City Council and Concurrent Authorities
July 9, 2024

October 2023
EXHIBIT 12-G: REQUIRED FEDERAL-AID CONTRACT LANGUAGE
(For Local Assistance Construction Projects)
The following language must be incorporated into all Local Assistance Federal-aid construction contracts.

The following language, with minor edits, was taken from the Code of Federal Regulations.

MAINTAIN RECORDS AND SUBMIT REPORTS DOCUMENTING YOUR PERFORMANCE UNDER THIS

SECTION

1. DISADVANTAGED BUSINESS ENTERPRISES (DBE) ..................................................................................... 2 A. Nondiscrimination Statement............................................................................................................... 3 B. Contract Assurance............................................................................................................................... 3 C. Prompt Progress Payment.................................................................................................................... 3 D. Prompt Payment of Withheld Funds to Subcontractors ................................................................... 3 E. Termination and Replacement of DBE Subcontractors..................................................................... 4 F. Commitment and Utilization ................................................................................................................. 6 G. Running Tally of Attainments............................................................................................................... 7 H. Commercially Useful Function............................................................................................................. 7 I. Use of Joint Checks.............................................................................................................................. 8

2. BID OPENING ...................................................................................................................................................... 9

3. BID RIGGING ....................................................................................................................................................... 9

4. CONTRACT AWARD........................................................................................................................................... 9

5. CONTRACTOR LICENSE.................................................................................................................................... 9

6. CHANGED CONDITIONS .................................................................................................................................... 9 A. Differing Site Conditions....................................................................................................................... 9 B. Suspensions of Work Ordered by the Engineer................................................................................. 9 C. Significant Changes in the Character of Work .................................................................................10

7. BEGINNING OF WORK, TIME OF COMPLETION AND LIQUIDATED DAMAGES........................................10

8. BUY AMERICA...................................................................................................................................................10

9. QUALITY ASSURANCE ....................................................................................................................................11

10. PROMPT PAYMENT..........................................................................................................................................12

11. FORM FHWA-1273 REQUIRED CONTRACT PROVISIONS FEDERAL-AID CONTRACTS ..........................12

12. FEMALE AND MINORITY GOALS....................................................................................................................12

13. TITLE VI ASSURANCES....................................................................................................................................14

14. FEDERAL TRAINEE PROGRAM ......................................................................................................................19

15. PROHIBITION OF CERTAIN TELECOMMUNICATIONS AND VIDEO SURVEILLANCE EQUIPMENT AND SERVICES..........................................................................................................................................................20 EXHIBIT E PAGE 105 OF 127 EXHIBIT 2 497
Local Assistance Procedures Manual Exhibit 12-G
Required Federal-Aid Contract Language

October 2023

1. DISADVANTAGED BUSINESS ENTERPRISES (DBE)
The contractor, subrecipient or subcontractor shall take necessary and reasonable steps to ensure that DBEs have opportunity to participate in the contract (49 CFR 26). To ensure equal participation of DBEs provided in 49 CFR 26.5, the Agency shows a contract goal for DBEs. The prime contractor shall make work available to DBEs and select work parts consistent with available DBE subcontractors and suppliers.

The prime contractor shall meet the DBE goal shown elsewhere in these special provisions or demonstrate that they made adequate Good Faith Efforts (GFE) to meet this goal. An adequate GFE means that the bidder must show that it took all necessary and reasonable steps to achieve a DBE goal that, by their scope, intensity, and appropriateness to the objective, could reasonably be expected to meet the DBE goal.

If the DBE goal is not met, the contractor needs to complete and submit the DBE GFE documentation as described in Local Assistance Procedures Manual (LAPM) Chapter 9, Section 9.8 within 5 (five) days of bid opening.

It is the prime contractor’s responsibility to verify that the DBE firm is certified as a DBE on the date of bid opening by using the California Unified Certification Program (CUCP) database and possesses the most specific available North American Industry Classification System (NAICS) codes and Work Code applicable to the type of work the firm will perform on the contract. Additionally, the prime contractor is responsible to document this verification by printing out the CUCP data for each DBE firm. A list of DBEs certified by the CUCP can be found at: https://dot.ca.gov/programs/civil-rights/dbe-search.

DBE participation will only count toward the California Department of Transportation’s federally mandated statewide overall DBE goal if the DBE performs a commercially useful function under 49 CFR 26.55.

Credit for materials or supplies the prime contractor purchases from DBEs counts towards the goal in the following manner:
• 100 percent counts if the materials or supplies are obtained from a DBE manufacturer. • 60 percent counts if the materials or supplies are obtained from a DBE regular dealer. • Only fees, commissions, and charges for assistance in the procurement and delivery of materials or supplies count if obtained from a DBE that is neither a manufacturer nor regular dealer. 49 CFR 26.55 defines "manufacturer" and "regular dealer."
The prime contractor receives credit towards the goal if they employ a DBE trucking company that performs a commercially useful function as defined in 49 CFR 26.55(d) as follows:
• The DBE must be responsible for the management and supervision of the entire trucking operation for which it is responsible on a particular contract, and there cannot be a contrived arrangement for the purpose of meeting DBE goals.
• The DBE must itself own and operate at least one fully licensed, insured, and operational truck used on the contract.
• The DBE receives credit for the total value of the transportation services it provides on the Contract using trucks it owns, insures, and operates using drivers it employs. • The DBE may lease trucks from another DBE firm, including an owner-operator who is certified as a DBE. The DBE who leases trucks from another DBE receives credit for the total value of the transportation services the lessee DBE provides on the Contract. • The DBE may also lease trucks from a non-DBE firm, including from an owner-operator. The DBE that leases trucks equipped with drivers from a non-DBE is entitled to credit for the total value of transportation services provided by non-DBE leased trucks equipped with drivers not to exceed the value of transportation services on the contract provided by DBE-owned trucks or leased trucks with DBE employee drivers. Additional participation by non-DBE owned trucks equipped with drivers receives credit only for the fee or commission it receives as a result of the lease arrangement. • The DBE may lease trucks without drivers from a non-DBE truck leasing company. If the DBE leases trucks from a non-DBE truck leasing company and uses its own employees as drivers, it is entitled to credit for the total value of these hauling services.

EXHIBIT E PAGE 106 OF 127 EXHIBIT 2 498
Local Assistance Procedures Manual Exhibit 12-G
Required Federal-Aid Contract Language

October 2023
• A lease must indicate that the DBE has exclusive use of and control over the truck. This does not preclude the leased truck from working for others during the term of the lease with the consent of the DBE, so long as the lease gives the DBE absolute priority for use of the leased truck. Leased trucks must display the name and identification number of the DBE.

A. Nondiscrimination Statement
The contractor, subrecipient or subcontractor will never exclude any person from participation in, deny any person the benefits of, or otherwise discriminate against anyone in connection with the award and performance of any contract covered by 49 CFR 26 on the basis of race, color, sex, or national origin. In administering the Local Agency components of the DBE Program Plan, the contractor, subrecipient or subcontractor will not, directly, or through contractual or other arrangements, use criteria or methods of administration that have the effect of defeating or substantially impairing accomplishment of the objectives of the DBE Program Plan with respect to individuals of a particular race, color, sex, or national origin.

B. Contract Assurance
Under 49 CFR 26.13(b): The contractor, subrecipient or subcontractor shall not discriminate on the basis of race, color, national origin, or sex in the performance of this contract. The contractor shall carry out applicable requirements of 49 CFR 26 in the award and administration of federal-aid contracts. Failure by the contractor to carry out these requirements is a material breach of this contract, which may result in the termination of this contract or such other remedy as the recipient deems appropriate, which may include, but is not limited to:
(1) Withholding monthly progress payments;
(2) Assessing sanctions;
(3) Liquidated damages; and/or
(4) Disqualifying the contractor from future bidding as non-responsible.

C. Prompt Progress Payment
In accordance with California Business and Professions Code section 7108.5, the prime contractor or subcontractor shall pay to any subcontractor, not later than seven days after receipt of each progress payment, unless otherwise agreed to in writing, the respective amounts allowed the contractor on account of the work performed by the subcontractors, to the extent of each subcontractor’s interest therein. In the event that there is a good faith dispute over all or any portion of the amount due on a progress payment from the prime contractor or subcontractor to a subcontractor, the prime contractor or subcontractor may withhold no more than 150 percent of the disputed amount. Any violation of this requirement shall constitute a cause for disciplinary action and shall subject the licensee to a penalty, payable to the subcontractor, of 2 percent of the amount due per month for every month that payment is not made.

In any action for the collection of funds wrongfully withheld, the prevailing party shall be entitled to his or her attorney’s fees and costs. The sanctions authorized under this requirement shall be separate from, and in addition to, all other remedies, either civil, administrative, or criminal. This clause applies to both DBE and nonDBE subcontractors.

D. Prompt Payment of Withheld Funds to Subcontractors
The Agency may hold retainage from the prime contractor and shall make prompt and regular incremental acceptances of portions, as determined by the Agency, of the contract work, and pay retainage to the prime contractor based on these acceptances. The Agency shall designate one of the methods below in the contract to ensure prompt and full payment of any retainage kept by the prime contractor or subcontractor to a subcontractor. The Agency shall include either Method 1, Method 2, or Method 3 below and delete the other two.

Method 1: No retainage will be held by the Agency from progress payments due to the prime contractor.

Prime contractors and subcontractors are prohibited from holding retainage from subcontractors. Any delay or postponement of payment may take place only for good cause and with the Agency’s prior written approval. Any violation of these provisions shall subject the violating contractor or subcontractor to the penalties, sanctions, and other remedies specified in Section 7108.5 of the California Business and Professions Code and Section 10262 of the California Public Contract Code. This requirement shall not be construed to limit or impair any contractual, administrative or judicial remedies, otherwise available to the EXHIBIT E PAGE 107 OF 127 EXHIBIT 2 499
Local Assistance Procedures Manual Exhibit 12-G
Required Federal-Aid Contract Language

October 2023
contractor or subcontractor in the event of a dispute involving late payment or nonpayment by the contractor, deficient subcontractor performance and/or noncompliance by a subcontractor. This clause applies to both DBE and non-DBE subcontractors.

Method 2: No retainage will be held by the Agency from progress payments due to the prime contractor.

Any retainage kept by the prime contractor or by a subcontractor must be paid in full to the earning subcontractor within seven (7) days after the subcontractor’s work is satisfactorily completed. Any delay or postponement of payment may take place only for good cause and with the Agency’s prior written approval.

Any violation of these provisions shall subject the violating contractor or subcontractor to the penalties, sanctions, and remedies specified in Section 7108.5 of the California Business and Professions Code and Section 10262 of the California Public Contract Code. This requirement shall not be construed to limit or impair any contractual, administrative or judicial remedies, otherwise available to the contractor or subcontractor in the event of a dispute involving late payment or nonpayment by the contractor, deficient subcontractor performance and/or noncompliance by a subcontractor. This clause applies to both DBE and non-DBE subcontractors.

Method 3: The Agency shall hold retainage from the prime contractor and shall make prompt and regular incremental acceptances of portions, as determined by the Agency of the contract work and pay retainage to the prime contractor based on these acceptances. The prime contractor or subcontractor shall return all monies withheld in retention from all subcontractors within seven (7) days after receiving payment for work satisfactorily completed and accepted including incremental acceptances of portions of the contract work by the Agency. Any delay or postponement of payment may take place only for good cause and with the Agency’s prior written approval. Any violation of these provisions shall subject the violating prime contractor or subcontractor to the penalties, sanctions, and other remedies specified in Section 7108.5 of the California Business and Professions Code and Section 10262 of the California Public Contract Code. This requirement shall not be construed to limit or impair any contractual, administrative or judicial remedies otherwise available to the contractor or subcontractor in the event of a dispute involving late payment or nonpayment by the contractor; deficient subcontractor performance and/or noncompliance by a subcontractor. This clause applies to both DBE and non-DBE subcontractors.

Any violation of these provisions of Prompt Progress Payment and Prompt Payment of Withheld Funds to Subcontractors shall subject the violating prime contractor or subcontractor to the penalties, sanctions and other remedies specified therein. These requirements shall not be construed to limit or impair any contractual, administrative, or judicial remedies otherwise available to the prime contractor or subcontractor in the event of a dispute involving late payment or nonpayment by the prime contractor, deficient subcontract performance, or noncompliance by a subcontractor.

E. Termination and Replacement of DBE Subcontractors
The prime contractor shall utilize the specific DBEs listed to perform the work and supply the materials for which each is listed unless the contractor obtains the Agency’s written consent. The prime contractor shall not terminate or replace a listed DBE for convenience and perform the work with their own forces or obtain materials from other sources without prior written authorization from the Agency. Unless the Agency’s prior written consent is provided, the contractor shall not be entitled to any payment for work or material unless it is performed or supplied by the listed DBE on the Exhibit 15-G Construction Contract DBE Commitment form, included in the Bid.

Termination of DBE Subcontractors
After a contract with a specified DBE goal has been executed, termination of a DBE may be allowed for the following, but not limited to, justifiable reasons with prior written authorization from the Agency:

1. Listed DBE fails or refuses to execute a written contract based on plans and specifications for the project.

2. The Local Agency stipulated that a bond is a condition of executing the subcontract and the listed DBE fails to meet the Local Agency’s bond requirements.

3. Work requires a contractor's license and listed DBE does not have a valid license under Contractors License Law, or is not properly registered with the California Department of Industrial Relations as a public works contractor.

4. Listed DBE fails or refuses to perform the work or furnish the listed materials (failing or refusing to EXHIBIT E PAGE 108 OF 127 EXHIBIT 2 500
Local Assistance Procedures Manual Exhibit 12-G
Required Federal-Aid Contract Language

October 2023
perform is not an allowable reason to remove a DBE if the failure or refusal is a result of bad faith or discrimination).

5. Listed DBE's work is unsatisfactory and not in compliance with the contract.

6. Listed DBE is ineligible to work on the project because of suspension or debarment.

7. Listed DBE becomes bankrupt or insolvent or exhibits credit unworthiness.

8. Listed DBE voluntarily withdraws with written notice from the Contract

9. Listed DBE is ineligible to receive credit for the type of work required.

10. Listed DBE owner dies or becomes disabled resulting in the inability to perform the work on the Contract.

11. The Agency determines other documented good cause.

To terminate a DBE or to terminate a portion of a DBE's work, the contractor must use the following procedures:

1. Send a written notice to the DBE of Contractor’s intent to use other forces or material sources and include one or more justifiable reasons listed above. Simultaneously send a copy of this written notice to the Agency. The written notice to the DBE must request they provide any response within five (5) business days to both the Contractor and the Agency by either acknowledging their agreement or documenting their reasoning as to why the use of other forces or sources of materials should not occur.

2. If the DBE does not respond within 5 business days, Contractor may move forward with the request as if the DBE had agreed to Contractor’s written notice.

3. Submit Contractor’s DBE termination request by written letter to the Agency and include:
• One or more above listed justifiable reasons along with supporting documentation. • Contractor’s written notice to the DBE regarding the request, including proof of transmission and tracking documentation of Contractor’s written notice
• The DBE's response to Contractor’s written notice, if received. If a written response was not provided, provide a statement to that effect.

The Agency shall respond in writing to Contractor’s DBE termination request within 5 business days.

Replacement of DBE Subcontractors
After receiving the Agency’s written authorization of DBE termination request, the Contractor must obtain the Agency’s written agreement for DBE replacement. The Contractor must find or demonstrate GFEs to find qualified DBE replacement firms to perform the work to the extent needed to meet the DBE commitment.

The following procedures shall be followed to request authorization to replace a DBE firm:

1. Submit a request to replace a DBE with other forces or material sources in writing to the Agency which must include:
a. Description of remaining uncommitted work items made available for replacement DBE solicitation and participation.
b. The proposed DBE replacement firm's business information, the work they have agreed to perform, and the following:
• Quote for bid item work and description of work to be performed • Proposed subcontract agreement and written confirmation of agreement to perform on the Contract
• Revised Subcontracting Request form
• Revised Exhibit 15-G: Construction Contract DBE Commitment

2. If Contractor has not identified a DBE replacement firm, submit documentation of the Contractor’s GFEs EXHIBIT E PAGE 109 OF 127 EXHIBIT 2 501
Local Assistance Procedures Manual Exhibit 12-G
Required Federal-Aid Contract Language

October 2023
to use DBE replacement firms within 7 days of Agency's authorization to terminate the DBE. The Contractor may request the Agency's approval to extend this submittal period to a total of 14 days.

Submit documentation of actions taken to find a DBE replacement firm, such as:
• Search results of certified DBEs available to perform the original DBE work identified and/or other work the Contractor had intended to self-perform, to the extent needed to meet the DBE commitment
• Solicitations of DBEs for performance of work identified • Correspondence with interested DBEs that may have included contract details and requirements • Negotiation efforts with DBEs that reflect why an agreement was not reached • If a DBE's quote was rejected, provide Contractor’s reasoning for the rejection, such as why the DBE was unqualified for the work, or why the price quote was unreasonable or excessive • Copies of each DBE's and non-DBE's price quotes for work identified, as the Agency may contact the firms to verify solicitation efforts and determine if the DBE quotes are substantially higher • Additional documentation that supports the GFE
The Agency shall respond in writing to the Contractor’s DBE replacement request within five (5) business days.

The Contractor must submit a revised Subcontracting Request form if the replacement plan is authorized by the Agency.

F. Commitment and Utilization
The Agency’s DBE program must include a monitoring and enforcement mechanism to ensure that DBE commitments reconcile to DBE utilization.

The bidder shall complete and sign Exhibit 15-G: Construction Contract DBE Commitment included in the contract documents regardless of whether DBE participation is reported. The bidder shall provide written confirmation from each DBE that the DBE is participating in the Contract. LAPM Exhibit 9-I: DBE Confirmation or equivalent form and DBE’s quote must be submitted. The written confirmation must be submitted no later than 4pm on the 5th day after bid opening. If a DBE is participating as a joint venture partner, the bidder shall submit a copy of the joint venture agreement.

If the DBE Commitment form, Exhibit 15-G, is not submitted with the bid, it must be completed and submitted by all bidders to the Agency within five (5) days of bid opening. If the bidder does not submit the DBE Commitment form within the specified time, the Agency will find the bidder’s bid nonresponsive.

The prime contractor shall use each DBE subcontractor as listed on Exhibit 15-G: Construction Contract DBE Commitment unless they receive written authorization for a termination or replacement from the Agency.

The Agency shall request the prime contractor to:

1. Notify the Resident Engineer or Inspector of any changes to its anticipated DBE participation

2. Provide this notification before starting the affected work

3. Maintain records including:
• Name and business address of each 1st-tier subcontractor • Name and business address of each DBE subcontractor, DBE vendor, and DBEtrucking company, regardless of tier
• Date of payment and total amount paid to each DBE (see Exhibit 9-F: Monthly Disadvantaged Business Enterprise Payment)
If the prime contractor is a DBE contractor, they shall include the date of work performed by their own forces and the corresponding value of the work.

Before the 15th of each month, the prime contractor shall submit a Monthly DBE Trucking Verification (LAPM Exhibit 16-Z1) form.

EXHIBIT E PAGE 110 OF 127 EXHIBIT 2 502
Local Assistance Procedures Manual Exhibit 12-G
Required Federal-Aid Contract Language

October 2023
If a DBE is decertified before completing its work, the DBE must notify the prime contractor in writing of the decertification date. If a business becomes a certified DBE before completing its work, the business must notify the prime contractor in writing of the certification date. The prime contractor shall submit the notifications. Upon work completion, the prime contractor shall complete a Disadvantaged Business Enterprises (DBE) Certification Status Change, Exhibit 17-O, form and submit the form within 30 days of contract acceptance.

Upon work completion, the prime contractor shall complete Exhibit 17-F: Final Report – Utilization of Disadvantaged Business Enterprises (DBE), First-Tier Subcontractors and submit it within 90 days of contract acceptance. The Agency will withhold $10,000 until the form is submitted. The Agency releases the withhold upon submission of the completed form.

G. Running Tally of Attainments
For projects awarded on or after March 1, 2020, but before September 1, 2023:

After submitting an invoice for reimbursement that includes a payment to a DBE, but no later than the 10th of the following month, the prime contractor/consultant must complete and email the Exhibit 9-F: Disadvantaged Business Enterprise Running Tally of Payments to [email protected] with a copy to local administering agencies.

For projects that are awarded on or after September 1, 2023:

Exhibit 9-F is no longer required. Instead, by the 15th of the month following the month of any payment(s), the prime contractor must now submit Exhibit 9-P to the Local Agency administering the contract. If the Contractor does not make any payments to subcontractors, supplier(s) and/or manufacturers they must report “no payments were made to subs this month” and write this visibly and legibly on Exhibit 9-P.

H. Commercially Useful Function
DBEs must perform a commercially useful function (CUF) under 49 CFR 26.55 when performing work or supplying materials listed on the DBE Commitment form. The DBE value of work will only count toward the DBE commitment if the DBE performs a CUF. A DBE performs a CUF when it is responsible for execution of the work on the contract and is carrying out its responsibilities by actually performing, managing, and supervising the work involved. If a DBE does not perform or exercise responsibility for at least 30% of the total cost of its contract with its own work force, or the DBE subcontracts a greater portion of the work of a contract than would be expected on the basis of normal industry practice for the type of work involved, it will be presumed that the DBE is not performing a CUF. Additionally, the DBE must also be responsible, with respect to materials and supplies used on the contract, for negotiating price, determining quality and quantity, ordering the material and installing (where applicable), and paying for the material itself.

The Contractor must perform CUF evaluation for each DBE company working on a federal-aid contract, with or without a DBE goal. Perform a CUF evaluation at the beginning of the DBE’s work, and continue to monitor the performance of CUF for the duration of the project.

The Contractor must provide written notification to the AGENCY at least 15 days in advance of each DBE's initial performance of work or supplying materials for the Contract. The notification must include the DBE's name, work the DBE will perform on the contract, and the location, date, and time of where their work will take place.

Within 10 (ten) days of a DBE initially performing work or supplying materials on the contract, the Contractor shall submit to the LPA the initial evaluation and validation of DBE performance of a CUF using the LAPM 9-J:

Disadvantaged Business Enterprise Commercially Useful Function Evaluation. Include the following information with the submittal:
• Subcontract agreement with the DBE
• Purchase orders
• Bills of lading
• Invoices
• Proof of payment
EXHIBIT E PAGE 111 OF 127 EXHIBIT 2 503
Local Assistance Procedures Manual Exhibit 12-G
Required Federal-Aid Contract Language

October 2023
The Contractor must monitor all DBE’s performance of CUF by conducting quarterly evaluations and validations throughout their duration of work on the contract using the LAPM 9-J: DBE Commercially Useful Function Evaluation. The Contractor must submit to the AGENCY these quarterly evaluations and validations by the 5th of the month for the previous three (3) months of work.

The Contractor must notify the AGENCY immediately if the Contractor believes the DBE may not be performing a CUF.

The AGENCY will verify DBEs performance of CUF by reviewing the initial and quarterly submissions of LAPM 9-J: DBE Commercially Useful Function Evaluation, submitted supporting information, field observations, and through any additional AGENCY evaluations. The AGENCY must evaluate DBEs and their CUF performance throughout the duration of a Contract. The AGENCY will provide written notice to Contractor and DBE at least two (2) business days prior to any evaluation. The Contractor and DBE must participate in the evaluation. Upon completing the evaluation, the AGENCY must share the evaluation results with the Contractor and DBE. An evaluation could include items that must be remedied upon receipt. If the AGENCY determines the DBE is not performing a CUF the Contractor must suspend performance of the noncompliant work.

The Contractor and DBEs must submit any additional CUF related records and documents within five (5) business days of AGENCY’s request such as:
• Proof of ownership or lease and rental agreements for equipment • Tax records
• Employee rosters
• Certified payroll records
• Inventory rosters
Failure to submit required DBE Commercially Useful Function Evaluation forms or requested records and documents can result in withholding of payment for the value of work completed by the DBE.

If the Contractor and/or the AGENCY determine that a listed DBE is not performing a CUF in performance of their DBE committed work, immediately suspend performance of the noncompliant portion of the work. The AGENCY may deny payment for the noncompliant portion of the work. The AGENCY will ask the Contractor to submit a corrective action plan (CAP) to the AGENCY within five (5) days of the noncompliant CUF determination. The CAP must identify how the Contractor will correct the noncompliance findings for the remaining portion of the DBE's work. The AGENCY has five (5) days to review the CAP in conjunction with the prime contractor’s review. The Contractor must implement the CAP within five (5) days of the AGENCY's approval. The AGENCY will then authorize the prior noncompliant portion of work for the DBE's committed work.

If corrective actions cannot be accomplished to ensure the DBE performs a CUF on the Contract, then the Contractor may have good cause to request termination of the DBE.

I. Use of Joint Checks
A joint check may be used between the Contractor or lower-tier subcontractor and a DBE subcontractor purchasing materials from a material supplier if the contractor obtains prior approval from the LPA for the proposed use of joint check upon submittal of the LAPM 9-K: DLA Disadvantaged Business Enterprises (DBE) Joint Check Agreement Request form.

To use a joint check, the following conditions must be met:
• All parties, including the Contractor, must agree to the use of a joint check • Entity issuing the joint check acts solely to guarantee payment • DBE must release the check to the material supplier
• LPA must authorize the request before implementation
• Any party to the agreement must provide requested documentation within 10 days of the LPA's request for the documentation
• Agreement to use a joint check must be short-term, not to exceed 1 year, allowing sufficient time needed to establish or increase a credit line with the material supplier EXHIBIT E PAGE 112 OF 127 EXHIBIT 2 504
Local Assistance Procedures Manual Exhibit 12-G
Required Federal-Aid Contract Language

October 2023
A request for a joint check agreement may be initiated by any party. If a joint check is used, the DBE remains responsible for all elements of 49 CFR 26.55(c)(1).

Failure to comply with the above requirements disqualifies DBE participation and results in no credit and no payment to the Contractor for DBE participation.

A joint check may not be used between the Contractor or subcontractor and a DBE regular dealer, bulk material supplier, manufacturer, wholesaler, broker, trucker, packager, manufacturer’s representative, or other persons who arrange or expedite transactions.

2. BID OPENING
The Agency publicly opens and reads bids at the time and place shown on the Notice to Contractors.

3. BID RIGGING
The U.S. Department of Transportation (DOT) provides a toll-free hotline to report bid rigging activities. Use the hotline to report bid rigging, bidder collusion, and other fraudulent activities. The hotline number is (800) 424- 9071. The service is available 24 hours 7 days a week and is confidential and anonymous. The hotline is part of the DOT's effort to identify and investigate highway construction contract fraud and abuse and is operated under the direction of the DOT Inspector General.

4. CONTRACT AWARD
If the Agency awards the contract, the award is made to the lowest responsible and responsive bidder.

5. CONTRACTOR LICENSE
The Contractor must be properly licensed as a contractor from contract award through Contract acceptance (23 CFR 635.110).

6. CHANGED CONDITIONS
A. Differing Site Conditions

1. During the progress of the work, if subsurface or latent physical conditions are encountered at the site differing materially from those indicated in the contract or if unknown physical conditions of an unusual nature, differing materially from those ordinarily encountered and generally recognized as inherent in the work provided for in the contract, are encountered at the site, the party discovering such conditions shall promptly notify the other party in writing of the specific differing conditions before the site is disturbed and before the affected work is performed.

2. Upon written notification, the engineer will investigate the conditions, and if it is determined that the conditions materially differ and cause an increase or decrease in the cost or time required for the performance of any work under the contract, an adjustment, excluding anticipated profits, will be made and the contract modified in writing accordingly. The engineer will notify the contractor of the determination whether or not an adjustment of the contract is warranted.

3. No contract adjustment which results in a benefit to the contractor will be allowed unless the contractor has provided the required written notice.

4. No contract adjustment will be allowed under this clause for any effects caused on unchanged work. [This provision may be omitted by the Local Agency, at their option.] B. Suspensions of Work Ordered by the Engineer

1. If the performance of all or any portion of the work is suspended or delayed by the engineer in writing for an unreasonable period of time (not originally anticipated, customary, or inherent to the construction industry) and the contractor believes that additional compensation and/or contract time is due as a result of such suspension or delay, the contractor shall submit to the engineer in writing a request for adjustment within 7 calendar days of receipt of the notice to resume work. The request shall set forth the reasons and support for such adjustment.

2. Upon receipt, the engineer will evaluate the contractor's request. If the engineer agrees that the cost and/or time required for the performance of the contract has increased as a result of such suspension and the suspension was caused by conditions beyond the control of and not the fault of the contractor, its suppliers, or subcontractors at any approved tier, and not caused by weather, the engineer will make an adjustment (excluding profit) and modify the contract in writing accordingly. The contractor will be notified of the engineer's determination whether or not an adjustment of the contract is warranted.

EXHIBIT E PAGE 113 OF 127 EXHIBIT 2 505
Local Assistance Procedures Manual Exhibit 12-G
Required Federal-Aid Contract Language

October 2023

3. No contract adjustment will be allowed unless the contractor has submitted the request for adjustment within the time prescribed.

4. No contract adjustment will be allowed under this clause to the extent that performance would have been suspended or delayed by any other cause, or for which an adjustment is provided or excluded under any other term or condition of this contract.

C. Significant Changes in the Character of Work

1. The engineer reserves the right to make, in writing, at any time during the work, such changes in quantities and such alterations in the work as are necessary to satisfactorily complete the project. Such changes in quantities and alterations shall not invalidate the contract nor release the surety, and the contractor agrees to perform the work as altered.

2. If the alterations or changes in quantities significantly change the character of the work under the contract, whether such alterations or changes are in themselves significant changes to the character of the work or by affecting other work cause such other work to become significantly different in character, an adjustment, excluding anticipated profit, will be made to the contract. The basis for the adjustment shall be agreed upon prior to the performance of the work. If a basis cannot be agreed upon, then an adjustment will be made either for or against the contractor in such amount as the engineer may determine to be fair andequitable.

3. If the alterations or changes in quantities do not significantly change the character of the work to be performed under the contract, the altered work will be paid for as provided elsewhere in the contract.

4. The term “significant change” shall be construed to apply only to the following circumstances:
• When the character of the work as altered differs materially in kind or nature from that involved or included in the original proposed construction; or
• When a major item of work, as defined elsewhere in the contract, is increased in excess of 125 percent or decreased below 75 percent of the original contract quantity. Any allowance for an increase in quantity shall apply only to that portion in excess of 125 percent of original contract item quantity, or in case of a decrease below 75 percent, to the actual amount of work performed.

7. BEGINNING OF WORK, TIME OF COMPLETION AND LIQUIDATED DAMAGES The Contractor shall begin work within 15 calendar days after the issuance of the Notice to Proceed.

This work shall be diligently prosecuted to completion before the expiration of WORKING DAYS beginning on the fifteenth calendar day after the date shown on the Notice to Proceed.

The Contractor shall pay to the City/County the sum of $ per day, for each and every calendar days’ delay in finishing the work in excess of the number of working days prescribed above.

8. BUY AMERICA
Buy America Requirements apply to steel and iron, manufactured products, and construction materials permanently incorporated into the project.

Steel and Iron Materials
All steel and iron materials must be melted and manufactured in the United States except:

1. Foreign pig iron and processed, pelletized, and reduced iron ore may be used in the domestic production of the steel and iron materials [60 Fed Reg 15478 (03/24/1995)];

2. If the total combined cost of the materials produced outside the United States does not exceed the greater of 0.1 percent of the total contract amount or $2,500, materials produced outside the United States may be used if authorized.

Furnish steel and iron materials to be incorporated into the work with certificates of compliance and certified mill test reports. Mill test reports must indicate where the steel and iron were melted and manufactured. All melting and manufacturing processes for these materials, including an application of a coating, must occur in the United States. Coating includes all processes that protect or enhance the value of the material to which the coating is applied.

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Manufactured Products
Iron and steel used in precast concrete manufactured products must meet the requirements of the above section (Steel and Iron Materials) regardless of the amount used. Iron and steel used in other manufactured products must meet the requirements of the above section (Steel and Iron Materials) if the weight of steel and iron components constitute 90 percent or more of the total weight of the manufactured product.

Construction Materials
Buy America requirements apply to the following construction materials that are or consist primarily of:

1. Non-ferrous metals

2. Plastic and polymer-based products such as:

2.1 Polyvinylchloride

2.2 Composite Building Materials

3. Glass

4. Fiber optic cable (including drop cable)

5. Optical fiber

6. Lumber

7. Engineered wood

8. Drywall
All manufacturing processes for these materials as defined in 2 CFR 184.6 must occur in the United States.

Where one or more of these construction materials have been combined by a manufacturer with other materials through a manufacturing process, Buy America requirements do not apply unless otherwise specified.

Furnish construction materials to be incorporated into the work with certificates of compliance with each project delivery. Manufacturer’s certificate of compliance must identify where the construction material was manufactured and attest specifically to Buy America compliance.

All manufacturing processes for these materials must occur in the United States.

Buy America requirements do not apply to the following:

1. Tools and construction equipment used in performing the work

2. Temporary work that is not incorporated into the finished project Waivers
If Buy America waivers are granted, use the following language to include in the contract:

The following steel and iron products, manufactured products, or construction materials have received an approved Buy America waiver for this contract, and therefore, are not subject to Buy America requirements:

1. _______________________________

2. _______________________________

9. QUALITY ASSURANCE
The Local Agency uses a Quality Assurance Program (QAP) to ensure a material is produced to comply with the Contract. The Local Agency may examine the records and reports of tests the prime contractor performs if they are available at the job site. Schedule work to allow time for QAP.

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October 2023

10. PROMPT PAYMENT
A. FROM THE AGENCY TO THE CONTRACTORS
The Local Agency shall make all project progress payment within 30 days after receipt of an undisputed and properly submitted payment request from the Contractor on a construction contract. If the Local Agency fails to pay promptly, the Local Agency shall pay interest to the Contractor, which accrues at the rate of 10 percent per annum on the principal amount of a money judgment remaining unsatisfied and pro-rated as necessary. Upon receipt of the payment request, the Local Agency shall act in accordance with both of the following:

1. The Local Agency shall review each payment request as soon as feasible after receipt to verify it is a proper payment request.

2. The Local Agency must return any payment request deemed improper by the Local Agency to the Contractor as soon as feasible, but not later than seven (7) days, after receipt. A request returned pursuant to this paragraph shall include documentation setting forth in writing the reasons why it is an improper payment request.

B. SUBMITTAL OF EXHIBIT 9-P
For projects awarded on or after September 1, 2023:

The Contractor must submit Exhibit 9-P to the Local Agency administering the contract by the 15th of the month following the month of any payment(s). If the Contractor does not make any payments to subcontractors, supplier(s) and/or manufacturers they must report “no payments were made to subs this month” and write this visibly and legibly on Exhibit 9-P.

The Local Agency must verify all Exhibit 9-P information, monitor compliance with prompt payment requirements for DBE and non-DBE firms, and address any shortfall to the DBE commitment and prompt payment issues until the end of the project. The Local Agency must email a copy of Exhibit 9-P to [email protected] before the end of the month after receiving the Exhibit 9-P from the Contractor.

11. FORM FHWA-1273 REQUIRED CONTRACT PROVISIONS FEDERAL-AID CONTRACTS [Form FHWA-1273 must be physically inserted into the contract without modification, excluding ATTACHMENT

A - EMPLOYMENT AND MATERIALS PREFERENCE FOR APPALACHIAN DEVELOPMENT HIGHWAY SYSTEM OR APPALACHIAN LOCAL ACCESS ROAD CONTRACTS.]
[The current version of Form FHWA-1273 is accessible at FHWA’s website:
https://www.fhwa.dot.gov/programadmin/contracts/1273/1273.pdf]

12. FEMALE AND MINORITY GOALS
To comply with Section II, "Nondiscrimination," of "Required Contract Provisions Federal-Aid Construction Contracts," the following are for female and minority utilization goals for Federal-aid construction contracts and subcontracts that exceed $10,000:

The nationwide goal for female utilization is 6.9 percent.

The goals for minority utilization (45 Fed Reg 65984 (10/3/1980)) are as follows:

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MINORITY UTILIZATION GOALS
Economic
Area
Goal
(Percent)
174 Redding CA:

Non-SMSA (Standard Metropolitan Statistical Area) Counties:

CA Lassen; CA Modoc; CA Plumas; CA Shasta; CA Siskiyou; CA Tehama

6.8 175
Eureka, CA
Non-SMSA Counties:

CA Del Norte; CA Humboldt; CA Trinity

6.6 San Francisco-Oakland-San Jose, CA:

28.9 25.6

19.6 14.9

9.1 17.1

23.2 SMSA Counties:
7120 Salinas-Seaside-Monterey, CA
CA Monterey
7360 San Francisco-Oakland
CA Alameda; CA Contra Costa; CA Marin; CA San Francisco; CA San Mateo 7400 San Jose, CA
176 CA Santa Clara, CA
7485 Santa Cruz, CA
CA Santa Cruz
7500 Santa Rosa
CA Sonoma
8720 Vallejo-Fairfield-Napa, CA
CA Napa; CA Solano
Non-SMSA Counties:

CA Lake; CA Mendocino; CA San Benito
177
Sacramento, CA:

SMSA Counties:
6920 Sacramento, CA
CA Placer; CA Sacramento; CA
Yolo Non-SMSA Counties
CA Butte; CA Colusa; CA El Dorado; CA Glenn; CA Nevada; CA Sierra; CA Sutter; CA Yuba

16.1 14.3
Stockton-Modesto, CA:

SMSA Counties:
5170 Modesto, CA 12.3
178 CA Stanislaus
8120 Stockton, CA 24.3
CA San Joaquin
Non-SMSA Counties 19.8
CA Alpine; CA Amador; CA Calaveras; CA Mariposa; CA Merced; CA Tuolumne Fresno-Bakersfield, CA
SMSA Counties:
179 0680 Bakersfield, CA 19.1
CA Kern
2840 Fresno, CA
CA Fresno
Non-SMSA Counties:

CA Kings; CA Madera; CA Tulare

26.1 23.6
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Los Angeles, CA:

11.9 28.3

21.5 19.0

19.7 24.6
SMSA Counties:
0360 Anaheim-Santa Ana-Garden Grove, CA
CA Orange
4480 Los Angeles-Long Beach, CA
CA Los Angeles
180 6000 Oxnard-Simi Valley-Ventura, CA
CA Ventura
6780 Riverside-San Bernardino-Ontario, CA
CA Riverside; CA San Bernardino
7480 Santa Barbara-Santa Maria-Lompoc, CA
CA Santa Barbara
Non-SMSA Counties
CA Inyo; CA Mono; CA San Luis Obispo
San Diego, CA:

16.9 18.2
SMSA Counties
181 7320 San Diego, CA
CA San Diego
Non-SMSA Counties
CA Imperial
For the last full week of July during which work is performed under the contract, the prime contractor and each non material-supplier subcontractor with a subcontract of $10,000 or more must complete Form FHWA PR-1391 (Appendix C to 23 CFR 230). Submit the forms by August 15.

13. TITLE VI ASSURANCES
[The U.S. Department of Transportation Order No.1050.2A requires all federal-aid Department of Transportation contracts between an agency and a contractor to contain Appendix A and E.

Note: Appendix B only requires inclusion if the contract impacts deeds effecting or recording the transfer of real property, structures, or improvements thereon, or granting interest therein. Appendices C and D only require inclusion if the contract impacts deeds, licenses, leases, permits, or similar instruments entered into by the recipient.]

APPENDIX A
During the performance of this Agreement, the contractor, for itself, its assignees and successors in interest (hereinafter collectively referred to as CONTRACTOR) agrees as follows:
a. Compliance with Regulations: CONTRACTOR shall comply with the regulations relative to nondiscrimination in federally assisted programs of the Department of Transportation, Title 49, Code of Federal Regulations, Part 21, as they may be amended from time to time, (hereinafter referred to as the REGULATIONS), which are herein incorporated by reference and made a part of this agreement. b. Nondiscrimination: CONTRACTOR, with regard to the work performed by it during the AGREEMENT, shall not discriminate on the grounds of race, color, sex, national origin, religion, age, or disability in the selection and retention of sub-applicants, including procurements of materials and leases of equipment. CONTRACTOR shall not participate either directly or indirectly in the discrimination prohibited by Section 21.5 of the Regulations, including employment practices when the agreement covers a program set forth in Appendix B of the Regulations. c. Solicitations for Sub-agreements, Including Procurements of Materials and Equipment: In all solicitations either by competitive bidding or negotiation made by CONTRACTOR for work to be performed under a Sub- agreement, including procurements of materials or leases of equipment, each potential sub-applicant or supplier shall be notified by CONTRACTOR of the CONTRACTOR’S obligations under this Agreement and the Regulations relative to nondiscrimination on the grounds of race, color, or national origin.
d. Information and Reports: CONTRACTOR shall provide all information and reports required by the EXHIBIT E PAGE 118 OF 127 EXHIBIT 2
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Regulations, or directives issued pursuant thereto, and shall permit access to its books, records, accounts, other sources of information, and its facilities as may be determined by the recipient or FHWA to be pertinent to ascertain compliance with such Regulations or directives. Where any information required of CONTRACTOR is in the exclusive possession of another who fails or refuses to furnish this information, CONTRACTOR shall so certify to the recipient or FHWA as appropriate, and shall set forth what efforts CONTRACTOR has made to obtain the information. e. Sanctions for Noncompliance: In the event of CONTRACTOR’s noncompliance with the nondiscrimination provisions of this agreement, the recipient shall impose such agreement sanctions as it or the FHWA may determine to be appropriate, including, but not limited to:
i. withholding of payments to CONTRACTOR under the Agreement within a reasonable period of time, not to exceed 90 days; and/or
ii. cancellation, termination or suspension of the Agreement, in whole or in part. f. Incorporation of Provisions: CONTRACTOR shall include the provisions of paragraphs (1) through (6) in every sub-agreement, including procurements of materials and leases of equipment, unless exempt by the Regulations, or directives issued pursuant thereto.

CONTRACTOR shall take such action with respect to any sub-agreement or procurement as the recipient or FHWA may direct as a means of enforcing such provisions including sanctions for noncompliance, provided, however, that, in the event CONTRACTOR becomes involved in, or is threatened with, litigation with a subapplicant or supplier as a result of such direction, CONTRACTOR may request the recipient enter into such litigation to protect the interests of the State, and, in addition, CONTRACTOR may request the United States to enter into such litigation to protect the interests of the United States.

APPENDIX B

CLAUSES FOR DEEDS TRANSFERRING UNITED STATES PROPERTY
The following clauses will be included in deeds effecting or recording the transfer of real property, structures, or improvements thereon, or granting interest therein from the United States pursuant to the provisions of Assurance 4:

NOW THEREFORE, the U.S. Department of Transportation as authorized by law and upon the condition that the recipient will accept title to the lands and maintain the project constructed thereon in accordance with Title 23 U.S.C., the regulations for the administration of the preceding statute, and the policies and procedures prescribed by the FHWA of the U.S. Department of Transportation in accordance and in compliance with all requirements imposed by Title 49, Code of Federal Regulations, U.S. Department of Transportation, Subtitle A, Office of the Secretary, Part 21, Non-discrimination in Federally-assisted programs of the U.S. Department of Transportation pertaining to and effectuating the provisions of Title VI of the Civil Rights Act of 1964 (78 Stat. 252; 42 U.S.C. § 2000d to 2000d-4), does hereby remise, release, quitclaim and convey unto the recipient all the right, title and interest of the U.S. Department of Transportation in and to said lands described in Exhibit A attached hereto and made a part hereof.
(HABENDUM CLAUSE)
TO HAVE AND TO HOLD said lands and interests therein unto the recipient and its successors forever, subject, however, to the covenants, conditions, restrictions and reservations herein contained as follows, which will remain in effect for the period during which the real property or structures are used for a purpose for which Federal financial assistance is extended or for another purpose involving the provision of similar services or benefits and will be binding on the recipient, its successors and assigns. The recipient, in consideration of the conveyance of said lands and interest in lands, does hereby covenant and agree as a covenant running with the land for itself, its successors and assigns, that (1) no person will on the grounds of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination with regard to any facility located wholly or in part on, over, or under such lands hereby conveyed [,] [and]* (2) that the recipient will use the lands and interests in lands and interest in lands so conveyed, in compliance with all requirements imposed by or pursuant to Title 49, Code of Federal Regulations, U.S. Department of Transportation, Subtitle A, Office of the Secretary, Part 21, Nondiscrimination in Federally-assisted programs of the U.S. Department of Transportation, Effectuation of Title EXHIBIT E PAGE 119 OF 127 EXHIBIT 2 511
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VI of the Civil Rights Act of 1964, and as said Regulations and Acts may be amended[, and (3) that in the event of breach of any of the above-mentioned non-discrimination conditions, the Department will have a right to enter or re-enter said lands and facilities on said lands, and that above described land and facilities will thereon revert to and vest in and become the absolute property of the U.S. Department of Transportation and its assigns as such interest existed prior to this instruction].* (*Reverter clause and related language to be used only when it is determined that such a clause is necessary in order to make clear the purpose of Title VI.)

APPENDIX C

CLAUSES FOR TRANSFER OF REAL PROPERTY ACQUIRED OR IMPROVED UNDER THE

ACTIVITY, FACILITY, OR PROGRAM
The following clauses will be included in deeds, licenses, leases, permits, or similar instruments entered into by the recipient pursuant to the provisions of Assurance 7(a):

A. The (grantee, lessee, permittee, etc. as appropriate) for himself/herself, his/her heirs, personal representatives, successors in interest, and assigns, as a part of the consideration hereof, does hereby covenant and agree [in the case of deeds and leases add “as a covenant running with the land”] that:

1. In the event facilities are constructed, maintained, or otherwise operated on the property described in this (deed, license, lease, permit, etc.) for a purpose for which a U.S. Department of Transportation activity, facility, or program is extended or for another purpose involving the provision of similar services or benefits, the (grantee, licensee, lessee, permittee, etc.) will maintain and operate such facilities and services in compliance with all requirements imposed by the Acts and Regulations (as may be amended) such that no person on the grounds of race, color, or national origin, will be excluded from participation in, denied the benefits of, or be otherwise subjected to discrimination in the use of said facilities.

B. With respect to licenses, leases, permits, etc., in the event of breach of any of the above Nondiscrimination covenants, the recipient will have the right to terminate the (lease, license, permit, etc.) and to enter, re-enter, and repossess said lands and facilities thereon, and hold the same as if the (lease, license, permit, etc.) had never been made or issued.*
C. With respect to a deed, in the event of breach of any of the above Non-discrimination covenants, the recipient will have the right to enter or re-enter the lands and facilities thereon, and the above described lands and facilities will there upon revert to and vest in and become the absolute property of the recipient and its assigns.*
(*Reverter clause and related language to be used only when it is determined that such a clause is necessary to make clear the purpose of Title VI.)
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Required Federal-Aid Contract Language

October 2023

APPENDIX D

CLAUSES FOR CONSTRUCTION/USE/ACCESS TO REAL PROPERTY ACQUIRED UNDER THE

ACTIVITY, FACILITY OR PROGRAM
The following clauses will be included in deeds, licenses, permits, or similar instruments/agreements entered into by the recipient pursuant to the provisions of Assurance 7(b):

A. The (grantee, licensee, permittee, etc., as appropriate) for himself/herself, his/her heirs, personal representatives, successors in interest ,and assigns, as a part of the consideration hereof, does hereby covenant and agree (in the case of deeds and leases add, “as a covenant running with the land”) that (1) no person on the ground of race, color, or national origin, will be excluded from participation in, denied the benefits of, or be otherwise subjected to discrimination in the use of said facilities, (2) that in the construction of any improvements on, over, or under such land, and the furnishings of services thereon, no person on the ground of race, color, or national origin, will be excluded from participation in, denied the benefits or, or otherwise be subjected to discrimination, (3) that the (grantee, licensee, lessee, permittee, etc.) will use the premises in compliance with all other requirements imposed by or pursuant to the Acts and Regulations, as amended, set forth in this Assurance.

B. With respect to (licenses, leases, permits, etc.) in the event of breach of any of the above of the above Non-discrimination covenants, the recipient will have the right to terminate the (license, permits, etc., as appropriate) and to enter or re-enter and repossess said land and the facilities thereon, and hold the same as if said (license, permit, etc., as appropriate) had never been made or issued.* C. With respect to deeds, in the event of breach of any of the above Non-discrimination covenants, the recipient will there upon revert to and vest in and become the absolute property of the recipient and its assigns.
(*Reverter clause and related language to be used only when it is determined that such a clause is necessary to make clear the purpose of Title VI.)

APPENDIX E
During the performance of this contract, the contractor, for itself, its assignees, and successors in interest (hereinafter referred to as the “contractor”) agrees to comply with the following non-discrimination statutes and authorities, including, but not limited to:

Pertinent Non-Discrimination Authorities:
• Title VI of the Civil Rights Act of 1964 (42 U.S.C. § 2000d et seq., 78 stat. 252), prohibits discrimination on the basis of race, color, national origin); and 49 CFR Part 21. • The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, (42 U.S.C. § 4601), (prohibits unfair treatment of persons displaced or whose property has been acquired because of Federal or Federal-aid programs and projects);
• Federal-Aid Highway Act of 1973, (23 U.S.C. § 324 et seq.), prohibits discrimination on the basis of sex; • Section 504 of the Rehabilitation Act of 1973, (29 U.S.C. § 794 et seq.), as amended, (prohibits discrimination on the basis of disability); and 49 CR Part 27; • The Age Discrimination Act of 1975, as amended, (42 U.S.C. § 6101 et seq.), prohibits discrimination on the basis of age);
• Airport and Airway Improvement Act of 1982, (49 U.S.C. § 471, Section 47123), as amended, (prohibits discrimination based on race, creed, color, national origin, or sex); • The Civil Rights Restoration Act of 1987, (PL 100-209), (Broadened the scope, coverage and applicability of Title VI of the Civil Rights Act of 1964, The Age Discrimination Act of 1975 and Section 504 of the Rehabilitation Act of 1973, by expanding the definition of the terms “programs or activities” to include all of the programs or activities of the Federal-aid recipients, sub-recipients and contractors, whether such EXHIBIT E PAGE 121 OF 127 EXHIBIT 2 513
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programs or activities are Federally funded or not);
• Titles II and III of the Americans with Disabilities Act, which prohibit discrimination of the basis of disability in the operation of public entities, public and private transportation systems, places of public accommodation, and certain testing entities (42 U.S.C. §§ 12131 – 12189) as implemented by Department of Transportation regulations 49 C.F.R. parts 37 and 38;
• The Federal Aviation Administration’s Non-discrimination statute (49 U.S.C. § 47123) (prohibits discrimination on the basis of race, color, national origin, and sex); • Executive Order 12898, Federal Actions to Address Environmental Justice in Minority Populations and LowIncome Populations, which ensures discrimination against minority populations by discouraging programs, policies, and activities with disproportionately high and adverse human health or environmental effects on minority and low-income populations;
• Executive Order 13166, Improving Access to Services for Persons with Limited English Proficiency, and resulting agency guidance, national origin discrimination includes discrimination because of limited English proficiency (LEP). To ensure compliance with Title VI, you must take reasonable steps to ensure that LEP persons have meaningful access to your programs (70 Fed. Reg. at 74087 to 74100); • Title IX of the Education Amendments of 1972, as amended, which prohibits you from discriminating because of sex in education programs or activities (20 U.S.C. 1681 et seq).

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Federal Trainee Program Special Provisions
(to be used when applicable)

14. FEDERAL TRAINEE PROGRAM
For the Federal training program, the number of trainees or apprentices is .

This section applies if a number of trainees or apprentices is shown on the Notice of Bidders.

As part of the prime contractor’s equal opportunity affirmative action program, provide on-the-job training to develop full journeymen in the types of trades or job classifications involved.

The prime contractor has primary responsibility for meeting this training requirement.

If the prime contractor subcontracts a contract part, they shall determine how many trainees or apprentices are to be trained by the subcontractor. Include these training requirements in each subcontract.

Where feasible, 25 percent of apprentices or trainees in each occupation must be in their 1st year of apprenticeship or training.

Distribute the number of apprentices or trainees among the work classifications on the basis of the prime contractor’s needs and the availability of journeymen in the various classifications within a reasonable recruitment area.

Before starting work, the prime contractor shall submit to the City/County of :

1. Number of apprentices or trainees to be trained for each classification

2. Training program to be used

3. Training starting date for each classification
The prime contractor shall obtain the City/County of approval for this submitted information before the prime contractor starts work. The City/County of credits the prime contractor for each apprentice or trainee the prime contractor employs on the job who is currently enrolled or becomes enrolled in an approved program.

The primary objective of this section is to train and upgrade minorities and women toward journeyman status.

The prime contractor shall make every effort to enroll minority and women apprentices or trainees, such as conducting systematic and direct recruitment through public and private sources likely to yield minority and women apprentices or trainees, to the extent they are available within a reasonable recruitment area and show that they have made the efforts. In making these efforts, the prime contractor shall not discriminate against any applicant for training.

The prime contractor shall not employ as an apprentice or trainee an employee:

1. In any classification in which the employee has successfully completed a training course leading to journeyman status or in which the employee has been employed as a journeyman

2. Who is not registered in a program approved by the US Department of Labor, Bureau of Apprenticeship and Training
The prime contractor shall ask the employee if the employee has successfully completed a training course leading to journeyman status or has been employed as a journeyman. The prime contractor’s records must show the employee's answers to the questions.

In the training program, the prime contractor shall establish the minimum length and training type for each classification. The City/County of and FHWA approves a program if one of the following is met:

1. It is calculated to:
• Meet the equal employment opportunity responsibilities • Qualify the average apprentice or trainee for journeyman status in the classification involved by the end of the training period

2. It is registered with the U.S. Department of Labor, Bureau of Apprenticeship and Training, and it is administered in a way consistent with the equal employment responsibilities of Federal-aid highway construction contracts
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The prime contractor shall obtain the State's approval for their training program before they start work involving the classification covered by the program.

The prime contractor shall provide training in the construction crafts, not in clerk-typist or secretarial-type positions. Training is allowed in lower-level management positions such as office engineers, estimators, and timekeepers if the training is oriented toward construction applications. Training is allowed in the laborer classification if significant and meaningful training is provided and approved by the division office. Off-site training is allowed if the training is an integral part of an approved training program and does not make up a significant part of the overall training.

The City/County of reimburses the prime contractor 80 cents per hour of training given an employee on thiscontract under an approved training program:

1. For on-site training

2. For off-site training if the apprentice or trainee is currently employed on a Federal-aid project and prime contractor does at least one of the following:
a. Contribute to the cost of the training
b. Provide the instruction to the apprentice or trainee c. Pay the apprentice's or trainee's wages during the off-site training period

3. If the prime contractor complies with this section.

Each apprentice or trainee must:

1. Begin training on the project as soon as feasible after the start of work involving the apprentice's or trainee's skill

2. Remain on the project as long as training opportunities exist in the apprentice's or trainee's work classification or until the apprentice or trainee has completed the training program Furnish the apprentice or trainee a:

1. Copy of the training plan approved by the U.S, Department of Labor or a training plan for trainees approved by both Caltrans and FHWA

2. Certification showing the type and length of training satisfactorily completed Maintain records and submit reports documenting contractor’s performance under this section.

15. PROHIBITION OF CERTAIN TELECOMMUNICATIONS AND VIDEO SURVEILLANCE EQUIPMENT AND

SERVICES
In response to significant national security concerns, the agency shall check the prohibited vendor list before making any telecommunications and video surveillance purchase because recipients and subrecipients of federal funds are prohibited from obligating or expending loan or grant funds to:
• Procure or obtain;
• Extend or renew a contract to procure or obtain; or
• Enter into a contract (or extend or renew a contract) to procure or obtain equipment, services, or systems that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system.

The prohibited vendors (and their subsidiaries or affiliates) are:
• Huawei Technologies Company;
• ZTE Corporation;
• Hytera Communications Corporation;
• Hangzhou Hikvision Digital Technology Company;
• Dahua Technology Company; and
• Subsidiaries or affiliates of the above-mentioned companies.

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In implementing the prohibition, the agency administering loan, grant, or subsidy programs shall prioritize available funding and technical support to assist affected businesses, institutions and organizations as is reasonably necessary for those affected entities to transition from covered communications equipment and services, to procure replacement equipment and services, and to ensure that communications service to users and customers is sustained.

The contractors should furnish telecommunications and video surveillance equipment with a certificate of compliance. The certificate must state telecommunications and video surveillance equipment was not procured or obtained from manufacturers identified in the above list.

EXHIBIT E PAGE 125 OF 127 EXHIBIT 2 517

Appendix E of the Title VI Assurances
(US DOT Order 1050.2A)
During the performance of this contract, the contractor, for itself, its assignees, and successors in interest (hereinafter referred to as the “contractor”) agrees to comply with the following nondiscrimination statutes and authorities; including but not limited to:

Pertinent Nondiscrimination Authorities:
• Title VI of the Civil Rights Act of 1964 (42 U.S.C. § 2000d et seq., 78 stat. 252), (prohibits discrimination on the basis of race, color, national origin); and 49 CFR Part 21.
• The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, (42 U.S.C. § 4601), (prohibits unfair treatment of persons displaced or whose property has been acquired because of Federal or Federal-aid programs and projects);
• Federal-Aid Highway Act of 1973, (23 U.S.C. § 324 et seq.), (prohibits discrimination on the basis of sex);
• Section 504 of the Rehabilitation Act of 1973, (29 U.S.C. § 794 et seq.), as amended, (prohibits discrimination on the basis of disability); and 49 CFR Part 27;
• The Age Discrimination Act of 1975, as amended, (42 U.S.C. § 6101 et seq.), (prohibits discrimination on the basis of age);
• Airport and Airway Improvement Act of 1982, (49 U.S.C. § 4 71, Section 4 7123), as amended, (prohibits discrimination based on race, creed, color, national origin, or sex);
• The Civil Rights Restoration Act of 1987, (PL 100-209), (Broadened the scope, coverage and applicability of Title VI of the Civil Rights Act of 1964, The Age Discrimination Act of 1975 and Section 504 of the Rehabilitation Act of 1973, by expanding the definition of the terms “programs or activities” to include all of the programs or activities of the Federal-aid recipients, subrecipients and contractors, whether such programs or activities are Federally funded or not);
• Titles II and III of the Americans with Disabilities Act, which prohibit discrimination on the basis of disability in the operation of public entities, public and private transportation systems, places of public accommodation, and certain testing entities (42 U.S.C. §§ 12131-12189) as implemented by Department of Transportation regulations at 49 C.F.R. parts 37 and 38;
EXHIBIT F PAGE 126 OF 127 EXHIBIT 2 518

• The Federal Aviation Administration's Nondiscrimination statute (49 U.S.C. § 47123) (prohibits discrimination on the basis of race, color, national origin, and sex);
• Executive Order 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations, which ensures discrimination against minority populations by discouraging programs, policies, and activities with disproportionately high and adverse human health or environmental effects on minority and low-income populations; • Executive Order 13166, Improving Access to Services for Persons with Limited English Proficiency, and resulting agency guidance, national origin discrimination includes discrimination because of limited English proficiency (LEP). To ensure compliance with Title VI, you must take reasonable steps to ensure that LEP persons have meaningful access to your programs (70 Fed. Reg. at 74087 to 74100);
• Title IX of the Education Amendments of 1972, as amended, which prohibits you from discriminating because of sex in education programs or activities (20 U.S.C. 1681 et seq).

EXHIBIT F PAGE 127 OF 127 EXHIBIT 2 519
1 BOND FOR FAITHFUL PERFORMANCE
KNOW ALL MEN BY THESE PRESENTS:

That we, _______________________________, a STATE OF
_____________________ CORPORATION, as Principal and
, a corporation,
organized and existing under the laws of the State of
and duly authorized to transact business under the laws of the State of California, as Surety, are held and firmly bound unto the City of Stockton, a municipal corporation, duly created and existing under and by virtue of the laws of the State of California, as obligee, in the just and full sum of FIVE MILLION, FIVE HUNDRED TWENTY-ONE THOUSAND, TWO HUNDRED THIRTY/100 DOLLARS ($5,521,230.00), in lawful money of the United States of America (being 100% of the contract price) for the payment whereof well and truly to be made to the said CITY, the said Principal and Surety bind themselves, their successors and assigns, jointly and severally, firmly by these presents.

The condition of the foregoing obligation is such that the above bounded Principal has simultaneously entered into a contract with the CITY, to do and perform the following work, to wit:

SAFE ROUTES TO SCHOOL SAFETY AND CONNECTIVITY IMPROVEMENTS PROJECT NO. WT19005 / FEDERAL PROJECT NO. ATPCML-5008(189) NOW, THEREFORE, if the above bounded Principal, CONTRACTOR, Company or
Corporation or its Subcontractor, shall well and truly perform the work contracted to be done under said contract, then this obligation to be null and void; otherwise to remain in full force and effect.

No prepayment or delay in payment and no change, extension, addition or alteration of any provision of said contract, or in said plans or specifications agreed to between the said CONTRACTOR and the said CITY, and no forbearance on the part of the said CITY shall operate to relieve any Surety or Sureties from liability on this bond, and consent by said Surety is hereby given, and the said Surety hereby waives the EXHIBIT 2 520
2 provisions of Sections 2819 and 2845 of the Civil Code of the State of California.

SIGNED AND SEALED on
APPROVED AS TO SURETY: By

PRINCIPAL
SURETY
APPROVED AS TO FORM & CONTENT:

LORI M. ASUNCION

OFFICE OF THE CITY ATTORNEY
By

ATTORNEY-IN-FACT
By

DEPUTY CITY ATTORNEY
EXHIBIT 2 521
1 BOND FOR LABOR AND MATERIAL
KNOW ALL MEN BY THESE PRESENTS:

That we, DIRT DYNASTY, INC. a STATE OF CALIFORNIA CORPORATION, as Principal and , a corporation,
organized and existing under the laws of the State of and duly authorized to transact business under the laws of the State of California, as Surety, are held and firmly bound unto the City of Stockton, a municipal corporation, duly created and existing under and by virtue of the laws of the State of California, and unto any and all material suppliers, persons, companies, or corporations furnishing materials, provisions, provender or other supplies used in, upon, for or about the performance of the work contemplated to be executed or performed under the contract hereinafter mentioned, and all persons, companies, or corporations renting or hiring teams, or implements of machinery, for or contributing to said work and all persons who perform work or labor upon the same, and all persons who supply both work and materials, and whose claims have not been paid by the contractor, company or corporation in the just and full sum of FIVE MILLION, FIVE HUNDRED TWENTY-ONE THOUSAND, TWO HUNDRED THIRTY/100 DOLLARS ($5,521,230.00), in lawful money of the United States of America (being 100% of the contract price) for the payment whereof well and truly to be made to said City of Stockton and to said persons jointly and severally, the said principal and Surety bind themselves, their successors and assigns, jointly and severally, firmly by these presents.

The condition of the foregoing obligations is such that the above bounden Principal has simultaneously entered into a contract of even date herewith, with the CITY, to do and perform the following work, to-wit:

SAFE ROUTES TO SCHOOL SAFETY AND CONNECTIVITY IMPROVEMENTS PROJECT NO. WT19005 / FEDERAL PROJECT NO. ATPCML-5008(189) NOW, THEREFORE, if the above bounden Principal, CONTRACTOR, Company or Corporation or its Subcontractor, fail to pay for all materials, provisions, provender, or other supplies, or teams, used in, upon, for or about the performance of the work EXHIBIT 2
522
2 contracted to be done, or for any work or labor done thereon of any kind, the Surety on this bond will pay the same, in an amount not exceeding the sum specified in this bond, provided that any and all claims hereunder shall be filed and proceedings had in connection therewith as required by the provisions of Division 3, Part 4, Title 15, Chapter 5, Article 1 of the Civil Code of California, provided that in case suit is brought upon this bond, a reasonable attorney's fee shall be awarded by the Court to the prevailing party in said suit; said attorney's fee to be fixed as costs in said suit, and to be included in the judgment therein rendered.

No prepayment or delay in payment and no change, extension, addition or alteration of any provision of said contract or in said plans or specifications agreed to between the said CONTRACTOR and the said CITY and no forbearance on the part of the said CITY shall operate to relieve any surety or sureties from liability on this bond, and consent to make such alterations without further notice to or consent by any such surety is hereby given, and the said sureties hereby waive the provisions of Sections 2819 and 2845 of the Civil Code of the State of California.

SIGNED AND SEALED on .

APPROVED AS TO SURETY: By

PRINCIPAL
SURETY
APPROVED AS TO FORM & CONTENT:

LORI M. ASUNCION

OFFICE OF THE CITY ATTORNEY
By

ATTORNEY-IN-FACT
By

DEPUTY CITY ATTORNEY
EXHIBIT 2
523
City of Stockton
Legislation Text
File #: 24-0663, Version: 1

RESOLUTION SETTING A PUBLIC HEARING TO ESTABLISH AN UNDERGROUND UTILITY

DISTRICT ALONG LOWER SACRAMENTO ROAD

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

1. Set a public hearing for August 20, 2024, to determine whether public necessity, health, safety, or welfare requires the formation of an underground utility district along Lower Sacramento Road pursuant to Stockton Municipal Code section 13.36.020.

2. Authorize the City Clerk to notify all affected property owners by mail of the public hearing pursuant to Stockton Municipal Code section 13.36.020.

3. Authorize the City Clerk to publish notice of this public hearing in a newspaper of local circulation, at least ten (10) days prior to said hearing.

4. Approve the proposed area to be included in the Lower Sacramento Road Underground Utility District.

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.

Summary
Pacific Gas & Electric (PG&E) is mandated by the California Public Utilities Commission (CPUC), under Tariff Rule 20, to budget monies for communities to convert overhead facilities to underground.

These undergrounding projects are commonly known as Rule 20A projects. As of March 2024, the City accumulated approximately $4.8 million in PG&E credits that can be used to relocate eligible overhead powerlines and communication utilities underground for eligible priority project(s) in the City of Stockton. PG&E typically takes the lead on Rule 20A projects and uses the credits to fund the design, construction, and administration costs.

The Lower Sacramento Road Widening and Bridge Replacements project is a priority project for Public Works that will require undergrounding of existing electrical and communication utilities. The limit of the project is between Royal Oaks Drive and Pixley Slough just north of Eight Mile Road. The project will generally widen the existing roadway from two to four/six lanes and was included in the 2019-24 Five-Year Capital Improvement Plan (CIP).

The CPUC Rule 20A guidelines require the City to establish an Underground Utility District and to determine the public interest the undergrounding would satisfy. Establishment of a District will enable City of Stockton Page 1 of 4 Printed on 7/3/2024
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staff, PG&E, and other utilities to start the process of relocating facilities underground in coordination with the construction of the Lower Sacramento Road Widening and Bridge Replacements project. It is recommended that Council approve the formation of an Underground Utility District between Pixley Slough and Bear Creek, as shown on Exhibit 1 to the Resolution, as it meets the Public Interest Criteria required under the CUPC guidelines.

It is also recommended that Council adopt a resolution authorizing the City Manager to set a public hearing for August 20, 2024, and authorize the City Clerk to publish notice of the public hearing.

DISCUSSION
Background
PG&E is mandated by the CPUC, under Tariff Rule 20A, to budget monies for communities to convert overhead facilities to underground. The CPUC Rule 20A program defines the policies and procedures for conversion for overhead power lines and other equipment to underground facilities where there is a public interest to do so. These undergrounding projects are commonly known as Rule 20A projects. As of March 2024, the City accumulated approximately $4.8 million in PG&E Rule 20A work credits that can be used to relocate eligible overhead powerlines and communication utilities underground within the City. PG&E typically takes the lead on Rule 20A projects and uses the credits to fund the design, construction, and administration costs. The City takes the lead in relocating any street lighting attached to PG&E utility poles that will be undergrounded.

In general, removing utility poles and relocating overhead facilities below ground improves safety and aesthetics of streets, sidewalks, neighborhoods, and civic areas. Potential hazards associated with downed lines or poles being situated close to vehicle travel areas are also eliminated. Rule 20A projects are typically identified by the City, in coordination with PG&E, and other utility providers.

Following this coordination, PG&E will, using available credits, replace its existing overhead electric facilities with underground electric facilities along the public street provided that the governing body of city has:

A. Determined that undergrounding the utilities is in the general public interest for one or more of the following reasons:

1. Undergrounding will avoid or eliminate an unusually heavy concentration of overhead electric facilities.

2. The street is extensively used by the general public and carries a heavy volume of pedestrian or vehicular traffic.

3. The street adjoins or passes through a civic area, recreation area, or an area of unusual scenic interest to the general public.

4. The street is an arterial or major collector road defined in the City’s General Plan.

B. Adopt an ordinance which approves the formation of an underground district where existing utilities will be removed and relocated underground; specifies all property services will be ready to receive underground services; and PG&E can discontinue its overhead service.

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On July 17, 1989, Council adopted policies and procedures for a Master Plan of Underground Utility Districts. This outlined the development of a long-range (30 to 50 years) Plan. First priority was given to major street widening and reconstruction projects by the City, and second priority was given to areas of civic, scenic, or historic importance.

Staff has reviewed the 50-year Master Plan, together with current and future priority road projects and identified the Lower Sacramento Road Widening and Bridge Replacements project (generally between Royal Oaks Drive and Pixley Slough just north of Eight Mile Road) as a priority project. This project is a key north-south primary arterial that serves as a primary connector to Lodi. San Joaquin County recently completed the widening of the Lower Sacramento Road segment north of Eight Mile Road including the undergrounding of aerial facilities. In addition, the Lower Sacramento Road Corridor is a project listed on the San Joaquin Council of Governments Measure K Strategic Plan. As such, the Lower Sacramento Road Corridor is a high priority for the establishment of an Undergrounding Utility District.

Public Works issued a Request for Proposals for professional engineering services to complete a Precise Roadway Plan and to design the Lower Sacramento Road Widening and Bridge Replacements project. The limit of the project is between Royal Oaks Drive and Pixley Slough just north of Eight Mile Road. Design work is expected to start by the end of 2024. The project will generally widen the existing roadway from two to four/six lanes and include the reconstruction of the bridges over Pixley Slough and Bear Creek. The project was included in the 2019-24 Five-Year CIP.

Present Situation
The Lower Sacramento Road Widening and Bridge Replacements project will require the undergrounding of existing electrical and communication utilities before the widening project starts.

As noted above, the City must create an Underground Utility District and determine the public interest the undergrounding would satisfy. It is recommended that Council approve the formation of an Underground Utility District between Pixley Slough and Bear Creek as shown on Exhibit 1 to the Resolution.

The Underground Utility District meets the Public Interest Criteria required under the CPUC guidelines. Formation of the proposed District will enable staff, PG&E, and other utilities to utilize Rule 20A funds to underground eligible facilities before the Lower Sacramento Road Widening and Bridge Replacements project starts. The full scope of undergrounding will be coordinated with the City’s design of the Lower Sacramento Road Widening and Bridge Replacements project in the next two or three years. After which, it is estimated PG&E can begin coordinating utility relocation and underground work no sooner than 2030. The construction of the City’s Lower Sacramento Road Widening and Bridge Replacements project is dependent on funding availability.

Stockton Municipal Code (SMC) Chapter 13.36 Regulations and Procedures for the Removal of Overhead Utility Facilities and the Installation of Underground Facilities in Underground Utility Districts, establishes regulations and procedures for the formation of Underground Utility Districts (Attachment A). In accordance with SMC section 13.36.020, a public hearing is required to determine whether the public necessity, health, safety, or welfare requires the undergrounding of overhead facilities. This also satisfies the CPUC Rule 20 requirement that the local government determines if a proposed Rule 20A project serves the public interest pursuant to a public hearing.

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Pursuant to SMC section 13.36.020, at least ten (10) days prior to the public hearing, the City Clerk will notify all affected property owners and respective utilities of the time and place of the hearing.

Owners within the proposed district will be notified of the public hearing by mail based on the last equalized assessment roll. A copy of the resolution with a map of this district will be included as well.

The recommended resolution will:

1. Set a public hearing for August 20, 2024.

2. Authorize the City Clerk to notify all affected property owners by mail of the public hearing pursuant to SMC section 13.36.020.

3. Authorize the City Clerk to publish notice of the public hearing.

Notice of the public hearing is required to be published a minimum of ten (10) days prior to the public hearing pursuant to SMC section 13.36.020. The required notice will be published in The Record on August 6, 2024.

PG&E takes the lead in the design and construction of Rule 20A projects. Rights of entry from adjacent property owners will be needed to allow PG&E contractors to make modifications to electrical panels to receive underground service. The cost to adapt electric panels to receive underground service will be covered by the Rule 20A project at no cost to the property owners. Upon formation of the Rule 20A underground district, PG&E will start coordination activities and design of the underground project. Design is anticipated to take approximately 12 months with underground construction activities starting as early as 2025.

FINANCIAL SUMMARY
As of March 2024, the City has accumulated approximately $4.8 million in the Rule 20A account with the utility companies. Some costs, such as right-of-way acquisition and street light relocation are not funded by Rule 20A and must be funded by the City. Partial funding exists in the Rule 20A Streetlighting program (PW1521) to fund the necessary activities and staff time associated with the Lower Sacramento Road Widening and Bridge Replacements project. The program currently has an unencumbered balance of $24,320.

Per SMC section 16.72.230, Developers remain to be responsible for the cost of utility undergrounding for their new development adjacent to the project.

There is no additional impact to the City’s General Fund or any other unrestricted fund as a result of taking the recommended actions.

Attachment A - SMC Chapter 13.36
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Stockton Municipal Code, Charter, and Civil Service Rules ,Yp Pre!ious .r:text Main tollapse
Municipal Code Title 13 PUBLIC SERVICES
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ATTACHMENT A
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Chapter 13.36 REGULATIONS AND PROCEDURES FOR THE REMOVAL OF OVERHEAD UTILITY

FACILITIES AND THE INSTALLATION OF UNDERGROUND FACILITIES IN UNDERGROUND UTILITY

DISTRICTS

13.36.010 Definitions.

Whenever in this chapter the words or phrases hereinafter in this section defined are used, they shall have the respective meanings assigned to them in the following definitions:
"Commission" means the Public Utilities Commission of the State of California. "Person" means and include individuals, firms, corporations, partnerships, and their agents and employees. "Poles, overhead wires and associated overhead structures" means poles, towers, supports, wires, conductors, guys, stubs, platforms, crossarms, braces, transformers, insulators, cutouts, switches, communication circuits, appliances, attachments and appurtenances located aboveground within a district and used or useful in supplying electric, communication or similar or associated service. "Underground utility district" or "district" means that area in the City within which poles, overhead wires, and associated overhead structures are prohibited as such area is described in a resolution adopted pursuant to the provisions of Section 13.36.030.
"Utility" means and includes all persons or entities supplying electric, communication or similar or associated service by means of electrical materials or devices. (Prior code § 9-750)

13.36.020 Public hearing by Council.

The Council may from time to time call public hearings to ascertain whether the public necessity, health, safety or welfare requires the removal of poles, overhead wires and associated overhead structures within designated areas of the City and the underground installation of wires and facilities for supplying electric, communication, or similar or associated service. The City Clerk shall notify all affected property owners as shown on the last equalized assessment roll and utilities concerned by mail of the time and place of such hearings at least 10 days prior to the date thereof.

Each such hearing shall be open to the public and may be continued from time to time. At each such hearing all persons interested shall be given an opportunity to be heard. The decision of the Council shall be final and conclusive. (Prior code § 9-7 51)

13.36.030 Council may designate Underground Utility Districts by resolution.

If, after any such public hearing the Council finds that the public necessity, health, safety or welfare requires such removal and such underground installation within a designated area, the Council shall, by resolution, declare such designated area an Underground Utility District and order such removal and underground installation. Such resolution shall include a description of the area comprising such district and shall fix the time within which such removal and underground installation shall be accomplished and within which affected property owners must be ready to receive underground service. A reasonable time shall be allowed for such removal and underground installation, having due regard for the availability of labor, materials and equipment necessary for such removal and for the installation of such underground facilities, as may be occasioned thereby. (Prior code § 9-752)

13.36.040 Unlawful acts.

Whenever the Council creates an underground utility district and orders the removal of poles, overhead wires 528
2 of4

ATTACHMENT A
and associated overhead structures therein as provided in Section 13.36.030, it is unlawful for any person or utility to erect, construct, place, keep, maintain, continue, employ or operate poles, overhead wires and associated overhead structures in the district after the date when said overhead facilities are required to be removed by such resolution, except as said overhead facilities may be required to furnish service to an owner or occupant of property prior to the performance by such owner or occupant of the underground work necessary for such owner or occupant to continue to receive utility service as provided in Section 13.36.090, and for such reasonable time required to remove said facilities after said work has been performed and except as otherwise provided in this chapter. (Prior code § 9-753)

13.36.050 Exception, emergency or unusual circumstances.

Notwithstanding the provisions of this chapter, overhead facilities may be installed and maintained for a period, not to exceed 10 days, without authority of the City Engineer in order to provide emergency service. The City Engineer may grant special permission, on such terms as the City Engineer may deem appropriate, in cases of unusual circumstances, without discrimination as to any person or utility, to erect, construct, install, maintain, use or operate poles, overhead wires and associated overhead structures. (Prior code § 9-754)

13.36.060 Other exceptions.

This chapter or any resolution adopted pursuant to Section 13.36.030, shall, unless otherwise provided in such resolution, not apply to the following types of facilities:

A. Any municipal facilities or equipment installed under the supervision and to the satisfaction of the City Engineer.

B. Poles, or electroliers used exclusively for street lighting.

C. Overhead wires ( exclusive of supporting structures) crossing any portion of a district within which overhead wires have been prohibited, or connecting to buildings on the perimeter of a district, when such wires originate in an area from which poles, overhead wires and associated overhead structures are not prohibited.

D. Poles, overhead wires and associated overhead structures used for the transmission of electric energy at nominal voltages in excess of 34,500 volts.

E. Overhead wires attached to the exterior surface of a building by means of a bracket or other fixture and extending from one location on the building to another location on the same building or to an adjacent building without crossing any public street.

F. Antennae, associated equipment and supporting structures, used by a utility for furnishing communication services.

G. Equipment appurtenant to underground facilities, such as surface mounted transformers, pedestal mounted terminal boxes and meter cabinets, and concealed ducts.

H. Temporary poles, overhead wires and associated overhead structures used or to be used in conjunction with construction projects. (Prior code§ 9-755)

13.36.070 Notice to property owners and utility companies.

Within 10 days after the effective date of a resolution adopted pursuant to Section 13.36.030, the City Clerk shall notify all affected utilities and all persons owning real property within the district created by said resolution of the adoption thereof. Said City Clerk shall further notify such affected property owners of the necessity that, if they or any person occupying such property desire to continue to receive electric, communication, or similar or associated service, they or such occupant shall provide all necessary facility changes on their premises so as to receive such service from the lines of the supplying utility or utilities at a new location, subject to the applicable rules, regulations and tariffs of the respective utility or utilities on file with the Commission. Notification by the City Clerk shall be made by mailing a copy of the resolution adopted pursuant to Section 13.36.030, together with a copy of this chapter, 529
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ATTACHMENT A
to affected property owners as such are shown on the last equalized San Joaquin County assessment roll and to the affected utilities. (Prior code § 9-756)

13.36.080 Responsibility of utility companies.

If underground construction is necessary to provide utility service within a district created by any resolution adopted pursuant to Section 13.36.030, the supplying utility shall furnish that portion of the conduits, conductors and associated equipment required to be furnished by it under its applicable rules, regulations and tariffs on file with the Commission. (Prior code § 9-757)

13.36.090 Responsibility of property owners.

A. Every person owning, operating, leasing, occupying or renting a building or structure within a district shall construct and provide that portion of the service connection on his or her property between the facilities referred to in Section 13.36.080 and the termination facility on or within said building or structure being served, all in accordance with applicable rules, regulations and tariffs of the respective utility or utilities on file with the Commission. If the above is not accomplished by any person within the time provided for in the resolution enacted pursuant to Section 13.36.030, the City Engineer shall give notice in writing to the person in possession of such premises, and a notice in writing to the owner thereof as shown on the last equalized assessment roll, to provide the required underground facilities within 10 days after receipt of such notice.

B. The notice to provide the required underground facilities may be given either by personal service or by mail. In case of service by mail on either of such persons, the notice must be deposited in the United States mail in a sealed envelope with postage prepaid, addressed to the person in possession of such premises at such premises, and the notice must be addressed to the owner thereof as such owner's name appears, and must be addressed to such owner's last known address as the same appears on the last equalized assessment roll, and when no address appears, to General Delivery, City of Stockton. If notice is given by mail, such notice shall be deemed to have been received by the person to whom it has been sent within 48 hours after the mailing thereof. If notice is given by mail to either the owner or occupant of such premises, the City Engineer shall, within 48 hours after the mailing thereof, cause a copy thereof, printed on a card not less than eight (8) inches by 10 inches in size, to be posted in a conspicuous place on said premises.

C. The notice given by the City Engineer to provide the required underground facilities shall particularly specify what work is required to be done, and shall state that if said work is not completed within 30 days after receipt of such notice, the City Engineer will provide such required underground facilities, in which case the cost and expense thereof will be assessed against the property benefited and become a lien upon such property.

D. If upon the expiration of the 30-day period, the said required underground facilities have not been provided, the City Engineer shall forthwith proceed to do the work, provided; however, if such premises are unoccupied and no electric or communications services are being furnished thereto, the City Engineer shall in lieu of providing the required underground facilities, have the authority to order the disconnection and removal of any and all overhead service wires and associated facilities supplying utility service to said property. Upon completion of the work by the City Engineer, he or she shall file a written report with the City Council setting forth the fact that the required underground facilities have been provided and the cost thereof, together with a legal description of the property against which such cost is to be assessed. The Council shall thereupon fix a time and place for hearing protests against the assessment of the cost of such work upon such premises, which said time shall not be less than 10 days thereafter.

E. The City Engineer shall forthwith, upon the time for hearing such protests having been fixed, give a notice in writing to the person in possession of such premises, and a notice in writing thereof to the owner thereof, in the manner hereinabove provided for the giving of the notice to provide the required underground facilities, of the time and place that the Council will pass upon such report and will hear protests against such assessment. Such notice shall also set forth the amount of the proposed assessment. 530
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ATTACHMENT A
F. Upon the date and hour set for the hearing of protests, the Council shall hear and consider the report and all protests, if there be any, and then proceed to affirm, modify or reject the assessment.

G. If any assessment is not paid within five ( 5) days after its confirmation by the Council, the amount of the assessment shall become a lien upon the property against which the assessment is made by the City Engineer, and the City Engineer is directed to tum over to the Assessor and Tax Collector a notice of lien on each of said properties on which the assessment has not been paid, and said Assessor and Tax Collector shall add the amount of said assessment to the next regular bill for taxes levied against the premises upon which said assessment was not paid. Said assessment shall be due and payable at the same time as said property taxes are due and payable, and if not paid when due and payable, shall bear interest at the rate of six (6) percent per year. (Prior code § 9-758)

13.36.100 Responsibility of City.

City shall remove at its own expense all City-owned equipment from all poles required to be removed hereunder in ample time to enable the owner or user of such poles to remove the same within the time specified in the resolution enacted pursuant to Section 13.36.030. (Prior code § 9-759)

13.36.110 Extension of time.

In the event that any act required by this chapter or by a resolution adopted pursuant to Section 13.36.030 cannot be performed within the time provided on account of shortage of materials, war, restraint by public authorities, strikes, labor disturbances, civil disobedience, or any other circumstances beyond the control of the actor, then the time within which such act will be accomplished shall be extended for a period equivalent to the time of such limitation. (Prior code § 9-760)
View the mobile version.
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Resolution No.

STOCKTON CITY COUNCIL

RESOLUTION APPROVING SETTING A PUBLIC HEARING TO ESTABLISH AN

UNDERGROUND UTILITY DISTRICT ALONG LOWER SACRAMENTO ROAD,

AUTHORIZING THE CITY CLERK TO NOTIFY ALL AFFECTED PROPERTY OWNERS

BY MAIL OF THE PUBLIC HEARING, AUTHORIZING THE CITY CLERK TO PUBLISH

NOTICE OF THE PUBLIC HEARING, AND APPROVING THE PROPOSED AREA TO

BE INCLUDED IN THE LOWER SACRAMENTO ROAD UNDERGROUND UTILITY

DISTRICT
On July 17, 1989, Council adopted policies and procedures for a Master Plan of Underground Utility Districts. This outlined the development of a long-range (30 to 50 years) Plan. First priority was given to major street widening and reconstruction project by the City, and second priority was given to areas of civic, scenic, or historic importance; and
Staff has reviewed the 50-year Master Plan, together with current and future priority road projects, and identified the Lower Sacramento Road Corridor as a high priority for the establishment of an Undergrounding Utility District. In addition, the Lower Sacramento Road Corridor is a project listed on the San Joaquin Council of Governments Measure K Strategic Plan; and
Stockton Municipal Code (SMC) Chapter 13.36, Regulations and Procedures for the Removal of Overhead Utility Facilities and the Installation of Underground Facilities in Underground Utility Districts, establishes regulations and procedures for the formation of Underground Utility Districts. In accordance with SMC section 13.36.020, a public hearing is required to determine whether the public necessity, health, safety, or welfare requires the undergrounding of overhead facilities; and PG&E is mandated by the California Public Utilities Commission, under Tariff Rule 20, to budget monies to convert overhead facilities to underground. These undergrounding projects are commonly known as Rule 20A projects; and As of March 2024, the City has accumulated approximately $4.8 million in PG&E credits that can be used to relocate eligible overhead powerlines and communication utilities underground within the City; and
Removing utility poles and relocating overhead facilities below ground improves safety and aesthetics of streets, sidewalks, neighborhoods, and civic areas. Potential hazards associated with downed lines or poles being situated close to vehicle travel areas are also eliminated. In addition, undergrounding poles will provide unobstructed right-of-way required to install the road improvements of the Lower Sacramento Road Widening and Bridge Replacements project; and
532
It has been recommended that such Lower Sacramento Road Underground Utility District be formed between Pixley Slough and Bear Creek and encompass 100 feet on either side of the centerline of Lower Sacramento Road; and Per SMC section 16.72.230, developers remain to be responsible for the cost of utility undergrounding for their new development adjacent to the project; now, therefore,

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

1. The City Council approves setting a public hearing for August 20, 2024, at 5:30 p.m., or as soon thereafter as the matter can be heard, in the Council Chambers of City Hall, 425 North El Dorado Street, Stockton, California, as the date, time, and place, when the City Council will conduct a public hearing to determine whether public necessity, health, safety, or welfare requires the formation of an underground utility` district along Lower Sacramento Road bound between Pixley Slough and Bear Creek.

2. The City Council authorizes the City Clerk to publish notice of this public hearing in a newspaper of local circulation, The Record, at least ten (10) days prior to said hearing date.

3. The City Council authorizes the City Clerk to notify by mail, all affected property owners as shown on the last equalized assessment roll and utilities concerned of the time and place of such hearing by mailing a copy of this Resolution to such property owners and utilities concerned at least ten (10) days prior to the date thereof as required by SMC section 13.36.020.

4. The City Council approves the area proposed to be included in the District which is shown upon that certain map entitled “Lower Sacramento Road Underground Utility District”, a copy of which is attached as Exhibit 1 and incorporated by this reference.

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

PASSED, APPROVED, and ADOPTED July 9, 2024 .

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

KATHERINE ROLAND, CMC, CPMC
Interim City Clerk of the City of Stockton
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EXHIBIT 1
534
City of Stockton
Legislation Text
File #: 24-0681, Version: 1

APPROVE MOTION TO RATIFY EXECUTION OF A FUNDS TRANSFER AGREEMENT FOR THE REDEVELOPMENT ON THE MIRACLE MILE: PUBLIC SAFTETY/MAINTENANCE

SUBSTATION/PARKING

RECOMMENDATION
It is recommended that the City Council approve a motion to ratify the City Manager executing a Funds Transfer Agreement between the City of Stockton and the California Department of Transportation for a total of $3,100,000 for the Redevelopment on the Miracle Mile: Public Safety/Maintenance Substation/Parking.

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.

Summary
Section 19.561, subdivision (g) (46) of the Budget Act of 2023 appropriated $3,100,000 from the State General Fund to Caltrans, to be allocated to the City of Stockton for the Redevelopment on the Miracle Mile: Public Safety/Maintenance Substation/Parking. The California Department of Transportation (Caltrans) is the authorizing agency for the proper distribution of the funding provided by this legislation. The funding will allow for increased public safety improvements, acquisition of a maintenance substation and enhance parking improvements along Pacific Avenue between Alpine Avenue and Harding Way and the immediate surrounding area (Attachment A - Vicinity Map).

Improvements may include areas along Harding Way between Lincoln Street and El Dorado Street.

It is recommended that Council approve a motion ratifying the City Manager executing a Funds Transfer Agreement in the amount of $3,100,000 with Caltrans for the Redevelopment on the Miracle Mile: Public Safety/Maintenance Substation/Parking Improvements Project (Attachment B).

DISCUSSION
Background
Section 19.561, subdivision (g) (46) of the Budget Act of 2023 appropriated $3,100,000 from the State General Fund to Caltrans, to be allocated to the City of Stockton for the Redevelopment on the Miracle Mile: Public Safety/Maintenance Substation/Parking. Caltrans is the authorizing agency for the proper distribution of the funding provided by this legislation. The funds are not attached to an established State program or subject to the authority of the California Transportation Commission or the California State Transportation Agency, unless specified in the legislation.

Caltrans determined the best method for allocation to ensure the funds are used for the purposes City of Stockton Page 1 of 2 Printed on 7/3/2024
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File #: 24-0681, Version: 1
specified in Section 19.56 of the Act is a Funds Transfer Agreement. Funds shall only be used for the project specified in the Act. The funds will be encumbered within two days of the effective date of the agreement. Pursuant to Section 19.56 of the Act, funds must be encumbered by June 30, 2025, and expended by June 30, 2027, or funds will revert to the State’s General Fund by operation of law.

Present Situation
The Miracle Mile is predominantly a shopping and dining district within the City of Stockton. The Miracle Mile includes businesses fronting along Pacific Avenue from Alpine Avenue to Harding Way, and businesses along Harding Way between El Dorado Street and Lincoln Street.

The Redevelopment on the Miracle Mile: Public Safety/Maintenance Substation/Parking will provide funding for increased public safety improvements, acquisition of a maintenance substation and enhanced parking improvements along Pacific Avenue between Alpine Avenue and Harding Way.

Caltrans has identified $3.1 million of available funding to aid in the safety improvements along the Miracle Mile.

It is recommended that Council approve a motion ratifying the City Manager’s execution of a Funds Transfer Agreement in the amount of $3,100,000 with Caltrans for the Redevelopment on the Miracle Mile: Public Safety/ Maintenance Substation/Parking Improvement.

FINANCIAL SUMMARY
Approval of the Funds Transfer Agreement will result in $3,100,000 of State General funds being applied to the Redevelopment on the Miracle Mile: Public Safety/Maintenance Substation/Parking Improvement Project.

There is no impact to the City’s General Fund or any other unrestricted fund as a result of taking the recommended action.

Attachment A - Vicinity Map
Attachment B - Funds Transfer Agreement
City of Stockton Page 2 of 2 Printed on 7/3/2024
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Miles

CITY OF STOCKTON

DEPARTMENT OF PUBLIC WORKS

MIRACLE MILE PEDESTRIAN CROSSING IMPROVEMENTS, INCLUDING

PEDESTRIAN CROSSING UPGRADES IMPROVEMENTS, PUBLIC SAFETY

IMPROVEMENTS, AND REVITALIZATION IMPROVEMENTS

PROJECT

LOCATION
ATTACHMENT A 537
Project ID PLBP-5008(215)
Advantage ID 1024000249
Funds Transfer Agreement Between the California Department of Transportation and the City of Stockton

1.1 The California Department of Tronsportation (Caltrans) and the City of Stockton (City) hereby enter into this Funds Transfer Agreement (Agreement) on the terms and conditions set forth below.

1.2 This Agreement is not valid until signed by both parties. This Agreement shall expire on City's completion of its obligations under this Agreement but may be extended by amending this Agreement.

BACKGROUND

2.1 Section 19.561, subdivision (g)(46) of the Budget Act of 2023 (the Act) appropriated $3,100,000 (the Funds) from the State General Fund to Cal+rans, to be allocated to City for the Redevelopment on the Miracle Mile: Public Safety/Maintenance Substation/Parking.

2.2 Caltrans determined the best method for allocation to ensure the funds are used for the purposes specified in Section 1 9.56! of the Act is a funds transfer agreement.

2.3 The Miracle Mile is predominantly a shopping and dining district within the City of Stockton. The Miracle Mile includes businesses fronting along Pacific Avenue from Alpine Avenue to Harding Way, and businesses along Harding Way between El Dorado Street and Lincoln Street.

Project's goal includes public safety, a maintenance substation and parking.

SCOPE OF WORK

3.1 The Funds provided under this Agreement will be used to redevelop the Miracle Mile along Pacific Avenue between Alpine Avenue and Harding Way and the immediate surrounding area (Project). Improvements may include areas along Harding Way between Lincoln Street and EI Dorado Street. Project scope may include public safety, maintenance substation and parking (Project). Deliverables may include the following:
* Conceptual Design - which may include:
o Curb, gutter, sidewalk, and driveways
ATTACHMENT B 538
Funds Transfer Agreement Between
and the
the California Department of Transportation
City of Stockton
o Roadway maintenance projects (slurry seals, cape seals, micro-surfacing, overlays, pulveriza+ions, and full depth reclamations with cement)
o Traffic signal upgrades
o High visibility crosswalks, Rectangular Rapid Flashing Beacons o Streetligh+s and ambient lighting
o ADA curb ramps
o Pedestrian safety improvements, buffered bike facilities, dedicated bicycle ramps, raised medians, and pavement
striping
o Maintenance substation acquisition improvements and
maintenance (includes single available NOFA to secure
location for maintenance).
o Parking improvements/maintenance
@ Environmental clearances as needed (CEQA/NEPA)
* Professional Design Services and Studies - may include the following submittals:
* Engineering Plans at 30%
@ Engineering Plans, Specifications, Estimate (60 and 90%) @ Engineering Plans, Specifications, Estimate at 100% and Final Approval
* Public Outreach/Public Meetings
* Public Safety Improvements
o Security cameras/monitoring services/reimbursements
* Project Advertisement
o Issuance of a Single Available Source NOFA to the Miracle Mile Improvement District (MMID)
* Construction Contract Award
@ Construction Management Services
@ Project Closeout

3.2 City shall only use Funds for the Project specified in the Act. City's selfattesta+ion verifying the intended use of funds shall be provided to the Department prior to the release of any funds.

FUNDING, COSTS, COST LIMITATION, & PAYMENT

4.1 The Funds will be encumbered within 2 days of the effective date of this Agreement. Pursuant to Section 1 9.56! of the Act, funds must be 2 Revised December 2023
ATTACHMENT B 539
Funds Transfer Agreement Between the California Department of Transportation and the City of Stockton
encumbered by June 30, 2025, and expended by June 30, 2027, or the funds will revert to the State's Generol Fund by operation of law.

4.2 Payments shall be made as authorized by Sections 19.561 (a) of the Act, including but not limited to the provisions noted below:
a. Notwithstanding any other ICIW, a designated state entity administering on allocation pursuant to this section may provide the allocation as an advanced lump sum payment, and the allocation may be used to pay for costs incurred prior to the effective date of the act adding this paragroph.
b. Funding provided in this section shall not be used for a purpose subject to Section 8 of the Article XVI of California Constitution.

4.3 After receiving the funds, the City shall provide semi-annual reporting on January 1 and July 1 to Caltrons each calendar year until the funds are expended or upon completion or termination oT the Project, whichever comes first.

4.4 Within 30 days of expending all of the Funds or upon completion or termination of Project, whichever comes first, City shall submit to Cal+rans a Project Closeout Report. The Project Closeout Report at a minimum shall include LAPM Exhibit 1 7-M, photos of the completed project (including be!ore photos, iT available), a description oT completed Project component(s) and a description of project deliverables.

4.5 Any Project costs paid using the Funds thot are determined by subsequent audit to be unallowable under 48 CFR, Part 31 or 2 CFR, Part 200, are subject to repayment by City to Caltrans.

4.6 City shall return any unspen+ Funds to Caltrans at the conclusion, completion, or termination of the Project.

4.7 Upon written demand by Cal+rans, any overpayment to City of amounts invoiced by Caltrans shall be returned to Caltrans.

4.8 Should City fail to refund any moneys due to Cal+rans as provided herein or should City breach this AGREEMENT by failing to complete Project without adequate justification and approval by Caltrans, then, within thirty (30) days demand, or within such other period as may be agreed to in wri+ing between the PARTIES, Caltrans, acting through the State Controller, the State Treasurer, the CTC or any other public entity or agency, may intercept, withhold and demand the transfer oF an amount equal to the 3 Revised December 2023
ATTACHMENT B 540
Funds Transfer Agreement Between the California Department of Transportation and the City of S+ockton
amounts paid by or owed to Caltrans for each Project, from future apportionments or any other funds due to City from Highway User TC)X Fund or any other sources of funds, and/or may also withhold approval of Tuture state-Tunded projects proposed by ADMINISTERING AGENCY.

INQUIRIES & NOTICES

5.1 All inquiries during the term of this Agreement will be directed to the representatives listed below:

For Caltrans:

Name: Silvia Dayak
Address: 1976 E Dr. Martin Lu+her
King Jr. Blvd,
Stockton, CA95205
Phone Number: (279) 220-0804
Email: [email protected]
For City of Stock+on:

Name: Harry Black
Address: 425 N. EI Dorado Street,
2nd Floor,
Stockton, CA 95202
Phone Number: (209) 937-8212
Emoil: [email protected]

5.2 Each party may change their representative listed above upon 10 calendar days' written or emailed notice to the other party and without the need for amending this Agreement.

OTHER TERMS & CONDITIONS

6.1 Druq-FreeWorkplaceRequirements:Citywillcomplywiththe requirements of the Drug-Free Workplace Act of 1990 and will provide a drug-free workplace by +aking the following actions:
a. Publish a statement notifying employees that unlawful manufacture, distribution, dispensation, possession, or use of a controlled substance is prohibited and specifying actions to be taken against employees for violations.
b. Establish a Drug-Free Awareness Program to inform employees about:
1 ) the dangers of drug abuse in the workplace;
2 ) the person's or organization's policy of maintaining a drug-free workplace;
3) any available counseling, rehabilitation, and employee assistance programs; and,
4) penalties that may be imposed upon employees for drug abuse violations.
4 Revised December 2023
ATTACHMENT B 541
Funds Transfer Agreement Between the California Department of Transportation and the City of Stock+on
c. Every employee who works on the proposed Agreement will:
1 ) receive a copy of the company's drug-free workplace policy statement; and,
2) agree to abide by the terms of the company's statement as a condition of employment on the Agreement.

Failure to comply with these requirements may result in suspension of payments under the Agreement or termination of the Agreement or both and City may be ineligible for award of any future State agreements if Caltrans or the State Department of General Services determines that any of the following has occurred: City hos made false certification, or violated the certification by failing to carry out the requirements as noted above. (Gov. Code §8350 et seq.)

6.2 Conflict of Interest: City needs to be aware of the following provisions regarding current or former state employees. If City has any questions on the status of any person rendering services or involved with the Agreement, Caltrans must be contacted immediately for clarification. (:urrent State Employees (Pub. Contract Code §10410):
1 ). No officer or employee shall engage in any employment, activity or enterprise from which the officer or employee receives compensation or has a Financial interest and which is sponsored or funded by any state agency, unless the employment, activity or enterprise is required as a condition of regular state employment. 2). No officer or employee shall contract on his or her own behalf as an independent contractor with any state agency to provide goods or services.

Former State Employees (Pub. Contract Code F:( 10411 ):
1 ). For the two-year period from the date he or she left state employment, no former state officer or employee may enter into a contract in which he or she engaged in any of the negotiations, transactions, planning, arrangements or any part of the decisionmaking process relevant to the contract while employed in any capacity by any state agency.
2). For the twelve-month period from the date he or she left state employment, no former state officer or employee may enter info a contract with any state agency if he or she was employed by that state agency in a policy-making position in the same general 5 Revised December 2023
ATTACHMENT B 542
Funds Transfer Agreement Between
and the
the California Department oT Transportation
City of Stockton
subject area as the proposed controct within the l 2-month period prior to his or her leoving state service.

It' City violates any provisions of above paragraphs, such action by City shall render this Agreement void. (Rub. Contract Code § 10420.) If the Agreement is rendered void, City shall return all Funds.

6.3 Labor Code/Workers' Compensation: City needs to be aware of the provisions which require every employer to be insured against liability for Worker's Compensation or to undertake self-insurance in accordance with the provisions, and City affirms to comply with such provisions before commencing the performance of the work described in this Agreement. (Labor Code § 3700.)

6.4. Americans With Disabilities Act: City assures the State that it complies with the Americans with Disabilities Act (ADA) of 1990, which prohibits discrimination on the basis of disability, as well as all applicable regulations and guidelines issued pursuant to the ADA. (42 u.s.c. § l 2101 et seq.)

6.5. City of Stockton Name Chanqe: An amendment is required to change City's name as listed on this Agreement. Upon receipt of legal documentation of the name change the State will process the amendment. Payment or invoices presented with a new name cannot be paid prior to approval of said amendment.

6.6. Resolution: A county, city, district, or other local public body must provide the State with a copy of a resolution, order, motion, or ordinance of the local governing body which by law has authority to enter into an agreement, authorizing execution of the agreement.

6.7. Air or Water Pollution Violation: Under State ICIW, City shall not be: (1) in violation of any order or resolution not subject to review promulgated by the State Air Resources Board or an air pollution control district; (2) subject to cease and desist order not subject to review issued pursuant to Section 133(] of the Water Code for violation of waste discharge requirements or discharge prohibitions; or (3) finally determined to be in violation of provisions of federal law relaxing to air or water pollution.

6.8. : City agrees that Caltrans, the California Department oT General Services, the California State Auditor's Office, or other State agency with a legitimate business purpose, or their designated representative(s) shall have the right to review and to copy any records and supporting 6 Revised December 2023
ATTACHMENT B 543
Funds Transfer Agreement Between
and the
the California Department of Transportation
City of Stockton
documentation pertaining to the performance of this Agreement. City agrees to maintain such records for possible audit for a minimum of three (3) years after final payment, unless a longer period of record retention is stipulated.

6.9. Amendments: No amendment or variation of the terms of this Agreement shall be valid unless made in writing and signed by the parties. Any amendment signed by City must be approved by its Council as evidenced by a resolution, order, motion, or ordinance of the City and a copy provided to Cal+rans. No oral understanding or agreement not incorporated in the Agreement is binding on any of the parties.

6.10. ComansandCityshallcontinuewiththeirresponsibilitiesunderthis Agreement during any dispute.

6.1 l This Agreement may be executed in separate counterparts.

6.12 An electronically signed copy of this Agreement shall have the same force and effect as if it were signed manually.

6.13 Should City be declared to be in breach of this AGREEMENT or otherwise in default thereof by Cal+rans, and if City is constituted as a joint powers authority, special district, or any other public entity not directly receiving funds through the State Controller, Caltrans is authorized to obtain reimbursement from whatever sources of Tunding are available, including withholding or transfer of funds, from those constituent entities comprising a joint powers authority or by bringing of an action against City or its constituent member entities, to recover Clll funds provided by Caltrans hereunder.
7 Revised December 2023
ATTACHMENT B 544
Funds Transfer Agreement Between the California Department of Transportation and the City of Stockton
State:

STATE OF CALIFORNIA

DEPARTMENT OF TRANSPORT ATION
Printed Name: Ann Fox
Signature:

Acting Deputy Director for Planning & Modal
Programs
Date:

Local Aqency:

I
City of Stockton
Printed Name:l-lai'ry Black
Signature: ""- < - ')
Title: City Manikin
Date:

APFROVED " FO M
Deliuty City Attomcy
Accounting Certification
For Caltrans Use Only
I hereby Certify upon my own aersonal knowledge that btxtgeted funds are available for encumbrance_ Pauline Wong d+:)ax 6/1 8/2024 $3,100,000.00
Accounting Officer Printed
Name
( Lj"
Accounting Officer
Signature
Date Amount Certified
Revised December 2023
ATTACHMENT B 545
City of Stockton
Legislation Text
File #: 24-0642, Version: 2

COMMUNITY SUPPORT GRANT PROGRAM FUNDED THROUGH THE AMERICAN RESCUE

PLAN ACT (ARPA) UPDATE

RECOMMENDATION
Informational only; no action to be taken.

Summary
This will be an informational update presented by the Economic Development Department as well as three program awardees and their funded programs:

1. Amelia Ann Adams Whole Life Center

2. Stockton Emergency Food Bank

3. United Way of San Joaquin County
City of Stockton Page 1 of 1 Printed on 7/3/2024
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546

COMMUNITY SUPPORT GRANT

PROGRAM FUNDED THROUGH

ARPA UPDATE
Stockton City Council
Agenda Item 15.1
July 9, 2024
547
 During the pandemic, Nonprofits and other community-based organizations were called upon by the City to serve those most in need, while oftentimes facing significant reductions in revenue streams.
 Through funding provided by the American Rescue Plan Act (ARPA), Council authorized the development of a Community Support Grant Program (Motion 2022-11-15-1205).
 The City issued a Notice of Funding Availability (NOFA) offering a one-time grant to eligible organizations providing programs, services, or activities that respond to and mitigate the various COVID-19 related community impacts.  $2.6 million in total was awarded to 34 nonprofits in November 2022.  Contracts were executed as organizations were able to provide the required information.

Background
548
Thought Partner Program
Barrier Removal
• Secure Temporary Housing
• Secure Reliable Transportation
• Prevent Homelessness through Rent Support
• Prevent Utilities shutoff through Utility Support
Health Services
• Monthly Food Distribution of Fresh Fruits & Vegetables • Mobile Clinic
• provides accessible healthcare and education
• Case Management
• serving over 50 families and over 100 individuals
Mental Health Support • Empowered Women of Excellence
• Monthly women’s support group
• Your Inner Peace Counseling & Wellness
• Partnership that provides Counseling Referrals
549
The EFB is grateful for the sustained support of our Programs.

Through the Community Support Grant Nutrition Educators and staff:
• Our Fresh Produce Program distribution increased by 520,623 pounds over the previous year, reaching a total distribution of 1,646,382 pounds of fresh produce.
• 12 sites were added to our Mobile Farmer’s Market Program, bringing fresh produce distribution, nutrition education and coaching, live cooking demonstrations, and in-person contact to 84 sites and 29,226 recipients over the last year.
• In-person Nutrition Education and independent living demonstrations and instruction, by our degreed Nutrition Educators, are administered directly in the dining room at St. Mary’s Community Services.
• We work with several partners weekly to distribute nutrition-dense foods in Homeless Encampments. Our partners include SJ County Public Health, Gospel Center Rescue Mission, St. Mary’s Community Services, Community Medical Centers, and the Salvation Army.
550
551
City of Stockton
Legislation Text
File #: 24-0560, Version: 1
COMMUNITY MEDICAL CENTERS PROJECT UPDATES: COMMUNITY WELL-BEING CRISIS

INTERVENTION PROJECT AND OPIOID SETTLEMENT AGREEMENTS

RECOMMENDATION
Informational only; no action to be taken.

Summary
This will be a quarterly informational update presented by Community Medical Centers on these projects:

1. Care Link Mobile Crisis Response Team (MCRT) pilot project, funded by the American Rescue Plan Act (ARPA).

2. Opioid Settlement Agreements (OSA), funded through the National Opioid Settlements.

City of Stockton Page 1 of 1 Printed on 7/3/2024
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552
 Feb-April 2024  Presented by: Lindsay
Lopez, Project Manager  Alfonso Apu, Chief
Behavorial Health Officer  Compiled by: Lindsay
Lopez and Nayeli Ramos
Camacho
1-833-311-2273
7 days a week
8am-11pm
City Council Meeting
July 9, 2024
Item # 15.2
553
Quarter 3
February 1 -April 30, 2024

1. Call Outcomes

2. Response Type

3. Who is calling for service?

4. Reason for Initial Calls

5. Zip Codes

6. Gender, Race & Ethnicity

7. Behavioral
Health Responses/Interventions

8. Case Studies
554
555
556
557
558
559
560
Gender Totals for
Q3
415 total gender values
Gathered for this last
quarter.
283 female
131 male
1 trans female
0 trans male to female
561
562
MCR Team, visited her and made initial contact with her at the location she was sleeping at outside with her small dog. MCR worked with the individual over the period of 2 months with 6 behavioral health encounters as well as a host of case management services.

She was linked to services for obtaining medical replacement card, obtaining food at local food banks, DMV appointments, DMV voucher, transportation to and from medical appointments, immigration services as well as connecting her with Univision to share her story as requested.

The Spanish-speaking channel came and interviewed and shared the story on the local news, and it created assistance for this person by way of being gifted a trailer to live in while she gets back on her feet.

During one of the incidents, CMM called MCR team to accompany her to the hospital, she felt as if she would not be shown understanding with both BH needs and being a Spanish Speaker. After connecting with MCR team she now has a stable home living in a trailer, has a behavioral health clinician, attends regular medical appointments and reports feeling a sense of safety now that she does not have to live on the streets Case Study #1
• "Bianca Jones", is selfreferred with her initial
call presenting as
needing behavioral
health intervention
services due to
experiencing mild to
moderate behavioral
health needs.
563
Case Study #2
 This is Jeremy, and he is 19 years old and lives in Stockton.  He was referred from Prevail due to mild to moderate Behavorial health concerns.  MCR Team visited him at his home with 7 encounters over 2 months.  His use of MCR services is noteworthy as he utilized services over Q2 and then phoned again this quarter when he was
robbed for his beloved bike.
564
Questions and Comments
565
We would love
to hear from
PLEASE CALL 209-507-2217 you!

FOR ADMINISTRATIVE NEEDS
[email protected]

YOU WOULD LIKE

A PRESENTATION FOR YOUR

STOCKTON TEAM
FOR SERVICE 833-311-2273 FOR BH
566
Stockton City Council
July 9, 2024 Agenda
Item #15.2
567
CMC Respite Center
201 N. Stanislaus Street, Stockton
(across the street from CMC
Channel Clinic/Pharmacy)
Open 24 hours per day,
7 days a week
R E S I D E N T I A L 2 4 / 7
Monday–Friday, 8am–5pm

M E D I C A L C L I N I C
568
569
CMC Respite Team + Services

C O U N S E L I N G
BH Clinician (LCSW)
Counselor (SUD Certified)

M E D I C A L
X- Waiver Provider (MD/NP/PA)
Medical Assistant (MA)
Nurse (RN/LVN)

S U P P O R T
Case Managers/ CHW
Patient Health Navigators
Peer Counselors
• 1-1 Behavioral and
Substance Use
Counseling • Case Managemen
• Medication
Assisted Treatmen
(MAT) for opioids
and alcohol • Group Counseling • Sobering (6
chairs—Stockton
only) • 14-Day Transitiona
Respite Stay • Monitored Detox
• 1-1 Behavioral and
Substance Use
Counseling • Group Counseling • Case Management • Medication Assisted Treatment (MAT) for
opioids and alcohol • Monitored detox • Sobering
• Serving individuals 18
and over • 14-Day Transitional
Respite Stay • 24-hour monitoring • Life skills classes and activities • Community programs • Presentations
570
CMC Respite Residential
Bed Days Data
Program started with an
enrollment rate of 52%,
which rose to 82% in
2023. Overall rate is 68%
Report on Bed Occupancy for Respite
Residential Bed Days
Pt. received 24 hrs. services:
 Case Management Services
 SUD Daily Programing 1-1/Groups
 Monitored Detox (as needed)
 Wrap Around Services –Med/BH Appt.
 Life Skills Programing
 3 meals & Snacks/Laundry
Beds
Feb.2024 143
Mar-24 141
Apr-24 94
143 141
94 0
20 40
60 80
100
120
140
160
February to April 2024
378 Bed Days
35 Race/Ethnicity
Total Individuals
Served
Men 27 Afro American 7
Women 8 Hispanic 14
Caucasian 10
2 American
Indian
Pacific Islander 1
DECLINED 1
571
After Care Data
Feb. to April 2024
Program started with an
enrollment rate of 52%,
which rose to 82% in
2023. Overall rate is 68%
36 ALL Clients offered to be
Connected with After Care :
 Case Management/Wrap
Around Services –appt. w/SUD,
BH & Medical (MAT)
 Transportation
 Next Level of Care transition
 Resources
29 13 12
24 5
6 1
After Care Services
Out pt. Services Transportation Resources
Case Management MAT (Medical Asst. Treatement) Long Term Recovery Program 572
Community Collaboration
Networking Partnerships
CVLIHC
Catholic Charities
Gospel Rescue Mission
El Concilio
St. Mary’s Shelter
Hospital ED
Managed Care Plan (HPSJ)
CBH
SUSD
County Collaborative Courts
Lilly Pad
Salvation Army
Circle of Friends
Recovery House
Medmark
Aegis
Food Bank
Shower of Love
Bread of Life
573
Program Highlights
54 % OF CLIENTS COMPLETE 14

DAY STAY AND GO ON TO RECEIVE

OUTPUT SERVICES
14 % OF CLIENTS OPEN TO

RECEIVING MAT (MEDICATION

ASSISTED TREATMENT)

SUCCESSFUL CLIENT ONGOING TO

GRADUATE COLLEGE
574
THANK
YOU
LeiHua (Lei) McMiller, LMFT
Director of SUD Services
[email protected]
575
City of Stockton
Legislation Text
File #: 24-0624, Version: 1
ADOPTION OF PROPOSED REDLINE CHANGES TO CHAPTERS 3.02 AND 3.03 OF THE

COUNCIL POLICY MANUAL

RECOMMENDATION
Staff recommends that the City Council adopt by resolution the proposed redline changes to Chapters 3.02 and 3.03 of the Council Policy Manual.

Summary
On April 17, 2024, and May 15, 2024, the Council Legislation/Environmental Committee reviewed and provided direction to staff for changes to Chapter’s 3.02 and 3.03 of the Council Policy Manual.

Those changes are presented for the City Council’s consideration for adoption.

DISCUSSION
Background
At the May 15, 2024, Council Legislation/Environmental Committee meeting, proposed changes to Chapters 3.02 and 3.03 were discussed by the Committee and recommendation forwarded to Council.

Chapter 3.02 language regarding recruitment for applicants to Boards and Commissions contained outdated language and did not reflect best practices. Updated language is reflected in the attached redline policy (Attachment A).

Chapter 3.03 regarding the attendance policy for Boards and Commissions needed clarity to ensure better governance. Language was updated to further define absences, meeting types, process for addressing violations, and provide clarity regarding boards that were an exception. These changes are reflected in the attached redline policy (Attachment B).

Present Situation
In accordance with Council Legislation/Environmental Committee recommendation, Staff now presents proposed redlines for Council Policy Manual Chapters 3.02 and 3.03 for adoption.

FINANCIAL SUMMARY
There is no financial impact from approval of these changes.

City of Stockton Page 1 of 1 Printed on 7/3/2024
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576
§ 3.02.010 Policy.
1) In 1975 the State Legislature amended Government Code Section 54957 of the Brown Act, removing "public officer" from those appointees that the Council could consider in executive session. This action resulted in the requirement that all discussions and deliberations by the City Council regarding appointments or confirmation of appointments are to take place in public at regular or special meetings of the City Council as opposed to closed executive sessions. This amendment was placed into effect January 1, 1976.
2) To comply with this new requirement, the City Council on January 19, 1976 adopted Resolution No. 32,937 establishing procedures for interviewing and confirming appointments in open Council session.

The resolution additionally incorporated the existing informal procedures of the City Council regarding such appointments.
3) On January 1, 1977, the Maddy Local Appointive List Act of 1975 (Section 54970 et seq. Government Code) became effective requiring, among other things, that:

On or before December 31st of each year, each legislative body shall prepare an appointments list of all regular and ongoing boards, commissions, and committees which are appointed by the legislative body of the local agency. The appointees' list shall contain the following information:

A) A list of all appointive terms which will expire during the next calendar year, with the name of the incumbent appointee, the date of appointment, the date the term expires, and the necessary qualifications for the position.

B) A list of all boards, commissions, and committees whose members serve at the pleasure of the legislative body, and the necessary qualifications for each position.

C) These requirements are contained in this Council policy. 4) The purpose of this policy is to establish an orderly process to provide all citizens of Stockton equal access to specific and current information about the many regulatory and advisory boards, commissions, and committees appointed by the City Council and/or the Mayor, to provide for equal opportunity to be informed of vacancies which, from time to time, shall occur, and to provide for open sessions in the interview or confirmation appointment process. Hereafter, for sake of simplicity, all boards, commissions and committees appointed as set forth in the following Policy shall be referred to as "Commission" or "Commissions." A member of a board, commission or committee shall be referred to as a "Commissioner."
5) APPOINTMENTS LIST
A) Each year, on or before December 31, the City Clerk shall prepare and provide to the City Council an appointments list of all regular and ongoing Commissions which are appointed by the Stockton City Council, a Stockton City Councilmember or by the Mayor. The appointment list shall set forth the following information:

A list of all current Commission vacancies and of all appointive terms which will expire during the next calendar year with the name of the incumbent appointee, the date of appointment, the date the term expires, and the necessary qualifications for the position.

B) The appointments list shall be made available to members of the public on the City's website for free or a hard copy for a reasonable fee as indicated on the City's Fee Schedule. 6) VACANCY ANNOUNCEMENTS
ATTACHMENT A 577
In mid-January and mid-July, wWhere a vacancy on a Commission exists or where by June 30 or December 31, respectively, a Commissioner's term of office will expire, the City Clerk shall announce through the news and social media, and post notice thereof on the City's website and in the Office of the City Clerk, that a vacancy exists or that a term of office will expire. A standing contact list of community partners and organizations will be maintained by the Clerk’s Office to facilitate effective outreach.

Announcements/postings shall indicate:

A) Title of the position;
B) Minimum qualifications;
C) Special residency requirements, if any;
D) Frequency of meetings of the Commission;
E) Remuneration, if any;
F) Where to submit an application;
G) Final date for submission of an application; and
H) Term of office.
7) APPLICATIONS
A) All applicants for Commission membership, including persons currently serving on a Commission who seek to be reappointed, shall complete and submit a uniform public service application form to the City Clerk's Office prior to the final time and date for submission of the application. An applicant may submit for consideration to more than one Commission, depending on the applicant's qualifications and interest
B) The City Council may appoint a person then serving on a Commission to serve on a different Commission after taking into account the number of other qualified application seeking appointment and whether the person's appointment to the different Commission is compatible with the person's current Commission service or creates the potential for overlapping subject matter jurisdiction.

C) The application shall identify the membership on the Commission or Commissions being sought, the applicant's background and qualifications and may include any additional material deemed relevant by the applicant. Additional material will not be accepted after the filing deadline.

D) The advertisement will remain open until the City Clerk has received one more application than the number of vacancies to be filled or 45 days from the date of the advertisement, whichever comes earlier, at which time the City Clerk will proceed to fill vacancies with the available applicants.

E) The City Clerk or other staff will review the applications to determine the applicant's compliance with this Policy and any other requirements specified in the Commission's Roster.

F) The City Clerk's office shall keep applications on file and applications shall be considered active for one year from the date received.

G) All applications shall be deemed to be public documents and shall be available for public inspection.

Nothing herein shall preclude the Mayor or an individual Councilmember from requesting additional or clarifying information of an applicant prior to the Council's consideration of the applicants for appointment as provided in this Policy.

ATTACHMENT A 578
8) STOCKTON RESIDENCY
Absent specific qualifying requirements to the contrary, all applicants and appointees to Commissions shall be residents of the City of Stockton during the term of their appointment. 9) PROHIBITION OF CITY EMPLOYEES
City Employees Prohibited. Because of potential conflicts between City employment and an employee serving on City Commissions, no City employee, with the exception of the staff person appointed to serve on the Successor Agency to the Redevelopment Agency, shall be appointed to a Commission. 10) APPLICANT INTERVIEWS
A) Except as provided below, the City department or affected agency that staffs a Commission for which there is a vacancy or for which a term of office will expire during the recruitment period shall prepare interview questions, reviewed and approved by the City Manager's Office, and forward the questions to the City Clerk. To the extent feasible, questions should be open-ended and limited to no more than five key queries. The City department or affected agency that staffs a Commission, in consultation with the City Manager's Office, will determine whether to provide the interview questions to the applicants ahead of the interview itself.

B) The City Clerk will notify the Council and the applicants regarding the date and time of the interviews.

The interviews will be streamed live. This will allow the Council the opportunity to view the interviews live via streamed video or at any time prior to the date on which the Council will make its appointment.

The video stream of the interviews will remain on the City's website only until the Council concludes the appointment process.

C) The City Clerk shall notify all applicants of the time and place of the interviews, the amount of time allowed for the interview and the method by which the Council appointment shall be made. If notifying the candidates by electronic mail, the City Clerk shall also follow up with a phone call to the applicant.

Applicants who desire to withdraw from consideration shall notify the City Clerk, preferably in writing.

D) On the date and time of the interview, applicants will arrive at the designated location, date and time as set by the City Clerk.

E) Applicants will assemble in the designated location where the City Clerk/designee will provide the applicants with the following information:
i) Instructions regarding the interview procedure; and
ii) The date and time of the meeting at which the Council will be voting on the appointment; applicants may be asked by the Council to appear at this meeting.

F) Applicants will be interviewed one at a time. Candidates yet to be interviewed will be instructed to wait in a lobby or other designated location until such time that s/he is invited to the location of the interview. Applicants not present for the interview will automatically be removed from further consideration for that recruitment period.

G) During the interview, the City Clerk/designee will give the opportunity for the applicant to make a twominute opening statement; the City Clerk/designee will read each question aloud from the list of prepared questions. Each interview is timed and limited to no more than 10 minutes per applicant.

Applicants will be excused at the end of the interview.

H) Interviews for applicants to the Central Parking District Authority Board, Cultural Heritage Board and ATTACHMENT A 579
Public Art Advisory Committee shall be conducted by committees of the respective Boards or Committee and the committee's recommendation then considered by the full Boards and Committee.

The Boards' and Committee's recommendations will be forwarded to the City Council for Council action. The City Council may appoint or not appoint the recommended applicant. An appointment to fill an unexpired term shall become effective immediately. Other appointments shall become effective as of July 1st or January 1st respectively. In the latter case, then serving Board or Committee members will continue to serve until the effective date of the new appointment. If the City Council does not appoint the recommended applicant, the Boards or Committee shall make another recommended appointment.

I) The City Council shall not appoint the City Council Salary Setting Commission. Applicants for that Commission shall be interviewed by the Civil Service Commission which will make the appointment (as provided in Charter Section 1912) and the Director of Human Resources shall notify the City Council of the appointment.
11) CITY COUNCIL APPOINTMENTS
A) Subsequent to the interviews, the City Clerk will immediately notify the Council that the interviews have been conducted and the date the Council will be voting on the appointments. The Council will have the opportunity to view the interviews during the live stream or may view the video stream at any time prior to the date set for Council appointment. Councilmembers shall limit conversation regarding the applicants amongst each other consistent with the Brown Act.

B) The City Clerk will prepare a staff report relative to the interviews conducted; this report will be placed on a regular meeting agenda for Council consideration on the date indicated to the applicants. The applicants are not required to appear at this meeting unless requested by a Councilmember before the appointment date. Any Councilmember may ask additional questions of the applicant(s) if the applicant has been requested to appear and has appeared at the meeting.

C) At the meeting at which the City Clerk has prepared a staff report relative to the persons who have been interviewed for an appointment to a Commission, for each Commission on which there is a vacancy or for which a term of office will expire, the City Clerk will provide to the City Council a list of those persons who have been interviewed.

D) All discussions by the City Council regarding appointments or confirmation of appointments shall be conducted in compliance with the Brown Act. The appointment process shall not require a public hearing; however, persons desiring to comment on the applicants may do so prior to Council action. A Councilmember may ask questions or seek clarification from any applicant present at the meeting before the Council takes action.

E) If there is at least one more applicant than the number of vacancies from the list(s) so provided to the Council, each Councilmember, including the Mayor, will rank the applicants for each Commission such that the number of applicants that each Councilmember ranks will be one number greater than the number of vacancies and/or the number of Commission members whose terms will be expiring. (This will likely avoid tie votes.) For example, if there is only one vacancy or only one term expiring, the Councilmember's first choice for appointment will be ranked with the number "2" and the Councilmember's second choice with the number "1." If because of a vacancy and/or because of an expiring term, there is more than one appointment to a Commission, the Councilmember will assign to the Councilmember's first choice the higher(est) number and lesser number(s) to the Councilmember's other choice(s). For example, if there were one vacancy and one term expiring, each Councilmember would rank three applicants, assigning the number "3" to the Councilmember's first choice, the number "2" to the Councilmember's second choice and the number "1" to the third choice. i) After the Council has ranked the applicants, the City Clerk will tally the rankings and the applicant(s) receiving the highest number(s) would, subject to Council ratification, be appointed. If there is a tie, ATTACHMENT A 580
then the process described in subsection E above will be repeated only as to the applicants who are tied. ii) In instances where there are a vacancy and an expiring term and the term of the vacant office is less than the new term of office, the applicant with the highest number will serve the new term of office and the applicant with the next highest number will serve the lesser term.

F) If the number of applicants is less than or equal to the number of vacancies, Council may direct staff to open a recruitment or proceed to fill any number of vacancies from the available list of applicants.

G) Should a vacancy occur within the first year of an appointment, the remainder of the unexpired term may be filled from the current, active pool without running a recruitment.

H) An appointment to fill an unexpired term shall become effective immediately. Other appointments shall become effective as of July 1st or January 1st, respectively. In the latter case, the serving Commissioners will continue to serve until the effective date of the new appointments. 12) APPOINTMENTS TO THE PLANNING COMMISSION
As to the Planning Commission, where a vacancy exists or a term of office is expiring from a particular Councilmember's District, the Councilmember from that District shall make the appointment subject to City Council approval; for the at-large Planning Commissioner, the Mayor shall make the appointment subject to City Council approval.
13) MAYORAL APPOINTMENTS
As to any appointments made by the Mayor (other than the Mayor's appointment to the Planning Commission), they shall be submitted on the next regular City Council meeting agenda. The City Council shall confirm or not confirm the appointment(s).
14) TERM OF OFFICE
No person shall serve more than two terms on any Commission other than the following: Port Commission; San Joaquin Commission on Aging; San Joaquin County Mosquito/Vector Control Board; and San Joaquin Regional Transit District Board. If a person is appointed to a vacancy and there are more than two years remaining on that term, that shall count as one term.

ATTACHMENT A 581
§ 3.03.010 Policy.
1) For any Board, Commission and Committee (hereafter "Commission") that meets regularly more than once a month, a Commissioner's unexcused absence from either three consecutive regular meetings or five or more regular meetings in any 12-month period shall result in the position being vacated, subject to City Council ratification as provided in this section. For any Commission that meets regularly once a month or less frequently, a Commissioner's unexcused absences from 25% or more of the regular meetings in any 12-month period shall result in the position being vacated, subject to City Council ratification as provided in this section. Meetings that are cancelled due to lack of quorum prior to the meeting date will be included in this attendance policy. 2) Excused absences shall include illness or other medical reasons, work related conflicts and scheduled vacations when notice is provided at least 30 days in advance. The Chairperson assigned staff support person of the particular Commission shall determine if the absence is excused; provided a commissioner, prior to the meeting, provides reasonable notice in writing, including 30 days' notice of scheduled vacation, of the absence to the Chairperson or to the staff person assigned to the Commission. In the case of a Chairperson's absence, the Vice-Chair shall make the determination. 3) The staff person assigned to the Commission shall record the attendance of Commissioners in a uniform format as shown on Board/Commission/Committee Attendance Report and submit the report to the City Clerk’s Office. The Clerk’s Office shall provide Attendance Reports to the City Council on a quarterly basis. As to any Commissioner who is required to be a resident of a Councilmember's district direct appointment, if the attendance record of that Commissioner is such that additional unexcused absences would result in the position being vacated, the staff person assigned to the Commission Clerk’s Office shall notify the Councilmember from that district of the Commissioner's attendance record. If the attendance records indicate that any Commissioner has exceeded the number of unexcused absences as provided in subsection 1 above, the staff person shall Councilmember may direct the Clerk’s Office to prepare a report to the City Council so stating and recommending that the City Council ratify that the position has been vacated. The City Council, at a regular meeting, shall consider the recommendation and take whatever action the City Council deems appropriate. If the City Council ratifies that the position has been vacated due to unexcused absences, the staff person shall notify any outside agency on which the Commissioner sat of the Council action.
4) The following Boards and Commissions are not directly appointed by City Council and require removal by their appointing bodies:

Stockton Arts Commission
Parks and Recreation Commission
Cultural Heritage Board
Salary Setting Commission
ATTACHMENT B 582
Resolution No.

STOCKTON CITY COUNCIL
A RESOLUTION ADOPTING A REVISED CITY COUNCIL POLICY CHAPTER 3.02 CITY

COUNCIL AND MAYORAL APPOINTMENTS TO COMMITTEES, BOARDS, AND COMMISSIONS AND CHAPTER 3.03 ATTENDANCE POLICY FOR APPOINTEES Chapter 3.02 of the Council Policy Manual addresses the procedures by which members are recruited to Committees, Boards, and Commissions; and Chapter 3.03 of the Council Policy Manual addresses the procedures by which attendance is monitored for appointed members of Boards and Commissions; and The Legislation and Environmental Committee voted on May 25, 2024, to forward a recommendation to Council to make changes to improve the recruitment and attendance monitoring process for Boards and Commissions; now, therefore,

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

1. City Council approves the revised City Council Policy 3.02 entitled “City Council and Mayoral Appointments to Committees, Boards, and Commissions;” attached hereto as “Exhibit 1.”

2. City Council approves the revised City Council Policy 3.03 entitled “Attendance Policy for Appointees;” attached hereto as “Exhibit 2.”

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 July 9, 2024 .

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

KATHERINE ROLAND, CMC,CPMC
Interim City Clerk of the City of Stockton
583
§ 3.02.010 Policy.
1) In 1975 the State Legislature amended Government Code Section 54957 of the Brown Act, removing "public officer" from those appointees that the Council could consider in executive session. This action resulted in the requirement that all discussions and deliberations by the City Council regarding appointments or confirmation of appointments are to take place in public at regular or special meetings of the City Council as opposed to closed executive sessions. This amendment was placed into effect January 1, 1976.
2) To comply with this new requirement, the City Council on January 19, 1976 adopted Resolution No. 32,937 establishing procedures for interviewing and confirming appointments in open Council session.

The resolution additionally incorporated the existing informal procedures of the City Council regarding such appointments.
3) On January 1, 1977, the Maddy Local Appointive List Act of 1975 (Section 54970 et seq. Government Code) became effective requiring, among other things, that:

On or before December 31st of each year, each legislative body shall prepare an appointments list of all regular and ongoing boards, commissions, and committees which are appointed by the legislative body of the local agency. The appointees' list shall contain the following information:

A) A list of all appointive terms which will expire during the next calendar year, with the name of the incumbent appointee, the date of appointment, the date the term expires, and the necessary qualifications for the position.

B) A list of all boards, commissions, and committees whose members serve at the pleasure of the legislative body, and the necessary qualifications for each position.

C) These requirements are contained in this Council policy. 4) The purpose of this policy is to establish an orderly process to provide all citizens of Stockton equal access to specific and current information about the many regulatory and advisory boards, commissions, and committees appointed by the City Council and/or the Mayor, to provide for equal opportunity to be informed of vacancies which, from time to time, shall occur, and to provide for open sessions in the interview or confirmation appointment process. Hereafter, for sake of simplicity, all boards, commissions and committees appointed as set forth in the following Policy shall be referred to as "Commission" or "Commissions." A member of a board, commission or committee shall be referred to as a "Commissioner."
5) APPOINTMENTS LIST
A) Each year, on or before December 31, the City Clerk shall prepare and provide to the City Council an appointments list of all regular and ongoing Commissions which are appointed by the Stockton City Council, a Stockton City Councilmember or by the Mayor. The appointment list shall set forth the following information:

A list of all current Commission vacancies and of all appointive terms which will expire during the next calendar year with the name of the incumbent appointee, the date of appointment, the date the term expires, and the necessary qualifications for the position.

B) The appointments list shall be made available to members of the public on the City's website for free or a hard copy for a reasonable fee as indicated on the City's Fee Schedule.

EXHIBIT 1 584
6) VACANCY ANNOUNCEMENTS
Where a vacancy on a Commission exists or where by a Commissioner's term of office will expire, the City Clerk shall announce through the news and social media, and post notice thereof on the City's website and in the Office of the City Clerk, that a vacancy exists or that a term of office will expire. A standing contact list of community partners and organizations will be maintained by the Clerk’s Office to facilitate effective outreach. Announcements/postings shall indicate:

A) Title of the position;
B) Minimum qualifications;
C) Special residency requirements, if any;
D) Frequency of meetings of the Commission;
E) Remuneration, if any;
F) Where to submit an application;
G) Final date for submission of an application; and
H) Term of office.
7) APPLICATIONS
A) All applicants for Commission membership, including persons currently serving on a Commission who seek to be reappointed, shall complete and submit a uniform public service application form to the City Clerk's Office prior to the final time and date for submission of the application. An applicant may submit for consideration to more than one Commission, depending on the applicant's qualifications and interest
B) The City Council may appoint a person then serving on a Commission to serve on a different Commission after taking into account the number of other qualified application seeking appointment and whether the person's appointment to the different Commission is compatible with the person's current Commission service or creates the potential for overlapping subject matter jurisdiction.

C) The application shall identify the membership on the Commission or Commissions being sought, the applicant's background and qualifications and may include any additional material deemed relevant by the applicant. Additional material will not be accepted after the filing deadline.

D) The advertisement will remain open until the City Clerk has received one more application than the number of vacancies to be filled or 45 days from the date of the advertisement, whichever comes earlier, at which time the City Clerk will proceed to fill vacancies with the available applicants.

E) The City Clerk or other staff will review the applications to determine the applicant's compliance with this Policy and any other requirements specified in the Commission's Roster.

F) The City Clerk's office shall keep applications on file and applications shall be considered active for one year from the date received.

G) All applications shall be deemed to be public documents and shall be available for public inspection.

Nothing herein shall preclude the Mayor or an individual Councilmember from requesting additional or EXHIBIT 1 585
clarifying information of an applicant prior to the Council's consideration of the applicants for appointment as provided in this Policy.
8) STOCKTON RESIDENCY
Absent specific qualifying requirements to the contrary, all applicants and appointees to Commissions shall be residents of the City of Stockton during the term of their appointment. 9) PROHIBITION OF CITY EMPLOYEES
City Employees Prohibited. Because of potential conflicts between City employment and an employee serving on City Commissions, no City employee, with the exception of the staff person appointed to serve on the Successor Agency to the Redevelopment Agency, shall be appointed to a Commission. 10) APPLICANT INTERVIEWS
A) Except as provided below, the City department or affected agency that staffs a Commission for which there is a vacancy or for which a term of office will expire during the recruitment period shall prepare interview questions, reviewed and approved by the City Manager's Office, and forward the questions to the City Clerk. To the extent feasible, questions should be open-ended and limited to no more than five key queries. The City department or affected agency that staffs a Commission, in consultation with the City Manager's Office, will determine whether to provide the interview questions to the applicants ahead of the interview itself.

B) The City Clerk will notify the Council and the applicants regarding the date and time of the interviews.

The interviews will be streamed live. This will allow the Council the opportunity to view the interviews live via streamed video or at any time prior to the date on which the Council will make its appointment.

The video stream of the interviews will remain on the City's website only until the Council concludes the appointment process.

C) The City Clerk shall notify all applicants of the time and place of the interviews, the amount of time allowed for the interview and the method by which the Council appointment shall be made. If notifying the candidates by electronic mail, the City Clerk shall also follow up with a phone call to the applicant.

Applicants who desire to withdraw from consideration shall notify the City Clerk, preferably in writing.

D) On the date and time of the interview, applicants will arrive at the designated location, date and time as set by the City Clerk.

E) Applicants will assemble in the designated location where the City Clerk/designee will provide the applicants with the following information:
i) Instructions regarding the interview procedure; and
ii) The date and time of the meeting at which the Council will be voting on the appointment; applicants may be asked by the Council to appear at this meeting.

F) Applicants will be interviewed one at a time. Candidates yet to be interviewed will be instructed to wait in a lobby or other designated location until such time that s/he is invited to the location of the interview. Applicants not present for the interview will automatically be removed from further consideration for that recruitment period.

G) During the interview, the City Clerk/designee will give the opportunity for the applicant to make a twominute opening statement; the City Clerk/designee will read each question aloud from the list of prepared questions. Each interview is timed and limited to no more than 10 minutes per applicant.

EXHIBIT 1 586
Applicants will be excused at the end of the interview.

H) Interviews for applicants to the Central Parking District Authority Board, Cultural Heritage Board and Public Art Advisory Committee shall be conducted by committees of the respective Boards or Committee and the committee's recommendation then considered by the full Boards and Committee.

The Boards' and Committee's recommendations will be forwarded to the City Council for Council action. The City Council may appoint or not appoint the recommended applicant. An appointment to fill an unexpired term shall become effective immediately. Other appointments shall become effective as of July 1st or January 1st respectively. In the latter case, then serving Board or Committee members will continue to serve until the effective date of the new appointment. If the City Council does not appoint the recommended applicant, the Boards or Committee shall make another recommended appointment.

I) The City Council shall not appoint the City Council Salary Setting Commission. Applicants for that Commission shall be interviewed by the Civil Service Commission which will make the appointment (as provided in Charter Section 1912) and the Director of Human Resources shall notify the City Council of the appointment.
11) CITY COUNCIL APPOINTMENTS
A) Subsequent to the interviews, the City Clerk will immediately notify the Council that the interviews have been conducted and the date the Council will be voting on the appointments. The Council will have the opportunity to view the interviews during the live stream or may view the video stream at any time prior to the date set for Council appointment. Councilmembers shall limit conversation regarding the applicants amongst each other consistent with the Brown Act.

B) The City Clerk will prepare a staff report relative to the interviews conducted; this report will be placed on a regular meeting agenda for Council consideration on the date indicated to the applicants. The applicants are not required to appear at this meeting unless requested by a Councilmember before the appointment date. Any Councilmember may ask additional questions of the applicant(s) if the applicant has been requested to appear and has appeared at the meeting.

C) At the meeting at which the City Clerk has prepared a staff report relative to the persons who have been interviewed for an appointment to a Commission, for each Commission on which there is a vacancy or for which a term of office will expire, the City Clerk will provide to the City Council a list of those persons who have been interviewed.

D) All discussions by the City Council regarding appointments or confirmation of appointments shall be conducted in compliance with the Brown Act. The appointment process shall not require a public hearing; however, persons desiring to comment on the applicants may do so prior to Council action. A Councilmember may ask questions or seek clarification from any applicant present at the meeting before the Council takes action.

E) If there is at least one more applicant than the number of vacancies from the list(s) so provided to the Council, each Councilmember, including the Mayor, will rank the applicants for each Commission such that the number of applicants that each Councilmember ranks will be one number greater than the number of vacancies and/or the number of Commission members whose terms will be expiring. (This will likely avoid tie votes.) For example, if there is only one vacancy or only one term expiring, the Councilmember's first choice for appointment will be ranked with the number "2" and the Councilmember's second choice with the number "1." If because of a vacancy and/or because of an expiring term, there is more than one appointment to a Commission, the Councilmember will assign to the Councilmember's first choice the higher(est) number and lesser number(s) to the Councilmember's other choice(s). For example, if there were one vacancy and one term expiring, each Councilmember would rank three applicants, assigning the number "3" to the Councilmember's first choice, the number "2" to the Councilmember's second choice and the number "1" to the third choice.

EXHIBIT 1 587
i) After the Council has ranked the applicants, the City Clerk will tally the rankings and the applicant(s) receiving the highest number(s) would, subject to Council ratification, be appointed. If there is a tie, then the process described in subsection E above will be repeated only as to the applicants who are tied. ii) In instances where there are a vacancy and an expiring term and the term of the vacant office is less than the new term of office, the applicant with the highest number will serve the new term of office and the applicant with the next highest number will serve the lesser term.

F) If the number of applicants is less than or equal to the number of vacancies, Council may direct staff to open a recruitment or proceed to fill any number of vacancies from the available list of applicants.

G) Should a vacancy occur within the first year of an appointment, the remainder of the unexpired term may be filled from the current, active pool without running a recruitment.

H) An appointment to fill an unexpired term shall become effective immediately. Other appointments shall become effective as of July 1st or January 1st, respectively. In the latter case, the serving Commissioners will continue to serve until the effective date of the new appointments. 12) APPOINTMENTS TO THE PLANNING COMMISSION
As to the Planning Commission, where a vacancy exists or a term of office is expiring from a particular Councilmember's District, the Councilmember from that District shall make the appointment subject to City Council approval; for the at-large Planning Commissioner, the Mayor shall make the appointment subject to City Council approval.
13) MAYORAL APPOINTMENTS
As to any appointments made by the Mayor (other than the Mayor's appointment to the Planning Commission), they shall be submitted on the next regular City Council meeting agenda. The City Council shall confirm or not confirm the appointment(s).
14) TERM OF OFFICE
No person shall serve more than two terms on any Commission other than the following: Port Commission; San Joaquin Commission on Aging; San Joaquin County Mosquito/Vector Control Board; and San Joaquin Regional Transit District Board. If a person is appointed to a vacancy and there are more than two years remaining on that term, that shall count as one term.

EXHIBIT 1 588
§ 3.03.010 Policy.
1) For any Board, Commission and Committee (hereafter "Commission") that meets more than once a month, a Commissioner's absence from either three consecutive meetings or five or more meetings in any 12-month period shall result in the position being vacated, subject to City Council ratification as provided in this section. For any Commission that meets once a month or less frequently, a Commissioner's absences from 25% or more of the meetings in any 12-month period shall result in the position being vacated, subject to City Council ratification as provided in this section. Meetings that are cancelled due to lack of quorum prior to the meeting date will be included in this attendance policy. 2) Excused absences shall include illness or other medical reasons, work related conflicts and scheduled vacations when notice is provided at least 30 days in advance. The assigned staff support person of the particular Commission shall determine if the absence is excused; provided a commissioner provides reasonable notice in writing, including 30 days' notice of scheduled vacation, of the absence to the staff person assigned to the Commission.
3) The staff person assigned to the Commission shall record the attendance of Commissioners in a uniform format as shown on Board/Commission/Committee Attendance Report and submit the report to the City Clerk’s Office. The Clerk’s Office shall provide Attendance Reports to the City Council on a quarterly basis. As to any Commissioner who is a Councilmember's direct appointment, if the attendance record of that Commissioner is such that absences would result in the position being vacated, the Clerk’s Office shall notify the Councilmember from that district of the Commissioner's attendance record. If the attendance records indicate that any Commissioner has exceeded the number of absences as provided in subsection 1 above, the Councilmember may direct the Clerk’s Office to prepare a report to the City Council so stating and recommending that the City Council ratify that the position has been vacated. The City Council, at a regular meeting, shall consider the recommendation and take whatever action the City Council deems appropriate. If the City Council ratifies that the position has been vacated due to absences, the staff person shall notify any outside agency on which the Commissioner sat of the Council action.
4) The following Boards and Commissions are not directly appointed by City Council and require removal by their appointing bodies:

Stockton Arts Commission
Parks and Recreation Commission
Council Cultural Heritage Board
Salary Setting Commission
EXHIBIT 2 589

COUNCIL POLICY MANUAL
UPDATE – CHAPTERS 3.02
AND 3.03
JULY 9, 2024
AGENDA ITEM 15.3
590

REDLINE UPDATES

REMOVE BIANNUAL RECRUITMENT

TO PROMOTE INCREASED

FREQUENCY

REMOVE TERM OF OFFICE DATES TO

REFLECT CURRENT PRACTICE

CREATE NOTE REQUIRING A

STANDING LIST OF COMMUNITY

PARTNERS AND ORGANIZATIONS
Chapter 3.02 – Section 6
591

REDLINE UPDATES

REMOVE REFERENCE TO
“REGULAR” MEETINGS

REMOVE REFERENCE TO
“UNEXCUSED” ABSENCES

INCLUDE LANGUAGE TO

INDICATE MEETINGS

CANCELLED DO TO LACK OF

QUORUM PRIOR TO THE

MEETING DATE
Chapter 3.03 – Section 1
592

REDLINE UPDATES

CHANGE ATTENDANCE

DETERMINATION TO ASSIGNED

STAFF PERSON

CLARIFY PROCESS FOR

NOTIFICATION
Chapter 3.03 – Section 2
593

REDLINE UPDATES

CLARIFY PROCESS FOR

ATTENDANCE TRACKING AND

COMMISSIONER REMOVAL

CORRECT LANGUAGE TO

REFLECT POLICY CHANGES

CORRECT LANGUAGE TO

REFLECT COUNCIL DIRECT

APPOINTMENTS
Chapter 3.03 – Section 3
594

REDLINE UPDATES

ADD SECTION TO PROVIDE

CLARITY FOR BOARDS AND

COMMISSIONS THAT ARE

EXCEPTIONS TO THE POLICY
Chapter 3.03 – Section 4
595
City of Stockton
Legislation Text
File #: 24-0696, Version: 1

DISCUSSION REGARDING CAMPING ON CITY PROPERTY (GRANTS PASS DECISION)

RECOMMENDATION
Informational only; no action to be taken.

Summary
In 2019, the Ninth Circuit decided Martin v. Boise 920 F.3d 584 (2019). Martin involved an ordinance in Boise that made it a misdemeanor to use “streets, sidewalks, parks, or public places” for “camping.” The Ninth Circuit held that “the Eighth Amendment prohibits the imposition of criminal penalties for sitting, sleeping, or lying outside on public property for homeless individuals who cannot obtain shelter.” Boise (and all other local governments in the Ninth Circuit), therefore could not enforce public-camping ordinances against homeless individuals who lacked “access to alternative shelter.”
Grants Pass, a city in Oregon passed several ordinances after the Martin decision related to the regulation of sleeping outside, which taken together made it nearly impossible to sleep outside with any form of bedding or shelter on public land in the city. A violation of these ordinances resulted in fines, which would escalate if left unpaid. Two homeless individuals in Grants Pass filed a class action lawsuit on behalf of those that are “involuntarily homeless” against the city, arguing its ordinances are unconstitutional under the Eighth Amendment’s Cruel and Unusual Punishment Clause.

The Ninth Circuit affirmed the district court’s holding that “the anti-camping ordinances violated the Cruel and Unusual Punishment Clause to the extent they prohibited homeless individuals from ‘taking necessary minimal measures to keep themselves warm and dry while sleeping when there are no alternative forms of shelter available.’”
Grants Pass filed a petition for certiorari which was granted. Ultimately, the Supreme overturned Martin v. Boise, holding that anti-camping ordinances do not violate the Eighth Amendment to the Constitution.

DISCUSSION
Background
Grants Pass, a city in Oregon with a population of 38,000 people, of whom approximately 600 are individuals experiencing homelessness, passed several ordinances after the Martin decision related to the regulation of sleeping outside, which taken together made it nearly impossible to sleep outside with any form of bedding or shelter on public land in the city.

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A violation of these ordinances resulted in fines, which would escalate if left unpaid. The “park exclusion” ordinance allowed police officers to bar someone from a city park for 30 days if they received 2 more citations for violating park ordinances within one year. If someone received a park exclusion ordinance and was later found in a park, that could result in criminal trespass. The city amended its camping ordinance after Martin to make it clear that the involuntary act of sleeping in a park was not prohibited, rather what was prohibited was “camping” - i.e., sleeping with any bedding / shelter.

Two homeless individuals in Grants Pass filed a class action lawsuit on behalf of those that are “involuntarily homeless” against the city, arguing its ordinances are unconstitutional under the Eighth Amendment’s Cruel and Unusual Punishment Clause. The Ninth Circuit upheld the district court’s class certification of all “involuntarily homeless” in Grants Pass. The Ninth Circuit also affirmed the district court’s holding that “the anti-camping ordinances violated the Cruel and Unusual Punishment Clause to the extent they prohibited homeless individuals from ‘taking necessary minimal measures to keep themselves warm and dry while sleeping when there are no alternative forms of shelter available.’” Although the city had four temporary shelters, none were “adequate” for the city’s homeless population.

Present Situation
Grants Pass filed a petition for certiorari and many cities and counties from across the Ninth Circuit and country joined Grants Pass in urging the Court to grant review, which the Court granted. On June 28, 2024, the Supreme Court issued a 6-3 decision overturning Martin v. Boise, holding that anticamping ordinances do not violate the Eighth Amendment to the Constitution.

The Court explained the “Constitution’s Eighth Amendment serves many important functions, but it does not authorize federal judges to wrest … [the] rights and responsibilities from the American people” to decide “how best to handle a pressing social question like homelessness” and “in their place dictate this Nation’s homelessness policy.” The decision also highlighted the complexities of the homeless crisis and noted that five years ago, the Ninth Circuit “took one of [the] tools [needed to address homelessness] off the table” in Martin v. Boise, 920 F. 3d 584 (2019).

In its 6-3 opinion, the Supreme Court reversed the Ninth Circuit’s “Martin experiment.” In doing so, the Court explained that the Eighth Amendment’s Cruel and Unusual Punishment Clause addresses “the method or kind of punishment a government may impose for the violation of criminal statutes.” Ultimately, the Court found that public camping laws like the one in Grants Pass do not criminalize status, but instead make certain actions a crime, and the crime applies to any defendant, as the Court puts it, whether the person is homeless or a backpacker on vacation. The Court also noted that Martin exemplifies much of what can go wrong when courts try to resolve matters without secure guidance in the Constitution.

In other words, the Court recognized that the problem of homelessness is complex and that its decision would return the hard task of solving the homelessness crisis to state and local policymakers, where it belongs. Rather than spending significant time, money, and resources litigating Martin claims, local governments can focus on expending resources to help the homeless community while ensuring their public spaces are safe and clean in a manner consistent with local needs.

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To that end, the City’s efforts to expand services for the unsheltered and address the ongoing root causes of homelessness will continue with an eye toward review and revision of existing ordinances as needed to further these efforts.

One example of these efforts is the Clean City Initiative which advances new and existing programs to reduce trash accumulation and illegal dumping across the city.

The initiative is a collaborative effort between the City Manager’s Office, Public Works Department, Stockton Police Department, Republic Services, Waste Manage, and community volunteers. The initiative is comprised of activities including recycling events, community cleanup events, and encampment cleanups. A summary of activity is provided below:

Event 2021 2022 2023
Drive Thru
Recycling
2,627 vehicles served 2,028 vehicles served 1,312 vehicles served Community
Cleanup
21 events, 575
volunteers, 458 bags
of litter
11 events, 409
volunteers, 38 trees
planted, 65 litter bags
collected
18 events, 457
volunteers, 72 trees
planted, 198 litter bags
collected
Neighborhood
Services Events
449 mattresses, 179
tires, 113 e-waste,

69.2 tons of trash,
224 appliances
115 mattresses, 169
tires, 112 e-waste,

76.8 tons of trash,
107 appliances
72 mattresses
recycled, 98 tires, 3
tons of e-waste, 47
tons of trash, 82
appliances
Homeless
Encampment
Cleanup
28 events, 897
truckloads, 1,485 tons
of waste removed
26 events, 690
truckloads, 1,216 tons
of waste removed
24 events, 583
truckloads, 1,238 tons
of waste removed
Another example is the City’s ongoing effort to facilitate and support the creation of affordable housing and shelter space. To that end, the following chart depicts completed or scheduled to be completed housing and shelter projects in 2024:

Housing Project Developer Units Timeframe
Villa D Flore Visionary 12 August
Grand View VillageVisionary 74 Opened in Feb.

Calaveras
Quarters
Housing Authority 69 October
Sonora Square Housing Authority 37 Opened in
Spring
Town Center
Studios
Central Valley 20 (of 40) Opened in July
Homeless Beds Developer Beds Timeframe
Navigation Center City of Stockton 150 Fall 2024
Pathways St. Mary's 280 December
2024/January
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Sonora Square Housing Authority 37 Opened in
Spring
Town Center
Studios
Central Valley 20 (of 40) Opened in July
Homeless Beds Developer Beds Timeframe
Navigation Center City of Stockton 150 Fall 2024
Pathways St. Mary's 280 December
2024/January
2025

FINANCIAL SUMMARY
Homelessness/Housing Spending
● 2020:
○ Total Allocated Funds: $15,845,000 (State/Federal funds) ● 2021:
○ Total Allocated Funds: $47.3 million (ERAP, ESG, ESG-CV) ○ Joined the Homeless Outreach Team (HOT)
● 2022:
○ Total Allocated Funds: $56 million (ERAP, Affordable Housing NOFA, CDBG, ESG, ESG -CV)
○ Housing Units Created: 838 units (86 very-low-income, 102 low-income) ● 2023:
○ Total Allocated Funds: $4.1 million (HHAP, SB2, LEAP, REAP), $10 million (Joint allocation, City + County Homeless Shelter)
○ Housing Units Created: 610 units (69 low-income, 51 ADUs) City of Stockton Page 4 of 4 Printed on 7/3/2024
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City of Stockton
Legislation Text
File #: 24-0564, Version: 1

AUTHORIZE THE ISSUANCE AND SALE OF STOCKTON PUBLIC FINANCING AUTHORITY

WASTEWATER REVENUE REFUNDING BONDS (WASTEWATER REFUNDING PROJECT), SERIES 2024 (THE “2024 BONDS”) TO ACHIEVE SAVINGS BY REFUNDING THE OUTSTANDING WASTEWATER REVENUE REFUNDING BONDS, SERIES 2014

RECOMMENDATION
Staff recommends the City of Stockton and the Stockton Public Financing Authority authorize the issuance and sale of the 2024 Bonds, in a principal amount not-to-exceed $32,000,000, to refund the remaining Wastewater Revenue Refunding Bonds, Series 2014 (the “2014 Bonds”), of which $34,710,000 is currently outstanding and $29,620,000 will be outstanding after September 1, 2024.

Resolution of the City of Stockton: This Resolution authorizes the form of and the execution and delivery of an Installment Purchase Contract, Bond Purchase Contract, Continuing Disclosure Certificate and Official Statement all relating to the issuance of the 2024 Bonds and approving certain actions in connection therewith.

Resolution of the Stockton Public Financing Authority: This Resolution authorizes the issuance and sale of the 2024 Bonds in an aggregate principal amount not to exceed $32,000,000; approves the form of and authorizes the execution and delivery of an Indenture, an Installment Purchase Contract, a Bond Purchase Contract, and an Official Statement all relating to the issuance of the 2024 Bonds and approving certain actions in connection therewith.

The Resolutions also approve the execution of all documents and other actions related to the issuance of the 2024 bonds and that the Chair of the Authority (Mayor), Executive Director of the Authority (City Manager), Treasurer of the Authority (Chief Financial Officer) or their designee be authorized to take appropriate and necessary actions to carry out the purpose and intent of the Resolutions (Exhibits 1-5 to both resolutions).

Summary
In October 2014, the Stockton Public Financing Authority issued Wastewater Revenue Refunding Bonds, Series 2014 (the “2014 Bonds”) in the original amount of $69,440,000 of which $34,710,000 is currently outstanding and $29,620,000 will be outstanding after September 1, 2024. The 2014 Bonds refunded two previously outstanding issues from 1998 and 2003.

The purpose of the refunding is to generate significant annual debt service savings for the City’s wastewater system. The savings are currently estimated at $227,225 per year from fiscal year 2026 to fiscal year 2030 for an estimated 3.56% in net present value savings.

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Staff is further seeking a potential waiver of the City’s Capital Financing and Debt Management Policy Chapter 17.01.040 (the “Policy”). The refunding currently meets the net present value savings threshold under the Policy; however, since this is most likely the last opportunity to refund the 2014 Bonds, staff would prefer to set a minimum cash flow savings target of $150,000 per year from fiscal year 2026 to fiscal year 2030. However, this lower minimum cash flow target equates to an estimated 2.38% in net present value savings, which is below the minimum established under the Policy.

DISCUSSION
Background
In October 2014, the Stockton Public Financing Authority issued Wastewater Revenue Refunding Bonds, Series 2014 (the “2014 Bonds”) in the original amount of $69,440,000, of which $34,710,000 is currently outstanding and $29,620,000 will be outstanding after September 1, 2024. The 2014 Bonds have a final maturity of September 1, 2029 (FY 2030), and are first callable on September 1, 2024, and any date thereafter, without prepayment penalty. The 2014 Bonds refunded the following outstanding issues:
(1) City of Stockton, Revenue Certificates of Participation, 1998 Series A (Wastewater System Project)
(2) City of Stockton Refunding Certificates of Participation, 2003 Series A (Wastewater System Project)
Staff seeks approval of the City Council and the Board of the Stockton Public Financing Authority (“Authority”) to issue the 2024 Bonds to refund the 2014 Bonds. The purpose of the refunding is to generate significant annual debt service savings for the City’s wastewater system. Total savings are currently estimated to be $1.17 million with average annual savings estimated at $227,225 per year from fiscal year 2026 to 2030 for an estimated 3.56% in net present value savings.

The City’s “Capital Financing and Debt Management Policy Chapter 17.01.040 Section VII Refinancing Outstanding Debt” sets a minimum net present value savings threshold goal of percent (3%) of the refunded bonds principal amount, net of all costs related to the refunding. As bonds get paid every year and the remaining term is shortened, the less the potential cash flow savings and the potential net present value benefit of doing a refunding. Given the short remaining term of the 2014 bonds, September 1, 2029 (FY 2030), it is unlikely the City will have another opportunity to refund the 2014 Bonds again, unless it does so as part of this action.

Staff would like to take advantage of this final opportunity and set a minimum annual savings target of $150,000 per year from fiscal year 2026 to fiscal year 2030. The total savings under this scenario would be $791,810 with an estimated net present value savings of 2.38%. While the current net present value savings are estimated to be 3.56% (within the range of the current policy) and cash flow savings are estimated at $227,225 per year from fiscal year 2026 to 2030, staff would still like to take advantage of this opportunity with $150,000 cash flow savings per year seen as minimally significant to the City’s wastewater fund.

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Therefore, staff recommends approval of the resolutions as proposed and a waiver from the Policy should the net present value savings percentage drop below 3.00%, by implementing “Section XVI:

Exceptions To These Policies”:
“The City may find in limited and exceptional instances that a waiver to any of the above stated policies is warranted given identified special City benefits to be derived from such waiver. Such waivers may be granted by the City Manager or CFO with the approval of the City Attorney, if provisions waived are not material, and shall be granted only by action of the City Council if as to material provisions and shall be based upon stated policies as warranted given identified special City benefits to be derived from such specific public purpose, economic and/or health and safety findings.”
Present Situation
The 2024 Bonds, after the refunding, will be on parity (have equal rights to the system net revenue) with the other outstanding obligations of the City’s wastewater fund:

Water Infrastructure Finance and Innovation Act (“WIFIA”) (Loan Number: N18126CA) Principal Payments: September 1, 2030 to September 1, 2051 Remaining Amount: $108,000,000
Interest Rate: 1.20%
Purpose: Repaid Bond Anticipation Notes sold to fund a portion of the Regional Wastewater Control Facilities Modification Project
California Department of Water Resources (SRF Loan Number: D2001045) Principal Payments: December 31, 2024 to December 31, 2051 Remaining Amount: $46,800,000
Interest Rates: 0.90%
Purpose: Used to pay project costs associated with the Regional Wastewater Control Facilities Modification Project
Assuming market interest rates as of May 14, 2024, staff estimates the proposed refunding will result in the following estimated savings assuming the acquisition of bond insurance and a surety for the reserve fund:

Outstanding 2014 Bonds (1) $29,620,000
Principal Amount of the 2024 Bonds $28,615,000
2014 Bonds Total Debt Service $34,211,250
2024 Bonds Total Debt Service $33,038,077
Total Savings $1,173,173
Average Annual Savings (2) $227,225
Net Present Value (“NPV”) Savings $1,055,707
NPV Savings Percentage (3) 3.56%
Final Maturity (4) September 1, 2029 (FY 2030)
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Notes
(1) Amount Outstanding After September 1, 2024
(2) From Fiscal Year 2026 to Fiscal Year 2030
(3) As a Percentage of the Principal Amount of Bonds Refunded (4) Same Final Maturity as the 2014 Bonds (No Extension of Term) Financing Team
Along with City staff, the financing team (the “Financing Team”) includes Hawkins Delafield & Wood LLP as Bond and Disclosure Counsel as a member of the authorized Bond Counsel Pool, and Hilltop Securities and Oppenheimer & Co. Inc. as the Underwriters, both as members of the authorized Underwriter Pool. Other members of the Financing Team include Del Rio Advisors, LLC, Municipal Advisor to the City and Authority as a member of the authorized Municipal Advisor Pool, and U.S.

Bank Trust Company, National Association as Trustee / Paying Agent.

Documents for Review
There are several documents to be approved as part of the Resolutions to authorize the issuance and sale of the 2024 Bonds:
2024 Indenture: An agreement between the Authority and U.S. Bank Trust Company, National Association (“U.S. Bank”) as Trustee. This document governs all the terms and conditions of the 2024 Bonds including the role of U.S. Bank as Trustee, the principal payments along with the interest rates on the individual maturities, the redemption provisions of the 2024 Bonds, establishes the funds and accounts for the 2024 Bonds, establishes the City obligations for continuing disclosure reporting, arbitrage rebate and annual CDIAC reporting, and remedies for bondholders in an event of default. 2024 Installment Purchase Contract: An agreement between the Authority (seller) and the City (purchaser) whereby the City will purchase from the Authority the Wastewater System improvements funded with proceeds of the 2014 Bonds. In exchange, the City agrees to make installment payments to the Authority. The installment payments are equal to the debt service on the 2024 Bonds.

Official Statement (Including the Continuing Disclosure Certificate): The Official Statement is the primary document used by the Underwriter to market the 2024 Bonds to investors. The official statement describes the 2024 Bonds in detail and all the information used by investors to make an informed purchase decision. The official statement, in the preliminary form presented, is deemed final pursuant to Rule 15c-2-12 under the Securities Exchange Act of 1934.

The Resolution permits staff to make updates as needed for a final version, which will primarily be to reflect actual interest rates when they are finally determined, and the final version will be made publicly available. The Continuing Disclosure Certificate, included as an attachment to the Official Statement, describes covenants of the City to provide required ongoing disclosure to investors in the form of an annual report due by the end of March each year and posted to the electronic platform known as the Electronic Municipal Market Access system (“EMMA”). In addition, the City covenants, when they occur, will provide notices of certain events as listed therein.

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A final Official Statement will be made available shortly after the 2024 Bonds are sold; it will be identical to the preliminary Official Statement except that it will reflect the final bond sale information.

A table of contents of the preliminary official statement identifies critical topics such as the plan of finance, security for the bonds, the continuing disclosure requirements, form of the 2024 Indenture and the 2024 Installment Purchase Contract and the opinion of Bond Counsel.

The distribution of the preliminary Official Statement and the final Official Statement is subject to federal securities laws, including the Securities Act of 1933 and the Securities Exchange Act of 1934.

These laws require that the Official Statement include all facts that would be material to an investor purchasing the 2024 Bonds. Material information exists where there is a substantial likelihood that the information would have actual significance in the deliberations of the reasonable investor when deciding whether to buy or sell securities. The Securities and Exchange Commission (SEC), the agency with regulatory authority over compliance with the federal securities laws, has indicated that if a member of a legislative body, like the City Council, has knowledge of any material facts or circumstances that an investor would want to know prior to investing in securities, similar to the 2024 Bonds, whether relating to their repayment, tax-exempt status, undisclosed conflicts of interest with interested parties, or otherwise, he or she should endeavor to discover whether such facts are adequately disclosed in the preliminary Official Statement. The steps that a member of the City Council could take to fulfill this obligation include becoming familiar with the preliminary Official Statement and questioning City staff and other members of the Financing Team about it.

Bond Purchase Contract: An agreement between the City, the Authority and the Underwriter, pursuant to which the Underwriter agrees to purchase the 2024 Bonds from the Authority, on the terms and conditions set forth therein. It provides certain conditions for closing that must be met prior to the closing and funding of the 2024 Bonds and will be executed on the date of pricing.

Financing Schedule
If the refunding is approved tonight, the Financing Team expects the following schedule to sell and close the 2024 Bonds:

Date Action
Tuesday July 9th City Council / Authority Board Meeting Week of July 29th Print and Post the Preliminary Official Statement Wednesday August 14th Sell the Bonds
Weeks of August 19th and
August 26th
Print and Post Final Official Statement Documents
Executed
Wednesday September 4th Transaction Closes

FINANCIAL SUMMARY
There is no impact on the City’s General Fund or any other unrestricted fund because of taking the recommended action.

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The total estimated costs of issuance of $503,936 includes estimated fixed costs of $178,763, estimated underwriter’s discount in the amount of $140,214, the estimated cost of a bond insurance policy of $99,114 and the estimated cost to purchase a surety bond for the reserve fund of $85,845.

The refunding will free up approximately $227,225 per year from fiscal year 2026 to fiscal year 2030.

These are dollars that the wastewater utility can use to meet operational needs.

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Resolution No.

STOCKTON PUBLIC FINANCING

AUTHORITY

RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF STOCKTON PUBLIC

FINANCING AUTHORITY WASTEWATER REVENUE REFUNDING BONDS
(WASTEWATER REFUNDING PROJECT), DESIGNATED AS “SERIES 2024,” IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $32,000,000; APPROVING

THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF AN

INDENTURE, AN INSTALLMENT PURCHASE CONTRACT, A BOND PURCHASE CONTRACT AND AN OFFICIAL STATEMENT RELATING TO THE BONDS; AND

APPROVING CERTAIN ACTIONS IN CONNECTION THEREWITH
The City of Stockton (the “City”) and the former Redevelopment Agency of the City of Stockton entered into a Joint Exercise of Powers Agreement establishing the Stockton Public Financing Authority (the “Authority”), a California 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 (commencing with section 6500), as amended, to provide financial assistance to the City; and The City and the Authority previously entered into an Installment Purchase Contract, dated as of October 1, 2014 (the “2014 Installment Purchase Contract”), whereby the Authority agreed to sell certain improvements to the City’s wastewater system (the “Prior Projects”) to the City and the City agreed to purchase such improvements from the Authority; and
In connection with the 2014 Installment Purchase Contract, the Authority entered into an Indenture, dated as of October 1, 2014, by and between Computershare Trust Company, N.A. as successor to Wells Fargo Bank, National Association, as successor trustee, and the Authority and, in connection therewith, the Authority issued its Wastewater Revenue Refunding Bonds, Series 2014 (1998 Wastewater Project and 2003 Wastewater Project) in the aggregate principal amount of $69,440,000 (the “2014 Bonds”) in October of 2014; and
The City now desires to refinance the Prior Projects by refunding the obligations of the City under the 2014 Installment Purchase Contract, and the Authority has determined to assist the City in the foregoing by prepaying all of the outstanding 2014 Bonds; and
To provide funds for the refinancing of the Prior Projects, the Authority desires to issue bonds tentatively designated as its Wastewater Revenue Refunding Bonds, Series 2024 (Wastewater Refunding Project) (the “2024 Bonds”); and 606
The Authority and the City desire to authorize the 2024 Bonds or any portion thereof to be sold in a public offering; and
The Authority and the City desire that the 2024 Bonds may be sold and issued in such series or subseries as may be necessary or desirable to effectuate the foregoing; and
In order to provide for the authentication and delivery of the 2024 Bonds, to establish and declare the terms and conditions upon which the 2024 Bonds are to be issued and secured and to secure the repayment thereof, it is proposed that the Authority and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”) enter into an Indenture (the “Indenture”); and
In order to implement the foregoing, the City and the Authority propose to enter into an Installment Purchase Contract (the “Installment Purchase Contract”); and Under the Installment Purchase Contract, the City will be obligated to make installment payments to the Authority for the refinancing of the Prior Projects; and Pursuant to section 5852.1 of the Government Code of the State of California, the Authority has received certain representations and good faith estimates from Hilltop Securities, LLC, an underwriter of the 2024 Bonds, including an estimate of costs associated with the issuance of the Bonds and the Authority has disclosed such good faith estimates as set forth on Exhibit 1 attached hereto; now, therefore,

BE IT RESOLVED BY THE STOCKTON PUBLIC FINANCING AUTHORITY, AS FOLLOWS:

Section 1. The method of refinancing the Prior Projects through the issuance by the Authority of the 2024 Bonds in the aggregate principal amount of not to exceed $32,000,000, is hereby approved.

Section 2. The issuance of the 2024 Bonds in the aggregate principal amount of not to exceed $32,000,000 on the terms and conditions set forth in and subject to the limitations specified in the Indenture, is hereby authorized and approved. The 2024 Bonds are authorized to be executed for and in the name and on behalf of the Authority by the manual or facsimile signature of the Chair or Executive Director of the Authority and attested to by the manual or facsimile signature of the Secretary of the Authority. The 2024 Bonds, when so executed and attested, are authorized to be delivered to the Trustee for authentication. The 2024 Bonds may be sold and issued in such series or subseries as may be necessary or desirable to effectuate the purposes of this resolution.

Section 3. The form of the Indenture (attached as Exhibit 2), a copy of which is on file in the office of the Secretary of the Authority or his or her designee (the “Secretary”) and submitted to this meeting, is hereby approved. The Chair, the Executive Director, any Deputy City Manager of the City on behalf of the Executive Director, and the Treasurer and the designees of any of them (each, an “Authorized Officer”), each acting 607
alone, are hereby authorized and directed, for and in the name of and on behalf of the Authority, to execute the Indenture, and the Secretary is authorized to attest thereto, with such additions and changes therein as the Authorized Officer executing the same shall approve, with the advice of counsel, as being in the best interests of the Authority, such approval to be conclusively evidenced by the execution and delivery thereof.

Section 4. The form of the Installment Purchase Contract (attached as Exhibit 3), a copy of which is on file in the office of the Secretary and submitted to this meeting, is hereby approved. The Authorized Officers, each acting alone, are hereby authorized and directed, for and in the name of and on behalf of the Authority, to execute the Installment Purchase Contract, and the Secretary is authorized to attest thereto, with such additions and changes therein as the Authorized Officer executing the same shall approve, with the advice of counsel, as being in the best interests of the Authority, such approval to be conclusively evidenced by the execution and delivery thereof; provided, that the installment payments to be contained in the Installment Purchase Contract shall be determined or approved by the Treasurer of the Authority or the designee thereof (the “Treasurer”) upon the sale of the 2024 Bonds, but the principal portions thereof shall not exceed $32,000,000 in aggregate principal amount and the final installment payments shall be due not later than September 1, 2029.

Section 5. The form of a Bond Purchase Contract (attached as Exhibit 4) relating to the sale of the 2024 Bonds (the “Bond Purchase Contract”), among Hilltop Securities Inc., on behalf of itself and as representative (the “Representative”) of Oppenheimer & Co. Inc. of the underwriters of the 2024 Bonds (the “Underwriters”), the Authority and the City, a copy of which is on file in the office of the Secretary and submitted to this meeting, is hereby approved. The Authorized Officers, each acting alone, are hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Bond Purchase Contract, and the Secretary is authorized to attest thereto, with such additions and changes therein as the Authorized Officer executing the same shall approve, with the advice of counsel, as being in the best interests of the Authority, such approval to be conclusively evidenced by the execution and delivery thereof; provided, that the debt service savings achieved from the refunding of the 2014 Bonds shall be at least $150,000 per year.

Section 6. The form of a preliminary official statement (attached as Exhibit 5) relating to the 2024 Bonds (the “Preliminary Official Statement”), a copy of which is on file in the office of the Secretary and submitted to this meeting, is hereby approved, with such additions and changes as may be approved, with the advice of counsel, by any Authorized Officer. The Authorized Officers, each acting alone, are hereby authorized on behalf of the Authority to the Underwriters of the 2024 Bonds that the Preliminary Official Statement is deemed “final” (as it relates to the Authority) for the purposes of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 (the “Rule”) (except for the omission of certain final pricing, rating and related information as permitted by the Rule).

The Authorized Officers, each acting alone, are hereby authorized and directed to execute and deliver to the Authority and, the Underwriters a final Official Statement (the “Official Statement”) in substantially the form of the Preliminary Official Statement, with such additions and changes as the Authorized Officer executing the same shall approve, 608
with the advice of counsel, as being in the best interests of the Authority, such approval to be conclusively evidenced by the execution of said Official Statement. The printing, delivery and distribution of the Preliminary Official Statement and the Official Statement are hereby approved, and the Underwriters of the 2024 Bonds are hereby authorized to distribute copies of the Preliminary Official Statement and the Official Statement to persons who may be interested in the purchase of the 2024 Bonds and are directed to deliver copies of the Official Statement to all purchasers of the 2024 Bonds.

Section 7. The Authorized Officers, each acting alone, are hereby authorized and directed to take all actions and execute any and all documents necessary or advisable to arrange for the insuring of all or a portion of the 2024 Bonds or to obtain a debt service reserve fund insurance policy or surety bond, or to obtain any other form of credit enhancement or debt service reserve fund facility, if, upon the advice of the Authority’s municipal advisor, such insurance, surety bond, other credit enhancement or other reserve fund facility will result in a lower true interest cost for the 2024 Bonds.

Section 8. All actions heretofore taken by any officers, employees or agents of the Authority with respect to the issuance, delivery or sale of the 2024 Bonds, or in connection with or related to any of the documents referenced herein or the refinancing of the Prior Projects, are hereby approved, confirmed and ratified; and the Authorized Officers are hereby authorized and directed, for and in the name and on behalf of the Authority, to do any and all things and take any and all actions and execute and deliver any and all certificates, agreements and other documents (including but not limited to a Tax Certificate and Agreement and escrow agreement), which they, or any of them, may deem necessary or advisable in order to consummate the lawful issuance and delivery of the 2024 Bonds and the disbursement of proceeds thereof in accordance with this Resolution.

Section 9. In connection with the 2024 Bonds, the Authority hereby appoints and retains Del Rio Advisors, LLC as Municipal Advisor and Hawkins Delafield & Wood LLP as Bond Counsel and Disclosure Counsel. Hilltop Securities Inc. is appointed as Representative of the Underwriters and Oppenheimer & Co. Inc. is appointed as comanager for the 2024 Bonds. //
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Section 10. This Resolution shall take effect immediately upon its adoption.

Section 11. The City Manager is hereby authorized to take whatever actions are necessary and appropriate to carry out the intent of this Resolution.

PASSED, APPROVED AND ADOPTED _____July 9, 2024______.

KEVIN J LINCOLN II, Chairman
Stockton Public Financing Authority
ATTEST:

KATHERINE ROLAND, CMC, CPMC
Interim Secretary Stockton Public Financing Authority
610
1 3885644.3 047520 RSIND
Resolution No.

STOCKTON CITY COUNCIL

RESOLUTION AUTHORIZING THE FORM OF AND AUTHORIZING THE EXECUTION

AND DELIVERY OF AN INSTALLMENT PURCHASE CONTRACT, BOND PURCHASE

CONTRACT, CONTINUING DISCLOSURE CERTIFICATE AND OFFICIAL

STATEMENT RELATING TO AN INSTALLMENT PURCHASE FINANCING AND

APPROVING CERTAIN ACTIONS IN CONNECTION THEREWITH
The City of Stockton (the “City”) and the former Redevelopment Agency of the City of Stockton entered into a Joint Exercise of Powers Agreement establishing the Stockton Public Financing Authority (the “Authority”), a California 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 (commencing with section 6500), as amended, to provide financial assistance to the City; and The City and the Authority previously entered into an Installment Purchase Contract, dated as of October 1, 2014, (the “2014 Installment Purchase Contract”), whereby the Authority agreed to sell certain improvements to the City’s wastewater system (the “Prior Projects”) to the City and the City agreed to purchase such improvements from the Authority; and
In connection with the 2014 Installment Purchase Contract, the Authority entered into an Indenture, dated as of October 1, 2014, by and between Computershare Trust Company, N.A. as successor to Wells Fargo Bank, National Association, as successor trustee, and the Authority and, in connection therewith, the Authority issued its Wastewater Revenue Refunding Bonds, Series 2014 (1998 Wastewater Project and 2003 Wastewater Project) in the aggregate principal amount of $69,440,000 (the “2014 Bonds”) in October of 2014; and
The City now desires to refinance the Prior Projects by refunding the obligations of the City under the 2014 Installment Purchase Contract, and the Authority has determined to assist the City in the foregoing by prepaying all of the outstanding 2014 Bonds; and
To provide funds for the refinancing of the Prior Projects, the Authority desires to issue bonds tentatively designated as its Wastewater Revenue Refunding Bonds, Series 2024 (Wastewater Refunding Project) (the “2024 Bonds”); and The Authority and the City desire to authorize the 2024 Bonds or any portion thereof to be sold in a public offering; and
611
The Authority and the City desire that the 2024 Bonds may be sold and issued in such series or subseries as may be necessary or desirable to effectuate the foregoing; and
In order to provide for the authentication and delivery of the 2024 Bonds, to establish and declare the terms and conditions upon which the 2024 Bonds are to be issued and secured and to secure the repayment thereof, it is proposed that the Authority and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”) enter into an Indenture (the “Indenture”); and
In order to implement the foregoing, the City and the Authority propose to enter into an Installment Purchase Contract (the “Installment Purchase Contract”); and Under the 2024 Installment Purchase Contract, the City will be obligated to make installment payments to the Authority for the refinancing of the Prior Projects; and Pursuant to section 5852.1 of the Government Code of the State of California, the City has received certain representations and good faith estimates from Hilltop Securities, LLC, an underwriter of the 2024 Bonds, including an estimate of costs associated with the issuance of the Bonds and the Authority has disclosed such good faith estimates as set forth in Exhibit 1, attached and incorporated by reference; now, therefore,

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

Section 1. The method of refinancing the Prior Projects through the issuance by the Authority of the 2024 Bonds in the aggregate principal amount of not to exceed $32,000,000, is hereby approved. The 2024 Bonds may be sold and issued in such series or subseries as may be necessary or desirable to effectuate the purposes of this resolution.

Section 2. The form of the Indenture (attached as Exhibit 2, incorporated by reference), a copy of which is on file in the office of the City Clerk or his or her designee (the “City Clerk”) and submitted to this meeting, is hereby approved. The Authority and the Trustee are hereby authorized and directed to enter into the Indenture as contemplated herein.

Section 3. The form of the Installment Purchase Contract (attached as Exhibit 3, incorporated by reference), a copy of which is on file in the office of the City Clerk and submitted to this meeting, is hereby approved. The Mayor, the City Manager, any Deputy City Manager, and the Chief Financial Officer and the designees of any of them (each, an “Authorized Officer”), each acting alone, are hereby authorized and directed, for and in the name of and on behalf of the City, to execute the Installment Purchase Contract, and the City Clerk is authorized to attest thereto, with such additions and changes therein as the Authorized Officer executing the same shall approve, with the advice of counsel, as being in the best interests of the City, such approval to be conclusively evidenced by the execution and delivery thereof; provided, that the installment payments to be contained 612
in the Installment Purchase Contract shall be determined or approved by the Chief Financial Officer or the designee thereof (the “Chief Financial Officer”) upon the sale of the 2024 Bonds, but the principal portions thereof shall not exceed $32,000,000 in aggregate principal amount and the final installment payments shall be due not later than September 1, 2029.

Section 4. The form of a Bond Purchase Contract (attached as Exhibit 4, incorporated by reference) relating to the sale of the 2024 Bonds (the “Bond Purchase Contract”), among Hilltop Securities Inc., on behalf of itself and as representative (the “Representative”) of Oppenheimer & Co. Inc., the underwriters of the 2024 Bonds (the “Underwriters”), the Authority and the City, a copy of which is on file in the office of the City Clerk and submitted to this meeting, is hereby approved. The Authorized Officers, each acting alone, are hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Bond Purchase Contract, and the City Clerk is authorized to attest thereto, with such additions and changes therein as the Authorized Officer executing the same shall approve, with the advice of counsel, as being in the best interests of the City, such approval to be conclusively evidenced by the execution and delivery thereof; provided, that the debt service savings achieved from the refunding of the 2014 Bonds shall be at least $150,000 per year.

Section 5. The form of a preliminary official statement (attached as Exhibit 5, incorporated by reference) relating to the 2024 Bonds (the “Preliminary Official Statement”), a copy of which is on file in the office of the City Clerk and submitted to this meeting, is hereby approved, with such additions and changes as may be approved, with the advice of counsel, by any Authorized Officer. The Authorized Officers, each acting alone, are hereby authorized on behalf of the City to certify to the Underwriters of the 2024 Bonds that the Preliminary Official Statement is deemed “final” for the purposes of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 (the “Rule”) (except for the omission of certain final pricing, rating and related information as permitted by the Rule). The Authorized Officers, each acting alone, are hereby authorized and directed to execute and deliver to the City and the Underwriters or a final Official Statement (the “Official Statement”) in substantially the form of the Preliminary Official Statement, with such additions and changes as the Authorized Officer executing the same shall approve, with the advice of counsel, as being in the best interests of the City, such approval to be conclusively evidenced by the execution of said Official Statement. The printing, delivery and distribution of the Preliminary Official Statement and the Official Statement are hereby approved, and the Underwriters of the 2024 Bonds are hereby authorized to distribute copies of the Preliminary Official Statement and the Official Statement to persons who may be interested in the purchase of the 2024 Bonds and are directed to deliver copies of the Official Statements to all purchasers of the 2024 Bonds.

Section 6. The form of Continuing Disclosure Certificate, a copy of which is attached as an exhibit to the form of Preliminary Official Statement on file in the office of the City Clerk and submitted to this meeting, is hereby approved. The Authorized Officers, each acting alone, are hereby authorized and directed, for and in the name of and on behalf of the City, to execute and deliver the Continuing Disclosure Certificate, and the City Clerk is authorized to attest thereto, with such additions and changes therein as the 613
Authorized Officer executing the same shall approve, with the advice of counsel, as being in the best interests of the City, such approval to be conclusively evidenced by the execution and delivery thereof.

Section 7. The Authorized Officers, each acting alone, are hereby authorized and directed to take all actions and execute any and all documents necessary or advisable to arrange for the insuring of all or a portion of the 2024 Bonds or to obtain a debt service reserve fund insurance policy or surety bond, or to obtain any other form of credit enhancement or debt service reserve fund facility, if, upon the advice of the City’s municipal advisor, such insurance, surety bond, other credit enhancement or other reserve fund facility will result in a lower true interest cost for the 2024 Bonds.

Section 8. All actions heretofore taken by any officers, employees or agents of the City with respect to the issuance, delivery or sale of the 2024 Bonds, or in connection with or related to any of the documents referenced herein or the refinancing of the Prior Projects, are hereby approved, confirmed and ratified; and the Authorized Officers are hereby authorized and directed, for and in the name and on behalf of the City, to do any and all things and take any and all actions and execute and deliver any and all certificates, agreements and other documents (including but not limited to a Tax Certificate and Agreement and escrow agreement), which they, or any of them, may deem necessary or advisable in order to consummate the lawful issuance and delivery of the 2024 Bonds and the disbursement of proceeds thereof in accordance with this Resolution.

Section 9. In connection with the 2024 Bonds, the City hereby appoints and retains Del Rio Advisors, LLC as Municipal Advisor and Hawkins Delafield & Wood LLP as Bond Counsel and Disclosure Counsel. Hilltop Securities Inc. is appointed as Representative of the Underwriters and Oppenheimer & Co. Inc. is appointed as comanager for the 2024 Bonds.

Section 10. This Resolution shall take effect immediately upon its adoption.

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

PASSED, APPROVED AND ADOPTED July 9, 2024 .

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

KATHERINE ROLAND, CMC, CPMC
Interim City Clerk of the City of Stockton
614
EXHIBIT 1
1 3885644.3 047520 RSIND

GOOD FAITH ESTIMATES
Stockton Public Financing Authority
Wastewater Revenue Refunding Bonds, Series 2024
(Wastewater Refunding Project)
The following information was obtained from Hilltop Securities, LLC, as an underwriter of the bonds defined above (the “Bonds”), for consideration prior to the authorization in the foregoing Resolution of the proposed Bonds:

1. True Interest Cost of the Bonds. Assuming an aggregate principal amount of the Bonds in the amount of $28,615,000 is sold to effectuate the financing with annual debt service savings and based on market interest rates prevailing at the time of preparation of this information, a good faith estimate of the true interest cost of the Bonds, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Bonds, is 3.365318%.

2. Finance Charge of the Bonds. Assuming such a principal amount of the proposed Bonds is sold and based on market interest rates prevailing at the time of preparation of this information, a good faith estimate of the Finance Charge of the Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the issuance of the Bonds), is $503,935.70 consisting of an estimated fixed costs of issuance of $178,762.97, estimated underwriter’s discount of $140,213.50, estimated bond insurance premium of $99,114.23 and estimated surety bond premium of $85,845.00.

3. Amount of Proceeds to be received. Assuming such aggregate principal amount of the proposed Bonds required to effectuate the financing is sold and based on market interest rates prevailing at the time of preparation of this information, a good faith estimate of the amount of proceeds expected to be received by the issuer for sale of the Bonds less the Finance Charge of the Bonds described in 2 above and any reserves or capitalized interest paid or funded with proceeds of the Bonds, is $29,599,973.00.

4. Total Payment Amount. Assuming such aggregate principal amount of the proposed Bonds $28,615,000 are sold and based on market interest rates prevailing at the time of preparation of this information, a good faith estimate of the total payment amount, which means the sum total of all payments the issuer will make to pay debt service on the Bonds plus the Finance Charge of the Bonds described in paragraph 2 above not paid with the proceeds of the Bonds, calculated to the final maturity of the Bonds, is $33,038,077.08 (does not include capitalized interest paid or funded from proceeds of the Bonds referenced above).

Attention is directed to the fact that the foregoing information constitutes good faith estimates only.

The actual interest cost, finance charges, amount of proceeds and total payment amount may vary from the estimates above due to variations from these estimates in the timing of Bond sales, the amount of Bonds sold, the amortization of the Bonds sold and market interest rates at the time of each sale. The date or dates of sale and the amount of Bonds sold will be determined by the issuer based on need for funds and other factors. The actual interest rates at which the Bonds will be sold will depend on the bond market at the time of sale. The actual amortization of the Bonds will also depend, in part, on market interest rates at the time of each sale. Market interest rates are affected by economic and other factors beyond the issuer’s control. 615
Hawkins Delafield & Wood LLP
Draft No. 2: 5/20/2024
3885672.5 047520 RSIND
2024 INDENTURE
by and between the

STOCKTON PUBLIC FINANCING AUTHORITY
And
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
Relating to the
$__________

STOCKTON PUBLIC FINANCING AUTHORITY
WASTEWATER REVENUE REFUNDING BONDS, SERIES 2024
(WASTEWATER REFUNDING PROJECT)
Dated as of __________ l, 2024
EXHIBIT 2 616
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3885672.5 047520 RSIND

TABLE OF CONTENTS
Page

ARTICLE I
DEFINITIONS; EQUAL SECURITY
Section 1.01. Definitions ...........................................................................................................2 Section 1.02. Equal Security ...................................................................................................12

ARTICLE II
ISSUANCE OF 2024 BONDS
Section 2.01. Authorization and Purpose of 2024 Bonds .......................................................12 Section 2.02. Terms of 2024 Bonds ........................................................................................13 Section 2.03. 2024 Bonds Not Subject to Redemption ...........................................................14 Section 2.04. Form of 2024 Bonds .........................................................................................14 Section 2.05. Execution of 2024 Bonds ..................................................................................14 Section 2.06. Transfer and Payment of 2024 Bonds ...............................................................14 Section 2.07. Exchange of 2024 Bonds ..................................................................................15 Section 2.08. 2024 Bonds Registration Books ........................................................................15 Section 2.09. Mutilated, Destroyed, Stolen or Lost 2024 Bonds ............................................15 Section 2.10. [Reserved] .........................................................................................................15 Section 2.11. Use of Book-Entry System for 2024 Bonds ......................................................15 Section 2.12. Procedure for the Issuance of 2024 Bonds ........................................................17 Section 2.13. Validity of 2024 Bonds .....................................................................................17

ARTICLE III

REVENUES
Section 3.01. Pledge of Revenues ...........................................................................................18 Section 3.02. Receipt and Deposit of Revenues in the 2024 Installment Payment Fund ..................................................................................................................18 Section 3.03. Establishment and Maintenance of Accounts for Use of Money in the 2024 Installment Payment Fund........................................................................19

ARTICLE IV

COVENANTS OF THE AUTHORITY
Section 4.01. Punctual Payment and Performance..................................................................20 Section 4.02. Against Encumbrances ......................................................................................20 Section 4.03. Tax Covenants ...................................................................................................20 Section 4.04. Accounting Records and Reports ......................................................................21 Section 4.05. Prosecution and Defense of Suits ......................................................................21 EXHIBIT 2 617
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3885672.5 047520 RSIND
Section 4.06. Amendments to 2024 Contract .........................................................................21 Section 4.07. Continuing Disclosure .......................................................................................22 Section 4.08. Further Assurances ............................................................................................22

ARTICLE V

THE TRUSTEE
Section 5.01. The Trustee........................................................................................................22 Section 5.02. Liability of Trustee ............................................................................................23 Section 5.03. Compensation and Indemnification of Trustee .................................................25 Section 5.04. Notice to the Trustee .........................................................................................25

ARTICLE VI
AMENDMENT OF THE 2024 INDENTURE
Section 6.01. Amendment of the 2024 Indenture ...................................................................26 Section 6.02. Disqualified 2024 Bonds ...................................................................................27 Section 6.03. Endorsement or Replacement of 2024 Bonds After Amendment .....................27 Section 6.04. Amendment by Mutual Consent .......................................................................27

ARTICLE VII

EVENTS OF DEFAULT AND REMEDIES OF HOLDERS
Section 7.01. Events of Default...............................................................................................27 Section 7.02. Application of Funds Upon Default ..................................................................28 Section 7.03. Institution of Legal Proceedings by Trustee .....................................................29 Section 7.04. Non-Waiver .......................................................................................................29 Section 7.05. Actions by Trustee as Attorney-in-Fact ............................................................29 Section 7.06. Remedies Not Exclusive ...................................................................................29 Section 7.07. Limitation on 2024 Bondholders’ Right to Sue ................................................30

ARTICLE VIII

DEFEASANCE
Section 8.01. Discharge of 2024 Bonds ..................................................................................30 Section 8.02. Unclaimed Money .............................................................................................31

ARTICLE IX

PROVISIONS RELATING TO THE BOND INSURANCE POLICY AND THE RESERVE

FUND POLICY
Section 9.01. Provisions of this Article to Govern .................................................................32 Section 9.02. Notice and Other Information to be Given to the Insurer .................................32 EXHIBIT 2 618
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3885672.5 047520 RSIND
Section 9.03. Defeasance ........................................................................................................32 Section 9.04. Trustee Provisions .............................................................................................33 Section 9.05. Amendments, Supplements and Consents ........................................................33 Section 9.06. Insurer As Third Party Beneficiary ...................................................................34 Section 9.07. Payment Procedure Under the Bond Insurance Policy .....................................34 Section 9.08. Exercise of Rights by the Insurer ......................................................................36 Section 9.09. Payment of Principal and Interest by the Insurer ..............................................36 Section 9.10. 2024 Reserve Account ......................................................................................36

ARTICLE X

MISCELLANEOUS
Section 10.01. Liability of Authority Limited to Revenues and Certain Other Funds .............38 Section 10.02. Benefits of the 2024 Indenture Limited to Parties and Beneficiaries ...............38 Section 10.03. Successor Is Deemed Included In All References To Predecessor ...................38 Section 10.04. Execution of Documents by Holders ................................................................38 Section 10.05. Waiver of Personal Liability .............................................................................39 Section 10.06. Deposit or Investment of Money in Accounts and Funds .................................39 Section 10.07. [Reserved] .........................................................................................................39 Section 10.08. Destruction of Cancelled 2024 Bonds ..............................................................40 Section 10.09. Content of Certificates ......................................................................................40 Section 10.10. Accounts and Funds; Business Days.................................................................40 Section 10.11. Notices...............................................................................................................40 Section 10.12. CUSIP Numbers ................................................................................................41 Section 10.13. Article and Section Headings and References ..................................................41 Section 10.14. Partial Invalidity ................................................................................................41 Section 10.15. Governing Law..................................................................................................42 Section 10.16. Execution in Several Counterparts ....................................................................42 Section 10.17. Use of Electronic Signatures .............................................................................42 EXHIBIT 2 619
3885672.5 047520 RSIND
2024 INDENTURE
This 2024 Indenture (the “2024 Indenture”), dated as of August 1, 2024, 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 “Authority”), and U.S.

Bank Trust Company, 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 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 Authority to issue revenue bonds to assist the City of Stockton (the “City”) in financing public capital improvements; WHEREAS, the City is a local agency as defined and provided in the Act; WHEREAS, the City and the Authority had previously entered into an Installment Purchase Contract, dated as of October 1, 2014 (the “2014 Installment Purchase Contract”), whereby the Authority agreed to sell certain improvements to the City’s wastewater system, consisting of the 1998 Wastewater Project and the 2003 Wastewater Project (each as defined herein, and collectively, the “Prior Projects”) to the City and the City agreed to purchase the Prior Projects from the Authority;
WHEREAS, in connection with the 2014 Installment Purchase Contract, the Authority entered into an Indenture, dated as of October 1, 2014, by and between Computershare Trust Company, N.A. as successor to Wells Fargo Bank, National Association, and the Authority and, in connection therewith, the Authority in October of 2014 issued its Wastewater Revenue Refunding Bonds, Series 2014 (1998 Wastewater Project and 2003 Wastewater Project) in the aggregate, principal amount of $69,440,000 (the “2014 Bonds”); WHEREAS, the Authority and the City have determined that providing funds to prepay all of the outstanding 2014 Bonds by the issuance of revenue bonds of the Authority will result in demonstrable savings in borrowing costs of the City and will result in significant public benefits to the City;
WHEREAS, the City will be obligated to make installment payments to the Authority for the refinancing of the Prior Projects;
WHEREAS, the City’s obligation to make the installment payments under the 2024 Contract are secured by a pledge of certain net revenues of the Wastewater System of the City; WHEREAS, in order to achieve the foregoing, the Authority has authorized the issuance of its Wastewater Revenue Refunding Bonds, Series 2024 (Wastewater Refunding Project) (the “2024 Bonds”) pursuant to the Act in an aggregate principal amount of $__________; EXHIBIT 2 620
2 3885672.5 047520 RSIND
WHEREAS, in order to provide for the authentication and delivery of the 2024 Bonds and to establish and declare the conditions and terms upon which the 2024 Bonds are to be issued and secured and to secure the payment of the interest on and principal of 2024 Bonds, the Authority has authorized the execution and delivery of the 2024 Indenture; WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed necessary to make the 2024 Bonds, when executed by the Authority and authenticated and delivered by the Trustee, valid and binding obligations of the Authority payable in accordance with their terms, and to constitute the 2024 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 2024 Indenture by the parties hereto has been in all respects duly authorized;
NOW, THEREFORE, THIS 2024 INDENTURE WITNESSETH, that in order to secure the payment of the interest on and principal of the 2024 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 2024 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 2024 Bonds by the registered owners thereof, and for other valuable considerations, the receipt whereof is hereby acknowledged, the Authority does hereby covenant and agree with the Trustee, for the benefit of the respective holders from time to time of the 2024 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:
1998 Installment Sale Agreement
“1998 Installment Sale Agreement” means the 1998 Installment Sale Agreement, dated as of February 1, 1998, between the City and the Authority. 1998 Wastewater Project
“1998 Wastewater Project” means those certain improvements to the City’s Wastewater System which the Authority sold to the City and the City purchased from the Authority under certain documents entered into in 1998, including the 1998 Installment Sale Agreement.

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2003 Installment Sale Agreement
“2003 Installment Sale Agreement” means the 2003 Installment Sale Agreement, dated as of June 1, 2003, between the City and the Authority. 2003 Wastewater Project
“2003 Wastewater Project” means those certain improvements to the City’s Wastewater System which the Authority sold to the City and the City purchased from the Authority under certain documents entered into in 2003, including the 2003 Installment Sale Agreement. 2014 Bonds
“2014 Bonds” means the Stockton Public Financing Authority Wastewater Revenue Refunding Bonds, Series 2014 (1998 Wastewater Project and 2003 Wastewater Project) issued in the aggregate, principal amount of $69,440,000. 2014 Escrow Agreement
“2014 Escrow Agreement” means that certain Escrow Agreement, dated as of August 1, 2024, among the City, the Authority and the Escrow Agent, relating to the prepayment and defeasance of the 2014 Bonds.
2014 Escrow Fund
“2014 Escrow Fund” means the fund so designated and created under the 2014 Escrow Agreement.
2014 Installment Purchase Contract
“2014 Installment Purchase Contract” means the Installment Purchase Contract, dated as of October 1, 2014, between the City and the Authority. 2014 Indenture
“2014 Indenture” means that certain Indenture, dated as of October 1, 2014, between the 2014 Trustee and the Authority, relating to the 2014 Bonds. 2014 Trustee
“2014 Trustee” means Computershare Trust Company, N.A., as successor to Wells Fargo Bank, National Association, as trustee under the 2014 Indenture. 2024 Bonds
“2024 Bonds” means the Authority’s Wastewater Revenue Refunding Bonds, Series 2024 (Wastewater Refunding Project), authorized, issued and delivered hereunder in accordance with Article II that are at any time Outstanding pursuant hereto.

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2024 Contract
“2024 Contract” means that certain 2024 Installment Purchase Contract, dated as of August 1, 2024, by and between the City and the Authority, as originally executed and as it may from time to time be amended in accordance therewith.
2024 Indenture
“2024 Indenture” means this 2024 Indenture dated as of August 1, 2024, by and between the 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.
2024 Installment Payment Fund
“2024 Installment Payment Fund” means the Stockton Public Financing Authority 2024 Installment Payment Fund established pursuant to Section 3.02. 2024 Installment Payments
“2024 Installment Payments” shall have the meaning given in the 2024 Contract. 2024 Reserve Account
“2024 Reserve Account” means the account within the 2024 Installment Payment Fund by that name established pursuant to Section 3.03. 2024 Reserve Requirement
“2024 Reserve Requirement” means, as of any date of determination, the least of (a) ten percent (10%) of the amount of the 2024 Bonds (as defined in Section 1.148-2(f)(1) of the Treasury Regulations), or (b) the maximum annual 2024 Installment Payments payable under the 2024 Contract in the then current or any future one-year period ending on [September 1], or (c) one hundred twenty-five per cent (125%) of the average annual 2024 Installment Payments payable under the 2024 Contract in the then current and all future one-year periods ending on [September 1], all as computed by the City under the Code and specified in writing to the Trustee; provided, that such requirement (or any portion thereof) may be provided by one or more financial instruments (including, but not limited to, one or more policies of financial guaranty insurance, one or more surety bonds or one or more letters of credit) issued by a municipal bond insurer, bank or other financial institution or organization with ratings at the time of issuance of such financial instrument at least equal to the rating on the 2024 Bonds (if any) assigned by Moody’s and by S&P.

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

Bond Insurance Policy
“Bond Insurance Policy” means the Municipal Bond Insurance Policy issued by the Insurer that guarantees the scheduled payment of principal of and interest on the 2024 Bonds when due.

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

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 and the regulations of the United States Department of the Treasury issued thereunder, and in this regard reference to any particular section of the Code shall include reference to all successor sections of the Code.

Costs of Issuance
“Costs of Issuance” means all items of expense directly or indirectly payable by or reimbursable to the Authority or the City related to the authorization, execution and delivery of the 2024 Contract, the 2024 Indenture and the sale of the 2024 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 2024 Bonds, and charges and fees for preparation, execution and safekeeping of the 2024 Bonds, and any other charge, cost or fee in connection with the original execution and delivery of the 2024 Bonds.

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Costs of Issuance Fund
“Costs of Issuance Fund” means the Stockton Public Financing Authority Wastewater Revenue Refunding Bonds, Series 2024 Costs of Issuance Fund established pursuant to Section 2.12(b).

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

8.01(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. Computershare Trust Company, N.A., in its capacity as escrow agent, shall serve as Escrow Agent under the 2014 Escrow Agreement.

Escheat Period
“Escheat Period” means, with respect to any money held by the Trustee in trust for the payment of the interest on or principal of 2024 Bonds, a period beginning on the date such payment was due and ending on the date sixty (60) days prior to the date on which such money would escheat to the State by operation of applicable law.

Event of Default
“Event of Default” means an event defined as such in Section 7.01.

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 Authority as its Fiscal Year in accordance with applicable law.

Holder
“Holder” means any person who shall be the registered owner of any Outstanding 2024 Bonds.

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 Authority, and each of whom -- EXHIBIT 2 625
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(1) is in fact independent and not under the domination of the Authority; (2) does not have a substantial financial interest, direct or indirect, in the operations of the Authority; and
(3) is not connected with the Authority as a member, officer or employee of the Authority, but which firm may be regularly retained by the Authority to audit the accounting records of the Authority and make reports thereon to the Authority.

Information Services
“Information Services” means securities information services selected by the Trustee to comply with custom or the rules of any securities and exchange commission or brokerage board.

Insurer
“Insurer” means [_______________], or any successor thereto.

Interest Account
“Interest Account” means the account within the 2024 Installment Payment Fund by that name established pursuant to Section 3.03.

Interest Payment Date
“Interest Payment Date” means a date on which interest is due on the 2024 Bonds, being March 1 and September 1 of each year to which reference is made, commencing on March 1, 2025.

Late Payment Rate
“Late Payment Rate” has the meaning given to such term in the 2024 Contract.

Moody’s
“Moody’s” means Moody’s Investors Service, a corporation duly organized and existing under and by virtue of the laws of the State of Delaware, and its successors or assigns, except that if such entity shall be dissolved or liquidated or shall no longer perform the services of a municipal securities rating agency, then “Moody’s” shall be deemed to refer to any other nationally recognized municipal securities rating agency selected by the 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 Authority.

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Outstanding
“Outstanding” means, when used with reference to 2024 Bonds and subject to the provisions of Section 6.02, all 2024 Bonds except -
(1) 2024 Bonds theretofore cancelled by the Trustee or surrendered to the Trustee for cancellation;
(2) 2024 Bonds paid or deemed to have been paid within the meaning of Section

8.01; and
(3) 2024 Bonds in lieu of or in substitution for which other 2024 Bonds shall have been executed, issued and delivered by the Authority pursuant hereto.

Permitted Investments
“Permitted Investments” means any of the following obligations to the extent then authorized by law for the investment of money of the 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)
• 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:

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• 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-1” 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 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;
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(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 53600- 53609 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 2024 Indenture, the value of the above investments shall be determined at fair market value.

Principal Corporate Trust Office
“Principal Corporate Trust Office” means the corporate trust office of the Trustee in San Francisco, 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 3.03.

Prior Projects
“Prior Projects” shall have the meaning as set forth in the recitals hereto.

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 2024 Installment Payment Fund by that name established pursuant to Section 3.03.

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

Reserve Fund Policy
“Reserve Fund Policy” means the Municipal Bond Debt Service Reserve Insurance Policy issued by the Insurer with respect to the 2024 Bonds.

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Revenues
“Revenues” means all 2024 Installment Payments paid by the City and received by the Authority, its successors and assigns under the 2024 Contract, 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, 711 Stewart Avenue, Garden City, New York 11530, Fax-(516) 227-4039 or 4190; Midwest Securities Trust Company, Capital Structures-Call Notification 440 South LaSalle Street, Chicago, Illinois 60605, Fax-(312) 663-2343; or in accordance with the current guidelines of the Securities and Exchange Commission, such other securities depositories as the Authority may designate in a Certificate of the Authority delivered to the Trustee.

S&P
“S&P” means S&P Global Ratings, a corporation duly organized and existing under and by virtue of the laws of the State of New York, and its successors or assigns, except that if such entity shall be dissolved or liquidated or shall no longer perform the services of a municipal securities rating agency, then “S&P” shall be deemed to refer to any other nationally recognized municipal securities rating agency selected by the Authority.

State
“State” means the State of California.

Supplemental Indenture
“Supplemental Indenture” means any indenture, duly executed and delivered by the 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 delivered by the Authority at the time of the issuance and delivery of the 2024 Bonds, as the same may be amended or supplemented in accordance with its terms.

Treasurer
“Treasurer” means the Treasurer of the Authority.

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Trustee
“Trustee” means U.S. Bank Trust, 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

5.01. Wastewater System
“Wastewater System” means the whole and each and every part of the wastewater system of the City, including the portion thereof existing on the date hereof and including all additions, betterments, extensions and improvements to such system or any part thereof and hereafter acquired or constructed.

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

Section 1.02. Equal Security. In consideration of the acceptance of the 2024 Bonds by the Holders thereof, the 2024 Indenture shall be deemed to be and shall constitute a contract by and among the Authority, the Trustee and the Holders from time to time of all 2024 Bonds authorized, executed, authenticated and delivered hereunder and then Outstanding to secure the full and final payment of the interest on and principal of all 2024 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 Authority shall be for the equal and proportionate benefit, protection and security of all Holders of the 2024 Bonds without distinction, preference or priority as to security or otherwise of any 2024 Bonds over any other 2024 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 2024 BONDS
Section 2.01. Authorization and Purpose of 2024 Bonds. The Authority has reviewed all proceedings heretofore taken relative to the authorization of the 2024 Bonds and has found, as a result of such review, and hereby finds and determines 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 the 2024 Bonds do exist, have happened and have been performed in due time, form and manner as required by law, that the Authority is now duly authorized, pursuant to each and every requirement of the Act, to issue the 2024 Bonds to prepay the 2014 Bonds in the form and manner provided herein for the purpose of providing funds to refinance the Prior Projects, as provided under the 2024 Contract, and that the 2024 Bonds shall be entitled to the benefit, protection and security of the provisions hereof.

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Section 2.02. Terms of 2024 Bonds. The 2024 Bonds shall be designated the “Stockton Public Financing Authority Wastewater Revenue Refunding Bonds, Series 2024 (Wastewater Refunding Project)” and shall be issued in the aggregate principal amount of $__________.

The 2024 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 2024 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
([September 1])
Principal
Amount
Interest
Rate
2025
2026
2027
2028
2029
The 2024 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 March 1 and September 1 in each year, commencing on March 1, 2025. Each 2024 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 2024 Bonds interest is then in default on the Outstanding 2024 Bonds, such 2024 Bonds shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment on the Outstanding 2024 Bonds. Payment of interest on the 2024 Bonds due on any Interest Payment Date on or before the maturity 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 Holder of one million dollars ($1,000,000) or more in aggregate principal amount of 2024 Bonds received by the Trustee prior to the applicable Record Date (which request shall remain in effect until rescinded in writing by such Holder), 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 Holder.

The principal of the 2024 Bonds shall be payable in lawful money of the United States of America upon the surrender thereof at maturity at the Principal Corporate Trust Office of the Trustee.

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Section 2.03. 2024 Bonds Not Subject to Redemption. The 2024 Bonds are not subject to redemption prior to their respective stated maturity dates.

Section 2.04. Form of 2024 Bonds. The 2024 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 2024 Bonds. The Chairperson or Executive Director of the Authority is hereby authorized and directed to execute each of the 2024 Bonds on behalf of the Authority and the Secretary of the Authority is hereby authorized and directed to countersign each of the 2024 Bonds on behalf of the Authority, which signatures of such Chair 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 2024 Bonds shall cease to be such officer before the delivery of the 2024 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 2024 Bonds.

Only those 2024 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 2024 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 2024 Bonds. Any 2024 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 2024 Bonds for cancellation accompanied by delivery of a duly executed written instrument of transfer in a form acceptable to the Trustee.

Whenever any 2024 Bonds shall be surrendered for transfer, the Authority shall execute and the Trustee shall authenticate and deliver to the transferee a new 2024 Bond or 2024 Bonds and aggregate principal amount of the same maturity date and of the same or other authorized denominations. All costs of printing 2024 Bonds and any services rendered or expenses incurred by the Trustee in connection with any such exchange shall be paid by the Authority; provided, that the Trustee shall require the payment by the Holder 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 Authority and the Trustee may deem and treat the registered owner of any 2024 Bonds as the absolute owner of such 2024 Bonds for the purpose of receiving payment thereof and for all other purposes, whether such 2024 Bonds shall be overdue or not, and neither the Authority nor the Trustee shall be affected by any notice or knowledge to the contrary; and payment of the interest on and principal of such 2024 Bonds shall be made only to such registered owner thereof, which payments shall be valid and effectual to satisfy and discharge liability on such 2024 Bonds to the extent of the sum or sums so paid.

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Section 2.07. Exchange of 2024 Bonds. Any 2024 Bond may be exchanged at the Principal Corporate Trust Office of the Trustee for a new 2024 Bond and aggregate principal amount of the same maturity date and of the same or other authorized denominations. All costs of printing 2024 Bonds and any services rendered or expenses incurred by the Trustee in connection with any such exchange shall be paid by the Authority; provided, that the Trustee shall require the payment by the Holder 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.

Section 2.08. 2024 Bonds Registration Books. The Trustee will keep at its Principal Corporate Trust Office sufficient books for the registration and transfer of the 2024 Bonds which shall during normal business hours be open to inspection by the Authority, and upon presentation for such purpose the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer the 2024 Bonds in such books as hereinabove provided.

Section 2.09. Mutilated, Destroyed, Stolen or Lost 2024 Bonds. If any 2024 Bonds shall become mutilated the Trustee at the expense of the Holder shall thereupon authenticate and deliver a new 2024 Bonds of like tenor and principal amount of authorized denominations in exchange and substitution for the 2024 Bonds so mutilated, but only upon surrender to the Trustee at its Principal Corporate Trust Office of the 2024 Bonds so mutilated, and every mutilated 2024 Bonds so surrendered to the Trustee shall be cancelled by the Trustee.

If any 2024 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 Holder, shall thereupon authenticate and deliver a new 2024 Bonds of like tenor and principal amount of authorized denominations in lieu of and in substitution for the 2024 Bonds so lost, destroyed or stolen.

The Trustee may require payment of the expenses which shall be incurred by the Authority and the Trustee in connection with the issuance of each new 2024 Bonds under this section. Any 2024 Bond issued under the provisions of this section in lieu of any 2024 Bonds alleged to be lost, destroyed or stolen shall be equally and proportionately entitled to the benefits hereof with all other 2024 Bonds secured hereby, and neither the Authority nor the Trustee shall be required to treat both the original 2024 Bonds and any replacement 2024 Bonds as being Outstanding for the purpose of determining the principal amount of 2024 Bonds which may be issued hereunder or for the purpose of determining any percentage of 2024 Bonds Outstanding hereunder, but both the original and replacement 2024 Bonds shall be treated as one and the same.

Section 2.10. [Reserved].

Section 2.11. Use of Book-Entry System for 2024 Bonds. The 2024 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 2024 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 2024 Bonds registered in the name of Cede & Co. shall EXHIBIT 2 634
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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 2024 Bonds shall be issued in the form of a single 2024 Bond for each stated maturity of the 2024 Bonds, representing the aggregate principal amount of the 2024 Bonds of such maturity. The Authority and the Trustee may treat DTC (or its nominee) as the sole and exclusive owner of the 2024 Bonds registered in its name for the purposes of payment of the interest on or principal of such 2024 Bonds, for giving any notice permitted or required to be given to Holders hereunder, for registering the transfer of 2024 Bonds, for obtaining any consent or other action to be taken by Holders of the 2024 Bonds and for all other purposes whatsoever; and neither the Authority nor the Trustee shall be affected by any notice to the contrary, and neither the 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 2024 Bonds under or through DTC or any Participant, or any other person whom is not shown on the registration records as being a Holder of 2024 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 the 2024 Bonds, (iii) any notice which is permitted or required to be given to Holders of 2024 Bonds hereunder, or (iv) any consent given or other action taken by DTC as a Holder of 2024 Bonds. The Trustee shall pay the interest on and principal of the 2024 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 Authority’s obligations with respect to the interest on or principal of the 2024 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 substitute a new nominee in place of its then existing nominee, the 2024 Bonds will be transferable to such new nominee in accordance with the last paragraph of this section.

In the event that the Authority determines that it is in the best interests of the beneficial owners of the 2024 Bonds that they be able to obtain definitive 2024 Bonds, the Trustee shall, upon receipt of a Written Request of the Authority, so notify DTC, whereupon DTC shall notify the Participants of the availability through DTC of definitive 2024 Bonds, and in such event, the 2024 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 2024 Bonds at any time by giving written notice of such discontinuance to the Authority or the Trustee and discharging its responsibilities with respect thereto under applicable law, and in such event the 2024 Bonds will be transferable in accordance with the last paragraph of this section. Whenever DTC requests the Authority and the Trustee to do so, the 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 2024 Bonds then Outstanding, and in such event, the 2024 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 2024 Bonds Outstanding are registered in the name of any nominee of DTC, all payments with respect to the interest on and principal of the 2024 Bonds and all notices with respect to the 2024 Bonds shall be made and given to DTC as provided in the Representation Letter.

EXHIBIT 2 635
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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.

In the event that any transfer or exchange of 2024 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 2024 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 2024 Bonds are issued to Holders other than Cede & Co., its successor as nominee of DTC as Holder of all the 2024 Bonds, another securities depository as Holder of all the 2024 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 2024 Bonds and the method of payment of the interest on and principal of the 2024 Bonds.

Section 2.12. Procedure for the Issuance of 2024 Bonds. At any time after the sale of the 2024 Bonds in accordance with the Act, the Authority shall execute the 2024 Bonds for issuance hereunder and shall deliver them to the Trustee, and thereupon the 2024 Bonds shall be authenticated and delivered by the Trustee to the purchaser thereof upon receipt of a Written Request of the Authority and upon receipt of payment therefor from such purchaser. Upon receipt of payment of the purchase price of the 2024 Bonds by the purchaser thereof (net of the premiums for the Bond Insurance Policy and the Reserve Fund Policy transferred directly by the purchaser to the Bond Insurer), the Trustee shall set aside and deposit in or transfer such net purchase price of the 2024 Bonds received from such sale to the following respective accounts or funds:
(a) The Trustee shall transfer the amount of $________ for deposit into the 2014 Escrow Fund to the Escrow Agent to provide for the prepayment and defeasance of all outstanding 2014 Bonds.
(b) The Trustee shall deposit in the “Stockton Public Financing Authority Wastewater Revenue Refunding Bonds, Series 2024 Costs of Issuance Fund” (which fund is hereby created and which fund the Trustee hereby agrees to maintain until _______, 2024), the sum of $_______. All money in the Costs of Issuance Fund shall be used and withdrawn by the Trustee to pay the Costs of Issuance of the 2024 Bonds upon receipt of a Written Request of the Authority filed with the Trustee, each of which shall be sequentially numbered and shall state the person to whom payment is to be made, the amount to be paid, the purpose for which the obligation was incurred and that such payment is a proper charge against said fund. On _______, 2024, any remaining balance in the Costs of Issuance Fund shall be transferred to the 2024 Installment Payment Fund.
(c) The Trustee shall deposit the Reserve Fund Policy to the credit of the 2024 Reserve Account.

Section 2.13. Validity of 2024 Bonds. The validity of the issuance of the 2024 Bonds shall not be dependent on or affected in any way by the proceedings taken by the Authority with respect to or in connection with the 2024 Contract. The recital contained in the 2024 Bonds EXHIBIT 2 636
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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 2024 Bonds shall be incontestable from and after their issuance. The 2024 Bonds shall be deemed to be issued, within the meaning hereof, whenever the definitive 2024 Bonds (or any temporary 2024 Bonds exchangeable therefor) shall have been delivered to the purchaser thereof and the proceeds of sale thereof received.

ARTICLE III

REVENUES
Section 3.01. Pledge of Revenues. All Revenues received by the Authority are hereby assigned by the Authority to the Trustee for the benefit of the Holders of the 2024 Bonds, and are hereby irrevocably pledged to the payment of the interest on and principal of the 2024 Bonds as provided herein, and the Revenues shall not be used for any other purpose while any of the 2024 Bonds remain Outstanding; provided, that out of the Revenues there may be applied such sums for such purposes as are permitted hereunder. 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 the 2024 Bonds in accordance with the terms hereof and thereof. The Authority (to the extent of its rights, if any, in the 2024 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 Authority not have any right, title or interest in or to the 2024 Installment Payment Fund or such money) hereby pledges and grants a lien on and a security interest in the 2024 Installment Payment Fund and such money to the Trustee for the benefit of the Holders. The Authority and the Trustee agree to take such action (including, if required under applicable law, the filing of 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 above.

In order to secure the pledge of the Revenues hereunder, the Authority hereby transfers, conveys and assigns to the Trustee, for the benefit of the Holders, all of the Authority’s rights under the 2024 Contract (excepting its right to indemnification thereunder), including the right to receive 2024 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 said assignment for the benefit of the Holders subject to the provisions of this 2024 Indenture.

Section 3.02. Receipt and Deposit of Revenues in the 2024 Installment Payment Fund. In order to carry out and effectuate the pledge, charge and lien contained herein, the Authority agrees and covenants that all Revenues when and as received by the Authority will be forthwith transferred by the Authority to the Trustee for deposit in the “Stockton Public Financing Authority 2024 Installment Payment Fund,” which fund is hereby created and which fund the Authority hereby agrees and covenants to maintain with the Trustee so long as any 2024 Bonds are Outstanding hereunder. All money in the 2024 Installment Payment Fund shall be accounted for through and held in trust in the 2024 Installment Payment Fund by the Trustee, and the Authority shall have no beneficial right or interest in any money in the 2024 Installment Payment Fund except only as herein provided. All Revenues, whether received by the Authority or deposited with the Trustee as herein provided, shall nevertheless be allocated, applied and EXHIBIT 2 637
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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 Authority.

Section 3.03. Establishment and Maintenance of Accounts for Use of Money in the 2024 Installment Payment Fund. All money in the 2024 Installment Payment Fund shall be set aside by the Trustee in the following respective special accounts within the 2024 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
2024 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 March 1, 2025, the Trustee shall set aside from the 2024 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 2024 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 2024 Bonds on such Interest Payment Date. All money in the Interest Account shall be used and withdrawn by the Trustee solely for the purpose of paying the interest on the 2024 Bonds as it shall become due and payable.
(b) Redemption Account. On [September 1 of each year, beginning on September 1, 2025], the Trustee shall set aside from the 2024 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 2024 Bonds maturing on such [September 1], provided, that no such deposit need be made in the Principal Subaccount on [September 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 2024 Bonds maturing by their terms on such [September 1]. 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 Serial 2024 Bonds as they shall become due and payable at maturity.
(c) 2024 Reserve Account.
(i) On [September 1] of each year, beginning on [September 1], 2025, the Trustee shall set aside from the 2024 Installment Payment Fund and deposit in the 2024 Reserve Account the amount of money necessary to restore the 2024 Reserve Account to the 2024 Reserve Requirement (taking into account the then available amount of the Reserve Fund Policy), and for this purpose all investments in each such account on [September 1] of each year (beginning on [September 1], 2025) shall be valued at the face value thereof if such investments mature within twelve (12) months from the date of such EXHIBIT 2 638
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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 holder, at his option, if so redeemable, or if not so redeemable, at the then current market value of such investments.
(ii) All money in the 2024 Reserve Account shall be used and withdrawn by the Trustee solely for the purpose of paying the interest on or principal of the 2024 Bonds if no other money is available in the 2024 Installment Payment Fund for such purpose; provided, that if at any time the Trustee determines that an amount in excess of the 2024 Reserve Requirement is on deposit in the 2024 Reserve Account (due to the foregoing valuation or otherwise), the Trustee shall withdraw any such excess and transfer it to the 2024 Installment Payment Fund or as otherwise directed in a Written Request of the Authority for any lawful purpose.

ARTICLE IV

COVENANTS OF THE AUTHORITY
Section 4.01. Punctual Payment and Performance. The Authority will punctually pay the interest on and principal of to become due on every 2024 Bond issued hereunder from the Revenues in strict conformity with the terms hereof and of the 2024 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 2024 Bonds.

Section 4.02. Against Encumbrances. The 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 2024 Bonds.

Section 4.03. Tax Covenants. The Authority will not use or permit the use of any proceeds of 2024 Bonds or any funds of the Authority, directly or indirectly, to acquire any securities or obligations and will not take or permit to be taken any other action or actions which would cause any 2024 Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Code, “private activity bonds” within the meaning of Section 141(a) of the Code or “federally guaranteed” within the meaning of Section 149(b) of the Code and any applicable requirements thereunder and under Section 103(c) of the Code. The Authority will observe and will not violate the requirements of Section 148 of the Code and any applicable regulations thereunder, and the Authority will comply with all requirements of Sections 148 and 149(b) of the Code and any applicable regulations thereunder to the extent applicable to the 2024 Bonds. In the event that at any time the Authority is of the opinion that for purposes of this section it is necessary to restrict or to limit the yield on the investment of any money held by the Trustee hereunder, the Authority shall so instruct the Trustee in writing, and the Trustee shall take such action as may be necessary in accordance with such instructions.

The Authority will comply with the provisions and procedures of the Tax Certificate, and the Trustee shall only be obligated to follow the directions of the Authority agreed to be followed by it hereunder.

EXHIBIT 2 639
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The Authority will not use or permit the use of any proceeds of the 2024 Bonds or any funds of the Authority, directly or indirectly, in any manner, and will not take or omit to take any action that would cause any of the 2024 Bonds to be treated as an obligation not described in Section 103(a) of the Code and any applicable regulations thereunder or which would affect the exemption of interest on the 2024 Bonds from State personal income taxes.

Notwithstanding any provisions of this section, if the Authority provides the Trustee with an Opinion of Counsel that any specified action required under this section is no longer required or that some further or different action is required to maintain the exclusion from federal income tax of interest with respect to the 2024 Bonds, the Trustee may conclusively rely on such opinion in complying with the requirements of this section, and, notwithstanding Article VI, the tax covenants hereunder shall be deemed to be modified to that extent.

Section 4.04. Accounting Records and Reports. The 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 more than two hundred seventy (270) days after the close of each Fiscal Year, the 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 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 4.05. Prosecution and Defense of Suits. The 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 Authority to fulfill its obligations hereunder; provided, that the Trustee or any affected Holder at its election may appear in and defend any such suit, action or proceeding. The 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 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 4.06. Amendments to 2024 Contract. The Authority will not supplement, amend, modify or terminate any of the terms of the 2024 Contract, 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 Holders or result in any material impairment of the security hereby given for the payment of the 2024 Bonds, or (b) the Trustee first obtains the written consent of the Holders of a majority in aggregate principal amount of the 2024 Bonds then Outstanding to such supplement, amendment, modification or termination; provided, that no such supplement, amendment, modification or termination shall reduce the amount of 2024 Installment Payments to be made to the Authority by the City pursuant to the 2024 Contract, or extend the time for making such 2024 Installment Payments, or permit the creation of EXHIBIT 2 640
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any lien prior to the lien created by the 2024 Contract on the Net System Revenues without the written consent of the Holders of all the 2024 Bonds then Outstanding.

Section 4.07. Continuing Disclosure. Pursuant to the 2024 Contract and the Continuing Disclosure Certificate (as defined in the 2024 Contract) the City has undertaken all responsibility for compliance with continuing disclosure requirements related to the 2024 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 Holders of at least twenty-five per cent (25%) in aggregate principal amount of Outstanding 2024 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 City to comply with its obligations under this section.

Section 4.08. Further Assurances. Whenever and so often as reasonably requested to do so by the Trustee or any Holder, the 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 Holders all rights, interests, powers, benefits, privileges and advantages conferred or intended to be conferred upon them hereby.

ARTICLE V

THE TRUSTEE
Section 5.01. The Trustee. U.S. Bank Trust Company, National Association at its Principal Corporate Trust Office, is hereby appointed Trustee for the purpose of receiving all money which the 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 the 2024 Bonds The 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 written notice of such resignation to the Authority and to the Holders, and upon receiving such notice of resignation, the 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 EXHIBIT 2 641
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Authority and shall have accepted such appointment, the removed or resigning Trustee may 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 is hereby authorized to pay interest on the 2024 Bonds due on or before the maturity to the Holders 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 Holders at their addresses appearing on such books (except that upon the written request of any Holder of one million dollars ($1,000,000) or more in aggregate principal amount of 2024 Bonds received by the Trustee prior to the applicable Record Date (which such request shall remain in effect until rescinded in writing by such Holder), 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 Holder) and to pay to the Holders the principal of the 2024 Bonds upon presentation and surrender of the 2024 Bonds to the Trustee at maturity. The Trustee shall cancel and destroy all 2024 Bonds paid by it at maturity and all 2024 Bonds surrendered to it by the Authority, and shall deliver to the Authority a certificate of such destruction, and the Trustee shall keep accurate records of all 2024 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 the 2024 Bonds at maturity shall be held in trust for the account of the Holders thereof, and the Trustee shall not be required to pay Holders or the Authority any interest on, or be liable to the Authority, the Holders 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 5.02. Liability of Trustee. The recitals of facts, agreements and covenants contained herein and in the 2024 Bonds shall be taken as statements, agreements and covenants of the 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 2024 Bonds or of the 2024 Contract, 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 2024 Bonds, and shall not be liable in connection with the performance of its duties hereunder except for its own negligence or willful 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 EXHIBIT 2 642
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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 Holder of a 2024 Bonds unless and until such 2024 Bond is submitted for inspection, if required, and such Holder’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 Holders of not less than a majority in aggregate principal amount of the 2024 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 Holders pursuant to the provisions hereof unless such Holders 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 Holders for the payment of the interest on and principal of the 2024 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 any of the documents executed in connection with the 2024 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 EXHIBIT 2 643
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with the rendering of professional advice in accordance with the terms hereof, if such attorney-atlaw 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 2024 Bonds.

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

Section 5.03. Compensation and Indemnification of Trustee. The 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 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 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 2024 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 Authority under this section shall survive the discharge of the 2024 Bonds and hereof and the resignation or removal of the Trustee.

Section 5.04. Notice to the Trustee. The Trustee shall be protected in acting upon any 2024 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 Authority, with regard to legal questions, and the opinion of such 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 EXHIBIT 2 644
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be conclusively established or proved by a Certificate of the 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 VI
AMENDMENT OF THE 2024 INDENTURE
Section 6.01. Amendment of the 2024 Indenture.
(a) The 2024 Indenture and the rights and obligations of the Authority and of the Holders may be amended at any time by a Supplemental Indenture which shall become binding when the written consents of the Holders of a majority in aggregate principal amount of the 2024 Bonds then Outstanding, exclusive of 2024 Bonds disqualified as provided in Section 6.02, are filed with the Trustee; provided, that before executing any such Supplemental Indenture the Trustee shall first be provided at the Authority’s expense with an Opinion of Counsel that such Supplemental Indenture is permitted by the 2024 Indenture, 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 any 2024 Bonds without the express written consent of the Holder of such 2024 Bonds, or (2) permit the creation by the 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 2024 Bonds, or (3) reduce the percentage of 2024 Bonds required for the written consent to any such amendment, or (4) modify any duties or obligations of the Authority or the Trustee without their prior written assent thereto, respectively. (b) The 2024 Indenture and the rights and obligations of the Authority and of the Holders may also be amended at any time by a Supplemental Indenture which shall become binding upon adoption without the consent of any Holders, but only to the extent permitted by law, for any purpose that will not materially adversely affect the interests of the Holders, 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 Authority other agreements and covenants thereafter to be performed by the Authority, or to surrender any right or power reserved herein to or conferred herein on the Authority;
(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 Authority may deem desirable or necessary and not inconsistent herewith;
(iii) to add to the agreements and covenants required herein, such agreements and covenants as may be necessary to qualify the 2024 Indenture under the Trust Indenture Act of 1939;
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(iv) to make any amendments or supplements necessary or appropriate to preserve or protect the exclusion of interest on the 2024 Bonds from gross income for federal income tax purposes under the Code or the exemption of such interest from State personal income taxes;
(v) to make such amendments or supplements as may be necessary or appropriate to maintain any then current rating on the 2024 Bonds; or (vi) to add to the rights of the Trustee;
provided, that before executing any such Supplemental Indenture the Trustee shall first be provided at the Authority’s expense with an Opinion of Counsel that such Supplemental Indenture is permitted by the 2024 Indenture, on which opinion the Trustee may conclusively rely.

Section 6.02. Disqualified 2024 Bonds. 2024 Bonds owned or held by or for the account of the Authority shall not be deemed Outstanding for the purpose of any consent or other action or any calculation of Outstanding 2024 Bonds provided in this article, and shall not be entitled to consent to or take any other action provided in this article.

Section 6.03. Endorsement or Replacement of 2024 Bonds After Amendment.

After the effective date of any action taken as hereinabove provided, the Authority may determine that the 2024 Bonds may bear a notation by endorsement in form approved by the Authority as to such action, and in that case upon demand of the Holder of any Outstanding 2024 Bonds and presentation of such Holder’s 2024 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 2024 Bonds. If the Authority shall so determine, new 2024 Bonds so modified as, in the opinion of the Authority, shall be necessary to conform to such action shall be prepared and executed, and in that case upon demand of the Holder of any Outstanding 2024 Bonds a new 2024 Bonds or 2024 Bonds shall be exchanged at the Principal Corporate Trust Office of the Trustee without cost to each Holder for its 2024 Bonds or 2024 Bonds then Outstanding upon surrender of such Outstanding 2024 Bonds.

Section 6.04. Amendment by Mutual Consent. The provisions of this article shall not prevent any Holder from accepting any amendment as to the particular 2024 Bonds held by him; provided, that due notation thereof is made on such 2024 Bonds.

ARTICLE VII

EVENTS OF DEFAULT AND REMEDIES OF HOLDERS
Section 7.01. Events of Default. The following events shall constitute “Events of Default” hereunder:
(a) if default shall be made by the Authority in the due and punctual payment of the interest on any 2024 Bonds when and as the same shall become due and payable; (b) if default shall be made by the Authority in the due and punctual payment of the principal of any 2024 Bonds when and as the same shall become due and payable at maturity; EXHIBIT 2 646
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(c) if default shall be made by the Authority in the performance of any of the agreements or covenants contained herein required to be performed by the Authority, and such default shall have continued for a period of thirty (30) days after the Authority shall have been given notice in writing of such default by the Trustee; (d) if the 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 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 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 2024 Contract) has occurred under the 2024 Contract.

Notwithstanding anything to the contrary contained herein, in no event are the 2024 Bonds subject to acceleration if an Event of Default occurs and is continuing.

Section 7.02. Application of Funds Upon Default. All money in the accounts and funds provided in Sections 2.12, 3.02 and 3.03 upon the date of the declaration of an Event of Default by the Trustee as provided in Section 7.01 and all Revenues thereafter received by the 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 Holders in providing for the declaration of such Event of Default, including reasonable compensation to their accountants and counsel; Second, to the payment of the Holders entitled thereto of all installments of interest then due on the 2024 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 Holders entitled thereto, without any discrimination or privilege;
Third, to the payment of the Holders entitled thereto of the unpaid principal of the 2024 Bonds which shall have become due (other than 2024 Bonds matured) in the order of their due dates, and if the amount available shall not be sufficient to pay in full the principal of such 2024 Bonds due on any particular date, then to the payment ratably, according to the amount due on such date, to the Holders entitled thereto without any discrimination or privilege; and Fourth, to be held for the payment to the Holders entitled thereto as the same shall become due of the principal of and interest on the 2024 Bonds which may thereafter become due at maturity, and if the amount available shall not be sufficient to pay in full such principal due on EXHIBIT 2 647
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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 7.03. 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 Holders of a majority in principal amount of the 2024 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 Holders of 2024 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 7.04. Non-Waiver. Nothing in this article or in any other provision hereof or in the 2024 Bonds shall affect or impair the obligation of the Authority, which is absolute and unconditional, to pay the interest on and principal of the 2024 Bonds to the respective Holders of the 2024 Bonds at the respective dates of maturity 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

7.07) shall affect or impair the right of such Holders, which is also absolute and unconditional, to institute suit to enforce such payment by virtue of the contract embodied herein and in the 2024 Bonds.

A waiver of any default or breach of duty or contract by the Trustee or any Holder 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 Holder 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 Holders 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 Holders.

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

Section 7.05. Actions by Trustee as Attorney-in-Fact. Any action, proceeding or suit which any Holder 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 Holders, whether or not the Trustee is a Holder, and the Trustee is hereby appointed (and the successive Holders, by taking and holding the 2024 Bond issued hereunder, shall be conclusively deemed to have so appointed it) the true and lawful attorney-in-fact of the Holders 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 Holders as a class or classes as may be advisable or necessary in the opinion of the Trustee as such attorney-in-fact.

Section 7.06. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Holders is intended to be exclusive of any other remedy, and each such remedy EXHIBIT 2 648
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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 7.07. Limitation on 2024 Bondholders’ Right to Sue. No Holder of any 2024 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 Holder shall have previously given to the Trustee written notice of the occurrence of an Event of Default; (b) the Holders of at least a majority in aggregate principal amount of all the 2024 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 Holders 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 Holder of 2024 Bonds of any remedy hereunder; it being understood and intended that no one or more Holders 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 Holders of Outstanding 2024 Bonds.

ARTICLE VIII

DEFEASANCE
Section 8.01. Discharge of 2024 Bonds.
(a) If the Authority shall pay or cause to be paid or there shall otherwise be paid to the Holders of all Outstanding 2024 Bonds the interest thereon and the principal thereof at the times and in the manner stipulated herein, then the Holders of such 2024 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 Authority to the Holders of such 2024 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 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 Authority all money or securities held by it pursuant hereto which are not required for the payment of the interest on and principal of such 2024 Bonds and for the payment of any fees and expenses of the Trustee.
(b) Any Outstanding 2024 Bonds shall on the maturity 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 such 2024 Bonds on the maturity dates thereof.

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(c) Any Outstanding 2024 Bonds shall prior to the maturity 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 Authority shall remain liable for the payment of such 2024 Bonds, but only out of the money or securities deposited with the Trustee or an Escrow Agent) if (1) there shall have been deposited with the Trustee or with an Escrow Agent in trust for the benefit of the Holders thereof either (A) money in an amount which shall be sufficient to pay when due the interest to become due on such 2024 Bonds on and prior to the maturity dates thereof and the principal to become due on such 2024 Bonds on such maturity 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 bookentry 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, to pay when due the interest to become due on such 2024 Bonds on and prior to the maturity dates thereof, and the principal to become due on such 2024 Bonds on such maturity dates, and (2) the Authority shall have given the Trustee in form satisfactory to it irrevocable instructions to mail as soon as practicable a notice to the Holders of such 2024 Bonds that the deposit required above has been made with the Trustee or such Escrow Agent and that such 2024 Bonds are deemed to have been paid in accordance with this section and stating the maturity date upon which money is to be available for the payment of the principal of such 2024 Bonds.
(d) After the payment of the interest on and principal of the 2024 Bonds as provided in this section, the Trustee shall, after the payment of all amounts due the Trustee hereunder, execute and deliver to the Authority all such instruments as may be necessary or desirable to evidence the discharge and satisfaction of the 2024 Indenture, and the Trustee shall pay over or deliver to the Authority all money or deposits or investments held by it pursuant hereto which are not required for the payment of the interest and principal on the 2024 Bonds.

Section 8.02. Unclaimed Money. Anything contained herein to the contrary notwithstanding, if any money is held by the Trustee in trust for the payment and discharge of the interest on or principal of the 2024 Bonds after the date when the interest on or principal of such 2024 Bonds has become due and payable at their stated maturity dates and remains unclaimed for the Escheat Period, such money shall be repaid by the Trustee to the Authority as its absolute property free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Holders shall not look to the Trustee for the payment of the interest on or principal of such 2024 Bonds; provided, that before being required to make any such payment to the Authority, the Trustee shall, at the expense of the Authority, cause to be mailed to all Holders and to the Information Services and the Securities Depositories a notice that such money remains unclaimed and that, after a date named in such notice, which date shall not be less than thirty (30) days after the date of the mailing of each such notice, the balance of such money then unclaimed will be returned to the Authority.

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ARTICLE IX

PROVISIONS RELATING TO THE BOND INSURANCE POLICY AND THE RESERVE

FUND POLICY
Section 9.01. Provisions of this Article to Govern. Notwithstanding anything to the contrary set forth in this 2024 Indenture, the provisions of this Article IX shall govern this 2024 Indenture and the 2024 Bonds.

Section 9.02. Notice and Other Information to be Given to the Insurer. The Authority will provide the Insurer with all notices and other information it is obligated to provide to the holders of 2024 Bonds or the Trustee under this 2024 Indenture. The notice address of [INSURANCE PROVIDER] is set forth in Section 10.11 of this 2024 Indenture.

Section 9.03. Defeasance.
(a) The Permitted Investments purchased for any defeasance escrow relating to the 2024 Bonds under Section 8.01(c) of this 2024 Indenture shall be limited to non-callable, direct obligations of the United States of America and securities fully and unconditionally guaranteed as to the timely payment of principal and interest by the United States of America, or as otherwise may be authorized under this 2024 Indenture and approved by the Insurer. (b) At least (three) 3 Business Days prior to any defeasance with respect to the 2024 Bonds under Section 8.01(c)(2)(B) of this 2024 Indenture, the Authority shall deliver to the Insurer draft copies of an escrow agreement, an opinion of counsel acceptable to the Insurer regarding the validity and enforceability of the escrow agreement, an opinion of bond counsel regarding the defeasance of the 2024 Bonds, and a verification report (a “Verification Report”) prepared by a nationally recognized independent financial analyst or firm of certified public accountants regarding the sufficiency of the escrow fund. Such opinions and Verification Report shall be addressed to the Insurer and shall be in form and substance satisfactory to the Insurer. (c) In addition, any escrow agreement entered into to defease 2024 Bonds under Section 8.01(c) of this 2024 Indenture shall provide that:
(i) Any substitution of securities following the execution and delivery of the escrow agreement shall require the delivery of a Verification Report, an opinion of bond counsel to the effect that such substitution will not adversely affect the exclusion from gross income of the holders of the 2024 Bonds of the interest on the 2024 Bonds for federal income tax purposes and the prior written consent of the Insurer, which consent will not be unreasonably withheld.
(ii) [Reserved].
(iii) The Authority shall not amend the escrow agreement or enter into a forward purchase agreement or other agreement with respect to rights in the escrow without the prior written consent of the Insurer.

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Section 9.04. Trustee Provisions. The Trustee shall provide the Insurer with prior written notice of any name change of the Trustee. Any Trustee must be (1) a national banking association that is supervised by the Office of the Comptroller of the Currency and has at least $250 million of assets, (2) a state-chartered commercial bank that is a member of the Federal Reserve System and has at least $1 billion of assets, or (3) otherwise approved by the Insurer in writing. No removal, resignation or termination of the Trustee shall take effect until a successor, acceptable to the Insurer, shall be qualified and appointed.

Section 9.05. Amendments, Supplements and Consents.
(a) Any amendments or supplements to the 2024 Indenture or the 2024 Contract shall require the prior written consent of the Insurer with the exception of amendments or supplements:
(i) to cure any ambiguity or formal defect or omissions or to correct any inconsistent provisions in the transaction documents or in any supplement thereto; or (ii) to grant or confer upon the holders of the ‘2024 Bonds any additional rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon the holders of the 2024 Bonds; or
(iii) to add to the conditions, limitations and restrictions on the issuance of bonds or other obligations under the provisions of the 2024 Indenture or the 2024 Contract other conditions, limitations and restrictions thereafter to be observed; or (iv) to add to the covenants and agreements of the Authority or the City in the 2024 Indenture or 2024 Contract other covenants and agreements thereafter to be observed by the Authority or the City or to surrender any right or power therein reserved to or conferred upon the Authority or the City.
(b) The Authority shall send copies of any amendments or supplements to the 2024 Indenture and the 2024 Contract to the Insurer and any rating agencies then rating the 2024 Bonds at the request of the Authority or the City.
(c) Any amendment, supplement, modification to, or waiver of, the 2024 Indenture or 2024 Contract that requires the consent of holders of the 2024 Bonds or adversely affects the rights or interests of the Insurer shall be subject to the prior written consent of the Insurer.
(d) In the event of any reorganization or liquidation of the Authority or the City, the Insurer shall have the right to vote on behalf of all holders of the 2024 Bonds on any reorganization or liquidation plan absent a continuing failure by the Insurer to make a payment under the Bond Insurance Policy.
(e) Anything in the 2024 Indenture or the 2024 Contract to the contrary notwithstanding, upon the occurrence and continuance of a default or an event of default, the Insurer shall be entitled to control and direct the enforcement of all rights and remedies granted to the holders of the 2024 Bonds or the Trustee or Paying Agent for the benefit of the holders of the EXHIBIT 2 652
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2024 Bonds under the 2024 Indenture and the 2024 Contract. No default or event of default may be waived without the Insurer’s written consent.
(f) Upon the occurrence and continuance of a default or an event of default as described in Section 7.01, the Insurer shall be deemed to be the sole owner of the 2024 Bonds for all purposes under the 2024 Indenture and the 2024 Contract, including, without limitations, for purposes of exercising remedies and approving amendments. (g) No grace period shall be permitted for payment defaults on the 2024 Bonds.

No grace period for a covenant default shall exceed 30 days without the prior written consent of the Insurer.
(h) If an Insurer Default shall occur and be continuing, then, notwithstanding anything in subsections (a)-(e) above to the contrary, (1) if at any time prior to or following an Insurer Default, the Insurer has made payment under the Bond Insurance Policy or the Reserve Fund Policy, to the extent of such payment the Insurer shall be treated like any other holder of the 2024 Bonds for all purposes, including giving of consents, and (2) if the Insurer has not made any payment under the Bond Insurance Policy or the Reserve Fund Policy, the Insurer shall have no further consent rights until the particular Insurer Default is no longer continuing or the Insurer makes a payment under the Bond Insurance Policy or the Reserve Fund Policy, in which event, the foregoing clause (1) shall control. For purposes of this paragraph, “Insurer Default” means:
(A) the Insurer has failed to make any payment under the Bond Insurance Policy or the Reserve Fund Policy when due and owing in accordance with its terms; or (B) the Insurer shall (i) voluntarily commence any proceeding or file any petition seeking relief under the United States Bankruptcy Code or any other Federal, state or foreign bankruptcy, insolvency or similar law, (ii) consent to the institution of or fail to controvert in a timely and appropriate manner, any such proceeding or the filing of any such petition, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator or similar official for such party or for a substantial part of its property, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors, or (vi) take action for the purpose of effecting any of the foregoing; or (C) any state or federal agency or instrumentality shall order the suspension of payments on the Bond Insurance Policy or the Reserve Fund Policy or shall obtain an order or grant approval for the rehabilitation, liquidation, conservation or dissolution of the Insurer (including without limitation under the New York Insurance Law).

Section 9.06. Insurer As Third Party Beneficiary. The Insurer is recognized as and shall be deemed to be a third party beneficiary of this 2024 Indenture and may enforce the provisions of this 2024 Indenture as if it were a party hereto.

Section 9.07. Payment Procedure Under the Bond Insurance Policy. (a) In the event that principal and/or interest due on the 2024 Bonds shall be paid by the Insurer pursuant to the Bond Insurance Policy, the 2024 Bonds shall remain outstanding for all purposes, not be defeased or otherwise satisfied and not be considered paid by the Authority, the assignment and pledge of the Revenues and all covenants, agreements and other obligations of the Authority to the Owners of the 2024 Bonds shall continue to exist and shall run to the benefit EXHIBIT 2 653
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of the Insurer, and the Insurer shall be subrogated to the rights of such registered owners including, without limitation, any rights that such Owners may have in respect of securities law violations arising from the offer and sale of the 2024 Bonds.
(b) In the event that on the second (2nd) business day prior to any payment date on the 2024 Bonds, the Trustee has not received sufficient moneys to pay all principal of and interest on the 2024 Bonds due on such payment date, the Trustee shall immediately notify the Insurer or its designee on the same business day by telephone or electronic mail, of the amount of the deficiency. If any deficiency is made up in whole or in part prior to or on the payment date, the Trustee shall so notify the Insurer or its designee.
(c) In addition, if the Trustee has notice that any holder of the 2024 Bonds has been required to disgorge payments of principal of or interest on the 2024 Bonds pursuant to a final, non-appealable order by a court of competent jurisdiction that such payment constitutes an avoidable preference to such holder within the meaning of any applicable bankruptcy law, then the Trustee shall notify the Insurer or its designee of such fact by telephone or electronic mail, or by overnight or other delivery service as to which a delivery receipt is signed by a person authorized to accept delivery on behalf of the Insurer.
(d) The Trustee shall irrevocably be designated, appointed, directed and authorized to act as attorney-in-fact for holders of the 2024 Bonds as follows:
(i) If there is a deficiency in amounts required to pay interest and/or principal on the 2024 Bonds, the Trustee shall (1) execute and deliver to the Insurer, in form satisfactory to the Insurer, an instrument appointing the Insurer as agent and attorneyin-fact for such holders of the 2024 Bonds in any legal proceeding related to the payment and assignment to the Insurer of the claims for interest on the 2024 Bonds, (2) receive as designee of the respective holders (and not as Trustee) in accordance with the tenor of the Bond Insurance Policy payment from the Insurer with respect to the claims for interest so assigned, and (3) disburse the same to such respective holders; and (ii) If there is a deficiency in amounts required to pay principal of the 2024 Bonds, the Trustee shall (1) execute and deliver to the Insurer, in form satisfactory to the Insurer, an instrument appointing the Insurer as agent and attorney-in-fact for such holder of the 2024 Bonds in any legal proceeding related to the payment of such principal and an assignment to the Insurer of the 2024 Bonds surrendered to the Insurer, (2) receive as designee of the respective holders (and not as Trustee) in accordance with the tenor of the Bond Insurance Policy payment therefore from the Insurer, and (3) disburse the same to such holders.

The Trustee shall designate any portion of payment of principal on Insured Obligations paid by the Insurer, whether by virtue of maturity or other advancement of maturity, on its books as a reduction in the principal amount of 2024 Bonds registered to the then current holder, whether DTC or its nominee or otherwise, and shall issue a replacement 2024 Bond to the Insurer, registered in the name directed by the Insurer, in a principal amount equal to the amount of principal so paid (without regard to authorized denominations); provided that the Trustee’s failure to so designate any payment or issue EXHIBIT 2 654
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any replacement 2024 Bond shall have no effect on the amount of principal or interest payable by the Authority on any 2024 Bond or the subrogation or assignment rights of the Insurer.
(e) Payments with respect to claims for interest on and principal of 2024 Bonds disbursed by the Trustee from proceeds of the Bond Insurance Policy shall not be considered to discharge the obligation of the Authority with respect to such 2024 Bonds, and the Insurer shall become the owner of such unpaid 2024 Bonds and claims for the interest in accordance with the tenor of the assignment made to it under the provisions of the preceding paragraphs or otherwise. (f) Irrespective of whether any such assignment is executed and delivered, the Authority and Trustee agree for the benefit of the Insurer that:
(i) They recognize that to the extent the Insurer makes payments directly or indirectly (e.g., by paying through the Trustee), on account of principal of or interest on the 2024 Bonds, the Insurer will be subrogated to the rights of such holders to receive the amount of such principal and interest from the Authority, with interest thereon, as provided and solely from the sources stated in the 2024 Indenture and 2024 Contract and the 2024 Bonds; and
(ii) They will accordingly pay to Insurer the amount of such principal and interest, with interest thereon as provided in the 2024 Indenture and 2024 Contract and the 2024 Bonds, but only from the sources and in the manner provided therein for the payment of principal of and interest on the 2024 Bonds to holders, and will otherwise treat the Insurer as the owner of such rights to the amount of such principal and interest.

Section 9.08. Exercise of Rights by the Insurer. The rights granted to the Insurer under the 2024 Indenture and the 2024 Contract to request, consent to or direct any action are rights granted to the Insurer in consideration of its issuance of the Bond Insurance Policy. Any exercise by the Insurer of such rights is merely an exercise of the Insurer’s contractual rights and shall not be construed or deemed to be taken for the benefit, or on behalf, of the holders of the 2024 Bonds and such action does not evidence any position of the Insurer, affirmative or negative, as to whether the consent of the holders of the 2024 Bonds or any other person is required in addition to the consent of the Insurer.

Section 9.09. Payment of Principal and Interest by the Insurer. The Insurer shall be entitled to pay principal of or interest on the 2024 Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer (as such terms are defined in the Bond Insurance Policy) in accordance with the 2024 Indenture, whether or not the Insurer has received a claim upon the Bond Insurance Policy.

Section 9.10. 2024 Reserve Account.
(a) The prior written consent of the Insurer shall be a condition precedent to the deposit of any credit instrument provided in lieu of a cash deposit into the 2024 Reserve Account, if any (each a “Reserve Fund Credit Instrument”). Amounts on deposit in the 2024 Reserve Account shall be applied solely to the payment of debt service due on the 2024 Bonds in accordance with the 2024 Indenture.

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(b) All cash and investments in the 2024 Reserve Account shall be transferred to the Interest Account and the Redemption Account for the payment of the debt service on the 2024 Bonds before any drawing may be made on the Reserve Fund Policy or any other Reserve Fund Credit Instrument in lieu of cash.
(c) Payment of any Policy Costs shall be made prior to the replenishment of any cash amounts. Draws on all Reserve Fund Credit Instruments (including the Reserve Fund Policy) on which there is available coverage shall be made on a pro-rata basis (calculated by reference to the coverage then available thereunder) after applying all available cash and investments in the 2024 Reserve Account. Payment of Policy Costs and reimbursement of amounts with respect to other Reserve Fund Credit Instruments shall be made on a pro-rata basis prior to replenishment of any cash drawn from the 2024 Reserve Account. For the avoidance of doubt, “available coverage” means the coverage then available for disbursement pursuant to the terms of the applicable Reserve Fund Credit Instrument without regard to the legal or financial ability or willingness of the provider of such Reserve Fund Credit Instrument to honor a claim or draw thereon or the failure of such provider to honor any such claim or draw. (d) Repayment of draws under the Reserve Fund Policy and payment of expenses and accrued interest thereon at the Late Payment Rate (collectively, “Policy Costs”) shall commence in the first month following each draw, and each such monthly payment shall be in an amount at least equal to 1/12 of the aggregate Policy Costs related to such draw. (e) Amounts in respect of Policy Costs paid to the Insurer shall be credited first to interest due, then to expenses due and then to principal due. As and to the extent that payments are made to the Insurer on account of principal due, the coverage under the Reserve Fund Policy will be increased by a like amount, subject to the terms of the Reserve Fund Policy. (f) Draws under the Reserve Fund Policy may only be used to make payments on the 2024 Bonds.
(g) If the City shall fail to pay any Policy Costs in accordance with the requirements of Section 8.06 of the 2024 Contract, the Insurer shall be entitled to exercise any and all legal and equitable remedies available to it, including those provided under this 2024 Indenture and the 2024 Contract other than (i) acceleration of the maturity of the 2024 Bonds or the 2024 Installment Payments, or (ii) remedies which would adversely affect the owners of the 2024 Bonds.
(h) The 2024 Indenture shall not be discharged until all Policy Costs owing to the Insurer shall have been paid in full. The City’s obligation to pay such amount shall expressly survive payment in full of the 2024 Bonds.
(i) The Trustee shall ascertain the necessity for a claim upon the Reserve Fund Policy in accordance with the provisions of this Section 9.10 and provide notice to the Insurer at least two (2) business days prior to each date upon which interest or principal is due on the 2024 Bonds.
(j) The Reserve Fund Policy shall expire on the earlier of the date the 2024 Bonds are no longer Outstanding and the final maturity date of the 2024 Bonds.

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ARTICLE X

MISCELLANEOUS
Section 10.01. Liability of Authority Limited to Revenues and Certain Other Funds. Notwithstanding anything contained herein, the Authority shall not be required to advance any money derived from any source other than the Revenues and the funds held in the accounts and funds as provided herein for the payment of the interest on or principal of the 2024 Bonds or for the performance of any agreements or covenants herein contained; provided, that the Authority may, however, advance funds for any such purpose so long as such funds are derived from a source legally available for such purpose without incurring an indebtedness.

The 2024 Bonds are limited obligations of the Authority and are payable, as to interest thereon and principal thereof, solely from the Revenues and the funds held in the accounts and funds provided herein, and the Authority is not obligated to pay such interest or principal on the 2024 Bonds except from the Revenues and such funds. All the 2024 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 the 2024 Bonds as provided herein. The full faith and credit of the Authority is not pledged for the payment of the interest on or principal of the 2024 Bonds, and no tax shall ever be levied or collected to pay the interest on or principal of the 2024 Bonds, The 2024 Bonds are not secured by a legal or equitable pledge of or charge or lien upon any property of the Authority or any of its income or receipts except the Revenues and such funds. Neither the payment of the interest on or principal of the 2024 Bonds is a debt, liability or general obligation of the City or the State and neither the faith and credit of the City or the State are pledged to the payment of interest on or principal of the 2024 Bonds.

Section 10.02. Benefits of the 2024 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 Authority, the Trustee, and the Holders 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 Authority shall be for the sole and exclusive benefit of the Authority, Trustee, and the Holders.

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

Whenever herein either the 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 Authority or such officer, and all agreements and covenants required hereby to be performed by or on behalf of the 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 Holders. Any declaration, request or other instrument which is permitted or required herein to be executed by Holders may be in one or more instruments of similar tenor and may be executed by Holders in person or by their attorneys appointed in writing. The fact and date of the execution by any Holder or his attorney of any declaration, request or other instrument or of any writing appointing such attorney may be proved EXHIBIT 2 657
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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 notary public or other officer. The ownership of any 2024 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 Holder of any 2024 Bonds shall bind all future Holders of such 2024 Bonds with respect to anything done or suffered to be done by the Trustee or the Authority in good faith and in accordance therewith.

Section 10.05. Waiver of Personal Liability. No member, officer or employee of the Authority shall be individually or personally liable for the payment of the interest on or principal of the 2024 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 4.03, 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 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 2024 Reserve Account shall be invested in those Permitted Investments that mature (or which may be redeemed or terminated by the Authority or the Trustee at par) not later than five (5) years after their purchase or the final maturity date of the related 2024 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 those Permitted Investments described in subdivision (6) of the definition thereof. 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 Authority periodic cash transaction statements which include detail for all investment transactions made by the Trustee hereunder.

The Authority acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the Authority the right to receive brokerage confirmations of security transactions as they occur, the 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].

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Section 10.08. Destruction of Cancelled 2024 Bonds. Whenever provision is made for the return to the Authority of any 2024 Bonds which have been cancelled pursuant to the provisions hereof, the Trustee shall destroy such 2024 Bonds and furnish to the Authority a certificate of such destruction, and the Authority agrees to reimburse the Trustee for costs incurred in connection with the microfilming or the making of other permanent records of any such destroyed 2024 Bonds.

Section 10.09. Content of Certificates. Every Certificate of the 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 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 Authority, upon a representation by an officer or officers of the 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 2024 Bonds and the rights of the Holders. 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:

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If to the Authority:

Stockton Public Financing Authority
425 N. El Dorado Street
Stockton, California 95202
Attention: Treasurer
If to the Trustee:

Attention: Corporate Trust Services
If to the Insurer:

Attention: Surveillance, Re: Policy No. ________
Telephone:

Telecopier:

Email:

In each case in which notice or other communication refers to an event of default or a claim on the Bond Insurance Policy or Reserve Fund Policy, then a copy of such notice or other communication shall also be sent to the attention of the General Counsel at the same address and at [email protected] or at. Telecopier: __________ and shall be marked to indicate “URGENT MATERIAL ENCLOSED.”
Section 10.12. CUSIP Numbers. Neither the Authority nor the Trustee shall be liable for any defect or inaccuracy in the CUSIP number that appears on any 2024 Bonds, and the Trustee may, in its discretion, include in any defeasance notice relating to any of the 2024 Bonds a statement to the effect that the CUSIP numbers on the 2024 Bonds have been assigned by an independent service and are included in such notice solely for the convenience of the Holders and that neither the 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 2024 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 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 EXHIBIT 2 660
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hereof or of the 2024 Bonds, and the Holders shall retain all the benefit, protection and security afforded to them under the Act or any other applicable provisions of law. The Authority and the Trustee hereby declare that they would have executed and delivered the 2024 Indenture and each and every other article, section, paragraph, subdivision, sentence, clause and phrase hereof and would have authorized the issuance of the 2024 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 2024 Indenture shall be construed and governed in accordance with the laws of the State.

Section 10.16. Execution in Several Counterparts. The 2024 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 Authority and the Trustee shall preserve undestroyed, shall together constitute but one and the same instrument.

Section 10.17. Use of Electronic Signatures. Each of the parties hereto agrees that the transaction consisting of this 2024 Indenture may be conducted by electronic means. Each party agrees, and acknowledges that it is such party’s intent (i) that, by signing this 2024 Indenture using an electronic signature, it is signing, adopting and accepting this 2024 Indenture, and (ii) that signing this 2024 Indenture using an electronic signature is the legal equivalent of having placed the undersigned officer’s handwritten signature on this 2024 Indenture on paper. Each party acknowledges that it is being provided with an electronic or paper copy of this 2024 Indenture in a usable format.

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IN WITNESS WHEREOF, the Stockton Public Financing Authority has caused the 2024 Indenture to be signed in its name by its [Title] and U.S. Bank Trust Company, National Association, in token of its acceptance of the trusts created hereunder, has caused the 2024 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
[Name, Title]
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Trustee
By
Authorized Signatory

EXHIBIT 2 662
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EXHIBIT A
FORM OF 2024 BONDS

UNITED STATES OF AMERICA

STATE OF CALIFORNIA

STOCKTON PUBLIC FINANCING AUTHORITY
WASTEWATER REVENUE REFUNDING BOND, SERIES 2024
(WASTEWATER REFUNDING PROJECT)
No. R ____ $___________
Interest Rate Maturity Date Bond Date CUSIP
_______% [September 1], ____ __________, 2024 __________ 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 “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 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 2024 Bond (unless this 2024 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 March 1, 2025. The interest due on this 2024 Bond on or before the maturity shall be payable only to the person whose name appears in the registration books required to be kept by U.S. Bank Trust Company, National Association(the “Trustee”) at its Principal Corporate Trust Office (as that term is defined in the 2024 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 2024 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 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 EXHIBIT 2 663
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System designated in writing by such registered owner. The principal of this 2024 Bond shall be payable only to the person whose name appears in such registration books as the registered owner hereof, such principal to be paid upon surrender of this 2024 Bond to the Trustee at its Principal Corporate Trust Office at maturity. The interest on and principal of this 2024 Bond is payable in lawful money of the United States of America.

This 2024 Bond is one of a duly authorized issue of revenue bonds of the Authority designated as its “Wastewater Revenue Refunding Bonds, Series 2024 (Wastewater Refunding Project)” (the “2024 Bonds”) in the aggregate principal amount of sixty-nine million four hundred forty thousand 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 2024 Indenture dated as of August 1, 2024, by and between the Authority and the Trustee (the “2024 Indenture”) (copies of which are on file at the Principal Corporate Trust Office of the Trustee ).

The 2024 Bonds are issued to provide funds to refinance the cost of the acquisition and construction of certain additions, betterments, extensions and improvements to the Wastewater System (as that term is defined in the 2024 Indenture) of the City of Stockton (the “City”). The Bonds are limited obligations of the Authority and are payable, as to interest thereon and principal thereof, solely from the Revenues (the “Revenues”) constituting the installment payments (the “2024 Installment Payments”) to be made by the City to the Authority for the refinancing of the Prior Projects (as defined in the 2024 Indenture) pursuant to the 2024 Installment Purchase Contract, dated as of August 1, 2024, by and between the City and the Authority (the “2024 Contract”) and the funds held in the accounts and funds pursuant to the 2024 Indenture as provided therein, and the Authority is not obligated to pay interest on or principal of the Bonds except from the Revenues and such funds.

All the 2024 Bonds are equally and ratably secured in accordance with the terms and conditions of the 2024 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 the 2024 Bonds as provided in the 2024 Indenture. The full faith and credit of the Authority is not pledged for the payment of the interest on or principal of the 2024 Bonds, and no tax shall ever be levied or collected to pay the interest on or principal of the 2024 Bonds. The 2024 Bonds are not secured by a legal or equitable pledge of or charge or lien upon any property of the Authority or any of its income or receipts except the Revenues and such funds. Neither the payment of the interest on or principal of the 2024 Bonds is a debt, liability or general obligation of the City or the State of California and neither the faith and credit of the City or the State of California are pledged to the payment of interest on or principal of the 2024 Bonds.

Reference is hereby made to the Act and to the 2024 Indenture and any and all amendments thereof and supplements thereto for a description of the terms on which the 2024 Bonds are issued, the provisions with regard to the nature and extent of the Revenues, the rights of the registered owners of the 2024 Bonds, the security for payment of the 2024 Bonds, the remedies upon default and limitations thereon, and the amendment of the 2024 Indenture (with or without consent of the registered owners of the 2024 Bonds); and all the terms of the 2024 Indenture are hereby incorporated herein and constitute a contract between the Authority and the registered owner of EXHIBIT 2 664
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this 2024 Bond, to all the provisions of which the registered owner of this 2024 Bond, by acceptance hereof, agrees and consents.

The 2024 Bonds are not subject to redemption prior to their respective stated maturity dates.

This 2024 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 2024 Indenture and upon surrender of this 2024 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 2024 Bond or 2024 Bond in the same aggregate principal amount of authorized denominations will be issued to the transferee in exchange therefor. The 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 for all other purposes, whether or not this 2024 Bond shall be overdue, and neither the Authority nor the Trustee shall be affected by any notice or knowledge to the contrary; and payment of the interest on and principal of this 2024 Bond shall be made only to such registered owner, which payments shall be valid and effectual to satisfy and discharge liability on this 2024 Bond to the extent of the sum or sums so paid.

This 2024 Bond shall not be entitled to any benefit, protection or security under the 2024 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 2024 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 2024 Bond, together with all other indebtedness of the 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 2024 Bond permitted to be issued under the 2024 Indenture.

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IN WITNESS WHEREOF, the Stockton Public Financing Authority has caused this 2024 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 2024 Bond to be dated as of [_______], 2024.

STOCKTON PUBLIC FINANCING AUTHORITY
By
Chairperson
Countersigned:

Secretary
EXHIBIT 2 666
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This is one of the 2024 Bonds described in the within-mentioned 2024 Indenture which has been authenticated on
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Trustee
By
Authorized Signatory
EXHIBIT 2 667
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ASSIGNMENT
For value received the undersigned hereby sells, assigns and transfers unto ____________________ (Taxpayer Identification Number: ______________) the within 2024 Bonds and all rights thereunder, and hereby irrevocably constitutes and appoints __________________________ attorney to transfer the within 2024 Bonds on the books kept for registration thereof, with full 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 2024 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.
[STATEMENT OF INSURANCE TO BE ADDED TO INSURED BONDS]
EXHIBIT 2 668
Hawkins Delafield & Wood LLP
Draft No. 2: 5/20/2024
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2024 INSTALLMENT PURCHASE CONTRACT
by and between the

CITY OF STOCKTON
and the

STOCKTON PUBLIC FINANCING AUTHORITY

RELATING TO THE

CITY OF STOCKTON

WASTEWATER PROJECTS
Dated as of August l, 2024
EXHIBIT 3 669
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TABLE OF CONTENTS
Page

ARTICLE I

DEFINITIONS

ARTICLE II

REFUNDING OF THE INSTALLMENT PAYMENTS DUE FOR THE PRIOR PROJECTS Section 2.01. Refunding of the Installment Payments for the Prior Projects ..........................12

ARTICLE III
2024 INSTALLMENT PAYMENTS
Section 3.01. Refunding Price .................................................................................................13 Section 3.02. Payment of the 2024 Installment Payments ......................................................13 Section 3.03. Prepayment of the 2024 Installment Payments .................................................14

ARTICLE IV

REVENUES
Section 4.01. Pledge of Net System Revenues; Revenue Fund ..............................................14 Section 4.02. Allocation of Net System Revenues .................................................................15 Section 4.03. Additional Obligations ......................................................................................16

ARTICLE V

COVENANTS OF THE CITY
Section 5.01. Compliance with and Amendment of 2024 Contract ........................................18 Section 5.02. Against Encumbrances ......................................................................................19 Section 5.03. Against Sale or Other Disposition of Property .................................................19 Section 5.04. Against Competitive Facilities ..........................................................................19 Section 5.05. Tax Covenants ...................................................................................................19 Section 5.06. Maintenance, and Operation of the Wastewater System ..................................19 Section 5.07. Payment of Claims ............................................................................................19 Section 5.08. Compliance with Contracts ...............................................................................19 Section 5.09. Insurance ...........................................................................................................20 Section 5.10. Accounting Records; Financial Statements and Other Reports ........................20 Section 5.11. Protection of Security and Rights of Authority.................................................20 Section 5.12. Payment of Taxes and Compliance with Governmental Regulations ...............20 Section 5.13. Amount of Charges, Fees and Rates; Rate Stabilization Fund .........................20 Section 5.14. Eminent Domain and Insurance Proceeds.........................................................21 EXHIBIT 3 670
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Section 5.15. Continuing Disclosure .......................................................................................21 Section 5.16. Further Assurances ............................................................................................21

ARTICLE VI

EVENTS OF DEFAULT AND REMEDIES OF THE AUTHORITY
Section 6.01. Events of Default...............................................................................................21 Section 6.02. Distribution of Assets ........................................................................................22 Section 6.03. Remedies of the Authority ................................................................................23 Section 6.04. Non-Waiver .......................................................................................................23 Section 6.05. Remedies Not Exclusive ...................................................................................24

ARTICLE VII

DISCHARGE OF OBLIGATIONS
Section 7.01. Discharge of Obligations...................................................................................24

ARTICLE VIII

PROVISIONS RELATING TO THE BOND INSURANCE POLICY AND THE RESERVE

FUND POLICY
Section 8.01. Provisions of this Article to Govern .................................................................25 Section 8.02. Notice and Other Information to be Given to the Insurer .................................25 Section 8.03. Defeasance ........................................................................................................25 Section 8.04. Insurer As Third Party Beneficiary ...................................................................25 Section 8.05. Additional Payments .........................................................................................25 Section 8.06. Payment of Policy Costs — Reserve Fund Policy ............................................26 Section 8.07. No Acceleration of Parity Obligations ..............................................................26

ARTICLE IX

MISCELLANEOUS
Section 9.01. Liability of City Limited to Net System Revenues ...........................................26 Section 9.02. Benefits of Contract Limited to Parties and Beneficiary ..................................27 Section 9.03. Assignment ........................................................................................................27 Section 9.04. Successor is Deemed Included in all References to Predecessor ......................27 Section 9.05. Waiver of Personal Liability .............................................................................27 Section 9.06. Article and Section Headings, Gender and References ....................................27 Section 9.07. Partial Invalidity ................................................................................................27 Section 9.08. Net Contract ......................................................................................................28 Section 9.09. California Law ..................................................................................................28 Section 9.10. Notices...............................................................................................................28 Section 9.11. Effective Date....................................................................................................28 Section 9.12. Execution in Counterparts .................................................................................29 EXHIBIT 3 671
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Section 9.13. Use of Electronic Signatures .............................................................................29 EXHIBIT 3 672
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2024 INSTALLMENT PURCHASE CONTRACT
This 2024 Installment Purchase Contract (the “2024 Contract”), dated as of August 1, 2024, by and between 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 of California and its charter (the “City”), 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 “Authority”);
WITNESSETH:

WHEREAS, the City is authorized by law to purchase improvements for the municipal wastewater system of the City; and
WHEREAS, the City and the Authority had previously entered into an Installment Sale Agreement, dated as of October 1, 2014 (the “2014 Installment Purchase Contract”), whereby the Authority agreed to sell certain improvements to the City’s wastewater system, consisting of the 1998 Wastewater Project and the 2003 Wastewater Project (each as defined herein, and collectively, the “Prior Projects”), to the City and the City agreed to purchase the Prior Projects from the Authority;
WHEREAS, in connection with the 2014 Installment Purchase Contract, the Authority entered into an Indenture, dated as of October 1, 2014, by and between Computershare Trust Company, N.A. as successor to Wells Fargo Bank, National Association and the Authority and, in connection therewith, the Authority in October of 2014 issued its Wastewater Revenue Refunding Bonds, Series 2014 (1998 Wastewater Project and 2003 Wastewater Project) in the aggregate principal amount of $69,440,000 (the “2014 Bonds”); WHEREAS, the City has determined that the refinancing of the Prior Projects by refunding the obligations of the City under the 2014 Installment Purchase Contract, as provided in the 2024 Contract (as that term is hereinafter defined), is necessary and proper for the City and is in the public interest, and the Authority has determined to assist the City in the foregoing by prepaying all of the outstanding 2014 Bonds;
WHEREAS, the Authority and the City have determined that providing funds to prepay all of the outstanding 2014 Bonds by the issuance of revenue bonds of the Authority will result in demonstrable savings in borrowing costs of the City and will result in significant public benefits to the City;
WHEREAS, the City will be obligated to make installment payments to the Authority for the refinancing of the Prior Projects;
WHEREAS, the City has agreed to make scheduled installment payments to the Authority to refinance the Prior Projects, together with interest thereon, which installment payments are to be secured by a pledge of and lien on certain revenues of the Wastewater System (as further described herein, the “Net System Revenues”), as provided herein; and EXHIBIT 3 673
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WHEREAS, the City and the 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 2024 Contract 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 2024 Contract;

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

MUTUAL AGREEMENTS AND COVENANTS CONTAINED HEREIN AND FOR OTHER

VALUABLE CONSIDERATION, THE PARTIES HERETO DO HEREBY AGREE AS FOLLOWS:

ARTICLE I

DEFINITIONS
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 2024 Contract, capitalized terms used but not defined in this 2024 Contract shall have the meanings given in the 2024 Indenture. 1998 Installment Sale Agreement
“1998 Installment Sale Agreement” means the 1998 Installment Sale Agreement, dated as of February 1, 1998, between the City and the Authority. 1998 Wastewater Project
“1998 Wastewater Project” means those certain improvements to the City’s Wastewater System which the Authority sold to the City and the City purchased from the Authority under certain documents entered into in 1998, including the 1998 Installment Sale Agreement. 2003 Installment Sale Agreement
“2003 Installment Sale Agreement” means the 2003 Installment Sale Agreement, dated as of June 1,2003, between the City and the Authority. 2003 Wastewater Project
“2003 Wastewater Project” means those certain improvements to the City’s Wastewater System which the Authority sold to the City and the City purchased from the Authority under certain documents entered into in 2003, including the 2003 Installment Sale Agreement. 2014 Installment Purchase Contract
“2014 Installment Purchase Contract” means the 2014 Installment Purchase Contract, dated as of October 1, 2014, between the City and the Authority.

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2020 WIFIA Loan
“2020 WIFIA Loan” means the $108,000,000 Stockton Public Financing Authority Wastewater Revenue Bond, Series 2020 (Regional Wastewater Control Facility Modifications Project) (WIFIA – N18126CA), issues pursuant to that certain WIFIA Loan Agreement dated as of September 30, 2020 among the City, the Authority, and the United States Environmental Protection Agency, an agency of the United States of America, acting by and through the Administrator of the Environmental Protection Agency, that certain Installment Purchase Contract dated as of September 30, 2020, by and between the City and the Authority, and that certain Indenture dated as of September 1, 2020 by and between the Authority and [Computershare Trust Company, N.A., as successor to Wells Fargo Bank, National Association], as trustee. 2021 SRF Loan
“2021 SRF Loan” means that certain loan issued in connection with that certain Construction Installment Sale Agreement Regional Wastewater Control Facilities Modifications Project No. C-06-8447-110, Agreement No. SWRCB0000000000D2001045, by and between the City and the California State Water Resources Control Board, in the Project Funding Amount of $46,800,000.
2024 Bonds
“2024 Bonds” means all wastewater revenue bonds of the Authority authorized, issued and delivered under the 2024 Indenture that are at any time outstanding pursuant thereto. 2024 Contract
“2024 Contract” means this 2024 Installment Purchase Contract dated as of August 1, 2024, by and between the City and the Authority, as originally executed and as it may from time to time be amended in accordance herewith.
2024 Indenture
“2024 Indenture” means that certain 2024 Indenture, dated as of August 1, 2024, by and between the Authority and the Trustee, as originally executed and as it may from time to time be amended or supplemented in accordance with its terms. 2024 Installment Payment Date
“2024 Installment Payment Date” has the meaning set forth in Section 3.02. 2024 Installment Payment Fund
“2024 Installment Payment Fund” means the Stockton Public Financing Authority 2024 Installment Payment Fund established pursuant to Section 3.02 of the 2024 Indenture.

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2024 Installment Payments
“2024 Installment Payments means the installment payments scheduled to be paid by the City hereunder and set forth in Exhibit A hereto. 2024 Reserve Account
“2024 Reserve Account” means the account within the 2024 Installment Payment Fund by that name established pursuant to Section 3.03 of the 2024 Indenture.

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

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.

Adjusted Net System Revenues
“Adjusted Net System Revenues” means, for any Fiscal Year, the Net System Revenues for such Fiscal Year less, to the extent included in the calculation of Net System 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 City or a fiduciary, on behalf of the City, in such Fiscal Year.

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

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.

Bond Insurance Policy
“Bond Insurance Policy” means the Municipal Bond Insurance Policy issued by the Insurer that guarantees the scheduled payment of principal of and interest on the 2024 Bonds when due.

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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 and the regulations of the United States Department of the Treasury issued thereunder, and in this regard reference to any particular section of the Code shall include reference to all successor sections of the Code.

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 City to perform acts or carry out the duties provided for such consultant in this 2024 Contract. 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.

Coverage Requirement
“Coverage Requirement” means, for any Fiscal Year or any other period, an amount of Adjusted Net System Revenues equal to at least one hundred fifteen per cent (115%) of Parity Debt Service for such Fiscal Year or such other period, as applicable.

Credit Provider Reimbursement Obligations
“Credit Provider Reimbursement Obligations” means obligations of the City to repay, from Net System 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 EXHIBIT 3 677
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such obligations that are held by a custodian in safekeeping on behalf of the owners of such securities.

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 City 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.

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 City, and each of whom:
(1) is in fact independent and not under the domination of the City; (2) does not have a substantial financial interest, direct or indirect, in the operations of the City; and
(3) is not connected with the City as a councilmember, officer or employee of the City, but which firm may be regularly retained by the City to audit the accounting records of the City and make reports thereon to the City.

Insurer
“Insurer” means _______________, or any successor thereto.

Issuing Document
“Issuing Document” means the 2024 Contract and any installment purchase contract, indenture, trust agreement or other document that provides for the issuance or incurrence of Parity Obligations.

Late Payment Rate
“Late Payment Rate” means the lesser of (a) the greater of (i) the per annum rate of interest, publicly announced from time to time by JPMorgan Chase Bank, N.A., at its principal office in The City of New York, New York, as its prime or base lending rate (“Prime Rate”) (any change in such Prime Rate to be effective on the date such change is announced by JPMorgan EXHIBIT 3 678
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Chase Bank, N.A.) plus 3%, and (ii) the then applicable highest rate of interest on the 2024 Bonds and (b) the maximum rate permissible under applicable usury or similar laws limiting interest rates.

In the event JPMorgan Chase Bank, N.A., ceases to announce its Prime Rate, the Prime Rate shall be the prime or base lending rate of such other bank, banking association or trust company as the Insurer, in its sole and absolute discretion, shall designate. Interest at the Late Payment Rate on any amount owing to the Insurer shall be computed on the basis of the actual number of days elapsed in a year of 360 days.

Moody’s
“Moody’s” means Moody’s Investors Service, a corporation duly organized and existing under and by virtue of the laws of the State of Delaware, and its successors or assigns, but only to the extent that such entity is then rating any Parity Obligations at the request of the Authority.

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

Operation and Maintenance Costs
“Operation and Maintenance Costs” means the reasonable and necessary costs paid or incurred by the City for maintaining and operating the Wastewater System, determined in accordance with Generally Accepted Accounting Principles, including the expenses of maintenance, repair, billing and collection and other expenses incurred to maintain and preserve the Wastewater System in good repair and working order, and including all administrative and management costs of the City that are charged directly or apportioned to the operation of the Wastewater System, such as salaries and wages of employees, payments to employee retirement systems, overhead, taxes (if any) and insurance premiums (including payments required to be paid into any self-insurance funds), and including all other reasonable and necessary costs of the City or charges required to be paid by it to comply with the terms hereof, 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 Wastewater System 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.

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 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:

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(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 City 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) City Obligated to Pay Net Variable Payments. If a Payment Agreement has been entered into by the City 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 City, 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 City, 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 of (x) the actual variable rate or rates payable by the City 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 City 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 EXHIBIT 3 680
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payable by the City 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) City Obligated to Pay Net Fixed Payments. If a Payment Agreement has been entered into by the City 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 City, 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 City 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;
(G) If, under any statutory scheme, during any period of calculation the City or a fiduciary, on behalf of the City, 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 City or fiduciary, on behalf of the City, during such period of calculation; and EXHIBIT 3 681
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(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 2024 Installment Payments, [the 2020 WIFIA Loan, the 2021 SRF Loan] and any other obligation (including, but not limited to, any installment payment obligation) payable on a parity with the 2024 Installment Payments from Net System 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 City as a “Parity Obligation” in the Payment Agreement.

Payment Agreement
“Payment Agreement” means a written agreement for the purpose of managing or reducing the City’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 City 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 City 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 City under all Payment Agreements.

Prior Projects
“Prior Projects” shall have the meaning as described in the recitals hereto.

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

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Refunding Price
“Refunding Price” means the principal amount owed by the City to the Authority for the refunding of the installment payments due under the 2014 Installment Purchase Contract under the terms hereof as provided in Section 3.01
Reserve Fund Policy
“Reserve Fund Policy” means the Municipal Bond Debt Service Reserve Insurance Policy issued by the Insurer with respect to the 2024 Bonds.

Revenue Fund
“Revenue Fund” means the Wastewater Utility Fund, established and held by the City into which all System Revenues are deposited.

S&P
“S&P” means S&P Global Ratings, a corporation duly organized and existing under and by virtue of the laws of the State of New York, and its successors or assigns, but only to the extent that such entity is then rating any Parity Obligations at the request of the Authority.

State
“State” means the State of California.

System Revenues
“System Revenues” means all gross income and revenue received or receivable by the City from the ownership or operation of the Wastewater System, determined in accordance with Generally Accepted Accounting Principles, including all fees, rates, charges and amounts paid under any contracts received by or owed to the City in connection with the operation of the Wastewater System and all proceeds of insurance relating to the Wastewater System and all other income and revenue howsoever derived by the City from the ownership or operation of the Wastewater System.

Termination Payments
“Termination Payments” means any payments due and payable by the City in connection with the termination of a Payment Agreement.

Trustee
“Trustee” means U.S. Bank Trust Company, 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 2024 Indenture, and any successors thereto.

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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.

Wastewater Project
“Wastewater Project” means any additions, betterments, extensions or improvements to the Wastewater System designated by the City Council of the City as a designated Wastewater Project for the City.

Wastewater Service
“Wastewater Service” means the wastewater services made available or provided by the Wastewater System.

Wastewater System
“Wastewater System” means the whole and each and every part of the wastewater system of the City including the portion thereof existing on the date of this 2024 Installment Purchase Contract and including all additions, betterments, extensions and improvements to such system or any part thereof and hereafter acquired or constructed.

ARTICLE II

REFUNDING OF THE INSTALLMENT PAYMENTS DUE FOR THE PRIOR PROJECTS Section 2.01. Refunding of the Installment Payments for the Prior Projects. The Authority agrees to refund the installment payments due by the City for the purchase of the Prior Projects. In order to implement this provision, the Authority agrees to deliver to the Trustee the sum of $__________ from the proceeds of the 2024 Bonds to be deposited in the 2014 Escrow Fund with the Escrow Agent and the City agrees to use such amount (together with funds on deposit relating to the ____ Prior Projects in the amount of $__________) to prepay the installment payments payable by the City for the purchase of the Prior Projects to the Authority as provided herein.

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In the event the Authority fails to observe or perform any agreement, condition, covenant or term contained herein required to be observed or performed by it, the City may institute such action or proceeding against the Authority as the City 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 City may, at its own cost and expense and in its own name or in the name of the Authority, prosecute or defend any action or proceeding or take any other action involving third persons which the City deems reasonably necessary in order to protect or secure its rights hereunder, and in such event the Authority agrees to cooperate fully with the City and to take all action necessary to effect the substitution of the City for the Authority in any action or proceeding if the City shall so request.

ARTICLE III
2024 INSTALLMENT PAYMENTS
Section 3.01. Refunding Price.
(a) The Refunding Price to be paid by the City hereunder to the Authority for the refunding of the aggregate installment payments payable by the City under the 2014 Installment Sale Agreement is $__________, 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 2024 Reserve Account deposits required pursuant to Section 4.02, which may be credited to the 2024 Installment Payments as provided herein.
(b) The interest on the unpaid balance of the principal amount of the City’s obligations hereunder constituting the 2024 Installment Payments shall accrue from __________, 2024, at the following annual rates of interest per annum, and shall be paid by the City as and constitute interest paid on the principal amount of the City’s obligations hereunder constituting the 2024 Installment Payments, namely:

Installment Payment Date
(September 1)
Principal
Installment
Interest
Rate
2025
2026
2027
2028
2029
Section 3.02. Payment of the 2024 Installment Payments. The City shall, subject to any right of prepayment as provided herein, pay the Authority the 2024 Installment Payments as herein provided, without offset or deduction of any kind, by paying the principal components of the 2024 Installment Payments annually in the amounts and on or before the date that is at least two (2) business days prior to September 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 2024 Installment Payments, which interest components shall be paid semiannually on or before the date that is at least two (2) business days prior to each March 1 and EXHIBIT 3 685
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September 1, commencing March 1, 2025 (each such March 1 and September 1, a “2024 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 City fails to make any 2024 Installment Payment when due, the defaulted 2024 Installment Payment shall continue as an obligation of the City, and the City shall pay the same with interest thereon from the due date thereof at the rate of interest applicable thereto.

The obligation of the City to pay the 2024 Installment Payments from the Net System Revenues as herein provided is absolute and unconditional, and until such time as the 2024 Installment Payments shall have been fully paid (or provision for the payment thereof shall have been made pursuant to Section 7.01), the City will not discontinue or suspend any 2024 Installment Payments required to be made by it under this section, whether or not the Wastewater System, 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 Wastewater System, 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 2024 Installment Payments. The City may prepay the principal components of the 2024 Installment Payments; provided, however, that the 2024 Bonds are not subject to redemption prior to their state maturity date pursuant to Section 2.03 of the 2024 Indenture, but the 2024 Bonds are subject to defeasance pursuant to the 2024 Indenture.

Notwithstanding any such prepayment, the City shall not be relieved of its obligations hereunder until all 2024 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 System Revenues; Revenue Fund. (a) The City hereby grants to the Authority a lien on and a security interest in and pledge of all Net System Revenues to secure the payment of the 2024 Installment Payments and any Parity Obligations as provided herein, and the Net System Revenues shall not be used for any other purpose while any 2024 Installment Payments or any Parity Obligations remain unpaid; provided, that out of the Net System 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 an exclusive lien on the Net System Revenues for the payment of the 2024 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 System Revenues shall be deposited as and when received in the Revenue Fund which fund is hereby continued in the treasury of the City and which fund shall be EXHIBIT 3 686
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maintained by the City, and all money in the Revenue Fund shall be set aside by the City and applied to the payment of Operation and Maintenance Costs, as and when required to be paid. (c) The City hereby covenants to cause all Net System Revenues to be allocated and applied as provided in Section 4.02; provided, that pending the use by the City of the Net System Revenues for such purposes, such money may be invested by the City in Permitted Investments.

Section 4.02. Allocation of Net System Revenues. All Net System Revenues shall be set aside by the City at the following times and deposited in the following account or fund in the following order of priority:
(a) 2024 Installment Payment Fund Deposits. On or before the date that is two (2) business days prior to each 2024 Installment Payment Date, the City shall, from Net System Revenues, transfer to the Trustee (on a parity with any required transfers of Net System Revenues for the payment of all other Parity Obligations) for deposit in the 2024 Installment Payment Fund a sum equal to the amount of the interest components becoming due hereunder on such 2024 Installment Payment Date and a sum equal to the amount of the principal components, if any, becoming due hereunder on such 2024 Installment Payment Date; (b) Reserve Account Deposits. On each date required by the 2024 Indenture, after making the transfers and deposits required by paragraph (a) for 2024 Installment Payments and payments on Parity Obligations currently due and payable, the City shall, from Net System Revenues, transfer to the Trustee (on a parity with any required transfers of Net System Revenues for the replenishment of all other reserve accounts for all Parity Obligations) for deposit in the 2024 Reserve Account a sum equal to the amount, if any, required by the terms of the 2024 Indenture, to be necessary to restore the 2024 Reserve Account to the 2024 Reserve Requirement, on such date (taking into account the then available amount of the Reserve Fund Policy); and (c) Surplus Net System Revenues. On any date, provided that (i) all transfers and deposits required by paragraph (a) for 2024 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 System Revenues may be used for any lawful purpose, including, but not limited to the payment of any obligations secured by Net System 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 2024 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 2024 Installment Payment Date, plus the principal component, if any, becoming due hereunder on such 2024 Installment Payment Date and if the 2024 Indenture does not require a replenishment of the amounts contained in the 2024 Reserve Account; and provided further, that nothing in this section shall be construed to limit the City’s ability to make other transfers and deposits at any time from Net System 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.

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Section 4.03. Additional Obligations.
(a) The City will not incur any obligations payable from Net System Revenues superior to the payment of the 2024 Installment Payments. (b) Without regard to Section 4.03(c), the City 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 City may at any time and from time to time issue or create any other Parity Obligations (in addition to the 2024 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 2024 Contract 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 City obtains or provides a certificate or certificates, prepared by the City or at the City’s option by a Consultant, showing that either:
(A) the Adjusted Net System 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 period ending immediately prior to the incurring of such additional Parity Obligations were at least sufficient to satisfy the Coverage Requirement for each of the next five full Fiscal Years following the incurring of such additional Parity Obligations or each of the next three full Fiscal Years following the incurring of such additional Parity Obligations during which no interest is capitalized, whichever is later, including the Parity Debt Service during such Fiscal Years on such additional Parity Obligations; and for the purpose of providing such certificate or certificates, the City or the City’s Consultant, as applicable, may adjust the Adjusted Net System Revenues for such Fiscal Year or 12 calendar month period, as the case may be, to reflect:
(i) an allowance for Net System Revenues that would
have been derived from each new connection to the Wastewater System that was made prior to the incurrence of such additional Parity Obligations but which was 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 System Revenues that would have been derived from each such connection if it had been made prior to the beginning of such Fiscal Year or 12 calendar month period, and
(ii) an allowance for Net System Revenues that would
have been derived from any increase in the rates, fees and charges fixed and prescribed for Wastewater Service which became effective prior to the incurrence of such additional Parity Obligations but which was not in effect, EXHIBIT 3 688
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during all or any part of such Fiscal Year or 12 calendar month period, in an amount equal to the estimated additional Net System 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 System Revenues for each of the five full Fiscal Years next following the earlier of (i) the end of the period during which interest on such additional Parity Obligations is to be capitalized or, if no interest is capitalized, the Fiscal Year in which such additional Parity Obligations are incurred, or (ii) the date on which substantially all Wastewater Projects financed with such additional Parity Obligations plus all Wastewater Projects financed with all existing Parity Obligations are expected to commence operations, will be at least sufficient to satisfy the Coverage Requirement for such period; and for the purpose of providing such certificate or certificates, the City or the City’s Consultant, as applicable, may adjust the foregoing estimated Adjusted Net System Revenues to reflect:
(i) an allowance for Net System Revenues that are
estimated to be derived from any increase in the rates, fees and charges for Wastewater Service which have been adopted by the City 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 System Revenues that are
estimated to be derived from new customers of the Wastewater System anticipated to be served by any additions or improvements to or extensions of the Wastewater System reasonably expected to become available during such five year period in an amount equal to the additional Net System Revenues that are estimated to be derived from such customers.

For purposes of clause (B) above, with respect to Operation and Maintenance Costs, the City or the City’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 Operation and Maintenance Costs, (ii) Operation and Maintenance Costs associated with the additions or improvements to or extensions of the Wastewater System to be financed with the proceeds of such additional Parity Obligations and any other new additions or improvements to or extensions of the Wastewater System during such five year period and (iii) such other factors, including inflation and changing operations or policies of the City, as the City or the City’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 City 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 EXHIBIT 3 689
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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 City may issue or incur obligations secured by Net System 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 CITY
Section 5.01. Compliance with and Amendment of 2024 Contract. (a) The City will punctually pay the 2024 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 2024 Contract 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 Wastewater System, 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 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 City will, so long as any 2024 Installment Payments remain unpaid, apply Net System Revenues as provided herein.
(b) The City and the Authority shall not supplement, amend, modify or terminate any of the terms of the 2024 Contract, or consent to any such supplement, amendment, modification or termination, without the prior written consent of the Insurer and 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 2024 Bonds or result in any material impairment of the security hereby given for the payment of the 2024 Installment Payments, or (b) the Trustee first obtains the written consent of a majority in aggregate principal amount of the 2024 Bonds then Outstanding to such supplement, amendment, modification or termination; provided, that no such supplement, amendment, modification or termination shall reduce the amount of 2024 Installment Payments to be made to the Authority or the Trustee by the City pursuant to the 2024 Contract, or extend the time for making such 2024 Installment Payments, or permit the creation of any lien prior to the lien created by the 2024 Contract on Net System Revenues without the written consent of the Insurer and all of the Holders of all 2024 Bonds then Outstanding.

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Section 5.02. Against Encumbrances. The City will not make any use of or encumber the Net System Revenues except as provided herein; provided, that so long as the City is not in default hereunder, the City may issue any obligations subordinate to the Parity Obligations that are payable from surplus Net System Revenues as provided in paragraph (c) of Section 4.02.

Section 5.03. Against Sale or Other Disposition of Property. The City will not sell, lease or otherwise dispose of the Wastewater System or any part thereof essential to the proper operation of the Wastewater System or to the maintenance of Net System Revenues. The City will not enter into any agreement which impairs the operation of the Wastewater System or any part thereof necessary to secure adequate Net System Revenues for the payment of Parity Obligations or which would otherwise impair the rights of the City with respect to Net System Revenues or the operation of the Wastewater System.

Section 5.04. Against Competitive Facilities. The City 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 the City any wastewater system competitive with the Wastewater System.

Section 5.05. Tax Covenants. The City will at all times do and perform all acts and things permitted by law which are necessary or desirable in order to assure that the interest components of the 2024 Installment Payments will not be included in the gross income of the owners of the 2024 Bonds (as defined in the 2024 Indenture) for federal income tax purposes under the Code and will be exempt from State of California personal income taxes, and will take no action that would result in such interest being so included or not being so exempt. Without limiting the foregoing, the City and the Authority will at all times comply with the requirements of the Tax Certificate executed in connection with the delivery of the 2024 Bonds. This covenant shall survive any defeasance or discharge of the 2024 Installment Payments pursuant to Article VII or any prepayment of principal components of the 2024 Installment Payments pursuant to Article III.

Section 5.06. Maintenance, and Operation of the Wastewater System. The City will maintain and preserve the Wastewater System in good repair and working order at all times and will operate the Wastewater System in an efficient and economical manner and will pay all Operation and Maintenance Costs as they become due and payable.

Section 5.07. Payment of Claims. The City will pay and discharge any and all lawful claims for labor, materials or supplies which, if unpaid, might become a lien on Net System Revenues or any part thereof or on any funds in the hands of the City or which might impair the security of the 2024 Installment Payments.

Section 5.08. Compliance with Contracts. The City 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 Wastewater System and all other contracts affecting or involving the Wastewater System to the extent that the City is a party thereto.

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Section 5.09. Insurance. The City will procure and maintain such insurance relating to the Wastewater System which it shall deem advisable or necessary to protect its interests and the interests of the 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 municipal wastewater systems comparable to the Wastewater System; 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 municipal wastewater systems in the State comparable to the Wastewater System and is, in the opinion of an accredited actuary, actuarially sound. All policies of insurance required to be maintained herein shall provide that the 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 City will keep appropriate accounting records in which complete and correct entries shall be made of all transactions relating to the Wastewater System and the Net System Revenues and the Operation and Maintenance Costs relating thereto, which records shall be available for inspection by the Authority and the Trustee at reasonable hours and under reasonable conditions.
(b) The City will prepare annually within two hundred seventy (270) days after the close of each Fiscal Year (commencing with the Fiscal Year ending June 30, 2024) financial statements of the City 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 Authority and the Trustee at reasonable hours and under reasonable conditions.

Section 5.11. Protection of Security and Rights of Authority. The City will preserve and protect the security hereof and the rights of the Authority to the 2024 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 City will pay and discharge all taxes, assessments and other governmental charges which may hereafter be lawfully imposed upon the Wastewater System or any part thereof or upon Net System Revenues when the same shall become due. The City will duly observe and comply with all valid regulations and requirements of any governmental authority relative to the operation of the. Wastewater System or any part thereof, but the City 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 City will fix, prescribe and collect rates, fees and charges for the Wastewater Service during each Fiscal Year which are estimated to yield Net System Revenues for such Fiscal Year equal to at least the Coverage Requirement for such Fiscal Year. The City 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 System Revenues from EXHIBIT 3 692
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such reduced rates, fees and charges are estimated to be sufficient to meet the requirements of this section.

The City may establish a fund denominated the Rate Stabilization Fund. From time to time the City may deposit into the Rate Stabilization Fund, from current System Revenues, such amounts as the City shall determine and the amount of available current System 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 System Revenues for such Fiscal Year when so transferred. The City 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 System Revenues in accordance with the terms of this Section or used for any lawful purpose.

Section 5.14. Eminent Domain and Insurance Proceeds. If all or any part of the Wastewater System shall be taken by eminent domain proceedings, or if the City receives any insurance proceeds resulting from a casualty loss to the Wastewater System, the net proceeds thereof, at the option of the City, shall be applied either to (a) the prepayment of Parity Obligations, or (b) to acquire and construct additions, betterments or improvements to the Wastewater System to replace the condemned or destroyed portion of the Wastewater System.

Section 5.15. Continuing Disclosure. The City hereby agrees to comply with and carry out all of the provisions of the continuing disclosure undertaking relating to the 2024 Bonds.

Notwithstanding any other provision of this 2024 Contract, failure of the City to comply with such undertaking shall not be considered an Event of Default under the 2024 Contract or the 2024 Indenture; provided, that the Trustee may (and, at the request of any Participating Underwriter or the Holders of at least twenty-five per cent (25%) in aggregate principal amount of Outstanding 2024 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 City to comply with its obligations under this section. Capitalized terms used in this section but not defined in this 2024 Contract shall have the meanings given in the aforesaid continuing disclosure undertaking.

Section 5.16. Further Assurances. The City 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 Authority of the rights and benefits provided to it herein.

ARTICLE VI

EVENTS OF DEFAULT AND REMEDIES OF THE 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 2024 Installment Payment when the same shall become due and payable; EXHIBIT 3 693
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(b) if default shall be made by the City 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 thirty (30) days after the City shall have been given notice in writing of such default by the Authority or the Trustee;
(c) if the City 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 City 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 City 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 2024 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 Authority as provided in Section 6.01, all Net System 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 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 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 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);
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(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 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 City from Net System Revenues, including, but not limited to the payment of obligations secured by Net System 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 Authority. The 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 City or any councilmember, officer or employee thereof, and to compel the City 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 Authority; or
(c) by suit in equity upon the happening of an Event of Default to require the City 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 City, which is absolute and unconditional, to pay the 2024 Installment Payments to the Authority at their respective due dates or upon prepayment as provided herein from the Net System Revenues, or shall affect or impair the right of the Authority, which is also absolute and unconditional, to institute suit to enforce such payment by virtue of the contract embodied herein.

A waiver of any default or breach of duty or contract by the 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 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 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 Authority.

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

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Section 6.05. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the 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 City shall pay or cause to be paid all the 2024 Installment Payments at the times and in the manner provided herein, the right, title and interest of the Authority herein and the obligations of the City 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 2024 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 City makes payment of such 2024 Installment Payments and the interest 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 2024 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 City shall remain liable for the payment of such 2024 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 City 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 2024 Installment Payments or such portions thereof and the interest 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 City and the Trustee or such escrow agent, to pay when due the principal components of such 2024 Installment Payments or such portions thereof and the interest thereon on and prior to their payment dates or their dates of prepayment, as the case may be.

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ARTICLE VIII

PROVISIONS RELATING TO THE BOND INSURANCE POLICY AND THE RESERVE

FUND POLICY
Section 8.01. Provisions of this Article to Govern. Notwithstanding anything to the contrary set forth in this 2024 Contract, the provisions of this Article VIII shall govern this 2024 Contract.

Section 8.02. Notice and Other Information to be Given to the Insurer. The City will provide the Insurer with all notices and other information it is obligated to provide (1) under its Continuing Disclosure Certificate executed in connection with the 2024 Bonds and (2) to the holders of the 2024 Bonds or the Trustee under the 2024 Indenture. The notice address of the Insurer is set forth in Section 9.10 of this 2024 Contract.

Section 8.03. Defeasance. Defeasance of the 2024 Installment Payments under Section 7.01 of this 2024 Contract shall only be accomplished to the extent that the related 2024 Bonds are paid or deemed to have been paid under the 2024 Indenture.

Section 8.04. Insurer As Third Party Beneficiary. The Insurer is recognized as and shall be deemed to be a third party beneficiary of this 2024 Contract and may enforce the provisions of this 2024 Contract as if it were a party hereto.

Section 8.05. Additional Payments.
(a) To the extent permitted by law and solely from the Net System Revenues, the City agrees unconditionally that it will pay or reimburse the Insurer on demand any and all reasonable charges, fees, costs, losses, liabilities and expenses that the Insurer may pay or incur, including, but not limited to, fees and expenses of the Insurer’s agents, attorneys, accountants, consultants, appraisers and auditors and reasonable costs of investigations, in connection with the administration (including waivers and consents, if any), enforcement, defense, exercise or preservation of any rights and remedies in respect of the 2024 Indenture or 2024 Contract (“Administrative Costs”). For purposes of the foregoing, costs and expenses shall include a reasonable allocation of compensation and overhead attributable to the time of employees of the Insurer spent in connection with the actions described in the preceding sentence. The City agrees that failure to pay any Administrative Costs on a timely basis will result in the accrual of interest on the unpaid amount at the Late Payment Rate, compounded semi-annually, from the date that payment is first due to the Insurer until the date the Insurer is paid in full. (b) Notwithstanding anything herein to the contrary, the City agrees to pay to the Insurer, but solely from Net System Revenues (i) a sum equal to the total of all amounts paid by the Insurer under the Bond Insurance Policy (the “Bond Insurance Policy Payment”); and (ii) interest on such Bond Insurance Policy Payments from the date paid by the Insurer until payment thereof in full by the City, payable to Insurer at the Late Payment Rate per annum (collectively, “Insurer Reimbursement Amounts”) compounded semi-annually. The City hereby covenants and agrees that the Insurer Reimbursement Amounts constitute Credit Provider Reimbursement Obligations and Parity Obligations under this 2024 Contract.

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Section 8.06. Payment of Policy Costs — Reserve Fund Policy. (a) Solely from the Net System Revenues, the City agrees that it will repay any draws under the Reserve Fund Policy and, to the extent permitted by law, pay all related reasonable expenses incurred by the Insurer. Interest shall accrue and be payable on such draws and, to the extent permitted by law, expenses from the date of payment by the Insurer at the Late Payment Rate.
(b) Repayment of draws under the Reserve Fund Policy and payment of expenses and accrued interest thereon at the Late Payment Rate (collectively, “Policy Costs”) shall commence in the first month following each draw, and each such monthly payment shall be in an amount at least equal to 1/12 of the aggregate Policy Costs related to such draw. The City hereby covenants and agrees that the Policy Costs constitute Credit Provider Reimbursement Obligations and Parity Obligations under this 2024 Contract.
(c) Amounts in respect of Policy Costs paid to the Insurer shall be credited first to interest due, then to expenses due and then to principal due. As and to the extent that payments are made to the Insurer on account of principal due, the coverage under the Reserve Fund Policy will be increased by a like amount, subject to the terms of the Reserve Fund Policy. (d) If the City shall fail to pay any Policy Costs in accordance with the requirements of this Section 8.06, the Insurer shall be entitled to exercise any and all legal and equitable remedies available to it, including those provided under the 2024 Indenture and this 2024 Contract other than (i) acceleration of the maturity of the 2024 Bonds or the 2024 Installment Payments, or (ii) remedies which would adversely affect the owners of the 2024 Bonds. (e) The 2024 Contract shall not be discharged until all Policy Costs owing to the Insurer shall have been paid in full. The City’s obligation to pay such amount shall expressly survive payment in full of the 2024 Bonds.

Section 8.07. No Acceleration of Parity Obligations. No Parity Obligations shall be subject to acceleration without the prior written consent of the Insurer.

ARTICLE IX

MISCELLANEOUS
Section 9.01. Liability of City Limited to Net System Revenues.

Notwithstanding anything contained herein, the City shall not be required to advance any money derived from any source of income other than the Net System Revenues and the other funds provided herein for the payment of the 2024 Installment Payments or for the performance of any agreements or covenants required to be performed by it contained herein; provided, that the City 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 City for such purpose.

The obligation of the City to make the 2024 Installment Payments is a special obligation of the City and is payable solely from the Net System Revenues and the other funds as provided herein, and does not constitute a debt of the City or the State of California or of any EXHIBIT 3 698
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political subdivision thereof within the meaning of any constitutional or statutory debt limitation or restriction, and does not constitute an obligation for which the City is obligated to levy or pledge any form of taxation or for which the City has levied or pledged any form of taxation.

Section 9.02. 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 City, the 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 City or the Authority shall be for the sole and exclusive benefit of the City, the Authority and their assigns.

Section 9.03. Assignment. The 2024 Contract and any rights hereunder may be assigned by the Authority, as a whole or in part, without the necessity of obtaining the prior consent of the City. The assignment of the 2024 Contract 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 2024 Indenture.

Section 9.04. Successor is Deemed Included in all References to Predecessor.

Whenever either the City or the 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 City or the Authority, and all agreements and covenants required hereby to be performed by or on behalf of the City or the Authority with respect to the Wastewater System shall bind and inure to the benefit of the respective successors thereof whether so expressed or not.

Section 9.05. Waiver of Personal Liability. No councilmember, officer or employee of the City shall be individually or personally liable for the payment of the 2024 Installment Payments, but nothing contained herein shall relieve any councilmember, officer or employee of the City from the performance of any official duty provided by any applicable provisions of law or hereby.

Section 9.06. 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 2024 Contract as a whole and not to any particular article, section, subdivision or clause hereof.

Section 9.07. 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 City or the 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 City and the Authority hereby declare that they would have executed the 2024 Contract 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, EXHIBIT 3 699
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clauses or phrases hereof or the application thereof to any person or circumstance may be held to be unconstitutional, unenforceable or invalid.

Section 9.08. Net Contract. The 2024 Contract shall be deemed and construed to be a net contract, and the City shall pay absolutely net during the term hereof the 2024 Installment Payments and all other payments required hereunder, free of any deductions and without abatement, diminution or set-off whatsoever.

Section 9.09. California Law. The 2024 Contract shall be construed and governed in accordance with the laws of the State of California.

Section 9.10. 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 City:

City of Stockton
425 N. El Dorado Street
Stockton, California 95202
Attention: Chief Financial Officer
If to the Authority:

Stockton Public Financing Authority
425 N. El Dorado Street
Stockton, California 95202
Attention: Treasurer
If to the Insurer:

Attention:

Telephone:

Telecopier:

Email:

In each case in which notice or other communication refers to an event of default or a claim on the Bond Insurance Policy or Reserve Fund Policy, then a copy of such notice or other communication shall also be sent to the attention of the General Counsel at the same address and at [email protected] or at Telecopier: __________ and shall be marked to indicate “URGENT MATERIAL ENCLOSED.”
Section 9.11. Effective Date. The 2024 Contract shall become effective upon its execution and delivery.

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Section 9.12. Execution in Counterparts. The 2024 Contract 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.

Section 9.13. Use of Electronic Signatures. Each of the parties hereto agrees that the transaction consisting of this 2024 Contract may be conducted by electronic means. Each party agrees, and acknowledges that it is such party’s intent (i) that, by signing this 2024 Contract using an electronic signature, it is signing, adopting and accepting this 2024 Contract, and (ii) that signing this 2024 Contract using an electronic signature is the legal equivalent of having placed the undersigned officer’s handwritten signature on this 2024 Contract on paper. Each party acknowledges that it is being provided with an electronic or paper copy of this 2024 Contract in a usable format.

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IN WITNESS WHEREOF, the parties hereto have executed the 2024 Contract by their officers thereunto duly authorized as of the day and year first written above.

CITY OF STOCKTON
By
[Name, Title]

STOCKTON PUBLIC FINANCING AUTHORITY
By
[Name, Title]
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A-1
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EXHIBIT A
2024 INSTALLMENT PAYMENT SCHEDULE
2024 Installment
Payment Date(1)
Interest
Component
Principal
Component
Total 2024
Installment Payments
3/1/2025
6/30/2025
9/1/2025
3/1/2026
6/30/2026
9/1/2026
3/1/2027
6/30/2027
9/1/2027
3/1/2028
6/30/2028
9/1/2028
3/1/2029
6/30/2029
9/1/2029
6/30/2030
Total: $
(1) Pursuant to the 2024 Contract, the 2024 Installment Payments are to be paid by the City to the Trustee on the date that is at least two (2) business days prior to each 2024 Installment Payment Date specified.

EXHIBIT 3 703
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$_______

STOCKTON PUBLIC FINANCING AUTHORITY
WASTEWATER REVENUE REFUNDING BONDS, SERIES 2024
(WASTEWATER REFUNDING PROJECT)

BOND PURCHASE AGREEMENT
________, 2024
Stockton Public Financing Authority
425 N. El Dorado Street
Stockton, California 95202
City of Stockton
425 N. El Dorado Street
Stockton, California 95202
Ladies and Gentlemen:

Hilltop Securities Inc., on behalf of itself and as representative (the “Representative”) of Oppenheimer & Co. Inc. (collectively, with the Representative, the “Underwriters”), hereby offers to enter into this Bond Purchase Agreement (this “Bond Purchase Agreement”) with the Stockton Public Financing Authority (the “Authority”), a joint exercise of powers authority duly organized and validly existing under and pursuant to the laws of the State of California (the “State”), and the City of Stockton (the “City”), a municipal corporation and charter city duly organized and validly existing pursuant to the Constitution and laws of the State, which upon written acceptance of this offer, will be binding upon the Authority, the City and the Underwriters. This offer is made subject to the Authority’s and the City’s written acceptance hereof on or before 11:59 p.m., California time, on the date hereof, and, if not so accepted, will be subject to withdrawal by the Underwriters upon written notice delivered to the Authority and the City at any time prior to the acceptance hereof by the Authority and the City.

Capitalized terms used and not defined herein shall have the same meanings as set forth in the 2024 Installment Purchase Contract, the 2024 Indenture and the Official Statement (each as defined below).

1. Purchase and Sale of the Series 2024 Bonds
Subject to the terms and conditions and in reliance upon the representations, warranties and agreements set forth herein, the Underwriters hereby jointly and severally agree to purchase from the Authority, and the Authority hereby agrees to sell and deliver to the Underwriters, all (but not less than all) of the $_______ aggregate principal amount of Stockton Public Financing Authority Wastewater Revenue Refunding Bonds, Series 2024 (Wastewater Refunding Project) (the “Series 2024 Bonds”).

The Series 2024 Bonds will be issued on the Closing Date (as hereinafter defined), in the principal amount of $_______. The Series 2024 Bonds will bear interest from the Closing Date at the respective rates and will mature in the principal amounts on the respective dates set forth on Schedule I attached hereto. The purchase price for the Series 2024 Bonds shall be $_______, being the principal amount EXHIBIT 4 704
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of the Series 2024 Bonds plus original issue premium of $______ and less an Underwriters’ discount of $________.

The Representative represents and warrants that: (i) it has been duly authorized by and on behalf of the Underwriters to execute this Bond Purchase Agreement; and (ii) it has been duly authorized by the Underwriters to act hereunder and, as the representative of the Underwriters, to take all actions, and waive any condition or requirement, required or permitted to be taken or waived hereunder by the Underwriters. The Underwriters shall not designate any other representative except upon the approval of the Authority and the City (which approval shall not be unreasonably withheld).

The Underwriters agree to comply with all applicable Securities and Exchange Commission rules and rules of the Municipal Securities Rulemaking Board (the “MSRB”) governing the offering, sale and delivery of the Series 2024 Bonds to ultimate purchasers.

The Authority and the City acknowledge and agree that: (i) the primary role of the Underwriters, as underwriters, is to purchase securities, for resale to investors, in an arm’s length commercial transaction among the Authority, the City and the Underwriters and the Underwriters have financial and other interests that differ from those of the Authority and/or the City; (ii) the Underwriters are acting solely as principals and are not acting as municipal advisors, financial advisors or fiduciaries to the Authority or the City and have not assumed any advisory or fiduciary responsibility to the Authority or the City with respect to the transaction contemplated hereby and the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriters have provided other services or are currently providing other services to the Authority or the City on other matters); (iii) other than as imposed by law, the only obligations the Underwriters have to the Authority and/or the City with respect to the transaction contemplated hereby expressly are set forth in this Bond Purchase Agreement; and (iv) the Authority and the City have each consulted their own financial and/or municipal, legal, accounting and other advisors, as applicable, to the extent it has deemed appropriate.

The Authority and the City acknowledge that they have previously provided the Representative with an acknowledgement of receipt of the required Underwriter disclosure under Rule G-17 of the MSRB.

2. Description and Purpose of the Series 2024 Bonds
The Series 2024 Bonds shall be substantially in the form described in, shall be issued and secured under the provisions of, and shall be payable as provided in the 2024 Indenture, dated as of August 1, 2024 (the “2024 Indenture”), between the Authority and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). The Series 2024 Bonds are [not] subject to redemption prior to maturity, as provided in the 2024 Indenture.

The Series 2024 Bonds are limited obligations of the Authority payable from and secured by a pledge of the Revenues (as defined in the 2024 Indenture) comprised primarily of 2024 Installment Payments to be made by the City pursuant to the 2024 Installment Purchase Contract, dated as of August 1, 2024 (the “2024 Installment Purchase Contract”), between the Authority and the City.

The pledge and right of payment from Net System Revenues securing the 2024 Installment Payments (which, in turn, constitute the primary source of the Revenues that are pledged to secure the repayment of the Series 2024 Bonds) is on a parity to the pledge and right of payment from Net System Revenues securing (1) installment payments made by the City to the Authority in connection with a bond issued by the United States Environmental Protection Agency, an agency of the United States of America, acting by and through the Administrator of the Environmental Protection Agency, in the original aggregate principal amount of up to $108,000,000, which is current outstanding in the EXHIBIT 4 705
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aggregate principal amount of $[_____], and (2) a November 2021 loan issued by the California State Water Resources Control Board in the original aggregate principal amount of $46,800,000, which is currently outstanding in the aggregate principal amount of $[_______], and that will remain outstanding following the issuance of the Series 2024 Bonds.

The proceeds of the sale of the Series 2024 Bonds will be used to: (i) refund all of the outstanding principal amount of the Stockton Public Financing Authority Wastewater Revenue Refunding Bonds, Series 2014 (1998 Wastewater Project and 2003 Wastewater Project); [(ii) pay the premiums of a municipal bond insurance policy (the “Policy”) and a municipal bond debt service reserve insurance policy (the “Reserve Policy”) for the Series 2024 Bonds, each to be issued by _____ (the “Insurer”);] and (iii) pay certain costs for the Series 2024 Bonds. [The scheduled payment of principal of and interest on the Series 2024 Bonds when due will be guaranteed under the Policy to be issued concurrently with the delivery of the Series 2024 Bonds by the Insurer. The Insurer will also issue the Reserve Policy concurrently with the delivery of the Series 2024 Bonds.]

3. Public Offering
(a) The Underwriters agree to make a bona fide public offering of all the Series 2024 Bonds initially at prices not in excess of the public offering prices (or less than the yields) set forth on Schedule I attached hereto and incorporated herein by this reference. Subsequent to the initial public offering, the Underwriters reserve the right to change the public offering prices (or yields) as they deem necessary in connection with the marketing of the Series 2024 Bonds, provided that the Underwriters shall not change the interest rates set forth on Schedule I. The Series 2024 Bonds may be offered and sold to certain dealers, unit investment trusts and money market funds, certain of which may be sponsored or managed by one or more of the Underwriters, at prices lower than such initial public offering prices. In connection with the sale and delivery of the Series 2024 Bonds, the Representative will deliver an Issue Price Certificate substantially in the form attached hereto as Exhibit A. (b) The Authority and the City hereby authorize the use by the Underwriter of the 2024 Indenture and the 2024 Installment Purchase Contract in connection with the public offering and sale of the Series 2024 Bonds.

4. Delivery of Official Statement; Continuing Disclosure (a) Preliminary Official Statement. The Authority and the City have delivered or caused to be delivered to the Underwriters prior to the execution of this Bond Purchase Agreement, copies, including electronic copies, of the Preliminary Official Statement dated ________, 2024 relating to the Series 2024 Bonds (the “Preliminary Official Statement”). Such Preliminary Official Statement is the official statement deemed final by the Authority and the City for purposes of Rule 15c2-12 under the Securities Exchange Act of 1934 (the “Rule”), except for certain information permitted to be omitted therefrom by the Rule, and approved for distribution by the Underwriters by resolution of the Board of Directors of the Authority and by the City Council of the City. The Authority and the City hereby ratify and confirm their authorization of the use by the Underwriters prior to the date hereof of the Preliminary Official Statement.
(b) Final Official Statement. Within seven (7) business days from the date hereof, and in any event not later than two business days prior to the Closing Date, the Authority and the City shall deliver to EXHIBIT 4 706
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the Underwriters a final Official Statement, which may be in electronic form, executed on behalf of the Authority and the City by authorized representatives of such entities, which shall include information permitted to be omitted from the Preliminary Official Statement by paragraph (b)(1) of the Rule and with such other amendments or supplements as shall have been approved by the Authority, the City and the Representative (the “Final Official Statement”) and such additional conformed copies thereof, which may be electronic copies, as the Underwriters may reasonably request in sufficient quantities to comply with the Rule and rules of the MSRB and to meet potential customer requests for copies of the Final Official Statement. The Authority and the City hereby agree to deliver to the Underwriters an electronic copy of the Official Statement in a form that permits the Underwriters to satisfy their obligations under the rules and regulations of the MSRB and the Securities and Exchange Commission. Electronic copies of the Official Statement shall be filed and posted by the Representative on the MSRB’s Electronic Municipal Market Access System (“EMMA”) in connection with the offer and sale of the Series 2024 Bonds as provided herein, which may be in lieu of hard copies of the Official Statement. The Authority and the City hereby authorize the Underwriters to use the Final Official Statement and the information contained therein in connection with the offering and sale of the Series 2024 Bonds. The Authority and the City shall prepare the Official Statement, including any amendments thereto, in word-searchable PDF format as described in the MSRB’s Rule G-32 and shall provide the electronic copy of the word-searchable PDF format of the Official Statement to the Underwriters no later than one (1) business day prior to the Closing Date to enable the Underwriters to comply with MSRB Rule G-32. The Underwriters covenant to file, or cause to be filed, the Official Statement (and any supplement and amendment thereof furnished to the Underwriters pursuant to this Section 4), with EMMA.
(c) Continuing Disclosure Certificate. In order to enable the Underwriters to comply with the Rule, the City will execute a Continuing Disclosure Certificate concurrently with issuance of the Series 2024 Bonds substantially in the form attached as Appendix D to the Final Official Statement (the “Continuing Disclosure Certificate”).

5. Closing
At 8:30 a.m. Pacific time on _______, 2024, or such other time as shall be agreed upon by the Representative, the City and the Authority (the “Closing Date”), the Authority will deliver or cause to be delivered to the Underwriters by electronic means provided by Hawkins Delafield & Wood LLP, San Francisco, California (“Bond Counsel”), or by such other means as may be designated by the Representative and approved by the Authority and the City), the closing documents hereinafter mentioned and, through the F.A.S.T. facilities of The Depository Trust Company (“DTC”), the Series 2024 Bonds in the form of registered book-entry bonds evidenced by one certificate for each maturity of the Series 2024 Bonds (which may be typewritten) in denominations of $5,000 or any multiple thereof, duly executed by the Authority and authenticated by the Trustee, and subject to the terms and conditions hereof the Underwriters will accept delivery of the Series 2024 Bonds in book-entry form, and the Underwriters will pay the purchase price of the Series 2024 Bonds set forth in Section 1 by Federal Funds wire (such delivery and payment being herein referred to as “Closing”).

6. Representations, Warranties and Agreements of the Authority. For purposes of this Section 6, “to the best of the Authority’s knowledge” means to the best knowledge of the officers thereof.

The Authority represents, warrants and covenants with the City and the Underwriters that:

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(a) the Authority is a joint exercise of powers authority duly organized and validly existing under and pursuant to the laws of the State, with full legal right, power and authority to issue, sell and deliver the Series 2024 Bonds to the Underwriters pursuant to the 2024 Indenture, and execute, deliver and perform its obligations, as the case may be, under this Bond Purchase Agreement, the Series 2024 Bonds, the 2024 Installment Purchase Contract and the 2024 Indenture (collectively, the “Legal Documents”) and to carry out and consummate all transactions on its part contemplated by each of the aforesaid documents and the Final Official Statement, and compliance by the Authority with the provisions of the Legal Documents will not materially conflict with or constitute a breach of or default under any applicable constitutional provision, law, administrative regulation, court order or consent decree or any applicable judgment or decree or any loan agreement, note, resolution, indenture, agreement or other instrument to which the Authority is a party or may be otherwise subject; (b) the resolution adopted by the Board of Directors of the Authority on [July 9, 2024] approving and authorizing the execution and delivery by the Authority of the Legal Documents, the Preliminary Official Statement, the Final Official Statement and the Series 2024 Bonds (the “Authority Resolution”) was duly adopted at a meeting of the Authority 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 are in full force and effect and have not been amended or repealed; (c) when delivered by the Authority and paid for by the Underwriters in accordance with the provisions of this Bond Purchase Agreement, the Series 2024 Bonds will have been duly authorized, executed and delivered by, and will constitute the valid and binding limited obligations of, the Authority in conformity with, and entitled to the benefit and security of, the 2024 Indenture; (d) the Authority has duly authorized and approved the execution and delivery of the Legal Documents and when fully executed and delivered, the Legal Documents, assuming due authorization, execution and delivery by the other respective parties thereto, will constitute the legally valid and binding obligations of the 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; (e) except as otherwise disclosed in the Final Official Statement, as of the Closing, the Authority will be in compliance with the covenants and agreements contained in the Legal Documents, and no event has occurred and is continuing which, with the passage of time or giving of notice, or both, would, to the knowledge of the Authority, constitute an event of default thereunder; (f) all approvals, consents and orders of any governmental authority or agency having jurisdiction in the matter which would constitute a condition precedent to the preparation and distribution of the Preliminary Official Statement and the Official Statement or the due performance by the Authority of its obligations under the Legal Documents have been duly obtained or made, and are, and will be as of the Closing Date, in full force and effect;
(g) the Authority will comply with the requirements of the Tax Certificate executed by the Authority and the City in connection with the delivery of the Series 2024 Bonds; (h) any certificate signed by any officer of the Authority and delivered to the Underwriters pursuant to the Legal Documents or any document contemplated hereby or thereby shall be deemed a representation and warranty by the Authority to the Underwriters as to the statements made therein and that such officer shall have been duly authorized to execute the same; EXHIBIT 4 708
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(i) as of the date hereof there is not, and as of the Closing Date there will not be, a public vote or referendum pending or proposed, the results of which could materially adversely affect the transactions contemplated by the Preliminary Official Statement, the Official Statement, the Legal Documents or the Series 2024 Bonds, or the Revenues securing the Series 2024 Bonds, or the validity or enforceability of the Legal Documents or the Series 2024 Bonds; (j) the 2024 Indenture creates a valid pledge of and grant of a first priority security interest in the Revenues purported to be pledged thereby, subject to no prior pledges or security interests other than as described in the Final Official Statement;
(k) the information under the headings “THE AUTHORITY” and “ABSENCE OF MATERIAL LITIGATION – The Authority” in the Preliminary Official Statement, as of the date of the Preliminary Official Statement and as of the date hereof, was and is true and correct in all material respects, and did not and does not contain a misstatement of any material fact or omit to state a material fact necessary to make the statements contained therein, in the light of the circumstances in which such statements were made, not misleading;
(l) the information under the headings “THE AUTHORITY” and “ABSENCE OF MATERIAL LITIGATION – The Authority” in the Final 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 such information in the Final 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; (m) the Authority will advise the Representative and the City promptly of any proposal to amend or supplement the Final Official Statement and will not effect or consent to any such amendment or supplement without the consent of the Representative and the City, which consents will not be unreasonably delayed or withheld, and the Authority will advise the Representative and the City promptly of the institution of any proceedings known to it by any governmental agency prohibiting or otherwise affecting the use of the Final Official Statement in connection with the offering, sale or distribution of the Series 2024 Bonds;
(n) as of the time of acceptance hereof and as of the time of the Closing, except as otherwise disclosed in the Preliminary Official Statement and the Final Official Statement, the 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 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 for the Series 2024 Bonds or the Authority’s performance under the Legal Documents; and, as of such times, except as disclosed in the Final Official Statement, the authorization, execution and delivery by the Authority of the Legal Documents and the Series 2024 Bonds and compliance by the Authority 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 Authority (or any of its officers in their respective capacities as such) is subject, EXHIBIT 4 709
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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 Series 2024 Bonds and the Legal Documents;
(o) as of the time of acceptance hereof and the Closing, except as disclosed in the Preliminary Official Statement and the Final Official Statement, no action, suit, proceeding, inquiry or investigation, at law or in equity, notice of which has been given to the Authority, before or by any court, government agency, public board or body, is pending or to the best of the Authority’s knowledge after reasonable investigation, threatened (i) in any way questioning the corporate existence of the Authority or the titles of the Commissioners, Chair, Vice Chair or Secretary and Treasurer of the Authority to their respective offices; (ii) affecting, contesting or seeking to prohibit, restrain or enjoin the issuance, sale or delivery of any of the Series 2024 Bonds, or the payment or collection of any amounts pledged or to be pledged to pay the principal of and interest on the Series 2024 Bonds, or in any way contesting or affecting the validity of the Series 2024 Bonds, the Legal Documents or the consummation of the transactions contemplated thereby or hereby, or contesting the exclusion of the interest on the Series 2024 Bonds from gross income for Federal income tax purposes or contesting the powers of the Authority or its authority to issue the Series 2024 Bonds; (iii) which may result in any material adverse change relating to the Authority; or (iv) contesting the completeness or accuracy of the Preliminary Official Statement or the Final Official Statement or any supplement or amendment thereto or asserting that the Preliminary Official Statement or the Final 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, nor, to the knowledge of the Authority, is there any basis for any action, suit, proceeding, inquiry or investigation of the nature described in clauses (i) through (iv) of this paragraph; (p) for purposes of the Rule, the Authority has heretofore deemed final the Preliminary Official Statement prior to its use and distribution by the Underwriters, except for the information specifically permitted to be omitted by paragraph (b)(1) of the Rule; and (q) the Authority has not entered into any contract or agreement that would limit or restrict the Authority’s ability to enter into this Bond Purchase Agreement for the sale of the Series 2024 Bonds to the Underwriters.

All representations, warranties and agreements of the Authority shall remain operative and in full force and effect, regardless of any investigations made by or on the Underwriters’ behalf, and shall survive the delivery of the Series 2024 Bonds.

7. Representations, Warranties, and Agreements of the City. The City represents, warrants and covenants with the Underwriters that:
(a) the City is a municipal corporation and charter city duly organized and validly existing pursuant to the Constitution and laws of the State, with full legal right, power, and authority to execute, deliver and perform its obligations, as the case may be, under this Bond Purchase Agreement, the Continuing Disclosure Certificate and the 2024 Installment Purchase Contract (collectively, the “City’s Legal Documents”) and to carry out and consummate all transactions on its part contemplated by each of the City’s Legal Documents, and compliance by the City with the provisions of the City’s Legal Documents will not materially conflict with or constitute a breach of or default under any applicable EXHIBIT 4 710
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constitutional provision, law, charter provision, administrative regulation, court order or consent decree or any applicable judgment or decree or any loan agreement, note, resolution, indenture, agreement or other instrument to which the City is a party or may be otherwise subject; (b) the resolution adopted by the City Council of the City on [July 9, 2024] approving and authorizing the execution and delivery by the City of the City’s Legal Documents, the Preliminary Official Statement, the Final Official Statement and the Series 2024 Bonds (the “City Resolution”) was duly adopted at a meeting of the City 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 are in full force and effect and have not been amended or repealed;
(c) as of the time of acceptance hereof and the Closing, except as otherwise disclosed in the Preliminary Official Statement and the Final Official Statement, there is no action, suit, proceeding, inquiry or investigation at law or in equity, notice of which has been given to the City, or by or before any court, governmental agency, public board or body pending or, to the best knowledge of the City, after reasonable investigation, threatened against or affecting the City (i) which in any way contests the existence, organization or powers of the City or the title of the officers of the City to their respective offices, or (ii) affecting, contesting or seeking to prohibit, restrain or enjoin the issuance, sale or delivery of the Series 2024 Bonds, or the payment or collection of revenues or assets of the City pledged or to be pledged to pay the obligations of the City under the 2024 Installment Purchase Contract, or the pledge thereof, or (iii) in any way contesting or affecting the validity or enforceability of the City’s Legal Documents, or (iv) contesting the power of the City or its authority with respect to the Series 2024 Bonds or the City’s Legal Documents, (v) contesting the exclusion of interest on the Series 2024 Bonds from gross income for Federal income tax purposes or contesting the completeness or accuracy of the Preliminary Official Statement or the Final Official Statement or any supplement or amendment thereto or asserting that the Preliminary Official Statement or the Final 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; nor, to the best knowledge of the City, is there any basis for any action, suit, proceeding, inquiry or investigation of the nature described in clauses (i) through (v) of this paragraph;
(d) the execution and delivery of the City’s Legal Documents, the adoption of the City Resolution and compliance by the City with the provisions of the foregoing, 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 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; (e) the City has duly authorized the preparation and distribution of the Preliminary Official Statement and the Final Official Statement and the execution and delivery of the City’s Legal Documents and when executed and delivered, the City’s Legal Documents, assuming due authorization, execution and delivery by the other respective parties thereto, 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; (f) except as otherwise disclosed in the Preliminary Official Statement and the Final Official Statement, the City is not in violation or breach of or default under any applicable law or administrative regulation of the State or the United States of America, or any agency or instrumentality of either of EXHIBIT 4 711
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them, or any applicable judgment or decree, or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party or is otherwise subject, and no event has occurred and is continuing which, with the passage of time or the giving of notice or both, would constitute a violation or a breach of or a default under any such instrument; which violation, breach or default would materially adversely affect the security of the Series 2024 Bonds or the City’s performance under the City’s Legal Documents; and, except as disclosed in the Preliminary Official Statement and the Final Official Statement, the authorization, execution and delivery by the City of the City’s Legal Documents and compliance by the City 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, which conflict, breach or default would materially adversely affect the security of the Series 2024 Bonds or the City’s performance under the City’s Legal Documents; 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’s Legal Documents; (g) as of the date hereof, the City is, and as of the Closing Date will be, except as otherwise disclosed in the Preliminary Official Statement and the Final Official Statement, in compliance with the covenants and agreements contained in the City’s Legal Documents, and no event has occurred and is continuing which, with the passage of time or giving of notice, or both, would, to the knowledge of the City, constitute an event of default thereunder shall have occurred and be continuing; (h) all approvals, consents and orders of any governmental authority or agency having jurisdiction in the matter which would constitute a condition precedent to the preparation and distribution of the Preliminary Official Statement and the Final Official Statement or the due performance by the City of its obligations under the City’s Legal Documents have been duly obtained or made and are in full force and effect;
(i) the City will comply with the requirements of the Tax Certificate executed by the Authority and the City in connection with the delivery of the Series 2024 Bonds; (j) any certificate signed by any duly authorized officer of the City and delivered to the Underwriters pursuant to the City’s Legal Documents or any document contemplated thereby shall be deemed a representation and warranty by the City to the Underwriters as to the statements made therein;
(k) to the best knowledge of the City as of the date hereof, there is no public vote or referendum pending or proposed, the results of which could adversely affect the transactions contemplated by the Final Official Statement, the City’s Legal Documents or the Series 2024 Bonds, or the Revenues securing the Series 2024 Bonds, or the validity or enforceability of the Series 2024 Bonds; (l) the City has full legal right, power and authority to pledge the Net System Revenues, and the pledge of the Net System Revenues pursuant to the 2024 Installment Purchase Contract constitutes a valid first priority lien and pledge on the Net System Revenues purported to be pledged thereby, subject to no prior pledges or security interests other than as described in the Final Official Statement; EXHIBIT 4 712
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(m) the information in the Preliminary Official Statement, as of its date and as of the date hereof, was and is true and correct in all material respects, and contained and contains no untrue statement of any material fact, and did not and does not omit to state any material fact necessary to make the statements contained therein, in the light of the circumstances in which such statements were made, not misleading, provided, however, the City makes no representation or warranty with respect to the information concerning the Insurer, the Policy, the Reserve Policy, DTC and its book-entry system, or with respect to any statements or omissions made in reliance upon and in conformity with information furnished to the City in writing by the Underwriters expressly for use in the Preliminary Official Statement which the parties agree consists only of the information under the heading “UNDERWRITING” in the Preliminary Official Statement;
(n) the information in the Final Official Statement is, and at all times subsequent to the date of the Final Official Statement up to and including the Closing Date will be, true and correct in all material respects, and the Final Official Statement contains, and up to and including the Closing Date will contain, no untrue statement of any material fact and does not, and up to and including the Closing Date will not, omit to state any material fact necessary to make the statements contained therein, in the light of the circumstances in which such statements were made, not misleading, provided, however, (i) the City makes no representation or warranty with respect to any information concerning the Insurer, the Policy, the Reserve Policy, DTC and its book-entry system or with respect to any statements or omissions made in reliance upon and in conformity with any information furnished to the City in writing by the Underwriters expressly for use in the Final Official Statement and any amendment or supplement thereto, and (ii) the City acknowledges that the only information relating to the Underwriters furnished to the City in writing by the Underwriters expressly for use in the Final Official Statement and any amendment or supplement thereto is the identity of the Underwriters on the bottom of the cover page of the Final Official Statement and the information under the heading “UNDERWRITING” in the Final Official Statement and the pricing information appearing on the inside front cover of the Final Official Statement;
(o) the City will advise the Representative and the Authority promptly of any proposal to amend or supplement the Final Official Statement and will not effect or consent to any such amendment or supplement without the consent of the Representative and the Authority which consents will not be unreasonably delayed or withheld, and the City will advise the Representative and the Authority promptly of the institution of any proceedings known to it by any governmental agency prohibiting or otherwise affecting the use of the Final Official Statement in connection with the offering, sale or distribution of the Series 2024 Bonds;
(p) the City has not, in the last five years, failed to comply in any material respect with its obligations under any continuing disclosure undertaking entered into pursuant to the Rule except as disclosed in the Preliminary Official Statement and Final Official Statement. The City will undertake, pursuant to the Continuing Disclosure Certificate to provide annual reports and notices of certain events in accordance with the requirements of the Rule. (q) for purposes of the Rule, the City has heretofore deemed final the Preliminary Official Statement prior to its use and distribution by the Underwriters, except for the information specifically permitted to be omitted by paragraph (b)(1) of the Rule; (r) the financial statements of the City for Fiscal Year ended June 30, 2023 fairly present the financial position of the City and results of operations thereof as of the dates and for the periods therein EXHIBIT 4 713
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set forth, and the City believes that such financial statements have been prepared in accordance with generally accepted accounting principles consistently applied; All representations, warranties and agreements of the City shall remain operative and in full force and effect, regardless of any investigations made by or on the Underwriters’ behalf, and shall survive the delivery of the Series 2024 Bonds

8. Establishment of Issue Price. (a) The Representative, on behalf of the Underwriters, agrees to assist the Authority in establishing the issue price of the Series 2024 Bonds and shall execute and deliver to the Authority and the City on the Closing Date an “issue price” or similar certificate, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit B, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Representative, the 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 Series 2024 Bonds. (b) The Representative confirms that the Underwriters have offered each maturity of the Series 2024 Bonds to the public on or before the date of this Bond Purchase Agreement at the offering price or prices (the “initial offering price”), or at the corresponding yield or yields, set forth in Schedule I. Each separate CUSIP number within a maturity will be treated as its own maturity for purposes of this Section 8. Except for any maturities subject to the hold-the-offering-price rule (as defined below) identified in Schedule I attached hereto, the Authority will treat the first price at which 10% of each maturity of the Series 2024 Bonds (the “10% test”) is sold to the public as the issue price of that maturity. Prior to the execution of this Bond Purchase Agreement, the Representative shall report to the Authority the price or prices at which the underwriters have sold to the public each maturity of Series 2024 Bonds.
(c) Schedule I also sets forth, as of the date of this Bond Purchase Agreement, the maturities, if any, of the Series 2024 Bonds for which the 10% test has not been satisfied, including any maturities for which the Authority and the Representative, on behalf of the other Underwriters, agree that the restrictions set forth in the next sentence shall apply, which will allow the Authority to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the “hold-the-offering-price rule”). So long as the hold-the-offering-price rule remains applicable to any maturity of the Series 2024 Bonds, the Underwriters will neither offer nor sell unsold Series 2024 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; (ii) or the date on which the underwriters have sold at least 10% of that maturity of the Series 2024 Bonds to the public at a price that is no higher than the initial offering price to the public.

The Representative shall within one business day report to the Authority when the underwriters have sold 10% of that maturity of the Series 2024 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 (this reporting requirement, if applicable, together with the reporting requirement in the immediately preceding paragraph, the “Reporting Requirements”).

EXHIBIT 4 714
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(d) The Representative confirms that:
(i) any agreement among underwriters, any selling group agreement and each third-party distribution agreement (to which the Representative is a party) relating to the initial sale of the Series 2024 Bonds to the public, together with the related pricing wires, contains or will contain language obligating each underwriter, each dealer who is a member of the selling group and each broker-dealer that is a party to such third-party distribution agreement, as applicable:
(A) (i) to report the prices at which it sells to the public the unsold 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 Representative that the 10% test has been satisfied as to the Series 2024 Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Representative, and (ii) to comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Representative and as set forth in the related pricing wires, (B) to promptly notify the Representative of any sales of Bonds that, to its knowledge, are made to a purchaser who is a related party to an underwriter participating in the initial sale of the Series 2024 Bonds to the public (each such term being used as defined below),
(C) to acknowledge that, unless otherwise advised by the underwriter, dealer or broker-dealer, the Representative shall assume that each order submitted by the underwriter, dealer or broker-dealer is a sale to the public. (ii) any agreement among underwriters or selling group agreement relating to the initial sale of the Series 2024 Bonds to the public, together with the related pricing wires, contains or will contain language obligating each underwriter or dealer that is a party to a thirdparty distribution agreement to be employed in connection with the initial sale of the Series 2024 Bonds to the public to require each broker-dealer that is a party to such third-party distribution agreement to (A) report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Representative or such underwriter or dealer that the 10% test has been satisfied as to the Series 2024 Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Representative or such underwriter or dealer, and (B) comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Representative or the underwriter or the dealer and as set forth in the related pricing wires.
(e) The Authority acknowledges that, in making the representations set forth in subsection (c) of this Section 8, the Representative will rely on (i) the agreement of each underwriter to comply with the requirements for establishing the issue price of the Series 2024 Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Series 2024 Bonds, as set forth in an agreement among underwriters and the related pricing wires, (ii) in the event a selling group has been created in connection with the initial sale of the Series 2024 Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the EXHIBIT 4 715
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requirements for establishing issue price of the Series 2024 Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Series 2024 Bonds, as set forth in a selling group agreement and the related pricing wires, and (iii) in the event that an underwriter or dealer who is a member of the selling group is a party to a third-party distribution agreement that was employed in connection with the initial sale of the Series 2024 Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the requirements for establishing the issue price of the Series 2024 Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Series 2024 Bonds, as set forth in the third-party distribution agreement and the related pricing wires. The Authority further acknowledges that each underwriter shall be solely liable for its failure to comply with its agreement to adhere to the requirements for establishing issue price of the Series 2024 Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Series 2024 Bonds, and that no underwriter shall be liable for the failure of any other underwriter, or of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a third-party distribution agreement, to comply with its corresponding agreement to comply with the requirements for establishing the issue price of the Series 2024 Bonds, including, but not limited to, its agreement to comply with the holdthe-offering-price rule, if applicable to the Series 2024 Bonds. (f) The Underwriters acknowledge that sales of any Bonds to any person that is a related party to an underwriter participating in the initial sale of the Series 2024 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 Authority (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Series 2024 Bonds to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Series 2024 Bonds to the public (including a member of a selling group or a party to a third-party distribution agreement participating in the initial sale of the Series 2024 Bonds to the public),
(iii) a purchaser of any of the Series 2024 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 Bond Purchase Agreement by all parties.

EXHIBIT 4 716
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9. Conditions to the Obligations of the Underwriters
The Underwriters hereby enter into this Bond Purchase Agreement in reliance upon the representations and warranties of the Authority and the City contained herein, and the representations and warranties to be contained in the documents and instruments to be delivered on the Closing Date and upon the performance by the Authority, the City and the Trustee of their respective obligations both on and as of the date hereof and on and as of the Closing Date. Accordingly, the Underwriters’ obligations under this Bond Purchase Agreement to purchase, to accept delivery of and to pay for the Series 2024 Bonds on the Closing Date shall be subject, at the option of the Underwriters, to the accuracy in all material respects of the representations and warranties of the Authority and the City contained herein as of the date hereof and as of the Closing Date, to the accuracy in all material respects of the statements of the officers and other officials of the Authority, the City and the Trustee made in any certificate or document furnished pursuant to the provisions hereof, to the performance by the Authority, the City and the Trustee of their respective obligations to be performed hereunder and under the Series 2024 Bonds, the Legal Documents and the City’s Legal Documents at or prior to the date hereof and at or prior to the Closing Date, and also shall be subject to the following additional conditions:
(a) On the Closing Date, the Legal Documents and the City’s Legal Documents shall have been duly authorized, executed and delivered by the Authority and by the City where each is a party, all in substantially the forms heretofore submitted to the Representative, with only such changes as shall have been agreed to in writing by the Representative, and shall be in full force and effect; and there shall be in full force and effect such resolutions and ordinances of the Board of Directors of the Authority and the City Council as, in the opinion of Bond Counsel, shall be necessary or appropriate in connection with the transactions contemplated hereby; (b) On the Closing Date, all necessary action of the Authority and the City relating to the issuance and sale of the Series 2024 Bonds will have been taken and will be in full force and effect and will not have been amended, modified or supplemented;
(c) On or prior to the time of the Closing, the Underwriters shall have received the following documents, in each case reasonably satisfactory in form and substance to the Representative:
(i) the Official Statement and each supplement or amendment thereto, if any (ii) one copy of the Legal Documents and the City’s Legal Documents, each duly executed and delivered by the respective parties thereto;
(iii) the approving opinion, dated the date of the Closing and addressed to the Authority, of Bond Counsel in substantially the form of Appendix F to the Final Official Statement, and a letter of such counsel, dated the Closing Date, and addressed to the Underwriters to the effect that such opinion may be relied upon by the Underwriters to the same extent as if such opinion were addressed to them; (iv) a supplemental opinion or opinions of Bond Counsel addressed to the Underwriters, in form and substance acceptable to the Representative, and dated the date of the Closing substantially to the following effect:
(A) the City and the Authority have duly and validly executed the Bond Purchase Agreement, and, assuming the due authorization, execution and delivery by and validity against the Underwriters, the Bond Purchase Agreement constitutes the legal, valid and binding agreement of the City and the EXHIBIT 4 717
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Authority, 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;
(B) the statements contained in the Final Official Statement on the cover page and under the captions “INTRODUCTION,” “THE 2024 BONDS,” “SECURITY AND SOURCES OF PAYMENT FOR THE 2024 BONDS,” “TAX MATTERS,” and in Appendices C and F thereto, are accurate insofar as such statements expressly summarize certain provisions of the Series 2024 Bonds, the 2024 Indenture, the 2024 Installment Purchase Contract, and Bond Counsel’s final approving opinion relating to the Series 2024 Bonds; and
(C) the Series 2024 Bonds are exempt from registration under the Securities Act of 1933, as amended, and the 2024 Indenture is exempt from qualification under the Trust Indenture Act of 1939, as amended.
(v) a letter from Hawkins Delafield & Wood LLP (“Disclosure Counsel”), dated the Closing Date and addressed to the Underwriter, Authority and City, substantially to the effect that on the basis of the information developed in the course of such firm’s performance of services as Disclosure Counsel, such firm is of the view, subject to certain limitations to be set forth in such letter, that as of the Closing Date such firm has no reason to believe that the Preliminary Official Statement as of its date and the date of this Bond Purchase Agreement and the Final Official Statement ([excluding therefrom financial, demographic, economic, engineering and statistical data, forecasts, numbers, charts, tables, graphs, projections, estimates, assumptions and expressions of opinion, CUSIP numbers (or other identification numbers, if applicable), ratings and information relating to [the Insurer, the Policy, the Reserve Policy,] DTC and the book-entry only system, and information in Appendices B, E and G], as to all of which such firm expresses no opinion) as of its date and as of the Closing Date contained or contains any untrue statement of a material fact or omitted 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;
(vi) the opinion of Kutak Rock LLP, Irvine, California, counsel to the Underwriters (“Underwriters’ Counsel”), dated the Closing Date, addressed to the Underwriters, in form and substance satisfactory to the Underwriters;
(vii) the opinion of the counsel to the Authority dated the Closing Date and addressed to the Underwriters, substantially to the effect that: (A) the Authority is a joint exercise of powers authority duly organized and validly existing under the laws of the State of California; (B) the Authority Resolution was duly adopted at a regular meeting of the Authority that was called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and are in full force and effect and have not been amended or repealed; (C) other than as disclosed in the Preliminary Official Statement and the Official Statement, there is no action, suit, proceeding or investigation at law or in equity before or by any court, public board or body, pending, notice of which has been given to the Authority, or, to the best knowledge of such counsel after reasonable investigation, threatened against or affecting the Authority, to restrain or enjoin the issuance, execution, delivery or sale of the Series 2024 Bonds or the collection or payment of Revenues that are the source of security for the Series 2024 Bonds, or the pledge thereof, or in any way contesting or affecting the validity or enforceability of the Series 2024 Bonds or the Legal Documents, or in any way contesting or affecting the existence of the Authority or the title of any official of the Authority to such person’s office, or contesting the power of the Authority or its authority with respect to the Series 2024 Bonds or the Legal Documents or contesting the exclusion of interest on the Series 2024 Bonds EXHIBIT 4 718
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from gross income for federal income tax purposes or 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; (D) the execution and delivery of the Series 2024 Bonds and the Legal Documents, the adoption of the Authority Resolution, and compliance by the Authority with the provisions of the Series 2024 Bonds, the Legal Documents and the Authority Resolution, under the circumstances contemplated thereby, do not and will not in any material respect conflict with or constitute on the part of the Authority a breach or default under any agreement or other instrument to which the Authority is a party or by which it is bound or by any existing law, regulation, court order or consent decree to which the Authority is subject; (E) the Legal Documents have been duly authorized, executed and delivered by the Authority and, assuming due authorization, execution and delivery by the other parties thereto, constitute legal, valid and binding agreements of the Authority enforceable in accordance with their respective terms, subject to laws relating to bankruptcy, insolvency or other laws affecting the enforcement of creditors’ rights generally and the limitations on legal remedies against public agencies in the State and the application of equitable principles if equitable remedies are sought; (F) no authorization, approval, consent, or other order of the United States of America, the State, or any other governmental authority or agency within the State having jurisdiction over the Authority is required for the valid authorization, execution, delivery and performance by the Authority of the Legal Documents or for the adoption of the Authority Resolution which has not been obtained and is in full force and effect;; and (G) that while such counsel is not passing upon and does not assume any responsibility for the accuracy, completeness or fairness of any of the statements contained in the Preliminary Official Statement or in the Official Statement and make no representation that such counsel has independently verified the accuracy, completeness or fairness of any such statements, such counsel advises as a matter of fact and not opinion that (a) no facts had come to such counsel’s attention which caused them to believe, as of the date of the Preliminary Official Statement and as of the date of this Bond Purchase Agreement, that the information under the heading “ABSENCE OF MATERIAL LITIGATION” (as it relates to the Authority) in the Preliminary Official Statement 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, and (b) no facts had come to such counsel’s attention which caused them to believe that that the information under the heading “ABSENCE OF MATERIAL LITIGATION” (as it relates to the Authority) in the Official Statement, as of its date, contained, or as of the Closing Date, contains any untrue statement of a material fact or, as of its date, omitted, or as of the Closing Date, omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (viii) the opinion of the City Attorney, dated the Closing Date and addressed to the Authority and the Underwriters, substantially to the effect that: (A) the City is a municipal corporation of the State, duly organized and existing under its charter and the laws of the State; (B) the City Resolution was duly adopted at meetings of the City Council that were called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and is in full force and effect and has not been amended or repealed; (C) except as disclosed in the Preliminary Official Statement and the Official Statement, no action, suit, proceeding, or investigation at law or in equity before or by any court, public board or body is pending in which service of process has been completed, or to our knowledge is threatened against or affecting the City: (a) to restrain or enjoin the execution, delivery or sale of the Series 2024 Bonds; or (b) the payment or collection of revenues of the City from which the City will pay amounts due under the 2024 Installment Purchase Contract, or EXHIBIT 4 719
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the pledge thereof; or (c) in any way contesting or materially affecting the validity or enforceability of the Series 2024 Bonds or the City’s Legal Documents; or (d) in any way contesting or affecting the existence of the City or the title of any executive officer of the City to such executive officer’s office; or (e) contesting the power of the City or its authority with respect to the City’s Legal Documents; or (f) 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 necessary in order to make the statements made therein, in the light of the circumstances in which they were made, not misleading; (D) the execution and delivery of the City’s Legal Documents, the adoption of the City Resolution and compliance by the City with the provisions of the foregoing 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 violation or breach of, or constitute a default under, (a) any agreement or other instrument to which the City is a party or by which it is bound and with respect to such conflict, violation, breach or default would materially adversely affect the ability of the City to pay Installment Payments under the 2024 Installment Purchase Contract, or (b) any existing law, regulation, court order or consent decree to which the City is subject and that we have, in the exercise of customary professional diligence, recognized as applicable to the City and the transactions contemplated by the City’s Legal Documents. (E) the City has the necessary power and authority to execute and deliver the City’s Legal Documents; (F) the City’s Legal Documents have been duly authorized, executed and delivered by the City, and assuming due authorization, execution and delivery by the other parties thereto, constitute legal, valid and binding agreements of the City enforceable in accordance with their respective terms, subject to laws relating to bankruptcy, insolvency or other laws affecting the enforcement of creditors’ rights generally and the limitations on legal remedies against public agencies in the State of California and the application of equitable principles if equitable remedies are sought; (G) no authorization, approval, consent or other order of the United States of America, the State of California, or other governmental authority or agency within the State of California having jurisdiction over the City is required for the valid execution, delivery or performance by the City of the City’s Legal Documents or for the adoption of the City Resolution which has not been obtained, except for such actions as may be necessary to be taken to qualify the Series 2024 Bonds for offer and sale under the Blue Sky or other securities laws and regulations of any state or jurisdiction of the United States of America, as to which no opinion is expressed; and (H) while we are not passing upon and do not assume any responsibility for the accuracy, completeness or fairness of any of the statements contained in the Preliminary Official Statement or in the Official Statement and make no representation that we have independently verified the accuracy, completeness or fairness of any such statements, we advise you as a matter of fact and not opinion that (a) no facts had come to our attention which caused us to believe, as of the date of the Preliminary Official Statement and as of the date of this Bond Purchase Agreement, that the information under the heading “ABSENCE OF MATERIAL LITIGATION” (as it relates to the City) in the Preliminary Official Statement 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, and (b) no facts had come to our attention which caused us to believe that that the information under the heading “ABSENCE OF MATERIAL LITIGATION” (as it relates to the City) in the Official Statement, as of its date, contained, or as of the date hereof, contains any untrue statement of a material fact or, as of its date, omitted, or as of the date hereof, omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (ix) a certificate of a duly authorized official of the Authority, dated the Closing Date, in form and substance reasonably satisfactory to the Representative, to the effect that (A) the Authority’s representations and warranties contained in the Legal Documents are true and correct on and as of the EXHIBIT 4 720
18 4893-0523-4113.3
Closing Date with the same effect as if made on the Closing Date; (B) there is no misstatement of any material fact under the headings “THE AUTHORITY” and “ABSENCE OF MATERIAL LITIGATION” (as it relates to the Authority) in the Final Official Statement and such statements or information in the Final Official Statement do not omit to state a material fact necessary to make the statements contained therein, in the light of the circumstances in which such statements were made, not misleading; and (C) the Authority has complied with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied pursuant to the Legal Documents to which it is a party at or prior to the time of Closing;
(x) a certificate of a duly authorized official of the City, dated the Closing Date, in form and substance reasonably satisfactory to the Representative, to the effect that (A) the City’s representations and warranties contained in the City’s Legal Documents are true and correct on and as of the Closing Date with the same effect as if made on the Closing Date; (B) the information in the Final Official Statement as of its date was, and as of the date hereof is, true and correct in all material respects, and as of its date, the information in the Final Official Statement contained, and as of the date hereof, contains no misstatement of any material fact and as of its date did not, and as of the date hereof does not, omit to state a material fact necessary to make the statements contained therein, in the light of the circumstances in which such statements were made, not misleading (excluding therefrom any information concerning the Insurer, the Policy, the Reserve Policy, DTC and its book-entry system, or with respect to any statements or omissions made in reliance upon and in conformity with information furnished to the City in writing by the Underwriters expressly for use in the Final Official Statement); and (C) the City has complied with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied pursuant to the Bond Purchase Agreement and the City’s Legal Documents to which it is a party at or prior to the time of Closing; (xi) a certificate of a duly authorized official of the Trustee, dated the Closing Date, to the effect that: (A) the Trustee is a national banking association organized and existing under and by virtue of the laws of the United States, having the full power and being qualified to enter into and perform its duties under the 2024 Indenture and to authenticate and deliver the Series 2024 Bonds to the Underwriters; (B) the Trustee is duly authorized to enter into the 2024 Indenture and to authenticate and deliver the Series 2024 Bonds to the Underwriters pursuant to the 2024 Indenture; (C) when delivered to and paid for by the Underwriters at the Closing, the Series 2024 Bonds will have been duly authenticated and delivered by the Trustee; (D) the execution and delivery of the 2024 Indenture and compliance with the provisions on the Trustee’s part contained therein, will not conflict with or constitute a breach of or default under any law, administrative regulation, judgment, decree, loan agreement, indenture, note, resolution, agreement or other instrument to which the Trustee is a party or is otherwise subject (except that no representation, warranty or agreement is made with respect to any federal or state securities or blue sky laws or regulations), which conflict, breach or default would materially impair the ability of the Trustee to perform its obligations under the 2024 Indenture, nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the properties or assets held by the Trustee pursuant to the lien created by the 2024 Indenture under the terms of any such law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument, except as provided by the 2024 Indenture; and (E) to the best of the knowledge of the Trustee, it has not been served with any action, suit, proceeding, inquiry or investigation in law or in equity, before or by any court, governmental agency, public board or body, nor is any such action or other proceeding threatened against the Trustee, affecting the existence of the Trustee, or the titles of its officers to their respective offices or seeking to prohibit, restrain, or enjoining the execution and delivery of the Series 2024 Bonds or the collection of revenues EXHIBIT 4 721
19 4893-0523-4113.3
to be applied to pay the principal, premium, if any, and interest with respect to the Series 2024 Bonds, or the pledge thereof, or in any way contesting or affecting the validity or enforceability of the Series 2024 Bonds or the 2024 Indenture, or contesting the powers of the Trustee or its authority to enter into, adopt or perform its obligations under any of the foregoing to which it is a party, wherein an unfavorable decision, ruling or funding would materially adversely affect the validity or enforceability of the Series 2024 Bonds or the 2024 Indenture or the power and authority of the Trustee to enter into and perform its duties under the 2024 Indenture and to authenticate and deliver the Series 2024 Bonds to or upon the order of the Underwriters;
(xii) the opinion, dated the Closing Date and addressed to the Underwriters, the Authority and the City, of Counsel to the Trustee, to the effect that: (A) the Trustee has been duly incorporated as a national banking association under the laws of the United States and is in good standing under the laws of the United States, and is qualified to exercise trust powers therein, having full power and authority to enter into and to perform its duties under the 2024 Indenture; (B) the Trustee has duly authorized, executed and delivered the 2024 Indenture, and by all proper corporate action has authorized the acceptance of the trusts of the 2024 Indenture; (C) the 2024 Indenture constitutes the legally valid and binding agreement of the Trustee, enforceable against the Trustee in accordance with its terms, and (D) the Series 2024 Bonds have been validly authenticated and delivered by the Trustee; (xiii) one certified copy of the general resolution of the Trustee authorizing the execution and delivery of the 2024 Indenture;
(xiv) one certified copy of the Authority Resolution;
(xv) one certified copy of the City Resolution;
(xvi) a Tax Certificate of the Authority and the City in form and substance reasonably acceptable to Bond Counsel;
(xvii) evidence that the federal tax information form 8038-G has been prepared for filing; (xviii) 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 pursuant to Section 8855(g) of the California Government Code;
(xix) evidence that the Bonds have been rated as set forth in the Official Statement and that such ratings continue in effect as of the Closing;
(xx) a certified copy of the joint exercise of powers agreement pursuant to which the Authority was created;
(xxi) a copy of the Notice of Joint Exercise of Powers Agreement from the Secretary of State certifying that the joint exercise of powers agreement pursuant to which the Authority was created was duly filed;
(xxii) a copy of the Blanket Letter of Representations to DTC, properly executed by all parties thereto; and
(xxiii) [the Policy, duly executed by the Insurer;]
(xxiv) [the Reserve Policy, duly executed by the Insurer;] EXHIBIT 4 722
20 4893-0523-4113.3
(xxv) [an opinion of counsel to the Insurer, dated the Closing Date, addressed to the Authority, City and the Underwriter, in form and substance satisfactory to the Underwriter and Bond Counsel;] (xxvi) [a certificate or certificates of the Insurer, dated the Closing Date, as to the accuracy of the information relating to the Insurer, the Policy and the Reserve Policy included in the Official Statement and such other matters reasonably requested by the Underwriter and Bond Counsel;] (xxvii) such additional legal opinions, certificates, instruments or evidences thereof and other documents as the Counsel to the Underwriters or Bond Counsel may reasonably request to evidence the due authorization, execution and delivery of the Series 2024 Bonds and the conformity of the Series 2024 Bonds and the Legal Documents with the terms of the Series 2024 Bonds and the descriptions thereof in the Final Official Statement.
(d) the Underwriters shall have the right to terminate this Bond Purchase Agreement, without liability therefor, by written notification to the Authority and the City if at any time at or prior to the Closing:
(i) any event shall occur or facts are discovered which causes any statement contained in the Official Statement to be materially misleading or results in a failure of the Official Statement to state a material fact necessary in order to make the statements in the Official Statement, in the light of the circumstances under which they were made, not misleading, provided, however, the Underwriters shall not terminate this Bond Purchase Agreement if prior to the Closing and prior to the distribution of the Official Statement to any public investor the City and the Underwriters agree to and shall have amended or supplemented the Official Statement so that the Official Statement as so amended or supplemented will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made in the light of the circumstances in which they were made, not misleading, and, in the sole judgment of the Underwriters, such amendment or supplement would not have a material adverse effect on the marketability or market price of the Series 2024 Bonds on the terms and conditions contemplated by this Bond Purchase Agreement or the ability of the Underwriters to enforce contracts with investors for the sale of the Series 2024 Bonds (collectively, an “Adverse Effect”); or
(ii) any of an amendment to the Constitution of the United States or any legislation in or by the Congress of the United States or 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 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, which in any case has a materially adverse effect on the federal or State tax status of the City or the Authority, or the interest on bonds or notes or obligations of the general EXHIBIT 4 723
21 4893-0523-4113.3
character of the Series 2024 Bonds, shall have occurred and would, in the reasonable opinion of the Representative, have an Adverse Effect; or
(iii) 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 Representative, would have an Adverse Effect; or (iv) 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 of the Series 2024 Bonds shall be issued or made to the effect that the issuance, offering or sale of obligations of the general character of the Series 2024 Bonds, or the issuance, offering or sale of the Series 2024 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 Series 2024 Bonds, or the Series 2024 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 2024 Indenture needs to be qualified under the Trust Indenture Act of 1939, as amended and as then in effect; or
(v) there shall have occurred any outbreak or escalation of hostilities or terrorist activities or other local, national or international calamity or crisis, a downgrade of the sovereign debt rating of the United States by any major credit rating agency or payment default on United States Treasury obligations, 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, in any case the effect of which, in the Representative’s reasonable judgment, would have an Adverse Effect; or (vi) any rating of the Series 2024 Bonds or rating of other debt securities of the Authority that are payable from the City’s Wastewater System and not based solely on credit enhancement shall have been downgraded, suspended or withdrawn by S&P or Fitch or any rating of the Series 2024 Bonds or such other debt securities of the Authority shall be placed on “credit watch,” so long as such action was not the result of any sector-wide action or change in rating methodology undertaken by such rating agency, which, in the Representative’s reasonable opinion, would have an Adverse Effect; or (vii) the commencement of any action, suit or proceeding described in Section 6(o) hereof or in Section 7(c) hereto which, in the reasonable judgment of the Representative, would have an Adverse Effect; or
(viii) the declaration of a general banking moratorium by federal, New York or California authorities, the general suspension of trading on any national securities exchange or a material disruption in securities settlement, payment or clearance services, which event, in the reasonable judgment of the Representative, would have an Adverse Effect; or (ix) the imposition by the New York Stock Exchange or other national securities exchange, or any governmental authority, of any material restrictions not now in force with respect to obligations of the general character of the Series 2024 Bonds or securities generally, or the material increase of any such restrictions now in force, including those relating to the extension of credit by, or the charge to net EXHIBIT 4 724
22 4893-0523-4113.3
capital requirements of, the Underwriters, which, in the reasonable judgment of the Representative, would have an Adverse Effect; or
(x) [any rating of the Series 2024 Bonds or other obligations of the Insurer by a national rating agency shall have been withdrawn or downgraded or placed on negative outlook or negative watch; or]
(xi) there shall have been any materially adverse change in the affairs of the Authority or the City which (A) requires an amendment to the Official Statement under Section 11(a) or (b) hereof and (B) in the Representative’s reasonable judgment would have an Adverse Effect.

If the City or the Authority shall be unable to satisfy the conditions contained in this Bond Purchase Agreement, or if the obligations of the Underwriters shall be terminated for any reason permitted by this Bond Purchase Agreement, this Bond Purchase Agreement shall terminate and neither the Underwriters, the City nor the Authority shall be under further obligation hereunder, except as further set forth in Section 10 hereof.

10. Expenses
The Underwriters shall be under no obligation to pay, and the Authority and the City shall pay or cause to be paid, the expenses incident to the performance of the obligations of the Authority and the City 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 Legal Documents and the City’s Legal Documents and the cost of preparing, printing, issuing and delivering the definitive Series 2024 Bonds, (b) the fees and disbursements of any counsel, financial advisors, accountants, verification agents or other experts or consultants retained by the Authority or the City, (c) the fees and disbursements of Bond Counsel, (d) the fees and disbursements of Disclosure Counsel, (e) the fees and disbursements of the Trustee, (f) the cost of preparation (including preparation in electronic form), and printing and distribution of the Preliminary Official Statement and any supplements and amendments thereto and the cost of preparation (including preparation in electronic form), printing and distribution of the Official Statement and any supplements and amendments thereto, including the requisite number of copies thereof for distribution by the Underwriters, (g) [the premiums with respect to the Policy and the Reserve Policy,] and (h) charges of rating agencies for the rating of the Series 2024 Bonds. The Authority, the City and the Underwriters intend that the Authority and the City will pay all expenses of the Authority and City’s employees that are incidental to implementing this Bond Purchase Agreement, including, but not limited to, meals, transportation, and lodging, of those employees, and the Authority and the City shall reimburse the Underwriters if the Underwriters pay for any of such expenses on behalf of the Authority or City.

All out-of-pocket expenses of the Underwriters incident to the performance of the Underwriters’ obligations hereunder, including the California Debt and Investment Advisory Commission fee, CUSIP services bureau charges, fees of Underwriters’ counsel and other expenses (except as provided above), shall be paid by the Underwriters from the Underwriters’ discount set forth in Section 1 hereof; provided, however, certain such expenses may be included in the expense component of the Underwriters’ discount.

11. Covenants of Authority and City
The Authority and the City covenant with the Underwriters that:

EXHIBIT 4 725
23 4893-0523-4113.3
(a) Until the earlier of (i) the date which is twenty-five (25) days after the Authority delivers the Series 2024 Bonds to the Representative, or (ii) the date the Underwriters do not retain, directly or as a member of an underwriting syndicate, any unsold balance of the Series 2024 Bonds for sale to the public (the “End of the Underwriting Period”), if any event shall occur of which the Authority or the City is aware, as a result of which it may be necessary to supplement the Official Statement in order to ensure the Official Statement will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make such information therein, in the light of the circumstances under which it was made, not misleading, the Authority shall forthwith notify the Representative of any such event of which it has knowledge and shall cooperate fully in furnishing any information available to it for any supplement to the Official Statement necessary or desirable, in the Representative’s or Authority’s opinion, so that the statements therein as so supplemented will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make such information therein, in the light of the circumstances under which it was made, not misleading, and the Authority shall promptly furnish to the Underwriters electronic copies of such supplement; provided that unless the Representative delivers written notice to the Authority in accordance with this provision at or prior to the Closing Date specifying a date (if other than the Closing Date) to be deemed the “End of the Underwriting Period,” the Closing Date shall be the “End of the Underwriting Period.” If such notice is delivered, then and the Representative agrees to notify the Authority in writing of the date on which no Underwriter retains, directly or as a member of an underwriting syndicate, any unsold balance of the Series 2024 Bonds for sale to the public; (b) If the information contained in the Final Official Statement is amended or supplemented pursuant to subparagraph (a) of this Section 11, at the time of such supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such subparagraph) at all times subsequent thereto up to and including the End of the Underwriting Period, the portions of the Official Statement so supplemented or amended (including any financial and statistical data contained therein), excluding information concerning The Depository Trust Company and its book-entry system, CUSIP numbers, and any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter furnished to the Authority in writing by such Underwriter expressly for use in the Official Statement and any amendment or supplement thereto, will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make such information therein, in the light of the circumstances under which it was made, not misleading; (c) The Authority will advise the Representative immediately of receipt by the Authority or the City of any notification with respect to the suspension of the qualification of the Series 2024 Bonds for sale in any jurisdiction or the initiation or threat of any proceeding for that purpose; (d) The Authority and the City will advise the Representative 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 Representative, which consent will not be unreasonably withheld. The Authority and the City will advise the Representative promptly of the institution of any proceedings known to it by any court, governmental agency, public board or body, prohibiting or otherwise affecting the use of the Preliminary Official Statement or the Official Statement in connection with the offering, sale or distribution of the Series 2024 Bonds. (e) The Authority and the City will furnish such information, execute such instruments and take such other action in cooperation with the Underwriters as the Underwriters may reasonably request to qualify the Series 2024 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 Underwriters may EXHIBIT 4 726
24 4893-0523-4113.3
designate; provided, however, that the Authority and the City 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;
(f) Between the date of this Bond Purchase Agreement and the Closing Date, except as disclosed in the Final Official Statement, the Authority and/or the City will not, without prior written notice to the Representative, offer or issue any bonds, certificates, notes or other obligations for borrowed money secured by the Net System Revenues; and
(g) The Authority and the City will perform all actions as may be requested by the Underwriters (including delivery of an appropriate certificate with respect to the Preliminary Official Statement) in order for the Underwriters to comply with the applicable provisions of the Rule.

12. Notices
Any notice or other communication to be given to the Authority or the City under this Bond Purchase Agreement may be given by delivering the same in writing at the Authority’s and the City’s addresses, respectively, set forth above and any such notice or other communication to be given to the Representative or the Underwriters shall be delivered to the following address:

Hilltop Securities Inc.
777 S. Hwy 101, Suite 104
Solana Beach, CA 92075
Attention: Public Finance Department

13. Parties in Interest
This Bond Purchase Agreement is made solely for the benefit of the Authority, the City and the Underwriters and no other person shall acquire or have any right hereunder or by virtue hereof. All the representations and warranties of the parties hereto contained in this Bond Purchase Agreement shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Underwriters, the City or the Authority until the earlier of (a) delivery of and payment for the Series 2024 Bonds hereunder, and (b) any termination of this Bond Purchase Agreement.

14. Counterparts
This Bond Purchase Agreement may be executed in any number of counterparts, each of which shall be an original, and all of which shall constitute but one and the same instrument.

15. Effectiveness
This Bond Purchase Agreement shall become effective and binding upon the respective parties hereto upon the execution of the acceptance hereof by the duly authorized officers of the Authority and the City and shall be valid and enforceable as of the time of such acceptance.

16. Choice of Law
The validity, interpretation and performance of this Bond Purchase Agreement shall be governed by the laws of the State of California, without regard to conflicts of law.

EXHIBIT 4 727
25 4893-0523-4113.3

17. Severability
In the event any provision of this Bond Purchase Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.

18. Entire Agreement
The Bond Purchase Agreement, when accepted by the Authority and the City in writing as heretofore specified, shall constitute the entire agreement among the Authority, the City and the Underwriters.

19. Headings
The headings of the sections of this Bond Purchase Agreement are inserted for convenience only and shall not be deemed to be part hereof.

20. No Assignment
The rights and obligations created by this Bond Purchase Agreement shall not be subject to assignment by the Underwriters, the City or the Authority without the prior written consent of the other parties hereto.
[REMAINDER OF PAGE LEFT BLANK]
EXHIBIT 4 728
S-1
4893-0523-4113.3
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly authorized, have executed and delivered this Bond Purchase Agreement, effective as of the day and year first above written.

HILLTOP SECURITIES INC. for itself and as
Representative of:

OPPENHEIMER & CO. INC.

By:

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

STOCKTON PUBLIC FINANCING

AUTHORITY
By:

Authorized Officer

CITY OF STOCKTON
By:

Authorized Officer
Time of Execution: _____________ p.m.

California time
[SIGNATURE PAGE TO BOND PURCHASE AGREEMENT]
EXHIBIT 4 729
I-1
4893-0523-4113.3

SCHEDULE I
$_______

STOCKTON PUBLIC FINANCING AUTHORITY
WASTEWATER REVENUE REFUNDING BONDS, SERIES 2024
(WASTEWATER REFUNDING PROJECT)
Maturity Date
(September 1)
Principal
Amount
Interest
Rate Yield Price
10% Test
Satisfied*
10% Test
Not Satisfied
Subject to
Hold-theOffering
Price
Rule
2025
2026
2027
2028
2029

* At the time of execution of this Bond Purchase Agreement and assuming orders are confirmed by the close of the business day immediately following the date of this Bond Purchase Agreement.

EXHIBIT 4 730
A-1
4893-0523-4113.3

EXHIBIT A

FORM OF CERTIFICATE OF REPRESENTATIVE
$_______

STOCKTON PUBLIC FINANCING AUTHORITY
WASTEWATER REVENUE REFUNDING BONDS, SERIES 2024
(WASTEWATER REFUNDING PROJECT)
Hilltop Securities Inc. (“Hilltop”), on behalf of itself and as representative of Oppenheimer & Co. Inc., in connection with the sale and issuance by the Stockton Public Financing Authority (the “Issuer”) of its $______ Wastewater Revenue Refunding Bonds, Series 2024 (Wastewater Refunding Project) (the “Bonds”), being issued on the date hereof, hereby certifies and represents the following:

A. Issue Price.

1. Sale of the General Rule Maturities. As of the date of this certificate, for each Maturity of the [Bonds][General Rule Maturities], the first price at which at least 10% of such Maturity was sold to the Public is the respective price listed in Schedule A.

2. [Initial Offering Price of the Hold-the-Offering-PriceMaturities. (a) The Underwriter offered the Hold-the-Offering Price Maturities to the Public for purchase at the respective initial offering prices listed in Schedule A (the “Initial Offering Prices”) on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Hold-theOffering Price Maturities is attached to this certificate as Schedule B. (b) As set forth in the Bond Purchase Agreement between the Issuer and Hilltop, dated _______, 2024, Hilltop has agreed in writing that, (i) for each Maturity of the Hold-the-OfferingPrice Maturities, it would neither offer nor sell any of the unsold Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the “hold-the-offering-price rule”), and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any third-party distribution agreement shall contain the agreement of each broker-dealer who is a party to the third-party distribution agreement, to comply with the hold-the-offering-price rule. Pursuant to such agreement, no Underwriter has offered or sold any Maturity of the Hold-the-Offering-Price Maturities at a price that is higher than the respective Initial Offering Price for that Maturity of the Bonds during the Holding Period.]
For purposes of this certificate the following definitions apply:
(a) General Rule Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “General Rule Maturities.”
(b) [Hold-the-Offering-Price Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “Hold-the-Offering-Price Maturities.”] (c) [Holding Period means, with respect to a Hold-the-Offering-Price Maturity, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business EXHIBIT 4 731
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day after the Sale Date, or (ii) the date on which the Underwriter has sold at least 10% of such Hold-the-Offering-Price Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold the Offering Price Maturity.] (d) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities.
(e) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a Related Party to an Underwriter.
(f) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is _______, 2024. (g) Underwriter means (i) Hilltop, (ii) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (iii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clauses (i) or (ii) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a third-party distribution agreement participating in the initial sale of the Bonds to the Public).
(h) Related Party means any entity if an Underwriter and such entity are subject, directly or indirectly, to (i) more than 50 percent 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), (ii) more than 50 percent common ownership of their capital interests or profit interests, if both entities are partnerships (including direct ownership by one partnership of another), or (iii) more than 50 percent 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).

B. Bond Yield.

Using industry standard software, we have calculated the yield on the Bonds to be ______________%.

C. Weighted Average Maturity.

Using industry standard software, we have calculated (i) the weighted average maturity of the Bonds to be __________; and (ii) the remaining weighted average maturity of the Prior Bonds to be _________.

D. [Insurance Policy and Surety Policy.

We believe that the present value of the sum of the premiums for a municipal bond insurance policy insuring the payment of the principal of and interest on the Bonds and a surety bond for the Reserve Fund with respect to the Bonds (collectively, the “Credit Enhancement”) paid to [NAME OF PROVIDER] is less than the present value of the aggregate amount of interest reasonably expected to be saved as a result of such Credit Enhancement (based on the yield on the Bonds determined with EXHIBIT 4 732
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regard to premium for such Credit Enhancement). We further believe that the premium for the Credit Enhancement does not exceed a reasonable charge for the transfer of credit risk and is comparable with other fees under current market conditions for similar credits. The Credit Enhancement was a vital factor in marketing the Bonds and permits the marketing of the Bonds at interest rates comparable to other bond issues of a similar type and purpose.]
We understand that the representations contained herein may be relied upon by the Issuer and the City of Stockton in making certain of the representations contained in the Tax Certificate, and we further understand that Hawkins Delafield & Wood LLP, as bond counsel, may rely upon this certificate, among other things, in providing an opinion with respect to the exclusion from gross income of interest on the Bonds pursuant to Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”). The undersigned is certifying only as to facts in existence on the date hereof. Nothing herein represents the undersigned’s interpretation of any laws; in particular the regulations under the Code, or the application of any laws to these facts. The undersigned is authorized to execute this certificate on behalf of Hilltop, which certifications are not necessarily based on personal knowledge, but may instead be based on either inquiry deemed adequate by the undersigned or institutional knowledge (or both) regarding the matters set forth herein.

Dated: _______, 2024
HILLTOP SECURITIES INC.

By:

Name:

Title:

EXHIBIT 4 733
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SCHEDULE A
SALE PRICES OF THE GENERAL RULE MATURITIES [AND INITIAL OFFERING PRICES OF THE HOLD-THE-OFFERING-PRICE MATURITIES]
General Rule Maturities
Maturity Date
([____]) Principal Amount Interest Rate Yield Price
$ % %
[Hold-the-Offering-Price Maturities]
Maturity Date
([_____]) Principal Amount Interest Rate Yield Price
$ % %
EXHIBIT 4 734
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SCHEDULE B

PRICING WIRE OR EQUIVALENT COMMUNICATION
[SEE ATTACHED]
EXHIBIT 4 735
PRELIMINARY OFFICIAL STATEMENT DATED [JULY __], 2024
NEW ISSUE─FULL BOOK-ENTRY RATINGS
(See “RATINGS” herein)
In the opinion of Hawkins Delafield & Wood LLP, Bond Counsel, under existing statutes and court decisions and assuming continuing compliance with certain tax covenants described herein, (i) interest on the 2024 Bonds (as defined herein) is excluded from gross income for federal income tax purposes pursuant to Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”), and (ii) interest on the 2024 Bonds is not treated as a preference item in calculating the alternative minimum tax under the Code, however, interest on the 2024 Bonds is included in the “adjusted financial statement income” of certain corporations that are subject to the alternative minimum tax under Section 55 of the Code. In addition, in the opinion of Bond Counsel, under existing statutes, interest on the 2024 Bonds is exempt from State of California personal income taxes. See “TAX MATTERS” herein. $[PAR AMOUNT]∗

STOCKTON PUBLIC FINANCING AUTHORITY
WASTEWATER REVENUE REFUNDING BONDS, SERIES 2024
(WASTEWATER REFUNDING PROJECT)
Dated: Date of Delivery Due: September 1, as shown on the inside cover The $[PAR AMOUNT] principal amount of Stockton Public Financing Authority Wastewater Revenue Refunding Bonds, Series 2024 (Wastewater Refunding Project) (the “2024 Bonds”) are being issued by the Stockton Public Financing Authority (the “Authority”) for the purpose of providing funds which, together with certain other available moneys, will be used to: (i) refund all of the outstanding principal amount of the Stockton Public Financing Authority Wastewater Revenue Refunding Bonds, Series 2014 (1998 Wastewater Project and 2003 Wastewater Project) (the “2014 Bonds”); [(ii) pay the premiums of a municipal bond insurance policy and a municipal bond debt service reserve insurance policy for the 2024 Bonds; and] (iii) pay certain costs associated with the issuance of the 2024 Bonds. See “PLAN OF REFUNDING” herein.

The 2024 Bonds are being issued by the Authority pursuant to the 2024 Indenture, dated as of August 1, 2024 (the “2024 Indenture”), by and between the Authority and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). The 2024 Bonds are limited obligations of the Authority payable solely from installment payments (the “2024 Installment Payments”) to be made by the City under the 2024 Installment Purchase Contract, dated as of August 1, 2024 (the “2024 Contract”), by and between the Authority and the City, and certain amounts held under the 2024 Indenture. As security for the payment of the 2024 Installment Payments, the City has pledged the Net System Revenues (as defined herein) of the Wastewater System as provided in the 2024 Contract.

See “SECURITY AND SOURCES OF PAYMENT FOR THE 2024 BONDS” herein. The 2024 Bonds will be issued in denominations of $5,000 or any integral multiple thereof, in fully registered form. When delivered, the 2024 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 2024 Bonds. Individual purchases of the 2024 Bonds will be made in book-entry form only. See APPENDIX E – “DTC AND THE BOOK-ENTRY ONLY SYSTEM” attached hereto.

Interest on the 2024 Bonds is payable on March 1 and September 1 of each year, commencing March 1, 2025. Payments of principal of and interest on the 2024 Bonds are payable directly to DTC by the Trustee. Upon receipt of payments of principal and interest, DTC will in turn remit such principal and interest to DTC Participants for subsequent distribution to the beneficial owners of the 2024 Bonds. So long as the 2024 Bonds are registered in the name of Cede & Co., all payments with respect to the 2024 Bonds will be made to DTC.

The 2024 Bonds are not subject to redemption prior to maturity. See “THE 2024 BONDS – 2024 Bonds Not Subject to Redemption” herein.

The City has outstanding certain obligations, and may issue or incur additional obligations, secured by the pledge of, and payable from, Net System Revenues on a parity basis with the 2024 Installment Payments, as described herein. See “SECURITY AND SOURCES OF PAYMENT FOR THE 2024 BONDS – Outstanding Parity Obligations,” “ – Additional Parity Obligations,” and “ – Subordinate Obligations” herein. [The scheduled payment of principal of and interest on the 2024 Bonds when due will be guaranteed under a municipal bond insurance policy to be issued concurrently with the delivery of the 2024 Bonds by [INSURANCE PROVIDER]. See APPENDIX G – “SPECIMEN MUNICIPAL BOND INSURANCE POLICY” attached hereto.]
[INSURANCE PROVIDER LOGO]
THE 2024 BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM THE 2024 INSTALLMENT PAYMENTS AND CERTAIN MONEYS HELD UNDER THE 2024 INDENTURE. THE 2024 BONDS ARE NOT A DEBT OF THE CITY, THE STATE OF CALIFORNIA