Ukiah City Council
February 16, 2022

5 DEBT SERVICE SCHEDULE
The Bonds are payable from Revenues available under the Indenture, consisting primarily of the Installment Payments made by the City pursuant to the Installment Sale Agreement. The schedule below shows the annual debt service on the Bonds. The table below assumes the Bonds are retired as scheduled and not optionally redeemed prior to maturity.

Year Ending
March 1 Principal Interest
Total
Debt Service(1)
Totals

(1) Equal to the total Installment Payments due in each Fiscal Year.

Source: Underwriter.

Attachment 5

6 THE BONDS
The following is a summary of certain provisions of the Bonds. Reference is made to the Bonds for the complete text thereof and to the Indenture for a more detailed description of such provisions. The discussion herein is qualified by such reference. See APPENDIX A – “SUMMARY OF PRINCIPAL LEGAL DOCUMENTS.”
Authority for Issuance
The Bonds are being issued under the Bond Law, the Authority Resolution, the City Resolution and the Indenture.

General Provisions
General. The Bonds will be dated their date of initial delivery. Subject to the redemption provisions outlined below, the Bonds will mature on the dates and in the amounts set forth on the inside cover page of this Official Statement.

Interest. Interest on each Bond will accrue at the per annum interest rates set forth on the inside cover page of this Official Statement, payable semiannually on March 1 and September 1 of each year, beginning on September 1, 2022 (each, an “Interest Payment Date”).

Each Bond will bear interest, calculated on the basis of a 360-day year of twelve 30-day months, from the Interest Payment Date next preceding the date of authentication thereof; unless (i) it is authenticated on or before an Interest Payment Date and after the close of business on the preceding Record Date, in which event such Bonds bear interest from such Interest Payment Date; (ii) it is authenticated on or before the first Record Date, in which event such Bonds will bear interest from the date of delivery; provided, however, that if, as of the date of authentication of any Bond, interest thereon is in default, such Bond will bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment with respect to the outstanding Bonds. The Record Date with respect to an Interest Payment Date is the 15th day of the month immediately preceding such Interest Payment Date, whether or not such date is a Business Day.

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

Denominations. The Bonds will be issued in the form of fully registered bonds without coupons in the denomination of $1,000 each or any integral multiple thereof.

DTC and Book-Entry Only System. DTC will act as securities depository for the Bonds.

The Bonds will be executed and delivered as fully-registered securities registered initially in the name of Cede & Co. (DTC’s partnership nominee). So long as Cede & Co. is the registered owner of the Bonds, as nominee of DTC, references in this Official Statement to the “Owners” will mean Cede & Co., and will not mean the Beneficial Owners of the Bonds. See “APPENDIX F – DTC AND THE BOOK-ENTRY ONLY SYSTEM.”
Method of Payment. So long as the Bonds are registered in the name of Cede & Co., principal, premium, if any, and interest on the Bonds are payable directly to DTC by the Trustee in lawful money of the United States of America. Upon receipt of payments of principal, premium Attachment 5

7 or interest, DTC is to remit such principal, premium or interest to the “DTC Participants” (as defined in APPENDIX F) for subsequent disbursement to the Beneficial Owners of the Bonds.

See “APPENDIX F – DTC AND THE BOOK-ENTRY ONLY SYSTEM.”
Redemption*
Optional Redemption. The Bonds maturing on or before March 1, ____ are not subject to optional redemption prior to their respective stated maturity dates. The Bonds maturing on or after March 1, ____ are subject to redemption in whole, or in part at the written request of the Authority among maturities on such basis as the Authority may designate and by lot within a maturity, at the option of the Authority, on any date on or after March 1, ____, from any available source of funds, at a redemption price equal to 100% of the principal amount of the Bonds to be redeemed, plus accrued interest to the date of redemption, without premium.

Extraordinary Redemption from Net Proceeds of Insurance or Sales. The Bonds are subject to redemption as a whole or in part, on any date, from and to the extent of the proceeds of disposition of Electric System properties or the proceeds of hazard insurance not used to repair or rebuild the Electric System, which proceeds are required to be used for such purpose under the Installment Sale Agreement, at a redemption price equal to the principal amount of the Bonds to be redeemed, plus interest accrued thereon to the date fixed for redemption, without premium.

Mandatory Sinking-Fund Redemption. The Bonds maturing on March 1, ____ and March 1, ____ (the “Term Bonds”) are subject to mandatory redemption in part by lot, at a redemption price equal to 100% of the principal amount thereof to be redeemed, without premium, in the aggregate respective principal amounts and on March 1 in the respective years as set forth in the following tables; provided, however, that if some but not all of such Term Bonds have been redeemed under the redemption provisions described in the preceding paragraph, the total amount of all future sinking fund payments shall be reduced by the aggregate principal amount of the Term Bonds so redeemed, to be allocated among such sinking fund payments on a pro rata basis in integral multiples of $5,000 (as set forth in a schedule provided by the Authority to the Trustee).

Term Bonds Maturing March 1, ____
Sinking Fund
Redemption Date
(March 1)
Principal
Amount To Be
Redeemed
__________
* Preliminary, subject to change.

Attachment 5

8 Term Bonds Maturing March 1, ____
Sinking Fund
Redemption Date
(March 1)
Principal
Amount To Be
Redeemed
Selection of Bonds for Redemption; Partial Redemption. Whenever provision is made in the Indenture for the redemption of less than all of the Bonds of a single series or maturity, the Trustee shall select the Bonds of that series and maturity to be redeemed by lot in any manner which the Trustee in its sole discretion deems appropriate. For purposes of such selection, the Trustee shall treat each Bond as consisting of separate $5,000 portions and each such portion shall be subject to redemption as if such portion were a separate Bond.

Upon surrender of any Bonds redeemed in part only, the Authority shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Authority, a new Bond or Bonds of authorized denominations and of the same series, equal in aggregate principal amount to the unredeemed portion of the Bonds surrendered.

Notice of Redemption; Right to Rescind. The Trustee shall mail notice of redemption of the Bonds by first class mail, postage prepaid, not less than 20 nor more than 60 days before any redemption date, to the respective Owners of any Bonds designated for redemption at their addresses appearing on the Registration Books and to one or more Securities Depositories and to the Municipal Securities Rulemaking Board. Each notice of redemption shall state the date of the notice, the redemption date, the place or places of redemption, whether less than all of the series of Bonds (or all Bonds of a single maturity) are to be redeemed, the CUSIP numbers and (in the event that not all Bonds within a maturity are called for redemption) Bond series and numbers of the Bonds to be redeemed and the maturity or maturities of the Bonds to be redeemed, and in the case of Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be redeemed. Each such notice shall also state that on the redemption date there will become due and payable on each of said Bonds the redemption price thereof, and that from and after such redemption date interest thereon shall cease to accrue, and shall require that such Bonds be then surrendered. Neither the failure to receive any notice nor any defect therein shall affect the sufficiency of the proceedings for such redemption or the cessation of accrual of interest from and after the redemption date. Notice of redemption of Bonds shall be given by the Trustee, at the expense of the Authority, for and on behalf of the Authority.

The Authority has the right to rescind any notice of optional redemption of Bonds under the Indenture by written notice to the Trustee on or prior to the dated fixed for redemption. Any notice of optional redemption shall be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for redemption for the payment in full of the Bonds then called for redemption, and such cancellation shall not constitute an Event of Default. The Authority and the Trustee have no liability to the Bond Owners or any other party related to or arising from such rescission of redemption. The Trustee shall mail notice of such rescission of redemption in the same manner as the original notice of redemption was sent.

Attachment 5

9 Unless the book-entry only system is discontinued, the Authority and the Trustee will only recognize DTC or its nominee as an Owner. Conveyance of notices and other communications by DTC to its participants (“DTC Participants”) and by DTC Participants to each actual purchaser of each Bond will be governed by arrangements between them, subject to any statutory and regulatory requirements as may be in effect from time to time. See “APPENDIX F – DTC AND THE BOOK-ENTRY ONLY SYSTEM.”
Purchase in lieu of Redemption. In lieu of redemption of Bonds as provided in the Indenture, amounts held by the Trustee for such redemption may be applied by the Trustee to the purchase of Bonds at public or private sale as and when and at such prices (including brokerage, accrued interest and other charges) at the direction of the Authority or the City received by the Trustee at least 75 days prior to the selection of the Bonds for redemption, but such purchase price must not exceed the redemption price that would be payable if such Bonds were redeemed.

Effect of Redemption. Notice of redemption having been duly given, and moneys for payment of the redemption price of, together with interest accrued to the date fixed for redemption on the redemption date designated in such notice, the Bonds (or portions thereof) so called for redemption shall become due and payable, interest on the Bonds so called for redemption shall cease to accrue, said Bonds (or portions thereof) shall cease to be entitled to any benefit or security under this Indenture, and the Owners of said Bonds shall have no rights in respect thereof except to receive payment of the redemption price thereof.

All Bonds redeemed under the foregoing provisions of the Indenture shall be canceled by the Trustee upon surrender thereof and destroyed in accordance with the retention policy of the Trustee then in effect.

Attachment 5

10 SECURITY FOR THE BONDS
This section provides summaries of certain provisions of the Indenture, the Installment Sale Agreement and the Bonds. See APPENDIX A for a summary of additional provisions of the Indenture and Installment Sale Agreement. Capitalized terms used but not defined in this section have the meanings given in APPENDIX A.

General
The Bonds are special, limited obligations of the Authority payable solely from and secured by the Revenues and amounts held in certain funds and accounts established under the Indenture. The issuance of the Bonds will not directly, indirectly or contingently obligate the City or the Authority to levy or pledge any form of taxation or to make any appropriation for their payment. The Bonds are not a debt of the Authority, the City or of the State of California or of any political subdivision thereof in contravention of any constitutional or statutory debt limitation or restriction.

Except for the payment of Installment Payments when due and the performance of the other covenants and agreements of the City contained in the Installment Sale Agreement, the City has no obligation or liability to the Owners of the Bonds with respect to the Indenture or the execution, delivery or transfer of the Bonds, or the disbursement of debt service payments to the Owners by the Trustee. The obligation of the City to make the Installment Payments is a special obligation of the City secured by a pledge of Net Revenues and payable solely from the Net Revenues and other amounts available under the Indenture, and does not constitute a debt of the City or of the State of California or of any political subdivision thereof in contravention of any constitutional or statutory debt limitation or restriction.

Notwithstanding anything contained in the Installment Sale Agreement, the City is not required to advance any moneys derived from any source of income other than the Net Revenues and the other funds provided in the Installment Sale Agreement for the payment of amounts due under the Installment Sale Agreement or for the performance of any agreements or covenants required to be performed by it contained in the Installment Sale Agreement. See “BOND OWNERS’ RISKS – Limited Obligations” herein.

Revenues; Pledge of Revenues
The Bonds are payable from and secured by a lien on and security interest in the Revenues as provided in the Indenture. “Revenues” consist of (i) all of the Installment Payments, and (ii) all interest, profits or other income derived from the investment of amounts in any fund or account established under the Indenture, other than the Project Fund. Said pledge constitutes a lien on and security interest in the Revenues and such amounts and shall attach, be perfected and be valid and binding from and after the Closing Date, without the need for any physical delivery thereof or further act.

Assignment to Trustee
Under the Indenture, the Authority transfers, assigns and sets over to the Trustee, subject to the provisions of the Indenture, all of the Revenues (which consist primarily of the Installment Payments, as more fully described below) and any and all rights and privileges it has under the Installment Sale Agreement (excepting only certain of the Authority’s rights under the Installment Attachment 5

11 Sale Agreement), including the right to collect and receive directly all of the Installment Payments and the right to enforce the provisions of the Installment Sale Agreement.

Any Revenues collected or received by the Authority will be deemed to be held, and to have been collected or received, by the Authority as the agent of the Trustee, and will immediately be paid by the Authority to the Trustee.

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

Allocation of Revenues
On or before the 6th Business Day preceding each Interest Payment Date, the Trustee shall transfer from the Bond Fund and deposit into the following respective accounts and fund, the following amounts in the following order of priority:

Deposit to Interest Account. The Trustee shall deposit in the Interest Account (which the Trustee shall establish and maintain within the Bond Fund) an amount required to cause the aggregate amount on deposit in the Interest Account to be at least equal to the amount of interest becoming due and payable on such Interest Payment Date on all Bonds then Outstanding.

Deposit to Principal Account. The Trustee shall deposit in the Principal Account (which the Trustee shall establish and maintain within the Bond Fund) an amount required to cause the aggregate amount on deposit in the Principal Account to equal the principal amount of the Bonds coming due and payable on such Interest Payment Date, including the principal amount of Term Bonds which are subject to mandatory sinking fund redemption on such Interest Payment Date. [Deposit to Accounts within Reserve Fund. The Trustee shall deposit into the accounts within the Reserve Fund amount(s) which are needed to replenish the amounts therein to the applicable reserve requirement therefor or pay amounts due to any insurer with respect to any Qualified Reserve Fund Credit Instrument, including to pay Policy Costs due to any Insurer.] Installment Payments
Obligation to Pay. Under the Installment Sale Agreement, the City agrees to pay the Authority, as the purchase price of the Projects thereunder. In furtherance of the foregoing, the City agrees to pay to the Authority, as the purchase price of the Project described in this Official Statement the aggregate principal amount equal to the principal amount on the Bonds, together with interest (calculated on the basis of a 360-day year of twelve 30-day months) on the unpaid principal balance thereof, payable in semiannual installment payments in the respective amounts and on the respective Installment Payment Dates set forth in the Installment Sale Agreement.

The Installment Payment coming due and payable on any Installment Payment Date shall be Attachment 5

12 deposited by the City with the Trustee, as assignee of the Authority under the Indenture, in an amount which, together with amounts then held by the Trustee in the Bond Fund and the accounts therein, is equal to the full amount of such Installment Payment. The Installment Payments shall be secured by and payable solely from the sources specified in the Installment Sale Agreement.

Effect of Prepayment. If the City prepays all remaining Installment Payments in full, the City’s obligations under this Agreement will thereupon cease and terminate with respect to the Installment Payments; provided, however, that the City’s obligations to compensate and indemnify the Trustee under the Indenture will survive such prepayment. If the City prepays the Installment Payments in part but not in whole, the principal component of each succeeding Installment Payment related thereto will be reduced as provided in such Sections, and the interest component of each remaining Installment Payment will be reduced by the aggregate corresponding amount of interest which would otherwise be payable with respect to the Bonds thereby redeemed under the applicable provisions of the Indenture, as provided in a certificate of a City Representative.

The City shall provide the Trustee with a revised schedule of Installment Payments which results from any such prepayment in such certificate of a City Representative.

Rate on Overdue Payments. If the City fails to make any of the payments required in the Installment Sale Agreement, the payment in default will continue as an obligation of the City until the amount in default has been fully paid, and the City agrees to pay the same with interest thereon, from the date of default to the date of payment, at the Overdue Rate.

Assignment. The City understands and agrees that certain rights of the Authority, including but not limited to the right of the Authority to receive payment of the Installment Payments, have been assigned by the Authority to the Trustee in trust under the Indenture, for the benefit of the Owners of the Bonds, and the City hereby consents to such assignment. Under the Installment Sale Agreement, the Authority directs the City, and the City agrees, to pay to the Trustee at its Office, all payments payable by the City under the Installment Sale Agreement.

Pledge of Net Revenues
Pledge of Net Revenues. The Installment Payments and any Parity Debt are equally secured by a first pledge, charge and lien upon the Net Revenues and (with respect to the Installment Payments) moneys in the Bond Fund, including all amounts derived from the investment of such moneys, without priority for series, issue, number or date, and the payment of the Installment Payments shall be and are secured by an exclusive pledge, charge and lien upon the Net Revenues and such moneys. So long as any of the Bonds are Outstanding, the Net Revenues and such moneys may not be used for any other purpose; except that out of the Net Revenues there may be apportioned such sums, for such purposes, as are expressly permitted by this Section and any Parity Debt Document.

Key Definitions. As used in the Installment Sale Agreement, the following terms have the following meanings:
“Net Revenues” means, for any period, an amount equal to all of the Gross Revenues received during such period minus the amount required to pay all Operation and Maintenance Costs becoming payable during such period. “Gross Revenues” means all gross income and revenue received by the City from the ownership and operation of the Electric System, including, without limiting the generality of the foregoing, (a) all amounts levied by the City as a fee for connecting to the Attachment 5

13 Electric System, as such fee is established from time to time under applicable law, (b) all income, rents, rates, fees, charges or other moneys derived from the services and facilities of the Electric System, (c) the earnings on and income derived from the investment of such income, rents, rates, fees, charges or other moneys to the extent that the use of such earnings and income is limited by or under applicable law to the Electric System, (d) the proceeds derived by the City directly or indirectly from the sale, lease or other disposition of a part of the Electric System as permitted under this Agreement, (e) amounts transferred into the Electric Fund from a Rate Stabilization Fund, and (f) amounts received by the City from other public agencies as the proceeds of tax revenues or other amounts payable to the City under contracts for services provided by the City to users of the Electric System; provided, however, that the term “Gross Revenues” shall not include (i) customers’ deposits or any other deposits subject to refund until such deposits have become the property of the City, (ii) the proceeds of any ad valorem property taxes levied to pay general obligation bond indebtedness of the City with respect to the Electric System, and (iii) special assessments or special taxes levied upon real property within any improvement district for the purpose of paying special assessment bonds or special tax obligations of the City relating to the Electric System. “Operation and Maintenance Costs” means all expenses and costs of management, operation, maintenance and repair of the Electric System, including, without limiting the generality of the foregoing, (a) all costs of electric energy and power generated or purchased by the City for resale, costs of transmission, and fuel and water supply in connection with the foregoing, including all amounts required to be paid by the City under contracts for the purchase of capacity, energy, transmission capability or any other commodity or service related thereto that requires payments to be made by the City thereunder to be treated as maintenance and operation costs of the Electric System, (b) all reasonable expenses of management and repair and other expenses necessary to maintain and preserve the Electric System in good repair and working order, (c) all administrative costs of the City that are charged directly or apportioned to the operation of the Electric System, such as salaries and wages of employees, overhead, taxes (if any) and insurance premiums; provided, however, that the term “Operation and Maintenance costs” shall not include (i) payment of the Installment Payments which the City is required to pay hereunder, (ii) payment of debt service on bonds, notes or other obligations issued by the City with respect to the Electric System, (iii) depreciation, replacement and obsolescence charges or reserves therefor, (iv) capital expenditures made by the City with respect to the Electric System, (v) accrual of employee benefits which are not funded, (vi) amortization of intangibles or other bookkeeping entries of a similar nature, and (vii) the 6% in-lieu franchise tax payable to the General Fund of the City pursuant to Resolution No. 94-4 adopted by the City Council of the City on August 4, 1993, or any successor thereto.

Deposit of Gross Revenues into Electric Fund; Transfers to Make Payments. The City has previously established the Electric Fund, which the City shall continue to hold and maintain for the purposes and uses set forth herein. The City shall deposit all Gross Revenues in the Electric Fund promptly upon the receipt thereof, and shall apply amounts in the Electric Fund solely for the uses and purposes set forth herein and for the uses and purposes set forth in any Parity Debt Documents. The City shall withdraw amounts on deposit in the Electric Fund and apply such amounts at the times and for the purposes, and in the priority, as follows:

Operation and Maintenance Costs. The City shall apply amounts on deposit in the Electric Fund to pay all Operation and Maintenance Costs when due.

Attachment 5

14 Debt Service. The City shall pay the Installment Payments on or before the applicable Installment Payment Date, and all payments of principal of and interest on outstanding Parity Debt on or before the date specified therefor in the applicable Parity Debt Document.

Reserve Accounts and Other Required Payments. The City shall make other payments or deposits required to comply with the provisions of this Agreement and all Parity Debt Documents, including but not limited to payments or deposits required to restore the required balances in any reserve account established pursuant to the Indenture for any series of Bonds and any other reserve fund or reserve account which may be established for Parity Debt (or pay any reserve insurer any amounts owed in connection with any draw on any reserve fund insurance policies).

Payment of the Installment Payments and the principal of and interest on the outstanding Parity Debt, and payments made in accordance with any reserve account or reserve fund (including to pay any reserve insurer any amounts owed in connection with any draw on any reserve fund insurance policies), shall be made without preference or priority. If the amount of Net Revenues on deposit in the Electric Fund are any time insufficient to enable the City to pay when due the Installment Payments and the principal of and interest on all outstanding Parity Debt (or payments made in accordance with any reserve account or reserve fund, including to pay any reserve insurer any amounts owed in connection with any draw on any reserve fund insurance policies), such payments will be made on a pro rata basis.

Other Uses Permitted. The City shall manage, conserve and apply the amounts on deposit in the Electric Fund in such a manner that all deposits required to be made under the preceding subsection will be made at the times and in the amounts so required. So long as no Event of Default has occurred and is continuing and the City has reserved sufficient amounts to make debt service deposits next required to be made under the subsection above and under any Parity Debt Documents, the City may at any time use and apply moneys in the Electric Fund for any one or more of the following purposes: (i) the payment of any subordinate obligations or any unsecured obligations, including the 6% in-lieu franchise tax payable to the General Fund of the City; (ii) the acquisition and construction of extensions and improvements to the Electric System; (iii) the redemption of any obligations of the City relating to the Electric System; or (iv) any other lawful purpose of the City relating to the Electric System.

Treatment of 6% In-Lieu Franchise Tax. In the Installment Sale Agreement, the City covenants and agrees for the benefit of the Bondholders [and the Insurer] that so long as any Bonds are Outstanding, the 6% in-lieu franchise tax payable to the General Fund of the City pursuant to Resolution No. 94-4 adopted by the City Council of the City on August 4, 1993, or any successor thereto, shall be payable by the Electric System to the General Fund on a basis that is subordinate to the payment of debt service on the Bonds and replenishment of any reserve fund (or payment to any reserve insurer of any amounts owed in connection with any draw on any reserve fund insurance policies) established for any Bonds.

Debt Service Reserve Fund
[To come, if applicable. Reserve fund insurance policy description, if applicable.] Attachment 5

15 Rate Covenant
In the Installment Sale Agreement, the City covenants that it shall prescribe, revise and collect rates, fees and charges for the services and facilities of the Electric System which, after allowances for contingencies and error in the estimates, shall produce Gross Revenues sufficient in each Fiscal Year to provide Net Revenues equal to at least [1.20] times the Debt Service coming due and payable during such Fiscal Year.

Rate Stabilization Fund
Under the Installment Sale Agreement, the City has the right at any time to establish a rate stabilization fund (the “Rate Stabilization Fund”) to be held by it and administered in accordance therewith, for the purpose of stabilizing the rates and charges imposed by the City with respect to the Electric System. From time to time the City may deposit amounts in the Rate Stabilization Fund, from any source of legally available funds, including but not limited to Net Revenues which are released from the pledge and lien which secures the Installment Payments and any Parity Debt, as the City may determine.

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

The City has previously established a Rate Stabilization Fund for the Electric System. See “THE ELECTRIC SYSTEM – Electric Rates – Rate Stabilization Fund” for more details.

Senior Lien Debt
During the term of the Installment Sale Agreement, the City may not issue or incur any additional bonds or other obligations having any priority in payment of principal or interest out of the Gross Revenues over the Installment Payments, provided that the City may incur obligations payable as Operation and Maintenance Costs. See “ELECTRIC SYSTEM FINANCIAL INFORMATION – Outstanding Long-Term Obligations” for further details on certain obligations already payable by the Electric System as Operation and Maintenance Costs related to power generation projects in which the Electric System participates.

In addition, nothing in the Installment Sale Agreement limits or affects the ability of the City to issue or incur Parity Debt as described below under “–Issuance of Parity Debt,” or obligations which are either unsecured or which are secured on a basis which is junior and subordinate to the pledge of and lien upon the Net Revenues established under the Installment Sale Agreement for the Installment Payments.

Attachment 5

16 Issuance of Parity Debt
Under the Installment Sale Agreement, the City may issue or incur Parity Debt in such principal amount as it determines, subject to the following conditions precedent:
(i) The City is not in default under the terms of the Installment Sale Agreement (and no event has occurred which, once all notice and grace periods have passed, would constitute a default thereunder) unless such default shall be cured upon such issuance; and
(ii) Net Revenues, calculated on sound accounting principles, as shown by the books of the City for the latest Fiscal Year or any more recent 12-month period selected by the City ending not more than 60 days prior to the adoption or execution of the Parity Debt Document pursuant to which such Parity Debt is issued or incurred, plus, at the option of the City, the Additional Revenues, shall have amounted to at least [1.20] times the Maximum Annual Debt Service coming due and payable in any future Fiscal Year.

The City shall deliver to the Authority and the Trustee a certificate of a City Representative certifying that each of the conditions precedent to the issuance of such Parity Debt set forth above have been satisfied.

Notwithstanding the foregoing provisions, the City shall not be required to meet the requirements of the foregoing clause (ii) with respect to the issuance of any Parity Debt the proceeds of which are applied to prepay or discharge the Installment Payments or any Parity Debt, provided that as a result of such prepayment or discharge the aggregate amount of Debt Service on the Installment Payments and Parity Debt which will be outstanding following the issuance of such Parity Debt will be reduced in every Fiscal Year.

As used above, “Additional Revenues” means either or both of the following:
(i) An allowance for revenues from any additions to or improvements or extensions of the Electric System to be constructed with the proceeds of such additional obligations, and also for Net Revenues from any such additions, improvements or extensions which have been constructed from any source of funds but which, during all or any part of such Fiscal Year, were not in service, all in an amount equal to 70% of the estimated additional average annual Net Revenues to be derived from such additions, improvements and extensions for the first 36-month period following issuance of the proposed Parity Debt, all as shown by the certificate or opinion of a Financial Consultant employed by the City, may be added to such Net Revenues. (ii) An allowance for earnings arising from any increase in the charges made for service from the Electric System which has become effective prior to the incurring of such additional obligations but which, during all or any part of such Fiscal Year, was not in effect, in an amount equal to 100% of the amount by which the Net Revenues would have been increased if such increase in charges had been in effect during the whole of such Fiscal Year and any period prior to the incurring of such additional obligations, as shown by the certificate or opinion of a Financial Consultant employed by the City.

Attachment 5

17 THE AUTHORITY
The Authority is a joint powers authority established pursuant to the JPA Agreement. The Authority is governed by a five-member Board that consists of the members of the City Council of the City. The Authority was created for the purpose of assisting the financing or refinancing of certain public capital facilities within the City. Under the Bond Law, the Authority has the power to lease real property in furtherance of the acquisition of public improvements necessary or convenient for the operation of the City, or to purchase bonds issued by any local agency at public or negotiated sale and may sell such bonds to public or private purchasers at public or negotiated sale.

THE CITY
The City encompasses approximately five square miles and is located in the County, approximately 100 miles north of San Francisco in the northern coastal region of the State on U.S. Highway 101. The area is centrally located between the San Francisco Bay Area, Eureka and Sacramento. The City was incorporated in 1876 and is a general law city operating under a City Council/City Manager form of government. The City Council consists of 5 members, elected at-large to four-year terms. The City Council selects the Mayor from one of the City Council members. The City Manager and City Attorney are appointed by the City Council. The City has an estimated population of approximately 15,526 people as of January 1, 2021. For other selected information concerning the City, see “APPENDIX D – GENERAL INFORMATION REGARDING THE CITY OF UKIAH AND COUNTY OF MENDOCINO” herein.

Attachment 5

18 THE ELECTRIC SYSTEM
History and Background
The City has owned and operated its Electric System for more than 120 years, and as such, the Electric System is one of the oldest municipally-owned systems in the State. The Electric System is presently composed of electric generation and transmission facilities, as well as distribution system facilities, including a substation and both overhead and underground lines.

The service area of the distribution system includes all of the City, and there is no other competing enterprise that furnishes electric distribution service in the City.

In the 1970s, the City embarked on a program to develop its own power sources, instead of relying upon the power sources of Pacific Gas & Electric (“PG&E”). The major impetus for this action was the rapid increase in PG&E power costs in the 1970s and the availability to the City, beginning in 1982, of an allocation of power from the Western Area Power Administration (“Western” or “WAPA”), which markets power from the Central Valley Project (“CVP”), a federal multi-use hydroelectric development in northern California. Subsequently, the City became a member of the Northern California Power Agency (“NCPA”), which is a joint-exercise of powers agency. As an NCPA member, the Electric System receives power from certain NCPA electricgeneration projects in which the Electric System participates, as described herein.

The Electric System is operated as a separate department of the City, under the authority and direction of the City Council, the City Manager and the Electric Utility Director, as described herein.

Organization and Employees
City Council. The Electric System is under the governance of the City Council of the City.

The Electric Utility Director oversees operations of the electric utility and reports to the City Manager, who reports to the City Council. Special committees advise the City Council and Electric System with respect to rate setting and infrastructure planning.

Electric Utility Director. The Electric System is operated on a day-to-day basis under the direction and supervision of the Electric Utility Director. A brief biography follows.

Mel Grandi, P.E., Electric Utility Director. Mel Grandi has been Electric Utility Director since May 2008. Prior to that, he worked at Mare Island Navel Ship Yard in nuclear instrumentation, with General Electric as a field engineer, for the City of Lodi as engineering manager and assistant utility director, and in Texas as a systems manager.

He has a Bachelor’s Degree in Electrical Engineering from U.C. Davis.

Employees. As of June 30, 2021, 18.8 full-time equivalent (“FTE”) positions were authorized for the Electric System. Certain functions supporting the Electric System’s operations, including customer billing, collections and accounting, are performed by the Finance Department of the City. Most of the non-management City personnel working at the Electric System are represented by Local 1245 of the International Brotherhood of Electrical Workers (“IBEW”). The current IBEW contract will expire on September 18, 2022. In the past five years, there have been no strikes or other work stoppages at the City, including at the Electric System. For information regarding the City’s retirement benefits and plans, see “ELECTRIC SYSTEM FINANCIAL INFORMATION – Retirement Benefits” below.

Attachment 5

19 Sources of Power Supply
The Electric System is supplied by a diverse portfolio of power sources, including renewable sources as mandated by law. The following table provides a summary of the City’s sources of power supply for Fiscal Year 2020-21.

Table 1
Sources of Power Supply
Fiscal Year 2020-21
Source Type
Capacity
Available
(MW)(1)
Actual
Energy
(GWh)(2)
% of
Total
Self-Generation:

Lake Mendocino Hydroelectric Hydro 3.50 8.70 7.9%
Purchased Power:

WAPA Hydro N/A 6.30 5.7%
NCPA:

Geothermal Project (The Geysers Project) Geothermal 12.34 41.50 37.7% Hydroelectric Project No. 1 (Calaveras Project) Hydro 5.07 9.73 8.8% Lodi Energy Center Project Natural Gas 5.30 23.52 21.4% Combustion Turbine Project No. 1 (CT-1) Natural Gas 6.76 1.42 1.3% Market & Contract Purchases:

Renewable Purchases Various N/A 0.00
Non-Renewable Purchases Various N/A 18.80 17.2%
TOTAL 32.97 110.00 100.0%
Peak Demand (MW) 30.86
____________
(1) Capacity in MW and available for system peak.
(2) One gigawatt hour (GWh) equals 1 million kilowatt hours (kWh). Amounts shown are for full fiscal year.

Source: City of Ukiah.

Western Area Power Administration (WAPA). The City has various long-term power supply contracts with WAPA (administered for the City by NCPA). The City has a 0.346% share of the net output of the CVP, which provides varying amounts of capacity and energy depending upon hydrological conditions. The term of the power supply contracts extends through December 31, 2054.

Northern California Power Agency (NCPA). The City is a participant in a number of NCPA power generation projects. More specifically, the City has a 2.04% entitlement share in the NCPA Hydroelectric Project Number One (Calaveras County Project), a 5.61% entitlement share in the NCPA Geothermal Project (The Geysers Project), a 1.79% entitlement share in the NCPA Lodi Energy Center Project, and a 9.09% entitlement share in the NCPA Combustion Turbine Project Number One (CT-1). For each of these generation projects in which the City participates, the City is obligated to pay on an unconditional take-or-pay basis, as Operation and Maintenance Costs of the Electric System, its entitlement share of the debt service on NCPA bonds issued for the project as well as its share of the operation and maintenance expenses of the project. Each of the NCPA projects are summarized below.

Attachment 5

20 NCPA Geothermal Project (The Geysers Project). NCPA developed a geothermal project (the “NCPA Geothermal Project”) located on federal land in certain areas of Sonoma and Lake Counties, California. In addition to the geothermal leasehold, wells, gathering system and related facilities, the NCPA Geothermal Project consists of two electric generating stations (Geothermal Plant 1 and Geothermal Plant 2), with turbine generator units having a combined 165 MW (nameplate rating) that utilize low-pressure, low-temperature geothermal steam, associated electrical, mechanical and control facilities, a heat dissipation system, a steam gathering system, a transmission tap line and other related facilities. Geothermal steam for the NCPA Geothermal Project is derived from geothermal property, which includes well pads, access roads, steam wells and reinjection wells.

NCPA formed two not-for-profit corporations controlled by its members to own the generating plants of the NCPA Geothermal Project. NCPA manages the NCPA Geothermal Project for the corporations and is entitled to all the capacity and energy generated by the NCPA Geothermal Project. NCPA financed the NCPA Geothermal Project with NCPA Geothermal Project Number 3 Revenue Bonds with a final maturity date of July 1, 2024, of which an estimated $15.5 million were outstanding as of June 30, 2021. Subsequent to the development of the Geothermal Project, declines in steam pressure and quantity of steam have occurred. This decline is due to reduced steam availability and not from the thermal potential of the site, thus the generation capability of the plant benefits from the injection of water to create additional steam.

NCPA has managed this decline through additional drilling and maintenance of wells, injection of both plant condensate and supplemental water, and conversion to lower steam turbine operating pressures. NCPA has modified all three of the steam turbines and the associated steam collection system to more efficient designs for the available steam conditions. NCPA is implementing efficiency projects at the Geothermal Project; however, due to current operating protocols and forecasted operations, NCPA expects average annual generation and peak capacity to decrease over time.

The City has purchased from NCPA, pursuant to power sales contracts, a 5.61% entitlement share in the NCPA Geothermal Project and is obligated to pay a like percentage of all of the debt service and operating costs of the NCPA Geothermal Project.

In order to meet certain obligations required of NCPA to secure transmission and other support services for the NCPA Geothermal Project, NCPA and its transmission project participants (including the City) undertook the “Geysers Transmission Project,” which includes (a) an ownership interest in a 230 kilovolt (“kV”) line from Castle Rock Junction in Sonoma County to the Lakeville Substation owned by PG&E, (b) additional firm transmission rights in this line, and (c) a central dispatch facility (see “– Dispatch and Scheduling” below). The City has a 10.1% entitlement share of the Geysers Transmission Project transfer capability.

NCPA Hydroelectric Project Number One (Calaveras Project). NCPA’s Hydroelectric Project Number One (the “NCPA Hydroelectric Project”) consists of (a) three diversion dams, (b) the 246.86-MW Collierville Powerhouse, (c) the New Spicer Meadow Dam with a 6.0-MW powerhouse, and (d) associated tunnels located essentially on the North Fork of the Stanislaus River and on the Stanislaus River in Alpine, Tuolumne and Calaveras counties, California, together with required transmission facilities. The NCPA Hydroelectric Project (with the exception of certain transmission facilities discussed below) is owned by the Calaveras County Water District (“CCWD”) and is licensed to CCWD by the Federal Energy Regulatory Commission (“FERC”) under its license for Project No. 2409, which has a term of 50 years and expires in 2032.

Attachment 5

21 Under a power purchase contract, NCPA (i) is entitled to the electric output of the NCPA Hydroelectric Project until Fiscal Year 2031-32, (ii) managed the construction of the NCPA Hydroelectric Project and (iii) operates the generating and recreational facilities of the NCPA Hydroelectric Project. After the present FERC license for Project No. 2409 expires, NCPA has the option to continue to purchase project capacity and energy during a subsequent license renewal period. The purchase option includes all capacity and energy which is surplus to CCWD’s needs for power within the boundaries of Calaveras County. Under a separate FERC-issued license for Project No. 11197, with an expiration date coterminous with its license for Project No. 2409, NCPA holds the license to and owns two transmission lines from the NCPA Hydroelectric Project (the 230 kV Collierville-Bellota and 21 kV Spicer Meadow-Cabbage Patch transmission lines). NCPA has a separate FERC license for Project No. 11563 (Upper Utica Project), which consists of three storage reservoirs that mainly feed the New Spicer Meadow Reservoir. This license expires in 2033. NCPA financed the NCPA Hydroelectric Project through the issuance of the NCPA Hydroelectric Project Number One Revenue Bonds with a final maturity date of July 1, 2032, of which an estimated $223.3 million were outstanding as of June 30, 2021.

The operation of the NCPA Hydroelectric Project is determined by consideration of its storage capacity and available stream flows. The NCPA Hydroelectric Project’s average production is estimated to be 512 GWh annually, based on the 105-year record (1913 to 2018) of stream flows on the two rivers supplying water to the project. Using the driest period on record (1976-1977), the NCPA Hydroelectric Project is estimated to produce 180 GWh annually.

The City has a 2.04% entitlement share of the generating output of the NCPA Hydroelectric Project and is obligated to pay a like percentage of all of the debt service and operating costs of the NCPA Hydroelectric Project.

Lodi Energy Center Project. NCPA owns and operates a natural gas-fired, combinedcycle power generation plant located in the City of Lodi, San Joaquin County, California (the “Lodi Energy Center” or “LEC”). The electric generation components (the “Power Island”) of the Lodi Energy Center consists of the following components: (1) one natural gas-fired Siemens STGS5000F combustion turbine-generator (CTG), with an evaporative cooling system and dry low-NOx combustors to control air emissions; (2) one 3-pressure heat recovery steam generator (HRSG), (3) a selective catalytic reduction (SCR) and carbon monoxide (“CO”) catalyst to further control NOx and CO emissions, respectively; (4) one Siemens SST-900RH condensing steam turbine generator (“STG”); (5) one natural gas-fired auxiliary boiler; (6) one 7-cell draft evaporative cooling tower; and (7) associated support equipment. The Lodi Energy Center was placed into commercial operation on November 27, 2012.

LEC is currently registered with a Pmax of 302 MW (increased from 280 MW in 2018). (The Pmax is a measure of the maximum normal capability of a generating unit that is utilized by the California Independent System Operator (“CAISO”) in determining the amount of capacity that can be counted toward meeting resource adequacy requirements.) During drought conditions, the LEC generally operates at higher output levels to make up for the loss of hydroelectric generation available to participants in the project.

Pursuant to the Lodi Energy Center Power Sales Agreement (the “LEC Power Sales Agreement”), between NCPA and the City (and other participants in the project), NCPA agreed to construct and operate the Lodi Energy Center and sold the capacity and energy of the Lodi Energy Center to the City (and other participants) on a “take-or-pay” basis, in accordance with their respective generation entitlement shares to the capacity and energy of the Lodi Energy Center.

Attachment 5

22 NCPA financed a portion a portion of the costs of construction of the Lodi Energy Center through the issuance of revenue bonds: (i) its Lodi Energy Center Revenue Bonds, Issue One, issued on behalf of eleven of the thirteen participants in the Lodi Energy Center (being all of the above-named LEC Project Participants other than the Modesto Irrigation District and the California Department of Water Resources), of which $220.9 million is outstanding as of September 1, 2019, and (ii) its Lodi Energy Center Revenue Bonds, Issue Two, issued on behalf of the California Department of Water Resources, of which $110.2 million is outstanding as of September 1, 2019.

The City has a 1.79% entitlement share of the generating output of the NCPA Lodi Energy Center Project and is obligated to pay a like percentage of all of the debt service and operating costs of the NCPA Lodi Energy Center.

Combustion Turbine Project Number One (CT-1). The Combustion Turbine Project Number One (the “Combustion Turbine Project”) originally consisted of five combustion turbine units, each nominally rated 25 MW, with two units located in each of Roseville and Alameda and one in Lodi. Sale of the two units located in Roseville to the City of Roseville (an original participant in the Combustion Turbine Project) was effective on September 1, 2010, and the remaining Combustion Turbine Project includes only the two units in Alameda and the one unit in Lodi.

The Combustion Turbine Project provides capacity (i) that is economically dispatched during the peak load period to the extent permitted by air quality restrictions and (ii) to be used to meet the certain capacity reserve requirements (e.g., resource adequacy requirements). This resource provides the capacity below current spot market prices for capacity but as is typical of this type of technology, the average cost for power per kWh of power delivered to the participants in the Combustion Turbine Project is comparatively expensive.

NCPA has sold the capacity and energy of the Combustion Turbine Project to the Combustion Turbine Project participants on a “take-or-pay” basis, in accordance with their respective project entitlement percentages to the capacity and energy of the Combustion Turbine Project through the issuance of Combustion Turbine Project Number One Revenue Bonds, which bonds were retired as of August 15, 2010.

The City has a 9.09% entitlement share of the generating output of the NCPA Combustion Turbine Project and is obligated to pay a like percentage of all of the debt service and operating costs of the Combustion Turbine Project.

NCPA Natural Gas Supply Contracts. NCPA, on behalf of the certain project participants (including those in the Lodi Energy Center, such as Ukiah), has entered into a Master Transaction Confirmation that is appended to and made part of a Base Contract for Sale and Purchase of Natural Gas (the “Consolidated Natural Gas Agreement”), effective on October 30, 2012, with EDF Trading North America, LLC (“EDF”). The Consolidated Natural Gas Agreement provides gas supply and management services, including the following:
• Supply of spot market gas for the full daily output of Combustion Turbine Project Number One and Unit One of the Capital Facilities Project (approximately 35,136 MMBtu/day); and
• Scheduling, nomination, balancing and settlement services for NCPA gas supplies from third parties.

Attachment 5

23 The contract with EDF automatically renews each year on January 1, unless terminated earlier by six months written notice by either party.

Pursuant to a 30-year agreement terminating in October 2023 with various natural gas pipeline management companies, NCPA has entitlement rights to natural gas pipeline capacity of approximately 2,743 MMBtu/day sourced at AECO (Alberta) and sinking at PG&E Citygate (California). The four pipeline segments that are included in the contiguous pipeline entitlement include pipeline contained in the following natural gas systems: NOVA Gas Transmission Ltd. (NOVA), Foothills Pipelines (Foothills), Gas Transmission Northwest (GTN), and PG&E’s CGT (CGT). NCPA’s natural gas pipeline rights are managed by Mercuria Energy America, Inc., pursuant to an Asset Management Agreement for Pipeline Transport Capacity dated January 1, 2015. For release of such natural gas pipeline to Mercuria Energy America, Inc., NCPA is paid the value of the unused pipeline capacity by the pipeline manager.

In addition, NCPA and EDF entered into an agreement to provide the gas supply and the nomination, imbalance and settlement services for NCPA’s Lodi Energy Center, which became effective on September 1, 2016.

NCPA Power Purchase and Natural Gas Contracts. The City also participates in the following two programs offered by NCPA.

Market Purchase Program. NCPA, on behalf of Alameda, BART, Biggs, Gridley, Healdsburg, Lodi, Lompoc and Ukiah may enter into supply agreements for terms of up to five years utilizing NCPA Commission approved Edison Electric Institute and WSPP Inc.

Purchase Agreements. Procurement terms and conditions are governed by a Market Purchase Program agreement between NCPA and the participating Members listed in the preceding sentence. Purchase amounts are limited to 115% of each participating members forecast net open position associated with the period of the procurement. The Program was approved by the NCPA Commission on July 26, 2007.

Natural Gas Program. NCPA, on behalf of Biggs, Gridley, Healdsburg, Lodi, Lompoc and Ukiah may enter into gas supply agreements using competitive bids submitted in response to a NCPA Request For Proposals (“RFP Process”), or (ii) through direct purchases from the State of California Department of General Services Natural Gas Services Program. Procurement terms and conditions are governed by a Natural Gas Program agreement between NCPA and the participating Members identified in the preceding sentence. Purchases are subject to limits as may be changed from time to time as outlined in the NCPA Agreement Policy and/or Regulations. The Natural Gas Program was approved by the NCPA Commission on March 24, 2011.

Attachment 5

24 Renewable Purchases. The City has historically entered into long term purchases to hedge electricity costs. With the passage of California Senate Bill X1-2, the California Renewable Energy Resources Act (“SBX1-2”), California Senate Bill 350, the Clean Energy and Pollution Reduction Act of 2015 (“SB 350”), and California Senate Bill 100, the 100 Percent Clean Energy Act of 2018 (“SB 100”), the City must comply with the State’s renewable energy targets to achieve renewable energy procurement of 33% by 2020, 50% by 2025, and 60% by 2030. The City has an additional incentive to enter into long term contracts, as certain contracts at least ten years in duration have the ability to carry forward renewable energy credits to be used to meet future compliance periods. Starting in 2020, 65% of Renewable Portfolio Standard (“RPS”) procurement must be derived from long-term contracts of 10 or more years. The City has satisfied all RPS targets for Compliance Period 1 (from 2011 through 2013), Compliance Period 2 (from 2014 through 2016), and Compliance Period 3 (2017-2020). Further, the City’s RPS contracts are forecasted to fulfill compliance requirements under current law through 2024. See also “FACTORS AFFECTING THE ELECTRIC UTILITY INDUSTRY” for more information.

Power Purchase Agreement with SFWPA. South Feather Water and Power Agency (“SFWPA”) has agreed to sell to NCPA, and NCPA has agreed to purchase from SFWPA, acting on behalf of City of Ukiah and other participating NCPA members, certain energy, capacity rights and associated environmental attributes supplied from the South Feather Power Project pursuant to the terms and conditions set forth in the Power Purchase Agreement (“PPA”) between South Feather Water and Power Agency and Northern California Power Agency. The SFWPA Project is comprised of four Hydroelectric generating units with a total capacity of 121 MW.

The term of the PPA includes the Initial Delivery Term that will begin on the Initial Delivery Date, and will continue uninterrupted through December 31, 2031. At the end of the Initial Delivery Term, if SFWPA does not elect to terminate the PPA, the term of the PPA will automatically extend for an additional 10-year period (the Extended Delivery Term). During the term of the PPA, NCPA will schedule and dispatch the South Feather Power Project, and SFWPA will own, operate and maintain the South Feather Power Project.

To enable NCPA to enter into the PPA on behalf of the City of Ukiah and the other participating members, pursuant to the terms and conditions of the Amended and Restated Facilities Agreement, the Third Phase Agreement provides all means necessary for NCPA to fulfill obligations incurred on behalf of NCPA and the Participants pursuant to the PPA, and to enable and obligate the Participants to take delivery of and pay for such electric capacity and energy and to pay NCPA for all costs it incurs for undertaking the foregoing activities.

The City of Ukiah has entered into a Third Phase Agreement for 1.65% (2 MW) of the project that specifies the rights and obligations of NCPA and the Participants regarding governance and administration of the PPA, and obligates each Participant to pay for its Project Participation Percentage share of all Project Costs, Administrative Services Costs, scheduling coordination costs, and all other costs related to the PPA.

Attachment 5

25 Open Market Term Purchase and Sale Agreements. The City enters into various fixed-price purchase or sale contracts on the open market periodically to meet its power supply requirements and hedge its portfolio costs. Purchases include transactions to hedge natural gas (physical or financial) and electricity (physical or financial) over various tenors. In addition to the above supply resources, the City expects that it will obtain additional resources from market purchases or investment in generation facilities, either independently, through NCPA or other agencies. In accordance with current State law, the City expects that future energy purchases will increasingly be made from renewable energy sources.

The following table shows the City’s energy requirements and resources using projected estimates for the next 10 fiscal years.

Table 2
Energy Requirements and Resources (GWh)
Projected Fiscal Years Ending June 30, 2022 through 2031

Source: City of Ukiah.

Annual Budget
2,022 2023 2024 2025 2026 2027 2028 2029 2030 2031
NET ANNUAL GENERATION (MWh)
Lake Mendocino Hydroelectric 8,700 8,700 8,700 8,700 8,700 8,700 8,700 8,700 8,700 NCPA Plants
Hydroelectric 9,739 10,576 10,486 10,516 10,528 10,418 10,439 10,545 10,525 10,515 Geothermal 38,540 40,015 39,381 40,996 43,034 42,390 41,865 41,168 40,590 40,016 Combustion Turbine No. 1 949 803 744 894 845 834 752 567 765 779 Combustion Turbine No. 2 (STIG) - - - - - - - - - -
Lodi Energy Center 16,882 15,242 12,735 6,952 6,722 5,223 3,578 3,138 2,872 2,672 SFWPA * 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 Member Resources (Pool) - - - - - - - - - -
Western Resource Pool (Memo Only) 9,143 9,018 9,122 9,611 9,416 9,416 9,659 10,378 10,378 10,378 Market Power Purchases (Pool) 3,510 - - - - - - - - -
* Projected
Forecast

NORTHERN CALIFORNIA POWER AGENCY
ANNUAL BUDGET & TEN-YEAR FORECAST - MWh's
UKIAH
Attachment 5

Regional Transmission Facilities
California Independent System Operator Controlled Grid. The CAISO provides a market for electric utilities in California, including the Electric System. Under current CAISO operating protocols, the City pays per MWh charges for use of the transmission system for exports from the CAISO.

NCPA Power Pool. NCPA operates a power pool that includes the following members:

Alameda, Biggs, Gridley, Healdsburg, Lodi, Lompoc, Palo Alto, Plumas Sierra, the Port of Oakland and Ukiah (each, an “NCPA Pool Member”). The ten NCPA Pool Members’ service areas are interconnected to the CAISO-controlled grid. NCPA operates a central dispatch facility (the “Central Dispatch Center”) at NCPA’s headquarters. The Central Dispatch Center balances loads and resources pursuant to the Third Amended and Restated NCPA Metered Subsystem Aggregation Agreement (the “MSSA”), as such may be amended from time to time, with the CAISO (as described below) for the ten NCPA Pool Members, and the City of Santa Clara. The Central Dispatch Center separately coordinates with the City of Roseville to schedule Roseville’s entitlement to the NCPA-project output across the CAISO-controlled grid as requested by Roseville. The Central Dispatch Center also monitors and controls load and voltage levels, and enters into buy and sell transactions with other utilities throughout the western United States and Canada and regulates various hydroelectric facilities in coordination with the CAISO to maintain a safe and reliable interconnected system.

NCPA operates according to the terms and conditions of the CAISO tariff and the MSSA, the original form of which was approved by FERC in 2002 and as has been amended and restated as needed from time to time to conform to applicable market rules established by the CAISO and FERC. The MSSA identifies operational terms and conditions that vary from the CAISO tariff, largely allowing NCPA Members to continue to operate their respective systems as vertically integrated utilities by generally self- providing for resources and services otherwise procured through the CAISO’s markets. In conjunction with the execution of the MSSA, NCPA and PG&E are parties to an Interconnection Agreement (the “NCPA- PG&E Interconnection Agreement”) that provides for the terms and conditions for connecting NCPA resources and member loads to the CAISO-controlled grid (or PG&E wholesale transmission system), where such CAISO-controlled grid facilities are owned by PG&E and transferred to CAISO operational control through a Transmission Control Agreement between PG&E and the CAISO. Santa Clara has separate agreements for the services provided under the MSSA and NCPA-PG&E Interconnection Agreement.

TANC California-Oregon Transmission Project (“COTP”). The City is a member of the Transmission Agency of Northern California (“TANC”). TANC, together with the City of Redding, WAPA, two California water districts and PG&E (collectively, the “COTP Participants”) own the California-Oregon Transmission Project (“COTP”), a 339-mile long, 1,600 MW, 500 kV transmission power project between Southern Oregon and Central California. The City has executed the TANC Agreement (defined below) for a participation percentage of TANC’s entitlement of COTP transfer capability. The COTP was placed in service on March 24, 1993, at a cost of approximately $430 million, and was financed through a combination of bonds and notes issued by TANC. A major debt refinancing was completed in 2016 to extend the debt service from year 2024 to year 2039. As of June 30, 2020, approximately $169.4 million principal amount of TANC COTP bonds were outstanding, with a final maturity date of May 1, 2039. Under its agreement with TANC, the City has a 0.021% entitlement share in the COTP transfer capability (approximately 29.35 MW). In return, the City has agreed to pay, on an unconditional take-or-pay basis, 0.021% of the construction costs of the COTP, including debt service, and 0.021% of Attachment 5

27 TANC’s COTP operating and maintenance expenses. These obligations constitute Operation and Maintenance Costs of the City’s Electric System.

PG&E-Owned Transmission Line. The City of Ukiah receives California Independent System Operator (CAISO) transmission service from a 115kV transmission loop. This loop provides redundancy for the City of Ukiah. The northern feed extends approximately 70 miles from Williams CA to Ukiah on an overhead transmission line and the south feed extends from Ukiah to Cloverdale. PG&E has significantly expanded their maintenance and vegetation management in high fire threat areas by increasing line clearances and reducing potential ignition sources due to vegetation.

Electric Distribution System
General. The City owns and operates the electrical distribution system serving customers within the City’s boundaries. The distribution system consists of over 40 miles of overhead lines (including 5 miles of lines that connect the Lake Mendocino Dam to the rest of the Electric System), over 37 miles of underground lines, 5 fiber circuit miles (budgeted for installation FY2022), and 1 substation. The City performs continued maintenance on its distribution system to sustain service reliability.

Dispatch and Scheduling. As noted above, the City is part of the NCPA power pool, pursuant to which NCPA provides scheduling and dispatch services to the Electric System.

Service Area, Customer Base and Demand
Service Area. The Electric System serves an area of approximately 4 square miles, which is coterminous with the City’s borders (except for one legacy customer located outside City limits).

As of June 30, 2021, the Electric System served approximately 8,100 customers. See APPENDIX D for background and demographic information about the City and the surrounding area.

Customer Base. The Electric System’s customer base is a mixture of residential and commercial customers, and has been very stable in recent years. No major new development is planned within the service area and the Electric System has excess capacity available to meet anticipated future demand needs.

Attachment 5

28 Historical Customers Sales and Peak Demand. The average number of customers, electricity sales measured in megawatt-hours (“MWh”) and in revenues, and peak demand during the past five fiscal years, is listed below.

Table 3
Customers, Sales and Peak Demand
Fiscal Years 2016-17 through 2020-21
2016-17 2017-18 2018-19 2019-20 2020-21
Number of Customers:

Residential 6,152 6,311 6,591 6,469 6,568
Commercial 1,623 1,571 1,626 1,551 1,650
7,775 7,882 8,217 8,020 8,218
Sales (MWh):

Residential 38,208 39,308 35,273 36,638 40,753
Commercial 69,347 69,188 74,323 72,189 70,376
107,555 108,496 109,596 108,827 111,129
Revenues ($):

Residential $5,143,205 $5,494,052 $5,441,309 $5,435,169 $6,102,579 Commercial 9,288,858 9,740,280 10,062,923 9,586,811 9,872,528 $14,432,063 $15,234,332 $15,504,232 $15,021,980 $15,975,107 Peak Demand (MW) 33.14 MW 33.07 MW 32.95 MW 32.02 MW 30.86 MW ____________
Source: City of Ukiah.

Ten Largest Customers. The ten largest customers of the Electric System for the most recently ended fiscal year are set forth in the following table.

Table 4
Ten Largest Customers – Fiscal Year 2020-21
(Alphabetical Order)
Electric % Total % Total
Rate Payers Revenues ($) Revenue(1) Usage (kWh) kWh(2)
City of Ukiah $ 904,055 6% 6,319,233 6%
Costco 309,638 2% 2,474,768 2%
County of Medocino 609,301 4% 4,260,000 4%
Maverick Enterprises 290,780 2% 2,632,338 2%
Save Mart Supermarkets (Lucky's) 194,224 1% 1,674,007 2% Save Mart Supermarkets (Food Maxx) 196,829 1% 1,554,048 1% Safeway Stores 266,714 2% 2,089,150 2%
Ukiah Unified School District 362,708 2% 2,459,002 2%
Ukiah Valley Medical Center 844,815 5% 5,415,561 5%
Wal-Mart 189,534 1% 1,381,613 1%
Total - Top 10 $ 4,168,598 26% 30,259,720 27%

(1) Based on total revenues for Fiscal Year 2020-21 of $15,975,107 (2) Based on total kWh for Fiscal Year 2020-21 of 111,129,554.

Source: City of Ukiah.

Attachment 5

29 Electric Rates
Rate-Setting Procedure. The City Council has the exclusive jurisdiction to set electric rates and charges for the Electric System. The City Council reviews the Electric System’s rates periodically and makes adjustments as necessary. These rates are not currently subject to review by the California Public Utility Commission (“CPUC”), the California Energy Commission (“CEC”) the Federal Energy Regulatory Commission (“FERC”) or any other state or federal agency. See “FACTORS AFFECTING THE ELECTRIC UTILITY INDUSTRY – Rate Regulation.” History of Electric Utility Rates. A history of the rates of the Electric System for the past five fiscal years are set forth in the following table. New rates were recently adopted.

Table 5
Electric Utility Rates
Last Five Fiscal Years
Rate by Effective Date: 1/1/2017 7/1/2017 7/1/2018 7/1/2019 7/1/2020 Residential Rates:

Energy Rates ($/kWh)
Baseline quantities(1) $0.12040 $0.12410 $0.12790 $0.13180 $0.13580 Exceeding baseline quantities(1) 0.15800 0.16280 0.16770 0.17280 0.17800 Basic Monthly Charge ($/mo.):

Monthly kWh less than 200 kWh per month $0.50 $0.52 $0.54 $0.56 $0.58 Monthly kWh between 200 - 550 kWh per month 1.00 1.03 1.07 1.11 1.15 Monthly kWh greater than 550 kWh per month 1.50 1.55 1.60 1.65 1.70 Minimum monthly billing ($/mo.) $5.00 $5.00 $5.00 $5.00 $5.00 Commercial Rates (Three Categories):

1. General Service
Base charge ($/mo.)
Single phase(2) $8.66 $8.92 $9.19 $9.47 $9.76
Poly-phase 9.69 9.99 10.29 10.60 10.92
X-ray machine 21.63 22.28 22.95 23.64 24.35
Energy Rates ($/kWh)
Winter $0.12663 $0.13043 $0.13435 $0.13839 $0.14255
Summer 0.17066 0.17578 0.18106 0.18650 0.19210

2. General Service with Demand
Basic Charge ($/mo.) $72.72 $74.91 $77.16 $79.48 $81.87 Energy Rates ($/kWh)
Winter $0.09094 $0.09367 $0.09649 $0.09939 $0.10238
Summer 0.11295 0.11634 0.11984 0.12344 0.12715
Demand charge(3) ($/kWh)
Winter $4.31 $4.31 $4.44 $4.58 $4.72
Summer 6.65 6.85 7.06 7.28 7.50

3. General Large Industrial Service with Demand
Basic Charge ($/mo.) $72.72 $74.91 $77.16 $79.48 $81.87 Energy Rates ($/kWh)
Winter $0.07034 $0.07246 $0.07464 $0.07688 $0.07919
Summer 0.09235 0.09513 0.09799 0.10093 0.10396
Demand charge(3) ($/kWh)
Winter $4.18 $4.31 $4.44 $4.58 $4.72
Summer 6.65 6.85 7.06 7.28 7.50
____________
(1) Baseline quantities are equal to 360 kWh per month. (2) The same amount is also charged as a minimum charge for a 2nd meter. (3) The customer is billed for demand according to the customer’s “maximum kilowatt demand” each month. The number of kW used will be recorded over 15 minute intervals, with the higher 15-minute average kW use being the maximum demand.

Source: City of Ukiah.

Attachment 5

30 Rate Comparison. The City’s current retail electric rates are among the lowest in California and lower than other retail electric rates being charged in the region. Table 7 below sets forth a comparison between average electric rates paid by City customers and by PG&E customers.

Table 6
Electric Rate Comparison with Neighboring Utilities
Based on Average Annual Rates as of June 30, 2021
Customer
Type
Ukiah Electric
System Rates
PG&E
Rates
%
Difference
Residential $0.150 0.283 89%
Commercial 0.126 0.277 121%
Industrial 0.129 0.242 88%

Source: City of Ukiah.

Rate Stabilization Cash Reserve. In addition to 100% cost recovery through the rates, the Electric System maintains a 180-day rate stabilization cash balance to reduce the impact of energy cost fluctuations.

Rate Study and Recently-Approved Rate Increases. A new rate study was recently performed for the Electric System. The rate study proposed rate increases of approximately 9% per year starting April 1, 2022 through April 1, 2026. On February 2, 2022, the City Council of the City adopted the proposed rates for the Electric System. Beginning with the April 1, 2022 rate adjustment and in April of every year thereafter, the Electric Department staff will conduct a review of the rates of the Electric System to determine whether the annual adjustments adequately account for the actual increases or decreases of the Electric System’s reasonable operating costs. [Review with City.]
The projected anticipated rates for the Electric System are reflected in the projected debt service coverage table in Table 8.

Energy Efficiency and Conservation
Under applicable law, the Electric System must set yearly goals regarding energy efficiency and conservation measures. Accordingly, the City has a full portfolio of public benefits programs, addressing the following areas of concentration required by State law: energy efficiency programs, renewable energy production, demand reduction, advanced electric technology demonstration, research and development, and low income assistance programs.

Residential and commercial energy efficiency offerings focus primarily on summer period consumption reduction and include programs for both existing facilities and new construction.

The City is also required to develop ten-year plans for energy efficiency goals and report on these goals to the California Energy Commission (“CEC”) with updates every four years. The CEC has the obligation to develop energy efficiency goals for the entire state, after consultation with utilities and others. The City must report annually to its customers and to the CEC, its investment in energy efficiency and demand reduction programs.

For additional details, see “FACTORS AFFECTING THE ELECTRIC UTILITY INDUSTRY.”
Attachment 5

31 Risk Management; Insurance
The Electric System, like the City more generally, is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters.

The City is a member of the California Intergovernmental Risk Authority (“CIRA”). CIRA is organized under a Joint Powers Agreement pursuant to the California Government Code. The purpose of CIRA is to arrange and administer programs of insurance for the pooling of self-insured losses and to purchase excess insurance coverage. The City pays an annual premium to CIRA for its workers’ compensation, general liability, and property coverage. The City of Ukiah participates in the following three CIRA programs: (1) General Liability Insurance; (2) Workers’ Compensation Insurance; and (3) Property Insurance.

For additional details, including certain insurance coverages, see “APPENDIX B – AUDITED FINANCIAL STATEMENTS OF THE CITY FOR FISCAL YEAR 2020-21.” Wildfire Mitigation Measures
The City owns and operates only 1/4 mile of transmission lines. No City of Ukiah Electric System facilities have been the cause of any wildfires experienced in California. Within municipal boundaries of the City, the primary geographical area of the Electric System, only 10% of the Electric System’s overhead electrical lines and equipment are located in a Tier 2 California Public Utilities Commission (“CPUC”) designated fire-threat area, which are the areas where there is a higher risk (including likelihood and potential impacts on people and property) from utility-related wildfires. The City is currently in compliance with all applicable law regarding wildfire mitigation, including preparation of a wildfire mitigation plan in accordance with the requirements of applicable law.

For additional details, see “FACTORS AFFECTING THE ELECTRIC UTILITY INDUSTRY – Wildfire Mitigation Measures” and “BOND OWNERS’ RISKS – Environmental Risks.”
Capital Improvement Plan
The City has a comprehensive 5-year capital improvement plan (“CIP”) that includes all capital projects of the City, including those for the Electric System. Based on the most recent CIP updated in July 2020, the Electric System plans on undertaking various key capital projects over the 5-year CIP timeline, including the following:
• Service Center remodel and facility improvement project ($1,960,000) • Renewable resource (solar) development project ($3,800,000) • Hydroelectric plant warehouse and shop project ($190,000) • Substation site development project ($320,000)
• Gobbi material yard project ($45,000)
These costs are anticipated to be financed using a combination of the proceeds of the Bonds, as well as on a pay-as-you-go basis using Electric System revenues. See “FINANCING PLAN” for more details on the anticipated uses of the Bond proceeds.

Attachment 5

32 ELECTRIC SYSTEM FINANCIAL INFORMATION
Significant Accounting Policies
Governmental accounting systems are organized and operated on a fund basis. A fund is defined as an independent fiscal and accounting entity with a self-balancing set of accounts recording cash and other financial resources, together with all related liabilities and residual equities or balances, and changes therein. Funds are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions or limitations.

The Electric System is accounted for as an enterprise fund. Enterprise funds are used to account for operations (i) that are financed and operated in a manner similar to private business enterprises (where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges) or (ii) where the governing body has decided that periodic determination of revenues earned, expenses incurred and/or net income is appropriate for capital maintenance, public policy, management control, accountability or other purposes. The Electric Fund uses the accrual method of accounting. Revenues are recognized when they are earned and expenses are recognized when they are incurred.

Audited Financial Statements
The City’s Financial Statements for Fiscal Year 2020-21 were audited by Van Lant & Fankhanel, LLP, Certified Public Accountants, Murrieta, California (the “Auditor”), in accordance with generally accepted auditing standards, and contains opinions that the financial statements present fairly the financial position of the various funds maintained by the City. The reports include certain notes to the financial statements, which are not fully described below. Such notes constitute an integral part of the audited financial statements. The City’s Audited Financial Statements for Fiscal Year 2020-21 are attached as APPENDIX B to this Official Statement. The City has not requested nor did the City obtain permission from the Auditor to include the audited financial statements as an appendix to this Official Statement. Accordingly, the Auditor has not performed any post-audit review of the financial condition or operations of the Electric System. In addition, the Auditor has not reviewed this Official Statement.

Financial Policies
Investment Policy. The cash attributable to the Electric System must be invested in accordance with the City’s Investment Policy. Pursuant to the Investment Policy, the City strives to maintain a level of investment of all idle funds, less required reserves, as near 100% as possible, through daily and projected cash flow determinations. Idle cash management and investment transactions are the responsibility of the City Treasurer. Criteria for selecting investments and the order of priority are: (1) Safety -- Preservation of principal and interest; (2) Liquidity -- Ability to convert investment to cash at any moment in time; (3) Yield -- Potential dollar earnings on an investment.

Attachment 5

33 Retirement Benefits
Much of the following information concerning the California Public Employees’ Retirement System (“CalPERS”) is excerpted from publicly available sources, which the City believes to be accurate. CalPERS should be contacted directly at CalPERS, Lincoln Plaza, 400 Q Street Room 1820, Sacramento, CA 95811, Telephone: (888) 225-7377 for other information, including information relating to its financial position and investments.

Overview. Substantially all permanent City employees, including those employees assigned to the Electric System, are eligible to participate in pension plans offered by CalPERS, an agent-multiple employer defined benefit pension plan which acts as a common investment and administrative agent for its participating member employers. CalPERS provides retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. CalPERS acts as a common investment and administrative agent for participating public entities within the State. CalPERS is a contributory plan deriving funds from employee contributions as well as from employer contributions and earnings from investments. Copies of CalPERS annual financial reports may be obtained from its Executive Office located at 400 Q Street Room 1820, Sacramento, CA 95811. Such report is not incorporated herein and does not constitute part of this Official Statement.

The City’s employees participate in the separate Safety (for its police and fire employees) and Miscellaneous (for all other employees) employee plans. Benefit provisions under both plans are established by State statute and City resolution. Benefits are based on years of credited service; one year of credited service is equal to one year of full-time employment.

Contributions to Miscellaneous Plan. The City’s required contributions to CalPERS fluctuate each year and include a normal cost component and a component equal to an amortized amount of the unfunded liability. Many assumptions are used to estimate the ultimate liability of pensions and the contributions that will be required to meet those obligations. The CalPERS Board of Administration has adjusted and may in the future further adjust certain assumptions used in the CalPERS actuarial valuations, which adjustments may increase Ukiah’s required contributions to CalPERS in future years. Accordingly, the City’s cannot provide any assurances that the City’s required contributions to CalPERS in future years will not significantly increase (or otherwise vary) from any past or current projected levels of contributions.

On December 21, 2016, the CalPERS Board of Administration voted to lower the pension plan’s assumed rate of return for purposes of its actuarial valuations from 7.5% to 7.0% by 2020 (which reduction has been phased in over the period from Fiscal Year 2017-18 to 2019-20).

CalPERS estimated that with a reduction in the rate of return to 7.0%, most employers could expect a 1% to 3% increase in the percentage of payroll contribution for the normal cost for miscellaneous plans. As a result, required contributions of employers, including the City, toward unfunded accrued liabilities, and as a percentage of payroll for normal costs, are expected to increase. Future costs could also be increased in the event that a sustained deterioration in global stock market values as an economic consequence of the COVID-19 pandemic negatively impacts the market value of assets held to fund the City’s pension plans, requiring future unanticipated increases in required plan contributions. See “BOND OWNERS’ RISKS – COVID-19 Pandemic.” The Electric System’s estimated allocated share of the City’s contributions to the Miscellaneous Plan for the Fiscal Year ending June 30, 2021 is estimated at $_______________ (unaudited).

Attachment 5

34 Net Pension Liability. Under GASB No. 68, the City is required to report the Net Pension Liability (i.e., the difference between the Total Pension Liability and the Pension Plan’s Net Position or market value of assets) in its financial statements. The Electric System’s estimated allocated share of the Net Pension Liability of the City with respect to the Miscellaneous Plan as of June 30, 2021 is estimated at $_______________ (unaudited).

For additional information relating to the City’s retirement plans, including discount rates and other assumptions, see “APPENDIX B – AUDITED FINANCIAL STATEMENTS OF THE CITY FOR FISCAL YEAR 2020-21.”
No OPEB
The City does not provide any other post-employment benefits (OPEB) to its retirees and, accordingly, neither does the Electric System.

Outstanding Long-Term Obligations
Obligations Payable as Operation & Maintenance Costs. As described above under “THE ELECTRIC SYSTEM – Sources of Power Supply,” the City participates in a number of NCPA power generation projects, pursuant to which the City pays its entitlement share of (1) the debt service on long-term obligations issued by NCPA for the project and (2) the operations and maintenance costs of the project. The obligations of the City under its agreements with NCPA constitute Operation and Maintenance Costs of the Electric System payable on a senior basis to any of the payments required to be made under the Installment Sale Agreement, including the Installment Payments payable from the Net Revenues that secure the Bonds.

The agreements with NCPA are on a “take or pay” basis, which requires payments to be made whether or not projects are operable, or whether output from such projects is suspended, interrupted or terminated. Certain of these agreements contain “step up” provisions obligating the City to pay a share of the obligations of a defaulting participant and granting the City a corresponding increased entitlement to electricity (generally, the City’s “step-up” obligation is limited to 25% of the City’s scheduled payments on such obligations).

A portion of the NCPA Hydroelectric Project bonds in the principal amount of approximately $79.2 million are variable rate debt, liquidity support for which is provided through a liquidity arrangement with a bank. Unreimbursed draws under such liquidity arrangement bear interest at a maximum rate substantially in excess of the current interest rates on such variable rate joint powers agency bonds. Moreover, in certain circumstances, the failure to reimburse draws on the liquidity agreement may result in the acceleration of the scheduled payment of the principal of such variable rate joint powers agency bonds. In connection with such variable rate joint powers agency bonds, NCPA has entered into an interest rate swap agreement for the purposes of substantially fixing the interest cost with respect to such bonds. There is no guarantee that the floating rate payable pursuant to such interest rate swap agreement will match the variable interest rate on the related variable rate joint powers agency bonds at all times or at any time. Under certain circumstances, the swap provider may be obligated to make payments under the interest rate swap agreement that is less than the interest due on the associated variable rate joint powers agency bonds. In such event, such insufficiency will be payable as a debt service obligation from the obligated joint powers agency members (a corresponding amount of which proportionate to its debt service obligations to such joint powers agency could be due from the City). In addition, under certain circumstances, the swap agreement is subject to early termination, in which event NCPA could be obligated to make a substantial payment to the applicable swap Attachment 5

35 provider (a corresponding amount of which proportionate to its debt service obligations to such joint powers agency could be due from the City).

The City’s participation and share of debt service obligation (without giving effect to any “step up” provisions) for each of the joint powers agency projects in which it participates are shown in the following table.

Table 7
Outstanding Debt of Joint Powers Agencies
As of June 30, 2021
Outstanding
Debt(1)
Ukiah
Participation(2)
Ukiah Share of
Outstanding Debt
NCPA
The Geysers Project $ 11,918,503 5.61% $ 668,628
Calaveras Project 287,125,000 2.04% 5,857,350
Lodi Energy Center Project 563,651,620 1.79% 10,089,364 CT-1 Project 0.00 9.09% 0.00
TANC
Transmission Project 2,517,565 0.303% 7,628
TOTAL $865,212,688 $16,622,970
____________________
(1) Principal only. Does not include obligation for payment of interest on such debt or payment of share of operations and maintenance costs of each applicable project.
(2) Participation based on actual debt service obligation. Participation obligation is subject to increase upon default of another project participant. Such increase shall not exceed, without written consent of a non-defaulting participant, an accumulated maximum of 25% of such non-defaulting participant’s original participation.

Source: City of Ukiah.

Parity Obligations. The Installment Payments are the only obligation currently secured by the Net Revenues of the Electric System. However, in the future, the City have issue or incur additional long-term obligations payable from the Net Revenues on a parity basis, subject to the conditions set forth int eh Installment Sale Agreement. See “SECURITY FOR THE BONDS – Conditions to Issue Additional Parity Debt.”
Revenues, Expenses and Debt Service Coverage
The following presents a summary of the revenues, expenses, and debt service coverage for the City’s Electric Fund for the prior five fiscal years on a historical basis and projected for the current and future fiscal years. This table is based on historic operating results, where applicable, of the Electric System, but is presented on a cash basis consistent with the definitions of Gross Revenues and Operation and Maintenance Costs as defined in the Installment Sale Agreement, and as such, does not match the audited financial statements of the Electric System.

The projections in the table are based on the following assumptions, among others:
• Rate increases are implemented on April 1 of each of the years April 1, 2022 through April 1, 2026.
• No other debt is issued during the projection period.

Attachment 5

Table 8
Pro Forma Historical and Projected Revenues, Expenses and Debt Service Coverage Fiscal Years 2016-17 through Fiscal Year 2025-26
Pro Forma Historical (Audited) Projected
2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 Revenues
Charges for Services $15,085,258 $15,814,986 $16,100,036 $15,581,664 $16,677,722 $16,563,150 $19,698,564 $21,552,732 $23,580,554 $25,798,165 Other 1,280 52,693 329,021 200,941 2,483 100,000 100,000 100,000 100,000 100,000 Interest Income 137,499 148,433 202,498 274,557 123,643 100,000 100,000 100,000 100,000 100,000 Total Revenues 15,224,037 16,016,112 16,631,555 16,057,162 16,803,848 16,763,150 19,898,564 21,752,732 23,780,554 25,998,165 Operating Expenses(1)
General and Administrative 2,999,983 1,766,740 1,887,135 2,289,143 2,566,491 2,700,000 2,889,000 3,033,450 3,185,123 3,344,379 Maintenance and Operations 12,962,188 12,850,945 14,422,571 14,150,936 14,755,022 15,653,670 16,179,131 16,425,474 16,746,261 16,440,701 Total Operating Expenses 15,962,171 14,617,685 16,309,706 16,440,079 17,321,513 18,353,670 19,068,131 19,458,924 19,931,383 19,785,079 Net Revenue ($738,134) $1,398,427 $321,849 ($382,917) ($517,665) ($1,590,520) $830,433 $2,293,808 $3,849,171 $6,213,086 Debt Service*
2022 Bonds* $0 $0 $0 $0 $0 $0 $388,908 $548,000 $546,250 $544,250 Debt Service Coverage Ratio* -- -- -- -- -- -- 2.14 4.19 7.05 11.42 ___________________________
* Preliminary, subject to change.
(1) Excludes non-cash items (such as depreciation), capital expenses, and 6% in-lieu franchise tax.

Source: City of Ukiah; NHA Advisors, LLC.

Attachment 5

RATE REGULATION
The City Council sets rates, fees and charges for electric service of the Electric System. The authority of the City to impose and collect rates and charges for electric power and energy sold and delivered is not subject to the general regulatory jurisdiction of the California Public Utilities Commission (the “CPUC”), and currently neither the CPUC nor any other regulatory authority of the State of California nor Federal Energy Regulatory Committee (“FERC”) approves such rates and charges. It is possible that future legislative and/or regulatory changes could subject the rates and/or service area of the City to the jurisdiction of the CPUC or to other limitations or requirements. See “CONSTITUTIONAL LIMITATIONS ON TAXES AND FEES” for a discussion of certain voter-approved constitutional measures affecting the imposition of fees and charges by governmental agencies in the State.

FERC potentially could assert jurisdiction over rates of licensees of hydroelectric projects and customers of such licensees under Part I of the Federal Power Act, although it as a practical matter has not exercised or sought to exercise such jurisdiction to modify rates that would legitimately be charged. Even if it did assert such jurisdiction, the City’s hydroelectric resources currently constitute less than 10% of total Electric System power resources.

Under sections 210, 211, 211A, and 212 of the Federal Power Act, FERC has the authority, under certain circumstances and pursuant to certain procedures, to order certain utilities (municipal, distribution cooperative or otherwise) to provide transmission access to others at FERC-approved rates. See “FACTORS AFFECTING THE ELECTRIC UTILITY INDUSTRY.” The California Energy Commission (“CEC”) is authorized to evaluate rate policies for electric energy as related to the goals of the Energy Resources Conservation and Development Act and to make recommendations to the Governor, the Legislature and publicly owned electric utilities.

FACTORS AFFECTING THE ELECTRIC UTILITY INDUSTRY
Rates and Charges for Service
The City Council sets the rates, fees and charges for the electric service provided by the Electric System. The authority of the City to impose and collect rates and charges for electric power and energy sold and delivered is not subject to the general regulatory jurisdiction of the CPUC, and currently neither the CPUC nor any other State or federal regulatory authority approves such rates and charges. However, FERC could potentially assert jurisdiction over rates of licensees of hydroelectric projects (such as NCPA), which could impact the Electric System.

See “RATE REGULATION” for additional details.

Electric Market Deregulation
The restructuring of energy markets in the United States began in 1996 with FERC orders 888 and 889. See “– Energy Policy Acts,” below. These orders opened the electricity transmission system so that unused transmission must be made available at a cost-based rate and defined the market mechanism by which these resources would be offered and purchased. Subsequently California enacted AB 1890, the Electric Utility Restructuring Act, which transitioned two thirds of the State from a bilateral to a structured market with the creation of CAISO. This market structure redefined electricity markets in California in fundamental ways by becoming the reliability and market clearing entity for most of California.

Attachment 5

38 Substantial disruptions to the CAISO electric market occurred in 2000 and 2001. The response to the disruptions was the expansion of CAISO’s responsibilities to the creation of new market frameworks, implemented on April 1, 2009 as the Market Redesign and Technology Upgrade (the “MRTU”), and adoption of a legislative and regulatory requirement for additional reserve capacity called the Resource Adequacy Standard. The MRTU establishes enhanced unit commitment and balancing markets for energy purchases and sales. The Resource Adequacy Standard ensures that adequate levels of capacity to meet load and reserves are procured by all load serving entities in a timely manner for the purpose of avoiding future shortages.

Western Energy Imbalance Market. The CAISO has developed a regional real-time market service, referred to as an “Energy Imbalance Market” (“EIM”). EIM may help to optimize management of the transmission system to help balance supply and demand across a larger footprint, across multiple balancing authorities. By developing the EIM between the balancing authorities, a broad array of resources can be shared and economically dispatched through the CAISO five-minute market. According to the CAISO, the EIM has the potential to strengthen grid reliability. The purpose is to optimize the interconnected high-voltage system as market systems automatically handle electricity bottlenecks on transmission lines during the process of managing the flow of electricity.

Following FERC approval of the implementation agreement between the CAISO and PacifiCorp in June of 2013, PacifiCorp and the CAISO officially launched the EIM in November 2014. PacifiCorp, headquartered in Portland, Oregon, is a subsidiary of Berkshire Hathaway Energy and operates as a utility that serves 1.8 million customers across six western states. Since the launch of the EIM between CAISO and PacifiCorp, six additional utilities across the western United States have signed EIM implementation agreements, officially stating their intent to participate in the EIM.

In October 2016, BANC and SMUD announced their intent to initiate negotiations with the CAISO to participate in the CAISO EIM. After completing an extensive cost/benefit analysis in conjunction with its members, BANC concluded that there are benefits for some of its members and is interested in entering into an arrangement for EIM participation that would allow phasing in those members who would like to participate in the EIM. SMUD elected to be the first member to participate through BANC in the EIM.

Other Regional Developments – Western Regional Energy Market. California Senate Bill 350, signed into law in 2015, increased California’s renewable portfolio standard to 50% by 2030 and also directed the CAISO to explore how its expansion into the wider West could help the state meet that goal. After completion of multiple studies, the CAISO determined that a regional energy market would help to advance the State’s ambitious clean energy goals and to reduce the cost of energy in the western states and is an efficient, effective way to meet the demand for reliable, affordable and sustainable energy. According to the CAISO, a regional energy market would coordinate electricity systems across the West, utilizing the CAISO’s infrastructure to develop one western grid.

State Legislation
Bills affecting the electric utility industry are continually enacted by the California Legislature. In general, these bills have provided for reduced greenhouse gas emission standards and greater investment in energy-efficient and environmentally friendly generation alternatives through more stringent renewable resource portfolio standards. The following is a brief summary of certain of these bills. See also “– Wildfire Mitigation Measures,” below.

Attachment 5

39 Greenhouse Gas Emissions. On June 1, 2005, then Governor Schwarzenegger signed Executive Order S-3-05, which placed an emphasis on such efforts to reduce greenhouse gas emissions by establishing statewide greenhouse gas reduction targets. The targets are: (i) a reduction to 2000 emissions levels by 2010; (ii) a reduction to 1990 levels by 2020; and (iii) a reduction to 80% below 1990 levels by 2050. The Executive Order also called for the California Environmental Protection Agency to lead a multi-agency effort to examine the impacts of climate change on California and develop strategies and mitigation plans to achieve the targets. On April 25, 2006, the Governor also signed Executive Order S-06-06, which directs the State to meet a 20% biomass utilization target within the renewable generation targets of 2010 and 2020 for the contribution to greenhouse gas emission reduction.

On September 27, 2006, then Governor Schwarzenegger signed into law Assembly Bill 32 (“AB 32”), the Global Warming Solutions Act of 2006. AB 32 requires all California utilities to inventory and report greenhouse gas emissions beginning January 1, 2008 and requires the California Air Resources Board (“CARB”) to adopt enforceable greenhouse gas emission limits and emission reduction measures by regulation in order to reduce greenhouse gas emissions to 1990 levels by 2020. In December 2008, the CARB adopted the AB 32 Scoping Plan, which serves as California’s blueprint for reducing greenhouse gas emissions. The Scoping Plan called for essential complementary measures along with the creation of a cap-and-trade program and is revised every 5 years as CARB proceeds with its next task of designing the mechanisms for returning the State to 80% below 1990 levels by 2050 as directed in Executive Order S-3-05. On December 14, 2010, CARB initially adopted regulations approving the cap-and-trade program for California. The CARB regulations became enforceable on January 1, 2012.

On September 8, 2016, then Governor Schwarzenegger signed Senate Bill 32, the Global Warming Solutions Act of 2006, and Assembly Bill 197, State Air Resource Board: Greenhouse Gasses, which together established a statewide greenhouse gas emission reduction target to reduce greenhouse gas emissions to 40 percent below 1990 levels by 2030 to ensure California continues moving towards its target of reducing greenhouse gas emissions to 80 percent below 1990 levels by 2050.

This legislation is currently being implemented by the cap-and-trade program established through a series of regulations. Under the cap-and-trade program where CARB creates one allowance for each ton of carbon dioxide-equivalent greenhouse gases (“CO2e”) up to the target level of CO2e for a given year (the cap) and parties responsible for CO2e emissions much purchase one allowance for each ton of CO2e they produced in either an auction or bilateral market (the trade). The cap declines each year. By reducing amount of available allowances through time, the state is able to meet its emission reduction targets.

The cap-and-trade program includes the distribution of carbon allowances. Each allowance is equal to one metric ton of CO2e. Initially, most of the carbon allowances are distributed for free. Additional allowances are auctioned quarterly, which began in November 2012. Utilities can acquire more carbon allowances at these auctions. They are then required to purchase allowances to meet their compliance obligations, and use any remaining proceeds from the sale of their allocated allowances for the benefit of their ratepayers. Publicly-owned electric utilities (“POU”) that do not sell into the CAISO markets (such as the Electric System) have three options (which are not mutually exclusive) once their allocated allowances are distributed to them.

They can (i) place allowances in their compliance accounts to meet compliance obligations for plants they operate directly, (ii) place allowances in the compliance account of a joint powers Attachment 5

40 agency or public power utility that generates power on their behalf, and/or (iii) auction the allowances and use the proceeds to benefit their ratepayers.

In July 2017, then-Governor Brown signed into law Assembly Bill 398 (“AB 398”), which extends the cap-and-trade regulations from 2021 to 2030. The bill passed both chambers with a 2/3 supermajority vote, which protects the legislation from certain legal challenges. Under AB 398, CARB was directed to address the following: establish a price ceiling, offer non-tradeable allowances at two price containment points below the price ceiling, transfer current vintages unsold for more than 24 months to the allowance price containment reserve, evaluate and address allowance over-allocation concerns, set industry assistance factors for allowance allocation, and establish allowance banking rules. Under AB 398, CARB was directed to include cost containment provisions to keep allowance prices from rising too high and pushing business expansion outside of the state (referred to as “leakage”). AB 398 was passed in conjunction with AB 617, which strengthens the monitoring of criteria air pollutants and toxic air contaminants in local communities. Amendments to the cap-and-trade regulations to reflect the requirements of AB 398 were adopted by CARB and went into effect on April 1, 2019.

On September 29, 2006, then Governor Schwarzenegger signed into law Senate Bill 1368 (“SB 1368”), the Greenhouse Gas Emissions Performance Standard. SB 1368 sets a greenhouse gas emission performance standard (“EPS”) for baseload electric generating resources. Any new investment in baseload generation or contract for baseload generation with a term of over five years must have greenhouse gas emissions at or below that of a baseload, combined cycle power plant. The CEC has established the EPS and associated compliance methodologies for the publicly-owned utilities. The CPUC has the similar responsibility for the IOUs.

Energy Procurement and Efficiency Reporting. Senate Bill 1037 (“SB 1037”), signed by the Governor on September 29, 2005, requires that each POU, including the City, prior to procuring new energy generation resources, first acquire all available energy efficiency, demand reduction and renewable resources that are cost effective, reliable and feasible. SB 1037 also requires each municipal electric utility to report annually to its customers and to the CEC its investment in energy efficiency and demand reduction programs. Further, Assembly Bill 2021 (“AB 2021”), signed by the Governor on September 29, 2006 requires that POUs establish, report, and explain the basis of the annual energy efficiency and demand reduction targets by June 1, 2007 and every four years thereafter (as amended) for a ten year horizon. Reporting requirements per AB 2021 include: (i) the identification of sources of funding for the investment in energy efficiency and demand reduction programs, (ii) the methodologies and input assumptions used to determine cost-effectiveness, and (iii) the results of an independent evaluation to measure and verify energy efficiency savings and demand reduction program impacts. The information obtained from local publicly-owned utilities from these reporting requirements is utilized by the CEC to present the progress made by the POUs towards the statewide goal to double energy efficiency savings in electricity and natural gas final end uses by 2030, to the extent doing so is cost effective, feasible, and does not adversely impact public health and safety, as prescribed in SB 350. In addition, the CEC can provide recommendations for improvement to assist each POU in achieving cost-effective, reliable, and feasible savings in conjunction with the established targets for reduction.

California New Construction Standards California has continually increased the energy efficiency of new construction and appliances since the Warren Alquist Act of 1974. These standards require the implementation of Zero Net Energy (“ZNE”) residential new construction.

ZNE homes are energy efficient homes combined with distributed generation, predominantly Attachment 5

41 rooftop solar generation, sized so that over the year building consumption is approximately equal to building generation.

Renewable Portfolio Standards (“RPS”). SBX1-2, the California Renewable Energy Resources Act, and its successor SB 350, the Clean Energy and Pollution Reduction Act of 2015, codify the RPS target for retail electricity sellers to serve 50% of their loads with eligible renewable energy resources by 2030. Subsequent legislation, SB 100, signed into law in 2018, increased California’s renewable portfolio standard to 60% by 2030 and 100% carbon free by 2045. The CEC is actively engaged in its rulemaking process for the SB 100 update to the RPS. It is expected that these rules will be implemented later in 2020. These laws make the requirements of the RPS program applicable to POUs (rather than just prescribing that POUs meet the intent of the legislation as under previous statutes). However, the governing boards of POUs are responsible for implementing the requirements, rather than the CPUC, as is the case for the IOUs.

In addition, certain enforcement authority with respect to POUs is given to the CEC and CARB, including authority to impose penalties. Each POU must adopt and implement a renewable energy resource procurement plan. See “THE ELECTRIC SYSTEM – Sources of Power Supply” above.

The CEC, collaboratively with the Western Governors’ Association and the Western Electricity Coordinating Council (“WECC”), has undertaken the development and establishment of the Western Renewable Energy Generation Information System, which issued to ensure the integrity of RECs and prevent the double counting of the certificates. The electronic tracking system became operational in June of 2007.

The ambitious renewable goals in California have been primarily met with solar, and to a lesser degree, wind resources. These resources are classified by the term Variable Energy Resource (“VERs”). Solar and wind resources generally produce energy not when an operator directs them, but when the fuel source (in this case sunlight and wind) are available. In the case of solar energy, photovoltaic power plants only produce electricity between dawn and dusk, and can vary power output very quickly when a cloud passes over. This creates two challenges. First solar energy increases rapidly in the morning and decreases rapidly in the afternoon, when customer needs are increasing. Secondly, the amount of solar energy produced can vary quickly and unexpectedly as the weather changes. To address the challenge of rapidly changing power output, FERC passed order 764 in 2014. This ruling required markets to offer 15 minute trading in addition (or in place of) hourly trading. The more granular market allows the market to react better to the variable nature of solar and wind resources. The CAISO implemented a 15 minute market and in addition offered a 5 minute and 15 minute Energy Imbalance Market outside the CAISO region.

SB 350 also requires POUs over a certain size to produce an Integrated Resource Plan (“IRP”), reviewed in a public forum and delivered to the CEC for comment. This plan must address a number of requirements in this and other legislation, including: ensuring procurement of 50% renewable resources by 2030; demonstrating activity reflecting electricity sector’s responsibility meeting the State’s economy-wide greenhouse gas reduction goals to 40% below 1990 GHG levels by 2030; fulfilling obligations to serve customers at just and reasonable rates and minimizing impacts to ratepayers bills; ensuring system and local reliability; strengthening the diversity, sustainability, and resilience of the bulk transmission, distribution systems and local communities; minimizing localized air pollutants and other greenhouse gas emissions with early priority to disadvantaged communities; and addressing procurement of each of the following: (i) efficiency and and demand resources that are cost effective, reliable and feasible, (ii) energy storage, (iii) transportation electrification, (iv) a diversified procurement portfolio of short term Attachment 5

42 electricity, long term electricity, and demand response products, and (v) resource adequacy requirements.

Solar Power. The California State Legislature enacted Senate Bill (“SB 1”) in 2006 to encourage the installation of 3,000 MW of photovoltaic (PV) solar energy by the year 2017. SB 1 requires all publicly-owned utilities to adopt, finance, and implement a solar initiative program for the purpose of investing in and encouraging the increased installation of residential and commercial solar energy systems. POUs were required to commence a solar initiative program in order to establish the funding of solar energy systems receiving ratepayer funded incentives, which commenced no later than January 1, 2008. A POU was given the choice of selecting an incentive based on the installed capacity, starting at $2.80 per watt, or based on the energy produced by the solar energy system, measured in kWh. Incentives are required to decrease at a minimum average rate of 7% per year.

Smart Grid and Advanced Metering Infrastructure. In 2007 and 2008, CEC held rulemaking proceedings for the definition of load management standards for Advanced Metering Infrastructure (“AMI”) and for demand response. The CEC was evaluating the use of advanced technologies for operation and maintenance of the electric grid and impacts to California electricity customers. The largest IOUs in California have deployed smart meters for gas and electric services, and several POUs have implemented such technology.

Resource Adequacy. In September 2005, the California Legislature enacted and the Governor signed into law Assembly Bill 380 (“AB 380”), which requires the CPUC to establish resource adequacy requirements for all load-serving entities (“LSEs”) within the CPUC’s jurisdiction. In addition, AB 380 requires POUs, including the City, to meet the most recent resource adequacy standard as adopted by the WECC. In October 2005, the CPUC issued a decision stating that LSEs under its jurisdiction would be required, by June 2006, to demonstrate that they have acquired capacity sufficient to serve their forecast retail customer load plus a 15% reserve margin. The WECC has yet to formally adopt a resource adequacy requirement.

Energy Policy Acts
Energy Policy Act of 1992. The Energy Policy Act of 1992 (the “Energy Policy Act”) made fundamental changes in the federal regulation of the electric utility industry, particularly in the area of transmission access under Sections 211, 212 and 213 of the Federal Power Act. The purpose of these changes, in part, was to bring about increased competition in the electric utility industry.

As amended by the Energy Policy Act, Sections 211, 212 and 213 of the Federal Power Act provide FERC authority, upon application by any electric utility, federal power marketing agency or other person or entity generating electric energy for sale or resale, to require a transmitting utility to provide transmission services (including any enlargement of transmission capacity necessary to provide such services) to the applicant at rates, charges, terms and conditions set by FERC based on standards and provisions in the Federal Power Act. Under the Energy Policy Act, electric utilities owned by municipalities and other public agencies which own or operate electric power transmission facilities which are used for the sale of electric energy at wholesale are “transmitting utilities” subject to the requirements of Sections 211, 212 and 213.

See also “FACTORS AFFECTING THE ELECTRIC UTILITY INDUSTRY – Rate Regulation.” Energy Policy Act of 2005. Although the Electric System is exempt from most federal rate regulation pursuant to Section 201(f) of the Federal Power Act, the Energy Policy Act of 2005 Attachment 5

43 (“EPACT 2005”) imposed specific exceptions. In particular, FERC was given authority over the behavior of market participants. Under FERC’s authority it can impose penalties on any seller for using a manipulative or deceptive device, including market manipulation, in connection with the purchase or sale of energy or of transmission service. The Commodity Futures Trading Commission (“CFTC”) also has jurisdiction to enforce certain types of market manipulation or deception claims under the Commodity Exchange Act.

EPAct 2005 authorized FERC to issue permits to construct or modify transmission facilities located in a national interest electric transmission corridor if FERC determines that the statutory conditions are met. EPAct 2005 also required the creation of an electric reliability organization (“ERO”) to establish and enforce, under FERC supervision, mandatory Reliability Standards to increase system reliability and minimize blackouts. The Reliability Standards apply to users, owners and operators of the Bulk-Power System, as more specifically set forth in each Reliability Standard. On February 3, 2006, FERC issued Order 672, which certified NERC as the ERO.

Many Reliability Standards have since been approved by FERC. The Reliability Standards include requirements related to cybersecurity of systems that could affect the reliable operation of the electric grid.

The ERO or the entities to which NERC has delegated enforcement authority through an agreement approved by FERC (“Regional Entities”), such as the WECC, may enforce the Reliability Standards, subject to FERC oversight, or FERC may independently enforce them.

Potential monetary sanctions include fines in excess of $1 million per violation per day. FERC Order 693 further provided the ERO and Regional Entities with the discretion necessary to assess penalties for such violations, while also having discretion to calculate a penalty without collecting the penalty if circumstances warrant.

Federal Cybersecurity Policy
On February 13, 2013, then President Obama issued an Executive Order entitled “Improving Critical Infrastructure Security.” The Executive Order calls for improved sharing and processing of security clearances for owners and operators of critical infrastructure. As required by the Executive Order, the National Institute of Standards and Technology (“NIST”) is leading the development of a framework to reduce cyber risks to critical infrastructure.

On December 18, 2015, then President Obama signed the Cybersecurity Information Sharing Act, which creates an industry-supported, voluntary cybersecurity information sharing program which facilitates the secure sharing of cyber-related threat information among both public and private sector entities. See also “BOND OWNERS’ RISKS – Cybersecurity.” Wildfire Mitigation Measures
Senate Bill 1028 (“SB 1028”) was signed into law by then-Governor Brown in September 2016. SB 1028 requires that each POU and each electric cooperative in the State construct, maintain, and operate its electrical lines and equipment in a manner that will minimize the risk of catastrophic wildfire posed by those electrical lines and equipment. SB 1028 requires the governing board of each POU to determine, based on historical fire data and local conditions, and in consultation with the fire departments or other entities responsible for the control of wildfires within the geographical area where the utility’s overhead electrical lines and equipment are located, whether any portion of that geographical area has a significant risk of wildfire resulting from those electrical lines and equipment, and if so, to present for board approval wildfire Attachment 5

44 mitigation measures the utility intends to undertake to minimize the risk of its overhead electrical lines and equipment causing a catastrophic wildfire.

California Senate Bill 901 (“SB 901”) was signed into law by then-Governor Brown in September 2018. SB 901 amends certain provisions of SB 1028 requiring POUs and electric cooperatives to prepare wildfire mitigation measures if the utilities’ overhead electrical lines and equipment are located in an area that has a significant risk of wildfire resulting from those electrical lines and equipment. Under SB 901, each POU or electric cooperative is required to prepare before January 1, 2020 and annually thereafter, a wildfire mitigation plan. SB 901 requires specified information and elements to be considered as necessary, at minimum, in the wildfire mitigation plan. The POU or electric cooperative is required to present each wildfire mitigation plan in an appropriately noticed public meeting, and to accept comments on its wildfire mitigation plan from the public, other local and state agencies, and interested parties. In addition, SB 901 requires the POU or electric cooperative to contract with a qualified independent evaluator with experience in assessing the safe operation of electrical infrastructure to review and assess the comprehensiveness of its wildfire mitigation plan. The report of the independent evaluator is to be made available to the public and to be presented at a public meeting of the POU’s governing board.

Assembly Bill 1054 (“AB 1054”) was signed into law by Governor Newsom in July 2019.

AB 1054 establishes a Wildfire Fund for IOUs to facilitate payment of eligible, uninsured thirdparty damage claims resulting from future catastrophic wildfires. Participation in the Wildfire Fund is exclusive to IOUs. AB 1054 expands on the existing requirements for POUs established under SB 901 for wildfire mitigation plans. AB 1054 requires each POU, by July 1 of each year, to submit its wildfire mitigation plan to a newly created California Wildfire Safety Advisory Board (the “Wildfire Advisory Board”) for review and comment. Under AB 1054, the Wildfire Advisory Board is required to provide comments and an advisory opinion to each POU regarding the content and sufficiency of its plan and to make recommendations on the mitigation of wildfire risks. AB 1054 requires each POU to comprehensively revise its wildfire mitigation plan at least once every three years.

SB 1028, SB 901 and AB 1054 do not address the existing liability of utilities for wildfires.

How any future legislation addresses California’s inverse condemnation and “strict liability” issues for utilities in the context of wildfires in particular could be significant for the electric utility industry.

Other Environmental Issues
General. Electric utilities are subject to continuing environmental regulation. Federal, state and local standards and procedures that regulate the environmental impact of electric utilities are subject to change. These changes may arise from continuing legislative, regulatory and judicial action regarding such standards and procedures. Consequently, there is no assurance that any City facility or project will remain subject to the laws and regulations currently in effect, will always be in compliance with future laws and regulations or will always be able to obtain all required operating permits. An inability to comply with environmental standards could result in additional capital expenditures, reduced operating levels or the shutdown of individual units not in compliance. In addition, increased environmental laws and regulations may create certain barriers to new facility development, may require modification of existing facilities and may result in additional costs for affected resources.

Greenhouse Gas Regulations Under the Clean Air Act. The United States Environmental Protection Agency (the “EPA”) regulates GHG emissions under existing law by imposing monitoring and reporting requirements, and through its permitting programs. Like other Attachment 5

45 air pollutants, GHGs are regulated under the Clean Air Act through the Prevention of Significant Deterioration (“PSD”) Permit Program and the Title V Permit Program. A PSD permit is required before commencement of construction of new major stationary sources or major modifications of a major stationary source and requires best available control technologies (“BACT”) to control emissions at a facility. Title V permits are operating permits for major sources that consolidate all Clean Air Act requirements (arising, for example, under the Acid Rain, New Source Performance Standards, National Emission Standards for Hazardous Air Pollutants, and/or PSD programs) into a single document and the permit process provides for review of the documents by the EPA, state agencies and the public. GHGs from major natural gas-fired facilities are regulated under both permitting programs through performance standards imposing efficiency and emissions standards.

On October 23, 2015, under the Obama Administration, the EPA published the Clean Power Plan and final regulations for (1) carbon pollution standards for new, modified, and reconstructed power plans, and (2) carbon pollution emission guidelines for existing electric generating units (“EGUs”). The total national emissions reduction goal under the Clean Power Plan targeted an average of a 32% reduction from 2005 levels by 2030, with incremental interim goals for the years from 2022 through 2029. The Clean Power Plan allowed states multiple options for measuring reductions and established different reduction goals depending upon the regulatory program set forth in the state plan.

On March 28, 2017, President Trump signed the Executive Order on Energy Independence (E.O. 13783), which called for a review of the Clean Power Plan. On October 16, 2017, a Notice of Proposed Rulemaking was published in the Federal Register that proposed to repeal the Clean Power Plan, under the premise that it exceeded EPA’s statutory authority under Section 111 of the Clean Air Act. On December 28, 2017, an Advance Notice of Proposed Rulemaking was published in the Federal Register proposing a new GHG emission limit rule for existing EGUs. On June 19, 2019, the EPA issued the final rule, known as the “Affordable Clean Energy” rule, which became effective on September 6, 2019.

The final Affordable Clean Energy rule: (i) replaces the Clean Power Plan with revised emissions guidelines that inform the development, submittal, and implementation of state plans to reduce GHG emissions from fossil fuel steam EGUs, primarily coal-fired plants; and (ii) implements new regulations that provide direction to both the EPA and the states on the implementation of emission guidelines. The final rule identifies heat rate improvements as the best system of emission reduction from coal-fired power plants, to be made at the individual facilities. Under the Affordable Clean Energy rule, states will have three years to submit implementation plans. The EPA will have 12 months to approve or disapprove a state’s plan.

A number of environmental advocates and state attorneys general have filed lawsuits challenging the Affordable Clean Energy rule. The City is unable to predict the outcome of any ongoing legal challenges to the EPA rulemaking regulating GHG emissions from electric generating units and other stationary sources would have on the City’s Electric System or, given the legal uncertainty regarding the Affordable Clean Energy rule, what the ultimate impact of any federal rulemaking will be.

Air Quality – National Ambient Air Quality Standards. The Clean Air Act requires that the EPA establish National Ambient Air Quality Standards (“NAAQS”) for certain air pollutants. When a NAAQS has been established, each state must identify areas in its state that do not meet the EPA standard (known as “non-attainment areas”) and develop regulatory measures in its state implementation plan to reduce or control the emissions of that air pollutant Attachment 5

46 in order to meet the standard and become an “attainment area.” For example, on January 7, 2010, the EPA released a draft rule proposing stricter NAAQS for ground-level ozone, the main component of smog. On September 2, 2011, President Obama directed the EPA to withdraw its proposal for stricter NAAQS for ozone. As a result of this withdrawal, the EPA resumed the process of issuing non-attainment designations for the ozone NAAQS under the standard set in 2008.

PG&E Bankruptcy
The following statements in this section regarding PG&E's financial condition, potential wildfire liabilities, and its actions and developments in connection with PG&E's voluntary bankruptcy filing have been obtained from public sources that the Authority believes to be reliable, but such statements have not been independently verified by the Authority and the Authority assumes no responsibility for the accuracy or completeness thereof.

On January 29, 2019, PG&E and PG&E Corporation filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”). A Chapter 11 case under the Bankruptcy Code is utilized to accomplish either a restructuring and/or liquidation of businesses.

In its bankruptcy filings, PG&E indicated that its voluntary bankruptcy filing was initiated to address extraordinary financial challenges. These are largely attributed to its potential liabilities associated with a number of wildfires which occurred in Northern California in 2017 and 2018. In its Form 8-K filing with the Securities and Exchange Commission reporting its intent to file voluntary bankruptcy (the “PG&E SEC filing”) and its subsequent bankruptcy filings, PG&E estimated if it were found liable for certain or all of the costs, expenses and other losses with respect to the 2017 and 2018 Northern California wildfires, the amount of such liability (exclusive of potential putative damages, fines and penalties or damages related to future claims) could exceed $30 billion. SB 901, which was enacted by the California legislature in September 2018, addressed a portion of the liabilities PG&E faced in connection with the 2017 wildfires. That legislation, however, expressly excluded any similar relief for wildfires occurring in 2018.

PG&E has requested approval from the bankruptcy court to continue operations of both its electric and gas systems. In its SEC filing, PG&E stated that it expected to operate in the ordinary course of business following the Chapter 11 filing, including providing uninterrupted electric and natural gas service to customers. In its bankruptcy filings, PG&E has indicated that it has obtained approximately $5.5 billion in secured debtor-in-possession financing from several financial institutions that would provide liquidity to fund its operations during the Chapter 11 process. PG&E’s bankruptcy could have broader effects on the electric markets generally. Subject to Bankruptcy Court approval, Chapter 11 debtors have the power to assume or reject contractual arrangements. Chapter 11 debtors may seek to reject contracts that are uneconomic or otherwise burdensome to the debtor. In the event PG&E were to seek to reject some power purchase agreements, and if the court orders this, there may be further market impacts. In addition, it is possible that one or more other entities may ultimately assume or acquire all or a portion of PG&E's operations and activities in the future. Further, in its SEC filing, PG&E stated it is exploring possible sales or other dispositions of certain assets and businesses.

Operations of PG&E’s transmission system is overseen by the CAISO, which is in turn overseen by FERC. To date, the Electric System has not experienced any operational disruptions as a result of the PG&E bankruptcy filing. Although there are uncertainties associated with Attachment 5

47 PG&E’s emergence from bankruptcy, and its future ownership, financing and rate structure, the CAISO and FERC will continue to oversee grid operations and reliability.

Future State and Federal Legislation
Numerous bills have been under consideration in the State Legislature and federal Congress addressing United States energy policies and various environmental matters, including those related to energy supplies and development (such as a federal energy efficiency standard and expedited permitting for natural gas drilling projects), cybersecurity, reducing regulatory burdens, climate change and water quality. Many of these bills, if enacted into law, could have a material impact on the electric utility industry generally, and the Electric System more specifically.

Previously, proposed energy and climate change-related pieces of legislation have included, among other things, a cap-and-trade system to regulate and reduce the emission of carbon dioxide and other greenhouse gases and a federal renewable energy portfolio standard. The impact that federal greenhouse gas cap-and-trade legislation could have on the electric utility industry and business would largely depend on the specific provisions of any legislation that might ultimately become law. Some of the important factors to be addressed would include the timing and magnitude of the emissions cap, the extent to which emissions allowances are either allocated or auctioned to the highest bidder, the extent to which emissions may be offset by other actions, whether there will be a cap on the price of emissions allowances and the allocation of proceeds from the auction of allowances. Other areas of consideration for energy legislation include, but are not limited to, the development and deployment of alternative fuels, renewable energy resources, and energy conservation measures. The timeline and impact of any future climate change legislation cannot be accurately assessed at this time, but it is expected that any such federal action would have a significant impact on fossil-fueled generation facilities.

Attachment 5

48 CONSTITUTIONAL LIMITATIONS ON TAXES AND APPROPRIATIONS State Constitution Articles XIIIA and XIIIB
Article XIIIA of the California Constitution limits the taxing powers of California public agencies. Article XIIIA provides that the maximum ad valorem tax on real property cannot exceed one percent of the “full cash value” of the property, and effectively prohibits the levying of any other ad valorem property tax except for taxes above that level required to pay debt service on voter-approved general obligation bonds. “Full cash value” is defined as “the County Assessor’s valuation of real property as shown on the 1975-76 tax bill under ‘full cash value’ or, thereafter, the appraisal value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment.” The “full cash value” is subject to annual adjustment to reflect inflation at a rate not to exceed two percent or a reduction in the consumer price index or comparable local data, or declining property value caused by damage, destruction or other factors.

The foregoing limitation does not apply to ad valorem taxes or special assessments to pay the interest and redemption charges on any indebtedness approved by the voters before July 1, 1978 or any bonded indebtedness for the acquisition or improvement of real property approved by two-thirds of the votes cast by the voters voting on the proposition.

Under Article XIIIB of the California Constitution, state and local government entities have an annual “appropriations limit” which limits their ability to spend certain moneys called “appropriations subject to limitation”, which consist of tax revenues, certain state subventions and certain other moneys, including user charges to the extent they exceed the costs reasonably borne by the entity in providing the service for which it is levying the charge. The City is of the opinion that the electric service and use charges imposed by the City do not exceed the costs the City reasonably bears in providing the electric service. In general terms, the “appropriations limit” is to be based on certain 1978/79 expenditures, and is to be adjusted annually to reflect changes in the consumer price index, population, and services provided by these entities. Among other provisions of Article XIIIB, if an entity’s revenues in any year exceed the amount permitted to be spent, the excess would have to be returned by revising tax rates or fee schedules over the subsequent two years.

State Constitution Articles XIIIC and XIIID
Proposition 218. Proposition 218, a State ballot initiative known as the “Right to Vote on Taxes Act,” was approved by the voters of the State of California on November 5, 1996.

Proposition 218 added Articles XIIIC and XIIID to the State Constitution. Article XIIIC imposes a majority voter approval requirement on local governments (including the City) with respect to taxes for general purposes, and a two-thirds voter approval requirement with respect to taxes for special purposes. Article XIIID creates additional requirements for the imposition by most local governments of general taxes, special taxes, assessments and “property-related” fees and charges. Article XIIID explicitly exempts fees for the provision of electric service from the provisions of such article.

Article XIIIC expressly extends the people’s initiative power to reduce or repeal previously-authorized local taxes, assessments, and fees and charges imposed prior to its effective date (November 1996). The terms “fees and charges” are not defined in Article XIIIC, although the California Supreme Court held in Bighorn-Desert View Water Agency v. Verjil, 39 Attachment 5

49 Cal. 4th 205 (2006), that the initiative power described in Article XIIIC may apply to a broader category of fees and charges than the property-related fee and charges governed by Article XIIID.

Moreover, in the case of Bock v. City Council of Lompoc, 109 Cal. App. 3d 43 (1980), the Court of Appeal determined that an electric rate ordinance was not subject to the same constitutional restrictions that are applied to the use of the initiative process for tax measures so as to render it an improper subject of the initiative process. Thus, electric service charges (which are expressly exempted from the provisions of Article XIIID) may be subject to the initiative provisions of Article XIIIC, thereby subjecting such fees and charges to reduction by the electorate. The City believes that even if the electric rates of the Electric System are subject to the initiative power, under Article XIIIC or otherwise, Article XIIIC does not grant to the electorate of the City the power to repeal or reduce its electric rates and charges in a manner that would impair the payment of the contractual obligations of the City or Authority (including those related to the Bonds).

Proposition 26. Proposition 26 was approved by the electorate at the November 2, 2010 election and amended California Constitution Articles XIIIA and XIIIC. The proposition imposes a two-thirds voter approval requirement for the imposition of fees and charges by the State. It also imposes a majority voter approval requirement on local governments with respect to fees and charges for general purposes, and a two-thirds voter approval requirement with respect to fees and charges for special purposes. Proposition 26, according to its supporters, is intended to prevent the circumvention of tax limitations imposed by the voters pursuant to Proposition 13, approved in 1978, and other measures through the use of non-tax fees and charges. Proposition 26 expressly excludes from its scope a charge imposed for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable cost to the State or local government of providing the service or product to the payor. Proposition 26 may, however, be interpreted to limit fees and charges for electric utility services charged by governmental entities such as the City to preclude future transfers of electric utility generated funds to a local government’s general fund and/or require stricter standards for the allocation of costs among customer classes.

Proposition 26 is subject to interpretation by California courts, including the extent to which it is applicable to pre-existing electric rates and general fund transfers. A number of lawsuits have been filed against public agencies in California under Proposition 26, including particularly with respect to electric utility fund transfers. The City is unable to predict at this time how Proposition 26 will ultimately be interpreted or the impact of Proposition 216 on the Electric System.

Future Initiatives
Article XIIIA, Article XIIIB, Articles XIIIC and XIIID and Proposition 26, were each adopted pursuant to measures qualified for the ballot pursuant to California’s constitutional initiative process. From time to time other initiative measures could be adopted by California voters. The adoption of any such initiatives might place limitations on the ability of the City to increase revenues or to increase appropriations.

BOND OWNERS’ RISKS
The following information should be considered by prospective investors in evaluating the Bonds. However, the following does not purport to be an exclusive listing of risks and other considerations that may be relevant to investing in the Bonds, and the order in which the following information is presented is not intended to reflect the relative importance of any such risks and considerations.

Attachment 5

50 Limited Obligations
The Bonds are limited obligations of the Authority secured by and payable from the Installment Payments, which are secured by the Net Revenues of the Electric System. The Installment Payments are limited obligations of the City and are not secured by a legal or equitable pledge or charge or lien upon any property of the City or any of its income or receipts, except the Net Revenues. The obligation of the City to make the Installment Payments does not constitute an obligation of the City to levy or pledge any form of taxation or for which the City has levied or pledged any form of taxation.

No representation or assurance can be made that revenues will be realized by the Electric System of the City in amounts sufficient to make payments required by the Installment Sale Agreement. Future economic and other conditions, including economic trends and events, technological developments and demographic changes, increases in insurance claims, as well as increased costs and changes in government regulations may adversely affect the future financial condition of the Electric System and, consequently, the City’s ability to make the Installment Payments securing payment of the principal of and premium, if any, and interest on Bonds. There is no assurance that the City can succeed in operating the Electric System such that Net Revenues in the future amounts projected in this Official Statement will be realized.

Limitations on Remedies and Limited Recourse on Default The ability of the City to comply with its covenants under the Installment Sale Agreement and to generate Net Revenues sufficient to pay principal of and interest on the Bonds may be adversely affected by actions and events outside of the control of the City and may be adversely affected by actions taken (or not taken) by voters, property owners, taxpayers or persons obligated to pay assessments, fees and charges. Failure by the City to pay the Installment Payments constitutes an event of default under the Installment Sale Agreement, and the Trustee is permitted to pursue remedies at law or in equity to enforce the City’s obligation to make such payments. Although the Trustee has the right to accelerate the total unpaid principal amount of the unpaid Payments under Installment Sale Agreement, including the Installment Payments, there is no assurance that the City would have sufficient funds to pay the accelerated Payments.

Furthermore, the remedies available to the owners of the Bonds upon the occurrence of an event of default under the Installment Sale Agreement are in many respects dependent upon judicial actions which are often subject to discretion and delay and could prove both expensive and time consuming to obtain. In addition, the rights and remedies of bondholders under the Indenture and the Installment Sale Agreement may be subject to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases and to limitations on legal remedies against cities in the State of California. The opinion to be delivered by Bond Counsel concurrently with the issuance of the Bonds will be subject to such limitations and the various other legal opinions to be delivered concurrently with the issuance of the Bonds will be similarly qualified. See “APPENDIX E – FORM OF OPINION OF BOND COUNSEL.” In the event the City fails to comply with its covenants under the Installment Sale Agreement or fails to pay the Installment Payments, there can be no assurance of the availability of remedies adequate to protect the interest of the holders of the Bonds.

Attachment 5

51 Regulatory Risks; Change in Law
The electric utility industry is a heavily regulatory industry, and subject to changes in law at both the federal and State level that may impact the revenues and/or the expenses of the Electric System and the ability of the City to pay debt service on the Bonds. Investors should read the section, “FACTORS AFFECTING THE ELECTRIC UTILITY INDUSTRY” in its entirety before making an investment decision with respect to the Bonds.

In addition, in recent years several initiative measures have been proposed or adopted which affect the ability of local governments to increase taxes and rates. There is no assurance that the electorate or the State Legislature will not at some future time approve additional limitations that could affect the ability of the City to implement rate increases, which could reduce Net Revenues and adversely affect the security for the Bonds. See “CONSTITUTIONAL LIMITATIONS ON TAXES AND APPROPRIATIONS.”
Environmental Risks
Seismic. The service area of the Electric System, like much of California, is subject to seismic activity that could result in interference with its operation of the Electric System. In addition, other active and potentially active seismic faults cross the regional transmission facilities through which the City obtains power. No assurance can be given that a future seismic event will not materially adversely affect the operation of the Electric System.

Drought. California is subject to droughts from time-to-time. On April 1, 2015, for the first time in California’s history, Governor Edmund G. Brown directed the State Wastewater Resources Control Board to implement mandatory water reductions in cities and towns across California to reduce water usage by 25%. Following a wet winter in 2016-17, most of the mandatory water reductions were lifted. However, in 2021, drought conditions were declared across California again and water restrictions were again put into place. Drought conditions can have material adverse impacts on the hydroelectric generation facilities that supply power to the Electric System, among other things.

Wildfire. A number of wildfires have occurred in northern California in recent years. Under the doctrine of inverse condemnation (a legal concept that entitles property owners to just compensation if their property is damaged by a public use), California courts have imposed liability on utilities in legal actions brought by property holders for damages caused by the utility’s infrastructure. Thus, if the facilities of a utility, such as its electric distribution and transmission lines, are determined to be the substantial cause of a fire, and the doctrine of inverse condemnation applies, the utility could be liable for damages without having been found negligent.

The City does not independently own or operate any transmission lines, and its owned or co-owned transmission or distribution facilities have not been the cause of any wildfires experienced in California. Within municipal boundaries of the City, the primary geographical area of the Electric System, only 10% of the Electric System’s overhead electrical lines and equipment are located in a Tier 2 CPUC designated fire-threat area, which are the areas where there is a higher risk (including likelihood and potential impacts on people and property) from utility-related wildfires. Similarly, the City is not within United States Forest Service/California Department of Forestry and Fire Protection (Cal Fire) designated high hazard zone. See also “THE ELECTRIC SYSTEM – Wildfire Mitigation Measures.”
Attachment 5

52 Although the City is not located within a Fire Hazard Severity Zone as established by Cal Fire (https://egis.fire.ca.gov/FHSZ), there are areas adjacent to the City that are open space parklands and more susceptible to wildfires. With the exception of a small area in the western foothills, the majority of the City of Ukiah is within the moderate or lesser wildfire risk exposure zones, with only 6% of the improved parcel value within the high and very high exposure zones according to CalFire data. The City was one of the first jurisdictions in the State to implement an aggressive vegetation management program in collaboration with CalFire to reconstitute control burns, dozer fuel breaks, and shaded fuel breaks in the State responsibility areas surrounding the Ukiah Valley. Currently the City is actively acquiring land in the western hills to protect open space and prevent urban develop in higher risk fire zones. An active public outreach and inspection program requiring vegetation management on private property and prevention checks of businesses is ongoing.

Climate Change. The impacts of drought, wildfire and other conditions may be becoming worse as a result of climate change. The City is unable to predict what, if any, impacts may results from climate change on the Electric System although it is possible the Net Revenues available to pay debt service on the Bonds may be material adversely impacted.

COVID-19 Pandemic
The outbreak of COVID-19 (a respiratory disease caused by a novel strain of coronavirus) which began in the winter of 2020 and which continues as of the date of this Official Statement, has been declared as a pandemic by the World Health Organization. The pandemic is having significant negative impacts throughout the world, including in the United States and the State of California. In response to the COVID-19 outbreak, governmental actions have included the implementation of “stay-at-home” (or “safer-at-home”) orders by the State and local governments requiring citizens to remain at home except for certain essential purposes, and except as needed to maintain continuity of operation of certain critical sectors. This has caused the disruption of daily life in all jurisdictions, including the closure of, among others, bars, dine-in restaurants, retail stores, schools, gyms, movie theatres, certain government buildings and religious institutions, and general prohibitions on gatherings. Although most of these restrictions have been eased, they may be modified, lifted, re-instated or expanded as the pandemic continues and local conditions warrant.

The City is monitoring the COVID-19 pandemic but is not yet able to fully predict the effect it will have on the Electric System’s financial performance or operations. Based on data available through June 30, 2021, the Electric System’s retail electricity deliveries declined by approximately _____% for the fiscal year, due to ________. [City to confirm] The City cannot predict (i) the duration or ultimate extent of the COVID-19 pandemic; (ii) to what extent the COVID-19 pandemic may affect the operations and revenues of the Electric System in the future; (iii) to what extent the COVID-19 pandemic may ultimately disrupt the local, State, national or global economy, manufacturing or supply chain, or whether any such disruption will adversely impact Electric System-related construction, the cost, sources of funds, schedule or implementation of the Electric System’s capital improvement program, or other Electric System operations; (iv) to what extent the City may provide additional customer assistance measures or deferrals, forbearances, adjustments or other changes to its customers or its billing and collection procedures; or (v) whether any of the foregoing may have a material adverse effect on the finances and operations of the Electric System. Prospective investors should consider that the restrictions and limitations instituted related to COVID-19 may increase (even after they are decreased), and the upheaval to the national and global economies may continue and/or be Attachment 5

53 exacerbated, at least over the near term, and the recovery may be prolonged, and therefore, COVID-19 may adversely impact the Electric System revenues.

Risk of Inverse Condemnation Actions
Under the doctrine of inverse condemnation (a legal concept that entitles property owners to just compensation if their property is damaged by a public use), California courts have imposed liability on public agencies in legal actions brought by property holders for damages caused by such public agencies’ infrastructure. Thus, if the facilities of the Electric System are determined to be the substantial cause of damage to property from flooding, fire or otherwise, and the doctrine of inverse condemnation applies, the Electric System could be liable for property damage, business interruption, interest, and attorneys’ fees without having been found negligent, which liability, in the aggregate, could be substantial. In addition to such claims for property damage, business interruption, interest, and attorneys’ fees, the Electric System could be liable for flood or fire suppression costs, evacuation costs, medical expenses, personal injury damages, punitive damages, and other damages under other theories of liability, including if personnel operating the Electric System were found to have been negligent, which liability, in the aggregate, could be substantial.

Cybersecurity
Like all agencies connected to the Internet, the City and the Electric System are subject to cybersecurity risks. The Electric System places a high priority on all of its security practices to protect electric infrastructure. With respect to cybersecurity, these practices include, but are not limited to: performance of periodic security risk assessments and gap analyses to identify security strengths and vulnerabilities; implementation of access controls and restrictions; personnel risk assessments; software patch management; reliance on appropriate malware protection; practices for the designation of and proper safeguards for confidential or sensitive information; practices for the backup and recovery of data; and security awareness training. The Electric System staff will continue to take actions to address new threats as they arise and to close new vulnerabilities as they are identified that are appropriate for the assets owned, operated, and controlled by the Electric System.

IRS Audit of Tax-Exempt Bond Issues
The Internal Revenue Service (the “IRS”) has initiated an expanded program for the auditing of tax-exempt bond issues, including both random and targeted audits. It is possible that the Bonds will be selected for audit by the IRS. It is also possible that the market value of such Bonds might be affected as a result of such an audit (or by an audit of similar bonds or securities).

Secondary Market
There can be no guarantee that there will be a secondary market for the Bonds or, if a secondary market exists, that the Bonds can be sold for any particular price. Occasionally, because of general market conditions or because of adverse history or economic prospects connected with a particular issue, secondary marketing practices in connection with a particular issue are suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon then prevailing circumstances. Such prices could be substantially different from the original purchase price.

Attachment 5

54 [Bond Insurance Risk Factors]
[The Authority has applied for a bond insurance policy to guarantee the scheduled payment of principal and interest on the Bonds. The Authority has yet to determine whether an insurance policy will be purchased with the Bonds. If an insurance policy is purchased, the following are risk factors relating to bond insurance.

In the event of default of the payment of principal or interest with respect to the Bonds when all or some becomes due, any owner of the Bonds shall have a claim under the applicable Bond Insurance Policy (the “Policy”) for such payments. However, in the event of any acceleration of the due date of such principal by reason of mandatory or optional redemption or acceleration resulting from default or otherwise, other than any advancement of maturity pursuant to a mandatory sinking fund payment, the payments are to be made in such amounts and at such times as such payments would have been due had there not been any such acceleration. The Policy does not insure against redemption premium, if any. The payment of principal and interest in connection with mandatory or optional prepayment of the Bonds by the issuer which is recovered by the issuer from the bond owner as a voidable preference under applicable bankruptcy law is covered by the insurance policy, however, such payments will be made by the Insurer at such time and in such amounts as would have been due absence such prepayment by the Issuer unless the Bond Insurer chooses to pay such amounts at an earlier date.

Under most circumstances, default of payment of principal and interest does not obligate acceleration of the obligations of the Bond Insurer without appropriate consent. The Bond Insurer may direct and must consent to any remedies and the Bond Insurer’s consent may be required in connection with amendments to any applicable bond documents.

In the event the Bond Insurer is unable to make payment of principal and interest as such payments become due under the Policy, the Bonds are payable solely from the moneys received pursuant to the applicable bond documents. In the event the Bond Insurer becomes obligated to make payments with respect to the Bonds, no assurance is given that such event will not adversely affect the market price of the Bonds or the marketability (liquidity) for the Bonds.

The long-term ratings on the Bonds are dependent in part on the financial strength of the Bond Insurer and its claim paying ability. The Bond Insurer’s financial strength and claims paying ability are predicated upon a number of factors which could change over time. No assurance is given that the long-term ratings of the Bond Insurer and of the ratings on the Bonds insured by the Bond Insurer will not be subject to downgrade and such event could adversely affect the market price of the Bonds or the marketability (liquidity) for the Bonds. See description of “RATINGS” herein.

The obligations of the Bond Insurer are general obligations of the Bond Insurer and in an event of default by the Bond Insurer, the remedies available may be limited by applicable bankruptcy law or other similar laws related to insolvency.

Neither the Authority or Underwriter have made independent investigation into the claims paying ability of the Bond Insurer and no assurance or representation regarding the financial strength or projected financial strength of the Bond Insurer is given. Thus, when making an investment decision, potential investors should carefully consider the ability of the Issuer to pay principal and interest on the Bonds and the claims paying ability of the Bond Insurer, particularly over the life of the investment. See “Bond Insurance” herein for further information provided by Attachment 5

55 the Bond Insurer and the Policy, which includes further instructions for obtaining current financial information concerning the Bond Insurer.]
Other Risks to the Electric System
The Electric System, like the rest of the electric utility industry, has been, or in the future may be, affected by a number of other factors which could impact the financial condition and competitiveness of the Electric System, including:
• effects of compliance with rapidly changing environmental, safety, licensing, regulatory and legislative requirements other than those described above; • changes resulting from conservation and demand-side management programs on the timing and use of electric energy;
• changes resulting from a national energy policy;
• effects of competition from other electric utilities (including increased competition resulting from mergers, acquisitions, and “strategic alliances” of competing electric and natural gas utilities and from competitors transmitting less expensive electricity from much greater distances over an interconnected system) and new methods of, and new facilities for, producing low-cost electricity;
• the proposed repeal of certain federal statutes that would have the effect of increasing the competitiveness of many investor-owned utilities; • increased competition from independent power producers and marketers, brokers and federal power marketing agencies;
• changes in the industry stemming from the 2019 bankruptcy declaration of PG&E initiated to address extraordinary financial challenges attributed to existing and potential liabilities for wildfires, the outcome of the remaining disputes regarding its reorganization plan following its emergence from bankruptcy on July 1, 2020, and the recently-enacted legislation that would authorize the creation of a non-profit public benefit corporation for the benefit of all Californians, which non-profit public benefit corporation could acquire PG&E under specified circumstances in the future;
• “self-generation” or “distributed generation” (such as microturbines and fuel cells) by industrial and commercial customers and others;
• issues relating to the ability to issue tax-exempt obligations, including severe restrictions on the ability to sell to nongovernmental entities electricity from generation projects and transmission service from transmission line projects financed with outstanding tax-exempt obligations;
• effects of inflation on the operating and maintenance costs of an electric utility and its facilities;
• changes from projected future load requirements;
• increases in costs and uncertain availability of capital; • shifts in the availability and relative costs of different fuels (including the cost of natural gas);
• sudden and dramatic increases in the price of energy purchased on the open market that may occur in times of high peak demand in an area of the country experiencing such high peak demand, such as has previously occurred in California; • issues relating to risk management procedures and practices with respect to, among other things, the purchase and sale of energy and transmission capacity; • other legislative changes, voter initiatives, referenda and statewide propositions; • other political risks impacting the City’s rates or other operational or financial matters;
Attachment 5

56 • effects of changes in the economy, including those resulting from the COVID-19 pandemic;
• effects of possible manipulation of electric markets; and • natural disasters or other physical calamities, including, but limited to, earthquake, drought, floods, wildfires and climate change.

Any of these factors (as well as other factors) could have an adverse effect on the financial condition of any given electric utility, including the Electric System. The City cannot predict what effects such factors will have on the business operations and financial condition of the Electric System, but the effects could be significant. The foregoing is a brief discussion of these factors.

The City has taken certain steps to mitigate the impacts of these changes, including establishing the Rate Stabilization Fund and implementation of the renewable energy surcharge and greenhouse gas emission reduction surcharge. This Official Statement includes a brief discussion of these steps. This discussion does not purport to be comprehensive or definitive, and these matters are subject to change subsequent to the date hereof. Extensive information on the electric utility industry is, and will be, available from the legislative and regulatory bodies and other sources in the public domain.

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

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

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

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

Under the Tax Code, original issue discount is treated as interest excluded from federal gross income and exempt from State of California personal income taxes to the extent properly allocable to each owner thereof subject to the limitations described in the first paragraph of this section. The original issue discount accrues over the term to maturity of the Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight-line interpolations between compounding dates). The amount of original issue discount accruing during each period is added to the adjusted basis of such Bonds to determine taxable gain upon Attachment 5

57 disposition (including sale, redemption, or payment on maturity) of such Bond. The Tax Code contains certain provisions relating to the accrual of original issue discount in the case of purchasers of the Bonds who purchase the Bonds after the initial offering of a substantial amount of such maturity. Owners of such Bonds should consult their own tax advisors with respect to the tax consequences of ownership of Bonds with original issue discount, including the treatment of purchasers who do not purchase in the original offering to the public at the first price at which a substantial amount of such Bonds is sold to the public.

Under the Tax Code, original issue premium is amortized on an annual basis over the term of the Bond (said term being the shorter of the Bond’s maturity date or its call date). The amount of original issue premium amortized each year reduces the adjusted basis of the owner of the Bond for purposes of determining taxable gain or loss upon disposition. The amount of original issue premium on a Bond is amortized each year over the term to maturity of the Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight-line interpolations between compounding dates). Amortized bond premium is not deductible for federal income tax purposes. Owners of premium Bonds, including purchasers who do not purchase in the original offering, should consult their own tax advisors with respect to State of California personal income tax and federal income tax consequences of owning such Bonds.

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

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

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

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

Attachment 5

58 CERTAIN LEGAL MATTERS
Jones Hall, A Professional Law Corporation, Bond Counsel, will render an opinion with respect to the validity of the Bonds, the form of which opinion is set forth in APPENDIX E. Certain legal matters will also be passed upon for the Authority and the City by Jones Hall, A Professional Law Corporation, as Disclosure Counsel. Certain legal matters will be passed upon for the City and the Authority by the City Attorney, and for the Trustee by counsel to the Trustee. Payment of the fees and expenses of Bond Counsel, Disclosure Counsel, the Municipal Advisor and Trustee’s counsel is contingent upon the sale and delivery of the Bonds.

LITIGATION
Except as may otherwise be set forth in this Official Statement, to the best knowledge of the City, there is no action, suit, proceeding, inquiry or investigation before or by any court or federal, state, municipal or other governmental authority pending and notice of which has been served on and received by the City or, to the knowledge of the City, threatened against or affecting the City or the assets, properties or operations of the City which, if determined adversely to the City or its interests, would have a material and adverse effect upon the consummation of the transactions contemplated by or the validity of the Installment Sale Agreement or the Indenture, or upon the financial condition, assets, properties or operations of the Electric System, and the City is not in default with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or other governmental authority, which default might have consequences that would materially adversely affect the consummation of the transactions contemplated by the Installment Sale Agreement or the Indenture, or the financial conditions, assets, properties or operations of the Electric System, including but not limited to the payment and performance of the City’s obligations under the Installment Sale Agreement.

The City is subject to claims, actions, and lawsuits arising in the normal course of business. At this time, the City does not believe any of the lawsuits are likely to be resolved in a manner that would result in liability to the Electric System in excess of its existing insurance coverage. However, no assurance can be given that an adverse outcome in any pending or future litigation against the City would not result in a material adverse effect upon the financial condition of the Electric System and its ability to pay the Installment Payments securing the Bonds.

RATING[S]
[Add insured rating language, if applicable.]. S&P Global Ratings (“S&P”) has assigned its municipal bond rating of “_____” to the Bonds. A rating reflects only the views of the rating agency, and an explanation of the significance of this rating, and any outlook assigned to or associated with this rating, should be obtained from the rating agency. There is no assurance that this rating will continue for any given period of time, or that this rating will not be revised downward or withdrawn entirely by the rating agency if, in its judgment, circumstances so warrant.

Any downward revision or withdrawal of the rating from S&P may have an adverse effect on the market price of the Bonds.

CONTINUING DISCLOSURE
The City will covenant for the benefit of owners of the Bonds to provide certain financial information and operating data by not later than nine months after the end of the City’s fiscal year, Attachment 5

59 or April 1, of each year (based on the City’s current fiscal year-end of June 30), commencing April 1, 2023, with the report for the 2021-22 fiscal year (the “Annual Report”) and to provide notices of the occurrence of certain listed events.

These covenants have been made in order to assist the Underwriter in complying with Securities Exchange Commission Rule 15c2-12(b)(5), as amended (the “Rule”). The specific nature of the information to be contained in the Annual Report or the notices of listed events by the City is set forth in “APPENDIX C – Form of Continuing Disclosure Certificate.” A review of the City’s prior compliance with its continuing disclosure obligations under the Rule reveals that the City did not timely file its audited financial statement and/or annual report information by the due dates for Fiscal Year 2015-16.

In addition, the Successor Agency to the Ukiah Redevelopment Agency did not timely file a notice of defeasance in Fiscal Year 2019-20 related to the refunding of tax allocation bonds.

The City has retained NHA Advisors, LLC to serve as the dissemination agent for its outstanding bonded indebtedness which are subject to the Rule.

MUNICIPAL ADVISOR
The City and the Authority have retained NHA Advisors LLC, of San Rafael, California, as municipal advisor (the “Municipal Advisor”) in connection with the offering of the Bonds. All financial and other information presented in this Official Statement has been provided by the City and the Authority from their records, except for information expressly attributed to other sources.

The Municipal Advisor takes no responsibility for the accuracy or completeness of the data provided by the City, Authority or others and has not undertaken to make an independent verification or does not assume responsibility for the accuracy, completeness, or fairness of the information contained in this Official Statement. The fee of the Municipal Advisor is contingent upon the successful closing of the Bonds.

UNDERWRITING
The 2022 Bonds are being sold pursuant to a negotiated sale with RBC Capital Markets, LLC, as underwriter (the “Underwriter”). The Bonds are being purchased by the Underwriter at a purchase price of $_____, which represents the aggregate principal amount of the Bonds, plus an original issue premium of $___________ less an Underwriter’s discount of $______________.

The Underwriter intends to offer and sell the Bonds to the public at the offering prices set forth on the inside cover page of this Official Statement. After the initial public offering, the public offering price may be varied from time to time by the Underwriter.

The Underwriter and its respective affiliates are full-service financial institutions engaged in various activities that may include securities trading, commercial and investment banking, municipal advisory, brokerage, and asset management. In the ordinary course of business, the Underwriter and its respective affiliates may actively trade debt and, if applicable, equity securities (or related derivative securities) and provide financial instruments (which may include bank loans, credit support or interest rate swaps). The Underwriter and its respective affiliates may engage in transactions for their own accounts involving the securities and instruments made the subject Attachment 5

60 of this securities offering or other offering of the Authority and/or the City. The Underwriter and its respective affiliates may make a market in credit default swaps with respect to municipal securities in the future. The Underwriter and its respective affiliates may also communicate independent investment recommendations, market color or trading ideas and publish independent research views in respect of this securities offering or other offerings of the Authority and/or the City.

PROFESSIONAL SERVICES
In connection with the issuance of the Bonds, fees payable to the following professionals involved in the offering are contingent upon the issuance and delivery of the Bonds: Jones Hall, A Professional Law Corporation, as Bond Counsel and Disclosure Counsel; NHA Advisors LLC, San Rafael, California, as municipal advisor to the Authority and the City; Nixon Peabody LLP, Los Angeles, California, as counsel to the Underwriter; and The Bank of New York Mellon Trust Company, N.A., as Trustee.

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

UKIAH PUBLIC FINANCING AUTHORITY
By:

Executive Director

CITY OF UKIAH
By:

City Manager
Attachment 5

A-1

APPENDIX A

SUMMARY OF PRINCIPAL LEGAL DOCUMENTS
Attachment 5

B-1

APPENDIX B

AUDITED FINANCIAL STATEMENTS OF THE CITY
FOR FISCAL YEAR 2020-21
Attachment 5

C-1

APPENDIX C

FORM OF CONTINUING DISCLOSURE CERTIFICATE
$____________

UKIAH PUBLIC FINANCING AUTHORITY
Electric Revenue Bonds, Series 2022
This Continuing Disclosure Certificate (this “Disclosure Certificate”) is executed and delivered by the City of Ukiah (the “City”) in connection with the issuance by the Authority of the bonds captioned above (the “Bonds”). The Bonds are being issued under an Indenture of Trust dated as of March 1, 2022 (the “Indenture”), by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”). The City hereby covenants and agrees as follows:

Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the City for the benefit of the holders and beneficial owners of the Bonds and in order to assist the Participating Underwriter in complying with S.E.C. Rule 15c2- 12(b)(5).

Section 2. Definitions. In addition to the definitions set forth above and in the Indenture, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:
“Annual Report” means any Annual Report provided by the City pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. “Annual Report Date” means April 1 of each year.
“Dissemination Agent” means NHA Advisors LLC, or any successor Dissemination Agent designated in writing by the City and which has filed with the City a written acceptance of such designation.
“Listed Events” means any of the events listed in Section 5(a) of this Disclosure Certificate. “MSRB” means the Municipal Securities Rulemaking Board, which has been designated by the Securities and Exchange Commission as the sole repository of disclosure information for purposes of the Rule, or any other repository of disclosure information that may be designated by the Securities and Exchange Commission as such for purposes of the Rule in the future.

“Official Statement” means the final official statement, executed by the City and the Authority in connection with the issuance of the Bonds. “Participating Underwriter” means RBC Capital Markets, LLC, the original underwriter of the Bonds required to comply with the Rule in connection with offering of the Bonds. “Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time.

Attachment 5

C-2
Section 3. Provision of Annual Reports.
(a) The City shall, or shall cause the Dissemination Agent to, not later than the Annual Report Date, commencing April 1, 2022, with the report for Fiscal Year 2020-21, provide to the MSRB, in an electronic format as prescribed by the MSRB, an Annual Report that is consistent with the requirements of Section 4 of this Disclosure Certificate. Not later than 15 Business Days prior to the Annual Report Date, the City shall provide the Annual Report to the Dissemination Agent (if other than the City). If by 15 Business Days prior to the Annual Report Date the Dissemination Agent (if other than the City) has not received a copy of the Annual Report, the Dissemination Agent shall contact the City to determine if the City is in compliance with the previous sentence. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the City may be submitted separately from the balance of the Annual Report, and later than the Annual Report Date, if not available by that date. If the City’s Fiscal Year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(b). The City shall provide a written certificate with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by the City hereunder.
(b) If the City does not provide (or cause the Dissemination Agent to provide) an Annual Report by the Annual Report Date, the City shall provide (or cause the Dissemination Agent to provide) in a timely manner to the MSRB, in an electronic format as prescribed by the MSRB, a notice in substantially the form attached as Exhibit A. (c) With respect to each Annual Report, the Dissemination Agent shall:
(i) determine each year prior to the Annual Report Date the then-applicable rules and electronic format prescribed by the MSRB for the filing of annual continuing disclosure reports; and
(ii) if the Dissemination Agent is other than the City, file a report with the City certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, and stating the date it was provided.

Section 4. Content of Annual Reports. The City’s Annual Report shall contain or incorporate by reference the following:
(a) Audited Financial Statements of the City prepared in accordance with Generally Accepted Accounting Principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the City’s audited financial statements are not available by the Annual Report Date, the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available. (b) To the extent not contained in the audited financial statements filed pursuant to the preceding clause (a), the Annual Report shall contain information showing:
(i) the principal amount of Bonds outstanding as of June 30 preceding the filing of the Annual Report;
Attachment 5

C-3
(ii) the balance in each fund under the Indenture as of June 30 preceding the filing of the Annual Report; and
(iii) updates to the substance of the information contained in the following tables in the Official Statement:
(A) Table 1 – Sources of Power Supply
(B) Table 3 – Customers, Sales and Peak Demand
(C) Table 4 – Ten Largest Customers
(D) Table 7 – Outstanding Debt of Joint Powers Agencies (E) Table 8 – Pro Forma Historical and Projected Revenues, Expenses and Debt Service Coverage (most recent 5 fiscal years only; no projections)
(c) In addition to any of the information expressly required to be provided under this Disclosure Certificate, the City shall provide such further material information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading.
(d) Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the City or related public entities, which are available to the public on the MSRB’s Internet web site or filed with the Securities and Exchange Commission. The City shall clearly identify each such other document so included by reference.

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

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(13) The consummation of a merger, consolidation, or acquisition involving the City or an obligated person, or the sale of all or substantially all of the assets of the City or an obligated person (other than in the ordinary course of business), the entry into a definitive agreement to undertake such an action, or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material.
(14) Appointment of a successor or additional trustee or the change of name of a trustee, if material.
(15) Incurrence of a financial obligation of the City, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the City, any of which affect security holders, if material (for definition of “financial obligation,” see clause (f)).
(16) Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the City, any of which reflect financial difficulties (for definition of “financial obligation,” see clause (f)). (b) Whenever the City obtains knowledge of the occurrence of a Listed Event, the City shall, or shall cause the Dissemination Agent (if not the City) to, file a notice of such occurrence with the MSRB, in an electronic format as prescribed by the MSRB, in a timely manner not in excess of 10 business days after the occurrence of the Listed Event. Notwithstanding the foregoing, notice of Listed Events described in subsection (a)(8) above need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to holders of affected Bonds under the Indenture.
(c) The City acknowledges that the events described in subparagraphs (a)(2), (a)(7), (a)(8) (if the event is a bond call), (a)(10), (a)(13), (a)(14), and (a)(15) of this Section 5 contain the qualifier “if material” and that subparagraph (a)(6) also contains the qualifier “material” with respect to certain notices, determinations or other events affecting the tax status of the Bonds.

The City shall cause a notice to be filed as set forth in paragraph (b) above with respect to any such event only to the extent that it determines the event’s occurrence is material for purposes of U.S. federal securities law. Whenever the City obtains knowledge of the occurrence of any of these Listed Events, the City will as soon as possible determine if such event would be material under applicable federal securities law. If such event is determined to be material, the City will cause a notice to be filed as set forth in paragraph (b) above. (d) For the purposes of the event identified in (a)(12) above, the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person.
(e) For purposes of this Disclosure Certificate, any event described in paragraph (a)(12) above is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the City in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City, or if Attachment 5

C-5
such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the City.
(f) For purposes of Section 5(a)(15) and (16), “financial obligation” means a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The term financial obligation shall not include municipal securities as to which a final official statement has been provided to the Municipal Securities Rulemaking Board consistent with the Rule.

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

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

Section 8. Dissemination Agent. The City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Agent, with or without appointing a successor Dissemination Agent.

Any Dissemination Agent may resign by providing 30 days’ written notice to the City.

Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of an obligated person with respect to the Bonds, or type of business conducted; (b) the undertakings herein, as proposed to be amended or waived, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the primary offering of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) the proposed amendment or waiver either (i) is approved by holders of the Bonds in the manner provided in the Indenture for amendments to the Indenture with the consent of holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the holders or beneficial owners of the Bonds.

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

Attachment 5

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If an amendment is made to the undertaking specifying the accounting principles to be followed in preparing financial statements, the annual financial information for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison shall include a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information, in order to provide information to investors to enable them to evaluate the ability of the City to meet its obligations. To the extent reasonably feasible, the comparison shall be quantitative.

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

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

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

Section 12. Duties, Immunities and Liabilities of Dissemination Agent. (a) The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the City agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys’ fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The Dissemination Agent shall have no duty or obligation to review any information provided to it hereunder and shall not be deemed to be acting in any fiduciary capacity for the City, the Bond owners or any other party. The obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. (b) The Dissemination Agent shall be paid compensation by the City for its services provided hereunder in accordance with its schedule of fees as amended from time to time, and shall be reimbursed for all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder.

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Section 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the City, the Dissemination Agent, the Participating Underwriter and holders and beneficial owners from time to time of the Bonds, and shall create no rights in any other person or entity.

Section 14. Counterparts. This Disclosure Certificate may be executed in several counterparts, each of which shall be regarded as an original, and all of which shall constitute one and the same instrument.

Section 15. Governing Law. This Disclosure Certificate shall be governed by the laws of the state of California.

Date: ________________, 2022

CITY OF UKIAH
By
Name:_____________
Title:_____________
ACCEPTED AND AGREED:

NHA Advisors LLC,
As Dissemination Agent
By
Authorized Representative
Attachment 5

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APPENDIX D

GENERAL INFORMATION REGARDING THE CITY OF UKIAH

AND THE COUNTY OF MENDOCINO
The following information concerning the County of Mendocino (the “County”) and the City of Ukiah (the “City”) is included only for the purpose of supplying general information regarding the area. The Bonds are not a debt of the County, the City, the State of California (the “State”) or any of its political subdivisions, and neither the County, the City, the State nor any of its political subdivisions is liable therefor. The City and the Underwriter take no responsibility for the accuracy or completeness of such information.

General
The City. The City is located in the north central area of the County, approximately 100 miles north of San Francisco and about an hour’s drive from the coastal redwoods and the Mendocino Coast. The City is the largest city in the County and is the County seat. The City was incorporated in 1876 and was the first community in the United States to utilize a Council-Manager form of government. The City Council is made up of five members who set policy and set up the City budget. The City Council appoints a Mayor, City Manager, City Treasurer, City Clerk and members of other commissions.

The County. The County was created in 1850 by the State Legislature and was one of the State’s original 27 counties. Sonoma, Lake, Glenn, Tehama, Trinity and Humboldt counties all border Mendocino County on its inland side. The County spans an area of over 2 million acres, which is approximately 3500 square miles and its coastline runs about 100 miles. Coastal highways 1 and 101, running through the center of the County, are important transportation routes. Smaller country roads connect Mendocino’s five distinct regions, which are the Anderson Valley to the south, South Mendocino coast, North Mendocino coast, Northern Mendocino County and the Russian River Valley to the east. The City of Ukiah is the largest city in the County and is the County seat. The County is legislatively governed by a board of five supervisors, each with a separate district.

The County has nine Indian reservations lying within its borders, the fourth most of any county in the United States (after San Diego County, California; Sandoval County, New Mexico; and Riverside County, California).

Attachment 5

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

CITY OF UKIAH, COUNTY OF MENDOCINO, STATE OF CALIFORNIA Population Estimates
Years 2017 through 2021, as of January 1
Year
City of
Ukiah
Mendocino
County
State of
California
2017 15,937 88,646 39,352,398
2018 16,081 88,542 39,519,535
2019 15,942 88,205 39,605,361
2020 15,951 87,708 39,648,938
2021 15,526 86,669 39,466,855

Source: California Department of Finance, Demographic Research Unit.

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Attachment 5

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Industry and Employment
The following table shows the unemployment rate in Mendocino County for the years shown.

MENDOCINO COUNTY
Civilian Labor Force, Employment and Unemployment
Calendar Years 2016 through 2020
(March 2020 benchmark)
2016 2017 2018 2019 2020
Civilian Labor Force (1) 39,620 39,560 39,460 38,650 37,020 Employment 37,520 37,760 37,870 37,090 33,720
Unemployment 2,100 1,800 1,590 1,560 3,290
Unemployment Rate 5.3% 4.5% 4.0% 4.0% 8.9%
Wage and Salary Employment:
(2)
Agriculture 1,360 1,380 1,450 1,460 1,410
Mining and Logging 300 330 310 290 270
Construction 1,060 1,220 1,380 1,390 1,320
Manufacturing 2,550 2,540 2,470 2,430 2,360
Wholesale Trade 740 840 810 740 700
Retail Trade 4,730 4,760 4,820 4,810 4,480
Transportation, Warehousing, Utilities 710 710 730 720 840 Information 250 230 230 210 170
Financial Activities 1,050 1,060 1,070 1,050 980
Professional and Business Services 1,670 1,670 1,790 1,860 1,800 Educational and Health Services 5,580 5,750 5,780 5,840 5,530 Leisure and Hospitality 4,410 4,410 4,490 4,360 3,200
Other Services 790 810 810 750 700
Federal Government 280 270 270 270 290
State Government 570 560 580 600 640
Local Government 6,400 6,400 6,320 6,310 5,740
Total all Industries (3) 32,440 32,950 33,290 33,100 30,390 (1) Labor force data is by place of residence; includes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(2) Industry employment is by place of work; excludes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(3) Columns may not sum to totals due to rounding.

Source: State of California Employment Development Department. [Remainder of page intentionally left blank]
Attachment 5

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Principal Employers
The following table lists the principal employers within the City for fiscal year 2019-20.

CITY OF UKIAH
Principal Employers
Fiscal Year 2019-20
Employer Name
No. of
Employees
Adventist Health Ukiah Valley 500-999
City of Ukiah 100-249
Costco Wholesale 100-249
County of Mendocino 1,000-1,250
Dharma Realm Buddhist Association 100-249
Mendocino Community Health 250-499
Mendocino County Office of Education 100-249
Pacific Coast Farm Credit 100-249
Ukiah Valley Medical Center 500-999
Walmart 100-249

Source: City of Ukiah.
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Attachment 5

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The following table lists, in alphabetical order, the largest manufacturing and nonmanufacturing employers within the County as of October 2021.

COUNTY OF MENDOCINO
Major Employers
As of October 2021
(In Alphabetical Order)
Employer Name Location Industry
Adventist Health Howard Meml Willits Hospitals
Adventist Health Mendocino Cst Fort Bragg Hospitals
Adventist Health Ukiah Vly Ukiah Outpatient Services
California Department-Forestry Willits Government Offices-State Costco Wholesale Ukiah Wholesale Clubs
Coyote Valley Casino Redwood Valley Casinos
Dharma Realm Buddhist Assn Ukiah Associations
Fetzer Vineyards Hopland Wineries (mfrs)
Georgia-Pacific Corp Fort Bragg Sawmills (mfrs)
Little River Inn Little River Golf Courses
Mendocino Community Health Ukiah Clinics
Mendocino County Food Stamps Ukiah Government Offices-County Mendocino County Office of Edu Ukiah Boards of Education Mendocino County Sheriff Point Arena Government Offices-County Mendocino County Social Svc Ukiah Government Offices-County Mendocino Redwood Co LLC Calpella Restaurants
Metalfx Inc Willits Sheet Metal Fabricators (mfrs)
Oak Point Ranch Potter Valley Vineyards
Pacific Coast Farm Credit Ukiah Loans-Agricultural
Safeway Fort Bragg Grocers-Retail
Sawmill Ukiah Sawmills & Planing Mills-General (mfrs)
Ukiah City Civic Ctr Ukiah Government Offices-City/Village & Twp Ukiah High School Ukiah Schools
Ukiah Valley Medical Ctr Ukiah Hospitals
Walmart Ukiah Department Stores
Source: State of California Employment Development Department, extracted from The America’s Labor Market Information System (ALMIS) Employer Database, 2022 1st edition.
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Attachment 5

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

Deducted from this total are personal taxes (federal, state and local), nontax payments (fines, fees, penalties, etc.) and personal contributions to social insurance. According to U.S. government definitions, the resultant figure is commonly known as “disposable personal income.” The following table summarizes the total effective buying income for the City, the County, the State, and the United States for the period 2018 through 2022.

CITY OF UKIAH, MENDOCINO COUNTY,

STATE OF CALIFORNIA AND UNITED STATES

EFFECTIVE BUYING INCOME
As of January 1, 2018 through 2022
Year Area
Total Effective
Buying Income
(000’s Omitted)
Median Household
Effective
Buying Income
2018 City of Ukiah $304,459 $37,984
Mendocino County 1,833,429 40,496
California 1,113,648,181 59,646
United States 8,640,770,229 50,735
2019 City of Ukiah $341,372 $39,976
Mendocino County 1,958,994 42,231
California 1,183,264,399 62,637
United States 9,017,967,563 52,841
2020 City of Ukiah $412,016 $47,335
Mendocino County 2,374,052 48,768
California 1,243,564,816 65,870
United States 9,487,165,436 55,303
2021 City of Ukiah $366,626 $45,764
Mendocino County 2,149,946 46,801
California 1,290,894,604 67,956
United States 9,809,944,764 56,790
2022 City of Ukiah $416,520 $55,457
Mendocino County 2,538,336 55,971
California 1,452,426,153 77,058
United States 11,208,582,541 64,448

Source: The Nielsen Company (US), Inc for year 2018; Claritas, LLC for 2019 through 2022.

Attachment 5

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

Total taxable sales during the first quarter of calendar year 2021 in the City were reported to be $143,482,524, a 13.16% increase over the total taxable sales of $126,801,383 reported during the first quarter of calendar year 2020.

CITY OF UKIAH
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions Calendar Years 2016 through 2020 (Dollars in Thousands) Retail Stores Total All Outlets
Number
of Permits
Taxable
Transactions
Number
of Permits
Taxable
Transactions
2016 478 $415,019 775 $467,938
2017 469 413,944 774 465,072
2018 457 432,223 803 485,110
2019 455 491,185 807 548,622
2020 461 520,425 814 582,571

Source: State Department of Tax and Fee Administration.

Total taxable sales during the first quarter of calendar year 2021 in the County were reported to be $434,304,382, a 20.66% increase over the total taxable sales of $359,950,406 reported during the first quarter of calendar year 2020.

COUNTY OF MENDOCINO
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions Calendar Years 2016 through 2020 (Dollars in Thousands) Retail Stores Total All Outlets
Number
of Permits
Taxable
Transactions
Number
of Permits
Taxable
Transactions
2016 2,489 $1,075,436 4,145 $1,424,943
2017 2,529 1,111,403 4,460 1,467,165
2018 2,492 1,150,832 4,796 1,490,850
2019 2,472 1,245,092 5,046 1,602,968
2020 2,567 1,350,609 5,232 1,728,692

Source: State Department of Tax and Fee Administration.

Attachment 5

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

CITY OF UKIAH
Building Permit Valuation
For Calendar Years 2016 through 2020
(Dollars in Thousands)(1)
2016 2017 2018 2019 2020
Permit Valuation
New Single-family $2,230.4 $3,582.6 $4,794.6 $2,054.1 $2,340.8 New Multi-family 8,400.0 0.0 0.0 0.0 3,526.4
Res. Alterations/Additions 850.3 1,133.6 10,268.4 627.8 991.5 Total Residential 11,480.7 4,716.2 15,063.0 2,681.9 6,858.7 New Commercial 654.0 3,403.7 5,699.5 331.6 1,973.3
New Industrial 78.2 0.0 0.0 14.6 0.0
New Other 667.0 505.1 1,877.1 244.9 700.0
Com. Alterations/Additions 726.4 726.8 845.0 608.0 613.1 Total Nonresidential 2,125.6 4,635.6 8,421.6 1,199.1 3,286.4 New Dwelling Units
Single Family 13 16 25 11 9
Multiple Family 48 0 0 0 240
TOTAL 61 16 25 11 249

(1) Totals may not foot due to rounding.

Source: Construction Industry Research Board, Building Permit Summary.

MENDOCINO COUNTY
Building Permit Valuation
For Calendar Years 2016 through 2020
(Dollars in Thousands)(1)
2016 2017 2018 2019 2020
Permit Valuation
New Single-family $11,628.5 $17,779.4 $29,034.7 $22,296.2 $20,148.2 New Multi-family 8,400.0 224.9 0.0 1,630.7 3,526.4
Res. Alterations/Additions 10,523.7 7,241.9 985.7 9,095.0 9,570.8 Total Residential 30,552.2 25,246.2 39,303.1 33,021.9 33,245.4 New Commercial 3,937.5 14,404.3 4,248.8 17,698.1 20,058.6 New Industrial 78.2 775.3 5.0 14.6 20,158.6
New Other 4,008.9 2,859.7 20,105.1 5,738.3 4,898.0
Com. Alterations/Additions 6,652.3 2,240.8 7,387.6 8,771.3 5,546.0 Total Nonresidential 14,676.9 20,280.1 31,746.5 32,222.3 50,661.2 New Dwelling Units
Single Family 70 91 157 137 102
Multiple Family 48 2 0 8 240
TOTAL 118 93 157 145 342

(1) Totals may not foot due to rounding.

Source: Construction Industry Research Board, Building Permit Summary.

Attachment 5

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APPENDIX E

PROPOSED FORM OF BOND COUNSEL OPINION
[Closing Date]
Board of Directors of the
Ukiah Public Financing Authority
300 Seminary Avenue
Ukiah, California 95482
OPINION: $_____________Ukiah Public Financing Authority Electric Revenue Bonds, Series 2022
Members of the Board:

We have acted as bond counsel to the Ukiah Public Financing Authority (the “Authority”) in connection with the issuance by the Authority of its Electric Revenue Bonds, Series 2022 (the “Bonds”) in the aggregate principal amount of $_______________, pursuant to the provisions of the Marks-Roos Local Bond Pooling Act of 1985 (commencing with Section 6584 of the California Government Code) and an Indenture of Trust, dated as of March 1, 2022 (the “Indenture”), between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”). The Bonds are secured by Revenues, as such term is defined in the Indenture, including certain installment payments made by the City of Ukiah (the “City”) under an Installment Sale Agreement, dated as of March 1, 2022 (the “Installment Sale Agreement”) between the Authority and the City. We have examined the law and such certified proceedings and other papers as we deem necessary to render this opinion.

As to questions of fact material to our opinion, we have relied upon representations of the Authority and the City contained in the Indenture and the Installment Sale Agreement, and in the certified proceedings and certifications of public officials and others furnished to us, without undertaking to verify such facts by independent investigation.

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

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

2. The Bonds constitute legal, valid and binding special obligations of the Authority enforceable in accordance with their terms and payable solely from the sources provided therefor in the Indenture.

3. The Indenture has been duly authorized, executed and delivered by the Authority, and constitutes a legal, valid and binding obligation of the Authority enforceable against the Attachment 5

E-2
Authority in accordance with its terms. The Indenture creates a valid pledge to secure the payment of the principal of, and interest on, the Bonds of the Revenues and the other amounts held by the Trustee in certain funds or accounts established pursuant to the Indenture securing the Bonds, subject to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth therein.

4. The City is a municipal corporation and general law city duly organized and existing under the laws of the State of California, with power to enter into the Installment Sale Agreement and to perform the agreements on its part contained therein. The Installment Sale Agreement has been duly authorized, executed and delivered by the City, and constitutes a legal, valid and binding obligation of the City enforceable against the City in accordance with its terms.

5. The interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax.

The opinions set forth in the preceding sentence are subject to the condition that the Authority comply with all requirements of the Internal Revenue Code of 1986 that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The Authority has covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds. We express no opinion regarding other federal tax consequences arising with respect to the ownership, sale or disposition of the Bonds, or the amount, accrual or receipt of interest on the Bonds.

6. The interest on the Bonds is exempt from personal income taxation imposed by the State of California.

We express no opinion regarding any other tax consequences arising with respect to the ownership, sale or disposition of, or the amount, accrual or receipt of interest on, the Bonds.

The rights of the owners of the Bonds and the enforceability of the Bonds are limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights generally, and by equitable principles, whether considered at law or in equity.

This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law that may hereafter occur. Our engagement with respect to this matter has terminated as of the date hereof.

Respectfully submitted,
A Professional Law Corporation
Attachment 5

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APPENDIX F

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

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

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

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

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

Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned Attachment 5

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subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC is rated “AA+” by Standard & Poor’s. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.

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

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

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

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

7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Authority as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting Attachment 5

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rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).

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

9. If applicable, a Beneficial Owner will give notice to elect to have its Securities purchased or tendered, through its Participant, to tender/remarketing agent, and will effect delivery of such Securities by causing the Direct Participant to transfer the Participant’s interest in the Securities, on DTC’s records, to tender/remarketing agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC’s records and followed by a book-entry credit of tendered Securities to tender/remarketing agent’s DTC account.

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

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

Attachment 5

4810-6766-7665.8
NP DRAFT 2/9
Ukiah Public Financing Authority
Electric Revenue Bonds,
Series 2022
________, 2022

CONTRACT OF PURCHASE
City of Ukiah
300 Seminary Avenue
Ukiah, CA 95482
Attention: City Manager
Ukiah Public Financing Authority
300 Seminary Avenue
Ukiah, CA 95482
Attention: Executive Director
Ladies and Gentlemen:

RBC Capital Markets, LLC (the “Underwriter”) acting on behalf of itself and not as an agent or representative of you, offers to enter into this purchase contract (the “Purchase Contract”) with the City of Ukiah (the “City”) and the Ukiah Public Financing Authority (the “Authority”), which will be binding upon the City, the Authority and the Underwriter upon the acceptance hereof by the City and the Authority. This offer is made subject to its acceptance by the City and the Authority by execution of this Purchase Contract and its delivery to the Underwriter, on or before 8:00 p.m., California time, on the date hereof. All terms used herein and not otherwise defined shall have the meanings given to such terms in the Official Statement, the Indenture, and the Installment Purchase Agreement (as such terms are hereafter defined).

1. Purchase and Sale. Upon the terms and conditions and upon the basis of the representations, warranties and agreements hereinafter set forth, the Underwriter hereby agrees to purchase, and the Authority hereby agrees to cause to be delivered to the Underwriter, all (but not less than all) of $__________ aggregate principal amount of the Ukiah Public Financing Authority Electric Revenue Bonds, Series 2022 (the “Series 2022 Bonds”). The Series 2022 Bonds will mature in the amounts and on the dates and bear interest at the rates set forth on Exhibit A hereto.

The Underwriter will purchase the Series 2022 Bonds for the aggregate purchase price of $________ (representing the aggregate principal amount of the Series 2022 Bonds plus a reoffering premium of $________ and less an underwriting discount of $_________).

2. Description and Purpose of the Series 2022 Bonds. The Series 2022 Bonds shall be executed and delivered pursuant to an Indenture of Trust dated as of __________, 2022 (the “Indenture”) by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (“BONY”). The Series 2022 Bonds are special limited obligations of the Authority Attachment 6

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2 and are payable solely from the revenues and from certain other amounts on deposit in funds and accounts as described in the Indenture. Such revenues will consist primarily of amounts received by the Authority (the “Installment Payments”) pursuant to the Installment Purchase Agreement dated as of _________, 2022 (the “Installment Purchase Agreement”), between the Authority and the City and all interest or gain derived from the investment of amounts in any of the funds or accounts established under the Indenture. The Series 2022 Bonds shall be as described in the Indenture and the Official Statement dated _________, 2022, relating to the Series 2022 Bonds (which, together with all exhibits and appendices included therein or attached thereto and such amendments or supplements thereto which shall be approved by the Underwriter, is hereinafter called the “Official Statement”).

The Series 2022 Bonds are being issued to (i) finance improvements to the Electric System of the City, and (ii) pay certain costs incurred in connection with the issuance of the Bonds.

3. Public Offering. The Underwriter agrees to make an initial bona fide public offering of all the Series 2022 Bonds at the public offering prices set forth on the inside cover page of the Official Statement. Subsequent to the initial public offering, the Underwriter reserves the right to change the initial public offering prices as it deems necessary in connection with the marketing of the Series 2022 Bonds, provided that the Underwriter shall not change the interest rates set forth on Exhibit A hereto. The Underwriter may offer and sell the Series 2022 Bonds to certain dealers (including dealers depositing the Series 2022 Bonds into investment trusts) and others at prices lower than initial public offering prices. The Underwriter also reserves the right (i) to engage in transactions that stabilize, maintain or otherwise affect the market price of the Series 2022 Bonds at a level above that which might otherwise prevail in the open market and (ii) to discontinue such transactions, if commenced, at any time.

4. Establishment of Issue Price.
(a) The Underwriter agrees to assist the Authority in establishing the issue price of the Series 2022 Bonds and shall execute and deliver to the Authority at Closing (as defined herein) 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 Authority and Bond Counsel, to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Series 2022 Bonds.
(b) [Except as otherwise set forth in Exhibit A attached hereto,] [T][t]he Authority will treat the first price at which 10% of each maturity of the Series 2022 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). Exhibit A attached hereto sets forth the maturities of the Series 2022 Bonds for which the 10% test has been satisfied as of the date of this Purchase Contract (the “General Rule Maturities”) and the prices at which the Underwriter has sold such General Rule Maturities to the public.

Attachment 6

4810-6766-7665.8
3 (c) The Underwriter confirms that: any selling group agreement and any thirdparty distribution agreement (to which the Underwriter is a party) relating to the initial sale of the Series 2022 Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer who is a member of the selling group and each broker-dealer that is a party to such third-party distribution agreement, as applicable:
(i) to report the prices at which it sells to the public the unsold Series 2022 Bonds of each maturity allocated to it, whether or not the Closing Date (as defined herein) has occurred, until either all Series 2022 Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter that the 10% test has been satisfied as to the Series 2022 Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Underwriter, and (ii) to comply with the hold-theoffering-price rule, if applicable, if and for so long as directed by the Underwriter and as set forth in the related pricing wires,
(ii) to promptly notify the Underwriter of any sales of Series 2022 Bonds that, to its knowledge, are made to a purchaser who is a related party to an underwriter participating in the initial sale of the Series 2022 Bonds to the public (each such term being used as defined below),
(iii) to acknowledge that, unless otherwise advised by the underwriter, dealer or broker-dealer, the Underwriter shall assume that each order submitted by the underwriter, dealer or broker-dealer is a sale to the public.(D)any selling group agreement relating to the initial sale of the Series 2022 Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer that is a party to a third-party distribution agreement to be employed in connection with the initial sale of the Series 2022 Bonds to the public to require each broker-dealer that is a party to such third-party distribution agreement to (A) report the prices at which it sells to the public the unsold Series 2022 Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Series 2022 Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter or such underwriter or dealer that the 10% test has been satisfied as to the Series 2022 Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Underwriter or such underwriter or dealer, and (B) comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter or the underwriter or the dealer and as set forth in the related pricing wires.
(d) The Authority acknowledges that, in making the representations set forth in this subsection, the Underwriter will rely on (i) in the event a selling group has been created in connection with the initial sale of the Series 2022 Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the requirements for establishing issue price of the Series 2022 Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Series 2022 Bonds, as set forth in a selling group agreement and the related pricing wires, and (ii) in Attachment 6

4810-6766-7665.8
4 the event that a third-party distribution agreement was employed in connection with the initial sale of the Series 2022 Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the requirements for establishing the issue price of the Series 2022 Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Series 2022 Bonds, as set forth in the third-party distribution agreement and the related pricing wires. The Authority further acknowledges that the Underwriter shall not be liable for the failure of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a third-party distribution agreement, to comply with its corresponding agreement to comply with the requirements for establishing issue price of the Series 2022 Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Series 2022 Bonds.
(e) The Underwriter acknowledges that sales of any Series 2022 Bonds to any person that is a related party to an underwriter participating in the initial sale of the Series 2022 Bonds to the public (each such term being used as defined below) shall not constitute sales to the public for purposes of this section. Further, for purposes of this section:
(i) “public” means any person other than an underwriter or a related party,
(ii) “underwriter” means (A) any person that agrees pursuant to a written contract with the Authority (or with the Underwriter to form an underwriting syndicate) to participate in the initial sale of the Series 2022 Bonds to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Series 2022 Bonds to the public (including a member of a selling group or a party to a third-party distribution agreement participating in the initial sale of the Series 2022 Bonds to the public),
(iii) a purchaser of any of the Series 2022 Bonds is a “related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (A) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (B) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (C) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other), and (iv) “sale date” means the date of execution of this Purchase Contract by all parties.

5. Delivery of Official Statement. Pursuant to the authorization of the Authority and the City, the Underwriter has distributed copies of the Preliminary Official Statement dated Attachment 6

4810-6766-7665.8
5 ________, 2022, relating to the Series 2022 Bonds, which, together with the cover page and appendices thereto, is herein called the “Preliminary Official Statement.” By their execution of this Purchase Contract, the Authority hereby approves and ratifies the distribution and use by the Underwriter of the Preliminary Official Statement (other than the section entitled “THE CITY” and Appendix A to the Preliminary Official Statement) and the City hereby approves and ratifies the distribution and use by the Underwriter of the section entitled “THE CITY” and Appendix A to the Preliminary Official Statement (the “City Portion”). The Authority agrees to execute and deliver a final Official Statement in substantially the same form as the Preliminary Official Statement with such changes as may be made thereto with the consent of the Authority and/or the City and the Underwriter, as appropriate, and to provide copies thereof to the Underwriter as set forth in Paragraph 7(a)(xiv) hereof. The City and the Authority hereby authorize the Underwriter to use and distribute, in connection with the offer and sale of the Series 2022 Bonds: the Preliminary Official Statement, the Official Statement, the Indenture, the Installment Purchase Agreement, the Continuing Disclosure Certificate (as hereinafter defined), and other documents or contracts to which the City or the Authority is a party in connection with the transactions contemplated by this Purchase Contract, including this Purchase Contract and all information contained herein, and all other documents, certificates and statements furnished by the City or the Authority to the Underwriter in connection with the transactions contemplated by this Purchase Contract.

6. The Closing. At 8:00 a.m., California time, on _________, 2022, or at such other time or on such earlier or later business day as shall have been mutually agreed upon by the City, the Authority and the Underwriter, the Authority will cause to be executed and delivered (i) the Series 2022 Bonds in book-entry form through the facilities of The Depository Trust Company, or its agent, on behalf of the Underwriter, and (ii) the closing documents hereinafter mentioned at the offices of Jones Hall, A Professional Law Corporation (“Bond Counsel”) in San Francisco, California or another place to be mutually agreed upon by the City, the Authority and the Underwriter. The Underwriter will accept such delivery of the Series 2022 Bonds and pay the purchase price of such Series 2022 Bonds as set forth in Section 1 hereof in immediately available funds to the order of the City. This payment for and delivery of the Series 2022 Bonds, together with the execution and delivery of the aforementioned documents, is herein called the “Closing.”

7. (a) City Representations, Warranties and Covenants. The City represents, warrants and covenants to the Underwriter that:
(i) Due Organization, Existence and Authority. The City is duly organized and existing under the Constitution and laws of the State of California (the “State”), with full right, power and authority to execute, deliver and perform its obligations under this Purchase Contract, the Installment Purchase Agreement and the Continuing Disclosure Certificate (collectively, the “City Documents”) and to carry out and consummate the transactions contemplated by the City Documents and the City Portion of the Preliminary Official Statement and the Official Statement.
(ii) Due Authorization and Approval. By all necessary official action of the City, the City has duly authorized and approved the delivery of and the performance by the City of the obligations contained or described in the City Portion of the Preliminary Official Statement and the City Portion of the Official Statement and the execution and delivery of and the Attachment 6

4810-6766-7665.8
6 performance by the City of the obligations contained or described in the City Documents, and as of the date hereof, such authorizations and approvals are in full force and effect and have not been amended, modified or rescinded. When executed and delivered, and assuming the authorization, execution and delivery by the other parties thereto, each City Document will constitute the legally valid and binding obligation of the City enforceable in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws or equitable principles relating to or affecting creditors’ rights generally or by the exercise of judicial discretion in appropriate cases or by limitations on legal remedies against public agencies in the State.
(iii) City Portion of Official Statement Accurate and Complete. The City Portion of the Preliminary Official Statement was as of its date, and the City Portion of the Official Statement is, and at all times subsequent to the date of the Official Statement up to and including the Closing will be, true and correct in all material respects, and the City Portion of the Preliminary Official Statement contained as of its date and as of the date hereof and the City Portion of the Official Statement contains, and up to and including the Closing, will contain no misstatement of any material fact and do not, and up to and including the Closing, will not omit any statement necessary to make the statements contained therein, in the light of the circumstances in which such statements were made, not misleading (except no representation is made with respect to information relating to [the Insurer, the Policy, or the Surety Bonds, or information relating to DTC or DTC’s book-entry system or any information provided by the Underwriter for inclusion in the Preliminary Official Statement or the Official Statement, including but not limited to the information contained under the caption “Underwriting” (collectively, the “Excluded Information”). All financial projections for future fiscal years included in the Official Statement are developed using assumptions and opinions, and shall not be considered an expectation of performance or an actual outcome of the financial characteristic of the City. (iv) Underwriter’s Consent to Amendments and Supplements to City Portion of the Official Statement. The City will advise the Underwriter promptly of any proposal to amend or supplement the City Portion of the Official Statement and will not effect or consent to any such amendment or supplement without the consent of the Underwriter, which consent will not be unreasonably withheld. The City will advise the Underwriter promptly of the institution of any proceedings known to it by any governmental agency prohibiting or otherwise affecting the use of the City Portion of the Official Statement in connection with the offering, sale or distribution of the Series 2022 Bonds.
(v) City Agreement to Amend or Supplement City Portion of the Official Statement. If after the date of this Purchase Contract and until 25 days after the end of the “underwriting period” (as defined in Section 240 15c2-12 in Chapter II of Title 17 of the Code of Federal Regulations (“Rule 15c2-12”)), any event occurs as a result of which the City Portion of the Official Statement as then amended or supplemented would include an untrue statement of a material fact, or omit to state any 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, in the reasonable opinion of the Underwriter, an amended or supplemented City Portion of the Official Statement should be delivered in connection with the offers or sales of the Series 2022 Bonds to reflect such event, the City promptly will prepare at its expense an amendment or supplement which will correct such statement or omission and the City shall promptly furnish to the Attachment 6

4810-6766-7665.8
7 Underwriter a reasonable number of copies of such amendment or supplement. The Underwriter hereby agrees to deposit the Official Statement with the Municipal Securities Rulemaking Board (the “MSRB”). The Underwriter acknowledges that the end of the “underwriting period” will be the date of Closing, unless the Underwriter otherwise informs the City in writing on or prior to the date of Closing.
(vi) No Material Change in Finances. Except as otherwise described in the City Portion of the Preliminary Official Statement and the Official Statement, there shall not have been any material adverse changes in the financial condition of the City since the end of the fiscal year ending [June 30], 2021.
(vii) No Breach or Default. As of the time of acceptance hereof, (A) the City is not in default, nor has it been in default, as to principal or interest with respect to an obligation issued or incurred by the City, and (B) the City is not and will not be, in any manner which would materially adversely affect the transactions contemplated by the City Documents, in breach of or in default under any applicable constitutional provision, law or administrative rule or regulation of the State or the United States, or any applicable judgment or decree or any trust agreement, loan agreement, bond, note, resolution, ordinance, agreement or other instrument to which the City is a party or is otherwise subject, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute, in any manner which would materially adversely affect the transactions contemplated by the City Documents, a default or event of default under any such instrument; and, as of such time, the authorization, execution and delivery of the City Documents and compliance with the provisions of each of such agreements or instruments do not and will not, in any manner which would materially adversely affect the transactions contemplated by the City Documents, conflict with or constitute a breach of or default under any applicable constitutional provision, law or administrative rule or regulation of the State or the United States, or any applicable judgment, decree, license, permit, trust agreement, loan agreement, bond, note, resolution, ordinance, agreement or other instrument to which the City (or any of its officers in their respective capacities as such) is subject, or by which it or any of its properties is bound, nor will any such authorization, execution, delivery or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of its assets or properties or under the terms of any such law, regulation or instrument, except as may be provided by the City Documents. (viii) No Litigation. As of the time of acceptance hereof and as of the date of Closing, no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, is pending or, except as disclosed in the City Portion of the Preliminary Official Statement and the Official Statement, to the best knowledge of the City after due investigation, threatened (A) in any way questioning the corporate existence of the City or the titles of the officers of the City to their respective offices; (B) affecting, contesting or seeking to prohibit, restrain or enjoin the execution or delivery of any of the Series 2022 Bonds, or in any way contesting or affecting the validity of the Series 2022 Bonds or the City Documents or the consummation of the transactions contemplated thereby, or contesting the exclusion of the interest on the Series 2022 Bonds from gross income for federal income tax purposes, or contesting the powers of the City to enter into the City Documents; (C) which may result in any material adverse change to the financial condition of the City; (D) which may result in any material adverse change to the City’s ability to pay the Installment Payments when due; or (E) contesting the Attachment 6

4810-6766-7665.8
8 completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or asserting that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and there is no basis for any action, suit, proceeding, inquiry or investigation of the nature described in clauses (A) through (E) of this sentence.
(ix) Prior Liens. Except for the Contracts (as defined in the Installment Purchase Agreement), the City will not have outstanding any indebtedness which indebtedness is secured by a lien on the Net Revenues (as defined in the Installment Purchase Agreement) superior to or on a parity with the lien of the Series 2022 Bonds on the Net Revenues; (x) Further Cooperation: Blue Sky. The City will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request in order (A) to qualify the Series 2022 Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may designate and (B) to determine the eligibility of the Series 2022 Bonds for investment under the laws of such states and other jurisdictions, and will use its best efforts to continue such qualifications in effect so long as required for the distribution of the Series 2022 Bonds; provided, however, that the City shall not be required to execute a general or special consent to service of process or qualify to do business in connection with any such qualification or determination in any jurisdiction. (xi) Consents and Approvals. All authorizations, approvals, licenses, permits, consents and orders of or filings with any governmental authority, legislative body, board, agency or commission having jurisdiction in the matters which are required for the due authorization of, which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by the City of its obligations in connection with, the City Documents have been duly obtained or made, except as may be required under the Blue Sky or securities laws of any state in connection with the offering and sale of the Series 2022 Bonds.
(xii) No Other Obligations. Between the date of this Purchase Contract and the date of Closing and except as otherwise disclosed in the City Portion of the Official Statement, the City will not, without the prior written consent of the Underwriter, offer or issue any bonds, notes or other obligations for borrowed money, or incur any material liabilities, directly or contingently payable from the Net Revenues.
(xiii) Certificates. Any certificate signed by any official of the City and delivered to any of the Underwriter shall be deemed to be a representation and warranty by the City to the Underwriter as to the statements made therein. (xiv) Compliance with Rule 15c2-12. The City Portion of the Preliminary Official Statement heretofore delivered to the Underwriter has been deemed final by the City as of the date of the Preliminary Official Statement, except for the omission of such information as is permitted to be omitted in accordance with paragraph (b)(i) of Rule 15c2-12. The City hereby Attachment 6

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9 covenants and agrees that, within seven business days from the date hereof, it shall cause a final word searchable form of the City Portion of the Official Statement to be delivered to the Underwriter in sufficient quantity to comply with paragraph (b)(4) of Rule 15c2-12 and Rules of the MSRB.
(xv) Continuing Disclosure. Other than as disclosed in the Preliminary Official Statement and the Official Statement, during the past five years, the City has not failed to comply in any material respect with any continuing disclosure undertaking previously entered into by the City pursuant to Rule 15c2-12 of the Securities and Exchange Commission. The City will undertake, pursuant to a Continuing Disclosure Certificate (the “Continuing Disclosure Certificate”), to provide annual reports and notices of certain events in accordance with the requirements of Rule 15c2-12. A form of the Continuing Disclosure Certificate is set forth in an Appendix to the Official Statement relating to the City. (b) Authority Representations, Warranties and Covenants. The Authority represents, warrants and covenants to the Underwriter that:
(i) Due Organization, Existence and Authority. The Authority is a joint exercise of powers agency duly organized and existing under a Joint Exercise of Powers Agreement, dated May 5, 2020, between the City and __________ under the Constitution and laws of the State, with full right, power and authority to execute, deliver and perform its obligations under this Purchase Contract, the Indenture and the Installment Purchase Agreement (collectively, the “Authority Documents”), and to carry out and consummate the transactions contemplated by the Authority Documents and the Preliminary Official Statement and the Official Statement, excluding the City Portion (the “Authority Portion”).
(ii) Due Authorization and Approval. By all necessary official action of the Authority, the Authority has duly authorized and approved the delivery of, and the performance by the Authority of the obligations contained or described in the Authority Portion of the Preliminary Official Statement and the Authority Portion of the Official Statement and the execution and delivery of, and the performance by the Authority of the Authority Documents and as of the date hereof, such authorizations and approvals are in full force and effect and have not been amended, modified or rescinded. When executed and delivered, and assuming the authorization, execution and delivery by the other parties thereto, each Authority Document and the Series 2022 Bonds will constitute the legally valid and binding obligation of the Authority enforceable in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws or equitable principles relating to or affecting creditors’ rights generally or by the exercise of judicial discretion in appropriate cases or by limitations on legal remedies against public agencies in the State. (iii) Authority Portion of the Official Statement Accurate and Complete.

The Authority Portion of the Preliminary Official Statement was as of its date and is as of the date hereof, and the Authority Portion of the Official Statement is, and at all times subsequent to the date of the Official Statement up to and including the Closing will be, true and correct in all material respects, and the Authority Portion of the Preliminary Official Statement and the Authority Portion of the Official Statement contain, and up to and including the Closing, will contain no misstatement of any material fact and do not, and up to and including the Closing, will Attachment 6

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10 not omit any statement necessary to make the statements contained therein, in the light of the circumstances in which such statements were made, not misleading (except no representation is made with respect to information relating to the Excluded Information). (iv) Underwriter’s Consent to Amendments and Supplements to Authority Portion of the Official Statement. The Authority will advise the Underwriter promptly of any proposal to amend or supplement the Authority Portion of the Official Statement and will not effect or consent to any such amendment or supplement without the consent of the Underwriter, which consent will not be unreasonably withheld. The Authority will advise the Underwriter promptly of the institution of any proceedings known to it by any governmental agency prohibiting or otherwise affecting the use of the Authority Portion of the Official Statement in connection with the offering, sale or distribution of the Series 2022 Bonds. (v) Authority Agreement to Amend or Supplement Authority Portion of the Official Statement. If after the date of this Purchase Contract and until 25 days after the end of the “underwriting period” (as defined in Rule 15c2-12), any event occurs as a result of which the Authority Portion of the Official Statement as then amended or supplemented would include an untrue statement of a material fact, or omit to state any 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, in the reasonable opinion of the Underwriter, an amended or supplemented the Official Statement should be delivered in connection with the offers or sales of the Series 2022 Bonds to reflect such event, the Authority promptly will prepare at its expense an amendment or supplement which will correct such statement or omission and the Authority shall promptly furnish to the Underwriter a reasonable number of copies of such amendment or supplement. The Underwriter hereby agrees to deposit the Official Statement with the MSRB. The Underwriter acknowledges that the end of the “underwriting period” will be the date of the Closing, unless the Underwriter otherwise informs the Authority in writing on or prior to the date of Closing. (vi) Compliance with Rule 15c2-12. The Authority Portion of the Preliminary Official Statement heretofore delivered to the Underwriter has been deemed final by the Authority as of the date of the Preliminary Official Statement, except for the omission of such information as is permitted to be omitted in accordance with paragraph (b)(i) of Rule 15c2-12.

The Authority hereby covenants and agrees that, within seven business days from the date hereof, it shall cause a final form of the Official Statement to be delivered to the Underwriter in sufficient quantity to comply with paragraph (b)(4) of Rule 15c2-12 and Rules of the MSRB.

8. Closing Conditions. The Underwriter has entered into this Purchase Contract in reliance upon the representations, warranties and covenants herein and the performance by the City and the Authority of their respective obligations hereunder, both as of the date hereof and as of the date of the Closing. The Underwriter’s obligations under this Purchase Contract are and shall be subject to the following additional conditions:
(a) Bring-Down Representation. The representations, warranties and covenants of the City and the Authority contained herein, shall be true, complete and correct at the date hereof and at the time of the Closing, as if made on the date of the Closing.

Attachment 6

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11 (b) Executed Agreements and Performance Thereunder. At the time of the Closing (i) the City Documents and the Authority Documents shall be in full force and effect, and shall not have been amended, modified or supplemented except with the written consent of the Underwriter, (ii) there shall be in full force and effect such resolutions (the “Resolutions”) as, in the opinion of Bond Counsel, shall be necessary in connection with the transactions contemplated by the Official Statement, the City Documents and the Authority Documents, (iii) the City shall perform or have performed its obligations required or specified in the City Documents to be performed at or prior to Closing, (iv) the Authority shall perform or have performed its obligations required or specified in the Authority Documents to be performed at or prior to Closing, and (v) the Official Statement shall not have been supplemented or amended, except pursuant to Paragraphs 7(a)(iv), 7(a)(v), 7(b)(iv), and 7(b)(v) hereof or as otherwise may have been agreed to in writing by the Underwriter.
(c) No Default. At the time of the Closing, no default, or any event that with the passage of time would be reasonably likely to result in default, shall have occurred or be existing under the Resolutions, the Authority Documents, the City Documents, or any other agreement or document pursuant to which any of the City’s financial obligations were issued and the City shall not be in default in the payment of principal or interest on any of its financial obligations which default would materially adversely impact the ability of the City to make the Installment Payments.
(d) Termination Events. The Underwriter shall have the right to terminate this Purchase Contract, without liability therefor, by written notification to the City if at any time at or prior to the Closing:
(i) Legislation shall have been introduced in or favorably reported for passage by the State of California, in either house of the Congress of the United States of America by any committee of such house to which legislation has been referred for consideration or has been 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 order, 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, affecting (directly or indirectly) the federal or state taxation of interest received on obligations of the general character of the Series 2022 Bonds which, in the judgment of the Underwriter, materially adversely affects the market price or the marketability of the Series 2022 Bonds, or the ability of the Underwriter to enforce contracts for the sale, at the contemplated offering prices (or yields), of the Series 2022 Bonds; (ii) Legislation shall have been introduced in or favorably reported for passage by either house of the United States Congress by any committee of such house to which such legislation has been referred for consideration, or has been enacted (or resolution passed) by the Congress or an order, decree or injunction issued by any court of competent jurisdiction, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued Attachment 6

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12 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 Series 2022 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 Indenture is not exempt from qualification under or other requirements of the Trust Indenture Act of 1939, as amended, or that the issuance, offering or sale of obligations of the general character of the Series 2022 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;
(iii) A general suspension of trading in securities on the New York Stock Exchange, or the imposition by the New York Stock Exchange or other national securities exchange, or any governmental authority, of any material restrictions not now in force with respect to the Series 2022 Bonds, or the material increase of any such restrictions now in force, including those relating to the extension of credit by, or the charge to the net capital requirements of, the Underwriter, or a general banking moratorium or limits on loans or the amounts of loans to investment banking firms in general shall have been declared by federal, State of New York or State of California officials authorized to do so, which in the judgment of the Underwriter materially adversely affects the market price or the marketability of the Series 2022 Bonds, or the ability of the Underwriter to enforce contracts for the sale, at the contemplated offering prices (or yields), of the Series 2022 Bonds;
(iv) The introduction, proposal or enactment of any amendment to the United States Constitution or California Constitution 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), the validity or enforceability of the Resolution, the Indenture or the Series 2022 Bonds; (v) Any event occurring, or information becoming known which, in the judgment of the Underwriter, makes untrue in any material respect any statement or information 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; (vi) There shall have occurred (1) any outbreak or increase of hostilities or terrorism or other local, national or international event, act, or occurrence (or the escalation thereof); or (2) any calamity or crisis in the financial markets in the United States (or the escalation thereof); or (3) a downgrade of the sovereign debt rating of the United States by any major credit rating agency or payment default on United States Treasury obligations, which, in the reasonable judgment of the Underwriter, materially adversely affects the market price or marketability of the Series 2022 Bonds or the ability of the Underwriter to enforce contracts for the sale, at the contemplated offering prices (or yields), of the Series 2022 Bonds; (vii) There shall have been any material change in the affairs of the City and the City refuses to permit the Official Statement to be supplemented in a manner satisfactory to the Underwriter, or the Official Statement shall have been supplemented pursuant to Section Attachment 6

4810-6766-7665.8
13 8(k) hereof, and in the reasonable judgment of the Underwriter, such change or supplement materially affects the marketability of the Series 2022 Bonds or the market price of the Series 2022 Bonds or the ability of the Underwriter to enforce contracts for the sale, at the contemplated offering prices (or yields), of the Series 2022 Bonds;
(viii) (i) Any rating of the Series 2022 Bonds shall have been downgraded, suspended or withdrawn by a national rating service, which, in the Underwriter’s reasonable opinion, materially adversely affects the marketability or market price of the Series 2022 Bonds, or (ii) there shall have been any official statement as to a possible downgrading (such as being placed on “credit watch” or “negative outlook” or any similar qualification) of any rating of any debt securities issued by the City, including the Series 2022 Bonds; (ix) An order, decree or injunction of any court of competent jurisdiction, issued or made to the effect that the issuance, offering or sale of obligations of the general character of the Series 2022 Bonds, or the issuance, offering or sale of the Series 2022 Bonds, including any or all underlying obligations, as contemplated hereby or by the Preliminary Official Statement of the Official Statement, is or would be in violation of any applicable law, rule or regulation, including (without limitation) any provision of applicable federal securities law as amended and then in effect;
(x) A stop order, ruling, regulation or official statement by the Securities and Exchange Commission or any other governmental agency having jurisdiction of the subject matter shall have been made or any other event occurs, the effect of which is that the issuance, offering or sale of the Series 2022 Bonds, or the execution and delivery of the Legal Documents as contemplated hereby or by the Preliminary Official Statement or the Official Statement, is or would be in violation of any applicable law, rule or regulation, including (without limitation) any provision of applicable federal securities laws, including the Securities Act of 1933, as amended, the Securities and Exchange Act of 1934, as amended, or the Trust Indenture Act, each as amended and as then in effect; or
(xi) Any litigation shall be instituted or be pending at the time of the Closing to restrain or enjoin the issuance, sale or delivery of the Series 2022 Bonds, or in any way contesting or affecting any authority for or the validity of the proceedings, authorizing and approving the Series 2022 Bonds, the Act, the Resolution, the Legal Documents or the existence or powers of the City with respect to its obligations under the Legal Documents or the Series 2022 Bonds.
(e) Closing Documents. At or prior to the Closing, the Underwriter shall receive with respect to the Series 2022 Bonds the following documents:
(i) Bond Opinion. The approving opinion of Bond Counsel dated the date of the Closing and substantially in the form included as Appendix E to the Official Statement, together with a letter from such counsel, dated the date of the Closing and addressed to the Underwriter and the Trustee, to the effect that the foregoing opinions addressed to the Authority may be relied upon by the Underwriter and the Trustee to the same extent as if such opinions were addressed to them.

Attachment 6

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14 (ii) Supplemental Opinion. A supplemental opinion or opinions of Bond Counsel substantially in the form attached hereto as Exhibit B, dated the date of the Closing and addressed to the Underwriter;
(iii) Disclosure Counsel Letter. A negative assurance letter relating to the Official Statement, substantially in the form attached hereto as Exhibit C, from Jones Hall, as disclosure counsel to the Authority, dated the date of the Closing and addressed to the Underwriter. (iv) City Counsel Opinion. An opinion of _______, general counsel to the City, dated the date of the Closing and addressed to the Underwriter, substantially in the form attached hereto as Exhibit D;
(v) Authority Counsel Opinion. An opinion of ________, general counsel to the Authority, dated the date of the Closing and addressed to the Underwriter, substantially in the form attached hereto as Exhibit E; (vi) BONY Counsel Opinion. The opinion of counsel to BONY, dated the date of the Closing, addressed to the City and the Underwriter, to the effect that:
(A) BONY is a national banking association duly organized and validly existing under the laws of the jurisdiction of its origin and has the corporate power to execute and deliver the Indenture and to perform its obligations under the Indenture; (B) The execution and delivery by BONY of the Indenture and any other documentation relating to the Indenture and its performance of its obligations under the Indenture, have been and are as of the date hereof duly authorized by all necessary corporate action;
(C) No approval, authorization or other action by, or filing with, any governmental body or regulatory authority (which has not been obtained) is required in connection with the due execution, delivery and performance by BONY of the Indenture; and (D) The Indenture have been duly executed and delivered and constitute the valid and legally binding obligations of BONY enforceable against it in accordance with their terms except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought as a proceeding in equity or at law).
(vii) Underwriter’s Counsel Opinion. The opinion of Nixon Peabody LLP, Los Angeles, California, Counsel to the Underwriter dated the Closing Date addressed to the Underwriter, in form and substance satisfactory to the Underwriter. (viii) City Certificate. A certificate of the City, dated the date of the Closing, signed on behalf of the City by the General Manager or other duly authorized officer of the City to the effect that:

Attachment 6

4810-6766-7665.8
15 (A) The representations, warranties and covenants of the City contained in the Purchase Contract are true and correct in all material respects on and as of the date of the Closing as if made on the date of the Closing and the City has complied with all of, the terms and conditions of the Purchase Contract required to be complied with by the City at or prior to the date of the Closing;
(B) No event affecting the City has occurred since the date of the Official Statement which has not been disclosed therein or in any supplement or amendment thereto which event should be disclosed in the City Portion of the Official Statement in order to make the statements in the City Portion of the Official Statement, in the light of the circumstances under which they were made, not misleading (except no representation is made with respect to information relating to the Excluded Information); and
(C) No event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute an event of default under the City Documents.
(ix) Authority Certificate. A certificate of the Authority, dated the date of the Closing, signed on behalf of the Authority by a duly authorized officer of the Authority to the effect that:
(A) The representations, warranties and covenants of the Authority contained in the Purchase Contract are true and correct in all material respects on and as of the date of the Closing as if made on the date of the Closing and the Authority has complied with all of the terms and conditions of the Purchase Contract required to be complied with by the Authority at or prior to the date of the closing;
(B) No event affecting the Authority has occurred since the date of the Official Statement which has not been disclosed therein or in any supplement or amendment thereto which event should be disclosed in the Authority Portion of the Official Statement in order to make the statements in the Authority Portion of the Official Statement, in the light of the circumstances under which they were made, not misleading (except no representation is made with respect to information relating to the Excluded Information); and (C) No event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute an event of default under the Authority Documents.
(x) Certificate of BONY. A certificate, dated the date of Closing, signed by a duly authorized official of BONY satisfactory in form and substance to the Underwriter, to the effect that:
(A) BONY is duly organized and existing as a national banking association under the laws of the United States of America, having the full corporate power and authority to enter into and perform its duties under the Indenture; (B) BONY is duly authorized to enter into the Indenture and has duly executed and delivered the Indenture, and assuming due authorization and execution by the Attachment 6

4810-6766-7665.8
16 other parties thereto, the Indenture is the legal, valid and binding upon BONY, and enforceable against BONY in accordance with its terms;
(C) BONY, acting as the trustee under the Indenture, has duly executed the Series 2022 Bonds under the Indenture and delivered the Series 2022 Bonds to or upon the order of the Underwriter; and
(D) No consent, approval, authorization or other action by any governmental or regulatory authority having jurisdiction over the banking or trust powers of BONY that has not been obtained is or will be required for the execution and delivery of the Series 2022 Bonds or the consummation by BONY of its obligations under the Indenture. (xi) Transcripts. Two transcripts of all proceedings relating to the authorization, execution and delivery of the Series 2022 Bonds. (xii) Official Statement. The Official Statement and each supplement or amendment, if any, thereto, executed on behalf of the Authority by duly authorized officers thereof. (xiii) Documents. An original executed copy of each of the Authority Documents and each of the City Documents.
(xiv) City Resolution. A certified copy of each resolution of the City authorizing the City Documents, certified by the Secretary for the City. (xv) Authority Resolution. A certified copy of each Authority Resolution, certified by the Secretary or Assistant Secretary of the Authority. (xvi) Resolution of BONY. A certified copy of the general resolution of BONY authorizing the execution and delivery of certain documents by certain officers and employees of BONY, which resolution authorizes the execution and delivery of the Indenture by BONY.
(xvii) 15c2-12 Certificates of the City and the Authority. Certificates of the City and the Authority “deeming final” their respective portions of the Preliminary Official Statement for purposes of Rule 15c2-12.
(xviii) CDIAC Statements. A copy of Notices of Sale required to be delivered to the California Debt Investment Advisory Commission pursuant to Sections 8855(g) and 53583 of the California Government Code.
(xix) Ratings. Evidence that the Series 2022 Bonds have been assigned an underlying rating of “_____” from ___.
(xx) Continuing Disclosure Certificate. An executed copy of the Continuing Disclosure Certificate.
(xxi) Additional Documents. Such additional certificates, instruments and other documents as the Underwriter may reasonably deem necessary.

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17 If the City or the Authority shall be unable to satisfy the conditions contained in this Purchase Contract, or if the obligations of the Underwriter shall be terminated by the Underwriter for any reason permitted by this Purchase Contract, this Purchase Contract shall terminate and none of the Underwriter, the City nor the Authority shall be under further obligation hereunder, except as further set forth in Section 9 hereof.

9. Expenses. (a) All costs and expenses incident to the sale and delivery of the Bonds to the Underwriter shall be payable by the Authority from the proceeds of the Bonds, including, but not limited to: (i) all advertising expenses in connection with the offering of the Bonds; (ii) the fees and expenses of the City, its counsel, municipal advisor and consultants; (iii) the fees and expenses of the Authority, its counsel and consultants; (iv) the fees and expenses of Bond Counsel; (v) the fees and expenses of Disclosure Counsel; (vi) all expenses in connection with the preparation and printing of the Bonds; (vii) all expenses in connection with the preparation, printing, distribution and delivery of the Preliminary Official Statement, the Official Statement and any amendment or supplement thereto; (viii) the initial fees and expenses of the Trustee, including the reasonable fees and expenses of its counsel; and (ix) the fees and expenses of any rating agency rating the Bonds.
(b) The Underwriter shall pay all expenses incurred by them in connection with the public offering and distribution of the Bonds including, but not limited to: (i) the fees and disbursements of Underwriter’ Counsel, and (ii) all out-of-pocket disbursements and expenses incurred by the Underwriter in connection with the offering and distribution of the Bonds, including, air travel and hotel accommodations in connection with the pricing of the Bonds; investor meetings, rating agency trips and meetings; the Closing; meals and transportation for the City, the Underwriter and other working group personnel during rating agency, investor meetings; pricing and Closing trips; expenses related to attending working group meetings, such as parking, meals and transportation and any other miscellaneous costs associated with the Closing; (iii) all other expenses incurred by the Underwriter in connection with the public offering and distribution of Bonds, except as provided in Section 10(a) hereof or as otherwise agreed to by the Underwriter, the Authority and the City; and (iv) the fees of the California Debt and Investment Advisory Commission. Such items may be included as an expense component of the Underwriter’s discount. (c) The Authority and the City acknowledge that they have had an opportunity, in consultation with such advisors as they may deem appropriate, if any, to evaluate and consider the fees and expenses being incurred as part of the issuance of the Bonds.

10. Notice.

Any notice or other communication to be given to the City under this Purchase Contract may be given by delivering the same in writing to:

City of Ukiah
300 Seminary Avenue
Ukiah, CA 95482
Attention: City Manager
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18 Any notice or other communication to be given to the Authority under this Purchase Contract may be given by delivering the same in writing to:

Ukiah Public Financing Authority
300 Seminary Avenue
Ukiah, CA 95482
Attention: Executive Director
Any notice or other communication to be given to the Underwriter under this Purchase Contract may be given by delivering the same in writing to:

RBC Capital Markets, LLC
777 S. Figueroa Street, Suite 850
Los Angeles, California 90017
Attention: _______________

11. Entire Agreement. This Purchase Contract, when accepted by the City and the Authority, shall constitute the entire agreement among the City, the Authority and the Underwriter with respect to the subject matter hereof and is made solely for the benefit of the City, the Authority and the Underwriter (including the successors of the Underwriter). No other person shall acquire or have any right hereunder by virtue hereof, except as provided herein. All of the representations, warranties and agreements of the City and the Authority in this Purchase Contract shall remain operative and in full force and effect except as otherwise provided herein, regardless of any investigations made by or on behalf of the Underwriter and shall survive the delivery of and payment for the Series 2022 Bonds.

12. No Advisory or Fiduciary Role. The City and Authority acknowledge and agree that (i) the purchase and sale of the Series 2022 Bonds pursuant to this Purchase Contract is an arm’s-length commercial transaction among the City, the Authority and the Underwriter, (ii) in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Underwriter is and has been acting solely as a principal and is not acting as the agent, advisor or fiduciary of the City or the Authority, (iii) the Underwriter has not assumed an advisory, fiduciary or municipal advisory responsibility in favor of the City or the Authority with respect to the offering contemplated hereby or the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriter has provided other services or are currently providing other services to the City and the Authority on other matters) and the Underwriter have no obligation to the City or the Authority with respect to the offering contemplated hereby except the obligations expressly set forth in this Purchase Contract and (iv) the City and Authority have consulted their own legal, financial, municipal advisory, and other advisors to the extent deemed appropriate.

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

Attachment 6