Financing Authority and to the Owners, and upon receiving such notice of resignation, the Financing Authority shall promptly appoint a successor Trustee by an instrument in writing having the qualifications required hereby. Any resignation or removal of a Trustee and appointment of a successor Trustee shall become effective only upon the acceptance of appointment by the successor Trustee. If within thirty (30) days after notice of the removal or resignation of the Trustee no successor Trustee shall have been appointed by the Financing Authority and shall have accepted such appointment, the removed or resigning Trustee may ATTACHMENT B 197
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petition any court of competent jurisdiction for the appointment of a successor Trustee, which court may thereupon, after such notice, if any, as it may deem proper and prescribe and as may be required by law, appoint a successor Trustee having the qualifications required hereby. The Trustee’s right to indemnify and reimbursement of outstanding fees and expenses shall survive the Trustee’s resignation or removal.

The Trustee is hereby authorized to pay interest on the 2020 Bonds due on or before the maturity or prior redemption thereof to the Owners as their names appear at the close of business as of the Record Date next preceding each Interest Payment Date on the registration books required to be kept by it pursuant to Section 2.08 as the registered owners thereof, such interest to be paid by check mailed by first class mail to the Owners at their addresses appearing on such books (except that upon the written request of any Owner of one million dollars ($1,000,000) or more in aggregate principal amount of 2020 Bonds received by the Trustee prior to the applicable Record Date (which such request shall remain in effect until rescinded in writing by such Owner), interest shall be paid on each Interest Payment Date by wire transfer of immediately available funds to an account maintained in any bank or trust company in the United States of America that is a member of the Federal Reserve System designated in writing by such Owner) and to pay to the Owners the principal of and redemption premiums, if any, on the 2020 Bonds upon presentation and surrender of the 2020 Bonds to the Trustee at maturity or on redemption prior to maturity. In accordance with its retention policy then in effect, the Trustee shall cancel and destroy all 2020 Bonds paid by it at maturity or on redemption prior to maturity and all 2020 Bonds surrendered to it by the Financing Authority, and shall deliver to the Financing Authority a certificate of such destruction, and the Trustee shall keep accurate records of all 2020 Bonds cancelled and destroyed by it hereunder. All money held by or on behalf of the Trustee for the payment of the interest on or principal of or redemption premiums, if any, on the 2020 Bonds, whether at maturity or upon prior redemption, shall be held in trust for the account of the Owners thereof, and the Trustee shall not be required to pay Owners or the Financing Authority any interest on, or be liable to the Financing Authority, the Owners or any other person for any interest earned on, any money so held.

Any company into which the Trustee shall be merged or converted or with which it may be consolidated or any company resulting from any merger, conversation or consolidation to which it shall be a party or any company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, so long as such company shall meet the requirements set forth in this section, shall be the successor to the Trustee and shall be vested with all of the trusts, powers, discretions, immunities, privileges and all other matters as was its predecessor, without the execution or filing of any paper or further act, anything herein to the contrary notwithstanding
SECTION 6.02 Liability of Trustee. The recitals of facts, agreements and covenants contained herein and in the 2020 Bonds shall be taken as statements, agreements and covenants of the Financing Authority, and the Trustee shall not assume any responsibility for the correctness of the same and does not make any representation as to the sufficiency or validity hereof or of the 2020 Bonds or of the 2020 Installment Purchase Agreement, and shall not incur any responsibility in respect thereof other than in connection with the rights and obligations expressly assigned to or imposed upon it herein or in the 2020 Bonds, and shall not be liable in connection with the performance of its duties hereunder except for its own negligence or willful ATTACHMENT B 198
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misconduct. The Trustee shall not be liable for any error of judgment made in good faith, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts, and no provision hereof shall require the Trustee to expend or risk its own funds or otherwise incur any liability for the performance of its duties hereunder, or in the exercise of any of its rights or powers hereunder, if repayment of such funds, or adequate indemnity satisfactory to it against such risks or liability, is not assured to it.

The Trustee shall not be liable for any error of judgment made in good faith by a responsible officer unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts, and the Trustee shall be entitled to advice of counsel concerning all matters of trust and its duties hereunder; provided, that the Trustee shall not be answerable for the negligence or misconduct of any attorney or certified public accountant selected by it with due care.

The Trustee shall, prior to an Event of Default, and after the curing or waiver of all Events of Default that may have occurred, perform such duties and only such duties as are specifically set forth herein, and no implied duties or obligations shall be read herein against the Trustee. The Trustee shall, during the existence of any Event of Default (that has not been cured or waived), exercise such of the rights and powers vested in it hereby, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.

The Trustee shall not be bound to recognize any person as the Owner of a 2020 Bonds unless and until such 2020 Bond is submitted for inspection, if required, and such Owner’s title thereto satisfactorily established, if disputed.

The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Owners of not less than a majority in aggregate principal amount of the 2020 Bonds at the time Outstanding relating to the time, method and place of conducting any proceedings for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee hereunder.

The Trustee shall be under no obligation to exercise any of the rights or powers vested in it hereby at the request, order or direction of any of the Owners pursuant to the provisions hereof unless such Owners shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities that may be incurred therein or thereby. The Trustee has no obligation or liability to the Owners for the payment of the interest on, principal of or redemption premiums, if any, with respect to the 2020 Bonds from its own funds, but rather the Trustee’s obligations shall be limited to the performance of its duties and obligations hereunder.

The Trustee shall not be deemed to have knowledge of any Event of Default hereunder unless and until an officer at the Trustee’s Principal Corporate Trust Office responsible for the administration of the Trustee’s duties and obligations hereunder shall have actual knowledge thereof or the Trustee shall have received written notice thereof at its Principal Corporate Trust Office. The Trustee shall not be bound to ascertain or to inquire as to the performance or observance of any of the agreements, conditions, covenants or terms herein or of ATTACHMENT B 199
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any of the documents executed in connection with the 2020 Bonds, or as to the existence of an Event of Default hereunder.

The Trustee shall be entitled to advice of counsel and other professionals concerning all matters of trust and its duty hereunder, but the Trustee shall not be answerable for the professional malpractice of any attorney-at-law or certified public accountant in connection with the rendering of professional advice in accordance with the terms hereof, if such attorneyat-law or certified public accountant was selected by the Trustee with due care.

No provision hereof shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance or exercise of any of its duties hereunder, or in the exercise of its rights or powers.

The Trustee shall have no responsibility, opinion or liability with respect to any information, statement or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of the 2020 Bonds.

All immunities, indemnifications and releases from liability granted herein to the Trustee shall extend to the directors, employees, officers and agents thereof.

SECTION 6.03 Compensation and Indemnification of Trustee. The Financing Authority agrees to pay to the Trustee from time to time, and the Trustee shall be entitled to, reasonable compensation for all services rendered by it in the exercise and performance of any of the duties and obligations of the Trustee hereunder, and the Financing Authority will pay or reimburse the Trustee upon its request for all expenses, disbursements and advances incurred or made by the Trustee and its affiliates, directors, employees or agents in accordance with any of the provisions hereof (including the reasonable compensation and the expenses and disbursements of its counsel and of all persons not regularly in its employ) except any such expense, disbursement or advance as may arise from its negligence, default or willful misconduct. The Financing Authority, to the extent permitted by law, agrees to indemnify, defend and hold harmless the Trustee against any loss, damages, liability or expense incurred without negligence or bad faith on the part of the Trustee arising out of or in connection with (i) the exercise or performance of any of its duties or obligations hereunder, or (ii) any untrue statement or alleged untrue statement of any material fact or omission or alleged omission to state a material fact necessary to make the statements made, in the light of the circumstances under which they were made, not misleading in any official statement or other offering circular utilized in connection with the sale of any of the 2020 Bonds, including costs and expenses (including attorneys’ fees) of defending itself against any claim or liability in connection with the exercise or performance of any of its duties and obligations hereunder. The rights of the Trustee and the obligations of the Financing Authority under this section shall survive the discharge of the 2020 Bonds and hereof and the resignation or removal of the Trustee.

SECTION 6.04 Notice to the Trustee. The Trustee shall be protected in acting upon any 2020 Bonds, certificate, consent, notice, opinion, report, request, resolution or other document or paper believed by it to be genuine and to have been signed or presented by the proper party or parties. The Trustee may consult with counsel, including, without limitation, counsel to the Financing Authority, with regard to legal questions, and the opinion of such ATTACHMENT B 200
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counsel shall be full and complete authorization and protection with respect to any action taken or suffered hereunder in good faith and in accordance therewith.

Whenever in the administration of its rights and obligations hereunder the Trustee shall deem it necessary or desirable that a matter be established or proved prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of bad faith on the part of the Trustee, be deemed to be conclusively established or proved by a Certificate of the Financing Authority, which shall be full warrant to the Trustee for any action taken or suffered under the provisions hereof upon the faith thereof, and on which the Trustee may conclusively rely, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as it may deem reasonable.

ARTICLE VII

AMENDMENT OF THE INDENTURE
SECTION 7.01 Amendment of the Indenture.
(a) The Indenture and the rights and obligations of the Financing Authority and of the Owners may be amended at any time by a Supplemental Indenture which shall become binding when the written consents of the Owners of a majority in aggregate principal amount of the 2020 Bonds then Outstanding, exclusive of 2020 Bonds disqualified as provided in Section 7.02, are filed with the Trustee; provided, that before executing any such Supplemental Indenture the Trustee shall first be provided at the Financing Authority’s expense with an Opinion of Counsel that such Supplemental Indenture is permitted by the Indenture, is enforceable against the Financing Authority and does not adversely impact the tax-exempt status of the interest on the 2020 Bonds, on which opinion the Trustee may conclusively rely. No such amendment shall (1) extend the maturity of or reduce the interest rate on or amount of interest on or principal of or redemption premium, if any, on or sinking fund payment for any 2020 Bonds without the express written consent of the Owner of such 2020 Bonds, or (2) permit the creation by the Financing Authority of any pledge of or charge or lien upon the Revenues as provided herein superior to or on a parity with the pledge, charge and lien created hereby for the benefit of the 2020 Bonds, or (3) reduce the percentage of 2020 Bonds required for the written consent to any such amendment, or (4) modify any duties or obligations of the Financing Authority or the Trustee without their prior written assent thereto, respectively. (b) This Indenture and the rights and obligations of the Financing Authority and of the Owners may also be amended at any time by a Supplemental Indenture which shall become binding upon adoption without the consent of any Owners, but only to the extent permitted by law, for any purpose that will not materially adversely affect the interests of the Owners, including (without limitation) for any one or more of the following purposes — (i) to add to the agreements and covenants required herein to be performed by the Financing Authority other agreements and covenants thereafter to be performed by the Financing Authority, or to surrender any right or power reserved herein to or conferred herein on the Financing Authority; or
ATTACHMENT B 201
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(ii) to make such provisions for the purpose of curing any ambiguity or of correcting, curing or supplementing any defective provision contained herein or in regard to questions arising hereunder which the Financing Authority may deem desirable or necessary and not inconsistent herewith; or
(iii) to add to the agreements and covenants required herein, such agreements and covenants as may be necessary to qualify the Indenture under the Trust Indenture Act of 1939; or
(iv) to make any amendments or supplements necessary or appropriate to preserve or protect the exclusion of interest on the 2020 Bonds from gross income for federal income tax purposes under the Code or the exemption of such interest from State personal income taxes; or
(v) to make such amendments or supplements as may be necessary or appropriate to maintain any then current rating on the 2020 Bonds; (vi) to add to the rights of the Trustee; or
(vii) many any other amendment or supplement not materially adverse to Owners of the 2020 Bonds;
provided, that before executing any such Supplemental Indenture the Trustee shall first be provided at the Financing Authority’s expense with an Opinion of Counsel that such Supplemental Indenture is permitted by the Indenture, on which opinion the Trustee may conclusively rely.

SECTION 7.02 Disqualified 2020 Bonds. 2020 Bonds owned or held by or for the account of the Financing Authority shall not be deemed Outstanding for the purpose of any consent or other action or any calculation of Outstanding 2020 Bonds provided in this article, and shall not be entitled to consent to or take any other action provided in this article.

SECTION 7.03 Endorsement or Replacement of 2020 Bonds After Amendment.

After the effective date of any action taken as hereinabove provided, the Financing Authority may determine that the 2020 Bonds may bear a notation by endorsement in form approved by the Financing Authority as to such action, and in that case upon demand of the Owner of any Outstanding 2020 Bonds and presentation of such Owner’s 2020 Bonds for such purpose at the Principal Corporate Trust Office of the Trustee, a suitable notation as to such action shall be made on such 2020 Bonds. If the Financing Authority shall so determine, new 2020 Bonds so modified as, in the opinion of the Financing Authority, shall be necessary to conform to such action shall be prepared and executed, and in that case upon demand of the Owner of any Outstanding 2020 Bonds a new 2020 Bonds or 2020 Bonds shall be exchanged at the Principal Corporate Trust Office of the Trustee without cost to each Owner for its 2020 Bonds or 2020 Bonds then Outstanding upon surrender of such Outstanding 2020 Bonds.

SECTION 7.04 Amendment by Mutual Consent. The provisions of this article shall not prevent any Owner from accepting any amendment as to the particular 2020 Bonds held by him; provided, that due notation thereof is made on such 2020 Bonds.

ATTACHMENT B 202
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ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES OF OWNERS
SECTION 8.01 Events of Default. The following events shall constitute “Events of Default” hereunder:
(a) if default shall be made by the Financing Authority in the due and punctual payment of the interest on any 2020 Bonds when and as the same shall become due and payable;
(b) if default shall be made by the Financing Authority in the due and punctual payment of the principal of or redemption premium, if any, on or the making of any sinking fund payment for any 2020 Bonds when and as the same shall become due and payable, whether at maturity or by proceedings for redemption;
(c) if default shall be made by the Financing Authority in the performance of any of the agreements or covenants contained herein required to be performed by the Financing Authority, and such default shall have continued for a period of thirty (30) days after the Financing Authority shall have been given notice in writing of such default by the Trustee; (d) if the Financing Authority shall file a petition or answer seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if a court of competent jurisdiction shall approve a petition filed with or without the consent of the Financing Authority seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if under the provisions of any other law for the relief or aid of debtors any court of competent jurisdiction shall assume custody or control of the Financing Authority or of the whole or any substantial part of its property; or (e) If an Event of Default (as that term is defined in the 2020 Installment Purchase Agreement) has occurred under the 2020 Installment Purchase Agreement.

Notwithstanding anything to the contrary contained herein, in no event are the 2020 Bonds subject to acceleration if an Event of Default occurs and is continuing.

SECTION 8.02 Application of Funds Upon Default. All money in the accounts and funds provided in Sections 3.01, 4.02 and 4.03 upon the date of the declaration of an Event of Default by the Trustee as provided in Section 8.01 and all Revenues thereafter received by the Financing Authority hereunder shall be transmitted to the Trustee and shall be applied by the Trustee in the following order--
First, to the payment of the costs and expenses of the Trustee, if any, in carrying out the provisions of this article, including any outstanding fees and expenses of the Trustee and including reasonable compensation to its accountants and counsel, and thereafter to the payment of the costs and expenses of the Owners in providing for the declaration of such Event of Default, including reasonable compensation to their accountants and counsel; ATTACHMENT B 203
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Second, to the payment of the Owners entitled thereto of all installments of interest then due on the 2020 Bonds, in the order of the maturity of the installments of such interest, and if the amount available shall not be sufficient to pay in full any particular installment, then to the payment ratably, according to the amounts due on such installment, to the Owners entitled thereto, without any discrimination or privilege; Third, to the payment of the Owners entitled thereto of the unpaid principal of and redemption premiums, if any, on any of the 2020 Bonds which shall have become due (other than 2020 Bonds matured or called for redemption for the payment of which moneys are held pursuant to the provisions of this Indenture) in the order of their due dates, and if the amount available shall not be sufficient to pay in full the principal of and redemption premiums, if any, on such 2020 Bonds due on any particular date, then to the payment ratably, according to the amount due on such date, to the Owners entitled thereto without any discrimination or privilege; and
Fourth, to be held for the payment to the Owners entitled thereto as the same shall become due of the principal of and redemption premiums, if any, on and interest on the 2020 Bonds which may thereafter become due, either at maturity or upon call for redemption prior to maturity, and if the amount available shall not be sufficient to pay in full such principal and redemption premiums, if any, due on any particular date, together with interest then due and owing thereon, payment shall be made in accordance with the Second and Third paragraphs hereof.

SECTION 8.03 Institution of Legal Proceedings by Trustee. If one or more of the Events of Default shall happen and be continuing, the Trustee may, and upon the written request of the Owners of a majority in principal amount of the 2020 Bonds then Outstanding (so long as the Trustee is indemnified to its satisfaction therefor) shall, proceed to protect or enforce its rights or the rights of the Owners of 2020 Bonds hereunder by a suit in equity or action at law, either for the specific performance of any agreement or covenant contained herein, or in aid of the execution of any power herein granted, or by mandamus or other appropriate proceeding for the enforcement of any other legal or equitable remedy as the Trustee shall deem most effectual in support of any of its rights and duties hereunder.

SECTION 8.04 Non-Waiver. Nothing in this article or in any other provision hereof or in the 2020 Bonds shall affect or impair the obligation of the Financing Authority, which is absolute and unconditional, to pay the interest on and principal of and redemption premiums, if any, on the 2020 Bonds to the respective Owners of the 2020 Bonds at the respective dates of maturity or upon prior redemption as provided herein from the Revenues and the funds held in the accounts and funds as provided herein pledged for such payment, or (except as provided in Section 8.07) shall affect or impair the right of such Owners, which is also absolute and unconditional, to institute suit to enforce such payment by virtue of the contract embodied herein and in the 2020 Bonds.

A waiver of any default or breach of duty or contract by the Trustee or any Owner shall not affect any subsequent default or breach of duty or contract or impair any rights or remedies on any such subsequent default or breach of duty or contract. No delay or omission by the Trustee or any Owner to exercise any right or remedy accruing upon any default or breach of ATTACHMENT B 204
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duty or contract shall impair any such right or remedy or shall be construed to be a waiver of any such default or breach of duty or contract or an acquiescence therein, and every right or remedy conferred upon the Owners by the Act or by this article may be enforced and exercised from time to time and as often as shall be deemed expedient by the Trustee or the Owners.

If any action, proceeding or suit to enforce any right or exercise any remedy is abandoned, the Financing Authority, the Trustee and any Owner shall be restored to their former positions, rights and remedies as if such action, proceeding or suit had not been brought or taken.

SECTION 8.05 Actions by Trustee as Attorney-in-Fact. Any action, proceeding or suit which any Owner shall have the right to bring to enforce any right or remedy hereunder may be brought by the Trustee for the equal benefit and protection of all Owners, whether or not the Trustee is an Owner, and the Trustee is hereby appointed (and the successive Owners, by taking and holding the 2020 Bond issued hereunder, shall be conclusively deemed to have so appointed it) the true and lawful attorney-in-fact of the Owners for the purpose of bringing any such action, proceeding or suit and for the purpose of doing and performing any and all acts and things for and on behalf of the Owners as a class or classes as may be advisable or necessary in the opinion of the Trustee as such attorney-in-fact.

SECTION 8.06 Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Owners is intended to be exclusive of any other remedy, and each such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or otherwise and may be exercised without exhausting and without regard to any other remedy conferred by the Act or any other law.

SECTION 8.07 Limitation on 2020 Owners’ Right to Sue. No Owner of any 2020 Bond issued hereunder shall have the right to institute any suit, action or proceeding, at law or equity, for any remedy hereunder unless (a) such Owner shall have previously given to the Trustee written notice of the occurrence of an Event of Default; (b) the Owners of at least a majority in aggregate principal amount of all the 2020 Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such suit, action or proceeding in its own name; (c) such Owners shall have tendered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; and (d) the Trustee shall have refused or omitted to comply with such request for a period of sixty (60) days after such request shall have been received by, and such tender of indemnity shall have been made to, the Trustee.

Each such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of 2020 Bonds of any remedy hereunder; it being understood and intended that no one or more Owners shall have any right in any manner whatever by his or their action to enforce any right hereunder except in the manner herein provided, and that all proceedings at law or in equity to enforce any provision hereof shall be instituted and maintained in the manner herein provided and for the equal benefit of all Owners of Outstanding 2020 Bonds.

ATTACHMENT B 205
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ARTICLE IX

DEFEASANCE
SECTION 9.01 Discharge of 2020 Bonds,
(a) If the Financing Authority shall pay or cause to be paid or there shall otherwise be paid to the Owners of all Outstanding 2020 Bonds the interest thereon and the principal thereof and the redemption premiums, if any, thereon at the times and in the manner stipulated herein and therein, then the Owners of such 2020 Bonds shall cease to be entitled to the pledge of and charge and lien upon the Revenues as provided herein, and all agreements, covenants and other obligations of the Financing Authority to the Owners of such 2020 Bonds hereunder shall thereupon cease, terminate and become void and be discharged and satisfied. In such event, the Trustee shall execute and deliver to the Financing Authority all such instruments as may be necessary or desirable to evidence such discharge and satisfaction, and the Trustee shall pay over or deliver to the Financing Authority all money or securities held by it pursuant hereto which are not required for the payment of the interest on and principal of and redemption premiums, if any, on such 2020 Bonds and for the payment of any fees and expenses of the Trustee.
(b) Any Outstanding 2020 Bonds shall on the maturity dates or redemption dates thereof be deemed to have been paid within the meaning of and with the effect expressed in subsection (a) of this section if there shall be on deposit with the Trustee money which is sufficient to pay the interest on and principal of and redemption premiums, if any, on such 2020 Bonds on the maturity dates or redemption dates thereof. (c) Any Outstanding 2020 Bonds shall prior to the maturity dates or redemption dates thereof be deemed to have been paid within the meaning of and with the effect expressed in subsection (a) of this section (except that the Financing Authority shall remain liable for the payment of such 2020 Bonds, but only out of the money or securities deposited with the Trustee or an Escrow Agent) if (1) in case any of such 2020 Bonds are to be redeemed on any date prior to their maturity date, the Financing Authority shall have given to the Trustee in form satisfactory to it irrevocable instructions to provide notice of such redemption in accordance with Section 2.03(d), (2) there shall have been deposited with the Trustee or with an Escrow Agent in trust for the benefit of the Owners thereof either (A) money in an amount which shall be sufficient to pay when due the interest to become due on such 2020 Bonds on and prior to the maturity dates or redemption dates thereof, as the case may be, and the principal of and redemption premiums, if any, to become due on such 2020 Bonds on such maturity dates or redemption dates, or (B) (a) Permitted Investments of the type described in clause (1) of the definition thereof which are not subject to redemption prior to maturity (including any such Permitted Investments issued or held in book-entry form on the books of the Treasury of the United States of America) or (b) tax exempt obligations of a state or political subdivision thereof which have been defeased under irrevocable escrow instructions by the deposit of such money or Permitted Investments and which are then rated in the highest rating category by Moody’s and S&P, the interest on and principal of which when paid will provide money which, together with the money, if any, deposited with the Trustee or such Escrow Agent at the same time, will be sufficient, in the opinion of an Independent Certified Public Accountant addressed to the Trustee, ATTACHMENT B 206
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to pay when due the interest to become due on such 2020 Bonds on and prior to the maturity dates or redemption dates thereof, as the case may be, and the principal of and redemption premiums, if any, to become due on such 2020 Bonds on such maturity dates or redemption dates, and (3) in the event such 2020 Bonds are not by their terms subject to redemption within the next succeeding sixty (60) days, the Financing Authority shall have given the Trustee in form satisfactory to it irrevocable instructions to mail as soon as practicable a notice to the Owners of such 2020 Bonds that the deposit required by clause (2) above has been made with the Trustee or such Escrow Agent and that such 2020 Bonds are deemed to have been paid in accordance with this section and stating the maturity date or redemption date upon which money is to be available for the payment of the principal of and redemption premiums, if any, on such 2020 Bonds. (d) After the payment of the interest on and principal of and redemption premiums, if any, on the 2020 Bonds as provided in this section, the Trustee shall, after the payment of all amounts due the Trustee hereunder, execute and deliver to the Financing Authority all such instruments as may be necessary or desirable to evidence the discharge and satisfaction of the Indenture, and the Trustee shall pay over or deliver to the Financing Authority all money or deposits or investments held by it pursuant hereto which are not required for the payment of the interest and principal and redemption premiums, if any, on the 2020 Bonds.

SECTION 9.02 Unclaimed Money. Anything in this Indenture to the contrary notwithstanding, any moneys held by the Trustee in trust for the payment and discharge of any of the Notes which remain unclaimed for two (2) years after the date when such Notes or interest thereon have become due and payable, either at their stated maturity dates or by call for earlier redemption, if such moneys were held by the Trustee at such date, or for two (2) years after the date of deposit of such moneys if deposited with the Trustee after said date when such Notes become due and payable, shall be repaid by the Trustee to the Financing Authority, as its absolute property and free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Owners shall look only to the Financing Authority for the payment of such Notes; provided, however, that before being required to make any such payment to the Financing Authority, the Trustee shall, at the Written Request of the Financing Authority (and of its expense), cause to be mailed to the Owners of all such Notes, at their respective addresses appearing on the Registration Books, a notice that said moneys remain unclaimed and that, after a date named in said notice, which date shall not be less than thirty (30) days after the date of mailing of such notice, the balance of such moneys then unclaimed will be returned to the Financing Authority.

ARTICLE X

MISCELLANEOUS
SECTION 10.01 Liability of Authority Limited to Revenues and Certain Other Funds. Notwithstanding anything contained herein, the Financing Authority shall not be required to advance any money derived from any source other than the Revenues and the hinds held in the accounts and funds as provided herein for the payment of the interest on or principal of or redemption premiums, if any, on the 2020 Bonds or for the performance of any agreements or covenants herein contained; provided, that the Financing Authority may, however, advance funds ATTACHMENT B 207
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for any such purpose so long as such funds are derived from a source legally available for such purpose without incurring an indebtedness.

The 2020 Bonds are limited obligations of the Financing Authority and are payable, as to interest thereon, principal thereof and any redemption premiums thereon, solely from the Revenues and the funds held in the accounts and funds provided herein, and the Financing Authority is not obligated to pay such interest, principal or redemption premiums, if any, on the 2020 Bonds except from the Revenues and such funds. All the 2020 Bonds are equally and ratably secured by a pledge of and charge and lien upon the Revenues and such funds, and the Revenues and such funds constitute a trust fund for the security and payment of the interest on and principal of and redemption premiums, if any, on the 2020 Bonds as provided herein. The full faith and credit of the Financing Authority is not pledged for the payment of the interest on or principal of or redemption premiums, if any, on the 2020 Bonds, and no tax shall ever be levied or collected to pay the interest on or principal of or redemption premiums, if any, on the 2020 Bonds. The 2020 Bonds are not secured by a legal or equitable pledge of or charge or lien upon any property of the Financing Authority or any of its income or receipts except the Revenues and such funds. Neither the payment of the interest on or principal of or redemption premiums, if any, on the 2020 Bonds is a debt, liability or general obligation of the City, the Parking Authority or the State and neither the faith and credit of the City, the Parking Authority or the State are pledged to the payment of interest on or principal, or redemption premium, if any, on the 2020 Bonds.

SECTION 10.02 Benefits of the Indenture Limited to Parties and Beneficiaries.

Nothing contained herein, expressed or implied, is intended or shall be construed to confer upon, or to give or grant to, any person or entity other than the Financing Authority, the Trustee, and the Owners any right, remedy or claim under or by reason hereof or any covenant, condition or stipulation hereof; and all covenants, stipulations, promises and agreements herein contained by and on behalf of the Financing Authority shall be for the sole and exclusive benefit of the Financing Authority, Trustee, and the Owners.

SECTION 10.03 Successor Is Deemed Included In All References To Predecessor.

Whenever herein either the Financing Authority or any officer thereof is named or referred to, such reference shall be deemed to include the successor to the powers, duties and functions that are presently vested in the Financing Authority or such officer, and all agreements and covenants required hereby to be performed by or on behalf of the Financing Authority or any officer thereof shall bind and inure to the benefit of the respective successors thereof whether so expressed or not.

SECTION 10.04 Execution of Documents by Owners. Any declaration, request or other instrument which is permitted or required herein to be executed by Owners may be in one or more instruments of similar tenor and may be executed by Owners in person or by their attorneys appointed in writing. The fact and date of the execution by any Owner or his attorney of any declaration, request or other instrument or of any writing appointing such attorney may be proved by the certificate of any notary public or other officer authorized to make acknowledgments of deeds to be recorded in the state or territory in which he purports to act that the person signing such declaration, request or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution duly sworn to before such ATTACHMENT B 208
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notary public or other officer. The ownership of any 2020 Bonds and the amount, maturity, number and date of holding the same may be proved by the registration books kept by the Trustee pursuant to Section 2.08.

Any declaration, request, consent or other instrument or writing of the Owner of any 2020 Bonds shall bind all future Owners of such 2020 Bonds with respect to anything done or suffered to be done by the Trustee or the Financing Authority in good faith and in accordance therewith.

SECTION 10.05 Waiver of Personal Liability. No member, officer or employee of the Financing Authority shall be individually or personally liable for the payment of the interest on or principal of or redemption premiums, if any, on the 2020 Bonds by reason of their issuance, but nothing herein contained shall relieve any such member, officer or employee from the performance of any official duty provided by the Act or any other applicable provisions of law or hereby.

SECTION 10.06 Deposit or Investment of Money in Accounts and Funds. Subject to Section 5.03, all money held by the Trustee in any of the accounts or funds established pursuant hereto shall be invested in those Permitted Investments described in a Written Request of the Financing Authority filed with the Trustee at least two (2) Business Days prior to the making of any such investment, which such Permitted Investments shall, as nearly as practicable, mature on or before the dates on which such money is anticipated to be needed-for disbursement hereunder, except that any money held in the 2020 Reserve Account shall be invested in those Permitted Investments that mature (or which may be redeemed or terminated by the Financing Authority or the Trustee at par) not later than five (5) years after their purchase or the final maturity date of the related 2020 Bonds, whichever is earlier, and the Trustee shall have no liability or responsibility for any loss resulting from any investment made in accordance herewith; provided, that if no such Written Request is received by the Trustee, the Trustee shall invest such money in the Wells Fargo Government Money Market Fund. The earnings on any investment in any fund or account created hereunder shall be deposited in such fund or account.

The Trustee will furnish the Financing Authority periodic cash transaction statements which include detail for all investment transactions made by the Trustee hereunder.

The Financing Authority acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the Financing Authority the right to receive brokerage confirmations of security transactions as they occur, the Financing Authority specifically waives receipt of such confirmations to the extent permitted by law.

The Trustee or any of its affiliates may act as principal, agent, sponsor or advisor in connection with any investment made by the Trustee hereunder and may impose its customary fees therefor.

SECTION 10.07 [Reserved].

SECTION 10.08 Destruction of Cancelled 2020 Bonds. Whenever provision is made for the return to the Financing Authority of any Notes which have been cancelled pursuant ATTACHMENT B 209
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to the provisions hereof, the Trustee shall destroy such Notes and shall cancel such Notes in accordance with its retention policy then in effect.

SECTION 10.09 Content of Certificates. Every Certificate of the Financing Authority with respect to compliance with any agreement, condition, covenant or provision provided herein shall include (a) a statement that the person or persons making or giving such certificate have read such agreement, condition, covenant or provision and the definitions herein relating thereto; (b) a statement that, in the opinion of the signers, they have made or caused to be made such examination or investigation as is necessary to enable them to express an informed opinion as to whether or not such agreement, condition, covenant or provision has been complied with; and (c) a statement as to whether, in the opinion of the signers, such agreement, condition, covenant or provision has been complied with.

Any Certificate of the Financing Authority may be based, insofar as it relates to legal matters, upon an Opinion of Counsel unless the person making or giving such certificate knows that the Opinion of Counsel with respect to the matters upon which his certificate may be based, as aforesaid, is erroneous, or in the exercise of reasonable care should have known that the same was erroneous. Any Opinion of Counsel may be based, insofar as it relates to factual matters information with respect to which is in the possession of the Financing Authority, upon a representation by an officer or officers of the Financing Authority unless the counsel executing such Opinion of Counsel knows that the representation with respect to the matters upon which his opinion may be based, as aforesaid, is erroneous, or in the exercise of reasonable care should have known that the same was erroneous.

SECTION 10.10 Accounts and Funds; Business Days. Any account or fund required herein to be established and maintained by the Trustee may be established and maintained in the -accounting records of the Trustee either as an account or a fund, and may, for the purposes of such accounting records, any audits thereof and any reports or statements with respect thereto, be treated either as an account or a fund; but all such records with respect to all such accounts and funds shall at all times be maintained in accordance with sound industry practice and with due regard for the protection of the security of the 2020 Bonds and the rights of the Owners. Any action required to occur hereunder on a day which is not a Business Day shall be required to occur on the next succeeding Business Day.

SECTION 10.11 Notices. All written notices to be given hereunder shall be given by mail to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other party in writing from time to time, namely:

If to the Financing Authority:

Stockton Public Financing Authority
425 N. Eldorado Street
Stockton, California 95202
Attention: Executive Director
ATTACHMENT B 210
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If to the Trustee:

Wells Fargo Bank National Association
MAC # E2064-05A
333 S. Grand Avenue, 5th Floor
Los Angeles, CA 90071-1504
Attention: Corporate Trust Services
SECTION 10.12 CUSIP Numbers. Neither the Financing Authority nor the Trustee shall be liable for any defect or inaccuracy in the CUSIP number that appears on any 2020 Bonds or in any redemption notice relating thereto, and the Trustee may, in its discretion, include in any redemption notice relating to any of the 2020 Bonds a statement to the effect that the CUSIP numbers on the 2020 Bonds have been assigned by an independent service and are included in such notice solely for the convenience of the Owners and that neither the Financing Authority nor the Trustee shall be liable for any defects or inaccuracies in such numbers.

SECTION 10.13 Article and Section Headings and References. The headings or titles of the several articles and sections hereof and the table of contents appended hereto shall be solely for convenience of reference and shall not affect the meaning, construction or effect hereof. All references herein to “Articles,” “Sections” and other subdivisions or clauses are to the corresponding articles, sections, subdivisions or clauses hereof; and the words “hereby,” “herein,” “hereof,” “hereto,” “herewith,” “hereunder” and other words of similar import refer to the Indenture as a whole and not to any particular article, section, subdivision or clause hereof.

SECTION 10.14 Partial Invalidity. If any one or more of the agreements or covenants or portions thereof required hereby to be performed by or on the part of the Financing Authority or the Trustee shall be contrary to law, then such agreement or agreements, such covenant or covenants or such portions thereof shall be null and void and shall be deemed separable from the remaining agreements and covenants or portions thereof and shall in no way affect the validity hereof or of the 2020 Bonds, and the Owners shall retain all the benefit, protection and security afforded to them under the Act or any other applicable provisions of law.

The Financing Authority and the Trustee hereby declare that they would have executed and delivered the Indenture and each and every other article, section, paragraph, subdivision, sentence, clause and phrase hereof and would have authorized the issuance of the 2020 Bonds pursuant hereto irrespective of the fact that any one or more articles, sections, paragraphs, subdivisions, sentences, clauses or phrases hereof or the application thereof to any person or circumstance may be held to be unconstitutional, unenforceable or invalid.

SECTION 10.15 Governing Law. The Indenture shall be construed and governed in accordance with the laws of the State.

SECTION 10.16 Execution in Several Counterparts. The Indenture may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts, or as many of them as the Financing Authority and the Trustee shall preserve undestroyed, shall together constitute but one and the same instrument.

ATTACHMENT B 211
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IN WITNESS WHEREOF, the Stockton Public Financing Authority has caused the Indenture to be signed in its name by its Executive Director and Wells Fargo Bank National Association, in token of its acceptance of the trusts created hereunder, has caused the Indenture to be signed by one of its duly authorized signatories, all as of the day and year first above written.

STOCKTON PUBLIC FINANCING

AUTHORITY
By
Executive Director

WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Trustee
By
Authorized Signatory
ATTACHMENT B 212
A-1

EXHIBIT A
FORM OF 2020 BONDS

UNITED STATES OF AMERICA

STATE OF CALIFORNIA

STOCKTON PUBLIC FINANCING AUTHORITY
PARKING REVENUE BOND, SERIES 2020
No. R-1 $_______
Interest Rate Maturity Date Bond Date CUSIP
_____% March 1, _____ February __ ,2020 _____
REGISTERED OWNER:

PRINCIPAL SUM: DOLLARS
The Stockton Public Financing Authority, a joint exercise of powers entity duly organized and existing under and pursuant to the laws of the State of California (the “Financing Authority”), for value received, hereby promises to pay (but only out of the Revenues and certain other funds hereinafter referred to) to the registered owner identified above or registered assigns, on the maturity date specified above (subject to any right of prior redemption hereinafter provided for) the principal sum specified above, together with interest thereon computed on the basis of a 360-day year of twelve (12), 30 day calendar months from the interest payment date next preceding the date of authentication of this 2020 Bond (unless this 2020 Bond is authenticated on an interest payment date or on a day during the period from the sixteenth (16th) day of the month next preceding an interest payment date to such interest payment date, both dates inclusive, in which event it shall bear interest from such interest payment date, or unless it is authenticated on a day on or before the Record Date (as that term is hereinafter defined) for the first interest payment date, in which event it shall bear interest from its date) until the principal hereof shall have been paid, at the interest rate per annum specified above, payable semiannually thereafter on March 1 and September 1 in each year, commencing on [September 1, 2020]. The interest due on this 2020 Bond on or before the maturity or prior redemption hereof shall be payable only to the person whose name appears in the registration books required to be kept by Wells Fargo, Bank National Association (the “Trustee”) at its Principal Corporate Trust Office (as that term is defined in the Indenture hereinafter referred to, and herein the “Principal Corporate Trust Office”) as the registered owner hereof at the close of business as of the fifteenth (15th) day of the month next preceding each interest payment date (each, a “Record Date”), with such interest to be paid by check mailed by first class mail on each interest payment date to such registered owner at his address as it appears on such registration books; provided, that upon the written request of the registered owner of one million dollars ($1,000,000) or more in aggregate principal amount of 2020 Bond received by the Trustee prior to the applicable Record Date (which such request shall remain in effect until rescinded in writing by such registered owner), interest shall be paid on each interest payment date by wire transfer of immediately available ATTACHMENT B 213
A-2
funds to an account maintained in any bank or trust company in the United States of America that is a member of the Federal Reserve System designated in writing by such registered owner.

The principal of and redemption premium, if any, on this 2020 Bond shall be payable only to the person whose name appears in such registration books as the registered owner hereof, such principal and redemption premium, if any, to be paid upon surrender of this 2020 Bond to the Trustee at its Principal Corporate Trust Office at maturity or upon prior redemption. The interest on and principal of and redemption premium, if any, on this 2020 Bond is payable in lawful money of the United States of America.

This 2020 Bond is one of a duly authorized issue of revenue bonds of the Financing Authority designated as its “Parking Revenue Bonds, Series 2020” (the “2020 Bonds”) in the aggregate principal amount of _________ dollars ($_____) all of like tenor and date (except for such variations, if any, as may be required to designate varying numbers, maturities and interest rates), and is issued under and pursuant to the provisions of the Joint Exercise of Powers Act (being Chapter 5 of Division 7 of Title 1 of the California Government Code, as amended) and all laws amendatory thereof or supplemental thereto (the “Act”) and under and pursuant to the provisions of a Indenture dated as of February 1, 2020, by and between the Financing Authority and the Trustee (the “Indenture”) (copies of which are on file at the Principal Corporate Trust Office of the Trustee ).

The 2020 Bonds are issued to provide funds to refinance the cost of the acquisition and construction of certain additions, betterments, extensions and improvements to the Parking Facilities (as that term is defined in the Indenture) of the Parking Authority of the City of Stockton (the “Parking Authority”). The Bonds are limited obligations of the Financing Authority and are payable, as to interest thereon, principal thereof and any redemption premiums thereon, solely from the Revenues (the “Revenues”) constituting the installment payments (the “2020 Installment Payments”) to be made by the Parking Authority to the Financing Authority for the prepayment of the 2015 Installment Sale Agreement and the financing of the Improvements (each as defined in the Indenture) pursuant to the 2020 Installment Purchase Contract, dated as of February 1, 2020, by and between the Parking Authority and the Financing Authority (the “2020 Installment Purchase Agreement”) and the funds held in the accounts and funds pursuant to the Indenture as provided therein, and the Financing Authority is not obligated to pay interest on or principal of or redemption premiums, if any, on the Bonds except from the Revenues and such funds.

All the 2020 Bonds are equally and ratably secured in accordance with the terms and conditions of the Indenture by a pledge of and charge and lien upon the Revenues and such funds, and the Revenues and such funds constitute a trust fund for the security and payment of the interest on and principal of and redemption premiums, if any, on the 2020 Bonds as provided in the Indenture. The full faith and credit of the Financing Authority is not pledged for the payment of the interest on or principal of or redemption premiums, if any, on the 2020 Bonds, and no tax shall ever be levied or collected to pay the interest on or principal of or redemption premiums, if any, on the 2020 Bonds. The 2020 Bonds are not secured by a legal or equitable pledge of or charge or lien upon any property of the Financing Authority or any of its income or receipts except the Revenues and such funds. Neither the payment of the interest on or principal of or redemption premiums, if any, on the 2020 Bonds is a debt, liability or general obligation of the City, the Parking Authority or the State of California and neither the faith and credit of the ATTACHMENT B 214
A-3
City, the Parking Authority or the State of California are pledged to the payment of interest on or principal or redemption premiums, if any, on the 2020 Bonds. Reference is hereby made to the Act and to the Indenture and any and all amendments thereof and supplements thereto for a description of the terms on which the 2020 Bonds are issued, the provisions with regard to the nature and extent of the Revenues, the rights of the registered owners of the 2020 Bonds, the security for payment of the 2020 Bonds, the remedies upon default and limitations thereon, and the amendment of the Indenture (with or without consent of the registered owners of the 2020 Bonds); and all the terms of the Indenture are hereby incorporated herein and constitute a contract between the Financing Authority and the registered owner of this 2020 Bond, to all the provisions of which the registered owner of this 2020 Bond, by acceptance hereof, agrees and consents.

The 2020 Bonds shall be subject to redemption as provided in the Indenture.

This 2020 Bond is transferable only on a register to be kept for that purpose at the above-mentioned office of the Trustee by the registered owner hereof in person or by his duly authorized attorney upon payment of the charges provided in the Indenture and upon surrender of this 2020 Bond together with a written instrument of transfer satisfactory to the Trustee duly executed by the registered owner or his duly authorized attorney, and thereupon a new fully registered 2020 Bond or 2020 Bond in the same aggregate principal amount of authorized denominations will be issued to the transferee in exchange therefor. The Financing Authority and the Trustee may deem and treat the registered owner hereof as the absolute owner hereof for the purpose of receiving payment of the interest hereon and principal hereof and redemption premium, if any, hereon and for all other purposes, whether or not this 2020 Bond shall be overdue, and neither the Financing Authority nor the Trustee shall be affected by any notice or knowledge to the contrary; and payment of the interest on and principal of and redemption premium, if any, on this 2020 Bond shall be made only to such registered owner, which payments shall be valid and effectual to satisfy and discharge liability on this 2020 Bond to the extent of the sum or sums so paid.

This 2020 Bond shall not be entitled to any benefit, protection or security under the Indenture or become valid or obligatory for any purpose until the certificate of authentication hereon endorsed shall have been executed and dated by the Trustee.

It is hereby certified that all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in the issuance of this 2020 Bond do exist, have happened and have been performed in due time, form and manner as required by law and that the amount of this 2020 Bond, together with all other indebtedness of the Financing Authority, does not exceed any limit prescribed by the Constitution or laws of the State of California and is not in excess of the amount of 2020 Bond permitted to be issued under the Indenture.

ATTACHMENT B 215
A-4
IN WITNESS WHEREOF, the Stockton Public Financing Authority has caused this 2020 Bond to be executed in its name and on its behalf by the manual or facsimile signature of its Chairperson and countersigned by the manual or facsimile signature of its Secretary, and has caused this 2020 Bond to be dated as of [_____], 2020.

STOCKTON PUBLIC FINANCING

AUTHORITY
By
Chairperson
Countersigned:
________________________
Secretary
ATTACHMENT B 216
A-5
This is one of the 2020 Bonds described in the within-mentioned Indenture which has been authenticated on _________________________________.

WELLS FARGO BANK NATIONAL
ASSOCIATION, as Trustee
By
Authorized Signatory
For value received the undersigned hereby sells, assigns and transfers unto ___________________ (Taxpayer Identification Number: ___________________) the within 2020 ___________________ Bonds and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within 2020 Bonds on the books kept for registration thereof, with lull power of substitution in the premises.

Dated: ___________________
Signature Guaranteed: ___________________
Note: The signature to this Assignment must correspond with the name as written on the face of the 2020 Bonds in every particular, without alteration or enlargement or any change whatever, and the signature must be guaranteed by an eligible guarantor institution. [DTC LEGEND]
Unless this Bond is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the Trustee for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of

DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof Cede & Co., has an interest herein.

ATTACHMENT B 217
B-1

EXHIBIT B

STOCKTON PUBLIC FINANCING AUTHORITY

WATER REVENUE BONDS,
SERIES 2020
(Issue Dated Date: ____, 2020)
Requisition of the Parking Authority
(Acquisition and Construction Fund)
(Section 3.02 of the Indenture)
Wells Fargo Bank, National Association, as Trustee
Attention: Corporate Trust Department
Request No.: P-___ (to be sequentially numbered)
Project Component
Amount of
This Draw
Aggregate Amount
Draws Including
This Draw
___________ _______________
___________ _______________
___________ _______________
___________ _______________
___________ _______________
___________ _______________
___________ _______________
___________ _______________
___________ _______________
___________ _______________
___________ _______________
(Continue on Additional Sheet if Necessary)
ATTACHMENT B 218
B-2
Name and Address of party to whom payment is to be made:

Purpose for which the obligation was incurred:

The undersigned representative of the Parking Authority of the City of Stockton (the “Parking Authority”) hereby certifies that (i) each such cost or expense constitutes a proper charge against the Acquisition and Construction Fund for services rendered, and has not been the subject of any other payment request filed with you; and (ii) if the payment is to be made to the Parking Authority for amounts that it has paid or will pay to third parties, then the Parking Authority has either made payment or will make payment within three business days of receipt of moneys requisitioned hereunder and that the aggregate number of business days during this calendar year during which it has held such amounts before making payment does not exceed twenty.

Date: ________________________

PARKING AUTHORITY OF

THE CITY OF STOCKTON
By:___________________________
Title:_________________________
ATTACHMENT B 219
B-3

EXHIBIT C

STOCKTON PUBLIC FINANCING AUTHORITY

WATER REVENUE BONDS,
SERIES 2020
(Issue Dated Date: _______, 2020)
Requisition of the Financing Authority
(Costs of Issuance Fund)
(Section 3.03 of the Indenture)
Wells Fargo Bank, National Association, as Trustee
Attention: Corporate Trust Department
Date of Requisition: ________, 20__.

Request No.: P-___ (to be sequentially numbered)
The undersigned, ____________________, hereby certifies as follows:

1. I am _______________________ of the Stockton Public Financing Authority, a joint powers authority duly established and existing under the laws of the State of California (the “Issuer”).

2. Pursuant to the provisions of the Indenture, dated as of February 1, 2020 (the “Indenture”), between the Issuer and Wells Fargo Bank, National Association, as trustee (the “Trustee”), I am an authorized signatory of the Issuer and I am delivering this Requisition on behalf of the Issuer.

3. The undersigned hereby requests that the Trustee pay from the Costs of Issuance Fund established pursuant to Section 3.03 of the Indenture the amounts specified in Schedule I hereto to the persons identified in Schedule I.

4. The undersigned hereby certifies that: (i) each obligation mentioned therein is a proper charge against the Costs of Issuance Fund and has not previously been disbursed by the Trustee from amounts in the Costs of Issuance Fund, and (ii) the amount of such disbursement is for payment of Costs of Issuance incurred and payable by the Issuer; and that this Requisition specifies in reasonable detail the nature of the obligation; and is accompanied by a bill or statement of account (if any) for each obligation.

Dated: _______, 20__.

STOCKTON PUBLIC FINANCING

AUTHORITY
By
Authorized Signatory
ATTACHMENT B 220
B-4
Schedule I
Costs of Issuance Fund
To Amount Purpose
$
ATTACHMENT B 221
Exhibit 2

INSTALLMENT PURCHASE AGREEMENT
by and between

PARKING AUTHORITY OF THE CITY OF STOCKTON,
as Purchaser
and

STOCKTON PUBLIC FINANCING AUTHORITY,
as Seller

RELATING TO THE

STOCKTON PUBLIC FINANCING AUTHORITY
PARKING REVENUE BONDS, SERIES 2020
Dated as of February 1, 2020
ATTACHMENT B 222

TABLE OF CONTENTS
Page
-iARTICLE I

DEFINITIONS
SECTION 1.01. Definitions.................................................................................................. 4 SECTION 1.02. Article and Section Headings, Gender and References ........................... 14 SECTION 1.03. Terms Not Defined Herein ....................................................................... 15

ARTICLE II
ISSUANCE OF THE 2020 BONDS; SALE AND PURCHASE OF THE LEASED PARKING

FACILITIES AND THE IMPROVEMENTS
SECTION 2.01. 2020 Bonds .............................................................................................. 15 SECTION 2.02. Appointment of Parking Authority as Agent of Financing Authority .................................................................................................. 15 SECTION 2.03. Sale and Purchase of the Improvements .................................................. 15 SECTION 2.04. Failure of the Financing Authority to Perform Under this 20202 Installment Purchase Agreement .................................................. 16

ARTICLE III
2020 INSTALLMENT PAYMENTS
SECTION 3.01. Purchase Price .......................................................................................... 16 SECTION 3.02. Payment of the 2020 Installment Payments ............................................. 17 SECTION 3.03. Prepayment of the 2020 Installment Payments ........................................ 17

ARTICLE IV

REVENUES
SECTION 4.01. Pledge of Net Parking Revenues; Revenue Fund .................................... 18 SECTION 4.02. Allocation of Net Parking Revenues........................................................ 18 SECTION 4.03. Additional Obligations ............................................................................. 19

ARTICLE V

COVENANTS OF THE PARKING AUTHORITY
SECTION 5.01. Compliance with and Amendment of 2020 Installment Purchase Agreement ................................................................................ 21 SECTION 5.02. Against Encumbrances ............................................................................. 22 SECTION 5.03. Against Sale or Other Disposition of Property ........................................ 22 SECTION 5.04. Against Competitive Facilities ................................................................. 22 SECTION 5.05. Tax Covenants ......................................................................................... 23 SECTION 5.06. Maintenance and Operation of the Parking Facilities .............................. 24 SECTION 5.07. Payment of Claims ................................................................................... 24 SECTION 5.08. Compliance with Contracts ...................................................................... 24 SECTION 5.09. Insurance .................................................................................................. 24 SECTION 5.10. Accounting Records; Financial Statements and Other Reports ............... 24 SECTION 5.11. Protection of Security and Rights of Authority ....................................... 25 SECTION 5.12. Payment of Taxes and Compliance with Governmental Regulations .............................................................................................. 25 SECTION 5.13. Amount of Charges, Fees and Rates; Rate Stabilization Fund ................ 25 ATTACHMENT B 223

TABLE OF CONTENTS
(continued)
Page
-iiSECTION 5.14. Eminent Domain and Insurance Proceeds ............................................... 25 SECTION 5.15. Continuing Disclosure ............................................................................. 26 SECTION 5.16. Further Assurances................................................................................... 26 SECTION 5.17. Application of CFD Revenues to the Payment of Gross Operation and Maintenance Costs ........................................................... 26 SECTION 5.18. Incurrence of Obligations Payable From CFD Revenues ....................... 26 SECTION 5.19. Preservation of the CFD Revenues .......................................................... 26 SECTION 5.20. CFD Revenues Assignment Agreement .................................................. 26

ARTICLE VI

EVENTS OF DEFAULT AND REMEDIES OF THE FINANCING AUTHORITY SECTION 6.01. Events of Default ..................................................................................... 27 SECTION 6.02. Distribution of Assets .............................................................................. 27 SECTION 6.03. Remedies of the Financing Authority ...................................................... 28 SECTION 6.04. Non-Waiver .............................................................................................. 28 SECTION 6.05. Remedies Not Exclusive .......................................................................... 29

ARTICLE VII

DISCHARGE OF OBLIGATIONS
SECTION 7.01. Discharge of Obligations ......................................................................... 29

ARTICLE VIII

MISCELLANEOUS
SECTION 8.01. Liability of City Limited to Net Parking Revenues ................................. 30 SECTION 8.02. Benefits of Contract Limited to Parties and Beneficiary ......................... 30 SECTION 8.03. Assignment .............................................................................................. 30 SECTION 8.04. Successor is Deemed Included in all References to Predecessor .............................................................................................. 31 SECTION 8.05. Waiver of Personal Liability .................................................................... 31 SECTION 8.06. Partial Invalidity....................................................................................... 31 SECTION 8.07. Net Contract ............................................................................................. 31 SECTION 8.08. California Law ......................................................................................... 31 SECTION 8.09. Notices ..................................................................................................... 31 SECTION 8.10. Effective Date .......................................................................................... 32 SECTION 8.11. Governing Law ........................................................................................ 32 SECTION 8.12. Execution in Counterparts ........................................................................ 32 ATTACHMENT B 224
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INSTALLMENT PURCHASE AGREEMENT
This INSTALLMENT PURCHASE AGREEMENT (the “2020 Installment Purchase Agreement”), dated as of February 1, 2020, by and between THE PARKING AUTHORITY OF CITY OF STOCKTON, a public body corporate and politic organized and existing under and by virtue of the laws of the State of California (the “Parking Authority”), and the STOCKTON PUBLIC FINANCING AUTHORITY, a joint exercise of powers entity duly organized and existing under and by virtue of the laws of the State of California (the “Financing Authority”);
WITNESSETH:

WHEREAS, The City of Stockton (the “City”) and the former Redevelopment Agency of the City of Stockton entered into a Joint Exercise of Powers Agreement, dated as of June 18, 1990 (the “Joint Powers Agreement”), establishing the Financing Authority; WHEREAS, the Parking Authority is authorized by law to purchase parking facilities and improvements thereto;
WHEREAS, the Financing Authority is a joint exercise of powers entity duly organized and existing under and pursuant to Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California, as amended (the “Act”); WHEREAS, the Act authorizes and empowers the Financing Authority to issue revenue bonds to assist the Parking Authority in financing and refinancing public capital improvements;
WHEREAS, the Parking Authority is a local agency as defined and provided in the Act;
WHEREAS, pursuant to that certain Site and Facility Lease, dated as of June 1, 2004 (the “Site and Facility Lease”), the City, as lessor, leased to the Financing Authority, as lessee, certain parcels of real property situated in the City (the “Site”), and the City’s Market Street Parking Garage, the Edmund S. Coy Parking Garage, and the Stockton Events Center Parking Structure, respectively, to the Site and Facility Lease (collectively, the “Leased Parking Facilities”);
WHEREAS, the Financing Authority issued and sold its $32,785,000 Stockton Public Financing Authority Lease Revenue Bonds, Series 2004 (Parking and Capital Projects) (the “2004 Parking Bonds”), pursuant to an Indenture of Trust (the “2004 Bonds Indenture”), dated as of June 1, 2004, by and between the Financing Authority and Wells Fargo Bank, National Association, as trustee (the “2004 Trustee”);
WHEREAS, in order to provide for repayment of the 2004 Parking Bonds, the Financing Authority leased the Site and the Leased Parking Facilities to the City pursuant to a Lease Agreement, dated as of June 1, 2004 (the “Lease Agreement”), by and between the Financing Authority and the City, pursuant to which the City agreed to make certain lease payments to the Financing Authority (the “Lease Payments”); ATTACHMENT B 225
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WHEREAS, Pursuant to the terms of the 2004 Indenture and a Memorandum of Assignment of Lease, dated as of June 1, 2004, by and between the Financing Authority and the 2004 Trustee, the Financing Authority assigned, transferred and set over to the 2004 Trustee, all of the Financing Authority's rights under the Lease Agreement (other than certain retained rights), including the right to receive such Lease Payments;
WHEREAS, following the City’s default on certain Lease Payments due under the Lease Agreement, the 2004 Trustee sought and, on April 19, 2012, the Superior Court for the County of San Joaquin (the “Superior Court”) awarded the 2004 Trustee possession of the Leased Parking Facilities (the “2004 Parking Bonds Proceeding”); WHEREAS, the City was the debtor in a bankruptcy case under chapter 9 of Title 11 of the United States Code, Case No. 2012-32118 in the United States Bankruptcy Court for the Eastern District of California, Sacramento Division, styled In re City of Stockton, California (the “Bankruptcy Case”);
WHEREAS, the 2004 Indenture provides that, for all purposes of the 2004 Indenture provisions governing events of default and remedies, except the giving of notice of default to owners of the Bonds, National Public Finance Guarantee Corporation (“NPFG”), as the insurer of the 2004 Parking Bonds (as successor to Financial Guaranty Insurance Company) shall be deemed to be the sole holder of the 2004 Parking Bonds it has insured for so long as it has not failed to comply with its payment obligations under its policy securing payment of principal of and interest on the 2004 Parking Bonds;
WHEREAS, in connection with the Bankruptcy Case, the City agreed to a settlement (the “Settlement”) of the claims of the 2004 Trustee, on behalf of holders of the 2004 Parking Bonds, and NPFG with respect to the 2004 Parking Bonds; WHEREAS, pursuant to the terms of the Settlement, NPFG and the 2004 Trustee agreed, subject to compliance by the City, the Financing Authority and the Parking Authority of the City of Stockton (the “Parking Authority”) with certain terms of the Settlement, to forbear enforcement of certain of their rights relating to payment of the 2004 Parking Bonds and related obligations, and to cause the 2004 Trustee to transfer to the Parking Authority all of its possessory rights, title and interest in the Site and the Leased Parking Facilities granted to it in the 2004 Bonds Parking Proceeding in exchange for, among other things, certain payments from the Parking Authority to the Trustee for the benefit of NPFG and the owners of the 2004 Parking Bonds; WHEREAS, pursuant to the terms of the Settlement, the City Council of the City passed Resolution No. 2013-12-17-1209 on December 17, 2013 (the “Parking Authority Resolution”) authorizing the activation of the Parking Authority, and authorizing it to operate within boundaries described in the Parking Authority Resolution; WHEREAS, in furtherance of the Settlement, the City entered into a Forbearance Agreement, dated as of February 25, 2015 (the “Forbearance Agreement”), by and among the City, the 2004 Trustee, the Parking Authority, the Financing Authority and NPFG, setting forth certain terms of the Settlement, including an agreement by NPFG and the 2004 Trustee to forbear enforcement of certain of their rights relating to payment on the 2004 Parking Bonds and related ATTACHMENT B 226
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obligations, subject to the compliance by the City and the Parking Authority with their obligations under the Forbearance Agreement and the 2015 Installment Sale Agreement (as defined herein); WHEREAS, under the Forbearance Agreement, the City, among other things, transferred to the Parking Authority all of its rights, title and interest in the City’s Parking Facilities (as defined herein) and assigned to the Parking Authority all of the City’s rights, title and interest, as lessee, pursuant to the Site Lease, and as lessor, pursuant to the Lease Agreement, and the Parking Authority assumed all of the City’s obligation under the Site Lease and the Lease Agreement;
WHEREAS, pursuant to the terms of the Settlement, the Parking Authority entered into an Installment Sale Agreement (Parking Garages and Downtown Parking District Facilities), dated as of February 25, 2015 (the “2015 Installment Sale Agreement”), with the 2004 Trustee and NPFG, pursuant to which the Parking Authority is required to make installment payments to the 2004 Trustee for the benefit of NPFG and the owners of the 2004 Parking Bonds; and WHEREAS, the Parking Authority now desires to prepay the 2015 Installment Sale Agreement; and
WHEREAS, the Parking Authority has also identified the need to make certain capital improvements to the Parking Facilities, including the improvement of certain elevators located in the Parking Facilities (the “Improvements”); and WHEREAS, the Financing Authority and the Parking Authority have determined that providing funds to prepay 2015 Installment Sale Agreement and finance the Improvements by the issuance of revenue bonds of the Financing Authority will result in demonstrable savings in borrowing costs of the Parking Authority and will result in significant public benefits to the Parking Authority; and
WHEREAS, by virtue of the prepayment of the 2015 Installment Sale Agreement, a portion of the 2004 Parking Bonds shall be defeased and redeemed; and WHEREAS, the Parking Authority has agreed to make scheduled installment payments to the Financing Authority to prepay the 2015 Installment Sale Agreement and finance the Improvements, together with interest thereon, which installment payments are to be secured by a pledge of and lien on certain revenues of the Parking Facilities (as further described herein, the “Net Parking Revenues”), as provided herein; and
WHEREAS, the Parking Authority and the Financing Authority hereby certify that all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of the 2020 Installment Purchase Agreement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into the 2020 Installment Purchase Agreement;

NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND OF THE

MUTUAL AGREEMENTS AND COVENANTS CONTAINED HEREIN AND FOR OTHER ATTACHMENT B 227
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VALUABLE CONSIDERATION, THE PARTIES HERETO DO HEREBY AGREE AS FOLLOWS:

ARTICLE I

DEFINITIONS
SECTION 1.01. Definitions.
2015 Installment Sale Agreement
“2015 Installment Sale Agreement” means the Installment Sale Agreement (Parking Garages and Downtown Parking District Facilities), dated as of February 25, 2015, by and between National Public Finance Guarantee Corporation, Wells Fargo Bank, National Association and the Parking Authority.
2020 Bonds
“2020 Bonds” means all parking revenue bonds of the Financing Authority authorized, issued and delivered under the 2020 Indenture that are at any time outstanding pursuant thereto.
2020 Installment Purchase Agreement
“2020 Installment Purchase Agreement” means this Installment Purchase Agreement dated as of February 1, 2020, by and between the Parking Authority and the Financing Authority, as originally executed and as it may from time to time be amended in accordance herewith.
2020 Indenture
“2020 Indenture” means that certain 2020 Indenture, dated as of February 1, 2020, by and between the Financing Authority and the Trustee, as originally executed and as it may from time to time be amended or supplemented in accordance with its terms. 2020 Installment Payment Date
“2020 Installment Payment Date” has the meaning set forth in Section 3.02. 2020 Installment Payment Fund
“2020 Installment Payment Fund” means the Stockton Public Financing Authority 2020 Installment Payment Fund established pursuant to Section 3.02 of the 2020 Indenture. 2020 Installment Payments
“2020 Installment Payments means the installment payments scheduled to be paid by the Parking Authority hereunder and set forth in Exhibit A hereto.

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2020 Reserve Account
“2020 Reserve Account” means the account within the 2020 Installment Payment Fund by that name established pursuant to Section 3.03 of the 2020 Indenture.

Accountant’s Report
“Accountant’s Report” means an audited financial report prepared and signed by an Independent Certified Public Accountant.

Acquisition and Construction
“Acquisition and Construction” means, with respect to the Improvements, the acquisition, construction, improvement, equipping, renovation, remodeling or reconstruction thereof.

Acquisition and Construction Costs
“Acquisition and Construction Costs” means, with respect to any of the Improvements, all costs of the Acquisition and Construction thereof which are paid from moneys on deposit in the Acquisition and Construction Fund, including but not limited to:
(a) all costs required to be paid to any person under the terms of any agreement for or relating to the Acquisition and Construction of the Improvements; (b) obligations incurred for labor and materials in connection with the Acquisition and Construction of the Improvements;
(c) the cost of performance or other bonds and any and all types of insurance that may be necessary or appropriate to have in effect in connection with the Acquisition and Construction of the Improvements;
(d) all costs of engineering and architectural services, including the actual outof-pocket costs for test borings, surveys, estimates, plans and specifications and preliminary investigations therefor, development fees, sales commissions, and for supervising construction, as well as for the performance of all other duties required by or consequent to the proper Acquisition and Construction of the Improvements;
(e) any sums required to reimburse the Financing Authority or the Parking Authority for advances made for any of the above items or for any other costs incurred and for work done which are properly chargeable to the Acquisition and Construction of the Improvements;
(f) all financing costs incurred in connection with the Acquisition and Construction of the Improvements, including but not limited to Costs of Issuance and other costs incurred in connection with this Agreement and the financing of the Improvements; and ATTACHMENT B 229
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(g) the interest components of the Installment Payments during the period of Acquisition and Construction of the Improvements, to the extent not paid from the proceeds of the 2020 Bonds deposited in the Interest Account pursuant to the Indenture.

Adjusted Net Parking Revenues
“Adjusted Net Parking Revenues” means, for any Fiscal Year, the Net Parking Revenues for such Fiscal Year less, to the extent included in the calculation of Net Parking Revenues for such Fiscal Year, all amounts referred to in clause (G) of the definition of Parity Debt Service received or expected to be received by the Parking Authority or a fiduciary, on behalf of the Parking Authority, in such Fiscal Year.

Balloon Obligation
“Balloon Obligation” means any Parity Obligation designated as such in such obligation or in the related Issuing Document.

Balloon Payments
“Balloon Payments” means any payments designated as such in any Balloon Obligation or in the related Issuing Document.

CFD
“CFD” means Communities Facilities District No. 2001-1 (Downtown Parking) formed the City.

CFD Revenues
“CFD Revenues” means all revenues generated by the levy of the Special Tax within the CFD pursuant to the terms of the Rate and Method.

CFD Revenues Assignment Agreement
“CFD Revenues Assignment Agreement” means that certain Assignment Agreement, dated as of February 1, 2020, by and between the City and the Parking Authority, pursuant to which the City assigned the CFD Revenues to the Parking Authority.

City
“City” means the City of Stockton, a municipal corporation and chartered city duly organized and existing under and by virtue of the Constitution and laws of the State and its charter.

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Code
“Code” means the Internal Revenue Code of 1986, as amended.

Consultant
The term “Consultant” means the consultant, consulting firm, financial consultant, financial consulting firm, engineer, architect, engineering firm, architectural firm, accountant or accounting firm retained by the Parking Authority to perform acts or carry out the duties provided for such consultant in this 2020 Installment Purchase Agreement. Such consultant, consulting firm, financial consultant, financial consulting firm, engineer, architect, engineering firm or architectural firm shall be nationally or regionally recognized within its profession for work of the character required. Any such accountants or accounting firms shall be an Independent Certified Public Accountant licensed to practice in the State of California.

Credit Provider Reimbursement Obligations
“Credit Provider Reimbursement Obligations” means obligations of the Parking Authority to repay, from Net Parking Revenues, amounts advanced by a municipal bond insurance company, bank or other financial institution or organization as credit support or liquidity support for Parity Obligations or obligations secured by Parity Obligations, together with any interest on such advances and any related administrative costs.

Event of Default
“Event of Default” means an event defined as such in Section 6.01(a), (b), (c), or (d).

Federal Securities
“Federal Securities” means United States of America Treasury bills, notes, bonds or certificates of indebtedness, or obligations for which the full faith and credit of the United States of America are pledged for the payment of interest and principal, or securities evidencing direct ownership interests in such obligations or in specified portions of the interest on or principal of such obligations that are held by a custodian in safekeeping on behalf of the owners of such securities.

Financing Authority
“Financing Authority” means the Stockton Public Financing Authority, a joint exercise of powers entity duly organized and existing under and by virtue of the Act.

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Fiscal Year
“Fiscal Year” means the twelve-month period terminating on June 30 of each year, or any other annual accounting period hereafter selected and designated by the Parking Authority as its Fiscal Year in accordance with applicable law.

Generally Accepted Accounting Principles
“Generally Accepted Accounting Principles” means the uniform accounting and reporting procedures set forth in publications of the American Institute of Certified Public Accountants or its successor, or by any other generally accepted authority on such procedures, and includes, as applicable, the standards set forth by the Governmental Accounting Standards Board or its successor.

Gross Operation and Maintenance Costs
“Gross Operation and Maintenance Costs” means the reasonable and necessary costs spent or incurred for maintenance and operation of the Parking Facilities calculated in accordance with Generally Accepted Accounting Principles, including (among other things) (a) the reasonable expenses of management and repair, including fees, charges and other invoices of a professional operator, person, firm or corporation with staff experienced in the management and operation of parking facilities similar to the Parking Facilities who is managing and operating all or a portion of the Parking Facilities, and other expenses necessary to maintain and preserve the Parking Facilities in good repair and working order, (b) the reasonable administrative costs of the Parking Authority and the City that are reasonably charged or directly apportioned to the Parking Facilities, including but not limited to, salaries and wages of employees, payments to the Public Employees Retirement System, overhead, utilities and services, insurance, taxes (including parking taxes), fees of auditors, accountants, attorneys, consultants or engineers and insurance premiums and , and including all other reasonable and necessary costs of the Parking Authority or the City or charges required to be paid by it to comply with the terms hereof, or the terms of any Parity Obligations, but excluding in all cases (i) depreciation, replacement and obsolescence charges or reserves therefor, (ii) amortization of intangibles, (iii) costs of capital additions, replacements, betterments, extensions or improvements to the Parking Facilities which under Generally Accepted Accounting Principles are chargeable to a capital account, and (iv) charges for the payment of principal and interest on any debt service or other regularly scheduled payments on account of any Parity Obligation or obligation subordinate to the Parity Obligations.

Improvements
The term “Improvements” shall have the meaning ascribed thereto in the recitals hereof.

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Independent Certified Public Accountant
“Independent Certified Public Accountant” means any firm of certified public accountants duly licensed and entitled to practice and practicing as such under the laws of the State, appointed and paid by the Parking Authority, and each of whom — (1) is in fact independent and not under the domination of the Parking Authority;
(2) does not have a substantial financial interest, direct or indirect, in the operations of the Parking Authority; and
(3) is not connected with the Parking Authority as a councilmember, officer or employee of the Parking Authority, but which firm may be regularly retained by the Parking Authority to audit the accounting records of the Parking Authority and make reports thereon to the Parking Authority.

Issuing Document
“Issuing Document” means the 2020 Installment Purchase Agreement and any installment purchase contract, indenture, trust agreement or other document that provides for the issuance or incurrence of Parity Obligations.

Leased Parking Facilities
The term “Leased Parking Facilities” shall have the meaning ascribed thereto in the recitals hereof.

Maximum Annual Debt Service
The term “Maximum Annual Debt Service” means, as of any date of calculation, the largest amount of Parity Debt Service during the period from the date of such calculation through the final maturity date of all Parity Obligations.

Net Parking Revenues
“Net Parking Revenues” means, for any period, the Parking Revenues during such period less the Net Operation and Maintenance Costs during such period.

Net Operation and Maintenance Costs
“Net Operation and Maintenance Costs” means, for any period, the Gross Operation and Maintenance Costs during such period less the amount of any CFD Revenues applied to the payment of Gross Operation and Maintenance Costs during such period.

Parity Debt Service
“Parity Debt Service” means, with respect to any Parity Obligation for any period of calculation, those portions of the payments of interest on and principal and redemption ATTACHMENT B 233
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premiums, if any, or other regularly scheduled payments required to be made during such period under such Parity Obligation, less any such interest that is to be paid from proceeds of such Parity Obligation, less the earnings to be derived from the investment of moneys on deposit in debt service reserve funds and capitalized interest funds established for such Parity Obligation; provided, that for purposes of the calculation of Parity Debt Service, the following shall apply:
(A) Interest on Variable Interest Rate Obligations. Interest on any Variable Interest Rate Obligation shall be assumed to bear interest at a fixed rate equal to the higher of:
(1) the actual rate on the date of calculation, or if such Parity Obligation is not yet outstanding, the initial rate (if established and binding); or (2) if such Parity Obligation has been outstanding for at least twelve months, the average rate over the twelve months immediately preceding the date of calculation, or if such Parity Obligation has not been outstanding for the twelve prior months, the average rate borne by reference to an index comparable to that to be utilized in determining the interest rate for the Parity Obligation to be issued. (B) Interest on Parity Obligations with respect to which a Payment Agreement is in force. For purposes of the definition of Parity Debt Service, interest deemed to be payable on any Parity Obligation with respect to which a Payment Agreement is in force shall be based on the net economic effect on the Parking Authority expected to be produced by the terms of such Parity Obligation and such Payment Agreement, including but not limited to the effects that (i) such Parity Obligation would, but for such Payment Agreement, be treated as an obligation bearing interest at a Variable Interest Rate instead shall be treated as an obligation bearing interest at a fixed interest rate, and (ii) such Parity Obligation would, but for such Payment Agreement, be treated as an obligation bearing interest at a fixed interest rate instead shall be treated as an obligation bearing interest at a Variable Interest Rate; and accordingly, the amount of interest deemed to be payable on any Parity Obligation with respect to which a Payment Agreement is in force shall be an amount equal to the amount of interest that would be payable at the rate or rates stated in such Parity Obligation plus the applicable Payment Agreement Payments minus the applicable Payment Agreement Receipts, and for the purpose of calculating as nearly as practicable the Payment Agreement Receipts and the Payment Agreement Payments under such Parity Obligation, the following assumptions shall be made:
(1) Parking Authority Obligated to Pay Net Variable Payments. If a Payment Agreement has been entered into by the Parking Authority with respect to a Parity Obligation resulting in the payment of a net variable interest rate with respect to such Parity Obligation and Payment Agreement by the Parking Authority, the interest rate on such Parity Obligation for future periods when the actual interest rate cannot yet be determined shall be assumed, during the period the Payment Agreement is in effect, to be equal to the sum of (i) the fixed rate or rates stated in such Parity Obligation, minus (ii) the fixed rate paid by the counterparty to the Parking Authority, plus (iii) the lesser of (A) the interest rate cap, if any, provided by the counterparty with respect to such Payment Agreement (but only during the period that such interest rate cap is in effect) and (B) the higher ATTACHMENT B 234
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of (x) the actual variable rate or rates payable by the Parking Authority to the Counterparty pursuant to the Payment Agreement on the date of calculation, or if such Payment Agreement is not yet outstanding, the initial rate (if established and binding) and (y) if such Payment Agreement has been in effect for at least twelve months, the average variable rate or rates payable by the Parking Authority to the counterparty pursuant to the Payment Agreement over the twelve months immediately preceding the date of calculation, or if such Payment Agreement has not been outstanding for the twelve prior months, the average variable rate or rates that would have been payable by the Parking Authority to the counterparty pursuant to such Payment Agreement for the twelve prior months determined by reference to an index comparable to that to be utilized in determining the variable rate for the Payment Agreement to be executed.
(2) Parking Authority Obligated to Pay Net Fixed Payments. If a Payment Agreement has been entered into by the Parking Authority with respect to a Parity Obligation which is reasonably believed, in the opinion of a financial consultant or financial consulting firm, to result in the payment of a net fixed interest rate with respect to such Parity Obligation and Payment Agreement by the Parking Authority, the interest on such Parity Obligation shall be included in the calculation of the Parity Debt Service during the period the Payment Agreement is in effect by including for each calculation period an amount equal to the amount of interest payable at the fixed interest rate pursuant to such Payment Agreement; (C) For purposes of calculating the Parity Debt Service on any Balloon Obligation, it shall be assumed that the principal of such Balloon Obligation will be amortized in a manner resulting in approximately equal annual installments of debt service over a term of thirty (30) years, at an assumed interest rate determined by reference to subparagraph (A) of this definition of Parity Debt Service;
(D) For purposes of any Parity Obligation or portions thereof the debt service requirements under which contain no current interest component but which are sold at a discount and which discount accretes with respect to such Parity Obligation or portions thereof, such accreted discount shall be treated as interest in the calculation of Parity Debt Service; (E) For purposes of any Parity Obligations that constitute paired obligations, the interest rate on such Parity Obligations shall be the resulting linked rate or the effective fixed interest rate (each as certified by a financial consultant or financial consulting firm) reasonably expected to be paid by the Parking Authority with respect to such paired obligations; (F) The amount on deposit in a debt service reserve fund with respect to a Parity Obligation on any date of calculation of Parity Debt Service shall be deducted from the amount of principal due at the final maturity of such Parity Obligation and to the extent the amount in such debt service reserve fund is in excess of such amount of principal, such excess shall be applied to the full amount of principal due, in each preceding year, in inverse order of due date, until such amount is exhausted;
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(G) If, under any statutory scheme, during any period of calculation the Parking Authority or a fiduciary, on behalf of the Parking Authority, receives or expects to receive any subsidy, reimbursement or other payment from a governmental entity (including, but not limited to, the federal government of the United States of America) in connection with, or related to, payments of principal of and/or interest or other regularly scheduled payments on Parity Obligations, then principal of and/or interest or other regularly scheduled payments on such Parity Obligations during such period of calculation shall be disregarded and not included in calculating Parity Debt Service to the extent that such subsidy, reimbursement or other payment is received or expected to be received by the Parking Authority or fiduciary, on behalf of the Parking Authority, during such period of calculation; and
(H) Credit Provider Reimbursement Obligations shall be disregarded, except to the extent such Credit Provider Reimbursement Obligations are due and owing at the time of calculation of Parity Debt Service.

Parity Obligations
“Parity Obligations” means the 2020 Installment Payments, any obligation (including, but not limited to, any installment payment obligation) payable on a parity with the 2020 Installment Payments from Net Parking Revenues, as the case may be, as provided in Article IV and the regularly scheduled payments under any Payment Agreement which have been designated by the Parking Authority as a “Parity Obligation” in the Payment Agreement.

Parking Authority
“Parking Authority” means the Parking Authority of the City of Stockton, a public body corporate and politic organized and existing under and by virtue of the laws of the State of California.

Parking Revenues
“Parking Revenues” means all gross income and revenue received or receivable by the Parking Authority from the ownership or operation of the Parking Facilities, determined in accordance with Generally Accepted Accounting Principles, including all fees, rates, charges, incomes, rents, fines, penalties collections and amounts paid under any contracts received by or owed to the Parking Authority in connection with the operation of the Parking Facilities and all proceeds of insurance relating to the Parking Facilities and all other income and revenue howsoever derived by the Parking Authority from the ownership or operation of the Parking Facilities; but excluding, (a) any proceeds of grants or loans or other debt obligations received by ATTACHMENT B 236
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the Parking Authority, (b) customer deposits or any other deposits or advances subject to refund until such deposits or advances have becomes property of the Parking Authority, and (c) the proceeds of any special assessments or special taxes levied upon real property within any improvement district established for the benefit of the Parking Facilities, including, but not limited, to the CFD Revenues.

Payment Agreement
“Payment Agreement” means a written agreement for the purpose of managing or reducing the Parking Authority’s exposure to fluctuations in interest rates or for any other interest rate, investment, asset or liability managing purposes, entered into either on a current or forward basis by the Parking Authority as authorized under any applicable laws of the State in connection with, or incidental to, the entering into of any Parity Obligation, that provides for an exchange of payments based on interest rates, ceilings or floors on such payments, options on such payments or any combination thereof, or any similar device.

Payment Agreement Payments
“Payment Agreement Payments” means the regularly scheduled amounts (excluding Termination Payments) periodically required to be paid by the Parking Authority under all Payment Agreements.

Payment Agreement Receipts
“Payment Agreement Receipts” means the regularly scheduled amounts (excluding Termination Payments) required to be paid by all counterparties to the Parking Authority under all Payment Agreements.

Principal Corporate Trust Office
“Principal Corporate Trust Office” means the corporate trust office of the Trustee in Los Angeles, California or such other office designated by the Trustee from time to time.

Project
“Project” means any additions, betterments, extensions or improvements to the Parking Facilities designated by the Board of the Parking Authority as a designated Project for the Parking Authority.

Rate and Method
“Rate and Method” means the Second Amended Rate and Method of Apportionment of Special Tax, approved by the voters of a special election held within the CFD on December 13, 2005, as such Second Amended Rate and Method of Apportionment of Special Tax may be amended from time to time in accordance with the laws of the State of California.

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Revenue Fund
“Revenue Fund” means the Parking Authority Fund, established and held by the Parking Authority into which all Parking Revenues are deposited.

S&P
“S&P” means S&P Global Ratings, a Standard and Poor’s Financial Services LLC business, and its successors or assigns, but only to the extent that such entity is then rating any Parity Obligations at the request of the Financing Authority.

Special Tax
“Special Tax” means the special tax levied in the CFD in accordance with the Rate and Method.

State
“State” means the State of California.

Termination Payments
“Termination Payments” means any payments due and payable by the Parking Authority in connection with the termination of a Payment Agreement.

Trustee
“Trustee” means Wells Fargo Bank, National Association, a national banking association duly organized and existing under and by virtue of the laws of the United States of America, at its Principal Corporate Trust Office, as trustee under the 2020 Indenture, and any successors thereto.

Variable Interest Rate
“Variable Interest Rate” means any variable interest rate or rates to be paid under any Parity Obligation, the method of computing which variable interest rate shall be as specified in such obligation, which obligation shall also specify either (i) the payment period or periods or time or manner of determining such period or periods or time for which each value of such variable interest rate shall remain in effect, and (ii) the time or times based upon which any change in such variable interest rate shall become effective, and which variable interest rate may, without limitation, be based on the interest rate on certain bonds or may be based on interest rate, currency, commodity or other indices.

Variable Interest Rate Obligations
“Variable Interest Rate Obligations” means, for any period of time, any Parity Obligations that bear a Variable Interest Rate during such period.

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SECTION 1.02. Article and Section Headings, Gender and References. The headings or titles of the several articles and sections hereof and the table of contents appended hereto shall be solely for convenience of reference and shall not affect the meaning, convenience or effect hereof, and words of any gender shall be deemed and construed to include all genders.

All references herein to “Articles,” “Sections” and other subdivisions or clauses are to the corresponding articles, sections, subdivisions or clauses hereof; and the words “hereby,” “herein,” “hereto,” “herewith,” “hereunder” and other words of similar import refer to the 2020 Installment Purchase Agreement as a whole and not to any particular article, section, subdivision or clause hereof.

SECTION 1.03. Terms Not Defined Herein. Unless the context otherwise requires, the terms defined in this Article shall for all purposes hereof and of any amendment hereof and of any report or other document mentioned herein or therein have the meanings defined herein, the following definitions to be equally applicable to both the singular and plural forms of any of the terms defined herein. Unless a contrary intent is expressed in this 2020 Installment Purchase Agreement, capitalized terms used but not defined in this 2020 Installment Purchase Agreement shall have the meanings given in the 2020 Indenture.

ARTICLE II
ISSUANCE OF THE 2020 BONDS; SALE AND PURCHASE OF THE LEASED PARKING

FACILITIES AND THE IMPROVEMENTS
SECTION 2.01. 2020 Bonds. The Financing Authority has authorized the issuance of the 2020 Bonds pursuant to the 2020 Indenture in the aggregate principal amount of ________ Dollars ($_______). The Financing Authority and the Parking Authority agree that the proceeds of the sale of the 2020 Bonds shall be paid to the Trustee on the Closing Date for deposit pursuant to the terms and conditions of the Indenture. The Parking Authority hereby approves the Indenture, the assignment to the Trustee of the rights of the Financing Authority assigned under and pursuant to the Indenture, and the issuance of the 2020 Bonds by the Financing Authority under and pursuant to the Indenture.

SECTION 2.02. Appointment of Parking Authority as Agent of Financing Authority. The Financing Authority hereby appoints the Parking Authority as its agent to carry out all phases of the Acquisition and Construction of the Improvements pursuant to and in accordance with the provisions hereof and the Indenture. The Parking Authority hereby accepts such appointment and assumes all rights, liabilities, duties and responsibilities of the Financing Authority regarding the Acquisition and Construction of the Improvements. The Financing Authority, or the Parking Authority as agent of the Financing Authority hereunder, shall enter into, administer and enforce all purchase orders or other contracts relating to the Acquisition and Construction of the Improvements. All contracts for, and all work relating to, the Acquisition and Construction of the Improvements shall be subject to all applicable provisions of law relating to the acquisition, construction, improvement, and equipping of like facilities and property by the Parking Authority.

SECTION 2.03. Sale and Purchase of the Improvements. As consideration for the proceeds of the 2020 Bonds, the Financing Authority hereby agrees to purchase, and the ATTACHMENT B 239
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Parking Authority hereby agrees to sell, the Improvements and the Leased Parking Facilities. As consideration for the City’s agreement to make 2020 Installment Payments in accordance with Section 3.01 hereof, the Financing Authority hereby agrees to sell, and the Parking Authority hereby agrees to purchase, the Improvements and the Leased Parking Facilities. All right, title and interest in the Improvements and the Leased Parking Facilities shall vest in the City immediately upon execution of this Agreement. Such vesting shall occur without further action by the Financing Authority or the Parking Authority; and the Financing Authority shall, if requested by the Parking Authority, or if necessary to assure such automatic vesting, deliver any and all documents required to assure such vesting.

SECTION 2.04. Failure of the Financing Authority to Perform Under this 20202 Installment Purchase Agreement. If the Financing Authority fails to observe or perform any agreement, condition, covenant or term contained herein required to be observed or performed by it, the Parking Authority may institute such action or proceeding against the Financing Authority as the Parking Authority may deem necessary or convenient to compel the observance or performance of such agreement, condition, covenant or term, or to recover damages for the nonobservance or nonperformance thereof. The Parking Authority may, at its own cost and expense and in its own name or in the name of the Financing Authority, prosecute or defend any action or proceeding or take any other action involving third persons which the Parking Authority deems reasonably necessary to protect or secure its rights hereunder, and in such event the Financing Authority agrees to cooperate fully with the Parking Authority and to take all action necessary to effect the substitution of the Parking Authority for the Financing Authority in any action or proceeding if the Parking Authority shall so request.

ARTICLE III
2020 INSTALLMENT PAYMENTS
SECTION 3.01. Purchase Price.
(a) The Parking Authority shall pay to the Financing Authority from Net Parking Revenues, the purchase price of the Leased Parking Facilities and Improvements in the amount of ________ dollars ($_______), payable in installments of principal together with interest on the unpaid principal balance thereof, all as provided in Section 3.01(b) (subject in each case to any right of prepayment provided herein), plus the 2020 Reserve Account deposits required pursuant to Section 4.02, which may be credited to the 2020 Installment Payments as provided herein.
(b) The interest on the unpaid balance of the principal amount of the Parking Authority’s obligations hereunder constituting the 2020 Installment Payments shall accrue from February __ , 2020, at the following annual rates of interest per annum, and shall be paid by the Parking Authority as and constitute interest paid on the principal amount of the Parking Authority’s obligations hereunder constituting the 2020 Installment Payments, namely:

Installment
Payment Date
(March 1)
Principal
Installment
Interest
Rate
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SECTION 3.02. Payment of the 2020 Installment Payments. The Parking Authority shall, subject to any right of prepayment as provided herein, pay the Financing Authority the 2020 Installment Payments as herein provided, without offset or deduction of any kind, by paying the principal components of the 2020 Installment Payments annually in the amounts and on or before the date that is at least two (2) business days prior to March 1 in each of the years in accordance with Exhibit A attached hereto and incorporated herein and made a part hereof, together with the interest components of the 2020 Installment Payments, which interest components shall be paid semiannually on or before each February 25 and August 25, commencing [August 25, 2020] (each such February 25 and August 25, a “2020 Installment Payment Date”), in the amounts set forth in Exhibit A attached hereto and incorporated herein and made a part hereof; provided, that in the event the Parking Authority fails to make any 2020 Installment Payment when due, the defaulted 2020 Installment Payment shall continue as an obligation of the Parking Authority, and the Parking Authority shall pay the same with interest thereon from the due date thereof at the rate of interest applicable thereto.

The obligation of the Parking Authority to pay the 2020 Installment Payments from the Net Parking Revenues as herein provided is absolute and unconditional, and until such time as the 2020 Installment Payments shall have been fully paid (or provision for the payment thereof shall have been made pursuant to Section 7.01), the Parking Authority will not discontinue or suspend any 2020 Installment Payments required to be made by it under this section, whether or not the Parking Facilities, or any part thereof is operating or operable or has been completed, or its use is suspended, interfered with, reduced or curtailed or terminated in whole or in part, and such payments shall not be subject to abatement because of any damage to, destruction or condemnation of the Parking Facilities, and such payments shall not be subject to reduction whether by offset or otherwise and shall not be conditioned upon the performance or nonperformance by any party of any agreement for any cause whatsoever.

SECTION 3.03. Prepayment of the 2020 Installment Payments. The Parking Authority may prepay the principal components of the 2020 Installment Payments at the same times, in the same amounts and upon the same terms and conditions as 2020 Bonds (as defined in the 2020 Indenture) may be redeemed pursuant to the 2020 Indenture.

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Notwithstanding any such prepayment, the Parking Authority shall not be relieved of its obligations hereunder until all 2020 Installment Payments shall have been fully paid (or provision for the payment thereof shall have been made pursuant to Section 7.01).

ARTICLE IV

REVENUES
SECTION 4.01. Pledge of Net Parking Revenues; Revenue Fund. (a) The Parking Authority hereby grants to the Financing Authority a first lien on and a security interest in and pledge of all Net Parking Revenues to secure the payment of the 2020 Installment Payments and any Parity Obligations as provided herein, and the Net Parking Revenues shall not be used for any other purpose while any 2020 Installment Payments or any Parity Obligations remain unpaid; provided, that out of the Net Parking Revenues there may be apportioned such sums for such purposes as are expressly permitted by this Article. This lien, security interest, and pledge shall constitute a first lien on the Net Parking Revenues for the payment of the 2020 Installment Payments and any Parity Obligations in accordance with the terms hereof (subject to the incurrence of Parity Obligations in accordance with Section 4.03 hereof). (b) All Parking Revenues shall be deposited as and when received in the Revenue Fund which fund is hereby continued in the treasury of the Parking Authority and which fund shall be maintained by the Parking Authority, and all money in the Revenue Fund shall be set aside by the Parking Authority and applied to the payment of Net Operation and Maintenance Costs, as and when required to be paid.
(c) The Parking Authority hereby covenants to cause all Net Parking Revenues to be allocated and applied as provided in Section 4.02; provided, that pending the use by the Parking Authority of the Net Parking Revenues for such purposes, such money may be invested by the Parking Authority in Permitted Investments.

SECTION 4.02. Allocation of Net Parking Revenues. All Net Parking Revenues shall be set aside by the Parking Authority at the following times and deposited in the following account or fund in the following order of priority:
(a) 2020 Installment Payment Fund Deposits. On or before each 2020 Installment Payment Date, the Parking Authority shall, from Net Parking Revenues, transfer to the Trustee (on a parity with any required transfers of Net Parking Revenues for the payment of all other Parity Obligations) for deposit in the 2020 Installment Payment Fund a sum equal to the amount of the interest components becoming due hereunder on such 2020 Installment Payment Date and a sum equal to the amount of the principal components, if any, becoming due hereunder on such 2020 Installment Payment Date;
(b) Reserve Account Deposits. On each date required by the 2020 Indenture, after making the transfers and deposits required by paragraph (A) for 2020 Installment Payments and payments on Parity Obligations currently due and payable, the Parking Authority shall, from Net Parking Revenues, transfer to the Trustee (on a parity with any required transfers of Net Parking Revenues for the replenishment of all other reserve accounts for all Parity Obligations) ATTACHMENT B 242
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for deposit in the 2020 Reserve Account a sum equal to the amount, if any, required by the terms of the 2020 Indenture, to be necessary to restore the 2020 Reserve Account to the 2020 Reserve Requirement, on such date; and
(c) Surplus Net Parking Revenues. On any date, provided that (i) all transfers and deposits required by paragraph (A) for 2020 Installment Payments and payments on Parity Obligations currently due and payable have been made and (ii) all transfers required to be made on such date by paragraph (B) have been made, Net Parking Revenues may be used for any lawful purpose, including, but not limited to the payment of any obligations secured by Net Parking Revenues on a priority subordinate to the Parity Obligations or the payment of any Termination Payment;
provided, that no such transfers to and deposits in the 2020 Installment Payment Fund need be made if the amount available and contained therein is at least equal to the interest component becoming due hereunder on such 2020 Installment Payment Date, plus the principal component, if any, becoming due hereunder on such 2020 Installment Payment Date and if the 2020 Indenture does not require a replenishment of the amounts contained in the 2020 Reserve Account; and provided further, that nothing in this section shall be construed to limit the Parking Authority’s ability to make other transfers and deposits at any time from Net Parking Revenues for the payment of debt service, reserve replenishment, credit enhancement reimbursement costs and Payment Agreement Payments to the extent required with respect to additional Parity Obligations incurred in accordance with Section 4.03.

SECTION 4.03. Additional Obligations.
(a) The Parking Authority will not incur any obligations payable from Net Parking Revenues superior to the payment of the 2020 Installment Payments. (b) Without regard to Section 4.03(c), the Parking Authority may at any time enter into or create an obligation or commitment which is a Credit Provider Reimbursement Obligation or a Payment Agreement.
(c) The Parking Authority may at any time and from time to time issue or create any other Parity Obligations (in addition to the 2020 Installment Payments, which may be incurred without compliance with this Section 4.03), provided:
(1) There shall not have occurred and be continuing (i) an Event of Default under the terms of this 2020 Installment Purchase Agreement or any Issuing Document or (ii) an Event of Default or Termination Event (as defined in any Payment Agreement) under any Payment Agreement; and
(2) The Parking Authority obtains or provides a certificate or certificates, prepared by the Parking Authority or at the Parking Authority’s option by a Consultant, showing that either:
(A) the Adjusted Net Parking Revenues for either the most recent Fiscal Year for which audited financial statements are available or any 12 consecutive calendar month period during the 18 consecutive calendar month ATTACHMENT B 243
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period ending immediately prior to the incurring of such additional Parity Obligations were at least [one hundred fifty percent (150%)] of Maximum Annual Debt Service, as calculated after the execution of such Parity Obligations; and for the purpose of providing such certificate or certificates, the Parking Authority or the Parking Authority’s Consultant, as applicable, may adjust the Adjusted Net Parking Revenues for such Fiscal Year or 12 calendar month period, as the case may be, to reflect:
(i) an allowance for Net Parking Revenues that would
have been derived from any additional Parking Facilities that were added prior to the incurrence of such additional Parity Obligations but which were not in existence, during all or any part of such Fiscal Year or 12 calendar month period under consideration, in an amount equal to the estimated additional Net Parking Revenues that would have been derived from such additional Parking Facilities if they had been added prior to the beginning of such Fiscal Year or 12 calendar month period, and
(ii) an allowance for Net Parking Revenues that would
have been derived from any increase in the rates, fees and charges fixed and prescribed for the Parking Facilities which became effective prior to the incurrence of such additional Parity Obligations but which was not in effect, during all or any part of such Fiscal Year or 12 calendar month period, in an amount equal to the estimated additional Net Parking Revenues that would have been derived from such increase in rates, fees and charges if it had been in effect prior to the beginning of such Fiscal Year or 12 calendar month period; or
(B) the estimated Adjusted Net Parking Revenues will be at least [one hundred fifty percent (150%)] of Maximum Annual Debt Service, as calculated after the execution of such Parity Obligations; and for the purpose of providing such certificate or certificates, the Parking Authority or the Parking Authority’s Consultant, as applicable, may adjust the foregoing estimated Adjusted Net Parking Revenues to reflect:
(i) an allowance for Net Parking Revenues that are
estimated to be derived from any increase in the rates, fees and charges for the Parking Facilities which have been adopted by the Parking Authority and which will be in effect during all or any portion of the period for which such estimates are provided; and
(ii) an allowance for Net Parking Revenues that are
estimated to be derived from new customers of the Parking Facilities anticipated to be served by any additions or improvements to the Parking Facilities financed by the Parity Obligations in an amount equal to the additional Net Parking Revenues that are estimated to be derived from such customers.

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For purposes of clause (B) above, with respect to Net Operation and Maintenance Costs, the Parking Authority or the Parking Authority’s Consultant, as applicable, shall use such assumptions (which shall be set forth in such certificate or certificates) as such believes to be reasonable, taking into account: (i) historical Net Operation and Maintenance Costs, (ii) Net Operation and Maintenance Costs associated with the additions or improvements to the Parking Facilities to be financed with the proceeds of such additional Parity Obligations and any other new additions or improvements to or extensions of the Parking Facilities during such five year period and (iii) such other factors, including inflation and changing operations or policies of the Parking Authority, as the Parking Authority or the Parking Authority’s Consultant, as applicable, believes to be appropriate.

The certificate or certificates described above in subsection (c)(2) shall not be required if the Parity Obligations being issued are for the purpose of refunding (x) then outstanding Parity Obligations, if at the time of the issuance of such refunding Parity Obligations a certificate of the Parking Authority shall be delivered showing that Parity Debt Service in each Fiscal Year on all Parity Obligations outstanding after the issuance of the refunding Parity Obligations will not exceed 110% of Parity Debt Service in each corresponding Fiscal Year on all Parity Obligations outstanding prior to the issuance of such refunding Parity Obligations; or (y) then outstanding Balloon Obligations or Variable Interest Rate Obligations, but only to the extent that the principal amount of such Balloon Obligations or Variable Interest Rate Obligations has been put, tendered to or otherwise purchased by a standby purchase or other liquidity facility relating to such Balloon Obligations or Variable Interest Rate Obligations.
(d) Without regard to Section 4.03(c), the Parking Authority may issue or incur obligations secured by Net Parking Revenues on a priority subordinate to the Parity Obligations and such obligations may be paid only in accordance with the provisions of Section 4.02 as long as (i) no Event of Default has occurred and is continuing (unless such Event of Default will not be continuing after the incurrence of such subordinate obligations) and (ii) no Event of Default or Termination Event (as defined in any Payment Agreement) under any Payment Agreement has occurred and is continuing (unless such Event of Default or Termination Event will not be continuing after the incurrence of such subordinate obligations).

ARTICLE V

COVENANTS OF THE PARKING AUTHORITY
SECTION 5.01. Compliance with and Amendment of 2020 Installment Purchase Agreement.
(a) The Parking Authority will punctually pay the 2020 Installment Payments in strict conformity with the terms hereof, and will faithfully observe and perform all the agreements, conditions, covenants and terms contained herein required to be observed and performed by it, and will not terminate the 2020 Installment Purchase Agreement for any cause whatsoever, including, without limiting the generality of the foregoing, any acts or circumstances that may constitute failure of consideration, destruction of or damage to the Parking Facilities, commercial frustration of purpose, any change in the tax or other laws of the United States of America or of the State of California or any political subdivision of either or any failure of the ATTACHMENT B 245
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Financing Authority to observe or perform any agreement, condition, covenant or term contained herein required to be observed and performed by it, whether express or implied. The Parking Authority will, so long as any 2020 Installment Payments remain unpaid, apply Net Parking Revenues as provided herein. The Trustee shall not be obligated to enter into any supplemental or amendment that adversely impacts its rights.
(b) The Parking Authority and the Financing Authority shall not supplement, amend, modify or terminate any of the terms of the 2020 Installment Purchase Agreement, or consent to any such supplement, amendment, modification or termination, without the prior written consent of the Trustee, which such consent, in the case of the Trustee, shall be given only if (a) such supplement, amendment, modification or termination will not materially adversely affect the interests of the 2020 Bonds or result in any material impairment of the security hereby given for the payment of the 2020 Installment Payments, or (b) the Trustee first obtains the written consent of a majority in aggregate principal amount of the 2020 Bonds then Outstanding to such supplement, amendment, modification or termination; provided, that no such supplement, amendment, modification or termination shall reduce the amount of 2020 Installment Payments to be made to the Financing Authority or the Trustee by the Parking Authority pursuant to the 2020 Installment Purchase Agreement, or extend the time for making such 2020 Installment Payments, or permit the creation of any lien prior to the lien created by the 2020 Installment Purchase Agreement on Net Parking Revenues without the written consent of all of the Holders of all 2020 Bonds then Outstanding.

SECTION 5.02. Against Encumbrances. The Parking Authority will not make any use of or encumber the Net Parking Revenues except as provided herein; provided, that so long as the Parking Authority is not in default hereunder, the Parking Authority may issue any obligations subordinate to the Parity Obligations that are payable from surplus Net Parking Revenues as provided in paragraph (c) of Section 4.02.

SECTION 5.03. Against Sale or Other Disposition of Property. The Parking Authority will not sell, lease or otherwise dispose of the Parking Facilities or any part thereof essential to the proper operation of the Parking Facilities or to the maintenance of Net Parking Revenues. The Parking Authority will not enter into any agreement which impairs the operation of the Parking Facilities or any part thereof necessary to secure adequate Net Parking Revenues for the payment of Parity Obligations or which would otherwise impair the rights of the Parking Authority with respect to Net Parking Revenues or the operation of the Parking Facilities.

SECTION 5.04. Against Competitive Facilities. The Parking Authority will not, to the extent permitted by law, acquire, purchase, maintain or operate and will not, to the extent permitted by law and within the scope of its powers, permit any other public or private agency, corporation, district or political subdivision or any person whomsoever to acquire, purchase, maintain or operate within any competitive Parking Facilities.

SECTION 5.05. Tax Covenants.
(a) General. The Parking Authority hereby that, notwithstanding any other provisions of this Installment Purchase Agreement, it shall not take any action, or fail to take action, if any such action or failure to take action would adversely affect the exclusion from gross ATTACHMENT B 246
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income of interest components of the 2020 Installment Payments under Section 103 of the Code.

The Parking Authority shall not, directly or indirectly, use or permit the use of proceeds of the 2020 Bonds or any of the property financed or refinanced with proceeds of the 2020 Bonds, or any portion thereof, by any person other than a governmental person (as such term is used in Section 141 of the Code and applicable Treasury Regulations), in such manner or to such extent as would result in the loss of exclusion from gross income for federal income tax purposes of interest on the 2020 Bonds.
(b) Use of Proceeds. The Parking Authority shall not take any action, or fail to take action, if any such action or failure to take action would cause the 2020 Bonds to be “private activity bonds” within the meaning of Section 141 of the Code and applicable Treasury Regulations, and in furtherance thereof, shall not make any use of the proceeds of the 2020 Bonds or any of the property financed or refinanced with proceeds of the 2020 Bonds, or any portion thereof, that would cause the 2020 Bonds to be “private activity bonds” within the meaning of Section 141 of the Code. To that end, so long as any 2020 Bonds are outstanding, the Parking Authority, with respect to such proceeds and property, will comply with the requirements of the Code and the Treasury Regulations, to the extent such requirements are, at the time, applicable and in effect. The Parking Authority shall establish reasonable procedures necessary to ensure continued compliance with Section 141 of the Code and the continued qualification of the 2020 Bonds as “governmental bonds.”
(c) Arbitrage. The Parking Authority shall not, directly or indirectly, use or permit the use of any proceeds of any 2020 Bonds, or of any property financed or refinanced thereby, or of other funds of the Parking Authority, that would cause the 2020 Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Code and applicable Treasury Regulations, and shall not otherwise take any action, or fail to take action, if such action or failure to take action would cause the 2020 Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Code and applicable Treasury Regulations. To that end, the Parking Authority shall comply with all requirements of Section 148 of the Code and the Treasury Regulations to the extent such requirements are, at the time, in effect and applicable to the 2020 Bonds. (d) Federal Guarantee. The Parking Authority shall not make any use of the proceeds of the 2020 Bonds, or of any other funds of the Parking Authority, that would cause the 2020 Bonds to be “federally guaranteed” within the meaning of Section 149(b) of the Code, and shall not otherwise take any action, or fail to take action, when such action or failure to take action would cause the 2020 Bonds to be “federally guaranteed” within the meaning of Section 149(b) of the Code.
(e) Compliance with Tax Certificate. In furtherance of the foregoing tax covenants of this Section 5.05, the Parking Authority covenants that it will comply with the provisions of the Tax Certificate, which is incorporated herein as if fully set forth herein. These covenants shall survive any defeasance or discharge of the 2020 Installment Payments pursuant to Article VII or any prepayment of principal components of the 2020 Installment Payments pursuant to Article III.

SECTION 5.06. Maintenance and Operation of the Parking Facilities. The Parking Authority will maintain and preserve the Parking Facilities in good repair and working ATTACHMENT B 247
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order at all times and will operate the Parking Facilities in an efficient and economical manner and will pay all Gross Operation and Maintenance Costs as they become due and payable.

SECTION 5.07. Payment of Claims. The Parking Authority will pay and discharge any and all lawful claims for labor, materials or supplies which, if unpaid, might become a lien on Net Parking Revenues or any part thereof or on any funds in the hands of the Parking Authority or which might impair the security of the 2020 Installment Payments.

SECTION 5.08. Compliance with Contracts. The Parking Authority will comply with, keep, observe and perform all agreements, conditions, covenants and terms, express or implied, required to be kept, observed and performed by it contained in all contracts for the use of the Parking Facilities and all other contracts affecting or involving the Parking Facilities to the extent that the Parking Authority is a party thereto.

SECTION 5.09. Insurance. The Parking Authority will procure and maintain such insurance relating to the Parking Facilities which it shall deem advisable or necessary to protect its interests and the interests of the Financing Authority and the Trustee, which insurance shall afford protection in such amounts and against such risks as are usually covered in the State in connection with parking facilities comparable to the Parking Facilities; provided, that any such insurance may be maintained under a self-insurance program so long as such self-insurance is maintained in the amounts and manner usually maintained in connection with parking facilities in the State comparable to the Parking Facilities and is, in the opinion of an accredited actuary, actuarially sound. All policies of insurance required to be maintained herein shall provide that the Financing Authority and the Trustee shall be given thirty (30) days’ written notice of any intended cancellation thereof or reduction of coverage provided thereby.

SECTION 5.10. Accounting Records; Financial Statements and Other Reports. (a) The Parking Authority will keep appropriate accounting records in which complete and correct entries shall be made of all transactions relating to the Parking Facilities and the Net Parking Revenues and the Gross Operation and Maintenance Costs and Net Operation and Maintenance Costs relating thereto, which records shall be available for inspection by the Financing Authority and the Trustee at reasonable hours and under reasonable conditions. (b) The Parking Authority will prepare annually by no later than March 31 following the close of each Fiscal Year (commencing with the Fiscal Year ending June 30, 2020) financial statements of the Parking Authority for the preceding Fiscal Year prepared in accordance with generally accepted accounting principles, together with an Accountant’s Report thereon, which records shall be available for inspection by the Financing Authority and the Trustee at reasonable hours and under reasonable conditions.

SECTION 5.11. Protection of Security and Rights of Authority. The Parking Authority will preserve and protect the security hereof and the rights of the Financing Authority to the 2020 Installment Payments hereunder and will warrant and defend such rights against all claims and demands of all persons.

SECTION 5.12. Payment of Taxes and Compliance with Governmental Regulations. The Parking Authority will pay and discharge all taxes, assessments and other ATTACHMENT B 248
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governmental charges which may hereafter be lawfully imposed upon the Parking Facilities or any part thereof or upon Net Parking Revenues when the same shall become due. The Parking Authority will duly observe and comply with all valid regulations and requirements of any governmental authority relative to the operation of the. Parking Facilities or any part thereof, but the Parking Authority shall not be required to comply with any regulations or requirements so long as the validity or application thereof shall be contested in good faith.

SECTION 5.13. Amount of Charges, Fees and Rates; Rate Stabilization Fund.

The Parking Authority will fix, prescribe and collect rates, fees and charges with respect to the Parking Facilities during each Fiscal Year which are estimated to yield Net Parking Revenues for such Fiscal Year equal to at least [one hundred twenty-five percent (125%)] of Parity Debt Service for such Fiscal Year. The Parking Authority may make adjustments from time to time in such fees and charges and may make such classification thereof as it deems necessary, but shall not reduce the rates, fees and charges then in effect unless the Net Parking Revenues from such reduced rates, fees and charges are estimated to be sufficient to meet the requirements of this section. [The Parking Authority may establish a fund denominated the Rate Stabilization Fund. From time to time the Parking Authority may deposit into the Rate Stabilization Fund, from current Parking Revenues, such amounts as the Parking Authority shall determine and the amount of available current Parking Revenues in the Fiscal Year shall be reduced by the amount so transferred. Amounts may be transferred from the Rate Stabilization Fund and deposited in the Revenue Fund, and any amounts so transferred within 270 days after the end of a Fiscal Year shall be deemed Parking Revenues for such Fiscal Year when so transferred. The Parking Authority may also apply moneys on deposit in the Rate Stabilization Fund for any lawful purpose. All interest or other earnings upon amounts in the Rate Stabilization Fund may be withdrawn therefrom and accounted for as Parking Revenues in accordance with the terms of this Section or used for any lawful purpose.] [Discuss]
SECTION 5.14. Eminent Domain and Insurance Proceeds. If all or any part of the Parking Facilities shall be taken by eminent domain proceedings, or if the Parking Authority receives any insurance proceeds resulting from a casualty loss to the Parking Facilities, the net proceeds thereof, at the option of the Parking Authority, shall be applied either to (a) the prepayment of Parity Obligations, or (b) to acquire and construct additions, betterments or improvements to the Parking Facilities to replace the condemned or destroyed portion of the Parking Facilities.

SECTION 5.15. Continuing Disclosure. The Parking Authority hereby agrees to comply with and carry out all of the provisions of the continuing disclosure undertaking relating to the 2020 Bonds. Notwithstanding any other provision of this 2020 Installment Purchase Agreement, failure of the Parking Authority to comply with such undertaking shall not be considered an Event of Default under the 2020 Installment Purchase Agreement or the 2020 Indenture; provided, that the Trustee may (and, at the request of any Participating Underwriter or the Holders of at least twenty-five percent (25%) in aggregate principal amount of Outstanding 2020 Bonds, shall) or any Holder or Beneficial Owner may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Parking Authority to comply with its obligations under this section. Capitalized terms used in this ATTACHMENT B 249
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section but not defined in this 2020 Installment Purchase Agreement shall have the meanings given in the aforesaid continuing disclosure undertaking.

SECTION 5.16. Further Assurances. The Parking Authority will adopt, deliver, execute and make any and all further assurances, instruments and resolutions as may be reasonably necessary or proper to carry out the intention or to facilitate the performance hereof and for the better assuring and confirming unto the Financing Authority of the rights and benefits provided to it herein.

SECTION 5.17. Application of CFD Revenues to the Payment of Gross Operation and Maintenance Costs. (a) The Parking Authority hereby covenants to establish an account to be held by the Parking Authority to be known as the “CFD Revenues Account.” When received, the Parking Authority shall deposit all CFD Revenues into the CFD Revenues Account.

The Parking Authority herby covenants to apply all CFD Revenues to the payment of Gross Operation and Maintenance Costs. If at the end of the Fiscal Year, after the CFD Revenues have been applied to the Gross Operation and Maintenance Costs, there are any CFD Revenues remaining in the CFD Revenues Account, such CFD Revenues the Parking Authority may be used for any lawful purpose consistent with the Rate and Method. (b) [The obligation of the Parking Authority to apply all CFD Revenues to payment of Operation and Maintenance Costs pursuant to Section 5.17(a) shall cease and terminate following upon the delivery to the Trustee and the Financing Authority of a certificate of the Parking Authority demonstrating that Adjusted Net Parking Revenues were at least [one hundred fifty percent (150%)] of Maximum Annual Debt Service for each of the three completed Fiscal Years prior to the date of calculation.]
SECTION 5.18. Incurrence of Obligations Payable From CFD Revenues. The Parking Authority will not incur any obligations payable from CFD Revenues superior to the payment of Gross Operation and Maintenance Costs.

SECTION 5.19. Preservation of the CFD Revenues. The Parking Authority shall take all necessary actions to ensure that the Special Tax is levied and collected within the CFD pursuant to the terms of the Rate and Method. The Parking Authority shall not allow the City to make any amendments to the Rate and Method that would decrease the amount of CFD revenues that the Parking Authority is entitled to receive as of the Closing Date or would otherwise have a material adverse effect on the receipt of CFD Revenues by the Parking Authority.

SECTION 5.20. CFD Revenues Assignment Agreement. As long as any 2020 Bonds remain outstanding, the Parking Authority shall not terminate the CFD Revenues Assignment Agreement. In addition, the Parking Authority covenants not to amend or modify the CFD Revenues Assignment Agreement if such amendment or modification would decrease the amount of CFD revenues that the Parking Authority is entitled to receive as of the Closing Date or would otherwise have a material adverse effect on the receipt of CFD Revenues by the Parking Authority.

ATTACHMENT B 250
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ARTICLE VI

EVENTS OF DEFAULT AND REMEDIES OF THE FINANCING AUTHORITY SECTION 6.01. Events of Default. The following events shall constitute “Events of Default” hereunder:
(a) if default shall be made in the due and punctual payment of any 2020 Installment Payment when the same shall become due and payable; (b) if default shall be made by the Parking Authority in the performance of any of the other agreements or covenants contained herein required to be performed by it, and such default shall have continued for a period of sixty (60) days after the Parking Authority shall have been given notice in writing of such default by the Financing Authority or the Trustee; (c) except for the current bankruptcy filing existing on the effective date of this 2020 Installment Purchase Agreement, if the Parking Authority shall file a petition or answer seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if a court of competent jurisdiction shall approve a petition filed with or without the consent of the Parking Authority seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if under the provisions of any other law for the relief or aid of debtors any court of competent jurisdiction shall assume custody or control of the Parking Authority or of the whole or any substantial part of its property; or (d) if an event of default (as defined in any Parity Obligation or Issuing Document) shall have occurred.

Notwithstanding anything to the contrary contained herein, in no event are the 2020 Installment Payments subject to acceleration if an Event of Default occurs and is continuing.

SECTION 6.02. Distribution of Assets. Upon the date of the declaration of an Event of Default by the Financing Authority as provided in Section 6.01, all Net Parking Revenues shall be applied in the following order -
(1) First, to the payment of the costs and expenses of the Trustee (as assignee of the Financing Authority), if any, in carrying out the provisions of this article, including reasonable compensation to its agents, accountants and counsel and including any expenses of the Financing Authority in indemnifying the Trustee; (2) Second, to the payment of interest and regularly scheduled payments then due on Parity Obligations (except Termination Payments), and, if the amount available shall not be sufficient to pay in full all such interest and regularly scheduled payments then due and payable, then to the payment thereof ratably, according to the amounts due thereon without any discrimination or preference;
(3) Third, to the payment of the unpaid principal amount of the Parity Obligations then due and payable with interest on the overdue principal and interest ATTACHMENT B 251
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amounts of the unpaid Parity Obligations at the rate or rates of interest then applicable to such Parity Obligations if paid in accordance with their terms, and, if the amount available shall not be sufficient to pay in full all the amounts due with respect to the Parity Obligations on any date, together with such interest, then to the payment thereof ratably, according to the principal amount due on such date, without any discrimination or preference;
(4) Fourth, to the required replenishment of any debt service reserves with respect to the Parity Obligations (including Credit Support Reimbursement Obligations);
(5) Fifth, to the payment of any other amounts becoming due and payable with respect to Parity Obligations; and
(6) Sixth, to the payment of the costs and expenses of the Financing Authority, if any, in carrying out the provisions of this article, including reasonable compensation to its agents, accountants and counsel, that were not paid pursuant to clause (1) above;
(7) Seventh, to the payment of all other amounts due and payable by the Parking Authority from Net Parking Revenues, including, but not limited to the payment of obligations secured by Net Parking Revenues on a priority subordinate to the Parity Obligations, and to the payment of any Termination Payments on any Payment Agreements.

SECTION 6.03. Remedies of the Financing Authority. The Financing Authority shall have the right —
(a) by mandamus or other action or proceeding or suit at law or in equity to enforce its rights against the Parking Authority or any councilmember, officer or employee thereof, and to compel the Parking Authority or any such councilmember, officer or employee to perform and carry out its duties under agreements and covenants required to be performed by it or him or her contained herein;
(b) by suit in equity to enjoin any acts or things which are unlawful or violate the rights of the Financing Authority; or
(c) by suit in equity upon the happening of an Event of Default to require the Parking Authority and its councilmembers, officers and employees to account as the trustee of an express trust.

SECTION 6.04. Non-Waiver. Nothing in this article or in any other- provision hereof shall affect or impair the obligation of the Parking Authority, which is absolute and unconditional, to pay the 2020 Installment Payments to the Financing Authority at their respective due dates or upon prepayment as provided herein from the Net Parking Revenues, or shall affect or impair the right of the Financing Authority, which is also absolute and unconditional, to institute suit to enforce such payment by virtue of the contract embodied herein.

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A waiver of any default or breach of duty or contract by the Financing Authority shall not affect any subsequent default or breach of duty or contract or impair any rights or remedies on any such subsequent default or breach of duty or contract, and no delay or omission by the Financing Authority to exercise any right or remedy accruing upon any default or breach of duty or contract shall impair any such right or remedy or shall be construed to be a waiver of any such default or breach of duty or contract or an acquiescence therein, and every right or remedy conferred upon the Financing Authority by applicable law or by this article may be enforced and exercised from time to time and as often as shall be deemed expedient by the Financing Authority.

If any action, proceeding or suit to enforce any right or exercise any remedy is abandoned or determined adversely to the Financing Authority, the Parking Authority and the Financing Authority shall be restored to their former positions, rights and remedies as if such action, proceeding or suit had not been brought or taken.

SECTION 6.05. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Financing Authority is intended to be exclusive of any other remedy, and each such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing in law or in equity or by statute or otherwise and may be exercised without exhausting and without regard to any other remedy conferred by applicable law.

ARTICLE VII

DISCHARGE OF OBLIGATIONS
SECTION 7.01. Discharge of Obligations.
(a) If the Parking Authority shall pay or cause to be paid all the 2020 Installment Payments at the times and in the manner provided herein, the right, title and interest of the Financing Authority herein and the obligations of the Parking Authority hereunder shall thereupon cease, terminate, become void and be completely discharged and satisfied, except as provided in Section 5.05.
(b) Any unpaid principal component of the 2020 Installment Payments shall on its scheduled payment date or date of prepayment be deemed to have been paid within the meaning of and with the effect expressed in subsection (a) of this section if the Parking Authority makes payment of such 2020 Installment Payments and the interest and prepayment premium, if applicable, thereon in the manner provided herein, and money for the purpose of such payment or prepayment is then held by the Trustee.
(c) All or any portion of unpaid principal components of the 2020 Installment Payments shall, prior to their scheduled payment dates or dates of prepayment, be deemed to have been paid within the meaning of and with the effect expressed in subsection (a) of this section (except that the Parking Authority shall remain liable for the payment of such 2020 Installment Payments, but only out of the money or securities deposited with the Trustee or an escrow agent as hereinafter described) if (i) notice is provided by the Parking Authority to the Trustee and (ii) there shall have been deposited with the Trustee or such escrow agent either money in an amount which shall be sufficient to pay when due the principal components of such 2020 ATTACHMENT B 253
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Installment Payments or such portions thereof and the interest and prepayment premiums, if any, thereon on and prior to their payment date or their dates of prepayment, as the case may be, or Federal Securities which are not subject to redemption prior to maturity except by the holder thereof (including any such Federal Securities issued or held in book entry form) the interest on and principal of which when paid will provide money which, together with money, if any, deposited with the Trustee or such escrow agent at the same time, shall be sufficient, as stated in a report of an Independent Certified Public Accountant addressed to the Parking Authority and the Trustee or such escrow agent, to pay when due the principal components of such 2020 Installment Payments or such portions thereof and the interest and prepayment premiums, if any, thereon on and prior to their payment dates or their dates of prepayment, as the case may be.

ARTICLE VIII

MISCELLANEOUS
SECTION 8.01. Liability of City Limited to Net Parking Revenues.

Notwithstanding anything contained herein, the Parking Authority shall not be required to advance any money derived from any source of income other than the Net Parking Revenues and the other funds provided herein for the payment of the 2020 Installment Payments or for the performance of any agreements or covenants required to be performed by it contained herein; provided, that the Parking Authority may advance money for any such purpose so long as such money is derived from a source legally available for such purpose and may be legally used by the Parking Authority for such purpose.

The obligation of the Parking Authority to make the 2020 Installment Payments is a special obligation of the Parking Authority and is payable solely from the Net Parking Revenues and the other funds as provided herein, and does not constitute a debt of the Parking Authority or the State of California or of any political subdivision thereof within the meaning of any constitutional or statutory debt limitation or restriction, and does not constitute an obligation for which the Parking Authority is obligated to levy or pledge any form of taxation or for which the Parking Authority has levied or pledged any form of taxation.

SECTION 8.02. Benefits of Contract Limited to Parties and Beneficiary. Except as provided in Sections 8.03 and 8.04, nothing contained herein, expressed or implied, is intended to give to any person other than the Parking Authority, the Financing Authority and their assigns any right, remedy or claim under or pursuant hereto, and any agreement or covenant required herein to be performed by or on behalf of the Parking Authority or the Financing Authority shall be for the sole and exclusive benefit of the, City, the Financing Authority and their assigns.

SECTION 8.03. Assignment. The 2020 Installment Purchase Agreement and any rights hereunder may be assigned by the Financing Authority, as a whole or in part, without the necessity of obtaining the prior consent of the Parking Authority. The assignment of the 2020 Installment Purchase Agreement or rights hereunder to the Trustee is solely in its capacity as Trustee and the duties, powers and liabilities of the Trustee in acting hereunder shall be subject to the provisions of the 2020 Indenture.

ATTACHMENT B 254
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SECTION 8.04. Successor is Deemed Included in all References to Predecessor.

Whenever either the Parking Authority or the Financing Authority is named or referred to herein, such reference shall be deemed to include the successor to the powers, duties and functions that are presently vested in the Parking Authority or the Financing Authority, and all agreements and covenants required hereby to be performed by or on behalf of the Parking Authority or the Financing Authority with respect to the Parking Facilities shall bind and inure to the benefit of the respective successors thereof whether so expressed or not.

SECTION 8.05. Waiver of Personal Liability. No councilmember, officer or employee of the Parking Authority shall be individually or personally liable for the payment of the 2020 Installment Payments, but nothing contained herein shall relieve any councilmember, officer or employee of the Parking Authority from the performance of any official duty provided by any applicable provisions of law or hereby.

SECTION 8.06. Partial Invalidity. If any one or more of the agreements or covenants or portions thereof required hereby to be performed by or on the part of the Parking Authority or the Financing Authority shall be contrary to law, then such agreement or agreements, such covenant or covenants or such portions thereof shall be null and void and shall be deemed separable from the remaining agreements and covenants or portions thereof and shall in no way affect the validity hereof, and the Parking Authority and the Financing Authority hereby declare that they would have executed the 2020 Installment Purchase Agreement and each and every other article, section, paragraph, subdivision, sentence, clause and phrase hereof irrespective of the fact that any one or more articles, sections, paragraphs, subdivisions, sentences, clauses or phrases hereof or the application thereof to any person or circumstance may be held to be unconstitutional, unenforceable or invalid.

SECTION 8.07. Net Contract. The 2020 Installment Purchase Agreement shall be deemed and construed to be a net contract, and the Parking Authority shall pay absolutely net during the term hereof the 2020 Installment Payments and all other payments required hereunder, free of any deductions and without abatement, diminution or set-off whatsoever.

SECTION 8.08. California Law. The 2020 Installment Purchase Agreement shall be construed and governed in accordance with the laws of the State of California.

SECTION 8.09. Notices. All written notices to be given hereunder shall be given by mail to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other party in writing from time to time, namely:

If to the Parking Authority:

Parking Authority of the Parking Authority of Stockton
425 N. Eldorado Street
Stockton, California 95202
Attention: Executive Director
ATTACHMENT B 255
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If to the Financing Authority:

Stockton Public Financing Authority
425 N. Eldorado Street
Stockton, California 95202
Attention: Executive Director
SECTION 8.10. Effective Date. The 2020 Installment Purchase Agreement shall become effective upon its execution and delivery.

SECTION 8.11. Governing Law. This Agreement is a contract made under the laws of the State and shall be governed by and construed in accordance with the Constitution and laws applicable to contracts made and performed in the State of California.

SECTION 8.12. Execution in Counterparts. The 2020 Installment Purchase Agreement may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument.

ATTACHMENT B 256
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IN WITNESS WHEREOF, the parties hereto have executed the 2020 Installment Purchase Agreement by their officers thereunto duly authorized as of the day and year first written above.

PARKING AUTHORITY OF THE PARKING

AUTHORITY OF STOCKTON
By
Executive Director

STOCKTON PUBLIC FINANCING AUTHORITY
By
Executive Director
ATTACHMENT B 257
98892657.5 A-1

EXHIBIT A
2020 INSTALLMENT PAYMENT SCHEDULE
2020 Installment
Payment Date(1)
Interest
Component
Principal
Component
Total 2020
Installment Payments

(1) Pursuant to the 2020 Installment Purchase Agreement, the 2020 Installment Payments are to be paid by the Parking Authority to the Trustee on each 2020 Installment Payment Date.

ATTACHMENT B 258
EXHIBIT 3
1 $_____________

STOCKTON PUBLIC FINANCING AUTHORITY
PARKING REVENUE BONDS, SERIES 2020

BOND PURCHASE AGREEMENT
___________, 2020
Stockton Public Financing Authority,
Parking Authority of the City of Stockton, and
City of Stockton
425 N El Dorado Street
Stockton, California 95202
Ladies and Gentlemen:

The undersigned, Stifel, Nicolaus & Company, Incorporated (the “Underwriter”), acting not as a fiduciary for you, but on behalf of itself, offers to enter into this Bond Purchase Agreement (this “Bond Purchase Agreement”) with the Stockton Public Financing Authority (the “Financing Authority”), the Parking Authority of the City of Stockton (the “Parking Authority”) and the City of Stockton (the “City,” and together with the Financing Authority and the Parking Authority, the “City Parties”), which will be binding upon the City Parties and the Underwriter upon the acceptance hereof by all parties hereto. This offer is made subject to its acceptance by the City Parties by execution of this Bond Purchase Agreement and its delivery to the Underwriter on or before 11:59 p.m., California time, on the date hereof. All terms used herein and not otherwise defined shall have the respective meanings given to such terms in the Indenture and the Installment Purchase Agreement (as those terms are hereafter defined).

1. Purchase and Sale. Upon the terms and conditions and upon the basis of the representations, warranties and agreements hereinafter set forth, the Underwriter hereby agree to purchase from the Financing Authority for offering to the public, and the Financing Authority hereby agrees to sell to the Underwriter for such purpose, all (but not less than all) of the $_____________ aggregate principal amount of the above-captioned bonds (the “Bonds”), at a purchase price equal to $____________, being the aggregate principal amount thereof less an Underwriter’ discount of $__________ and plus/less [net] original issue premium/discount of $_____________.

The City Parties acknowledge and agree that: (i) the purchase and sale of the Bonds pursuant to this Bond Purchase Agreement is an arm’s length, commercial transaction among the City Parties and the Underwriter, (ii) in connection with such transaction, including the process leading thereto, the Underwriter is acting solely as a principal and is not as an agent or fiduciary to the City Parties; (iii) the Underwriter has neither assumed an advisory or fiduciary responsibility in favor of the City Parties with respect to the offering of the Bonds, or the process leading thereto (whether or not such Underwriter, or any affiliate of such Underwriter, has advised or is currently advising the City Parties on other matters) nor has such Underwriter assumed any other obligation to the City Parties except the obligations expressly set forth in this Bond Purchase Agreement; (iv) the Underwriter has financial and other interests that differ from those of the City Parties; and ATTACHMENT B 259
EXHIBIT 3
2 (v) each of the City Parties has consulted its own legal and financial advisors to the extent it deemed appropriate in connection with the offering of the Bonds and the transactions related thereto.

2. Description of Bonds. The Bonds shall be issued pursuant to an Indenture, dated as of __________ 1, 2020 (the “Indenture”) by and between the Financing Authority and Wells Fargo Bank, National Association, as trustee (the “Trustee”), and pursuant to Article 4 of Chapter 5, Division 7, Title 1 (commencing with Section 6500) of the California Government Code (the “Act”). The Bonds shall be as described in the Indenture and the Official Statement relating to the Bonds (defined herein).

The Bonds are payable from “Revenues” consisting primarily of the 2020 Installment Payments paid by the Parking Authority and received by the Financing Authority (the “Installment Payments”) under an Installment Purchase Agreement dated as of __________ 1, 2020 (the “Installment Purchase Agreement”) and amounts on deposit in certain funds and accounts established by the Installment Purchase Agreement and the Indenture. The obligation of the Parking Authority to make Installment Payments under the Installment Purchase Agreement is a special obligation of the Parking Authority payable solely from and secured by a pledge of Net Parking Revenues (as such term is defined in the Installment Purchase Agreement). The Net Parking Revenues includes proceeds of any special assessments or special taxes levied upon real property within any improvement district established for the benefit of the Parking Facilities (as such term is defined in the Installment Purchase Agreement), including, but not limited, to the “CFD Revenues,” which is defined to mean the revenues generated by the levy of the Special Tax within Communities Facilities District No. 2001-1 (Downtown Parking) (the “CFD”) pursuant to the terms of the Second Amended Rate and Method of Apportionment of Special Tax, approved by the voters of a special election held within the CFD on December 13, 2005, as such Second Amended Rate and Method of Apportionment of Special Tax may be amended from time to time in accordance with the laws of the State of California (the “Rate and Method”).

In order to enable the Underwriter to comply with Rule 15c2-12 under the Securities Exchange Act of 1934 (the “Rule”), the City will execute and deliver a Continuing Disclosure Certificate concurrently with issuance of the Bonds (the “Continuing Disclosure Certificate”). [The scheduled payment of principal of and interest on the Bonds when due will be guaranteed under an insurance policy (the “Bond Insurance Policy”) to be issued concurrently with the delivery of the Bonds by ___________ (the “Insurer”). The Financing Authority will also purchase from the Insurer a reserve fund insurance policy (the “Reserve Policy”) for deposit to the credit of the 2020 Reserve Account established under the Indenture.] The net proceeds of the Bonds will be used to refund certain prior obligations of the City, Finance Authority and/or Parking Authority, and to finance the acquisition and construction of certain capital improvements, as described in the Official Statement.

3. Public Offering. The Underwriter agrees to make a bona fide public offering of all the Bonds initially at the public offering prices (or yields), and redemption provisions, set forth on Appendix A attached hereto and incorporated herein by reference. Subsequent to the initial public offering, the Underwriter reserves the right to change the public offering prices (or yields) as the Underwriter deems necessary in connection with the marketing of the Bonds, provided that the Underwriter shall not change the interest rates set forth on Appendix A. The Bonds may be offered and sold to certain dealers at prices lower than such initial public offering prices.

ATTACHMENT B 260
EXHIBIT 3
3 4. Delivery of Official Statement. The City Parties have delivered or caused to be delivered to the Underwriter prior to the execution of this Bond Purchase Agreement, copies of the Preliminary Official Statement relating to the Bonds (the “Preliminary Official Statement”).

Such Preliminary Official Statement is the official statement deemed final for purposes of the Rule and approved for distribution by resolution of the governing body of each of the applicable City Parties. The City Parties shall have executed and delivered to the Underwriter a certification to such effect in the form attached hereto as Appendix B.

Within seven (7) business days from the date hereof, or such earlier date identified by the Underwriter to be necessary to allow the Underwriter to meet their obligations under the Rule and Rule G-32 of the Municipal Securities Rulemaking Board (or such earlier date identified by the Underwriter to be necessary to allow the Underwriter to meet their obligations under the Rule and Rule G-32 of the Municipal Securities Rulemaking Board (“MSRB”)), the City Parties shall deliver to the Underwriter a final Official Statement, executed on behalf of the applicable City Parties by authorized representatives of such entities and dated the date of delivery thereof to the Underwriter, which shall include information permitted to be omitted by paragraph (b)(1) of the Rule and with such other amendments or supplements as shall have been approved by the City Parties and the Underwriter (the “Final Official Statement”) and such additional conformed copies thereof as the Underwriter may reasonably request in sufficient quantities to comply with the Rule and to meet potential customer requests for copies of the Official Statement. The Preliminary Official Statement and the Final Official Statement, including the cover pages, the appendices thereto and all information incorporated therein by reference are hereinafter referred collectively to as the “Official Statement.”
The Underwriter agree to file the Final Official Statement in compliance with MSRB Rule G-32. The Underwriter agree that they will not confirm the sale of any Bonds unless the confirmation of sale is accompanied or preceded by the delivery of a copy of the Final Official Statement.

5. The Closing. At 8:00 a.m., California time, on __________, 2020, or at such other time or on such earlier or later business day as shall have been mutually agreed upon by the City Parties and the Underwriter (the “Closing Date”), the Financing Authority will deliver (i) the Bonds in definitive form to the Underwriter in such place as the Underwriter shall request, and (ii) the closing documents hereinafter mentioned at the offices of Norton Rose Fulbright US LLP, in San Francisco, California or another place to be mutually agreed upon by the City Parties and the Underwriter. The Underwriter will accept such delivery and pay the purchase price of the Bonds as set forth in Section 1 hereof in immediately available funds to the order of the Trustee on behalf of the Financing Authority. This payment and delivery, together with the delivery of the aforementioned documents, is herein called the “Closing.” The Bonds will be delivered in such denominations and deposited in the account or accounts specified by the Underwriter pursuant to written notice given by the Underwriter not later than five business days prior to Closing. The Bonds will be made available to the Underwriter for inspection and packaging not less than 48 hours prior to the Closing.

6. Representations, Warranties and Covenants of the Financing Authority. The Financing Authority represents, warrants and covenants to the Underwriter that:
(a) Due Organization, Existence and Authority. The Financing Authority is a joint powers authority, duly organized and existing under the laws of the State of California (the “State”), including the Act, with full right, power and authority to issue the Bonds and to execute, deliver and perform its obligations under the Bonds, this Bond Purchase Agreement, the ATTACHMENT B 261
EXHIBIT 3
4 Installment Purchase Agreement and the Indenture (collectively, the “Financing Authority Documents”) and to carry out and consummate the transactions contemplated by the Financing Authority Documents and described in the Official Statement. (b) Due Authorization and Approval. By all necessary official action, the Financing Authority has duly authorized and approved the execution and delivery of, and the performance by the Financing Authority of the obligations contained in, the Bonds, the Preliminary Official Statement, the Official Statement, and the Financing Authority Documents and as of the date hereof, such authorizations and approvals are in full force and effect and have not been amended, modified or rescinded. When executed and delivered, the Bonds and the Financing Authority Documents will constitute the legally valid and binding obligations of the Financing Authority enforceable in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or affecting creditors’ rights generally. The Financing Authority has complied, and will at the Closing be in compliance in all respects, with the terms of the Bonds and the Financing Authority Documents.
(c) Official Statement Accurate and Complete. The Official Statement is, and at all times subsequent to the date of the Official Statement up to and including the Closing will be, true and correct in all material respects, and the Official Statement contains and up to and including the Closing will contain no misstatement of any material fact and does not, and up to and including the Closing will not, omit any statement necessary to make the statements contained therein, in the light of the circumstances in which such statements were made, not misleading. (d) Underwriter’ Consent to Amendments and Supplements to Official Statement. The Financing Authority will advise the Underwriter promptly of any proposal to amend or supplement the Official Statement and will not effect or consent to any such amendment or supplement without the consent of the Underwriter, which consent will not be unreasonably withheld. The Financing Authority will advise the Underwriter promptly of the institution of any proceedings known to it by any governmental agency prohibiting or otherwise affecting the use of the Official Statement in connection with the offering, sale or distribution of the Bonds. (e) No Breach or Default. As of the time of acceptance hereof and as of the time of the Closing, except as otherwise disclosed in the Official Statement, the Financing Authority is not and will not be in breach of or in default under any applicable constitutional provision, law or administrative rule or regulation of the State or the United States, or any applicable judgment or decree or any trust agreement, loan agreement, bond, note, resolution, ordinance, agreement or other instrument to which the Financing Authority 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 event of default under any such instrument which breach or default would materially adversely affect the security of the Bonds or the Financing Authority’s performance under the Financing Authority Documents; and, as of such times, except as disclosed in the Official Statement, the authorization, execution and delivery of the Financing Authority Documents and the Bonds and compliance with the provisions of each of such agreements or instruments do not and will not conflict with or constitute a breach of or default under any applicable constitutional provision, law or administrative rule or regulation of the State or the United States or any applicable judgment, decree, license, permit, trust agreement, loan agreement, bond, note, resolution, ordinance agreement or other instrument to which the Financing Authority (or any of its officers in their respective capacities as such) is subject, or by which it or any of its properties is bound; nor will any such authorization, execution, delivery or compliance result in the creation or imposition of any lien, charge or other security interest or ATTACHMENT B 262
EXHIBIT 3
5 encumbrance of any nature whatsoever upon any of its assets or properties or under the terms of any such law, regulation or instrument, except as may be provided by the Bonds and the Financing Authority Documents.
(f) No Litigation. As of the time of acceptance hereof and the Closing, except as disclosed in the Official Statement, no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending and served or, to the best of the Financing Authority’s knowledge, threatened (i) in any way questioning the corporate existence of the Financing Authority or the titles of the officers of the Financing Authority to their respective offices; (ii) affecting, contesting or seeking to prohibit, restrain or enjoin the issuance or delivery of any of the Bonds, or the payment or collection of any amounts pledged or to be pledged to pay the principal of and interest on the Bonds, or in any way contesting or affecting the validity of the Bonds, the Financing Authority Documents or the consummation of the transactions contemplated thereby or hereby, or contesting the exclusion of the interest on the Bonds from taxation or contesting the powers of the Financing Authority or its authority to issue the Bonds; (iii) which may result in any material adverse change relating to the Financing Authority; or (iv) contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or asserting that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and there is no basis for any action, suit, proceeding, inquiry or investigation of the nature described in clauses (i) through (iv) of this sentence. (g) Preliminary Official Statement. For purposes of the Rule, the Financing Authority has heretofore deemed final the Preliminary Official Statement prior to its use and distribution by the Underwriter, except for the information specifically permitted to be omitted by paragraph (b)(1) of the Rule.

7. Representations, Warranties and Covenants of the Parking Authority. The Parking Authority represents, warrants and covenants to the Underwriter that:
(a) Due Organization, Existence and Authority. The Parking Authority is a parking authority, duly organized and existing under the laws of the State of California (the “State”), with full right, power and authority to execute, deliver and perform its obligations under this Bond Purchase Agreement, the Installment Purchase Agreement[, the Continuing Disclosure Certificate] and the CFD Revenues Assignment Agreement (collectively, the “Parking Authority Documents”) and to carry out and consummate the transactions contemplated by the Parking Authority Documents and described in the Official Statement. (b) Due Authorization and Approval. By all necessary official action, the Parking Authority has duly authorized and approved the execution and delivery of, and the performance by the Parking Authority of the obligations contained in, the Preliminary Official Statement, the Official Statement, and the Parking Authority Documents and as of the date hereof, such authorizations and approvals are in full force and effect and have not been amended, modified or rescinded. When executed and delivered, the Parking Authority Documents will constitute the legally valid and binding obligations of the Parking Authority enforceable in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or affecting creditors’ rights generally. The Parking Authority has complied, and will at the Closing be in compliance in all respects, with the terms of the Parking Authority Documents.

ATTACHMENT B 263
EXHIBIT 3
6 (c) Official Statement Accurate and Complete. The Official Statement is, and at all times subsequent to the date of the Official Statement up to and including the Closing will be, true and correct in all material respects, and the Official Statement contains and up to and including the Closing will contain no misstatement of any material fact and does not, and up to and including the Closing will not, omit any statement necessary to make the statements contained therein, in the light of the circumstances in which such statements were made, not misleading. (d) Underwriter’ Consent to Amendments and Supplements to Official Statement. The Parking Authority will advise the Underwriter promptly of any proposal to amend or supplement the Official Statement and will not effect or consent to any such amendment or supplement without the consent of the Underwriter, which consent will not be unreasonably withheld. The Parking Authority will advise the Underwriter promptly of the institution of any proceedings known to it by any governmental agency prohibiting or otherwise affecting the use of the Official Statement in connection with the offering, sale or distribution of the Bonds. (e) No Breach or Default. As of the time of acceptance hereof and as of the time of the Closing, except as otherwise disclosed in the Official Statement, the Parking Authority is not and will not be in breach of or in default under any applicable constitutional provision, law or administrative rule or regulation of the State or the United States, or any applicable judgment or decree or any trust agreement, loan agreement, bond, note, resolution, ordinance, agreement or other instrument to which the Parking Authority 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 event of default under any such instrument which breach or default would materially adversely affect the security of the Bonds or the Parking Authority’s performance under the Parking Authority Documents; and, as of such times, except as disclosed in the Official Statement, the authorization, execution and delivery of the Parking Authority Documents and compliance with the provisions of each of such agreements or instruments do not and will not conflict with or constitute a breach of or default under any applicable constitutional provision, law or administrative rule or regulation of the State or the United States or any applicable judgment, decree, license, permit, trust agreement, loan agreement, bond, note, resolution, ordinance agreement or other instrument to which the Parking Authority (or any of its officers in their respective capacities as such) is subject, or by which it or any of its properties is bound; nor will any such authorization, execution, delivery or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of its assets or properties or under the terms of any such law, regulation or instrument, except as may be provided in the Parking Authority Documents.
(f) No Litigation. As of the time of acceptance hereof and the Closing, except as disclosed in the Official Statement, no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending or threatened (i) in any way questioning the corporate existence of the Parking Authority or the titles of the officers of the Parking Authority to their respective offices; (ii) affecting, contesting or seeking to prohibit, restrain or enjoin the issuance or delivery of any of the Bonds, or the payment of the Installment Payments, or in any way contesting or affecting the validity of the Bonds or the Parking Authority Documents or the consummation of the transactions contemplated thereby, or contesting the exclusion of the interest on the Bonds from taxation or contesting the power of the Parking Authority to pay the Installment Payments; (iii) which may result in any material adverse change relating to the Parking Authority or relating to the financial condition of the Parking Authority or the Parking Authority’s rights with respect to the CFD Revenues; or (iv) contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement or ATTACHMENT B 264
EXHIBIT 3
7 any supplement or amendment thereto or asserting that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and there is no basis for any action, suit, proceeding, inquiry or investigation of the nature described in clauses (i) through (iv) of this sentence.
(g) Preliminary Official Statement. For purposes of the Rule, the Parking Authority has heretofore deemed final the Preliminary Official Statement prior to its use and distribution by the Underwriter, except for the information specifically permitted to be omitted by paragraph (b)(1) of the Rule.

8. Representations, Warranties and Covenants of the City. The City represents, warrants and covenants to the Underwriter that:
(a) Due Organization, Existence and Authority. The City is a municipal corporation and charter city, duly organized and existing under the laws of the State, with full right, power and authority to execute, deliver and perform its obligations under this Bond Purchase Agreement[, the Continuing Disclosure Certificate], the CFD Revenues Assignment Agreement and the Installment Purchase Agreement (collectively, the “City Documents”) and to carry out and consummate the transactions contemplated by the City Documents and described in the Official Statement.
(b) Due Authorization and Approval. By all necessary official action of the City, the City has duly authorized and approved the execution and delivery of, and the performance by the City of the obligations contained in, the Preliminary Official Statement, the Official Statement and the City Documents and as of the date hereof, such authorizations and approvals are in full force and effect and have not been amended, modified or rescinded. When executed and delivered, the City Documents will constitute the legally valid and binding obligations of the City enforceable in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or affecting creditors’ rights generally. The City has complied, and will at the Closing be in compliance in all respects, with the terms of the City Documents. (c) Official Statement Accurate and Complete. To the City’s knowledge, the Official Statement is, and at all times subsequent to the date of the Official Statement up to and including the Closing will be, true and correct in all material respects, and the Official Statement contains, and up to and including the Closing will contain, no misstatement of any material fact and does not, and up to and including the Closing will not, omit any statement necessary to make the statements contained therein, in the light of the circumstances in which such statements were made, not misleading.
(d) Underwriter’ Consent to Amendments and Supplements to Official Statement. The City will advise the Underwriter promptly of any proposal to amend or supplement the Official Statement and will not effect or consent to any such amendment or supplement without the consent of the Underwriter, which consent will not be unreasonably withheld. The City will advise the Underwriter promptly of the institution of any proceedings known to it by any governmental agency prohibiting or otherwise affecting the use of the Official Statement in connection with the offering, sale or distribution of the Bonds.

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8 (e) No Breach or Default. As of the time of acceptance hereof and as of the time of the Closing, except as otherwise disclosed in the Official Statement, the City is not and will not be in breach of or in default under any applicable constitutional provision, law or administrative rule or regulation of the State or the United States, or any applicable judgment or decree or any trust agreement, loan agreement, bond, note, resolution, ordinance, 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 event of default under any such instrument which breach or default would materially adversely affect the security of the Bonds or the City’s performance under the City Documents; and, as of such times, except as disclosed in the Official Statement, the authorization, execution and delivery of the City Documents and compliance with the provisions of each of such agreements or instruments do not and will not conflict with or constitute a breach of or default under any applicable constitutional provision, law or administrative rule or regulation of the State or the United States, or any applicable judgment, decree, license, permit, trust agreement, loan agreement, bond, note, resolution, ordinance, agreement or other instrument to which the City (or any of its officers in their respective capacities as such) is subject, or by which it or any of its properties is bound; nor will any such authorization, execution, delivery or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of its assets or properties or under the terms of any such law, regulation or instrument, except as may be provided by the City Documents. (f) No Litigation. As of the time of acceptance hereof and the Closing, except as disclosed in the Official Statement, no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending or threatened (i) in any way questioning the corporate existence of the City or the titles of the officers of the City to their respective offices; (ii) affecting, contesting or seeking to prohibit, restrain or enjoin the issuance or delivery of any of the Bonds, or the payment of the Installment Payments, or in any way contesting or affecting the validity of the Bonds or the City Documents or the consummation of the transactions contemplated thereby, or contesting the exclusion of the interest on the Bonds from taxation or contesting the power of the City to pay the Installment Payments; (iii) which may result in any material adverse change relating to the City or relating to the financial condition of the City or the City’s rights with respect to the CFD Revenues; or (iv) contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or asserting that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and there is no basis for any action, suit, proceeding, inquiry or investigation of the nature described in clauses (i) through (iv) of this sentence.
(g) Preliminary Official Statement. For purposes of the Rule, the City has heretofore deemed final the Preliminary Official Statement prior to its use and distribution by the Underwriter, except for the information specifically permitted to be omitted by paragraph (b)(l) of the Rule. (h) Formation and Authority of the CFD. The CFD was duly formed and is validly existing as a community facilities district under the Mello-Roos Community Facilities Act of 1982, as amended (the “Mello-Roos Act”). The Special Taxes have been and will be levied in accordance with the Rate and Method and are secured by a lien on the properties on which they are levied. The CFD Revenues Assignment Agreement assigns all of the City’s rights, title and interest in, and to, the CFD Revenues to the Parking Authority, and the Parking Authority thereby acquires, accepts and receives, all of the City’s rights, title and interest in, and to, the CFD ATTACHMENT B 266
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9 Revenues received by the City. The resolutions and ordinance relating to the formation of the CFD and the levy of the special taxes therein are in full force and effect and have not been amended, modified, rescinded or challenged by referendum. The City has recorded the notice of special tax lien in the real property records of the County of San Joaquin, which established a continuing lien on the land within the CFD securing the payment of the special taxes therein. The City has and will comply with the terms of the CFD Revenues Assignment Agreement for so long as the Bonds are outstanding.
(i) Compliance with the Rule. Except as disclosed in the Preliminary Official Statement and the Final Official Statement, the City [and its related entities] have not failed in any material respect to comply with any undertaking under the Rule in the previous five years.

9. Closing Conditions. The Underwriter has entered into this Bond Purchase Agreement in reliance upon the Closing. The Underwriter’ obligations under this Bond Purchase Agreement to purchase representations, warranties and covenants herein and the performance by the City Parties of their respective obligations hereunder, both as of the date hereof and as of the date of and pay for the Bonds shall be subject to the following additional conditions:
(a) Bring-Down Representation. The representations, warranties and covenants of the City Parties contained herein shall be true, complete and correct at the date hereof and at the time of the Closing, as if made on the date of the Closing. (b) Executed Agreements and Performance Thereunder. At the time of the Closing (i) the City Documents, the Financing Authority Documents and the Parking Authority Documents shall be in full force and effect, and shall not have been amended, modified or supplemented except with the written consent of the Underwriter and (ii) there shall be in full force and effect such ordinances and resolutions (the “Resolutions”) as, in the opinion of Norton Rose Fulbright US LLP (“Bond Counsel”), shall be necessary in connection with the transactions contemplated by the Official Statement, the Financing Authority Documents, the Parking Authority Documents and the City Documents.
(c) Termination Events. The Underwriter shall have the right to terminate this Bond Purchase Agreement, without liability therefor, by notification to the City Parties if at any time at or prior to the Closing:
(i) any event shall occur 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 to make the statements in the Official Statement, in the light of the circumstances under which they were made, not misleading; or (ii) the marketability of the Bonds or the market price thereof, in the reasonable opinion of the Underwriter, has been materially adversely affected by an amendment to the Constitution of the United States or by any legislation in or by the Congress of the United States or by the State, or the amendment of legislation pending as of the date of this Bond Purchase Agreement in the Congress of the United States, or the recommendation to Congress or endorsement for passage (by press release, other form of notice or otherwise) of legislation by the President of the United States, the Treasury Department of the United States, the Internal Revenue Service or the Chairman or ranking minority member of the Committee on Finance of the United States Senate or the Committee on Ways and Means of the United States House of Representatives, or the proposal for consideration of legislation by either such Committee or by any member ATTACHMENT B 267
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10 thereof, or the presentment of legislation for consideration as an option by either such Committee, or by the staff of the Joint Committee on Taxation of the Congress of the United States, or the favorable reporting for passage of legislation to either House of the Congress of the United States by a Committee of such House to which such legislation has been referred for consideration, or any decision of any Federal or State court or any ruling or regulation (final, temporary or proposed) or official statement on behalf of the United States Treasury Department, the Internal Revenue Service or other federal or State authority materially adversely affecting the federal or State tax status of the Bonds, or the interest on bonds or notes or obligations of the general character of the Bonds; or (iii) 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 (iv) any legislation, ordinance, rule or regulation shall be introduced in, or be enacted by any governmental body, department or agency of the State, or a decision by any court of competent jurisdiction within the State or any court of the United States shall be rendered which, in the reasonable opinion of the Underwriter, materially adversely affects the market price of the Bonds; or
(v) legislation shall be enacted by the Congress of the United States, or a decision by a court of the United States shall be rendered, or a stop order, ruling, regulation or official statement by, or on behalf of, the Securities and Exchange Commission or any other governmental agency having jurisdiction of the subject matter shall be issued or made to the effect that the issuance, offering or sale of obligations of the general character of the Bonds, or the issuance, offering or sale of the Bonds, including all underlying obligations, as contemplated hereby or by the Official Statement, is in violation or would be in violation of, or that obligations of the general character of the Bonds, or the Bonds, are not exempt from registration under, any provision of the federal securities laws, including the Securities Act of 1933, as amended and as then in effect, or that the Indenture needs to be qualified under the Trust Indenture Act of 1939, as amended and as then in effect; or
(vi) additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any governmental authority or by any national securities exchange which restrictions materially adversely affect the Underwriter’ ability to trade the Bonds; or
(vii) a general banking moratorium shall have been established by federal or State authorities; or
(viii) there shall have occurred any outbreak of hostilities or other local, national or international calamity or crisis, or a default with respect to the debt obligations of, or the institution of proceedings under the federal bankruptcy laws by or against, any state of the United States or agency thereof, or any city in the United States having a population of over one million, the effect of which on the financial markets of the United States will be such as in the Underwriter’ reasonable judgment, makes it impracticable for the Underwriter to market the Bonds or enforce contracts for the sale of the Bonds; or (ix) there shall have occurred or any notice shall have been given of any intended downgrading, suspension, withdrawal or negative change in credit watch status ATTACHMENT B 268
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11 by any national rating service to any of the Financing Authority’s or the City’s obligations; or
(x) the commencement of any action, suit or proceeding described in Paragraphs 6(f) or 7(f) hereof which, in the judgment of the Underwriter, materially adversely affects the market price of the Bonds; or
(xi) there shall be in force a general suspension of trading on the New York Stock Exchange; or
(xii) there shall have been any materially adverse change in the affairs of any of the City Parties which in the Underwriter’ reasonable judgment materially adversely affects the ability of the Underwriter to market the Bonds. (d) Closing Documents. At or prior to the Closing, the Underwriter shall receive with respect to the Bonds (unless the context otherwise indicates) the following documents:
(1) Bond Opinion. An approving opinion of Bond Counsel dated the date of the Closing and substantially in the form appended to the Official Statement, together with a letter from such counsel, dated the date of the Closing and addressed to the Underwriter and the Trustee, to the effect that the foregoing opinion may be relied upon by the Underwriter and the Trustee to the same extent as if such opinion were addressed to them.
(2) Supplemental Opinion. A supplemental opinion or opinions of Bond Counsel addressed to the Underwriter, in form and substance acceptable to the Underwriter, and dated the date of the Closing substantially to the following effect:
(i) Each of the City Parties has duly and validly executed the Bond Purchase Agreement, and the Bond Purchase Agreement constitutes the legal, valid and binding agreement of the City Parties, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted and to the exercise of judicial discretion in appropriate cases;
(ii) The statements contained in the Official Statement on the cover page and under the captions "INTRODUCTION," “THE BONDS (other than information relating to DTC and its book-entry only system, as to which no opinion need be expressed),” “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS,” “TAX MATTERS,” and in [Appendices A and D] thereto, insofar as such statements expressly summarize certain provisions of the Bonds, the Indenture, the Installment Purchase Agreement, the CFD Revenues Assignment Agreement and our final approving opinion relating to the Bonds, are accurate in all material respects; and
(iii) The Bonds are exempt from registration under the Securities Act of 1933, as amended, and the Indenture is exempt from qualification under the Trust Indenture Act of 1939, as amended.

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12 (3) City Attorney Opinion. An opinion of the City Attorney, dated the date of the Closing and addressed to the Underwriter and the Trustee, in form and substance acceptable to Bond Counsel, substantially to the following effect:
(i) The City is a charter city duly organized and validly existing under the Constitution and the laws of the State of California; (ii) The resolution of the City (the “City Resolution”) approving and authorizing the execution and delivery of the City Documents and approving the Official Statement, was duly adopted at a meeting of the City Council 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 the City Resolution is in full force and effect and has not been modified, amended or rescinded; (iii) The execution and delivery of the City Documents and compliance with the provisions thereof, 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;
(iv) No additional authorization, approval, consent, waiver or any other action by any person, board or body, public or private, not previously obtained is required as of the date of the Closing for the City to enter into the City Documents, or to perform its obligations thereunder;
(v) Except as otherwise disclosed in the Official Statement, there is no litigation, proceeding, action, suit, or investigation at law or in equity before or by any court, governmental agency or body, pending or, to the best knowledge of such counsel after due investigation, threatened against the City, challenging the creation, organization or existence of the City, or the validity of the City Documents or seeking to restrain or enjoin the City’s obligations under the City Documents or in any way contesting or affecting the validity of the City Documents or any of the transactions referred to therein or contemplated thereby or contesting the City to enter into or perform its obligations under any of the City Documents, or under which a determination adverse to the City would have a material adverse effect upon the financial condition or the revenues of the City, or which, in any manner, questions or affects the right or ability of the City to enter into the City Documents or affects in any manner the right or ability of the City to perform under the City Documents;
(vi) That nothing has come to the attention of such counsel which would lead it to believe that the Official Statement (excluding therefrom the financial and statistical data and forecasts included therein, as to which no opinion need be expressed) contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (4) Financing Authority Counsel Opinion. An opinion of counsel to the Financing Authority, dated the date of the Closing and addressed to the Underwriter and ATTACHMENT B 270
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13 the Trustee, in form and substance acceptable to Bond Counsel, substantially to the following effect:
(i) The Financing Authority is a joint powers authority, duly created and lawfully existing under the laws of the State of California; (ii) The resolution (“Financing Authority Resolution”) of the Financing Authority approving and authorizing the execution and delivery of the Financing Authority Documents and approving the Official Statement has been duly adopted, and the Financing Authority Resolution is in full force and effect and has not been modified, amended or rescinded;
(iii) The authorization, execution and delivery of the Financing Authority Documents by the Financing Authority and compliance by the Financing Authority with the provisions thereof, will not conflict with, or constitute a breach or default under, any law, administrative regulation, court decree, resolution, ordinance or other agreement to which the Financing Authority is subject or by which it is bound; and
(iv) Except as otherwise disclosed in the Official Statement and to the best knowledge of such counsel, there is no litigation, action, suit, proceeding or investigation at law or in equity before or by any court, governmental agency or body, pending and served or, to the best of such counsel’s knowledge, threatened against the Financing Authority, challenging the creation, organization or existence of the Financing Authority, or the validity of the Bonds, the Financing Authority Documents or contesting the Financing Authority of the Financing Authority to enter into or perform its obligations under any of the Financing Authority Documents, or which, in any manner, questions the right of the Financing Authority to issue the Bonds or to use the Revenues for repayment of the Bonds. (5) Parking Authority Counsel Opinion. An opinion of counsel to the Parking Authority, dated the date of the Closing and addressed to the Underwriter and the Trustee, in form and substance acceptable to Bond Counsel, substantially to the following effect:
(i) The Parking Authority is a parking authority, duly created and lawfully existing under the laws of the State of California; (ii) The resolution (“Parking Authority Resolution”) of the Parking Authority approving and authorizing the execution and delivery of the Parking Authority Documents and approving the Official Statement has been duly adopted, and the Parking Authority Resolution is in full force and effect and has not been modified, amended or rescinded;
(iii) The authorization, execution and delivery of the Parking Authority Documents by the Parking Authority and compliance by the Parking Authority with the provisions thereof, will not conflict with, or constitute a breach or default under, any law, administrative regulation, court decree, resolution, ordinance or other agreement to which the Parking Authority is subject or by which it is bound; and (iv) Except as otherwise disclosed in the Official Statement and to the best knowledge of such counsel, there is no litigation, action, suit, proceeding or ATTACHMENT B 271
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14 investigation at law or in equity before or by any court, governmental agency or body, pending and served or, to the best of such counsel’s knowledge, threatened against the Parking Authority, challenging the creation, organization or existence of the Parking Authority, or the validity of the Bonds, the Parking Authority Documents or contesting the Parking Authority to enter into or perform its obligations under any of the Parking Authority Documents, or which, in any manner, questions the right of the Parking Authority to use the Net Parking Revenues for payment of the Installment Payment.
(6) Disclosure Counsel Letter. A letter of Schiff Hardin LLP (“Disclosure Counsel”), dated the date of the Closing, addressed to the City Parties and the Underwriter substantially to the following effect: On the basis of the information made available to such firm in the course of its participation in the preparation of the Official Statement (but without having undertaken to determine or verify independently, or assuming any responsibility for the accuracy, completeness or fairness of any of the statements contained in the Official Statement), no facts have come to the attention of the personnel in such firm directly involved in rendering legal advice and assistance to the City Parties in connection with the preparation of the Official Statement which cause such firm to believe that the Official Statement as of its date (excluding therefrom financial, engineering and statistical data; forecasts, projections, estimates, assumptions and expressions of opinions, including without limitation, the descriptions of the City Parties’ finances and operation; information relating to the Depository Trust Company and the book-entry only system; as to all of which such firm expresses no view as Disclosure Counsel) contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(7) Underwriter’ Counsel Opinion. An opinion of Jones Hall, A Professional Law Corporation, counsel to the Underwriter, dated the date of Closing and addressed to 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 Official Statement and without passing on and without assuming any responsibility for the accuracy, completeness and fairness of the statements in the Official Statement, and having made no independent investigation or verification thereof, no information has come to the attention of the attorneys rendering legal services in connection with such representation that leads them to believe that, as of the date of Closing, the Official Statement (except for any financial or statistical data or forecasts, numbers, charts, tables, graphs, estimates, projections, assumptions or expressions of opinion, or any information concerning the DTC or the book-entry only system, included therein, as to which no opinion or view need be expressed) contains any untrue statement of a material fact 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; that the Bonds are exempt from registration under the Securities Act of 1933, as amended; the Indenture is exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended; and the Continuing Disclosure Certificate provides a suitable basis for the Underwriter, in connection with the Offering (as defined in Rule 15c2-12) of the Bonds to make a reasonable determination as required by section (b)(5) of such Rule. (8) Trustee’s Certificate. A certificate of Wells Fargo Bank, National Association, dated the date of Closing, in form and substance acceptable to the Underwriter, to the following effect:

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15 (i) The Trustee is duly organized and existing as a national banking association in good standing under the laws of the United States of America, having the full power and authority to enter into and perform its duties under the Indenture;
(ii) The Trustee is duly authorized to enter into the Indenture; (iii) To the Trustee’s knowledge, there is no action, suit, proceeding or investigation, at law or in equity, before or by any court or governmental agency, public board or body served on the Trustee or threatened against the Trustee which in the reasonable judgment of the Trustee would affect the existence of the Trustee or in any way contesting or affecting the validity or enforceability of the Indenture or contesting the powers of the Trustee or its authority to enter into, accept and perform its obligations under the Indenture. (9) City Certificate. A certificate of the City, dated the date of the Closing, signed on behalf of the City by the City Manager or other duly authorized officer of the City to the effect that:
(i) The representations, warranties and covenants of the City contained herein are true and correct in all material respects on and as of the date of the Closing as if made on the date of the Closing and the City has complied with all of the terms and conditions of this Bond Purchase Agreement required to be complied with by the City at or prior to the date of the Closing; and (ii) No event affecting the City has occurred since the date of the Official Statement which has not been disclosed therein or in any supplement or amendment thereto which event should be disclosed in the Official Statement in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(10) Financing Authority Certificate. A certificate of the Financing Authority, dated the date of the Closing, signed on behalf of the Financing Authority by a duly authorized officer of the Financing Authority to the effect that:
(i) The representation, warranties and covenants of the Financing Authority contained herein are true and correct in all material respects on and as of the date of the Closing as if made on the date of the Closing and the Financing Authority has complied with all of the terms and conditions of this Bond Purchase Agreement required to be complied with by the Financing Authority at or prior to the date of Closing; and
(ii) No event affecting the Financing Authority has occurred since the date of the Official Statement which has not been disclosed therein or in any supplement or amendment thereto which event should be disclosed in the Official Statement in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

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16 (11) Parking Authority Certificate. A certificate of the Parking Authority, dated the date of the Closing, signed on behalf of the Parking Authority by a duly authorized officer of the Financing Authority to the effect that:
(i) The representation, warranties and covenants of the Parking Authority contained herein are true and correct in all material respects on and as of the date of the Closing as if made on the date of the Closing and the Parking Authority has complied with all of the terms and conditions of this Bond Purchase Agreement required to be complied with by the Parking Authority at or prior to the date of Closing; and
(ii) No event affecting the Parking Authority has occurred since the date of the Official Statement which has not been disclosed therein or in any supplement or amendment thereto which event should be disclosed in the Official Statement in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(12) Documents. An original executed copy of the Bond Purchase Agreement, of each of the Financing Authority Documents, each of the Parking Authority Documents, and each of the City Documents.
(13) Resolutions. A certified copy of the Financing Authority Resolution, the Parking Authority Resolution and the City Resolution.
(14) Form 8038-G. Evidence that the federal tax information form 8038-G has been prepared for filing.
(15) Nonarbitrage Certificate. A tax and nonarbitrage certificate in form satisfactory to Bond Counsel.
(16) CDIAC Statements. A copy of the Notice of Proposed Sale and Report of Final Sale required to be delivered to the California Debt and Investment Advisory Commission (“CDIAC”) pursuant to Section 8855(g) of the California Government Code. (17) A Continuing Disclosure Certificate executed by the [[City]] in order to assist the Underwriter with compliance with the Rule.
(18) Ratings. Evidence that the Bonds have been given the rating(s) set forth in the Final Official Statement.
(19) Documents Related to 2004 Parking Bonds and Related Matters. Such documents related to the 2004 Parking Bonds, the 2004 Parking Bonds Proceedings, the Settlement, the Forbearance Agreement, the 2015 Installment Sale Agreement and related matters, as may be requested by Bond Counsel or the Underwriter. [(20) Policies, Certificates and Opinions of the Insurer. (a) the Bond Insurance Policy; (b) the Reserve Policy; (c) one or more certificates of the Insurer certifying as to the accuracy of the information concerning the Insurer in the Official Statement; and (d) one or more legal opinions of counsel to the Insurer dated the Closing Date and addressed to the Underwriter, addressing the enforceability of the Bond Insurance Policy and the Reserve Policy.]
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17 (21) Additional Documents. Such additional certificates, instruments and other documents as Bond Counsel, the City Parties or the Underwriter may reasonably deem necessary.

If the City Parties shall be unable to satisfy the conditions contained in this Bond Purchase Agreement, or if the obligations of the Underwriter shall be terminated for any reason permitted by this Bond Purchase Agreement, this Bond Purchase Agreement shall terminate and neither the Underwriter nor any of the City Parties shall be under further obligation hereunder, except as further set forth in Section 11 hereof.

10. Establishment of Issue Price.
(a) The Underwriter agrees to assist the Financing Authority in establishing the issue price of the Bonds and shall execute and deliver to the Financing 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 Appendix C, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the Financing Authority and Bond Counsel, 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 Appendix A attached hereto, the Financing Authority will treat the first price at which 10% of each maturity of the Bonds (the “10% test”), identified under the column “10% Test Satisfied” in Appendix A, is sold to the public as the issue price of that maturity (if different interest rates apply within a maturity, each separate CUSIP number within that maturity will be subject to the 10% test). At or promptly after the execution of this Agreement, the Underwriter shall report to the Financing 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 Financing 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 the 10% test has been satisfied as to the Bonds of that maturity or until all Bonds of that maturity have been sold to the public.
(c) The Underwriter confirms that it has offered the Bonds to the public on or before the date of this Agreement at the offering price or prices (the “initial offering price”), or at the corresponding yield or yields, set forth in Appendix A attached hereto, except as otherwise set forth therein. Appendix A also sets forth, identified under the column “Subject to Hold the Offering Price Rule,” as of the date of this 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 Agreement) and (ii) the 10% test has not been satisfied and for which the Financing Authority and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the Financing Authority to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the “hold-the-offering-price rule”). So long as the hold-theoffering-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: (i) the close of the fifth (5th) business day after the sale date; or (ii) 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 shall promptly advise ATTACHMENT B 275
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18 the Financing Authority when 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, if that occurs prior to the close of the fifth (5th) business day after the sale date.
(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-offeringprice 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.
(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 (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-offeringprice 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 Financing 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 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 issue price of the Bonds, including, ATTACHMENT B 276
EXHIBIT 3
19 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 third-party distribution agreement and the related pricing wires. (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:
(i) “public” means any person other than an underwriter or a related party; (ii) “underwriter” means (A) any person that agrees pursuant to a written contract with the Financing 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); (iii) a purchaser of any of the Bonds is a “related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (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 (including direct ownership by one partnership of another), or (C) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other); and
(iv) “sale date” means the date of execution of this Purchase Agreement by all parties.

11. Expenses. The Underwriter shall be under no obligation to pay, and the City Parties shall pay or cause to be paid, the expenses incident to the performance of the obligations of the City Parties hereunder including but not limited to (a) the costs of the preparation and printing, or other reproduction (for distribution on or prior to the date hereof) of the Financing Authority Documents, Parking Authority Documents and City Documents and the cost of preparing, printing, issuing and delivering the definitive Bonds, (b) the fees and disbursements of any counsel, financial advisors, accountants or other experts or consultants retained by the City Parties, (c) the fees and disbursements of Bond Counsel, (d) the fees and disbursements of Disclosure Counsel, (e) the cost of preparation and printing of the Preliminary Official Statement and any supplements and amendments thereto and the cost of preparation and printing of the Official Statement, including the requisite number of copies thereof for distribution by the Underwriter, (f) charges of rating agencies for the rating of the Bonds, (g) premiums and costs for any bond insurance and/or reserve policy insurance, if applicable, and (h) for expenses (included in the expense component of the spread) incurred by the Underwriter on behalf of the City’s employees that are incidental to implementing this Purchase Agreement, including, but not limited to, meals and transportation of those employees.

ATTACHMENT B 277
EXHIBIT 3
20 The Underwriter shall pay, and the City Parties shall be under an obligation to pay, all expenses incurred by the Underwriter, and the CDIAC fee, in connection with the public offering of the Bonds.

12. Covenants of the City Parties. The City Parties covenant with the Underwriter that:
(a) If, at any time prior to the date twenty-five (25) days following the later of the Closing or the date the Underwriter no longer retain, directly or as a member of an underwriting syndicate, an unsold balance of the Bonds for sale to the public, which date, if other than the date of the Closing, shall be provided to the Issuer by written notice of the Underwriter (the "End of the Underwriting Period"), any event of which any of the City Parties has knowledge shall occur which might or would cause the Final Official Statement to contain an untrue statement of a material fact or to omit 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, the City Parties will promptly notify the Underwriter in writing of the circumstances and details of such event. If, as a result of such event or any other event, it is necessary, in the opinion of the Underwriter, the City Parties or their respective counsel, to amend or supplement the Final Official Statement in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, the City Parties will forthwith cooperate with the Underwriter in the prompt preparation and furnishing to the Underwriter of a reasonable number of copies of an amendment of or a supplement to the Final Official Statement, in form and substance reasonably satisfactory to the Underwriter, which will so amend or supplement the Final Official Statement so that, as amended or supplemented, it will not contain any untrue 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; (b) The City Parties will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request to qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may designate; provided, however, that the City Parties shall not be required to register as a dealer or broker or foreign corporation in any such state or jurisdiction or consent to service of process therein; and (c) The City Parties will comply, and perform all actions as may be requested by the Underwriter (including delivering of an appropriate certificate with respect to the preliminary Official Statement) in order for the Underwriter to comply, with the applicable provisions of Rule 15c2-12 under the Securities Exchange Act of 1934.

13. Notice. Any notice or other communication to be given to any City Party under this Bond Purchase Agreement may be given by delivering the same in writing to such entity at the address set forth above. Any notice or other communication to be given to the Underwriter under this Bond Purchase Agreement may be given by delivering the same in writing to Stifel, Nicolaus & Company, Incorporated, One Montgomery Street, 35th Floor, San Francisco, CA 94104, Attn.: Eric McKean.

14. Entire Agreement; Survival. This Bond Purchase Agreement, when accepted by the City and the Financing Authority, shall constitute the entire agreement among the City Parties and the Underwriter and is made solely for the benefit of the City Parties and the Underwriter (including the successors or assigns of either Underwriter). No other person shall acquire or have any right hereunder by virtue hereof, except as provided herein. All of the City Parties’ ATTACHMENT B 278
EXHIBIT 3
21 representations, warranties, and agreements in this contract will remain operative and in full force and effect, regardless of any investigations made by or on behalf of the Underwriter and will survive the Closing.

15. Counterparts. This Bond Purchase Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

16. Severability. In case any one or more of the provisions contained herein shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof.

17. State of California Law Governs. The validity, interpretation and performance of this Bond Purchase Agreement shall be governed by the laws of the State. [Signature Page Follows]
ATTACHMENT B 279
EXHIBIT 3
22 18. No Assignment. The rights and obligations created by this Bond Purchase Agreement shall not be subject to assignment by the Underwriter or any of the City Parties without the prior written consent of the other parties hereto.

STIFEL NICOLAUS & COMPANY,

INCORPORATED
By:

Authorized Representative
Agreed to and Accepted by:

STOCKTON PUBLIC FINANCING AUTHORITY
By:

Authorized Representative
Date/Time: ____________, 2020, ___ a.m./p.m.

PARKING AUTHORITY OF THE CITY OF STOCKTON
By:

Authorized Representative
Date/Time: ____________, 2020, ___ a.m./p.m.

CITY OF STOCKTON
By:

Authorized Representative
Date/Time: ____________, 2020, ___ a.m./p.m.

ATTACHMENT B 280
EXHIBIT 3
A-1

APPENDIX A
Maturity Date
(March 1)
Principal
Amount
Interest
Rate Yield Price
10% Test
Used
Hold-TheOffering-Price
Rule Used
_______________
C Priced to call at par on March 1, 20__.

Redemption Provisions
Optional Redemption. The 2020 Bonds maturing on or after March 1, 20__, are subject to optional redemption by the Financing Authority prior to their respective stated maturity dates, upon notice as hereinafter provided, from any source of funds other than sinking account payments, on any date on or after March 1, 20__, as a whole or in part, in either case at a redemption price equal to the sum of the principal amount thereof to be redeemed plus accrued interest thereon to the redemption date, without premium.

Mandatory Sinking Fund Redemption. The Series 2020 Bonds maturing on March 1, 20__ and March 1, 20__ (together, the “Term Bonds”) are also subject to mandatory redemption prior to their respective stated maturities, commencing March 1, _____, and March 1, _____, respectively, and on March 1 in each year thereafter to and including March 1, _____, and March 1, _____, respectively, in part by lot, from mandatory sinking account payments at a redemption price equal to the principal amount thereof, plus accrued interest, if any, to the redemption date, without premium, as set forth below 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 such Series 2020 Bonds have been redeemed pursuant to optional redemption provisions of this Indenture, the total amount of all future sinking fund payments shall be reduced by the aggregate principal amount of such Bonds so redeemed, to be allocated among such sinking fund payments on a pro rata basis in integral multiples of $5,000. The Parking Authority shall provide the Trustee with a revised sinking fund schedule.

Redemption Date
(March 1)
Principal
Amount
_______
* Maturity.

ATTACHMENT B 281
EXHIBIT 3
A-2
Redemption Date
(March 1)
Principal
Amount
_______
* Maturity.

ATTACHMENT B 282
B-1

APPENDIX B

STOCKTON PUBLIC FINANCING AUTHORITY
PARKING REVENUE BONDS, SERIES 2020
RULE 15c2-12 CERTIFICATE
The undersigned hereby certifies to Stifel, Nicolaus & Company, Incorporated (the “Underwriter”) that I am an authorized representative of the City of Stockton (the “City”), the Stockton Public Financing Authority (the “Financing Authority”) and the Parking Authority of the City of Stockton (the “Parking Authority” and together with the City and the Financing Authority, the “City Parties”), and as such, I am authorized to execute and deliver this Certificate and further hereby certify and reconfirm on behalf of the City Parties to the Underwriter as follows:
(1) This Certificate is delivered to enable the Underwriter to comply with Securities and Exchange Commission Rule 15c2-12 under the Securities Exchange Act of 1934 (the “Rule”) in connection with the offering and sale of the above-captioned bonds (the “Bonds”). (2) In connection with the offering and sale of the Bonds, there has been prepared a Preliminary Official Statement, setting forth information concerning the Bonds and the City Parties (the “Preliminary Official Statement”).
(3) As used herein, “Permitted Omissions” means the offering price(s), interest rate(s), selling compensation, aggregate principal amount, principal amount per maturity, delivery dates, ratings and other terms of the Bonds depending on such matters and the identity of the underwriter(s), all with respect to the Bonds.
(4) The Preliminary Official Statement is, except for the Permitted Omissions, deemed final within the meaning of the Rule and has been, and the information therein is, accurate and complete except for the Permitted Omissions.

IN WITNESS WHEREOF, the undersigned has executed this certificate as of this ______ day of ____________.

STOCKTON PUBLIC FINANCING AUTHORITY

PARKING AUTHORITY OF THE CITY OF STOCKTON

CITY OF STOCKTON
By:

Authorized Representative
ATTACHMENT B 283
C-1

APPENDIX C

FORM OF ISSUE PRICE CERTIFICATE
[To Come – From Bond Counsel]
ATTACHMENT B 284
Exhibit 4
PRELIMINARY OFFICIAL STATEMENT DATED JANUARY __, 2020
NEW ISSUE - FULL BOOK-ENTRY RATINGS: (See “RATINGS”)
$___,___,000*

STOCKTON PUBLIC FINANCING AUTHORITY

PARKING REVENUE BONDS,
SERIES 2020
Dated: Date of Delivery Due: [March] 1, as shown on inside front cover This cover page contains information for general reference only. It is not a complete summary of the 2020 Bonds. Investors should read the entire Official Statement to obtain information essential to the making of an informed investment decision. See “CERTAIN BONDOWNERS’ RISKS” for a discussion of certain factors that should be considered, in addition to the other matters set forth herein, in evaluating the investment quality of the 2020 Bonds.

The Stockton Public Financing Authority (the “Authority”) is issuing $___,___,000* principal amount of Stockton Public Financing Authority Parking Revenue Bonds, Series 2020 (the “2020 Bonds”) to provide funds which, together with certain other available funds, will be used to: (i) prepay outstanding obligations under an Installment Sale Agreement (Parking Garages and Downtown Parking District Facilities), dated as of February 25, 2015 that secure payment of the Authority’s Lease Revenue Bonds, Series 2004 (Parking and Capital Projects) and to finance the construction, acquisition, and installation of certain improvements to parking facilities owned by the City of Stockton Parking Authority (the “Parking Authority”) located in the downtown area of the City of Stockton (the “City”); (ii) fund a reserve account [purchase a municipal bond insurance policy and a debt service reserve policy] as security for the 2020 Bonds; and (iii) pay certain costs associated with the issuance of the 2020 Bonds. See “PLAN OF FINANCE” and “ESTIMATED SOURCES AND USES OF FUNDS.” The 2020 Bonds are issued under and pursuant to Chapter 5 of Division 7 of Title 1 of the California Government Code, as amended (the “Act”) and other applicable laws of the State of California, a resolution adopted by the Authority on December __, 2019 and in accordance with the provisions of a 2020 Indenture, dated as of February 1, 2020 (the “2020 Indenture”), by and between the Authority and Wells Fargo Bank, National Association, as trustee (the “Trustee”).

The 2020 Bonds are limited obligations of the Authority payable solely from installment payments (the “2020 Installment Payments”) to be made by the Parking Authority to the Authority pursuant to a 2020 Installment Purchase Agreement, dated as of February 1, 2020 (the “2020 Installment Purchase Agreement”), and certain amounts held under the 2020 Indenture. As security for the payment of the 2020 Installment Payments, the Parking Authority has pledged Net Parking Revenues, which consist generally of: (i) fees, rates, charges, and revenues derived from the operation of Parking Facilities (consisting of parking meters, surface lots and garages) located within the City (collectively, the “Parking Facilities”) and (ii) proceeds of a special tax levied on Taxable Property (as defined herein) within the City’s Community Facilities District No. 2001-01 (Downtown Parking) (the “Parking CFD”), which have been assigned by the City to the Parking Authority pursuant to an Assignment Agreement, dated as of February 1, 2020 (the “CFD Revenues Assignment Agreement”) between the City and the Parking Authority, less payment of Operation and Maintenance Costs (as defined herein). See “SECURITY AND SOURCES OF PAYMENT FOR THE 2020 BONDS.”
ATTACHMENT B 285
The Parking Authority may issue or incur additional obligations secured by and payable from Net Parking Revenues on a parity with the 2020 Installment Payments and other Parity Obligations (each as defined herein). See “SECURITY AND SOURCES OF PAYMENT FOR THE 2020 BONDS–Issuance of Parity Obligations.” The Parking Authority may also issue or incur additional obligations secured by and/or payable from Net Parking Revenues on a basis subordinate to the 2020 Installment Payments and other Parity Obligations. The City, on behalf of the Parking CFD, may issue bonds or incur other obligations secured by CFD Revenues [parity/subordinate? – Discuss]. The assignment of CFD Revenue to the Authority and the pledge thereof to secure the 2020 Bonds may by terminated by the Authority and the City as described in the CFD Revenues Assignment Agreement. See “THE PARKING CFD–Pledge of CFD Revenues–Termination of Pledge of CFD Revenues.”
The 2020 Bonds will mature on the and bear interest at the fixed rates set forth on the inside front cover page. Interest on the 2020 Bonds will be payable on each [March] 1 and [September] 1, commencing [September] 1, 2020. The 2020 Bonds are subject to optional [and mandatory sinking fund] redemption prior to their respective maturities. See “THE 2020 BONDS–Redemption Provisions.”
The 2020 Bonds will be issued in fully registered form in denominations of $5,000 or any integral multiple thereof. When delivered, the 2020 Bonds will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). DTC will act as securities depository for the 2020 Bonds. So long as Cede & Co. is the registered owner of the 2020 Bonds, payment of principal of and premium, if any, and interest on the 2020 Bonds will be made to Cede & Co.

Purchasers will not receive 2020 Bonds representing their interest in the 2020 Bonds. Individual purchases of the 2020 Bonds will be made in book-entry form only. See APPENDIX F–“DTC AND THE BOOK-ENTRY ONLY SYSTEM.”
THE 2020 BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM 2020 INSTALLMENT PAYMENTS MADE BY THE PARKING AUTHORITY AND CERTAIN MONEYS HELD UNDER THE 2020 INDENTURE. THE 2020 BONDS ARE NOT A

DEBT OF THE PARKING AUTHORITY, THE CITY, THE STATE OF CALIFORNIA OR ANY

POLITICAL SUBDIVISION THEREOF, AND SHALL BE PAYABLE SOLELY FROM THE REVENUES PLEDGED THEREFOR PURSUANT TO THE 2020 INDENTURE. THE OBLIGATION OF THE PARKING AUTHORITY TO MAKE 2020 INSTALLMENT PAYMENTS IS A SPECIAL

OBLIGATION OF THE PARKING AUTHORITY PAYABLE SOLELY FROM NET SYSTEM REVENUES OF THE PARKING FACILITIES AS PROVIDED IN THE 2020 INSTALLMENT PURCHASE AGREEMENT. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF

THE CITY, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF (INCLUDING THE

AUTHORITY) IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL AND PREMIUM, IF ANY, OF, OR INTEREST ON THE 2020 BONDS. THE AUTHORITY HAS NO TAXING POWER. THE ISSUANCE OF THE 2020 BONDS SHALL NOT DIRECTLY OR INDIRECTLY OBLIGATE THE

AUTHORITY, THE CITY, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF TO LEVY

OR PLEDGE ANY FORM OF TAXATION WHATSOEVER OR TO MAKE ANY APPROPRIATION FOR PAYMENT OF THE 2020 BONDS. THE 2020 BONDS AND THE 2020 INSTALLMENT PAYMENTS ARE NOT PAYABLE FROM THE GENERAL FUND OF THE CITY.

In the opinion of Norton Rose Fulbright US LLP (“Bond Counsel”), based on existing statutes, regulations, rulings and judicial decisions, and assuming compliance with certain covenants in the documents pertaining to the 2020 Bonds and requirements of the Internal Revenue Code of 1986, as amended, as described herein, interest on the 2020 Bonds is not includable in the gross income of the owners of the 2020 Bonds for federal income tax purposes. In the further opinion of Bond Counsel, interest on the 2020 Bonds is not treated as an item of tax preference for purposes of the federal ATTACHMENT B 286
alternative minimum tax. Bond Counsel is also of the opinion that interest on the 2020 Bonds is exempt from personal income taxes imposed by the State of California. Bond Counsel expresses no opinion regarding any other tax consequences related to the ownership or disposition of, or the accrual or receipt of interest on, the 2020 Bonds. See “TAX MATTERS.” [Bond Counsel to Review and Revise] The 2020 Bonds are offered when, as and if issued by the Authority and received by the Underwriter, subject to the approval as to their validity by Norton Rose Fulbright US LLP, Bond Counsel to the Authority, and certain other conditions. Del Rio Advisors, LLC, Modesto, California is serving as municipal advisor to the Authority and the Parking Authority in connection with the issuance of the 2020 Bonds. Certain legal matters will be passed on for the Authority and the Parking Authority by the City Attorney and by Schiff Hardin LLP, San Francisco, California, Disclosure Counsel to the Authority and the Parking Authority, and for the Underwriter by Jones Hall, A Professional Corporation, San Francisco, California, Underwriter’s Counsel. It is anticipated that the 2020 Bonds will be available for delivery in book-entry only form through the facilities of DTC on or about February __, 2020. [STIFEL Logo]
Dated: February __, 2020.
___________
* Preliminary, subject to change.

ATTACHMENT B 287
MATURITY SCHEDULE*
$___,___,000*

STOCKTON PUBLIC FINANCING AUTHORITY

PARKING REVENUE BONDS,
SERIES 2020
Maturity
([March] 1)
Principal
Amount*
Interest
Rate Yield Price CUSIP No. †

[$__,___,000* ____% Term Bonds Due [March] 1, 20__, Yield _____%; Price _____%; CUSIP No.† _________]
_______________
* Preliminary, subject to change.
† CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (“CGS”) is managed on behalf of the American Bankers Association by S&P Capital IQ. Copyright 2020 CUSIP Global Services. All rights reserved. CUSIP® data herein is provided by CGS. This data is not intended to create a database and does not serve in any way as a substitute for CGS database. The CUSIP® numbers are provided for convenience of reference only. None of the Authority, the Parking Authority, the City, the Underwriter, their agents, or counsel is responsible for the selection or uses of the CUSIP® numbers, and no representation is made as to their correctness on the applicable 2020 Bonds or as included herein. The CUSIP® numbers of specific maturities is subject to change following the issuance of the 2020 Bonds as a result of various actions, including, but not limited to, a refunding in whole or in part or as the result of the procurement of a secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the 2020 Bonds.

ATTACHMENT B 288
No dealer, broker, salesperson or other person has been authorized by the Authority, the Parking Authority, or the Underwriter to give any information or to make any representations other than as contained in this Official Statement, and if given or made, such other information or representations must not be relied upon as having been authorized by any of the foregoing.

This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the 2020 Bonds by any person, in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. This Official Statement is not to be construed as a contract with the purchasers of the 2020 Bonds. Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of fact.

The information set forth herein has been obtained from sources which are believed to be reliable, but such information is neither guaranteed as to accuracy or completeness, nor shall it be construed as a representation of such by the Authority, the Parking Authority, or the Underwriter. The information and expressions of opinion stated herein are subject to change without notice; and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Parking Authority or in the condition of the Parking Facilities, since the date hereof.

The summaries and references to the 2020 Indenture, the 2020 Installment Purchase Agreement, the Act and to other statutes and documents referred to herein do not purport to be comprehensive or definitive and are qualified in their entireties by reference to each such statute and document. This Official Statement including any amendment or supplement hereto is intended to be deposited with one or more information repositories.

The Underwriter have provided the following sentence for inclusion in this Official Statement: the Underwriter have reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter do not guarantee the accuracy or completeness of such information.

In connection with the offering of the 2020 Bonds, the Underwriter may overallot or effect transactions which stabilize or maintain the market price of the 2020 Bonds at a level above that which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time. The Underwriter may offer and sell the 2020 Bonds to certain dealers and others at prices lower than the public offering prices set forth on the inside cover page hereof and said public offering prices may be changed from time to time by the Underwriter.

The 2020 Bonds have not been registered under the Securities Act of 1933, as amended, in reliance upon an exemption from the registration requirements contained in such act. The 2020 Bonds have not been registered or qualified under the securities laws of any state.

The City maintains a website. Unless specifically indicated otherwise, the information presented on that website is not incorporated by reference as part of this Official Statement and should not be relied upon in making investment decisions with respect to the 2020 Bonds.

Any statement involving any forecast or matter of opinion or estimates, whether or not expressly stated, is intended solely as such and not as a representation of fact. Certain statements included or incorporated by reference in this Official Statement constitute “forward looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended (the “Securities Act”). Such forward-looking statements are generally identified by use of the words “plan,” “project,” “expect,” “estimate,” “budget” or other similar words. Such forward looking statements refer to the achievement of certain results or other expectations or performance which involve known and unknown risks, uncertainties and other factors. These risks, uncertainties and other factors may cause actual results, performance or achievements to be materially different from any projected results, performance or achievements described or implied by such forward looking statements. The Parking Authority does not plan to issue updates or revisions to such forward looking statements if or when its expectations, or events, conditions or circumstances on which such statements are based, occur, or if actual results, performance or achievements are materially different from any results, performance or achievements described or implied by such forward looking statements.
[_______ (the “Bond Insurer”) makes no representation regarding the 2020 Bonds or the advisability of investing in the 2020 Bonds. In addition, the Bond Insurer has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding the Bond Insurer, supplied by the Bond Insurer and presented under the heading “BOND INSURANCE” and APPENDIX G–“SPECIMEN MUNICIPAL BOND INSURANCE POLICY.”] ATTACHMENT B 289

STOCKTON PUBLIC FINANCING AUTHORITY

CHAIR AND BOARD OF DIRECTORS
AND

CITY COUNCIL

CITY OF STOCKTON

CHAIR AND BOARD OF DIRECTORS

AND MAYOR AND CITY COUNCIL
Michael Tubbs, Chair and Mayor
Daniel Wright, Member and Vice Mayor, District 2
Sol Jobrack, Member and Councilmember, District 1
Paul Canepa, Member and Councilmember District 3
Susan Lenz, Member and Councilmember, District 4
Christine Fugazi, Member and Councilmember, District 5
Jesus Andrade, Member and Councilmember, District 6

CITY STAFF
Laurie Montes, Interim City Manager
John Luebberke, City Attorney
Matt Paulin, Chief Financial Officer
[Carrie Wright, Director Economic Development Department] Kevin Beltz, Program Manager III-Debt and Treasury
Eliza R. Garza, City Clerk

SPECIAL SERVICES
Norton Rose Fulbright US LLP
Bond Counsel
Schiff Hardin LLP
San Francisco, California
Disclosure Counsel
Del Rio Advisors, LLC
Modesto, California
Municipal Advisor
___________
[City], [State]
Verification Agent
Wells Fargo Bank, National Association
San Francisco, California
Trustee and Escrow Agent for the
Refunded Bonds
Willdan Financial Services
Temecula, California
District Administrator
ATTACHMENT B 290

TABLE OF CONTENTS
Page Page
i
INTRODUCTION ............................................. 1 General; Purpose ................................... 1
Security for the 2020 Bonds ................. 2
2020 Reserve Account .......................... 3
Other Obligations .................................. 3
Continuing Disclosure .......................... 3
Bondowners’ Risks ............................... 4
Certain Information Related to
this Official Statement .................... 4
PLAN OF FINANCE ......................................... 4 Background ........................................... 5 2020 Improvements .............................. 6
2004 Parking Bonds .............................. 6
Verification ........................................... 7

ESTIMATED SOURCES AND USES OF
FUNDS ...................................................... 8 DEBT SERVICE SCHEDULE .......................... 9
THE 2020 BONDS .......................................... 10 General ................................................ 10 Redemption Provisions ....................... 10

SECURITY AND SOURCES OF PAYMENT
FOR THE 2020 BONDS ......................... 12
Pledge of Net Parking Revenues ......... 12
Rate Covenant ..................................... 14
Deposit of Revenues ........................... 15
2020 Reserve Account ........................ 16
Rate Stabilization Fund ....................... 16
Issuance of Parity Obligations and
Subordinate Obligations ............... 16
Default Under the 2020 Indenture
and 2020 Installment
Purchase Agreement;
Remedies ...................................... 18
THE PARKING CFD ...................................... 18 Special Tax Authorization .................. 18
Assignment and Pledge of CFD
Revenues ...................................... 19
Teeter Plan .......................................... 21 Special Tax Formula ........................... 22
Special Tax is not a Personal
Obligation ..................................... 26
Principal Taxpayers ............................ 27
Secured Property Tax Levies,
Collections and Delinquencies ..... 29
CERTAIN BONDOWNERS’ RISKS ............. 29
General ................................................ 29 Rate Covenant is Not a Guarantee
of Sufficient Net Parking
Revenues ...................................... 30
System Expenses ................................ 30
Parking Demand ................................. 30
Limited Recourse on Default .............. 30
Risk Factors Relating to the
Parking Facilities .......................... 30
Constitutional and Statutory
Restrictions on Fees and
Charges ........................................ 31
Climate Change .................................. 33
Risk of Earthquake and Other
Natural Disasters .......................... 34
Risk Management and Insurance ........ 35
Limitations on Remedies .................... 35
Cybersecurity ...................................... 36 Bankruptcy ......................................... 36 Secondary Market ............................... 38
[Risks Associated with Bond
Insurance] ..................................... 38
Initiatives; Changes in Law ................ 39
CITY ................................................................ 39 THE AUTHORITY ......................................... 39 THE PARKING AUTHORITY ...................... 40
PARKING FACILITIES ................................. 40 Description ......................................... 40 Parking Meters .................................... 43
Management of the Parking
Facilities ....................................... 43
Capital Improvement Program ........... 43
Employee Benefits .............................. 44
PARKING AUTHORITY FINANCES ........... 48
Rate Setting, Fines, Enforcement,
and Collection Procedures ........... 48
Revenues by Parking Facility ............. 49
Historical Operating Results ............... 50
Historical Debt Service Coverage ...... 53
Projected Debt Service Coverage ....... 54
TAX MATTERS ............................................. 55 LEGAL MATTERS ........................................ 55 LITIGATION .................................................. 55 The Authority ..................................... 55
The Parking Authority ........................ 55
CONTINUING DISCLOSURE ....................... 56
ATTACHMENT B 291

TABLE OF CONTENTS
(continued)
Page Page
ii
FINANCIAL STATEMENTS ......................... 56
RATINGS ........................................................ 57 UNDERWRITING .......................................... 58 MUNICIPAL ADVISOR ................................. 58

VERIFICATION OF MATHEMATICAL
COMPUTATIONS .................................. 58
MISCELLANEOUS ........................................ 59 List of Maps and Tables
Regional Location Map ................................................................................................................................ iii Flow of Funds ........................................................................................................................................... 14 Downtown Parking Garages and Lots ........................................................................................................ 42 Table 1 – 2004 Parking Bonds ............................................................................................................. 7 Table 2 – Estimated Sources and Uses of Funds .................................................................................. 8 Table 3 – Debt Service Schedule .......................................................................................................... 9 Table 4 – Taxable Property Classifications ........................................................................................ 23 Table 5 – Top 10 Taxpayers for Fiscal Year 2019-20 ........................................................................ 27 Table 6 – Historical Principal Taxpayers ........................................................................................... 28 Table 7 – Historical Delinquency Information ................................................................................... 29 Table 8 – Parking Facilities ................................................................................................................ 41 Table 9 – Revenues by Parking Facilities .......................................................................................... 49 Table 10 – Statement of Net Position ................................................................................................... 50 Table 11 – Statement of Revenues, Expenses and Changes in Net Position ........................................ 51 Table 12 – Historical Revenues, Expenses and Debt Service Coverage .............................................. 53 Table 13 – Projected Pro Forma and Debt Service Coverage Calculation ........................................... 54 List of Appendices

APPENDIX A GENERAL, ECONOMIC AND DEMOGRAPHIC INFORMATION RELATING TO THE CITY OF STOCKTON ............................................................... A-1

APPENDIX B AUDITED FINANCIAL STATEMENTS OF THE CITY OF STOCKTON FOR THE YEAR ENDED JUNE 30, 2019 .................................................................... B-1

APPENDIX C SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS ................................................................................................................ C-1 APPENDIX D RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX ......................... D-1 APPENDIX E PROPOSED FORM OF CONTINUING DISCLOSURE CERTIFICATE .................... E-1 APPENDIX F DTC AND THE BOOK-ENTRY ONLY SYSTEM ....................................................... F-1 APPENDIX G PROPOSED FORM OF OPINION OF BOND COUNSEL .......................................... G-1 APPENDIX H SPECIMEN MUNICIPAL BOND INSURANCE POLICY .......................................... H-1 ATTACHMENT B 292
iii

REGIONAL LOCATION MAP
ATTACHMENT B 293

OFFICIAL STATEMENT
$___,___,000*

STOCKTON PUBLIC FINANCING AUTHORITY

PARKING REVENUE BONDS,
Series 2020

INTRODUCTION
This Introduction is only a brief description of, and is qualified by, more complete and detailed information contained in the entire Official Statement, including the cover page through the appendices hereto, and the documents summarized or described herein. A full review should be made of the entire Official Statement. The offering of the 2020 Bonds to potential investors is made only by means of the entire Official Statement. Capitalized terms used herein and not otherwise defined shall have the meanings given to such terms as set forth in the 2020 Indenture or the 2020 Installment Purchase Agreement. See APPENDIX C–“SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS– DEFINITIONS OF CERTAIN TERMS.”
General; Purpose
This Official Statement, which includes the cover page through the Appendices hereto (the “Official Statement”), provides certain information concerning the issuance by the Stockton Public Financing Authority (the “Authority”) of $___,___,000* principal amount of Stockton Public Financing Authority Parking Revenue Bonds, Series 2020 (the “2020 Bonds”).

The 2020 Bonds are being issued by the Authority under and pursuant to Chapter 5 of Division 7 of Title 1 of the California Government Code, as amended (the “Act”) and other applicable laws of the State of California, a resolution adopted by the Authority on December __, 2019 and in accordance with the provisions of a 2020 Indenture, dated as of February 1, 2020 (the “2020 Indenture”), by and between the Authority and Wells Fargo Bank, National Association, as trustee (the “Trustee”).

The 2020 Bonds are being issued by the Authority to provide funds which, together with certain other available funds, will be used to: (i) prepay outstanding obligations under an Installment Sale Agreement (Parking Garages and Downtown Parking District Facilities), dated as of February 25, 2015 (the “2015 Installment Sale Agreement”) that secure payment of the Authority’s Lease Revenue Bonds, Series 2004 (Parking and Capital Projects) (the “2004 Parking Bonds”) and to finance the construction, acquisition, and installation of certain improvements (the “2020 Improvements”) to parking facilities owned by the City of Stockton Parking Authority (the “Parking Authority”) located in the downtown area of the City of Stockton (the “City”); (ii) fund a reserve account [purchase a municipal bond insurance policy and a debt service reserve policy] as security for the 2020 Bonds; and (iii) pay certain costs associated with the issuance of the 2020 Bonds. See “PLAN OF FINANCE” and “ESTIMATED SOURCES AND USES OF FUNDS.”
______________
* Preliminary, subject to change.

ATTACHMENT B 294
2 Security for the 2020 Bonds
The 2020 Bonds are limited obligations of the Authority payable solely from installment payments (the “2020 Installment Payments”) to be made by the City of Stockton Parking Authority (the “Parking Authority”) pursuant to a 2020 Installment Purchase Agreement, dated as of February 1, 2020 (the “2020 Installment Purchase Agreement”) to the Authority and certain amounts held under the 2020 Indenture. As security for the payment of the 2020 Installment Payments, the Parking Authority has pledged “Net Parking Revenues” derived from the operation of the parking facilities located within the City (the “Parking Facilities”), including revenues of a special tax levied on taxable parcels located within Community Facilities District No. 2001-1 (Downtown Parking) (the “Parking CFD”), that remain after payment of Operations and Maintenance Costs (each as defined herein). See “SECURITY AND SOURCES OF PAYMENT FOR THE 2020 BONDS.”
The 2020 Bonds are limited obligations of the Authority payable solely from installment payments (the “2020 Installment Payments”) to be made by the Parking Authority to the Authority pursuant to a 2020 Installment Purchase Agreement, dated as of February 1, 2020 (the “2020 Installment Purchase Agreement”), and certain amounts held under the 2020 Indenture. As security for the payment of the 2020 Installment Payments, the Parking Authority has pledged Net Parking Revenues, which consist generally of: (i) fees, rates, charges, and revenues derived from the operation of Parking Facilities (consisting of parking meters, surface lots and garages) located within the City (collectively, the “Parking Facilities”); and (ii) proceeds of a special tax levied on Taxable Property (as defined herein) within the City’s Community Facilities District No. 2001-01 (Downtown Parking) (the “Parking CFD”), which have been assigned by the City to the Parking Authority pursuant to an Assignment Agreement, dated as of February 1, 2020 (the “CFD Revenues Assignment Agreement”) between the City and the Parking Authority, less payment of Operation and Maintenance Costs (as defined herein). See “SECURITY AND SOURCES OF PAYMENT FOR THE 2020 BONDS.”
THE 2020 BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM 2020 INSTALLMENT PAYMENTS MADE BY THE PARKING AUTHORITY AND CERTAIN MONEYS HELD UNDER THE 2020 INDENTURE. THE 2020 BONDS ARE NOT A

DEBT OF THE PARKING AUTHORITY, THE CITY, THE STATE OF CALIFORNIA OR ANY

THE CITY, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF (INCLUDING THE

AUTHORITY, THE CITY, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF TO LEVY

The City emerged from bankruptcy on February 25, 2015 when the City’s plan of adjustment became effective. Throughout its bankruptcy case, the City maintained that revenues of its Parking Enterprise Fund qualified as “special revenues” under the United States Bankruptcy Code, and no creditor or party in interest argued otherwise. As a result, all revenues attributable to the Parking Authority were available solely for parking facilities operations. At no point were revenues of the Parking Authority ATTACHMENT B 295
3 diverted to fund general fund operations; nor did the general fund borrow funds from the Parking Facilities. See “PLAN OF FINANCE–Background.”
CFD Revenues. On December 11, 2001 the City Council approved Resolution No. 01-0651 forming the Parking CFD, approving the boundaries of the Parking CFD, stating the facilities and services to be provided, the cost of providing such facilities and services, and the rate and method of apportionment of the special tax to be levied within the Parking CFD for the purpose of providing certain facilities and services serving the Parking CFD. See “THE PARKING CFD” and APPENDIX D–“RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.”
2020 Reserve Account
Pursuant to the 2020 Indenture, a 2020 Reserve Account in the amount of the 2020 Reserve Requirement (defined herein) is established as security for the 2020 Bonds. [Concurrently with the issuance of the 2020 Bonds, the Bond Insurer will issue a debt service reserve fund policy in the amount of the 2020 Reserve Requirement (the “Reserve Policy”) for deposit in the 2020 Reserve Account.] See “SECURITY AND SOURCES OF PAYMENT FOR THE 2020 BONDS–2020 Reserve Account.” Other Obligations
Following the issuance of the 2020 Bonds and the refunding of the Refunded Bonds there will be no other obligations outstanding that are secured by or payable from Net Parking Revenues on a parity basis or senior to the 2020 Bonds.

The Parking Authority may issue or incur additional obligations secured by and payable from Net Parking Revenues on a parity with the 2020 Installment Payments and other Parity Obligations (as defined herein). See “SECURITY AND SOURCES OF PAYMENT FOR THE 2020 BONDS–Issuance of Parity Obligations.” The Parking Authority may also issue or incur additional obligations secured by and/or payable from Net Parking Revenues on a basis subordinate to the 2020 Installment Payments and other Parity Obligations.

City Council and Concurrent AuthoritiesSeptember 13, 2022

City Council and Concurrent Authorities
September 13, 2022