Tracy City Council
April 5, 2022

EXHIBIT A

FORM OF 2022 BOND

No. __ ***$______***

UNITED STATES OF AMERICA

STATE OF CALIFORNIA

COUNTY OF SAN JOAQUIN

CITY OF TRACY
Community Facilities District No. 2021-1
(Hillview)
Special Tax Bond, Series 2022

INTEREST RATE MATURITY DATE DATED DATE CUSIP

____% September 1, ______ ______, 2022 ___________

REGISTERED OWNER:

PRINCIPAL AMOUNT: *********DOLLARS

The City of Tracy (the “City”) for and on behalf of the "City of Tracy Community Facilities District No. 2021-1 (Hillview)" (the “CFD”), for value received, hereby promises to pay solely from the Special Tax Revenues (as defined in the hereinafter defined Agreement) to be collected in the CFD or amounts in certain funds and accounts held under the Agreement (as hereinafter defined), to the registered owner named above, or registered assigns, on the maturity date set forth above, unless redeemed prior thereto as hereinafter provided, the principal amount set forth above, and to pay interest on such principal amount from the Dated Date set forth above, or from the most recent Interest Payment Date (as hereinafter defined) to which interest has been paid or duly provided for (unless this Bond is authenticated on or before an Interest Payment Date and after the close of business on the Record Date preceding such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or unless this Bond is authenticated on or prior to August 15, 2022, in which event it shall bear interest from the Dated Date identified above, payable semiannually on each March 1 and September 1, commencing September 1, 2022 (each an “Interest Payment Date”), at the interest rate set forth above, until the principal amount hereof is paid or made available for payment provided, however, that if at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment.

Principal of and interest on the Bonds (including the final interest payment upon maturity or earlier redemption), is payable on the applicable Interest Payment Date by check of the Fiscal Agent (defined below) mailed by first class mail to the registered Owner thereof at such registered Owner's address as it appears on the registration books maintained by the Fiscal Agent at the close of business on the Record Date preceding the Interest Payment Date, or by wire transfer made on such Interest Payment Date upon written instructions of any Owner of $1,000,000 or more in aggregate principal amount of Bonds delivered to the Fiscal Agent prior to the applicable Exhibit A

Record Date. The principal of the Bonds and any premium on the Bonds are payable in l awful money of the United States of America upon surrender of the Bonds at the Principal Office of the Fiscal Agent or such other place designated by the Fiscal Agent.

This Bond is one of a duly authorized issue of bonds in the aggregate principal amount of $_________ approved by a resolution of the City Council of the City on ______ , 2022 (the “Resolution”), under the Mello- Roos Community Facilities Act of 1982, as amended, sections 53311, et seq., of the California Government Code (the “Act”) for the purpose of funding certain facilities for the City , and is one of the series of bonds designated “ City of Tracy Community Facilities District No. 2 021-1 ( Hillview) Special Tax Bonds, Series 2022” (the “Bonds”). The issuance of the Bonds and the terms and conditions thereof are provided for by a Fiscal Agent Agreement, dated as of _____, 2022 (the “Agreement”), between the City and U.S. Bank Trust Company, National Association (the “Fiscal Agent”) and this reference incorporates the Agreement herein, and by acceptance hereof the owner of this Bond assents to said terms and conditions. The Agreement is authorized under, this Bond is issued under and both are to be construed in accordance with, the laws of the State of California.

Pursuant to the Act, the Resolution and the Agreement, the principal of and interest on this Bond are payable solely from the annual special tax authorized under the Act to be collected within the CFD (the “Special Tax”) and certain funds held under the Agreement. Any tax for the payment hereof shall be limited to the Special Tax, except to the extent that provision for payment has been made by the City, as may be permitted by law. The Bonds do not constitute obligations of the City for which the City is obligated to levy or pledge, or has levied or pledged, general or special taxation other than described hereinabove. Neither the faith and credit nor the taxing power of the City (except to the limited extent set forth in the Agreement) or the State of California or any political subdivision thereof is pledged to the payment of the Bonds.

Optional Redemption. The
Bonds maturing on or after September 1, 20__ are subject to optional redemption as directed by the City, from sources of funds other than prepayments of Special Taxes, prior to their stated maturity on any date on or after September 1, 20__, as a whole or in part, at a redemption price (expressed as a percentage of the principal amount of the Bonds to be redeemed), as set forth below, together with accrued interest thereon to the date fixed for redemption:

Redemption Dates
Redemption
Price
September 1, 20__ through August 31, 20__ 10_%
September 1, 20__ through August 31, 20__ 10_
September 1, 20__ through August 31, 20__ 10_
September 1, 20__ and any date thereafter 100

Mandatory Sinking Fund Redemption. The Term Bond maturing on September 1, 20__, is subject to mandatory redemption in part by lot, from sinking fund payments made by the City from the Bond Fund, at a redemption price equal to the principal amount thereof to be redeemed, plus accrued interest to the redemption date, without premium, in the aggregate respective principal amounts all as set forth in the following table:

Exhibit A

Sinking Fund
Redemption Date
(September 1)

Sinking Fund
Payments
20__ $_______
20__ _______
20__ _______
20__ _______
20__ (maturity) ______

The Term Bond maturing on September 1, 20__, is subject to mandatory redemption in part by lot, from sinking fund payments made by the City from the Bond Fund, at a redemption price equal to the principal amount thereof to be redeemed, without premium, in the aggregate respective principal amounts all as set forth in the following table:

Sinking Fund
Redemption Date
(September 1)

Sinking Fund
Payments
20__ $_______
20__ _______
20__ _______
20__ _______
20__ (maturity) _______

Provided, however, if some but not all of the Term Bonds of a given maturity have been redeemed as a result of an optional redemption or a redemption from Special Tax Prepayments, the total amount of all future Sinking Fund Payments relating to such maturity shall be reduced by the aggregate principal amount of Term Bonds of such maturity so redeemed, to be allocated among such Sinking Fund Payments on a pro rata basis in integral multiples of $5,000 as determined by the City, notice of which determination shall be given by the City to the Fiscal Agent.

Redemption From Special Tax Prepayments . S
pecial Tax Prepayments and any
corresponding transfers from the 2022 Reserve Fund shall be used to redeem Bonds on the next Interest Payment Date for which notice of redemption can timely be given under the Fiscal Agent Agreement, among maturities so as t o maintain substantially the same Debt Service profile for the Bonds as in effect prior to such redemption and by lot within a maturity, at a redemption price (expressed as a percentage of the principal amount of the Bonds to be redeemed), as set forth below, together with accrued interest to the date fixed for redemption:

Redemption Dates
Redemption
Price
Any Interest Payment Date on or before March 1, 20__ 10_% September 1, 20__ and March 1, 20__ 10_
September 1, 20__ and March 1, 20__ 10_
September 1, 20__ and any Interest Payment Date thereafter 100

Notice of redemption with respect to the Bonds to be redeemed shall be given to the registered owners thereof, in the manner, to the extent and subject to the provisions of the Agreement.

Exhibit A

This Bond shall be registered in the name of the owner hereof, as to both principal and interest. Each registration and transfer of registration of this Bond shall be entered by the Fiscal Agent in books kept by it for this purpose and authenticated by its manual signature upon the certificate of authentication endorsed hereon.

No transfer or exchange hereof shall be valid for any purpose unless made by the registered owner, by execution of the form of assignment endorsed hereon, and authenticated as herein provided, and the principal hereof, interest hereon and any redemption premium shall be payable only to the registered owner or to such owner’s order. The Fiscal Agent shall require the registered owner requesting transfer or exchange to pay any tax or other governmental charge required to be paid with respect to such transfer or exchange. No transfer or exchange hereof shall be required to be made (i) fifteen days prior to the date established by the Fiscal Agent for selection of Bonds for redemption or (ii) with respect to a Bond after such Bond has been selected for redemption.

The Agreement and the rights and obligations of the City thereunder may be modified or amended as set forth therein. The principal of the Bonds is not subject to acceleration upon a default under the Agreement or any other document.

This Bond shall not become valid or obligatory for any purpose until the certificate of authentication and registration hereon endorsed shall have been dated and signed by the Fiscal Agent.

IT IS HEREBY CERTIFIED, RECITED AND DECLARED by the City that all acts, conditions and things required by law to exist, happen and be performed precedent to and in the issuance of this Bond have existed, happened and been performed in due time, form and manner as required by law, and that the amount of this Bond, together with all other indebtedness of the City, does not exceed any debt limit prescribed by the laws or Constitution of the State of California.

Unless this Bond is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the Fiscal Agent for registration of transfer, exchange, or payment, and any Bond 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 inasmuc h as the registered owner hereof, Cede & Co., has an interest herein.

Exhibit A

IN WITNESS WHEREOF, City of Tracy has caused this Bond to be to be signed by the facsimile signature of its Finance Director and countersigned by the facsimile signature of the Clerk.

Clerk Finance Director

[FORM OF FISCAL AGENT’S CERTIFICATE OF AUTHENTICATION AND REGISTRATION]

This is one of the Bonds described in the Agreement which has been authenticated on , 2022.

U.S. BANK TRUST COMPANY,

NATIONAL ASSOCIATION,
as Fiscal Agent

By:

Authorized Signatory
Exhibit A

FORM OF ASSIGNMENT

For value received, the undersigned do(es) hereby sell, assign and transfer unto

(Name, Address and Tax Identification or Social Security Number of Assignee)

the within Bond and do(es) hereby irrevocably constitute and appoint , attorney, to transfer the same on the registration books of the Fiscal Agent, with full power of substitution in the premises.

Dated:

Signature Guaranteed:

NOTICE: Signature(s) must be guaranteed
by an eligible guarantor.

NOTICE: Signature guarantee shall be made
by a guarantor institution participating in the
Securities Transfer Agents Medallion
Program or in such other guarantee program
acceptable to the Fiscal Agent
Exhibit B

EXHIBIT B

CITY OF TRACY
Community Facilities District No. 2021-1
(Hillview)
Special Tax Bonds, Series 2022

OFFICER’S CERTIFICATE REQUESTING DISBURSEMENT FROM IMPROVEMENT FUND

REQUISITION NO. _____

The undersigned hereby states and certifies that:

(i) I am the duly appointed, qualified and acting Finance Director of the City of Tracy, a general law city duly organized and existing under the laws of the State of California (the “City”) and as such, am familiar with the facts herein certified and am authorized to certify the same;

(ii) I am an “Authorized Officer,” as such term is defined in that certain Fiscal Agent Agreement, dated as of _______, 2022 (the “Fiscal Agent Agreement”), by and between the City and U.S. Bank Trust Company, National Association, as fiscal agent (the “Fiscal Agent”);

(iii) under Section 4.07(B) of the Fiscal Agent Agreement, the undersigned hereby requests and authorizes the Fiscal Agent to disburse from the Bond Proceeds Account established under the Fiscal Agent Agreement to each payee designated on Schedule A attached hereto and by this reference incorporated herein, the amount set forth opposite such payee, for payment or reimbursement of previous payment of a Project cost (as Project is defined in the Fiscal Agent Agreement) as described on attached Schedule A;

(iv) under Section 4.07(B) of the Fiscal Agent Agreement, the undersigned hereby requests and authorizes the Fiscal Agent to disburse from the Remainder Taxes Account established under the Fiscal Agent Agreement to each payee designated on Schedule A attached hereto and by this reference incorporated herein, the amount set forth opposite such payee, for payment or reimbursement of previous payment of a Project cost (as Project is defined in the Fiscal Agent Agreement) as described on attached Schedule A;

(v) under Section 4.07(B) of the Fiscal Agent Agreement, the undersigned hereby requests and authorizes the Fiscal Agent to transfer $_____ from the Remainder Taxes Account established under the Fiscal Agent Agreement to [the Bond Fund] [ the City for deposit in the Administrative Expense Account] [the 2022 Reserve Fund];

(vi) the disbursements described on the attached Schedule A are properly chargeable to the Improvement Fund; and

(vii) no portion of the amount herein requested to be disbursed was set forth in any Officers Certificate previously filed requesting disbursement.

Exhibit B

Dated:

CITY OF TRACY

By:

Finance Director
Exhibit B

SCHEDULE A

Payee Name and
Address

Purpose of Obligation

Amount
Account from which
Amounts should be
paid

Exhibit D

EXHIBIT C
CITY

OF TRACY
Community Facilities District No. 2021-1
(Hillview)
Special Tax Bonds, Series 2022
OFF
ICER’S CERTIFICATE REQUESTING DISBURSEMENT

FROM COSTS OF ISSUANCE FUND
REQU
ISITION NO. _____
The undersigned hereby states and certifies that:
(i) I
am the duly appointed, qualified and acting Finance Director of the City of Tracy, a general law city duly organized and existing under the laws of the State of California (the “City”) and as such, am familiar with the facts herein certified and am authorized to certify the same; (ii) I
am an “Authorized Officer,” as such term is defined in that certain Fiscal Agent Agreement, dated as of ______ 1, 2022 (the “Fiscal Agent Agreement”), by and between the City and U.S. Bank Trust Company, National Association, as fiscal agent (the “Fiscal Agent”); (iii) under
Section 4.02(B) of the Fiscal Agent Agreement, the undersigned hereby requests and authorizes the Fiscal Agent to disburse from the Costs of Issuance Fund established under the Fiscal Agent Agreement to each payee designated on Schedule A attached hereto and by this reference incorporated herein, the amount set forth opposite such payee, for payment or reimbursement of previous payment of Costs of Issuance (as that term is defined in the Fiscal Agent Agreement) as described on attached Schedule A; and (iv) t
he disbursements described on the attached Schedule A constitute Costs of Issuance, and are properly chargeable to the Costs of Issuance Fund.

Dated:

CITY

OF TRACY
By:

Finance Director
Exhibit D

SCHEDULE A
Payee Name and Address Pur pose of Obligation Amount
Stradling Yocca Carlson & Rauth
Draft of 3/22/22
4886-4702-6451v3/024667-0110
$_____________

CITY OF TRACY
COMMUNITY FACILITIES DISTRICT NO. 2021-1 (HILLVIEW)
SPECIAL TAX BONDS, SERIES 2022

BOND PURCHASE AGREEMENT
___________, 2022
City of Tracy
333 Civic Center Plaza
Tracy, California 95376
Ladies and Gentlemen:

Piper Sandler & Co., as underwriter (the “ Underwriter”), acting not as a fiduciary or agent for you, but on behalf of itself, offers to enter into this Bond Purchase Agreement (this “ Purchase Agreement”) with the City of Tracy (the “ City”), which upon acceptance will be binding upon the Underwriter and the City. This offer is made subject to the City’s acceptance by the execution of this Purchase Agreement and its delivery to the Underwriter at or before 8:00 P.M., California time, on the date hereof, and, if not so accepted, will be subject to withdrawal by the Underwriter upon notice delivered to the City at any time prior to the acceptance hereof by the City. All capitalized terms used herein, which are not otherwise defined, shall have the m eaning provided for such terms in the Fiscal Agent Agreement, dated as of ______ 1, 2022 (the “Fiscal Agent Agreement ”), by and between the City and U.S. Bank National Association, as fiscal agent (the “Fiscal Agent”).

1. Purchase, Sale and Delivery of the Bonds.

A. Subject to the terms and conditions and in reliance upon the representations, warranties and agreements set forth herein, the Underwriter hereby agrees to purchase from the City and the City hereby agrees to sell to the Underwriter all (but not less t han all) of the $ ___________ aggregate principal amount of the City of Tracy Community Facilities District No. 2021-1 (Hillview) Special Tax Bonds, Series 2022 (the “ Bonds”), dated the Closing Date (as hereinafter defined), bearing interest at the rates and maturing on the dates and in the principal amounts set forth in Exhibit A hereto. The purchase price for the Bonds shall be $___________ (being 100% of the aggregate principal amount thereof [plus/less] an original issue [premium/discount] of $___________ and less an Underwriter’s discount of $___________).

The Bonds shall be substantially in the form described in, shall be issued and secured under the provisions of, and shall be payable from the Special Tax Revenues , as provided in the Fiscal Agent Agreement, the Preliminary Official Statement (as hereinafter defin ed), and the Mello -Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 of Part 1 of Division 2 of Title 5 (commencing with Section 53311) of the Government Code of the State of California (the “ Act”).

The issuance of the Bonds has been du ly authorized by the City pursuant to a resolution adopted on ________, 2022 (the “Approving Resolution”).

ATTACHMENT C
2 4886-4702-6451v3/024667-0110
The net proceeds of the Bonds will be used, as indicated in the Fiscal Agent Agreement, for the following purposes: ( i) finance the acquisition and construction of certain public improvements , (ii) fund a debt service reserve fund for the Bonds, (iii) fund capitalized interest through September 1, 2022, and (iv) pay the costs of issuing the Bonds.

Prior to the acceptance of this Purchase Agreement by the City, the City shall have caused to be delivered to the Underwriter (i) a Letter of Representations duly executed by Lennar Homes of California, LLC, a California limited liability company (the “ Developer”) in substantially the fo rm set forth in Exhibit B hereto, with only such changes thereto as shall have been accepted by the Underwriter.

B. The City acknowledges that the Underwriter is entering into this Purchase Agreement in reliance on the representations and agreements made by t he City herein, and the City shall take all action necessary to enforce its rights hereunder for the benefit of the Underwriter and shall immediately notify the Underwriter if it becomes aware that any representation or agreement made by the City herein is incorrect in any material respect.

The City acknowledges and agrees that: (i) the purchase and sale of the Bonds pursuant to this Purchase Agreement is an arm’s-length commercial transaction between the City and the Underwriter; (ii) in connection therew ith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Underwriter is and has been acting solely as principal and is not acting as a Municipal Advisor (as defined in Section 15B of the Securities Exchange Act of 1934, as amended); (iii) the Underwriter has not assumed an advisory or fiduciary responsibility in favor of the City with respect to the offering contemplated hereby or the discussions, undertakings and procedures leading thereto (irrespect ive of whether the Underwriter has provided other services or is currently providing other services to the City on other matters); and (iv) the City has consulted its own legal, financial and other advisors to the extent that the City has deemed appropriate.

C. Pursuant to the authorization of the City, the Underwriter has distributed copies of the Preliminary Official Statement dated _____, 2022 , relating to the Bonds, which, together with the cover page, inside cover page and appendices thereto is herein cal led the “Preliminary Official Statement.” By its acceptance of this Purchase Agreement, the City hereby ratifies the use by the Underwriter of the Preliminary Official Statement and the preparation and distribution of the final Official Statement (togethe r with any supplements thereto, the “ Official Statement”) consisting of the Preliminary Official Statement with such changes as are noted thereon and as may be made thereto, with the approval of Jones Hall, A Professional Law Corporation, the City’s Bond C ounsel (“ Bond Counsel ”) and Disclosure Counsel (“ Disclosure Counsel ”) and the Underwriter. The City agrees to execute the Official Statement and to provide a copy thereof to the Underwriter as set forth in Section 4.E.1 hereof. The City hereby authorizes and requires the Underwriter to use and promptly distribute, in connection with the offer and sale of the Bonds, the Preliminary Official Statement, the Official Statement and any supplement or amendment thereto.

The City further authorizes the Underwrit er to use and distribute, in connection with the offer and sale of the Bonds, the Fiscal Agent Agreement, this Purchase Agreement and all information contained herein, and all other documents, certificates and statements furnished by or on behalf of the City to the Underwriter in connection with the transactions contemplated by this Purchase Agreement.
3 4886-4702-6451v3/024667-0110
D. To assist the Underwriter in complying with Securities and Exchange Commission Rule 15c2 -12(b)(5) (the “ Rule”), the City will undertake pursuant to the Continuing Disclosure Certificate, in the form attached to the Official Statement as Appendix E (the “Continuing Disclosure Certificate ”), to provide annual reports and notices of certain enumerated events. A description of this undertaking is set forth in the Preliminary Official Statement and will also be set forth in the Official Statement.

E. Except as the Underwriter and the City may otherwise agree, the City will deliver to the Underwriter, at the offices of Bond Counsel in San Francisco, California, or at s uch other location as may be mutually agreed upon by the Underwriter and the City, the documents hereinafter mentioned; and the City will deliver to the Underwriter through the facilities of The Depository Trust Company (“ DTC”) in New York, New York, the B onds, in definitive form (all Bonds bearing CUSIP numbers), duly executed by the City and authenticated by the Fiscal Agent in the manner provided for in the Fiscal Agent Agreement and the Act at 8:00 a.m. California time, on _____, 2022 ( the “ Closing Date”), and the Underwriter will accept such delivery and pay the purchase price of the Bonds as set forth in paragraph (A) of this Section by wire transfer, payable in federal or other immediately available funds (such delivery and payment being herein re ferred to as the “Closing”). The Bonds shall be in fully registered book -entry form (which may be typewritten) and shall be registered in the name of Cede & Co., as nominee of DTC.

2. Public Offering and Establishment of Issue Price.

A. The Underwriter agrees t o make a bona fide public offering of all of the Bonds initially at the public offering prices (or yields) set forth in Exhibit A attached hereto and incorporated herein by reference. Subsequent to the initial public offering, the Underwriter reserves the right to change the public offering prices (or yields) as it deems necessary in connection with the marketing of the Bonds, provided that the Underwriter shall not change the interest rates set forth in Exhibit A. The Bonds may be offered and sold to cer tain dealers at prices lower than such initial offering prices
B. The Underwriter agrees to assist the City in establishing the issue price of the Bonds and shall execute and deliver to the City at Closing an “issue price” or similar certificate, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit F, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the City and Bond Counsel, to ac curately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds.

All actions to be taken by the City under this section to establish the issue price of the Bonds may be taken on behalf of the City by CSG Advisors Incorporated (the “ Municipal Advisor ”) and any notice or report to be provided to the City may be provided to the Municipal Advisor.

C. Except as otherwise set forth in Exhibit A, the City will treat the first price at which 10% of each ma turity of the Bonds (the “ 10% test”) is sold to the public as the issue price of that maturity (if different interest rates apply within a maturity, each separate CUSIP number within that maturity will be subject to the 10% test). At or promptly after the execution of this Purchase Agreement, the Underwriter shall report to the City the price or prices at which it has sold to the public each maturity of the Bonds. If at that time the 10% test has not been satisfied as to any maturity of the Bonds, the Und erwriter agrees to promptly report to the City the prices at which it sells the unsold Bonds of that maturity to the public. That reporting obligation shall continue, 4 4886-4702-6451v3/024667-0110
whether or not the Closing Date has occurred, until the 10% test has been satisfied as t o the Bonds of that maturity or until all Bonds of that maturity have been sold to the public.

D. The Underwriter confirms that it has offered the Bonds to the public on or before the date of this Purchase Agreement at the offering price or prices (the “ initial offering price”), or at the corresponding yield or yields, set forth in Exhibit A, except as otherwise set forth therein. Exhibit A also sets forth, identified under the column “Hold the Offering Price Rule Used,” as of the date of this Purchase Agreement, the maturities, if any, of the Bonds for which the 10% test has not been satisfied and for which the City and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the City to treat the initial offeri ng 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 Bonds, the Underwriter will ne ither offer nor sell unsold Bonds of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following:

1. the close of the fifth (5th) business day after the sale date; or

2. the date on which the Underwriter has sold at least 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public.

The Underwriter shall promptly advise the City when it has sold 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public, if that occurs prior to the close of the fifth (5th) business day after the sale date.

E. The Underwriter confirm s that any selling group agreement and any retail distribution agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer who is a member of the selling group and each broker -dealer that is a party to such retail distribution agreement, as applicable, to:
(1) report the prices at which it sells to the public the unsold Bonds of each maturity allotted to it until it is notified by the Underwriter that ei ther the 10% test has been satisfied as to the Bonds of that maturity or all Bonds of that maturity have been sold to the public; and (2) comply with the hold- the-offering-price rule, if applicable, in each case if and for so long as directed by the Underw riter.

The City acknowledges that, in making the representation set forth in this subsection, the Underwriter will rely on: (A) in the event that a selling group has been created in connection with the initial sale of the Bonds to the public, the agreemen t of each dealer who is a member of the selling group to comply with the hold -the-offering-price rule, if applicable, as set forth in a selling group agreement and the related pricing wires; and (B) in the event that a retail distribution agreement was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker- dealer that is a party to such agreement to comply with the hold -the-offering-price rule, if applicable, as set forth in the retail distribution agreement an d the related pricing wires. The City further acknowledges that the Underwriter shall not be liable for the failure of any dealer who is a member of a selling group, or of any broker -dealer that is a party to a retail distribution agreement, to comply with its corresponding agreement regarding the hold -the-offering-price rule as applicable to the Bonds.
5 4886-4702-6451v3/024667-0110
F. The Underwriter acknowledges that sales of any Bonds to any person that is a related party to the Underwriter shall not constitute sales to the public for purposes of this section.

Further, for purposes of this section:

1. “public” means any person other than an underwriter or a related party;

2. “underwriter” means: (A) any person that agrees pursuant to a written contract with the City (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the 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 i nitial sale of the Bonds to the public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the public);

3. a purchaser of any of the Bonds is a “ related party ” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to: (A) at least 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); (ii) 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 (iii) more than 50% common ownership of the value of the outstandin g 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

4. “sale date” means the date of execution of this Purchase Agreement by all parties.

3. Representations and Covenants of the City . The City represents and covenants to the Underwriter that:

A. The City is duly organized and validly existing as a municipal corporation under the Constitution and laws of the State of California, and has duly authorized the formation of the City of Tracy Community Facilities District No. 2021-1 (Hillview) (the “Community Facilities District”) pursuant to resolutions and an ordinance duly adopted by the City Council (collectively, the “ Community Facilities District Formation Resolution ” and, together with the Approving Resolution authorizing the issuance of the Bonds, the “ City Resolutions”) and the Act . The City Council, as the legislative body of the City and the Community Facilities District, (i) has duly adopted the City Resolutions, (ii) has duly adopted Ordinance No. _____ of the City on ___________, levying special taxes within the Community Facilities District (the “Ordinance”), and (iii) has caused to be recorded in the real property records of San Joaquin County a notice of special tax lien (the “ Notice of Special Tax Lien ”) (the Community Facilities District Formation Resolution, the Ordinance, the rate and method of apportionment of special taxes approved by the City Council and the qualified electors within the Community Facilities District (the “ Rate and Method”) and the Notice of Special Tax Lien are coll ectively referred to herein as the “ Formation Documents”). Each of the Formation Documents remains in full force and effect as of the date hereof and has not been amended , except to the extent set forth therein . The Community Facilities District is duly organized and validly existing as a Community Facilities District under the laws of the State of California. The City has, and at the Closing Date will have, as the case may be, full legal right, power and authority: (i) to execute, deliver and perform its obligations under the Fiscal Agent 6 4886-4702-6451v3/024667-0110
Agreement and this Purchase Agreement, and to carry out all transactions contemplated by each of such agreements; (ii) to issue, sell and deliver its Bonds to the Underwrite r; (iii) to enter into the Continuing Disclosure Certificate; and (iv) to carry out, give effect to and consummate the transactions contemplated by the Formation Documents, the Fiscal Agent Agreement, the Continuing Disclosure Certificate, this Purchase Agreement, the Bonds and the Official Statement.

This Purchase Agreement, the Fiscal Agent Agreement, the Bonds and the Continuing Disclosure Certificate are collectively referred to herein as the “City Documents.” B. The City has complied, and will at the Clos ing Date be in compliance in all material respects, with the Formation Documents and the City Documents, and any immaterial noncompliance by the City, if any, will not impair the ability of the City to carry out, give effect to or consummate the transactions contemplated by the foregoing. From and after the date of issuance of the Bonds, the City will continue to comply with the covenants of the City contained in the City Documents.

C. Except as described in the Preliminary Official Statement, the City is not , in any respect material to the transactions referred to herein or contemplated hereby, in breach of or in default under, any law or administrative rule or regulation of the State of California, the United States of America, or of any department, division , agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the City is a party or is otherwise subject or bound, and the execution and delivery and the performance of its obligations under the City Documents and compliance with the provisions of each thereof, or the performance of the conditions precedent to be performed by the City pursuant to the C ity Documents, will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State, the United States of America, or of any department, division, agency or instrumentality of either thereof , or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the City is a party or is otherwise subject or bound, in any manner that would mat erially and adversely affect the performance by the City of its obligations under the City Documents or the performance of the conditions precedent to be performed by the City pursuant to the City Documents.

D. Except as may be required under the “blue sky” o r other securities laws of any jurisdiction, all approvals, consents, authorizations, elections and orders of, or filings or registrations with, any governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to, or the absence of which would materially adversely affect, the performance by the City of its obligations under the City Documents, have been or will be obtained at the Closing Date and are or will be in full force and effect at the Closing Date.

E. The City Documents conform as to form and tenor to the descriptions thereof contained in the Official Statement.

F. The Bonds are payable from the Special Tax Revenues generated by the levy of special taxes in the District (the “ Special Taxes”), as set f orth in the Fiscal Agent Agreement .

The levy of the Special Taxes has been duly and validly authorized pursuant to the Act and, subject to the maximum rate of Special Taxes in the Rate and Method and the application of the Special Tax Revenues as set forth in the Fiscal Agent Agreement, the levy of the Special Taxes within the District 7 4886-4702-6451v3/024667-0110
will be fixed and levied in an amount which, together with other available funds, is required for the payment of the pri ncipal of, and interest on, the Bonds when due and pa yable, all as provided in the Fiscal Agent Agreement. The City has covenanted in the Fiscal Agent Agreement to cause the Special Taxes to be levied and collected at the same time and in the same manner as ordinary ad valorem property taxes.

G. The Fiscal Age nt Agreement creates a valid pledge of, first lien upon and security interest in, the Special Tax Revenues, and in the moneys in the Special Tax Fund established pursuant to the Fiscal Agent Agreement, on the terms and conditions set forth in the Fiscal Ag ent Agreement.

H. Except as disclosed in the Preliminary Official Statement, or will be disclosed in the Official Statement, there are, to the best of the City’s knowledge, no entities with outstanding assessment liens against any of the properties within the District or which are senior to or on a parity with the Special Taxes referred to in paragraph (G) hereof.

I. The information contained in the Preliminary Official Statement and in the Official Statement ( other than statements therein pertaining to DTC and i ts book-entry system and under the caption “ OWNERSHIP AND DEVELOPMENT OF THE DISTRICT ,” as to which no view is expressed) does not and shall not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to m ake the statements therein, in light of the circumstances under which they were made, not misleading; and, upon delivery and up to and including 25 days after the End of the Underwriting Period (as defined in paragraph (J) below), the Official Statement wi ll be amended and supplemented so as to contain no misstatement of any material fact or omission of any statement necessary to make the statements contained therein, in the light of the circumstances in which such statements were made, not misleading.

J. Up t o and including 25 days after the End of the Underwriting Period, the City will advise the Underwriter promptly of any proposal to amend or supplement the Official Statement and will not effect or consent to any such amendment or supplement without the con sent of the Underwriter, which consent will not be unreasonably withheld. The City will advise the Underwriter promptly of the institution of any proceedings known to it by any governmental agency prohibiting or otherwise materially affecting the use of t he Official Statement in connection with the offering, sale or distribution of the Bonds. As used herein, the term “ End of the Underwriting Period” means the later of such time as: (i) the Bonds are delivered to the Underwriter; or (ii) the Underwriter does not retain, directly or as a member of an underwriting syndicate, an unsold balance of the Bonds for sale to the public. Unless the Underwriter gives notice to the contrary, the End of the Underwriting Period shall be deemed to be the Closing Date. A ny notice delivered pursuant to this provision shall be a written notice delivered to the City at or prior to the Closing Date, and shall specify a date (other than the Closing Date) to be deemed the “End of the Underwriting Period.” K. At the time of accepta nce hereof there is and as of the Closing there will be no action pending (notice of which has been served on the City) or to the best knowledge of the City threatened, in which any such action: (i) in any way questions the existence of the Community Facilities District or the titles of the officers of the City to their respective offices; (ii) affects, contests or seeks to prohibit, restrain or enjoin the issuance or delivery of the Bonds or the payment or collection of Special Tax Revenues or any amounts pledged or to be pledged to pay the principal of and interest on the Bonds, or in any way contests or affects the validity of the City Documents or the consummation of the transactions on the part of the City contemplated thereby; (iii) contests the 8 4886-4702-6451v3/024667-0110
exemption of interest on the Bonds from federal or State income taxation or contests the powers of the City or the Community Facilities District which may result in any material adverse change relating to the financial condition of the Community Facilities Dist rict; or (iv) contests the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or asserts that the Preliminary Official Statement or the Official Statement contained any untrue sta tement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and as of the time of acceptance hereof there is and, as of the Closing Date, there will be no basis for any action, suit, proceeding, inquiry or investigation of the nature described in clauses (i) through (iv) of this sentence.

L. Any certificate signed on behalf of the City by any officer or em ployee of the City authorized to do so shall be deemed a representation by the City to the Underwriter as to the statements made therein.

M. At or prior to the Closing, the City will have duly authorized, executed and delivered the Continuing Disclosure Certi ficate in substantially the form attached as Appendix E to the Official Statement. Except as disclosed in the Preliminary Official Statement, the City has not failed to comply in all respects with any previous undertakings with regard to the Rule to provi de annual reports or notices of material events in the last five years.

N. The City will apply the proceeds of its Bonds in accordance with the Fiscal Agent Agreement.

O. Between the date of the Purchase Agreement and the date of Closing, the City will not offer or issue any bonds, notes or other obligations for borrowed money payable or secured by Special Taxes, except as previously disclosed to the Underwriter.

The execution and delivery of this Purchase Agreement by the City shall constitute a representation to the Underwriter that the representations contained in this Section 3 are true as of the date hereof.

4. Conditions to the Obligations of the Underwriter . The obligation of the Underwriter to accept delivery of and pay for the Bonds on the Closing Date shall be subject, at the option of the Underwriter, to the accuracy in all material respects of the representations on the part of the City contained herein, to the accuracy in all material respects of the statements of the officers and other officials of the City made in any certificates or other documents furnished pursuant to the provisions hereof, to the performance by the City of its obligations to be performed hereunder at or prior to the Closing Date and, to the following additional conditions:

A. At the Closing Date, the City Resolutions, the Formation Documents, and the City Documents shall be in full force and effect, and shall not have been amended, modified or supplemented, except as may have been agreed to in writing by the Underwriter, and there s hall have been taken in connection therewith, with the issuance of the Bonds, and with the transactions contemplated thereby, and by this Purchase Agreement, all such actions as, in the opinion of Bond Counsel, shall be necessary and appropriate.

B. At the Cl osing Date, except as was described in the Official Statement, the City shall not be, in any respect material to the transactions referred to herein or contemplated 9 4886-4702-6451v3/024667-0110
hereby, in breach of or in default under, any law or administrative rule or regulation of t he State of California, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the City is a party or is otherwise subject or bound, and the execution and delivery and the performance by the City of its obligations under the City Documents, the City Resolutions and any other instruments contemplated by any of such documents, and compliance with the provisions of each thereof, will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State of California, the United Stat es of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the City is a party or is otherwise subject or bound, in any manner that would materially and adversely affect the performance by the City of its obligations under the City Documents or the City Resolutions.

C. The information contained in the Official Statement is, as of the Closing Date and as of the date of any supplement or amendment thereto pursuant hereto, true and correct in all material respects and does not, as of the Closing Date or as of the date of any supplement or amendment thereto, conta in any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

D. Between the date hereof and the Closing Date, the market price or marketability, at the initial offering prices set forth on the inside cover page of the Official Statement, of the Bonds shall not have been materially adversely affected, in the judgment of the Underwriter (evidenced by a written notice to the City terminating the obligation of the Underwriter to accept delivery of and pay for the Bonds), by reason of any of the following:

1. Legislation introduced in or enacted (or resolution passed) by the Congress of the United States of America or recommended to the Congress by the President of the United States, the Department of the Treasury, the Internal Revenue Service, or any member of Congress, or favorably reported for passage to either House of Congress by any committee of such House to which such legislation had been referred for consideration, or a decision rendered by a court established under Article III of the Constitution of the United States of America or by the Tax Court of the United States of America, or an orde r, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Treasury Department of the United States of America or the Internal Revenue Service, with the purpose or effect, directly or indirectly, of imposing federal income taxation upon such interest as would be received by any owners of the Bonds beyond the extent to which such interest is subject to taxation as of the date hereof;

2. Legislation introduced in or enacted (or resolution pas sed) by the Congress or an order, decree or injunction issued by any court of competent jurisdiction, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter, to the effect that obligations of the general character of the Bonds, including any or all underlying arrangements, are not exempt from registration under or other requirements of the Securities Act of 1933, as amended, or that the Fiscal Agent Agreement are not exempt from qualification under or other requirements of the Fiscal Agent Agreement Act of 1939, 10 4886-4702-6451v3/024667-0110
as amended, or that the issuance, offering or sale of obligations of the general character of the Bonds, including any or all underlying arrangements, as contemplated hereby or by the Official Statement or otherwise is or would be in violation of the federal securities laws as amended and then in effect;

3. A general suspension of trading in securities on the New York Stock Exchange, or a general banking moratorium declared by Federal, State of New York or State of California officials authorized to do so;

4. The introduction, proposal or enactment of any amendment to the Federal or California Constitutions or any action by any Federal or California court, legislative body, regulatory body or other authority materially adversely affecting the tax status of the City, its property, income, securities (or interest thereon), or the validity or enforceability of Special Taxes as contemplated by the Official Statement;

5. Any event occurring, or information becoming known which, in the judgment of the Underwriter, makes untrue in any material respect any statement or informati on contained in the Preliminary Official Statement or in the Official Statement, or has the effect that the Preliminary Official Statement or the Official Statement contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;

6. Any national securities exchange, the Comptroller of the Currency, or any other governmental authority, shall i mpose as to the Bonds or obligations of the general character of the Bonds, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by, or the charge to the net capital requirements of, the Underwriter;

7. There shall have occurred any material outbreak or escalation of hostilities or other calamity or crisis the effect of which on the financial markets of the United States is such as to make it impracticable, in the judgment of the Underwr iter, following consultation with the City, to sell the Bonds;

8. The filing or threat of an Action described Section 3.K hereof; or

9. Any proceeding shall have been commenced or be threatened in writing by the Securities and Exchange Commission against the City.

E. At or prior to the Closing Date, the Underwriter shall have received a counterpart original or certified copy of the following documents, in each case satisfactory in form and substance to the Underwriter:

1. The Official Statement, executed on behalf of t he City by its Finance Director or other authorized officer;

2. The City Documents, duly executed and delivered by all parties thereto;

3. The City Resolutions, together with a certificate dated as of the Closing Date of the City Clerk to the effect that the Cit y Resolutions are true, correct and complete copies of the City Resolutions duly adopted by the City Council; 11 4886-4702-6451v3/024667-0110

4. The Formation Documents, together with a certificate dated as of the Closing Date of the City Clerk to the effect that the Formation Documents are true, correct and complete copies of the Formation Documents duly adopted by the City Council;

5. An unqualified approving opinion for the Bonds, dated the Closing Date and addressed to the City, of Bond Counsel, in substantially the form included as Appendix G to the Official Statement;

6. A supplemental opinion or opinions, dated the Closing Date and addressed to the Underwriter, of Bond Counsel, in substantially the form attached hereto as Exhibit C;

7. A letter of Disclosure Counsel addressed to the Underwriter , to the effect that, no facts have come to attention of Disclosure Counsel that have caused such counsel to believe that the Preliminary Official Statement, as of its date, or the Official Statement, as of its date and as of the Closing Date (except for t he following items, which are expressly excluded from the scope of this sentence: any financial, statistical and demographic data or forecasts, numbers, charts, estimates, projections, assumpt ions or expressions of opinion , the appraisal and information regarding DTC and its book -entry only system, that is contained or incorporated by reference in the Official Statement and the appendices to the Offici al Statement) contained or contains any untrue statement of a material fact or omitted or omits to state an y material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;

8. A certificate dated the Closing Date and signed by an authorized representative of the City or an authorized designee, on behalf of the City to the effect that: (i) the representations made by the City contained in this Purchase Agreement are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date, provided that any references as to the Preliminary Official Statement shall be deemed to be to the Official Statement; (ii) to the best knowledge of such officer, no event has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purpose for which it is to be used or which it is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect; and (iii) the City has complied wit h all the agreements and satisfied all the conditions on its part to be satisfied under the City Documents prior to the Closing Date;

9. An opinion of the City Attorney of the City, dated the date of Closing and addressed to the Underwriter and the City, to the effect that:
a. The City is a municipal corporation, corporate and politic, duly organized and existing under the Constitution and laws of the State of California; b. The City Resolutions and the Formation Documents have been duly adopted at a meeting of the City Council, which was called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and the City Resolutions and the Formation Documents are in full force and effect and have not been modified, amended, rescinded or repealed since the date of their adoption; c. The City Documents and the Official Statement have been duly authorized, executed and delivered by the City and the City Documents constitute the legal, 12 4886-4702-6451v3/024667-0110
valid and binding obligations of the City enforceable against the City in accordance with their terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights, to the application of equitable principles where equitable remedies are sought and to the exercise of judicial discretion in appropriate cases; d. To the best knowledge of such counsel, the execution and delivery of the City Documents and the Official Statement and compliance with the provisions thereof under the circumstan ces contemplated thereby: (a) do not in any material respect conflict with or constitute on the part of the City a breach of or default under any agreement or other instrument to which the City is a party or by which it is bound; and (b) do not and will n ot in any material respect or constitute on the part of the City a violation, breach of or default under any court order or consent decree to which the City is subject;
e. Except as may be stated in the Official Statement, there is no action, suit, proceeding or investigation before or by any court, public board or body pending (notice of which has been served on the City) or, to such counsel’s knowledge, threatened wherein an unfavorable decision, ruling or finding would: (a) affect the creation, organization, existence or powers of the City or the Community Facilities District, or the titles of its members and officers to their respective offices; or (b) affect the validity of the City Documents, the City Resolutions or the Formation Documents, or restrain or enjoin the repayment of the Bonds or in any way contest or affect the validity of the City Documents, the City Resolutions or the Formation Documents, or contest the a uthority of the City to enter into or perform its obligations under any of the City Documents, the City Resolutions or the Formation Documents, or under which a determination adverse to the City would have a material adverse effect upon the financial condi tion or the revenues of the City or the Community Facilities District, questions the right of the City to use Special Tax Revenues for the repayment of the Bonds or affects in any manner the right or ability of the City to collect or pledge the Special Taxes levied within the District for the repayment of the Bonds;

10. A transcript of all proceedings relating to the authorization, issuance, sale and delivery of the Bonds, including certified copies of the Fiscal Agent Agreement and all resolutions of the City relating thereto;

11. A certificate dated the Closing Date from Goodwin Consulting Group, Inc. addressed to the City and the Underwriter to the effect that: (i) the Special Taxes (after payment of estimated Administrative Expenses) if collected in the maximum amounts permitted pursuant to the Rate and Method as of the Closing Date would generate at least 110% of the annual debt service on the Bonds in each year, based on such assumptions and qualifications as shall be acceptable to the Underwriter; and (ii) the statements in the Official Statement provided by Goodwin Consulting Group, Inc. concerning the Special Taxes and the Rate and Method and all information supplied by it for use in the Official Statement as of the date of the Official Statement and as of t he Closing Date did not and do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading;

12. Certified copie s of the general resolution of the Fiscal Agent authorizing the execution and delivery of certain documents by certain officers of the Fiscal Agent, which resolution authorizes the execution of the Fiscal Agent Agreement and the authentication of the Bonds;
13 4886-4702-6451v3/024667-0110

13. A certificate of the Fiscal Agent, addressed to the Underwriter and the City dated the Closing Date, to the effect that: (i) the Fiscal Agent is authorized to carry out corporate trust powers, and have full power and authority to perform its duties under the Fiscal Agent Agreement; (ii) the Fiscal Agent is duly authorized to execute and deliver the Fiscal Agent Agreement, to accept the obligations created by the Fiscal Agent Agreement and to authenticate the Bonds pursuant to the terms of the Fiscal Agen t Agreement; (iii) no consent, approval, authorization or other action by any governmental or regulatory authority having jurisdiction over the Fiscal Agent that has not been obtained is or will be required for the authentication of the Bonds or the consummation by the Fiscal Agent of the other transactions contemplated to be performed by the Fiscal Agent in connection with the authentication of the Bonds and the acceptance and performance of the obligations created by the Fiscal Agent Agreement; and (iv) to the best of its knowledge, compliance with the terms of the Fiscal Agent Agreement will not conflict with, or result in a violation or breach of, or constitute a default under, any loan agreement, trust agreement, bond, note, resolution or any other agreement or instrument to which the Fiscal Agent is a party or by which it is bound, or any law or any rule, regulation, order or decree of any court or governmental agency or body having jurisdiction over the Fiscal Agent or any of its activities or properties;

14. An opinion of counsel to the Fiscal Agent, dated the Closing Date, addressed to the Underwriter and the City to the effect that the Fiscal Agent is a national banking association duly organized and validly existing under the laws of the United States h aving full power and being qualified to enter into, accept and agree to the provisions of the Fiscal Agent Agreement, and that the Fiscal Agent Agreement has been duly authorized, executed and delivered by the Fiscal Agent and, assuming due execution and d elivery by the other parties thereto, constitutes the legal, valid and binding obligation of the Fiscal Agent enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement o f creditors’ rights in general and except as such enforceability may be limited by the application of equitable principles if equitable remedies are sought;

15. A certificate of the City dated the Closing Date, in a form acceptable to Bond Counsel and the Unde rwriter, that the Bonds are not arbitrage bonds within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended;

16. An opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, counsel to the Underwriter (“Underwriter’s Counsel”), dated the date of Closing and addressed to the Underwriter in form and substance acceptable to the Underwriter;

17. A closing certificate of the Developer dated the Closing Date, substantially in the form attached as Appendix I to Exhibit B attached hereto;

18. A Continuing Disclosure Certificate (Lennar Homes) (the “Developer Continuing Disclosure Certificate”) executed by the Developer in substantially the form set forth in Appendix F to the Preliminary Official Statement, with such additional changes as may be agreed to by the Underwriter;

19. A letter or letters from counsel to the Developer , in form and substance acceptable to the Underwriter, dated the Closing Date and addressed to the Underwriter, regarding: (i) negative assurance with respect to the Prel iminary Official Statement and Official Statement; and (ii) the validity and enforceability of the Developer Continuing Disclosure Certificate;
14 4886-4702-6451v3/024667-0110

20. An executed copy of the Acquisition Agreement relating to: City of Tracy Community Facilities District No. 2021 (Hillview), dated as of ________, ____ , by and between the City and the Developer;

21. A certificate of Integra Realty Resources, San Francisco, California (the “Appraiser”), dated the Closing Date, in substantially the form of Exhibit D attached hereto;

22. A certificate of Empire Economics, Inc. (the “ Market Consultant”), dated the Closing Date, in substantially the form of Exhibit E attached hereto; and

23. Such additional legal opinions, certificates, instruments and other documents as the Underwriter may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the Closing Date, of the material representations of the City contained herein, and of the statements and information contained in the Official Statement and the due performance or satisfaction by the City at or prior to the Closing of all agreements then to be performed and all conditions then to be satisfied by the City in connection with the transactions contemplated hereby and by the Fiscal Agent Agreement and the Official Statement.

If the City shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds contained in this Purchase Agreement, or if the obligations of the Underwriter to purchase, a ccept delivery of and pay for the Bonds shall be terminated for any reason permitted by this Purchase Agreement, this Purchase Agreement shall terminate and neither the City nor the Underwriter shall be under any further obligation hereunder, except that t he respective obligations of the Underwriter and the City set forth in Section 6 hereof shall continue in full force and effect.

5. Conditions to the Obligations of the City . The obligations of the City shall be subject to the satisfaction of the conditions contained in Section 4 of this Purchase Agreement.

6. Expenses. Whether or not the transactions contemplated by this Purchase Agreement are consummated, the Underwriter shall be under no obligation to pay, and the City shall pay only from the proceeds of the Bonds or any other legally available funds of the City or the Community Facilities District, but only as the City and such other party providing such services may agree, all expenses and costs of the City incident to the performance of its obligations in connection with the authorization, execution, sale and delivery of the Bonds to the Underwriter, including, without limitation, printing costs, initial fees of the Fiscal Agent, including fees and disbursements of their counsel, if any, fees and disburseme nts of Bond Counsel, Disclosure Counsel and other professional advisors employed by the City, costs of preparation, printing, signing, transportation, delivery and safekeeping of the Bonds and for expenses (included in the expense component of the spread) incurred by the Underwriter on behalf of the City’s employees which are incidental to implementing this Purchase Agreement, including, but not limited to, meals, transportation and lodging of those employees. The Underwriter shall pay all out -of-pocket ex penses of the Underwriter, including, without limitation, advertising expenses, the California Debt and Investment Advisory Commission fee, CUSIP Services Bureau charges, regulatory fees imposed on new securities issuers and any and all other expenses incurred by the Underwriter in connection with the public offering and distribution of the Bonds, including fees of its counsel.

7. Notices. Any notice of other communication to be given to the City under this Purchase Agreement may be given by delivering the sa me in writing to the City of Tracy, 333 Civic 15 4886-4702-6451v3/024667-0110
Center Plaza, Tracy, California 95376, Attention: Finance Director; any notice or other communication to be given to the Underwriter under this Purchase Agreement may be given by delivering the same in writing to Piper Sandler & Co, 3626 Fair Oaks Blvd., Suite 100, Sacramento, California 95864, Attention: Dennis McGuire.

8. Parties In Interest . This Purchase Agreement is made solely for the benefit of the City and the Underwriter (including any successors or assi gnees of the Underwriter) and no other person shall acquire or have any right hereunder or by virtue hereof.

9. Survival of Representations . The representations of the City under this Purchase Agreement shall not be deemed to have been discharged, satisfied or otherwise rendered void by reason of the Closing and regardless of any investigations made by or on behalf of the Underwriter (or statements as to the results of such investigations) concerning such representations and statements of the City and regardless of delivery of and payment for the Bonds.

10. Execution in Counterparts . This Purchase Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

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

12. No Prior Agreements . This Purchase Agreement supersedes and replaces all prior negotiations, agreements and understanding among the parties hereto in relation to the sale of the Bonds by the City.

13. Governing L aw. This Purchase Agreement shall be governed by the laws of the State of California.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

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4886-4702-6451v3/024667-0110

14. Effective Date. This Purchase Agreement shall become effective and binding upon the respective parties hereto upon the execution of the acceptance hereof by the City and shall be valid and enforceable as of the time of such acceptance.

Very truly yours,
PIPER SANDLER & CO.

By:

Its: Authorized Officer
Time of Execution: ____________

CITY OF TRACY
By:

Karin Schnaider, Finance Director

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4886-4702-6451v3/024667-0110

EXHIBIT A
$________

CITY OF TRACY
COMMUNITY FACILITIES DISTRICT NO. 2021-1 (HILLVIEW)
SPECIAL TAX BONDS, SERIES 2022
Schedule of Bond Maturities, Principal Amounts, Interest Rates, Yields and Initial Offering Prices
Maturity
Date
(September 1)
Principal
Amount
Interest
Rate Yield
Initial
Offering
Price
10% Test
Used
Hold the Price
Offering Rule
Used
C Priced to the optional redemption date of September 1, 20__ at ___%.

T Term Bond.

Optional Redemption. The Bonds maturing on or after September 1, 20__, are subject to optional redemption as directed by the City, from sources of funds other than prepayments of Special Taxes, prior to their stated maturity on any da te on or after September 1, 20__, as a whole or in part, at the redemption prices (expressed as a percentage of the p rincipal amount of the Bonds to be redeemed) set forth below, together with accrued interest thereon to the date fixed for redemption:

Redemption Dates
Redemption
Price
September 1, 20__ through August 31, 20__ %
September 1, 20__ through August 31, 20__
September 1, 20__ through August 31, 20__
September 1, 20__ and any date thereafter

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4886-4702-6451v3/024667-0110
Mandatory Sinking Fund Redemption . The Bonds maturing on September 1, 20 __, are subject to mandatory redemption in part by lot, from sinking fund payments made by the City from the Bond Fund, at a redemption price equal to the principal amount thereof to be redeemed, without premium, in the aggregate respective principal amounts all as set forth in the following table:

Sinking Fund
Redemption Date
(September 1)

Sinking Fund
Payments
$

(maturity)

The Bonds maturing on September 1, 20__, are subject to mandatory redemption in part by lot, from sinking fund payments made by the City from the Bond Fund, at a redemption price equal to the principal amount thereof to be redeemed, without premium, in the aggregate respective principal amounts all as set forth in the following table:

Sinking Fund
Redemption Date
(September 1)

Sinking Fund
Payments
$

(maturity)

Redemption from Special Tax Prepayments . Special Tax Prepayments and any corresponding transfers from the Reserve Fund under the Fiscal Agent Agreement will be used to redeem Bonds on the next Interest Payment Date for which notice of redem ption can timely be given under the Fiscal Agent Agreement, among maturities so as to maintain substantially the same debt service profile for the Bonds as in effect prior to such redemption and by lot within a maturity, at a redemption price (expressed as a percentage of the principal amount of the Bonds to be redeemed), as set forth below, together with accrued interest to the date fixed for redemption:

Redemption Dates Redemption Price
Any Interest Payment Date on or before March 1, 20__ __% September 1, 20__ and March 1, 20__ ____
September 1, 20__ and March 1, 20__ ____
September 1, 20__ and any Interest Payment Date thereafter _____

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EXHIBIT B

CITY OF TRACY
COMMUNITY FACILITIES DISTRICT NO. 2021-1 (HILLVIEW)
SPECIAL TAX BONDS, SERIES 2022

LETTER OF REPRESENTATIONS OF LENNAR HOMES OF CALIFORNIA, LLC _____, 2022
City of Tracy
333 Civic Center Plaza
Tracy, California 95376
Piper Sandler & Co.
3626 Fair Oaks Blvd., Suite 100
Sacramento, California 95864
Ladies and Gentlemen:

Reference is made to the City of Tracy Community Facilities District No. 2021-1 (Hillview) Special Tax Bonds, Series 2022 (the “Bonds”) and to the Bond Purchase Agreement (the “ Purchase Agreement”), by and between the City of Tracy (the “ City”) and Piper Sandler & Co. (the “Underwriter”), to be entered into in connection therewith. This Letter of Representations of Lennar Homes of California , L LC (the “ Letter of Representations ”) is delivered pursuant to th e Purchase Agreement. Capitalized terms that are used herein and not otherwise defined have the meanings ascribed to them in the Purchase Agreement.

The undersigned certifies that the undersigned is familiar with the facts herein and is authorized and qua lified to certify the same as an authorized officer or representative of Lennar Homes of California , L LC, a California limited liability company (the “ Developer”), and the undersigned, on behalf of the Developer, further certifies as follows:

1. The Developer is duly organized and validly existing under the laws of the State of Delaware, and has all requisite right, power and authority: (i) to execute and deliver this Letter of Representations and (ii) to complete the development on its property in City of Tracy Community Facilities District No. 20 21-1 (Hillview) (the “ Community Facilities District ”) as described in the Preliminary Official Statement.

2. The Developer agrees to execute at Closing a Continuing Disclosure Certificate (Lennar Homes) (the “Developer Continuing Disclosure Certificate”) in substantially the form set forth in Appendix F to the Preliminary Official Statement, with such additional changes as may be agreed to by the Underwriter.

3. As set forth in the Preliminary Official Statement, ti tle to a certain portion of the property within the Community Facilities District is held in the name of the Developer (the “Property”). The undersigned, on behalf of the Developer, makes the representations herein with respect to all such Property. Except as otherwise described in the Preliminary Official Statement, the

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Developer is, and the Developer’s current expectations are that the Developer shall remain, the party responsible for the development of the Property. The Developer has not entered into an agreement for development or management of the Property by any other entity, except for such subcontracts, consultant agreements and similar agreements for land development activities associated with the Developer’s development plan as are entered into in the ordinary course of business.

4. Except as set forth in the Preliminary Official Statement, no action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court, regulatory agency, public board or body is pending against the Developer (with proper service of process to the Developer having been accomplished) or, to the Actual Knowledge of the Undersigned 1, is pending against any current Affiliate2 (with proper service of process to such Affiliate having been accomplished) or to the Actual Knowledge of the Undersigned is threatened in writing against the Developer or any such Affiliate: (a) to restrain or enjoin the collection of Special Taxes or ot her sums pledged or to be pledged to pay the principal of and interest on the Bonds (e.g., the 2022 Reserve Fund established under the Fiscal Agent Agreement); (b) to restrain or enjoin the development of the Property as described in the Preliminary Official Statement; (c) in any way contesting or affecting the validity of the Special Taxes; or (d) which is reasonably likely to materially and adversely affect the Developer’s ability to complete the development and sale of the Property as described in the Preliminary Official Statement or to pay the Special Taxes due with respect to the Property.

1 “Actual Knowledge of the Undersigned ” means the knowledge that the individual signing on behalf of the Developer currently has as of the date of this Letter of Representations or has obtained through: (i) interviews with such current officers and responsible employees of the Developer and it s Affiliates as the undersigned has determined are reasonably likely, in the ordinary course of their respective duties, to have knowledge of the matters that are set forth in this Letter of Representations; and/or (ii) review of documents that were reason ably available to the undersigned and which the undersigned has reasonably deemed necessary in order for the undersigned to obtain knowledge of the matters that are set forth in this Letter of Representations. The undersigned has not conducted any extraordinary inspection or inquiry other than such inspections or inquiries as are prudent and customary in connection with the ordinary course of the Developer’s current business and operations. 2 “Affiliate” means, with respect to the Developer, any other Per son: (i) who directly, or indirectly through one or more intermediaries, is currently controlling, controlled by or under common control with the Developer; and (ii) for whom information, including financial information or operating data, concerning such P erson is material to potential investors in their evaluation of the Community Facilities District and investment decision regarding the Bonds (i.e., information relevant to: (a) the Developer’s development plans with respect to the Property and ability to pay its Special Taxes on the Property prior to delinquency; or (b) such Person’s assets or funds that would materially affect the Developer’s ability to develop the Property as described in the Preliminary Official Statement or to pay its Special Taxes on the Property prior to delinquency). “ Person” means an individual, a corporation, a partnership, a limited liability company, an association, a joint stock company, a trust, any unincorporated organization or a government or political subdivision thereof. For purposes hereof, the term “ control” (including the terms “controlling,” “controlled by” or “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person , whether through the ownership of voting securities, by contract or otherwise.

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5. As of the date of the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, the information that is contained therein solely with respect to the Developer, its Affiliates, the proposed development of the Property, ownership of the Property, the Developer’s development plan, the Developer’s financing plan, the Developer’s lenders, if any, and contractual arrangements of the Developer or any Aff iliates (including, if material to the Developer’s development plan or the Developer’s financing plan, other loans of such Affiliates) as set forth under the captions of the Preliminary Official Statement entitled “OWNERSHIP AND DEVELOPMENT OF THE DISTRICT ” and “CONTINUING DISCLOSURE” (excluding therefrom in all cases (i) information about the Developer or its property ownership or development in the Community Facilities District; (ii) information regarding market value and annual special tax rates and ratios; and (iii) information which is identified as having been provided by a source other than the Developer), is true and correct in all material respects and did not contain any untrue statement of a material fact or omit to state a material fact that is n ecessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

6. If between the date hereof and the Closing Date any event relating to or affecting the Developer, its Affiliates, the proposed development of the Property, ownership of the Property, the Developer’s development plan, the Developer’s financing plan, the Dev eloper’s lenders, if any, and contractual arrangements of the Developer or any Affiliates (including, if material to the Developer’s development plan or the Developer’s financing plan, other loans of such Affiliates) shall occur of which the Developer has actual knowledge which would cause the information under the captions of the Preliminary Official Statement that are described in Paragraph 5 (and subject to the limitations and exclusions contained in Paragraph 5) hereof to contain an untrue statement of a material fact or to omit to state a material fact that is necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Developer shall notify the City and the Underwriter. If in the reasonab le opinion of counsel to the City or the Underwriter such event requires the preparation and publication of a supplement or amendment to the Preliminary Official Statement, the Developer shall reasonably cooperate with the City in the preparation of an amendment or supplement to the Preliminary Official Statement in form and substance that is reasonably satisfactory to counsel to the City and to the Underwriter.

7. The Developer agrees to deliver a Closing Certificate dated the date of issuance of the Bonds at the time of issuance of the Bonds in substantially the form attached as Appendix 1.

The undersigned has executed this Letter of Representations solely in the undersigned’s capacity as an authorized officer or representative of the Developer and the und ersigned will have no personal liability arising from or relating to this Letter of Representations.

LENNAR HOMES OF CALIFORNIA, LLC,
a California limited liability company

By:
_____________,
________________

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APPENDIX 1 to EXHIBIT B

CITY OF TRACY
COMMUNITY FACILITIES DISTRICT NO. 2021-1 (HILLVIEW)
SPECIAL TAX BONDS, SERIES 2022

CLOSING CERTIFICATE OF LENNAR HOMES OF CALIFORNIA, LLC
_____, 2022
City of Tracy
333 Civic Center Plaza
Tracy, California 95376
Piper Sandler & Co.
3626 Fair Oaks Blvd., Suite 100
Sacramento, California 95864
Ladies and Gentlemen:

Reference is made to the City of Tracy Community Facilities District No. 2021-1 (Hillview) Special Tax Bonds, Series 2022 (the “Bonds”) and to the Bond Purchase Agreement, dated _____, 2022 (the “ Purchase Agreement ”), by and between the City of Tracy and Piper Sandler & Co., entered into in connection therewith. This Closing Certificate of Lennar Homes of California, LLC (the “Closing Certificate”) is delivered by Lennar Homes of California, LLC, a California limited liability company (the “Developer”), pursuant to the Purchase Agreement. Capitalized terms that are used herein and not otherwise defined have the meanings ascribed to the m in the Letter of Representations of Lennar Homes of California, LLC , dated _____, 2022 (the “ Letter of Representations”), delivered by the Developer.

The undersigned certifies that the undersigned is familiar with the facts herein certified and is authorized and qualified to certify the same as an authorized officer or representative of the Developer. The undersigned, on behalf of the Developer, further certifies as follows:

1. The Developer has received the final Official Statement relating to the Bonds dated _____, 2022 (the “Final Official Statement”). To the Actual Knowledge of the Undersigned, each statement, representation and warranty that was made in the Letter of Representations is true and correct in all material respects on and as of the date hereof with the same effect as if made on the date hereof, except that all references therein to the Preliminary Official Statement shall be deemed to be references to the Final Official Statement.

2. The Developer has duly authorized, executed and delivered the Developer Continuing Disclosure Certificate.

3. To the Actual Knowledge of the Undersigned, no event has occurred since the date of the Preliminary Official Statement which affects the statements and information that are described in Paragraph 5 of the Letter of Representations (and subject to the limitations and exclusions contained in Paragraph 5 of the Letter of Representations) relating to the Developer, its ownership of the

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Property, the Developer’s development plan, the Developer’s financing pl an and contractual arrangements of the Developer which should be disclosed in the Final Official Statement for the purposes for which it is to be used in order to make such statements and information that are contained in the Final Official Statement not misleading in any material respect.

4. For the period through 25 days after the “ end of the underwriting period ” (as such term is defined in the Purchase Agreement), if any event that relates to or affects the Developer, its ownership of the Property, the Developer’s development plan, the Developer’s financing plan and contractual arrangements of the Developer shall occur as a result of which it is necessary, in the opinion of the Underwriter or counsel to the City, to amend or supplement the Final Official Statement in order to make the information under the captions of the Final Official Statement that are described in Paragraph 5 of the Letter of Representations (and subject to the limitations and exclusions contained in Paragraph 5 of the L etter of Representations) not misleading, in the light of the circumstances under which they were made, the Developer shall reasonably cooperate with the City and the Underwriter in the preparation of an amendment or supplement to the information described in the captions of the Final Official Statement that are described in Paragraph 5 of the Letter of Representations (and subject to the limitations and exclusions contained in Paragraph 5 of the Letter of Representations). Such amendment or supplement shal l be in form and substance satisfactory to the Underwriter and counsel to the Community Facilities District and shall amend or supplement the Final Official Statement so that it will not contain an untrue statement of a material fact or omit to state a mat erial fact that is necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

The undersigned has executed this Closing Certificate solely in the undersigned’s capacity as an authorized officer or representative of the Developer and the undersigned will have no personal liability arising from or relating to this Closing Certificate.

LENNAR HOMES OF CALIFORNIA, LLC,
a California limited liability company

By:
_______________,
________________

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EXHIBIT C

SUPPLEMENTAL OPINION OF BOND COUNSEL
[Date of Issuance]
Piper Sandler & Co.
3626 Fair Oaks Blvd., Suite 100
Sacramento, California 95864
$___________
City of Tracy
Community Facilities District No. 2021-1 (Hillview)
Special Tax Bonds, Series 2022
(Supplemental Opinion)
Ladies and Gentlemen:

We have acted as bond counsel in connection with the issuance by the City of Tracy (the “City”) of the above -referenced bonds (the “ Bonds”) pursuant to the Mello -Roos Community Facilities Act of 1982, as amended, being sections 53311 et seq. of the California Government Code (the “Law”), Resolution No. ______, adopted on _____, 2022 (the “Resolution”) and a Fiscal Agent Agreement (the “ Fiscal Agent Agreement ”), dated as of _____ 1, 2022 , by and between the City, for and on behalf of the City of Tracy Community Facilities District No. 2021-1 (Hillview) (the “District”), and U.S. Bank National Association, as fiscal agent. Capitalized terms used herein but not defined have the meaning given them in the Bond Purchase Agreement, dated _____, 2022 (the “Purchase Agreement”), by and between Piper Sandler & Co., as underwriter (the “ Underwriter”), and the City, acting for and on behalf of the District.

We have examined the Fiscal Agent Agreement, the Purchase Agre ement, and the Continuing Disclosure Certificate, dated _____, 2022 (the “ Continuing Disclosure Certificate ”), executed and delivered by the City and agreed and accepted by Goodwin Consulting Group, Inc. , as dissemination agent, (collectively, the “ City Documents”), the Law and such certified proceedings and other papers as we deem necessary to render this opinion.

This letter is being delivered in our capacity as bond counsel to the City and not as counsel to the Underwriter.

As to questions of fact mater ial to our opinion, we have relied upon representations of the City contained in the Resolution, the Fiscal Agent Agreement and the certified proceedings and certifications of public officials and others furnished to us without undertaking to verify the sa me by independent investigation.

Based upon the foregoing, we are of the opinion, under existing law, as follows:
(i) the Purchase Agreement has been duly authorized, executed and delivered by the City, and, assuming the Purchase Agreement constitutes the valid and binding obligation of the C-2
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Underwriter, constitutes the legally valid and binding obligation of the City enforceable in accordance with its terms, except as enforcement may be limited by bankruptcy, moratorium, insolvency or other laws affecting c reditors’ rights or remedies and general principles of equity (regardless of whether such enforceability is considered in equity or at law); (ii) the Bonds are exempt from registration pursuant to the Securities Act of 1933, as amended, and the Fiscal Age nt Agreement is exempt from qualification under the Trust Indenture Act of 1939, as amended; and
(iii) the information contained in the Official Statement on the cover and under the captions “INTRODUCTION,” “THE 2022 BONDS,” “SECURITY FOR THE 2022 BONDS,” “LEGAL MATTERS” and Appendices C and G thereof (except that no opinion or belief is expressed as to any financial or statistical data contained therein), insofar as it purports to summarize certain provisions of the Act, the Bonds, the Fiscal Agent Agreement and the exclusion from gross income for federal income tax purposes and exemption from State personal income taxes of interest on the Bonds, presents a fair and accurate summary of such provisions.

The preceding paragraph is not an opinion but constitutes negative observations based on certain limited activities performed by specific lawyers in our firm in our role as special disclosure counsel to the City. The scope of the activities we performed for purposes of delivering this letter was inherently limited and does not purport to encompass all activities necessary for compliance with applicable securities laws. In addition, in performing those activities, we relied on third party representations, warranties, certifications and opinions, including and primarily, representations, warranties and certifications made by the City. The preceding paragraph is otherwise subject to the conditions set forth herein.

This opinion letter is solely for your benefit in connection with the transaction covered by the first paragraph of this letter and may not be relied upon, used, circulated, quoted or referred to, nor any copies hereof be delivered to, any other person without our prior written approval.

Very truly yours,
JONES HALL, a Professional Law Corporation
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EXHIBIT D
$__________

CITY OF TRACY
COMMUNITY FACILITIES DISTRICT NO. 2021-1 (HILLVIEW)
SPECIAL TAX BONDS, SERIES 2022

CERTIFICATE OF APPRAISER
_____, 2022
City of Tracy
333 Civic Center Plaza
Tracy, California 95376
Piper Sandler & Co.
3626 Fair Oaks Blvd., Suite 100
Sacramento, California 95864
The undersigned hereby states and certifies:

1. That he is an authorized principal of Integra Realty Resources (the “ Appraiser”) and as such is familiar with the facts herein certified and is authorized and qualified to certify the same.

2. That the Appraiser has prepared an appraisal report, dated March 9, 2022 (the “Appraisal Report”), on behalf of the City of Tracy (the “ City”) in connection with the Preliminary Official Statement, dated _____, 2022 (the “ Preliminary Official Statement ”) and the Official Statement dated _____, 2022 (“Official Statement”), for the C ity of Tracy Community Facilities District No. 2021-1 (Hillview) Special Tax Bonds, Series 2022 (the “Bonds”).

3. That the Appraiser hereby consents to the reproduction and use of the Appraisal Report appended to the Preliminary Official Statement and the Official Statement. The Appraiser also consents to the references to the Appraiser and the Appraisal Report made in the Preliminary Official Statement and the Official Statement.

4. In the opinion of the Appraiser the assumptions made in the Appraisal Rep ort are reasonable. Since the date of value of the Appraisal Report, the Appraiser is not aware of any facts that would cause its opinion of value of the taxable property in the City of Tracy Community Facilities District No. 2021-2 (Hillview) (the “Community Facilities District”) to be lower than the value in the Appraisal.

5. Each of the parcels appraised by the Appraiser is encompassed within the Community Facilities District as set forth in the boundary map of the Community Facilities District.

6. That, as of the date of the Official Statement and as of the date hereof, the Appraisal Report appended to the Official Statement, to the best of my knowledge and belief, and subject to all D-2
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of the Assumptions and Limiting Conditions set forth in the Appraisal Report, does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein, in the light of the circumstances under which they were made, not misleading, and no events or oc currences have been ascertained by us or have come to our attention that would substantially change the estimated values stated in the Appraisal Report. However, we have not performed any procedures since the date of the Appraisal Report to obtain knowled ge of such events or occurrences nor are we obligated to do so in the future.

7. The City and the Underwriter, Piper Sandler & Co., are entitled to rely on this Certificate.

INTEGRA REALTY RESOURCES
By:

Authorized Representative
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EXHIBIT E
$__________

CITY OF TRACY
COMMUNITY FACILITIES DISTRICT NO. 2021-1 (HILLVIEW)
SPECIAL TAX BONDS, SERIES 2022

CERTIFICATE OF MARKET ABSORPTION CONSULTANT
_____, 2022
City of Tracy
333 Civic Center Plaza
Tracy, California 95376
Piper Sandler & Co.
3626 Fair Oaks Boulevard, Suite 100
Sacramento, California 95864
The undersigned hereby states and certifies:

1. That he is an authorized principal of Empire Economics, Inc. (the “ Market Absorption Consultant”) and as such is familiar with the facts herein certified and is authorized and qualified to certify the same.

2. That the Market Absorption Consultant has prepared an Absorption Study, dated _____, 2022 (the “ Market Report”), on behalf of the City of Tracy (the “ City”) in connection with the Preliminary Official Statement, _____, 2022 (the “ Preliminary Official Stateme nt”) and the Official Statement dated _____, 2022 (“ Official Statement ”), for the City of Tracy Community Facilities District No. 2021-1 (Hillview) Special Tax Bonds, Series 2022 (the “Bonds”).

3. That the Market Absorption Consultant hereby consents to the reproduction and use of the Market Report appended to the Preliminary Official Statement and the Official Statement. The Market Absorption Consultant also consents to the references to the Market Absorption Consultant and the Market Report made in the Preliminary Official Statement and the Official Statement.

4. In the opinion of the Market Absorption Consultant the assumptions made in the Market Report are reasonable. Since the date of the Market Report, the Market Absorption Consultant is not aware of any facts that would cause its opinion as to the timing of home sales in City of Tracy Community Facilities District No. 2021 -1 (Hillview) to be different than the Market Report.

5. That, as of the date of the Official Statement and as of th e date hereof, the Market Report appended to the Official Statement, to the best of my knowledge and belief, and subject to all of the limiting conditions and major assumptions set forth in the Market Report, does not contain any untrue statement of a mate rial fact or omit to state a material fact necessary in order to make the statements contained therein, in the light of the circumstances under which they were made, not E-2
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misleading, and no events or occurrences have been ascertained by us or have come to o ur attention that would substantially change the estimated timing of home sales stated in the Market Report.

However, we have not performed any procedures since the date of the Market Report to obtain knowledge of such events or occurrences nor are we obligated to do so in the future.

6. The City and the Underwriter, Piper Sandler & Co., are entitled to rely on the Certificate.

EMPIRE ECONOMICS
By: ______________________________________
Authorized Representative

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EXHIBIT E
$__________

CITY OF TRACY
COMMUNITY FACILITIES DISTRICT NO. 2021-1 (HILLVIEW)
SPECIAL TAX BONDS, SERIES 2022

FORM OF ISSUE PRICE CERTIFICATE
The undersigned, on behalf of Piper Sandler & Co. (the “PSC”), hereby certifies as set forth below with respect to the sale and issuance of the above-captioned bonds (the “Bonds”).

1. Sale of the General Rule Maturities . As of the date of this certificate, for each Maturity of the General Rule Maturities, the first price at which at least 10% of such Maturity was sold to the Public is the respective price listed in Schedule A.

2. Initial Offering Price of the Hold-the-Offering-Price Maturities. (a) PJC 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 fo r the Bonds is attached to this certificate as Schedule B.
(b) As set forth in the Bond Purchase Agreement, dated _____, 2022, by and between PJC and the Issuer, PJC has agreed in writing that: (i) for each Maturity of the Hold -the-Offering- Price Maturities, it would neither offer nor sell any of the Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the “ hold-the-offering-price rule ”); and (ii) any se lling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any retail distribution agreement shall contain the agreement of each broker -dealer who is a party to the retail distribution agreement, to comply wi th the hold -the-offering-price rule. Pursuant to such agreement, no Underwriter (as defined below) 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 Mat urity of the Bonds during the Holding Period.

3. Reserve Fund.

The establishment of the Reserve Fund in the amount of the Reserve Requirement (as such terms are defined in the Fiscal Agent Agreement dated as of _____ 1, 2022, by and between the City and U.S. Bank Trust Company, National Association , as fiscal agent , p ursuant to which the Bonds are being issued) was vital to the marketing of the Bonds and reasonably required to assure payment of debt service on the Bonds.

4. Defined Terms.
(a) General Rule Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “General Rule Maturities.”
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(b) Hold-the-Offering-Price Maturities means those Maturities o f 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 day after the _____, 2022 (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) Issuer means the City of Tracy.
(e) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities.
(f) Public means any person (including an individual, t rust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter.

The term “ related party” for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (g) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is _____, 2022. (h) Underwriter means: (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public; and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public).

The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents PSC’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder.

The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Jones Hall, a Professional Law Corporation, in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds.

PIPER SANDLER & CO.

By:

Name:

Dated: _____, 2022

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SCHEDULE A

SALE PRICES OF THE GENERAL RULE MATURITIES
(Attached)

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SCHEDULE B

PRICING WIRE OR EQUIVALENT COMMUNICATION

(Attached)

RESOLUTION NO. 2022-

A RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF SPECIAL

TAX BONDS FOR THE PURPOSE OF FINANCING AUTHORIZED

FACILITIES, AND APPROVING AND AUTHORIZING RELATED DOCUMENTS

AND ACTIONS

CITY OF TRACY
Community Facilities District No. 2021-1
(Hillview)
RESOLVED, by this City Council (the “Council”) of the City of Tracy (the “City”), State of California, that:

WHEREAS, the City Council (the “Council”) previously conducted proceedings under and pursuant to the Mello- Roos Community Facilities Act of 1982, as amended, Chapter 2.5 of Part 1 of Division 2 of Title 5 (commencing with Section 53311) of the California Government Code (the “Act”), to form “ City of Tracy Community Facilities District No. 2021-1 (Hillview)” (the “CFD”) for the purpose of authorizing the levy of special taxes upon the land within the CFD and issue bonds secured by those special taxes for financing certain public improvements (the “Authorized Facilities”) in the aggregate principal amount of $12,000,000, all as described in those proceedings; and
WHEREAS, this Council now wishes to provide for the issuance of an initial series of bonds by the City, for and on behalf of the CFD, to be designated City of Tracy Community Facilities District No. 2021-1 (Hillview) Special Tax Bonds, Series 2022 (the “ 2022 Bonds”), pursuant to a Fiscal Agent Agreement (the “Fiscal Agent Agreement”) by and between the City of Tracy (the “City”), for and on behalf of the CFD, and U.S. Bank Trust Company, National Association, as fiscal agent (the “Fiscal Agent”), and there have been submitted to this Council certain documents described below providing for the issuance of the 2022 Bonds for the CFD and the use of the proceeds of those 2022 Bonds, and this Council with the aid of its staff, has reviewed the documents and found them to be in proper order; and WHEREAS, there have been submitted to this Council certain documents described below providing for the issuance of the Bonds for the CFD and the use of the proceeds of those Bonds, and this Council with the aid of its staff, has reviewed the documents and found them to be in proper order; and
WHEREAS, there has also been submitted to this Council a form of Preliminary Official Statement in connection with the marketing of the 2022 Bonds, and this Council, with the aid of its staff, has reviewed the Preliminary Official Statement (the “Preliminary Official Statement”) ; and
WHEREAS, i n accordance wit h Government Code Section 5852.1, the Council has obtained and disclosed the information set forth in Appendix A hereto; and WHEREAS, all conditions, things and acts required to exist, to have happened and to have been performed precedent to and in the issuance of the 2022 Bonds and the levy of the special taxes as contemplated by this resolution and the documents referred to herein exist,

have happened and have been performed in due time, form and manner as required by the laws of the State of California, including the Act.

NOW
THEREFORE BE IT RESOLVED, as follows:

1. Recitals. The foregoing recitals are all true and correct.

2. Bonds Authorized . Pursuant to the Act , this Resolution and the Fiscal Agent Agreement, the 2022 Bonds are hereby authorized to be issued in the principal amount no t to exceed ten million seven hundred thousand dollars ($10,700,000).

The 2022 Bonds
shall be dated, bear interest at the rates, mature on the dates, be issued in the form, be subject to redemption, and otherwise be issued on the terms and conditions, all as set forth in the Fiscal Agent Agreement and in accordance with this Resolution; provided, however, that the true interest cost shall not exceed six percent (6.0%).

The Fiscal Agent, an Authorized Officer (as defined in Section 4 of this Resolution) and other responsible officers of the City are hereby authorized and directed to take such actions as are required to cause the delivery of the 2022 Bonds upon receipt of the purchase price thereof.

3. Findings. This Council hereby finds the following:
(a) The is
suance of the 2022 Bonds is in compliance with the Act , the Fiscal Agent Agreement and the City’s “Amended Local Goals and Policies for Community Facilities District s (CFDs)” adopted by this Council on February 4, 2014, by Resolution No. 2014-019 (“Goals and Policies”), except that the provision requiring property owners to provide continuing disclosure as long as they own property that is responsible for at least 10% of the special taxes in the CFD is hereby waived so that the threshold can be established for the 2022 Bonds at a level acceptable to the Underwriter (as defined below).
(b) The appr
aisal described in the Preliminary Official Statement (the “Appraisal”) has been prepared consistent with the Goals and Policies. (c) The cur
rent draft of the Appraisal concludes that the taxable property in the CFD has a market value (subject to the various assumptions and conditions set forth in the Appraisal) that would be at least three times the maximum authorized principal amount of the 2022 Bonds approved pursuant to Section 2 and the principal amount of all other bonds outstanding that are secured by a special tax levied pursuant to the Act on property within the CFD or a special assessment levied on property within the CFD.

4. Authorities Granted. The Mayor, City Manager, Assistant City Manager, Finance Director, City Clerk or such other official of the City as may be designated by such officer pursuant to Section 9 hereof (each, an “Authorized Officer”) is hereby authorized and directed to execute and deliver the documents approved herein in substantially the form on file with the City Clerk, together with such additions or changes as are approved by such Authorized Officer, including such additions or changes as are necessary or advisable to permit the timely issuance, sale and delivery of the 2022 Bonds. The approval of such additions or changes shall be conclusively evidenced by the execution and delivery by an Authorized Officer of the documents herein specified.

5. Fiscal Agent Agreement . This Council hereby approves the Fiscal Agent Agreement, in substantially the form on file with the City Clerk. The terms and provisions of the Resolution 2022-

Fiscal Agent Agreement, as executed, are incorporated herein by this reference as if fully set forth herein. An Authorized Officer is hereby authorized and directed to execute the Fiscal Agent Agreement on behalf of the City, with such changes, additions or deletions as may be approved by the Authorized Officer, and the City Clerk is hereby authorized and directed to attest thereto.

6. Official Statement . Th is Council hereby approves the Preliminary Official Statement prepared in connection with the 2022 Bonds in substantially the form on file with the City Clerk , together with any changes therein or additions thereto deemed advisable by an Authorized Officer. This Co uncil hereby approves and authorizes the distribution by the underwriter of the 2022 Bonds of the Preliminary Official Statement to prospective purchasers of the 2022 Bonds, and authorizes and directs an Authorized Officer on behalf of the City to deem the Preliminary Official Statement “final” pursuant to Rule 15c2- 12 under the Securities Exchange Act of 1934 (the “Rule”) prior to its distribution to prospective purchasers of the 2022 Bonds. The execution of the final Official Statement, which shall include 2022 Bond pricing information, such other changes and additions thereto deemed advisable by an Authorized Officer, and such information permitted to be excluded from the Preliminary Official Statement pursuant to the Rule, shall be conclusive evidence of the approval of the Official Statement by the City.

7. Continuing Disclosure. This Council her eby approves the form of the Continuing Disclosure Certificate with respect to the 2022 Bonds in substantially the form thereof attached to the Official Statement on file with the City Clerk. An Authorized Officer is hereby authorized and directed to complete and execute the Continuing Disclosure Certificate on behalf of the City (for and on behalf of the CFD) with such changes, additions or deletions as may be approved by the Authorized Officer.

8. Sale of the 2022 Bonds ; Bond Purchase Agreement. The Bond Purchase Agreement, between the City , for and on behalf of the CFD , and Piper Sandler & Co. (the “Underwriter”), in substantially the form on file with the City Clerk and made a part hereof as though set forth in full herein, is hereby approved by the Council. An Authorized Officer is hereby authorized and directed to execute and deliver the Bond Purchase Agreement in such form, together with such changes, insertions and omissions that are approved by an Authorized Officer and that are in accordance with the provisions of this Resolution, such execution to be conclusive evidence of such approval; subject to the requirement that the Underwriter’s discount on the purchase of the 2022 Bonds may not exceed 1.50% of the par amount of the 2022 Bonds and the true interest cost may not exceed the rate specified in Section 1 hereof.

In additi
on, and pursuant to Section 53345.8 of the Act, this Council hereby finds and determines that an Authorized Officer may not execute and deliver the Bond Purchase Agreement unless the Appraisal concludes that the taxable property in the CFD has a market value (subject to the various assumptions and conditions set forth in the Appraisal) at least three times the principal amount of the 2022 Bonds to be sold and the principal amount of all other bonds outstanding that are secured by a special tax levied pursuant to the Act on property within the CFD or a special assessment levied on property within the CFD.

The Coun
cil hereby approves the negotiated sale of the 2022 Bonds to the Underwriter pursuant to such Bond Purchase Agreement.

Resolution 2022-

This Council hereby finds that sale of the 2022 Bonds to the Underwriter at a negotiated sale pursuant to the Bond Purchase Agreement will result in a lower overall cost than would be achieved by selling the 2022 Bonds at a public sale utilizing competitive bidding.

9. Actions Authorized. All actions heretofore taken by the officers and agents of the City with respect to the establishment of the CFD and the sale and issuance of the 2022 Bonds are hereby approved, confirmed and ratified, and the appropriate officers of the City are hereby authorized and directed to do any and all things and take any and all actions and execute any and all certificates, agreements and other documents, which they, or any of them, may deem necessary or advisable in order to consummate the lawful issuance and delivery of t he 2022 Bonds in accordance with this resolution, including but not limited to any actions required in connection with issuance of ratings or a municipal bond insurance policy with respect to the 2022 Bonds, and any certificate, agreement, and other document described in the documents herein approved. All actions to be taken by an Authorized Officer, as defined herein, may be taken by such Authorized Officer or any designee, with the same force and effect as if taken by the Authorized Officer.

10. Effective Date. This resolution shall take effect immediately upon its adoption.

The foregoing
Resolution 2022- was adopted by the Tracy City Council the 5th day of April,
2022, by the following vote:

By:

MAYOR
ATTEST:

CITY CLERK
Resolution 2022-

* * * * * * * * * * * * * * * * * * *
AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

APPENDIX A
Govern
ment Code Section 5852.1 Disclosure
The good fai
th estimates set forth herein are provided with respect to the 2022 Bonds in accordance with California Government Code Section 5852.1. Such good faith estimates have been provided to the City by CSG Advisors Incorporated, the City’s Municipal Advisor in consultation with Piper Sandler & Co., the Underwriter of the 2022 Bonds.

Pri
ncipal Amount . The Municipal Advisor has informed the City that, based on the CFD financing plan and current market conditions, its good faith estimate of the aggregate principal amount of the 2022 Bonds to be sold is $7,790,000 (the “Estimated Principal Amount”), together with approximately $278,000 of net premium estimated to be generated from current market pricing, for a total amount of bond proceeds of $8,068,000. Net premium is generated when, on a net aggregate basis for a single issuance, the prices paid for the bonds are higher than the face values of such bonds.

True In
terest Cost of the Bonds . The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the 2022 Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the true interest cost of the 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 3.84%.

Finance
Charge of the Bonds. The Municipal Advisor has informed the Ci ty that, assuming that the Estimated Principal Amount of the 2022 Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the finance charge for the 2022 Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the 2022 Bonds), is $380,000. Such fees and charges include fees for bond and disclosure counsel, municipal advisor, appraiser, market absorption consultant, special tax consultant, fiscal agent, city attorney and staff time related to bond issuance, set -aside for Fiscal Year 2022-23 CFD administrative expenses, printing, and underwriting.

Amount
of Proceeds to be Received. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the 2022 Bonds is sold plus net premium, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the amount of proceeds expected to be received on behalf of the CFD for sale of the 2022 Bonds, less the finance charge of the Bonds, as estimated above, and any reserves or capitalized interest paid or funded with proceeds of the 2022 Bonds, is $6,993,000.

Total
Payment Amount. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the 2022 Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the total payment amount, which means the sum total of all payments that the CFD property owners will make to pay debt service on the 2022 Bonds, plus the finance charge for the 2022 Bonds, as described above, not paid with the proceeds of the 2022 Bonds, and exclusive of any reserve funds or capitalized interest that could offset such costs, calculated to the final maturity of the 2022 Bonds, is $14,414,000.

The foregoing estimates constitute good faith estimates only. The actual principal amount of the 2022 Bonds issued and sold, the true interest cost thereof, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to (a) the actual date of the sale of the 2022 Bonds being different than the date assumed for purposes of such estimates, (b) the actual principal amount of 2022 Bonds sold being different from the Estimated Principal Amount, (c) the actual amortization of the 2022 Bonds being different than the amortization assumed for purposes of such estimates, (d) the actual market interest rates at the time of sale of the 2022 Bonds being different than t hose estimated for purposes of such estimates, (e) other market conditions, or (f) alterations in the CFD financing plan, delays in the financing, or a combination of such factors. The actual date of sale of the 2022 Bonds and the actual principal amount o f 2022 Bonds sold will be determined by the City based on the timing of the need for proceeds of the 2022 Bonds and other factors. The actual interest rates borne by the 2022 Bonds will depend on market interest rates at the time of sale thereof. The actual amortization of the 2022 Bonds will also depend, in part, on market interest rates at the time of sale thereof. Market interest rates are affected by economic and other factors beyond the control of the City.

April 5, 2022
AGENDA ITEM 3.G

REQUEST

INTRODUCE AN

ORDINANCE OF THE CITY OF TRACY ADOPTING A MILITARY
EQUIPMENT USE POLICY PURSUANT TO CALIFORNIA ASSEMBLY BILL 481

EXECUTIVE SUMMARY
California
Assembly Bill 481 (AB 481 or “the Bill”), codified by Government Code sections 7070 through 7075, requires a law enforcement agency (LEA) to implement a “military equipment” use policy (the Policy) and obtain approval of the Policy from the applicable governing body by ordinance (the Ordinance) prior to the LEA funding, acquiring, or using “military equipment.”
The City Counc
il must begin the process of approving the policy via ordinance by May 1, 2022, so that the Tracy Police Department may continue to use its equipment.

The Tracy Police Department is requesting that the City Council adopt the Ordinance and attached Military Equipment Use Policy (Lexipol Policy #708) so that the Department may continue to use the vital equipment specified therein.

DISCUSSION
Items
deemed to be “military equipment” by AB 481 are used as a component of overall best practices for law enforcement agencies throughout the country. These tools have been tested in the field and are used by LEAs to enhance citizen safety and officer safety. Loss of these items would significantly jeopardize the welfare of the community and peace officers within the Tracy Police Department (TPD).

The use of the “m
ilitary equipment” as defined by AB 481 by LEAs came, in part, from the need to have equipment which could help ensure the safety of the community and officers with the prevalence of crimes such as robberies and active shooter events being committed with firearms, especially high-powered firearms such as assault rifles. This in part, became a reason why many LEAs started deploying patrol rifles with patrol officers and LEAs began purchasing armored rescue vehicles. As examples with these two pieces of equipment, LEAs now have a rifle capable of dealing with heavily armed individuals and a rescue vehicle which allows officers to approach dangerous situations in a safer manner and a vehicle capable of evacuating community members should the need arise.

Another exam
ple is the use of non-weaponized Unmanned Aerial Systems (UAS).

These systems are significantly cheaper to purchase, operate and maintain and they perform many of the same duties of traditional police helicopters such as overhead intelligence of active events. TPD adheres to strict compliance with Federal Aviation Administration privacy standards when deploying a UAS.

AB 481 states
the governing body shall only approve a military equipment use policy if:

Agenda Item 3.G
April 5, 2022

(1) The military equipment is necessary because there is no reasonable alternative that can achieve the same objective of officer and civilian safety; (2) The proposed mi
litary equipment use policy will safeguard the public’s welfare, safety, civil rights, and civil liberties;
(3) If purchas
ing the equipment, the equipment is reasonably cost effective compared to available alternatives that can achieve the same objective of officer and civilian safety;
(4) Prior
military equipment use complied with the military equipment use policy that was in effect at the time, or if prior uses did not comply with the accompanying military equipment use policy, corrective action has been taken to remedy nonconforming uses and ensure future compliance.

All the equipm
ent identified within TPD Policy 708 meets the above-stated criteria. There are no reasonable alternatives to achieve the same objective and the equipment increases community safety and helps protect civil rights and civil liberties by helping limit the potential for significant uses of force. The equipment is cost effective compared to other reasonable alternatives. However, much of the equipment does not have alternatives which accomplish the same objective.

To date, none the
equipment requested for continue use has been used in a lethal force situation by TPD. It has often been used to help foster de-escalation and reduce the amount of potential of force used during an event.

The term “m
ilitary equipment” as used in AB 481 does not necessarily equate to equipment that has been used by the military. Pursuant to AB 481, items deemed to be “military equipment” include, but are not limited to: unmanned aerial or ground vehicles, armored vehicles, command and control vehicles, pepper balls, less lethal shotguns, less lethal 40mm projectile launchers, long range acoustic devices, and flashbangs.

TPD is committed to using the most up to date tools and equipment to safeguard the community.

Many of th
e items deemed to be “military equipment” by AB 481 have been employed for years by TPD and LEAs across the country in order to specifically reduce risks to community members and increase opportunities for de-escalation. These items provide peace officers with the ability to safely resolve volatile situations which otherwise may rise to the level of a lethal force encounter. To that end, the items at issue in this report, and accompanying Military Equipment Use Policy, also provide TPD’s peace officers with vital tools that facilitate compliance with its stringent use of force policy.

Other it
ems deemed to be “military equipment” via AB 481 include foundational equipment such as patrol rifles. These rifles allow peace officers to address lethal threats from a greater distance and with greater precision.

Previous
Councils have approved the purchase of several of the pieces of equipment included in AB 481. However, the law now requires approval for their continued use and TPD must seek continued approval annually.

Agenda Item 3.G
April 5, 2022

Attachment
“A” – Tracy Police Department Policy 708 – Military Equipment provides a detailed list that includes the description, quantity, capabilities, purchase cost of each item, purpose, authorized use, lifespan, fiscal impact, training, as well as legal and procedural rules.

TPD intends t
o explore replacement of the Command Post vehicle as well as potential funding sources to include grants. If funding sources are identified, the request will be presented at a regular City Council meeting seeking approval as required by AB 481 and already established City of Tracy purchasing guidelines.

STRATEGIC PLAN
This agenda item
relates to the Council’s Strategic Plans for Public Safety.

FISCAL IMPACT
None. All equipm
ent has already been purchased and is maintained with the existing general fund budget allocations.

RECOMMENDATION
Staff rec
ommends that the City Council introduce and waive the full reading of the proposed ordinance adopting a Military Equipment Use Policy pursuant to California Assembly Bill 481.

Prepared by: Trev
in Freitas, Police Lieutenant
Reviewed by: Sek
ou Millington, Chief of Police
Midori Lichtwardt, Assistant City Manager
Approved by: Mi
chael Rogers, City Manager
Attachments:

Attachment A – Copy of proposed Tracy Police Department Policy 708 – Military Equipment Attachment B - Copy of PowerPoint Presentation - AB 481 - "Military Equipment" Policy
708
Tracy Police Department
Tracy PD Policy Manual
Copyright Lexipol, LLC 2022/03/03, All Rights Reserved.

Published with permission by Tracy Police Department ***DRAFT*** Military Equipment - 1 Military Equipment
708.1 PURPOSE AND SCOPE
The purpose of this policy is to provide guidelines for the approval, acquisition, and reporting requirements of military equipment (Government Code § 7070; Government Code § 7071; Government Code § 7072).
708.1.1 DEFINITIONS
Definitions related to this policy include (Government Code § 7070):

Governing body
– The elected or appointed body that oversees the Department.

Military equipment – Includes but is not limited to the following:
• Unmanned, remotely piloted, powered aerial or ground vehicles. • Mine-resistant ambush-protected (MRAP) vehicles or armored personnel carriers. • High mobility multipurpose wheeled vehicles (HMMWV), two-and-one-half-ton trucks, five-ton trucks, or wheeled vehicles that have a breaching or entry apparatus attached. • Tracked armored vehicles that provide ballistic protection to their occupants. • Command and control vehicles that are either built or modified to facilitate the operational control and direction of public safety units. • Weaponized aircraft, vessels, or vehicles of any kind. • Battering rams, slugs, and breaching apparatuses that are explosive in nature. This does not include a handheld, one-person ram.
• Firearms and ammunition of_.50 caliber or greater, excluding standard-issue shotguns and standard-issue shotgun ammunition.
• Specialized firearms and ammunition of less than_.50 caliber, including firearms and accessories identified as assault weapons in Penal Code § 30510 and Penal Code § 30515, with the exception of standard-issue firearms.
• Any firearm or firearm accessory that is designed to launch explosive projectiles. • Noise-flash diversionary devices and explosive breaching tools. • Munitions containing tear gas or OC, excluding standard, service-issued handheld pepper spray.
• TASER® Shockwave, microwave weapons, water cannons, and long-range acoustic devices (LRADs).
• Kinetic energy weapons and munitions.
• Any other equipment as determined by a governing body or a state agency to require additional oversight.

Attachment A
Tracy Police Department
Tracy PD Policy Manual
Military Equipment
Copyright Lexipol, LLC 2022/03/03, All Rights Reserved.

Published with permission by Tracy Police Department ***DRAFT*** Military Equipment - 2 708.2 POLICY
It is the policy of the Tracy Police Department that members of this department comply with the provisions of Government Code § 7071 with respect to military equipment. 708.3 MILITARY EQUIPMENT COORDINATOR
The Chief of Police should designate a member of this department to act as the military equipment coordinator. The Professional Standards and Training Lieutenant is designated as the coordinator.

The responsibilities of the military equipment coordinator include but are not limited to:
(a) Acting as liaison to the governing body for matters related to the requirements of this policy.
(b) Identifying department equipment that qualifies as military equipment in the current possession of the Department, or the equipment the Department intends to acquire that requires approval by the governing body.
(c) Conducting an inventory of all military equipment at least annually. (d) Collaborating with any allied agency that may use military equipment within the jurisdiction of Tracy Police Department (Government Code § 7071). (e) Preparing for, scheduling, and coordinating the annual community engagement meeting to include:

1. Publicizing the details of the meeting.

2. Preparing for public questions regarding the department's funding, acquisition, and use of equipment.
(f) Preparing the annual military equipment report for submission to the Chief of Police and ensuring that the report is made available on the department website (Government Code § 7072).
(g) Establishing the procedure for a person to register a complaint or concern, or how that person may submit a question about the use of a type of military equipment, and how the Department will respond in a timely manner.
708.4 MILITARY EQUIPMENT INVENTORY
The following constitutes a list of qualifying equipment for the Department:

1. Mobile Incident Command Post (CP): A vehicle used as a mobile office that provides shelter, access to Department computer systems, and restrooms.
(a) Description, quantity, capabilities, and purchase cost: LDV USA (Custom Build) vehicle, cost: $ 369,045.00 using a grant from the Office of Homeland Security in 2006, quantity: (1). The CP can be utilized for operations involving the Crisis Response Unit (CRU), critical incident management, preplanned large events, searching for missing persons, natural disasters, and community events.
(b) Purpose: Used during specific circumstances such as a critical incident, large events, natural disasters, or community events.

Tracy Police Department
Tracy PD Policy Manual
Military Equipment
Copyright Lexipol, LLC 2022/03/03, All Rights Reserved.

Published with permission by Tracy Police Department ***DRAFT*** Military Equipment - 3 (c) Authorized Use: Only staff trained in the deployment and operations consistent with policy, law, and training are authorized to operate the CP. Staff must also obtain a Class B drivers' license from the California Department of Motor Vehicles (DMV).

The CP is authorized for use during but not limited to critical incidents, emergencies, community events, and natural disasters.
(d) Lifespan: 20 years on chassis and vehicle structure. IT systems currently outdated. (e) Fiscal Impact: Annual maintenance cost is approximately $4,000. (f) Training: The driver/operator shall receive training in the safe handling of the vehicle and obtain and maintain a class B license from the California DMV. (g) Legal and Procedural Rules: It is the policy of this Department to use the CP for official law enforcement purposes in compliance with California state law and the policies of the Tracy Police Department.

2. Armored Vehicle: Commercially produced wheeled vehicle armored vehicle utilized for law enforcement purposes.
(a) Description, quantity, capabilities, and purchase cost: LENCO BEARCAT is an armored rescue vehicle that seats 10-12 personnel with open floor plan that allows for rescue
of down personnel. It can stop various projectiles, which provides greater safety to citizens and officers beyond the protection level of shield and personal body armor, quantity: 1, cost: $281,000; $181,000 from general fund and $100,000 from COPS grant in 2012.
(b) Purpose: Used in response to critical incidents to enhance officer and community safety. In addition, allows for scene containment, stabilization to assist in resolving incidents and as a rescue vehicle to evacuate officers and community members from potential harm.
(c) Authorized Use: The use of armored vehicles shall only be authorized by a sworn supervisor, watch commander, or incident / tactical commander. Armored vehicles shall be used by only officers trained in its deployment and in a manner consistent with training and Department policy.
(d) Lifespan: 25 years.
(e) Fiscal Impact: Annual maintenance cost is approximately $3,500. (f) Training: All drivers must be attend a department orientation training. No special license is required by California DMV.
(g) Legal and Procedural Rules: It is the policy of this Department to utilize armored vehicles only for legitimate law enforcement purposes and in a manner consistent with State and Federal law.

3. Transport Vehicle: Commercially produced wheeled van utilized for law enforcement purposes. (a) Description, quantity, capabilities, and purchase cost: 2017 LDV Freightliner transport vehicle, quantity: 1, used to transport personnel and equipment to active scenes where the Crisis Response Unit is deployed and often deployed along with the LENCO Tracy Police Department
Tracy PD Policy Manual
Military Equipment
Copyright Lexipol, LLC 2022/03/03, All Rights Reserved.

Published with permission by Tracy Police Department ***DRAFT*** Military Equipment - 4 BEARCAT' cost: $206,000 ($140,000 from State COPS Grant / $66,000 from Asset Forfeiture) in 2016.
(b) Purpose: Used in response to critical incident to transport personnel and equipment to critical incidents to enhance officer and community safety; often deployed with the LENCO BEARCAT.
(c) Authorized Use: The use of the transport vehicle shall only be authorized by a sworn supervisor, watch commander, or incident / tactical commander. Armored vehicles shall be used by only officers trained in its deployment and in a manner consistent with training and Department policy.
(d) Lifespan: 25 years.
(e) Fiscal Impact: Annual maintenance cost is $3,500.00. (f) Training: All drivers must be attend a department orientation training. No special license is required by California DMV.
(g) Legal and Procedural Rules: It is the policy of this Department to utilize the vehicle only for legitimate law enforcement purposes and in a manner consistent with State and Federal law.

4. Unmanned Aerial System (UAS): An unmanned aircraft and associated equipment necessary to control it remotely.
(a) Description, quantity, capabilities, and purchase cost:

1. DJI Mavic 2 Enterprise Advanced 909 grams, quantity 7; M2EA thermal camera, M2EA Visual Camera, spotlight, strobe with a flight time of approx. 28 minutes.

Cost: $6,240 / each.

2. DJI Mini 2 249 grams, quantity: 4, 1/2" CMOS Visual Camera 12mp 4k video with a flight time of approx. 30 minutes. Cost: $599 / each.

3. DJI Mavic Air 570 grams, quantity: 2; 1/2" CMOS visual camera 48mp 4k video with a flight time of approx. 34 minutes. Cost: $988 / each. (b) Purpose: To be deployed when its view would assist officers or incident commanders with the following situations, which include but are not limited to:

1. major collision investigations.

2. search for missing persons.

3. natural disaster management.

4. crime scene photography.

5. SWAT, tactical or other public safety and life preservation missions.

6. In response to specific requests from local, state or federal fire authorities for fire response and/or prevention.
(c) Authorized Use: Only assigned operators who have completed the required training shall be permitted to operate any UAS during approved missions. (d) Lifespan: 5 - 10 years.

Tracy Police Department
Tracy PD Policy Manual
Military Equipment
Copyright Lexipol, LLC 2022/03/03, All Rights Reserved.

Published with permission by Tracy Police Department ***DRAFT*** Military Equipment - 5 (e) Fiscal Impact: Annual maintenance and battery replacement expected to be $4,000 - $6,000.
(f) Training: All Department UAS operators are licensed by the Federal Aviation Administration for UAS operation. In addition, each operator must attend ongoing department training.
(g) Legal and Procedural Rules: Use is established under Tracy Police Department policy 610, FAA Regulation 14 CFR Part 107, It is the policy of the Tracy Police Department to utilize UAS only for official law enforcement purposes, and in a manner that respects the privacy of our community, pursuant to State and Federal law.

5. Robots: A remotely controlled unmanned machine that operates on the ground which is utilized to enhance the safety of the community and officers.
(a) Description, quantity, capabilities, and purchase cost: AVATAR Tactical Robot; quantity 1; enhances the compatibilities of teh Crisis Response Unit by allowing to quickly and safely inspect dangerous situations without sending personnel. AVATAR has live feed video and audio with the capability to record; cost: $ 15,132. (b) Purpose: Used remotely to gain visual and audio access to clear areas in high risk situations.
(c) Authorized Use: Used by trained members of the Crisis Response Unit. (d) Lifespan: 8 - 10 years.
(e) Fiscal Impact: Annual maintenance cost of between $500. (f) Training: Training conducted internally by the Crisis Response Unit. (g) Legal and Procedural Rules: It is the policy of the Tracy Police Department to utilize the robot for official law enforcement purposes and in a manner that reflect the privacy of the community pursuant to Federal and State law.

6. Less Lethal Shotguns / Breaching Shotguns / 40MM Launchers and Munitions: These systems deploy less-lethal impact projectiles and breaching rounds. (a) Description, quantity, capabilities, and purchase cost:

1. Shotguns and 40MM Launchers:
(a) Less-Lethal Remington 870 Shotgun: quantity 23; The Remington 870 Less Lethal Shotgun is used to deploy the less lethal 12-gauge Super- Sock Beanbag Round up to a distance of 75 feet. The range of the weapon; system helps to maintain space between officers and a suspect reducing the immediacy of the threat which is a principle of De-escalation; cost $425/each.
(b) Breaching Remington 870 Shotgun: quantity 2; This weapon allows for breachers to safely utilize shotgun breaching rounds in order to destroy deadbolts, locks, and hinges. The stand-off device that is attached to the end of the barrel allows for positive placement of the shotgun into the correct position and vents gases to prevent overpressure. cost $425/each.

Tracy Police Department
Tracy PD Policy Manual
Military Equipment
Copyright Lexipol, LLC 2022/03/03, All Rights Reserved.

Published with permission by Tracy Police Department ***DRAFT*** Military Equipment - 6 (c) 40MM Defense Technology Launcher (single shot); quantity 7; The 40MM Single Launcher is a single shot launcher. It will fire standard 40mm less- lethal ammunition up to 4..8 inches in length. It will launch a 40MM less lethal round up to 131 feet; cost: $1000/each.
(d) 40MM Defense Technology Multi-Launcher; quantity 2; The 40MM Tactical 4-Shot Launcher is low-profile and lightweight, providing multi- shot capability in an easy to carry launcher; cost $2,000 / each.

2. Munitions:
(a) CTS 12-Gauge Super-Sock beanbag round, cost: $5, quantity: 2000. A less lethal 2.4-inch 12-gauge shotgun round firing a ballistic fiber bag filled with 40 grams of lead shot at a velocity of 270-290 feet per second (FPS). CTS Super-Sock rounds are discharged from a dedicated 12- gauge shotgun that is distinguishable by an orange butt stock and fore grip. This round provides accurate and effective performance when fired from the approved distance of not fewer than five (5) feet. The maximum effective range of this munition is up to 75 feet from the target (b) Royal Arms TESAR #1 orange cap 275 grain copper frangible breaching round; fired from a dedicated breaching shotgun and is used to destroy deadbolts, locks, and hinges; quantity 150; cost: $125 per box of 25 rounds.
(c) Royal Arms TESAR #2 black cap 425 grain copper frangible breaching round; fired from a dedicated breaching shotgun and is used to destroy deadbolts, locks, and hinges; quantity 150; cost: $125 per box of 25 rounds.
(d) Royal Arms TESAR #4 yellow cap 750 grain copper frangible breaching round; fired from a dedicated breaching shotgun and is used to destroy deadbolts, locks, and hinges; quantity 100; cost: $125 per box of 25 rounds.
(e) CTS 4557 40MM sponge round, fired from 40MM launcher, quantity 150; the 4557 sponge round is a smokeless, spin stabilized round, 4" long intended to deliver a less-lethal blunt trauma effect; cost $20/per round. (b) Purpose: To increase opportunities to utilize de-escalation and in an effort to reduce lethal force within law enforcement. To be used in efforts to resolve dynamic incidents where deadly force is not authorized or otherwise undesirable. (c) Authorized Use: Situations for use of the less lethal weapon systems may include, but are not limited to:

1. Self-destructive, dangerous and/or combative individuals.

2. Riot/crowd control and civil unrest incidents.

3. Circumstances where a tactical advantage can be obtained.

4. Potentially vicious animals.

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5. Training exercises or approved demonstrations
(d) Lifespan: 25 + years for launchers and shotguns. 5 years for munitions. (e) Fiscal Impact: Annual maintenance of approx. $25-$50 per shotgun and 40MM Launcher. munitions replenished as necessary based on usage and lifespan. (f) Training: Requires a 4 hours less lethal course by a certified instructor. The 4 hours course is required to be completed annually to maintain certification; the course is reviewed and updated annually to ensure compliance with current law and procedures. (g) Legal and Procedural Rules: Use of less-lethal shotguns and 40MM launchers is established under policy sections 300 - Use of Force and 303 - Control Devices and Techniques. It is the policy of the Tracy Police Department to utilize less-lethal equipment only for official law enforcement purposes and consistent with State and Federal law regarding use of force.

7. Distraction Devices: A device used to distract potentially dangerous persons. (a) Description, quantity, capabilities, and purchase cost:

1. Combined Tactical Systems, 7290-9 Flash-Bang, cost: $52, quantity: 50. A non- bursting, non-fragmenting multi-bang device that produces a thunderous bang with an intense bright light. Ideal for distracting dangerous suspects during assaults, hostage rescue, room entry or other high-risk arrest situations.

2. Combined Tactical Systems, 7290M Mini Flash-Bang, cost: $55, quantity: 75.

The 7290M Flash-Bang exhibits all the same attributes of its larger counterpart but in a smaller and lighter package. Weighing in at 15 ounces the new 7290M is approximately 30% lighter than the 7290 but still has the same 175db output of the 7290 and produces 6-8 million candelas of light. (b) Purpose: A distraction device is ideal for distracting dangerous suspects during assaults, hostage rescue, room entry or other high-risk arrest situations. To produce atmospheric overpressure and brilliant white light and, as a result, can cause short- term (6 - 8 seconds) physiological/psychological sensory deprivation to give officers a tactical advantage.
(c) Authorized Use: Diversionary Devices shall only be used:

1. By officers who have been trained in their proper use.

2. In hostage and barricaded subject situations.

3. In high risk warrant (search/arrest) services where there may be extreme hazards to officers.

4. During other high-risk situations where their use would enhance officer safety.

5. During training exercises.
(d) Lifespan: 5 years from date of shipment.
(e) Fiscal Impact: No annual maintenance. Cost is associated with replacement after use.

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Published with permission by Tracy Police Department ***DRAFT*** Military Equipment - 8 (f) Training: Prior to use, officers must attend diversionary device training that is conducted by certified instructors.
(g) Legal and Procedural Rules: Use is established under Crisis Response Unit Operational Manual. It is the policy of the Tracy Police Department to utilize diversion devices only for official law enforcement purposes, and pursuant to State and Federal law regarding the use of force.

8. Rifles: Firearms which are shoulder fired having long spiraled rifling within the barrel intended to improve the accuracy of the rifle.
(a) Description, quantity, capabilities, and purchase cost:

1. AR-15/M-4 Platform:
(a) Colt; AR-15 standard rifle with 16" barrel, quantity 84; standard issue rifle which fires a .223 caliber cartridge providing more powerful round than a stand issue handgun with greater accuracy; cost: $1,100/each. (b) Sionics; AR-15 custom rifle with 11.5" barrel; quantity 11; standard issue rifle which fires a .223 caliber cartridge providing more powerful round than a stand issue handgun with greater accuracy. It is a short-barreled rifle which allows a a trained officer better control inside of structures; cost $1,100/each.
(c) Sons of Liberty; M4-89 custom rifle with 11.5" barrel; quantity 24; standard issue rifle which fires a .223 caliber cartridge providing more powerful round than a stand issue handgun with greater accuracy; cost $1,350/ each.

2. Precision Rifles:
(a) Accuracy International AT .308 caliber bolt action rifle; quantity 4; rifle chambered in .308 caliber. The rifle is primarily used in over watch in critical incidents and other high-risk tactical situations such as hostage rescue and search warrant service, Cost $4,000 / each.
(b) Rock River Arms LAR-8 .308 caliber semi-automatic rifle; quantity 2; rifle chambered in .308 caliber. The rifle is primarily used in over watch in critical incidents and other high-risk tactical situations such as hostage rescue and search warrant service, Cost $2,000 / each.

3. Ammunition:
(a) Speer Gold Dot .223 caliber 62 grain rifle round, quantity 125 cases (500 rounds per case); cost: $285 per case.
(b) Hornaday A-Max .308 caliber 168 grain rifle round, quantity 5 cases (500 rounds per case); cost: $400 per case.
(c) Hornaday Bonded .308 caliber 165 grain rifles round, quantity 5 cases (500 rounds per case); cost: $400 per case.
(b) Purpose: To be used as precision weapons to address a threat with more precision and/or at greater distances than a handgun.

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Published with permission by Tracy Police Department ***DRAFT*** Military Equipment - 9 (c) Authorized Use: Only members who have attended a POST certified course are authorized to use a rifle. Tracy Police Department provides this training to all sworn peace officers.
(d) Lifespan: 15 years.
(e) Fiscal Impact: annual maintenance of approx. $50-100 per rifle. (f) Training: Prior to using a rifle, officers must be certified by POST instructors in the operation of the rifle. Additionally, all members that operate any rifle are required to pass a range qualification two
times a year.
(g) Legal and Procedural Rules: Use of rifles is established under policy sections 300 - Use of Force, 306 - Firearms, and 419 - Patrol Rifles. It is the policy of the Tracy Police Department to utilize rifles only for official law enforcement purposes and consistent with State and Federal law regarding use of force.

9. Chemical Agent and Smoke Canisters: Canister which contain chemical agents that are released when deployed.
(a) Description, quantity, capabilities, and purchase cost:

1. Remington 870 shotgun dedicated to launch CS; quantity 2; specialized Remington 870 shotgun with th dedicated launching cup for the purpose of launching CS cannisters; cost: $425/each. A 1210,12 gauge launching cartridge is used to deploy the CS cannisters. The launching cartridge is designed to propel the CS cannister further than could be thrown by hand.

2. CTS 5230B - CS Baffled canister grenade, pyro, low flame potential; quantity 100; The 5230B pyrotechnic grenade is designed for indoor use delivering a maximum amount of irritant smoke throughout multiple rooms with minimal risk of fire; cost: $37/each.

3. Defense Technology Spede-Heat Continuous Discharge Grenade, CS; quantity 50; The Spede-Heat CS Grenade is a high-volume continuous burn device. It expels its payload in approx. 30 - 4- seconds. The payload is discharged through four gas ports on the top of the canister, three on the side, and one on the bottom.

The canister holds approx. 81.2 grams of CS; cost $25/each.

4. Defense Technology Flameless TRI-CHAMBER CS Grenade, #1032; quantity 50; The design of the Tri-Chamber Flameless CS Grenade allows the contents to burn within an internal can and disperse the agent safely with reduced risk of fire.

The grenade is designed primarily for indoor tactical situations to detect and/or dislodge a barricaded subject. This grenade will deliver approximately.70 oz. of agent during its 20-25 seconds burn time. The Tri-Chamber Flameless Grenade can be used in crowd control as well as tactical deployment situations by Law Enforcement and Corrections but was designed with the barricade situation in mind. Its applications in tactical situations are primarily to detect and/or dislodge barricaded subjects. The purpose of the Tri-Chamber Flameless Grenade is to minimize the risks to all parties through pain compliance, temporary discomfort, and/or incapacitation of potentially violent or dangerous subjects. The Tri- Tracy Police Department
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Published with permission by Tracy Police Department ***DRAFT*** Military Equipment - 10 Chamber Flameless Grenade provides the option of delivering a pyrotechnic chemical device indoors, maximizing the chemicals' effectiveness via heat and vaporization, while minimizing or negatin the chance of fire to the structure; cost $25/each.

5. Defense Technology Ferret 40MM Liquid Barricade Penetrator Round, CS; quantity 100; The Ferret 40mm Round is non-burning and suitable for indoor use. Used primarily by tactical teams, it is designed to penetrate barriers, such as windows, hollow core doors, wallboard and thin plywood. Upon impacting the barrier, the nose cone ruptures and instantaneously delivers a small chemical payload inside of a structure or vehicle. In a tactical deployment situation, the 40mm
Ferret is primarily used to dislodge barricaded subjects from confined areas. Its purpose is to minimize the risks to all parties through pain compliance, temporary discomfort and/or incapacitation of potentially violent or dangerous subjects; cost: $23/each.

6. Defense Technology OC Aerosol Grenade 1.3% Fogger, 6oz; quantity 25; The 6 oz. OC Aerosol Grenade will delivery its payload of 1.3% MC% OC in 20-25 seconds. This is a anatomized mist which enhances the pungent 1.3% OC formulation. Ideal for area denial areas like attics, garages, etc. This device has minimum clean up. The canister may also be hand held to direct the spray pattern. This product is designed to provide room clearing ability with minimum clear up requirements; cost: $ 17/each.

7. Defense Technology Maximum HC Smoke Military-Style Canister; quantity 25; The Military-Style Maximum Smoke Grenade comes from the Defense Technology® #3 smoke grenade. It is a slow burning, high volume, continuous discharge grenade designed for outdoor use in crowd management situations.

Emits grey-white smoke only for approximately 1.5 to 2 minutes; cost: $30/each.

8. Defense Technology CS HAN-BALL Grenade; quantity 50; The Han-Ball™ CS Grenade is an outdoor use grenade expelling its payload in approximately 15-20 seconds. The rubber ball round has an over all size of 4.8 in. tall, including the fuze head, and 3.1 in. diameter. This launchable grenade holds approximately

1.6 oz. of active agent which is expelled through three ports around the equator of the ball. Due the intense heat generated by this grenade, it should not be used inside a building or near flammable material; cost: $45/each.

9. Golden Eagle Fogger Series 4 CS/OC Fogger; quantity 1; dispenses CS or OC efficiently in riotous situations. Utilizes Pepper Fog CS irritant and Pepper Fog OC; quantity 4 quarts each; cost $60 per quart.
(b) Purpose: To safely resolve critical situations high risk operations. These are necessary because there are no reasonable alternatives that can achieve the same objective of officer and civilian safety and will safeguard the public's welfare. (c) Authorized Use: To limit the escalation of conflict where employment of lethal force is prohibited or undesirable. Situations for use of the less lethal weapon systems may include, but are not limited to:

1. Self-destructive, dangerous and/or combative individuals.

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Published with permission by Tracy Police Department ***DRAFT*** Military Equipment - 11

2. Riot/crowd control and civil unrest incidents.

3. Circumstances where a tactical advantage can be obtained.

4. Potentially vicious animals.

5. Training exercises or approved demonstrations.
(d) Lifespan: 25 + years for breaching shotguns and 5 years for other materials. (e) Fiscal Impact: Annual maintenance and replacement is approx. $2,500. (f) Training: All staff utilzing the equipment must be training by a POST certified chemical agent instructor.
(g) Legal and Procedural Rules: The use of items is established by Department policy and the Crisis Response Unit Operational Manual.Tracy Police Department to utilize rifles only for official law enforcement purposes and consistent with State and Federal law regarding use of force.
708.4.1 MAINTENANCE OF SUPPLY LEVELS
The Department, by authorization of the Chief of Police is authorized to purchase equipment and associated and munitions approved by Council pursuant to this policy as long as it does not go beyond the scope of capabilities currently approved. The Department is authorized to maintain adequate levels of approved munitions, replace defective equipment, and increase quantities of approved equipment as needed to meet operational and safety needs of the Department and community. All purchases shall follow pre-established purchasing guidelines of the City of Tracy.

Purchase of equipment does not have to be the exact make and model listed however, they shall not exceed to capabilities and intended use as described and approved within this policy.

Example(s)

1. An increase in allocated positions by City Council may make necessary the purchase of additional equipment and munitions for both operational and training needs.

2. A manufacturer may stop making a specific model of a product, or that item may become difficult to obtain due to supply chain issues and it may become necessary to locate and purchase a similar product to maintain operation capabilities.

3. An approved military equipment program, may need to expand for operational needs (ex: increase the number of UAS in deployment, or purchase of additional less lethal shotguns).

It is the stated purpose of this policy section not exceed the scope of City Council approval and any increases in quantity shall be reported to City Council as part of the annual report for Military Equipment.

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Published with permission by Tracy Police Department ***DRAFT*** Military Equipment - 12 708.4.2 MILITARY EQUIPMENT USE REPORTING REQUIREMENTS All military equipment and munitions approved for use by this policy, when deployed in the field shall be documented and reported in PlanIt by the supervisor by the end of their assigned shift using the form titled "AB 481". The patrol Watch Commander shall conduct a weekly audit ensure the deployment data is being properly reported.

The Crisis Response Unit shall document the military equipment deployment as part of their after action report and the Team Leader, or designee shall enter the information into PlanIt using the form titled "AB 481". The Tactical Commander shall conduct a quarterly audit to the date is being property reported.

As part of the annual reporting requirement, the Professional Standards and Training Division shall complete a report to be submitted to City Council in a regular meeting.

As it relates to this policy, the term deployed means to have been utilized it response to a real world incident whether or not the equipment was
708.5 APPROVAL
The Chief of Police or the authorized designee shall obtain approval from the governing body by way of an ordinance adopting the military equipment policy. As part of the approval process, the Chief of Police or the authorized designee shall ensure the proposed military equipment policy is submitted to the governing body and is available on the department website at least 30 days prior to any public hearing concerning the military equipment at issue (Government Code § 7071). The military equipment policy must be approved by the governing body prior to engaging in any of the following (Government Code § 7071):
(a) Requesting military equipment made available pursuant to 10 USC § 2576a. (b) Seeking funds for military equipment, including but not limited to applying for a grant, soliciting or accepting private, local, state, or federal funds, in-kind donations, or other donations or transfers.
(c) Acquiring military equipment either permanently or temporarily, including by borrowing or leasing.
(d) Collaborating with another law enforcement agency in the deployment or other use of military equipment within the jurisdiction of this department. (e) Using any new or existing military equipment for a purpose, in a manner, or by a person not previously approved by the governing body.
(f) Soliciting or responding to a proposal for, or entering into an agreement with, any other person or entity to seek funds for, apply to receive, acquire, use, or collaborate in the use of military equipment.
(g) Acquiring military equipment through any means not provided above. 708.6 COORDINATION WITH OTHER JURISDICTIONS
Military equipment used by any member of this Department shall be approved for use and in accordance with this Department policy. Military equipment used by other jurisdictions that are Tracy Police Department
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Published with permission by Tracy Police Department ***DRAFT*** Military Equipment - 13 providing mutual aid to this Department, or otherwise engaged in law enforcement operations in this jurisdiction, shall comply with their respective military equipment use policies. 708.7 ANNUAL REPORT
Upon approval of a military equipment policy, the Chief of Police or the authorized designee should submit a military equipment report to the governing body for each type of military equipment approved within one year of approval, and annually thereafter for as long as the military equipment is available for use (Government Code § 7072).

The Chief of Police or the authorized designee should also make each annual military equipment report publicly available on the department website for as long as the military equipment is available for use. The report shall include all information required by Government Code § 7072 for the preceding calendar year for each type of military equipment in department inventory. 708.8 COMMUNITY ENGAGEMENT
Within 30 days of submitting and publicly releasing the annual report, the Department shall hold at least one well-publicized and conveniently located community engagement meeting, at which the Department should discuss the report and respond to public questions regarding the funding, acquisition, or use of military equipment.

Any member of the public can register a question or concern regarding military equipment by contacting the Professional Standards and Training Division by email at [email protected] or by telephone at (209) 831-6559.

AB 481 - “Military Equipment”
Authorize the use of specified equipment by ordinance and adoption of policy by the Tracy Police Department
April 5, 2022
Attachment B
AB 481
• AB 481 – Codified Government Code sections 7070 –
7075.

• Requires Tracy Police to obtain approval, from City
Co
uncil by adoption of a “military equipment”
policy and ordinance;
• Prior to funding, acquiring or using specific equipment aft
er January 1, 2022.
• Or, for specific equipment purchased prior to January 1, 20 22, the Tracy Police Department must begin the process of adoption of the policy and ordinance prior to May 1, 2022.
2 AB 481
• The legal definition of “military equipment” used
wi
th the law does not necessarily mean equipment
used or obtained from the military.
• All equipment used by TPD is industry standard
and us
ed to enhance the safety of community
members and officers.
3 AB 481
4 • The law lists specific criteria for equipment and
items which much be reported and the law
states “military equipment” means the
following:
• UAS / Drones (To include commercially available)
• TPD possesses 13 Drones (none are weaponized)
• MRAPS or Armored Personnel Carriers
• TPD has one (1) LENCO BEARCAT.
• Humvees or wheeled vehicles with breaching
apparatus attached
• The LENCO BEARCAT is capable of attaching a non-
explosive breaching tool.
• Tracked armored vehicles with ballistic protection.
• TPD has none.

AB 481
5 • Command and Control vehicles built or
modified to facilitate the operational control of
public safety units.
• TPD has one (1) Command Post and one (1)
transport vehicle.
• Weaponized aircraft, vessels, or vehicles.
• TPD has none.
• Battering rams, slugs, and breaching
apparatuses that are explosive in nature.
• The LENCO BEARCAT.
• TPD uses breaching 12-gauge shotguns rounds to
overcome barricaded and/or fortified structures.

AB 481
6 • Firearms of .50 caliber or greater excluding
standard issue shotguns.
• TPD has none.
• Ammunition of .50 caliber or greater excluding
shotgun ammunition.
• TPD has none.
• Specialized firearms of less the .50 caliber
including assaulting weapons as defined by PC
sections 30510 and 30515.
• TPD issues every officer a patrol rifle in .223 caliber. • TPD has four (4) officers assigned to the Crisis
Response Unit deploying .308 caliber precision
rifles.

AB 481
7 • Any firearm or accessory designed to launch
explosive projectiles.
• TPD has none.
• “Flashbang” grenades and explosive breaching
tools, “tear gas”, and “pepper balls.”
• TPD CRU has and may use “Flashbangs” as a
discretionary device on tactical deployments.
• TPD does not currently utilize explosive breaching.
• TPD CRU has and may use CS gas as part of tactical
deployments. Use is limited.
• TPD does not currently utilize “pepper balls.”
AB 481
8 • Taser shockwave, microwave weapons, water
cannons, and long-range acoustic devices.
• TPD does not utilize of possess any of these items.
• Projectile launch platforms and their associated
munitions; 40MM projectile launchers, “bean
bags”, rubber bullet, and specialty impact
munitions (SIM).
• TPD currently uses the 40MM projectile launcher
which is a less-lethal device firing a sponge round.
• TPD currently uses dedicated and mark (orange)
less-lethal 12-gauge shotguns firing a bean bag
round.
• TPD does not possess or use rubber bullets or
SIM
9 AB 481
• Requires Annual Report
• Summary of how equipment was used.
• Summary of complaints.
• Results of internal audits.
• Total annual cost.
• Quantity possessed of each item.
• If TPD intends to acquire equipment as
defined by AB 481 within the following
year.
• Information must be posted on agencies
website.
• TPD intends to add this as part of our
traditional annual report to Council.

AB 481
10 • Last week TPD released a detailed video to the
public on social media and our website.
• Questions can be directed to our Professional
Standards and Training Division:
• [email protected]
• (209) 831-6559
ORDINANCE ______

AN ORDINANCE OF THE CITY OF TRACY ADOPTING A MILTARY EQUIPMENT USE POLICY PURSUANT TO CALIFORNIA ASSEMBLY BILL 481
WHEREAS, on Sep
tember 30, 2021, Governor Gavin Newsom signed into law California Assembly Bill 481 (AB 481), regarding the use of military equipment by law enforcement agencies, and

WHEREAS, A
B 481, codified by California Government Code section 7070 through 7075, requires that all law enforcement agencies obtain approval from the applicable governing body, by ordinance, adopting a military equipment use policy prior to taking certain actions relating to the funding, acquisition, or use of military equipment, and

WHEREAS, G
overnment Code section 7070 defines the term “military equipment”, and WHEREAS, t
he proposed military equipment policy is found within the Tracy Police Department Military Equipment Use Policy (Lexipol Policy #708), and

WHEREAS, A
B 481 requires that the law enforcement agency make the military equipment use policy available on the law enforcement agency’s website at least 30 days prior to the public hearing relating to the adoption of the military use equipment policy, and WHEREAS, t
he Tracy Police Department Military Equipment Use Policy was published on the Tracy Police Department’s internet website on March 4, 2022, at least 30 days before the public hearing, and
WHEREAS, t
he Tracy Police Department Military Equipment Use Policy meets the requirements of Government Code section 7070, subdivision (d).

NOW THEREFO
RE, the City Council of the City of Tracy does ordain as follows:

SECTION 1: The City Council hereby determines the following:

A. The milit
ary equipment identified in the Tracy Police Department’s Military Equipment Use Policy (Lexipol Policy #708) is necessary because there are no reasonable alternatives that can achieve the same objectives of officer and civilian safety; B. Tracy Pol
ice Department’s Military Equipment Use Policy (Lexipol Policy #708) will safeguard the public’s welfare, safety, civil rights, and civil liberties; C. Prior milit
ary equipment use complied with the military equipment use policy that was in effect at the time; and
D. Tracy Pol
ice Department’s Military Equipment Use Policy (Lexipol Policy #708) is hereby approved and adopted.

SECTION 2: If any provision or the application of this Ordinance is for any reason held to be unconst itutional, invalid, or otherwise unenforceable, such decision shall not affect the validity of the remaining portions of this Ordinance or any part thereof. The City Council hereby declares that it would have adopted each subsection or provision of this Ordinance irrespective of the invalidity of any particular portion thereof and intends that the invalid portions should be severed and the balance of the Ordinance enforced.

SECTION 3: Thi s Ordinance shall take effect thirty (30) days after its final passage and adoption.

SECTION 4: This Ordinance shall either (1) be published once in a newspaper of general circulation, within 15 days after its final adoption, or (2) be published in summary form an d posted in the City Clerk’s office at least five days before the ordinance is adopted and within 15 days after adoption, with the names of the Council Members voting for and against the ordinance. (Gov’t. Code §36933.)
* *
* * * * * * * * * * * * * * * * * * * * The for
egoing Ordinance _______ was introduced at a regular meeting of the Tracy City Council on the 5th day of April, 2022, and finally adopted on the ______ day of __________, 2022, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:
___________________________
M
AYOR
ATTEST:
______________________

CITY CLERK
Ordinance ___