Union City City Council
July 14, 2026

July 14, 2026 | 7:00 PM Page 1 of 6
City Council / Successor Agency
Regular Meeting Agenda

NOTICE AND AGENDA

CITY OF UNION CITY

CITY COUNCIL / SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY

REGULAR MEETING
GARY SINGH, Mayor
JAIME PATIÑO, Vice Mayor (District 2)
LANCE NISHIHIRA, Councilmember (District 1)
JEFF WANG, Councilmember (District 3)
SCOTT SAKAKIHARA, Councilmember (District 4)
Tuesday, July 14, 2026 | 7:00 PM
City Hall – Tom Kitayama City Council Chambers
34009 Alvarado-Niles Road, Union City, CA 94587

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Live captions and interpretation are provided to improve accessibility and language access for meeting participants.

NOTICE OF PARTICIPATION PURSUANT TO GOVERNMENT CODE § 54953(b) Vice Mayor Patiño will participate in the meeting via teleconference from the site listed below. The meeting agenda will be posted on the publicly accessible teleconference site. Anyone wishing to address the Council from the teleconference site may do so.

Location:

July 14, 2026 | 7:00 PM Page 2 of 6
City Council / Successor Agency
Regular Meeting Agenda
Intercontinental Hotel – Downtown Los Angeles
900 Wilshire Boulevard
Los Angeles, CA 90017 United States
213 688-7777

1. CALL TO ORDER

1.1. Pledge of Allegiance

1.2. Roll Call

2. ORAL COMMUNICATIONS
Each person who wishes to speak during the Oral Communications section for non-agenda items will have up to three minutes. The Chair may shorten this time if there are many speakers or the City Council has a full agenda. If you want to speak during the first Oral Communications section, please complete a speaker card with your name and city of residence. You may also provide a mailing address if you would like to receive future information from the City. Filling out a speaker card and providing your name, city of residence, or mailing address is not required to speak, but it helps keep accurate records.

3. PUBLIC HEARINGS
Public Hearings provide an opportunity for the community to comment on items that require a formal hearing under state or local law. Staff will present the item first. After the presentation, the Mayor will open the public hearing and invite public comment. Individuals wishing to speak must complete and submit a speaker card before Oral Communications so the Mayor can call on them. Once all speakers have finished, the Mayor will close the public hearing. The City Council may then discuss the item and take action.

3.1. Adopt the Following Resolutions and Waive Full Reading and Introduce by Title Only the Following Ordinance Related to the Formation and Financing of City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services):

1. Adopt a Resolution Forming City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services), Designating Improvement Area No. 1 Therein, Establishing a Future Annexation Area, and Authorizing the Levy of Special Taxes to Finance Certain Public Services and the Acquisition and Construction of Certain Public Facilities;

2. Adopt a Resolution Deeming It Necessary to Incur Bonded Indebtedness in and for City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services), in an Amount Not to Exceed $38,000,000, to Finance the Acquisition and Construction of Certain Public Facilities;

3. Adopt a Resolution Calling a Special Election in and for City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services);

4. Adopt a Resolution Declaring the Results of the Special Election for City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services); and

5. Waive Full Reading and Introduce by Title Only an Ordinance Levying Special Taxes Within City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services).

3.2. Conduct a Public Hearing and Adopt a Resolution Approving the Adjusted July 14, 2026 | 7:00 PM Page 3 of 6
City Council / Successor Agency
Regular Meeting Agenda
Stormwater Fee and Ordering the Collection of the Fee on the Tax Roll

4. CITY MANAGER REPORTS

4.1. Adopt Two Resolutions:

1. Approving the Union Landing Property Owners Association Annual Report and Amending the City of Union City Revised Budget as Necessary for Consistency; and

2. Ordering Levy and Collection of Assessment for the Union Landing Property and Business Improvement District to Fund Services in Calendar Year 2027

4.2. Adopt a Resolution Calling an Election to Be Held on November 3, 2026, for Voter Consideration of a Ballot Measure Seeking Voter Authorization to Amend Municipal Code Chapter 3.28 to Extend the Term of the City’s Existing Utility Users Tax Without a Tax Increase; Establishing Related Election Policies and Procedures; Requesting Consolidation of the Election and Certain Services of the Alameda County Registrar of Voters; Providing for the Submittal of Ballot Arguments and Rebuttals; and Authorizing the Filing of an Impartial Analysis

4.3. Adopt a Resolution Authorizing the City Manager to Execute the First Amendment to the Purchase and Sale Agreement with the California Department of Transportation (Caltrans) for the Route 84 Excess Properties

5. SUCCESSOR AGENCY TO REDEVELOPMENT AGENCY

6. ITEMS REFERRED BY COUNCIL

7. GOOD OF THE ORDER

8. ADJOURNMENT

MEETING INFORMATION
The City Council is authorized to take action only on items listed on this agenda. Public comment is welcomed and encouraged on agenda items and on matters within the City Council's subject-matter jurisdiction during the designated public comment period.

Regular City Council meetings are held in person on the second and fourth Tuesday of each month at 7:00 p.m. in the Council Chambers, City Hall, 34009 Alvarado-Niles Road, Union City, CA 94587.

Meetings are broadcast live on UCTV Channel 15 and live-streamed on the City's website:
https://bit.ly/3x9mEiR.

Public Records:

Documents related to agenda items are available for review on the City's website at https://www.unioncityca.gov or during business hours at the City Clerk's Office, 34009 Alvarado-Niles Road, Union City, CA 94587.

Accessibility and Accommodation Requests:

If you require disability-related modification or accommodation, including auxiliary aids or services, to July 14, 2026 | 7:00 PM Page 4 of 6
City Council / Successor Agency
Regular Meeting Agenda
participate in this meeting, please contact the City Clerk's Office at (510) 675-5448 or [email protected] at least 72 hours before the meeting. The City will make reasonable efforts to accommodate requests received after that time. Closed captioning is available for regular City Council meetings.

ADDRESSING THE CITY COUNCIL
In-Person Public Comment:

Members of the public may address the City Council on any agenda item or during the Public Input portion of the meeting. Speaker cards are requested to assist with meeting administration but are not required for public comment. Providing a name, city of residence, mailing address, or other identifying information is voluntary. If you would like a follow-up from the City, please provide contact information.

Written Comment:

To submit written comments on an agenda item or during Public Input, please email [email protected]. Include "Public Comment" in the subject line and reference the agenda item number, if applicable. Written comments will be forwarded to the City Council and made publicly available.

REMOTE ATTENDANCE AND PUBLIC COMMENT
City Council meetings may be observed remotely through Zoom. Beginning July 1, 2026, pursuant to Senate Bill 707 and California Government Code sections 54953.4 and 54954.3, members of the public may also provide public comment in real time either in person or remotely through the two-way audiovisual platform or two-way telephonic service identified below. Remote public commenters will receive the same time allotment as members of the public commenting in person.

Join Online: http://citycouncil-live.unioncity.org
Direct Zoom Link:
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Join by Telephone: +1 408 638 0968
Telephone Passcode: 06932153
Remote Public Comment:

To provide public comment remotely, use the "Raise Hand" feature on Zoom or press *9 if participating by telephone. When called upon, the speaker will be unmuted and given the allotted time to speak.

Telephone participants may press *6 to mute or unmute themselves when called to speak. Remote speakers must be present in the Zoom or telephone queue when called. Remote participants are responsible for ensuring that they are connected and able to hear the meeting.

Remote Access Disruption:

The City Council adopted the City of Union City SB 707 Meeting Disruption Policy by Resolution No. 2026-060 on May 12, 2026. If a disruption of telephonic or internet service prevents remote attendance, observation, or public comment, the City Council will follow the adopted policy. The policy may require the open session to be recessed while the City makes good-faith efforts to restore service. If service is not restored, the City Council may continue only after making the required rollcall findings, as applicable.

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City Council / Successor Agency
Regular Meeting Agenda
Technical Assistance:

Meeting staff will monitor remote access during the meeting. If you experience remote access issues during the meeting, please notify the Zoom host as soon as possible.

CITY COUNCIL NORMS AND GUIDELINES
(Resolution No. 6129-23; Adopted May 23, 2023)
The Union City Council abides by the following norms:

1. We conduct ourselves in a professional manner, treat everyone with respect, and act with high integrity, always putting the interests of the City of Union City ahead of self-interests in accordance with our code of ethics.

2. We respect the Council-Manager form of government, and do not interfere with the City Manager's role or any professional duties of City staff.

3. We recognize that matters of confidential nature are to be kept private and undisclosed.

4. We respect each other's opinions and are supportive of each other's work advocating for the City, and we ensure that all voices are heard. We do not criticize others for having a different point of view, and we agree to disagree respectfully.

5. We understand that the City Council acts as a body, all members are equal, and policy direction is only given by a majority vote of the City Council. Once a decision is made, all members of the City Council must respect the City Council's direction.

6. We will be prepared for City Council meetings and ask our questions of the City Manager in advance so we can avoid surprising City staff at meetings.

7. We do not criticize City staff publicly or to others and will refrain from directing them. Instead, we will take our concerns and questions privately to the City Manager.

8. We will govern on an at-large basis, although elected by districts. We will maintain a citywide perspective and consider the needs and interests of the entire community.

9. We will continue to allocate resources based on long-term strategic priorities and efforts, with consideration of citywide service levels and financial capacity.

10. We understand customer service is the priority and each member of the City Council will help constituents regardless of the district in which they reside or from which a Councilmember themselves is elected.

11. We recognize the significant importance of attendance and participation at City Council meetings in proceeding with City business. All members of the City Council should endeavor to miss no more than two regular meetings per calendar year absent extraordinary circumstances. Members of the City Council should, absent unforeseen circumstances, provide a minimum of sixty days' notice to the City Council of planned absences during the Good of the Order or Items Referred by Council portion of the City Council agenda, as appropriate.

May these Council Norms be administered and enforced in the following manner:

1. Councilmembers have the primary responsibility to assure that ethical standards are understood and met by the Council, and that the public can continue to have full confidence in the integrity of government.

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City Council / Successor Agency
Regular Meeting Agenda

2. The Mayor and the Council have the responsibility to intervene when action of its members are in violation of Council Norms.

3. The City Council can review and revise the Council Norms as needed.

4. During City Council discussions, deliberations, and proceedings, the Mayor is designated with the primary responsibility to ensure that Councilmembers adhere to the Council Norms.

CERTIFICATION OF MEETING NOTICE AND AGENDA POSTING
This notice and agenda were posted on the City's website and the City Hall bulletin board at least 72 hours prior to the meeting date, in compliance with the Ralph M. Brown Act. /s/Thai Nam Pham, MMC, CPMC
City Clerk/Secretary to the City of Union City Successor Agency City Council Staff Report Page 1 of 5 July 14, 2026
Staff Report
Agenda Item No. 3.1
DATE: July 14, 2026
TO: Honorable Mayor and Members of the City Council
FROM: Joan Malloy, City Manager
SUBJECT: Adopt the Following Resolutions and Waive Full Reading and Introduce by Title Only the Following Ordinance Related to the Formation and Financing of City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services):

1. Adopt a Resolution Forming City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services), Designating Improvement Area No. 1 Therein,
Establishing a Future Annexation Area, and Authorizing the Levy of Special Taxes to Finance Certain Public Services and the Acquisition and Construction of Certain Public Facilities;

2. Adopt a Resolution Deeming It Necessary to Incur Bonded Indebtedness in and for City of Union City Community
Facilities District No. 2026-1 (Station East Facilities and Services), in an Amount Not to Exceed $38,000,000, to
Finance the Acquisition and Construction of Certain Public Facilities;

3. Adopt a Resolution Calling a Special Election in and for City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services);

4. Adopt a Resolution Declaring the Results of the Special Election for City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services); and

5. Waive Full Reading and Introduce by Title Only an Ordinance Levying Special Taxes Within City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services)
7 of 330
Agenda Item No. 3.1
City Council Staff Report Page 2 of 5 July 14, 2026

EXECUTIVE SUMMARY
Staff recommends that the City Council adopt the following resolutions and waive full reading and introduce by title only the following ordinance related to the formation and financing of City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services): (1) a resolution forming City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services), designating Improvement Area No. 1 therein, establishing a future annexation area, and authorizing the levy of special taxes to finance certain public services and the acquisition and construction of certain public facilities; (2) a resolution deeming it necessary to incur bonded indebtedness in and for City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services), in an amount not to exceed $38,000,000, to finance the acquisition and construction of certain public facilities; (3) a resolution calling a special election in and for City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services); (4) a resolution declaring the results of the special election for City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services); and (5) waive full reading and introduce by title only an ordinance levying special taxes within City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services).

These actions will finalize the process to form the new community facilities district for Station East, as anticipated in the Station East Development Agreement.

STRATEGIC PLAN ALIGNMENT
This agenda item is in alignment with:
- Goal C. Economic, Community Development, and Public Safety - Institute forward-thinking strategies in business, land use development, housing, social services, and public safety that promote community growth and innovation. - Strategy 3: Promote housing development for all income levels in the community by implementing the Housing Element, updating the zoning ordinance to include objective standards for new multi-family residential development to streamline the review of housing development applications, and other measures.

BACKGROUND
A community facilities district (CFD), also known as a Mello-Roos District, is a specialpurpose district formed to finance specific public infrastructure and services. Property owners within the CFD pay a special tax in addition to their other property taxes. The revenue is used to fund services, improvements, and/or to pay off bonds. The City has an existing CFD, CFD 2006-1, formed in 2007 to fund certain public services, including police, fire protection and suppression, paramedic, and park maintenance.

The Station East Development Agreement, approved by Ordinance 886-21, requires the formation of a CFD or an equivalent mechanism for the project. The CFD allows the developer to finance facilities and services. The First Amendment to the Development Agreement, approved by Ordinance 913-23, establishes the following priorities for financing services and facilities: 1) Offset the fiscal imbalance for services provided; 2) Finance capital facilities (i.e., project infrastructure such as roads or other public 8 of 330
Agenda Item No. 3.1
City Council Staff Report Page 3 of 5 July 14, 2026
improvements); and 3) Finance outside agency fees (i.e., ACWD, NHUSD, USD).

The special tax levied on property owners to fund infrastructure improvements or agency fees is known as the Facilities Special Tax. In addition, the portion of the CFD that offsets the fiscal imbalance will be used to support City services and is known as the Services Special Tax. The City has engaged consultants specializing in CFD formation to advise it on various aspects of the CFD.

On May 26, 2026, the City adopted Resolution No. 2026-074, setting forth the City’s intention to establish Community Facilities District No. 2026 (Station East Facilities and Services) (“CFD-2026-1”), designate Improvement Area No. 1 therein, establish the Future Annexation Area, and authorize the levy of special taxes. The City also adopted Resolution 2026-075 to Incur Bonded Indebtedness to Finance the Acquisition and Construction of Certain Public Facilities in Order to Mitigate the Impacts of Development within the proposed CFD No. 2026-1. In addition, the City Council approved Resolution No. 2026-073, adopting the “Amended and Restated Statement of Goals and Policies Regarding Use of the Mello-Roos Community Facilities Act of 1982,” which had not been updated for several years. Click here for a link to the City Council staff report and attachments for this item.

DISCUSSION
Approval of the resolutions described below is the next step toward establishing the proposed CFD and designating the initial Improvement Area therein. Each resolution to be approved complies with the Act and the City’s CFD policy.

A Public Hearing is required on (a) the formation of the City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services), the designation of an initial Improvement Area No. 1 therein, and the establishment of the Future Annexation Area; (b) the levy of special taxes within Improvement Area No. 1; and (c) the need to incur bonded indebtedness for the CFD and the improvement areas therein. Following the public hearing, the City Council will consider the following resolutions and an ordinance levying special taxes:

1. “Resolution of the City Council of the City of Union City to form City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services), designate Improvement Area No. 1 therein and establish a future annexation area, and to authorize the levy of special taxes therein to finance certain public services and the acquisition and construction of certain public facilities.”

2. “Resolution of the City Council of the City of Union City deeming it necessary to incur bonded indebtedness in and for City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services) in an amount not to exceed $38,000,000 to finance the acquisition and construction of certain public facilities.”

3. “Resolution of the City Council of the City of Union City calling special election in and for City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services).”

4. “Resolution of the City Council of the City of Union City declaring election results 9 of 330
Agenda Item No. 3.1
City Council Staff Report Page 4 of 5 July 14, 2026
of City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services).”
In addition to forming the CFD, the Resolution of Formation also approves an Acquisition Agreement between the City, for and on behalf of the CFD, and Lennar Homes of California, LLC (Lennar Homes), as the developer of the land within Improvement Area No. 1. Under the Acquisition Agreement, the City would acquire public facilities from Lennar Homes using proceeds of the facilities special tax and/or bonds issued for Improvement Area No. 1 that are secured by that tax.

If the proposed actions are approved, the City would be authorized to incur bonded indebtedness for the CFD in an amount not to exceed $38,000,000 (the “Authorization”), initially allocated as follows: (i) for Improvement Area No. 1, the bonded indebtedness limit is $20,000,000 and (ii) for the portion of the CFD that is not currently in Improvement Area No. 1, the bonded indebtedness limit is not to exceed $18,000,000 (the “Future Improvement Area Indebtedness Limit”). There is no series of bonds to be authorized at this time.

Finally, the proposed ordinance would authorize the imposition of special taxes within the CFD. If the foregoing actions are approved, the final steps for the formation of the CFD (second reading and approval of the Ordinance) would occur on July 28, 2026.

FISCAL IMPACT
All costs of forming the CFD, designating Improvement Area No. 1 therein, and establishing the Future Annexation Area are being funded by a deposit from Lennar Homes, the applicant. Going forward, the special taxes levied for Facilities and for Services will be used by the City to pay any fees, expenses, or debt service associated with the Facilities or Services to be financed. The special taxes will offset the City’s costs of providing the Facilities and Services to the new development planned within the CFD.

If and when special tax bonds are issued in the future to pay for the Facilities, debt service on the bonds will be payable solely from the special taxes levied for the Facilities within the CFD and not from the City’s General Fund or any other funds or accounts of the City.

RECOMMENDATION
Staff recommends that the City Council conduct a public hearing, adopt the following resolutions, waive full reading, and introduce by title only the following ordinance related to the formation and financing of City of Union City Community Facilities District No. 2026- 1 (Station East Facilities and Services): (1) a resolution forming City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services), designating Improvement Area No. 1 therein, establishing a future annexation area, and authorizing the levy of special taxes to finance certain public services and the acquisition and construction of certain public facilities; (2) a resolution deeming it necessary to incur bonded indebtedness in and for City of Union City Community Facilities District No. 2026- 1 (Station East Facilities and Services), in an amount not to exceed $38,000,000, to finance the acquisition and construction of certain public facilities; (3) a resolution calling a special election in and for City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services); (4) a resolution declaring the results of the special election for City of Union City Community Facilities District No. 2026-1 (Station East 10 of 330
Agenda Item No. 3.1
City Council Staff Report Page 5 of 5 July 14, 2026
Facilities and Services); and (5) waive full reading and introduce by title only an ordinance levying special taxes within City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services).

Prepared by: Leslie Carmichael, Consulting Planner
Submitted by: Carmela Campbell, Economic and Community Development Director Attachments

1. Draft Resolution of the City Council of the City of Union City to Form City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services), Designate Improvement Area No. 1 therein and Establish a Future Annexation Area, and to authorize the Levy of Special Taxes therein to Finance Certain Public Services and the Acquisition and Construction of Certain Public Facilities a. Exhibit A – Rate and Method of Special Tax
b. Exhibit B – Authorized Facilities and Services
c. Exhibit C – Form of Acquisition Agreement

2. Draft Resolution of the City Council of the City of Union City Deeming it Necessary to Incur Bonded Indebtedness in and for City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services) in an Amount Not to Exceed $38,000,000 to Finance the Acquisition and Construction of Certain Public Facilities

3. Draft Resolution of the City Council of the City of Union City Calling Special Election in and for City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services)
a. Exhibit A – Form of Special Election Ballot

4. Draft Resolution of the City Council of the City of Union City Declaring Election Results of City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services)
a. Exhibit A – Form of Canvass and Statement of Results of Election

5. Draft Ordinance of the City Council of the City of Union City Levying Special Taxes within City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services)
11 of 330
RESOLUTION NO. 2026-XXX

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UNION CITY

TO FORM CITY OF UNION CITY COMMUNITY FACILITIES DISTRICT NO. 2026-1 (STATION EAST FACILITIES AND SERVICES), DESIGNATE IMPROVEMENT AREA NO. 1 THEREIN AND ESTABLISH A FUTURE

ANNEXATION AREA, AND TO AUTHORIZE THE LEVY OF SPECIAL

TAXES THEREIN TO FINANCE CERTAIN PUBLIC SERVICES AND THE

ACQUISITION AND CONSTRUCTION OF CERTAIN PUBLIC FACILITIES WHEREAS, the City Council (the “City Council”) of the City of Union City (the “City”) on May 26, 2026, adopted its Resolution No. 2026-074 (the “Resolution of Intention”), stating its intention to (i) form “City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services)” (the “CFD”), (ii) designate therein “Improvement Area No. 1 of the City of Union City Community Facilities District No. 2026- 1 (Station East Facilities and Services)” (“Improvement Area No. 1”), and (iii) establish “City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services) (Future Annexation Area)” (the “Future Annexation Area”), all pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, Chapter 2.5 of Part 1 of Division 2 of Title 5, commencing with Section 53311, of the California Government Code (the “Act”); and
WHEREAS, the Resolution of Intention incorporates a map of the proposed boundaries of the CFD, Improvement Area No. 1, and the Future Annexation Area, which map is on file with the City Clerk and the provisions thereof are incorporated herein by this reference as if fully set forth herein; and
WHEREAS, the rate and method of apportionment of special tax for Improvement Area No. 1 is set forth as Exhibit A hereto and hereby made a part hereof, and the list of authorized services and facilities for Improvement Area No. 1 and the CFD is set forth as Exhibit B attached hereto and hereby made a part hereof; and WHEREAS, the City Council noticed a public hearing to be held on the date hereof, in accordance with the Act and the Resolution of Intention; and WHEREAS, at the hearing all interested persons desiring to be heard on all matters pertaining to the formation of the CFD, Improvement Area No. 1, and the Future Annexation Area, the services and facilities to be provided therein, and the levy of said special taxes were heard and a full and fair hearing was held; and WHEREAS, at the hearing evidence was presented to the City Council on said matters before it, including a report caused to be prepared by NBS as consultant to the City (the “Report”) as to the services and facilities to be provided in the CFD and the costs thereof and incidental expenses related thereto, a copy of which is on file with the City Clerk, and the City Council at the conclusion of said hearing is fully advised in the premises; and
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Resolution No. 2026-XXX
Form CFD No. 2026-1 and Designate Improvement Area No. 1

WHEREAS, written protests with respect to the formation of the CFD and the designation therein of Improvement Area No. 1, the furnishing of specified types of services and facilities and the rate and method of apportionment of the special taxes for Improvement Area No. 1 have not been filed with the City Clerk by fifty percent or more of the registered voters residing within the territory of the CFD and Improvement Area No. 1 or property owners of one-half or more of the area of land within the CFD and Improvement Area No. 1 and not exempt from the proposed special taxes; and WHEREAS, written protests with respect to the formation of the Future Annexation Area have not been filed with the City Clerk by fifty percent or more of the registered voters residing within the territory of the proposed CFD or the proposed Future Annexation Area or property owners of one-half or more of the area of land within the proposed CFD or proposed Future Annexation Area; and
WHEREAS, the special taxes proposed to be levied in Improvement Area No. 1 to pay for the proposed services and facilities, in accordance with the rate and method of apportionment for Improvement Area No. 1 have not been eliminated by protest by fifty percent or more of the registered voters residing within the territory of Improvement Area No. 1 or the owners of one-half or more of the area of land within Improvement Area No. 1 and not exempt from the special tax.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Union City as follows:

1. The foregoing recitals are true and correct.

2. The proposed facilities special tax and proposed services special tax to be levied within Improvement Area No. 1 have not been precluded by majority protest pursuant to section 53324 of the Act.

3. The community facilities district designated “City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services)” of the City is hereby established pursuant to the Act.

The improvement area designated “Improvement Area No. 1 of the City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services)” is hereby established pursuant to the Act.

The future annexation area designated “City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services) (Future Annexation Area)” is hereby established pursuant to the Act.

4. The boundaries of the CFD, Improvement Area No. 1, and the Future Annexation Area are shown on proposed boundary map on file with the City Clerk, which was approved by the Resolution of Intention and filed for record on June 4, 2026 in the Office of the County Recorder of the County of Alameda in Book 19 at Page 67 of the Maps of Assessment and Community Facilities Districts, as Document No. 2026073720 are hereby approved, are incorporated herein by reference and shall be the boundaries of the CFD, Improvement Area No. 1, and the Future Annexation Area, respectively. 13 of 330
Resolution No. 2026-XXX
Form CFD No. 2026-1 and Designate Improvement Area No. 1

Parcels within the Future Annexation Area shall be annexed to the CFD only with the unanimous approval (each, a “Unanimous Approval”) of the owner or owners of each parcel or parcels at the time that parcel or those parcels are annexed, without any requirement for further public hearings or additional proceedings. The City Council hereby determines that any property for which the owner or owners execute a Unanimous Approval shall be added to the CFD, either into an existing improvement area or a Future Improvement Area (defined herein), and the City Clerk shall record an amendment to the notice of special tax lien for Improvement Area No. 1 pursuant to Section 3117.5 of the Streets & Highways Code, or a new notice of special tax lien pursuant to Section 3114.5.

All or any portions of territory that annexes into the CFD from the Future Annexation Area or otherwise may be annexed into one or more separate improvement areas (each, a “Future Improvement Area”) then in existence or to be formed at the time of such annexation and no additional hearings or procedures are required. The designation of a parcel or parcels as an improvement area shall be specified and approved by the Unanimous Approval at the time that the parcel or parcels are annexed to the CFD. After the designation of a parcel or parcels as an improvement area, all proceedings for approval of an appropriations limit, the rate and method of apportionment and manner of collection of special taxes, and the authorization to incur bonded indebtedness may differ from other areas of the CFD, all as set forth in the Unanimous Approval, and shall apply only to the parcel or parcels within such improvement area.

5. The type of public facilities proposed to be financed by the CFD pursuant to the Act shall consist of those items listed as facilities, and incidental costs related thereto on Exhibit B (the “Facilities”), and the type of public services proposed to be financed by the CFD and each improvement area therein pursuant to the Act shall consist of those items listed as services on Exhibit B (the “Services”). The financing of the costs of Facilities may include, without limitation, the payment of principal of and interest on bonds together with all direct, indirect periodic, and/or other related costs (including, without limitation, costs of administering the CFD, levying the Facilities Special Tax and administering the bonds, and establishing and replenishing reserve funds).

The Council hereby determines that the Services are necessary to meet increased demands for such services placed upon the City as the result of development occurring within the area of the CFD. The Services are in addition to those provided in the territory of the CFD as of the date hereof and will not supplant services already available within the territory of the CFD as of the date hereof.

6. Facilities Special Tax and Services Special Tax.
a. Except to the extent that funds are otherwise available to the Improvement Areas to pay for the Facilities and Services, to pay the principal and interest on bonds and other debt (as defined in the Act) of the City to finance the Facilities, to the repayment of funds advanced by the City for the CFD and including the repayment under any agreement (which shall not constitute a debt or liability of the City) of advances of funds or reimbursement for the lesser of the value or cost of work in-kind provided by any person for the CFD, a facilities special tax (the “Facilities Special Tax”) and a services special tax (the “Services Special 14 of 330
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Tax” and together with the Facilities Special Tax, the “Special Tax”) sufficient to pay the costs thereof, secured by the recordation of a continuing lien against all non-exempt real property is intended to be levied annually and collected in the same manner as ordinary ad valorem property taxes or in such other manner as may be prescribed by this City Council.
b. The proposed rate and method of apportionment of the Special Tax among the parcels of real property within Improvement Area No. 1, in sufficient detail to allow each landowner within Improvement Area No. 1 to estimate the maximum amount such owner will have to pay, is attached hereto as Exhibit A to this Resolution and hereby incorporated herein (the “Rate and Method”). The Special Tax for Improvement Area No 1 (the “Improvement Area No. 1 Special Tax”) shall not be levied in Improvement Area No. 1 after the fiscal year set forth in the Rate and Method, except that an Improvement Area No. 1 Special Tax that was lawfully levied in or before the final tax year and that remains delinquent may be collected in subsequent years. Under no circumstances shall the Improvement Area No. 1 Special Tax levied against any parcel in Improvement Area No. 1 used for private residential purposes be increased as a consequence of delinquency or default by the owner of any other parcel or parcels within Improvement Area No. 1 by more than 10 percent.

The proposed rate and method of apportionment of the Special Tax among the parcels of real property within a Future Improvement Area, in sufficient detail to allow each landowner within such Future Improvement Area to estimate the maximum amount such owner will have to pay, shall be set forth in the applicable Unanimous Approval. The Special Tax shall not be levied in a Future Improvement Area after the fiscal year identified in the rate and method for such Future Improvement Area, except that a special tax that was lawfully levied in or before the final tax year and that remains delinquent may be collected in subsequent years. Under no circumstances shall the special tax levied against any parcel in a Future Improvement Area for private residential purposes be increased as a consequence of delinquency or default by the owner of any other parcel or parcels within such Future Improvement Area by more than 10 percent.

For Future Improvement Areas, a different rate and method may be adopted than the Rate and Method adopted for Improvement Area No. 1 if the annexed territory is designated as a separate improvement area. No supplements to the Rate and Method for any of the Improvement Areas and no new rate and method will cause the maximum tax rate in the then-existing territory of the CFD (including Improvement Area No. 1) to increase. The designation as an improvement area of any territory annexing to the CFD, the maximum amount of bonded indebtedness and other debt for such improvement area, the rate and method of apportionment of special tax for such improvement area and the appropriations limit for such improvement area shall be identified and approved in the Unanimous Approval executed by property owners in connection with their annexation to the CFD from the Future Annexation Area. The annexation and related matters described in the Unanimous Approval shall be implemented and completed without the need for City Council approval as long as the following conditions are met:
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(i) The rate and method of apportionment of special tax for the Future Improvement Area is prepared by a special tax consultant retained by the City.
(ii) The rate and method of apportionment of special tax for the Future Improvement Area substantially complies with the City’s local goals and policies concerning the use of the Act.
(iii) The rate and method of apportionment of special tax for the Future Improvement Area includes a mechanism that protects against revenue loss as a result of land use changes.
c. The special taxes levied within the annexation territory in the future to pay for Services to be supplied therein shall be equal to any special tax levied to pay for the same Services in the existing CFD, except that a higher or lower tax may be levied within the annexation territory to the extent that the actual cost of providing the Services in that territory is higher or lower than the cost of providing those Services in the existing CFD. Similarly, the special taxes levied within the annexation territory in the future to pay for Facilities financed with bonds that have already been issued and that are secured by the existing CFD shall be the same as the tax levied in the existing CFD for that purpose, except that a higher special tax may be levied for that purpose within the annexation territory in the future to compensate for the interest and principal previously paid by the existing CFD, less any depreciation allocable to the public facility. This paragraph shall not be construed to limit the levy of a special tax within the territory to be annexed in the future to provide new or additional Services beyond those supplied within the existing territory of the CFD, or to pay for new or additional public facilities, with or without bond financing.
d. Territory in the Future Annexation Area will be annexed into the CFD and a special tax will be levied on such territory only with the Unanimous Approval of the owner or owners of each parcel or parcels at the time that parcel or those parcels are annexed into the CFD. Except to the extent that funds are otherwise available to the CFD to pay for the Facilities and/or the principal and interest as it becomes due on bonds of the CFD issued to finance the Facilities, a Special Tax sufficient to pay the costs thereof, secured by the recordation of a continuing lien against all non-exempt real property in the Future Annexation Area, is intended to be levied annually within the Future Annexation Area, and collected in the same manner as ordinary ad valorem property taxes or in such other manner as may be prescribed by this City Council.
e. This City Council hereby finds that the provisions of Section 53313.6, 53313.7 and 53313.9 of the Act (relating to adjustments to ad valorem property taxes and schools financed by a community facilities district) are inapplicable to the proposed CFD and the Improvement Areas.

7. It is hereby found and determined that the Facilities and Services are necessary to meet increased demands placed upon local agencies as the result of 16 of 330
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development occurring in the CFD, Improvement Area No. 1, and the Future Annexation Area.

8. The Director of Finance of the City of Union City, 34009 Alvarado-Niles Road, Union City, California (tel: 510-675-5335) is designated as the office responsible for preparing annually a current roll of special tax levy obligations by assessor's parcel number, estimating future special tax levies and for establishing procedures to promptly respond to inquiries regarding estimates of future special tax levies. The City may contract with outside consultants to provide this service in lieu of the Director of Finance.

9. Upon recordation of a notice of special tax lien pursuant to Section 3114.5 of the Streets and Highways Code of California, a continuing lien to secure each levy of the special tax shall attach to all nonexempt real property in Improvement Area No. 1, and this lien shall continue in force and effect until the special tax obligation is prepaid and permanently satisfied and the lien canceled in accordance with law or until collection of the tax by the City ceases. Upon recordation of a notice of special tax lien pursuant to Section 3114.5 of the Streets and Highways Code of California, a continuing lien to secure each levy of the special tax shall attach to all nonexempt real property annexed to the CFD from the Future Annexation Area, and this lien shall continue in force and effect until the special tax obligation is prepaid and permanently satisfied and the lien canceled in accordance with law or until collection of the tax by the City ceases.

10. In accordance with the Act, the annual appropriations limit, as defined by subdivision (h) of Section 8 of Article XIII B of the California Constitution, shall be preliminarily established for the CFD in the amount of $38,000,000, of which the annual appropriations limit for the territory within Improvement Area No. 1 is hereby preliminarily established at $20,000,000, and the annual appropriations limit for the territory within the Future Annexation Area, once annexed to the CFD, is preliminarily established at $18,000,000. The proposition establishing said annual appropriations limit shall become effective if approved by the qualified electors voting thereon and shall be adjusted in accordance with the applicable provisions of the Act and other law.

The designation as an improvement area of any territory annexing to the CFD, the maximum amount of bonded indebtedness and other debt for such improvement area, the rate and method of apportionment of special tax for such improvement area and the appropriations limit for such improvement area shall be identified and approved in the Unanimous Approval executed by property owners in connection with their annexation to the CFD.

11. Pursuant to the provisions of the Act, the proposition of the levy of the Improvement Area No. 1 Special Tax and the proposition of the establishment of the appropriations limit for Improvement Area No. 1 specified above shall be submitted to the qualified electors of Improvement Area No. 1 at an election. The time, place and conditions of the election shall be as specified by a separate resolution of the City Council.

The qualified electors for the election to be held in these proceedings shall be the landowners owning land within the CFD. The City Council will conduct the election by mailed ballot and hereby designates the City Clerk as the official to conduct the mailedballot election. 17 of 330
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12. Section 53314.9 of the Act provides that, either before or after formation of the CFD, the City may accept work in-kind from any source, including, but not limited to, private persons or private entities, may provide, by resolution, for the use of that work inkind for any authorized purpose and the City Council may enter into an agreement (an “Acquisition Agreement”), by resolution, with the person or entity advancing the work inkind, to reimburse the person or entity for the value, or cost, whichever is less, of the work in-kind, as determined by the City Council, with or without interest, under the conditions specified in the Act. Any work in-kind must be performed or constructed as if the work had been performed or constructed under the direction and supervision, or under the authority of, the City. The City Manager, the Director of Finance of the City and each other authorized officer of the City is hereby authorized and directed to enter into an Acquisition Agreement, substantially in the form attached to this Resolution as Exhibit C.

Section 53316.2 of the Act provides that a community facilities district may finance facilities to be owned or operated by a public agency other than the agency that created the district, or services to be provided by a public agency other than the agency that created the district, or any combination, only pursuant to a joint community facilities agreement or a joint exercise of powers agreement adopted pursuant to this section. The City Manager, the Director of Finance of the City and each other authorized officer of the City is hereby authorized and directed to enter into joint community facilities agreements with the County and any other entity that will own or operate any of the Facilities, as may be necessary to comply with the provisions of Section 53316.2(a) and (b) of the Act. The City Council hereby declares that such joint agreements will be beneficial to owners of property in the area of the CFD.

13. Any bonds issued in these proceedings shall be callable in accordance with the provisions of the Act and as more specifically to be set forth in any resolution providing for the form, execution and issuance of bonds.

14. This City Council now finds and determines that all proceedings up to and including the adoption of this Resolution were and are valid and in conformity with the requirements of the Act. This determination and finding is final and conclusive in accordance with Government Code Section 53325.1.

15. This Resolution shall take effect immediately upon its adoption. 18 of 330
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PASSED, APPROVED, AND ADOPTED by the City Council of the City of Union City at a regular meeting held on July 14, 2026, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED:

GARY SINGH
Mayor
ATTESTED: APPROVED AS TO FORM:

THAI NAM N. PHAM
City Clerk
KRISTOPHER J. KOKOTAYLO
City Attorney
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EXHIBIT A

RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES

FOR CITY OF UNION CITY
COMMUNITY FACILITIES DISTRICT NO. 2026-1
(STATION EAST FACILITIES AND SERVICES)
IMPROVEMENT AREA NO. 1
A Special Tax, as hereinafter defined, shall be levied and collected within Improvement Area No. 1 of City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services) each Fiscal Year commencing in Fiscal Year 2026/27, in an amount determined by the application of the procedures below. All Assessor’s Parcels within Improvement Area No. 1, as hereinafter defined, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in the manner herein provided.

A. DEFINITIONS
The terms hereinafter set forth have the following meaning:
“Accessory Dwelling Unit” means all Assessor’s Parcels of Residential Property for which a Building Permit(s) has been issued for an “Accessory Dwelling Unit” as defined in California Government Code Section 66313, as may be amended from time to time, that is accessory to a primary Unit.
"Acre” or “Acreage" means the land area of an Assessor’s Parcel as shown on an Assessor’s Parcel Map. In the event that the Assessor’s Parcel Map shows no acreage, the Acreage for any Assessor’s Parcel may be determined by the CFD Administrator based upon, in the CFD Administrator’s discretion, the applicable condominium plan, final map, parcel map, Assessor’s Data or by using available spatial data and GIS.
"Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 of Part 1, Division 2 of Title 5 of the Government Code of the State. "Administrative Expenses” means the actual or reasonably estimated costs directly related to the administration of Improvement Area No. 1 including, but not limited to, the following: the costs of any paying agents/fiscal agents/trustees related to Improvement Area No. 1 Bond payments (including the fees and expenses of related counsel); the costs of computing the Annual Facilities Special Tax Requirement, the Annual Services Special Tax Requirement, the Special Taxes and of preparing the collection schedules for the Special Taxes; the costs of collecting the Special Taxes, including any charges levied by the County Auditor’s Office, County Tax Collector’s Office or County Treasurer’s Office; the 20 of 330
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costs of the City or designee in complying with the disclosure requirements associated with applicable federal and state securities laws, or otherwise related to Improvement Area No. 1 or Improvement Area No. 1 Bonds; the City’s annual administration fees and third party expenses; costs of responding to public inquiries regarding the Special Taxes; the costs of the City or designee related to an appeal of the Special Tax or interpretation of this Rate and Method of Apportionment; amounts needed to pay any required arbitrage rebate to the federal government related to Improvement Area No. 1 Bonds; the costs associated with the release of funds from any escrow account; and the costs of commencing and pursuing to completion any foreclosure action arising from delinquent Special Taxes in Improvement Area No. 1. Administrative Expenses shall also include amounts estimated or advanced by the City or Improvement Area No. 1 for any other administrative purposes of Improvement Area No. 1. "Annual Facilities Special Tax Requirement" means that amount required in any Fiscal Year for Improvement Area No. 1 to (1) pay Debt Service on all Outstanding Improvement Area No. 1 Bonds due in the Debt Year that commences in such Fiscal Year; (2) pay debt service on bonds expected to be issued by Improvement Area No. 1 due in the Debt Year that commences in such Fiscal Year; (3) Administrative Expenses; (4) provide any amount required to establish or replenish a reserve fund in connection with any Improvement Area No. 1 Bonds; (5) provide an amount equal to reasonably anticipated Facilities Special Tax delinquencies based on the delinquency rate for Special Taxes levied in the previous Fiscal Year as determined by the CFD Administrator, as limited by the Act, and without duplicating any amounts described in clauses (3) or (4); and (6) account for Pay-As-You-Go Expenditures for the Authorized Facilities (so long as such levy does not increase the Special Taxes on Final Map Property or Undeveloped Property). The amounts referred to in clauses (1) through (5) of the preceding sentence may be reduced in any Fiscal Year (in the City's sole discretion) by (i) surplus balances in funds and accounts for Improvement Area No. 1 Bonds to the extent that such balances are available to apply against Debt Service pursuant to the Indenture, (ii) proceeds from the collection of penalties associated with delinquent Special Tax, and (iii) any other revenues available to pay Debt Service on the Outstanding Improvement Area No. 1 Bonds or other indebtedness as determined by the CFD Administrator.
"Annual Services Special Tax Requirement" means that amount required in any Fiscal Year for Improvement Area No. 1 to (1) pay for Authorized Services; (2) Administrative Expenses; (3) provide any amount required to establish or replenish a reserve fund; (4) provide an amount equal to reasonably anticipated Services Special Tax delinquencies based on the delinquency rate for Special Taxes levied 21 of 330
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in the previous Fiscal Year as determined by the CFD Administrator, as limited by the Act, and without duplicating any amounts described in clauses (2) or (3). “Assessor’s Data” means the property characteristic data compiled and maintained by the County Assessor for each Assessor’s Parcel, including, but not limited to, Assessor’s Parcel Number, Acreage, and Units. "Assessor’s Parcel” or “Parcel” means a lot or parcel shown in an Assessor’s Parcel Map with an assigned Assessor’s Parcel Number.
"Assessor’s Parcel Map" means an official map of the County Assessor designating parcels by Assessor’s Parcel Number.
“Assessor’s Parcel Number” means, with respect to an Assessor’s Parcel, that number assigned to such Assessor’s Parcel by the County for purposes of identification.
“Assigned Facilities Special Tax” means the Assigned Facilities Special Tax determined in accordance with Section C below.
“Authorized Facilities” means the facilities authorized to be financed, in whole or in part, by (i) Improvement Area No. 1 Bonds or (ii) Facilities Special Tax revenue dedicated to Pay-As-You-Go Expenditures for Improvement Area No. 1. “Authorized Services” means the public services authorized to be financed, in whole or in part, by Improvement Area No. 1 Services Special Tax revenue. "Backup Facilities Special Tax" means the Backup Facilities Special Tax determined in accordance with Section C below.
“Building Permit” means a permit issued by the City for new construction of a residential or non-residential building on an Assessor’s Parcel. "CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Annual Facilities Special Tax Requirement and Annual Services Special Tax Requirement, and otherwise providing for the levy and collection of the Special Taxes.
"CFD No. 2026-1" means City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services), established by the City Council pursuant to the Act.
“City” means the City of Union City, California.
“City Council” means the City Council of the City, acting as the legislative body of CFD No. 2026-1.
"County" means the County of Alameda, California.
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“Debt Service” means for each Debt Year, the total amount of principal and interest due on any Outstanding Improvement Area No. 1 Bonds. “Debt Year” means the twelve (12) month period ending on the second debt service payment date of each calendar year.
"Developed Property" means, in any Fiscal Year, all Taxable Property in Improvement Area No. 1 for which a Building Permit for new construction was issued by the City prior to June 30 of the preceding Fiscal Year. "Development Class" means, individually, Developed Property, Final Map Property, Taxable Property Owner’s Association Property, Taxable Public Property, and Undeveloped Property.
“Exempt Property” means all Assessor’s Parcels located within the boundaries of Improvement Area No. 1 which are exempt from the Special Tax pursuant to the Act or Section F below.
"Facilities Special Tax" means the special tax to be levied in each Fiscal Year on each Assessor’s Parcel of Taxable Property within Improvement Area No. 1 to fund the Annual Facilities Special Tax Requirement.
“Final Map Property” means, in any Fiscal Year, all Residential Lots created within a Final Subdivision Map which has recorded prior to June 30 of the preceding Fiscal Year.
"Final Subdivision Map" means a final subdivision map, parcel map or lot line adjustment, approved by the City pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or recordation of a condominium plan pursuant to California Civil Code 4285, that creates individual lots for which Building Permits may be issued without further subdivision of such property. "Fiscal Year" means the period starting July 1 and ending on the following June

30. “GIS” means a system designed to capture, store, manipulate, analyze, manage, and present spatial or geographic data.
“Improvement Area No. 1” means Improvement Area No. 1 of CFD No. 2026-1. “Improvement Area No. 1 Bonds” means bonds or other Debt (as defined in section 53317 of the Act), whether in one or more series, issued or assumed by or on behalf of the City for Improvement Area No. 1 under the Act, and secured by pledge of the Special Taxes.
“Indenture” means the indenture, fiscal agent agreement, resolution, or other instrument pursuant to which Improvement Area No. 1 Bonds are issued, as 23 of 330
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modified, amended, and/or supplemented from time to time, and any instrument replacing or supplementing the same.
“Land Use Class” means any of the classes listed in Table 1 and Table 2 in Section C and Section D, respectively. For purposes of levying the Facilities Special Tax, reference shall be made to Attachment C to the Rate and Method of Apportionment for assigning the appropriate Land Use Class to Residential Property.
"Maximum Facilities Special Tax” means the maximum Facilities Special Tax, determined in accordance with Section C below, that can be levied in any Fiscal Year on any Assessor’s Parcel of Taxable Property.
“Maximum Services Special Tax” means the maximum Services Special Tax, determined in accordance with Section D below, that can be levied in any Fiscal Year on any Assessor’s Parcel of Taxable Property.
“Non-Residential Property” means, in any Fiscal Year all Assessor’s Parcels of Developed Property for which a building permit(s) was issued for a structure intended for non-residential use.
“Outstanding Improvement Area No. 1 Bonds” means all Improvement Area No. 1 Bonds which are outstanding under and in accordance with the provisions of the Indenture.
“Pay-As-You-Go Expenditure” means Special Tax revenue, which is used or set aside for Authorized Facilities, including for Authorized Facilities to be constructed or acquired by Improvement Area No. 1. Pay-As-You-Go Expenditures may be included in the Annual Facilities Special Tax Requirement by levying the Facilities Special Tax at one hundred percent (100%) of the Assigned Facilities Special Tax until the earlier of (i) the fifth Fiscal Year following the Fiscal Year in which the first series of Improvement Area No. 1 Bonds are issued, or (ii) if, for any reason, Improvement Area No. 1 Bonds are not issued, until such time as the Authorized Facilities are financed in full.
“Plan Area” means an area, as shown on Attachment C to the Rate and Method of Apportionment, proposed for residential development. “Property Owner’s Association” means any duly constituted property owner’s association. As used in this definition, a Property Owner’s Association includes any home-owner’s association, condominium owner’s association, master or subassociation or non-residential owner’s association. “Property Owner’s Association Property” means any property within the boundaries of Improvement Area No. 1 which is (a) owned by a Property Owner’s 24 of 330
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Association or (b) designated with specific boundaries and acreage on a final subdivision map as Property Owner’s Association Property. "Proportionately" means, for each Development Class, that the ratio of the actual Facilities Special Tax and Services Special Tax levied in any Fiscal Year to the Maximum Facilities Special Tax and Maximum Services Special Tax, respectively, authorized to be levied in that Fiscal Year is equal for all Assessor’s Parcels assigned to such Development Class.
“Public Property” means any property within the boundaries of Improvement Area No. 1 which (i) is owned by a public agency, (ii) has been irrevocably offered for dedication to a public agency, or (iii) is designated with specific boundaries and Acreage on a final subdivision map as property which will be owned by a public agency. For purposes of this definition, a public agency includes the federal government, the State, the County, the City, school districts, or any other governmental agency.
“Rate and Method of Apportionment” means this Rate and Method of Apportionment of Special Taxes for Improvement Area No. 1. “Residential Lot” means, an individual residential lot within a recorded Final Subdivision Map on which a Building Permit has been or is permitted to be issued for construction of one or more Units.
“Residential Property” means all Assessor’s Parcels of Developed Property for which a Building Permit has been issued for purposes of constructing one or more residential Units.
"Services Special Tax" means the special tax to be levied in each Fiscal Year on each Assessor’s Parcel of Taxable Property within Improvement Area No. 1 to fund the Annual Services Special Tax Requirement.
"Special Tax" means the Facilities Special Tax and/or the Services Special Tax. "State" means the State of California.
"Taxable Property" means all the Assessor’s Parcels within the boundaries of Improvement Area No. 1 that are not exempt from the Special Tax pursuant to law or Section F below.
“Taxable Property Owner’s Association Property” means all Assessor’s Parcels of Property Owner’s Association Property that are not exempt from the Facilities Special Tax pursuant to Section F herein.
“Taxable Public Property” means all Assessors Parcels of Public Property that are not exempt from the Facilities Special Tax pursuant to Section F herein. 25 of 330
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"Trustee" means the trustee or fiscal agent or paying agent acting as such under the applicable Indenture.
“Undeveloped Property” means, for each Fiscal Year, all Taxable Property not classified as Developed Property, Final Map Property, Taxable Property Owner’s Association Property, or Taxable Public Property.
“Unit” means an individual single family detached residential unit or an individual residential unit within a duplex, triplex, fourplex, townhome or condominium structure. The number of Units assigned to each Assessor’s Parcel may be determined by (i) referencing Assessor’s Data, (ii) site surveys and physical unit counts, and/or (iii) other research by the CFD Administrator. An Accessory Dwelling Unit shall not be considered a Unit for the purposes of the Facilities Special Tax.
“Welfare Exempt Property” means, in any Fiscal Year, all Parcels within the boundaries of Improvement Area No. 1 that (a) have been granted a welfare exemption by the County under subdivision (g) of Section 214 of the Revenue and Taxation Code indicated in the Assessor’s Data finalized as of January 1 of the previous Fiscal Year, and (b) are exempt from the Special Tax pursuant to Section 53340(c) of the Act. Pursuant to Section 53340(c) of the Act, after the issuance of the first series of Improvement Area No. 1 Bonds, any Assessor’s Parcels that receives a welfare exemption under subdivision (g) of Section 214 of the Revenue and Taxation Code shall not be classified as Welfare Exempt Property and will be subject to the Facilities Special Tax.

B. ASSIGNMENT TO LAND USE CLASSES
Each Fiscal Year, the CFD Administrator shall determine the Assessor’s Parcel Numbers for all property within Improvement Area No. 1 for the then-current Fiscal Year. To the extent an Assessor’s Parcel or Assessor’s Parcels of Taxable Property are subdivided, consolidated, or otherwise reconfigured, the Maximum Facilities Special Tax and Maximum Services Special Tax shall be assigned to the new Assessor’s Parcels Numbers pursuant to Section C and Section D, respectively. The CFD Administrator shall also determine: (i) the appropriate Development Class for each Assessor’s Parcel; (ii) the number of Units or Acreage each Assessor’s Parcel contains; (iii) the Land Use Class for each Assessor’s Parcel, if Developed Property; and (iv) the Annual Facilities Special Tax Requirement and the Annual Services Special Tax Requirement for the Fiscal Year.

C. MAXIMUM FACILITIES SPECIAL TAX

1. Developed Property
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The Maximum Facilities Special Tax for each Assessor’s Parcel of Developed Property shall be the greater of (i) the amount derived by application of the Assigned Facilities Special Tax or (ii) the amount derived by application of the Backup Facilities Special Tax.
a. Assigned Facilities Special Tax
The Assigned Facilities Special Tax rates for each Assessor’s Parcel of Developed Property are shown in Table 1.

TABLE 1

ASSIGNED FACILITIES SPECIAL TAX FOR DEVELOPED PROPERTY
IMPROVEMENT AREA NO. 1
FISCAL YEAR 2026/27
Land
Use
Class
Plan
Area Description
Assigned
Facilities
Special Tax
1 4 Residential Property $2,496 per Unit
2 5, 6, and
11 Residential Property $2,318 per Unit
3 7 and 8 Residential Property $1,737 per Unit
4 9 and 10 Residential Property $1,530 per Unit
5 n/a Accessory Dwelling
Unit $0 per Unit
6 n/a Non-Residential
Property $0 per Acre
b. Backup Facilities Special Tax
The Fiscal Year 2026/27 aggregate Backup Facilities Special Tax attributable to Developed Property will equal the Backup Facilities Special Tax as determined in Section 2.b., below, when such property became Final Map Property.
c. Increase in the Assigned Facilities Special Tax and Backup Facilities Special Tax
On each July 1, commencing on July 1, 2027, through July 1, 2065, the Assigned Facilities Special Tax and the Backup Facilities Special Tax for Developed Property shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year. 27 of 330
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2. Final Map Property
The Maximum Facilities Special Tax for each Assessor’s Parcel of Final Map Property shall be the greater of (i) the amount derived by application of the Assigned Facilities Special Tax or (ii) the amount derived by application of the Backup Facilities Special Tax.
a. Assigned Facilities Special Tax
The Assigned Facilities Special Tax for each Assessor’s Parcel of Final Map Property shall be $2,011 per Residential Lot in Fiscal Year 2026/27. b. Backup Facilities Special Tax
The Fiscal Year 2026/27 aggregate Backup Facilities Special Tax attributable to Taxable Property within a Final Subdivision Map shall be $102,340 per Acre multiplied by the Acreage of all Taxable Property located within such Final Subdivision Map, excluding Acreage associated with current or expected Taxable Public Property and Taxable Property Owner’s Association Property.

The Backup Facilities Special Tax for each Assessor’s Parcel of Residential Property in a Final Subdivision Map shall be computed by dividing the aggregate Backup Facilities Special Tax attributable to all Assessor’s Parcels of Taxable Property for which building permits for residential construction have or may be issued, as determined in the preceding paragraph, by the number of such Assessor’s Parcels (i.e., the number of Residential Lots).

Notwithstanding the foregoing, if all or any portion of a Final Subdivision Map is subsequently changed or modified, then the Backup Facilities Special Tax for each Assessor’s Parcel of Residential Property in the portion of such Final Subdivision Map that is changed or modified, shall be a rate per Acre calculated as follows:

1. Determine the total Backup Facilities Special Taxes anticipated to apply to the changed or modified portion of the Final Subdivision Map prior to the change or modification.

2. Divide the amount determined pursuant to paragraph 1 above by the total Acreage of Residential Property excluding Taxable Public Property and Taxable Property Owner’s Association Property which is ultimately expected to exist in such changed or modified Final Subdivision Map area, as reasonably determined by the CFD Administrator.

The result is the Backup Facilities Special Tax per Acre which shall be applicable to all Assessor's Parcels of Residential Property in such changed 28 of 330
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or modified Final Subdivision Map. The Backup Facilities Special Tax for an Assessor’s Parcel of Residential Property that was not changed shall not be increased.
c. Increase in the Assigned Facilities Special Tax and Backup Facilities Special Tax
On each July 1, commencing on July 1, 2027, through July 1, 2065, the Assigned Facilities Special Tax and the Backup Facilities Special Tax for Final Map Property shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year.

3. Undeveloped Property, Taxable Property Owner’s Association Property, and Taxable Public Property
a. Maximum Facilities Special Tax
The Maximum Facilities Special Tax for each Assessor’s Parcel of Undeveloped Property, Taxable Property Owner’s Association Property, and Taxable Public Property shall be $102,340 per Acre in Fiscal Year 2026/27.
b. Increase in the Maximum Facilities Special Tax
On each July 1, commencing on July 1, 2027, through July 1, 2065, the Maximum Special Tax for Undeveloped Property, Taxable Property Owner’s Association Property, and Taxable Public Property shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year.

D. MAXIMUM SERVICES SPECIAL TAX
Developed Property
The Maximum Services Special Tax rates for each Assessor’s Parcel of Developed Property are shown in Table 2.

TABLE 2

MAXIMUM SERVICES SPECIAL TAX FOR DEVELOPED PROPERTY
FISCAL YEAR 2026/27
Land
Use
Class Description
Maximum
Services
Special Tax
1 Residential Property $564 per Unit
2 Accessory Dwelling Unit $0 per Unit
3 Non-Residential Property $0 per Acre
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a. Increase in the Maximum Services Special Tax
On each July 1, commencing on July 1, 2027, the Maximum Services Special Tax for Developed Property shall be increased by an amount equal to five percent (5%) of the amount in effect for the previous Fiscal Year.

E. METHOD OF APPORTIONMENT OF THE SPECIAL TAXES

1. Facilities Special Tax
Commencing with Fiscal Year 2026/27 and for each following Fiscal Year, the CFD Administrator shall determine the Annual Facilities Special Tax Requirement and shall levy the Facilities Special Tax in each Fiscal Year as follows:

First: The Facilities Special Tax shall be levied Proportionately on each Assessor's Parcel of Developed Property at a rate up to 100% of the applicable Assigned Facilities Special Tax to satisfy the Annual Facilities Special Tax Requirement.

Second: If additional monies are needed to satisfy the Annual Facilities Special Tax Requirement after the first step has been completed, the Facilities Special Tax shall be levied Proportionately on each Assessor’s Parcel of Final Map Property at a rate up to 100% of the Maximum Facilities Special Tax for Final Map Property to satisfy the Annual Facilities Special Tax Requirement.

Third: If additional monies are needed to satisfy the Annual Facilities Special Tax Requirement after the second step has been completed, the Facilities Special Tax shall be levied Proportionately on each Assessor’s Parcel of Undeveloped Property at a rate up to 100% of the Maximum Facilities Special Tax for Undeveloped Property to satisfy the Annual Facilities Special Tax Requirement.

Fourth: If additional monies are needed to satisfy the Annual Facilities Special Tax Requirement after the first three steps have been completed, then the levy of the Facilities Special Tax on each Assessor’s Parcel of Developed Property whose Maximum Facilities Special Tax is determined through the application of the Backup Facilities Special Tax shall be increased in equal percentages from the applicable Assigned Facilities Special Tax up to 100% of the Maximum Facilities Special Tax for each such Assessor’s Parcel to satisfy the Annual Facilities Special Tax Requirement.

Fifth: If additional monies are needed to satisfy the Annual Facilities Special Tax Requirement after the first four steps have been completed, the Facilities Special Tax shall be levied on each Assessor’s Parcel of Taxable Property Owner’s Association Property at a rate up to 100% of the Maximum Facilities Special Tax 30 of 330
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for Taxable Property Owner’s Association Property to satisfy the Annual Facilities Special Tax Requirement.

Sixth: If additional monies are needed to satisfy the Annual Facilities Special Tax Requirement after the first five steps have been completed, then the Facilities Special Tax shall be levied Proportionately on all Taxable Public Property at a rate up to 100% of the Maximum Facilities Special Tax for Taxable Public Property to satisfy the Annual Facilities Special Tax Requirement.

2. Services Special Tax
Commencing with Fiscal Year 2026/27 and for each following Fiscal Year, the CFD Administrator shall determine the Annual Services Special Tax Requirement and shall levy the Services Special Tax until the amount of the Services Special Tax levied equals the Annual Services Special Tax Requirement. The Services Special Tax shall be levied each Fiscal Year as follows:

First: The Services Special Tax shall be levied Proportionately on each Assessor's Parcel of Developed Property at a rate up to 100% of the applicable Maximum Services Special Tax to satisfy the Annual Services Special Tax Requirement.

F. EXEMPTIONS

1. No Facilities Special Tax shall be levied on up to 4.98 Acres of Property Owner’s Association Property and/or Public Property. Tax-exempt status will be assigned by the CFD Administrator in the chronological order in which property becomes Property Owner’s Association Property or Public Property. If an Assessor’s Parcel of Taxable Property becomes Property Owner’s Association Property or Public Property after previously being subject to the Facilities Special Tax, such property shall be reclassified as either Taxable Property Owner’s Association Property or Taxable Public Property.

2. Property Owner’s Association Property that is not exempt from the Facilities Special Tax under this section, or pursuant to the Act, shall be classified as Taxable Property Owner’s Association Property. Taxable Property Owner’s Association Property shall be subject to the levy of the Facilities Special Tax and shall be taxed Proportionately as part of the fifth step in Section E.1 above, at up to 100% of the applicable Maximum Facilities Special Tax for Taxable Property Owner’s Association Property.

3. Public Property that is not exempt from the Facilities Special Tax under this section, or pursuant to the Act, shall be classified as Taxable Public Property.

Taxable Public Property shall be subject to the levy of the Facilities Special Tax and shall be taxed Proportionately as part of the sixth step in Section E.1 above, 31 of 330
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at up to 100% of the applicable Maximum Facilities Special Tax for Taxable Public Property.

4. Prior to the issuance of the first series of Improvement Area No. 1 Bonds, no Special Tax shall be levied on any Assessor’s Parcel in any Fiscal Year in which such Assessor’s Parcel is classified as Welfare Exempt Property; however, pursuant to Section 53340(c) of the Act, after the issuance of the first series of Improvement Area No. 1 Bonds, any Assessor’s Parcel that receives a welfare exemption under subdivision (g) of Section 214 of the Revenue and Taxation Code shall not be classified as Welfare Exempt Property and will be subject to the Facilities Special Tax.

G. APPEAL OF SPECIAL TAX LEVY
Any property owner may file a written appeal of the Special Tax with the CFD Administrator claiming that the amount or application of the Special Tax is not correct with respect to one or more specific Assessor’s Parcels. The appeal must be filed not later than one calendar year after having paid the Special Tax that is disputed, and the appellant must be current in all payments of the Special Taxes theretofore levied on the Assessor’s Parcel(s). In addition, during the term of the appeal process, all Special Taxes levied must be paid for the subject Assessor’s Parcel(s) prior to delinquency.

The appeal must specify the reasons why the appellant claims the Special Tax is in error. The CFD Administrator shall review the appeal, meet with the appellant if the CFD Administrator deems necessary, and advise the appellant of its determination.

If the property owner disagrees with the CFD Administrator’s decision relative to the appeal, the owner may then file a written appeal with the City Council whose subsequent decision shall be final and binding on all interested parties. If the decision of the CFD Administrator or subsequent decision by the City Council requires the Special Tax to be modified or changed in favor of the property owner, then an adjustment shall be made to credit future Special Taxes.

This procedure shall be exclusive and its exhaustion by any property owner shall be a condition precedent to filing any legal action by such owner.

H. INTERPRETATION OF RATE AND METHOD OF APPORTIONMENT
The City may, by resolution or ordinance, interpret, clarify and/or revise this Rate and Method of Apportionment to correct any inconsistency, vagueness, or ambiguity as it relates to the Special Taxes, method of apportionment, classification of Assessor’s Parcels, or any definition used herein, as long as once Improvement Area No. 1 Bonds have been issued such correction does not 32 of 330
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materially adversely affect the levy and collection of Special Taxes on any Assessor’s Parcel needed to repay the Improvement Area No. 1 Bonds. In addition, the interpretation and application of any section of this document shall be at the CFD Administrator’s discretion.

I. MANNER OF COLLECTION
The Special Taxes shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided that the CFD Administrator may directly bill the Special Tax, may collect the Special Tax at a different time or in a different manner if needed to meet the financial obligations of Improvement Area No. 1. The City may covenant to foreclose and may actually foreclose or cause an action for foreclosure to be prosecuted in respect of Assessor's Parcels of Taxable Property that are delinquent in the payment of the Special Tax.

J. PREPAYMENT OF FACILITIES SPECIAL TAX
The following definitions apply to this Section J:
“Authorized Facilities” means the public facilities authorized to be financed, in whole or in part, by Improvement Area No. 1.
“Buildout” means the state of maximum development of Improvement Area No. 1, based on plans and anticipated development.
"CFD Public Facilities Cost" means $12,500,000 for Improvement Area No. 1, expressed in 2026 dollars, which shall increase by the annual percentage change in the Construction Inflation Index on July 1, 2027 and on each July 1 thereafter, or such lower number as (i) shall be determined by the CFD Administrator as sufficient to provide the public facilities to be provided by Improvement Area No. 1 under the authorized bonding program for Improvement Area No. 1 by subtracting out the proceeds of Improvement Area No. 1 Bonds and Special Taxes used to fund Authorized Facilities, or (ii) shall be determined by the City Council concurrently with a covenant that it will not issue any more Bonds to be supported by Facilities Special Tax levied under this Rate and Method of Apportionment as described in Section E.
"Construction Inflation Index" means the annual percentage change in the Engineering News-Record Building Cost Index for the City of San Francisco, measured as of the calendar year which ends in the previous Fiscal Year, but not less than zero percent. In the event this index ceases to be published, the Construction Inflation Index shall be another index as determined by the City that is reasonably comparable to the Engineering News-Record Building Cost Index for the City of San Francisco.
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"Future Facilities Costs" means, as of the date of prepayment, the CFD Public Facilities Costs minus the portion of the CFD Public Facilities Costs previously funded from (a) proceeds of all Previously Issued Improvement Area No. 1 Bonds, which were, at the time of issuance, available to the City for Authorized Facilities, (b) interest earnings on the Improvement Fund actually earned prior to the date of prepayment and available to fund Authorized Facilities, and (c) proceeds of the Special Tax dedicated to Pay-As-You-Go Expenditures. In no case, shall the Future Facilities Costs be less than zero.
"Previously Issued Improvement Area No. 1 Bonds" means all Outstanding Improvement Area No. 1 Bonds that have been issued by Improvement Area No. 1 prior to the date of prepayment.

1. Prepayment in Full
The Facilities Special Tax obligation of an Assessor's Parcel of Developed Property, Taxable Property Owner’s Association Property, Taxable Public Property, Final Map Property, or Undeveloped Property may be prepaid and permanently satisfied as described herein; provided that there are no delinquent installments of the Facilities Special Tax with respect to such Assessor's Parcel at the time of prepayment. An owner of an Assessor's Parcel intending to prepay the Facilities Special Tax obligation shall provide the CFD Administrator with written notice of intent to prepay. Within 45 days of receipt of such written notice, the CFD Administrator shall notify such owner of the prepayment amount for such Assessor's Parcel. Prepayment must be made not less than 75 days prior to the next occurring date that notice of redemption of Outstanding Improvement Area No. 1 Bonds, if any.

Proceeds of such prepayment may be given to the Trustee pursuant to the Indenture. If a prepayment is made prior to the issuance of Improvement Area No. 1 Bonds, the Redemption Premium, Interest Amount, Reserve Fund Credit and Capitalized Interest Credit as calculated below, shall be zero. The CFD Administrator may charge the property owner requesting a prepayment calculation fee for providing this service.

The Facilities Special Tax Prepayment Amount (defined below) shall be calculated as summarized below (capitalized terms as defined below):

Bond Redemption Amount
Plus Future Facilities Amount
plus Redemption Premium
plus Interest Amount
plus Administrative Fees and Expenses
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less Reserve Fund Credit
less Capitalized Interest Credit
Total: equals Facilities Special Tax Prepayment Amount
As of the proposed date of prepayment, the Facilities Special Tax Prepayment Amount (defined below) shall be calculated by the CFD Administrator as follows:

Step Number:

1. Confirm that no Facilities Special Tax delinquency apply to such Assessor’s Parcel, and if delinquencies are applicable compute all amounts due, including interest and penalties.

2. a. For Assessor’s Parcels of Developed Property, compute the Assigned Facilities Special Tax and Backup Facilities Special Tax. For Assessor’s Parcels of Final Map Property and Undeveloped Property to be prepaid, compute the Assigned Facilities Special Tax and Backup Facilities Special Tax for that Assessor’s Parcel as though it was already designated as Developed Property, based upon the expected number of Residential Lots expected for such Assessor’s Parcel.
b. For Assessor’s Parcels of Taxable Property Owner’s Association Property, and Taxable Public Property, compute the Maximum Facilities Special Tax.

3. a. For Assessor’s Parcels of Developed Property, Final Map Property, and Undeveloped Property, divide the Assigned Facilities Special Tax computed pursuant to Step 2.a by the total estimated Assigned Facilities Special Tax for Improvement Area No. 1 based on the Developed Property Facilities Special Tax which could be charged in the current Fiscal Year on all expected development through Buildout of Improvement Area No. 1. b. For Assessor’s Parcels of Developed Property, Final Map Property, and Undeveloped Property, divide the Backup Facilities Special Tax computed pursuant to Step 2.a by the total estimated Backup Facilities Special Tax for Improvement Area No. 1 based on the Developed Property Facilities Special Tax which could be charged in the current Fiscal Year on all expected development through Buildout of Improvement Area No. 1. c. For Assessor’s Parcels of Developed Property, Final Map Property, and Undeveloped Property, determine which quotient computed pursuant to Step 3.a or 3.b is larger (the “Maximum Facilities Special Tax Percentage”). 35 of 330
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d. For Assessor’s Parcels of Taxable Property Owner’s Association Property, and Taxable Public Property, divide the Maximum Facilities Special Tax computed pursuant to Step 2.b by the total estimated Maximum Facilities Special Tax for Improvement Area No. 1 based on the Developed Property Facilities Special Tax which could be charged in the current Fiscal Year on all expected development through Buildout of Improvement Area No. 1 (the “Maximum Facilities Special Tax Percentage”).

4. Multiply the Maximum Facilities Special Tax Percentage by the Outstanding Improvement Area No. 1 Bonds to compute the principal amount of Outstanding Improvement Area No. 1 Bonds to be redeemed (the “Bond Redemption Amount”).

5. Compute the Future Facilities Costs.

6. Multiply the Maximum Facilities Special Tax Percentage by the total Future Facilities Costs to compute the Future Facilities amount to be prepaid (the “Future Facilities Amount”).

7. Multiply the Bond Redemption Amount computed pursuant to Step 4 by the applicable redemption premium, if any, on the Outstanding Improvement Area No. 1 Bonds to be redeemed (the "Redemption Premium") determined by reference to the Indenture.

8. Compute the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date following the current Fiscal Year until the earliest redemption date for the Outstanding Improvement Area No. 1 Bonds (the “Interest Amount”).

9. Verify the administrative fees and expenses, including the costs of computation of the prepayment, the costs to invest the prepayment proceeds, the costs of redeeming the Outstanding Improvement Area No. 1 Bonds, and the costs of recording any notices to evidence the prepayment and the redemption (the “Administrative Fees and Expenses”).

10. If reserve funds for the Outstanding Improvement Area No. 1 Bonds held under the Indenture, if any, are at or above 100% of the then reserve requirement (as required by the Indenture) on the prepayment date, a reserve fund credit shall be calculated as a reduction in the applicable reserve requirement for the Outstanding Improvement Area No. 1 Bonds to be redeemed pursuant to the prepayment (the "Reserve Fund Credit"). No Reserve Fund Credit shall be granted if reserve funds are below 100% of the applicable reserve requirement on the prepayment date or if the Reserve Fund is satisfied by a credit instrument rather than cash funded. 36 of 330
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11. If any capitalized interest for the Outstanding Improvement Area No. 1 Bonds will not have been expended at the time of the first interest and/or principal payment following the current Fiscal Year, a capitalized interest credit shall be calculated by multiplying the Maximum Facilities Special Tax Percentage by the expected balance in the capitalized interest fund after such first interest and/or principal payment (the "Capitalized Interest Credit").

12. The Facilities Special Tax prepayment is equal to the sum of the amounts computed pursuant to Steps 4, 6, 7, 8 and 9 less the amount computed pursuant to Steps 10 and 11 (the "Prepayment Amount").

13. From the Prepayment Amount, the amounts computed pursuant to Step 6 shall be used by the City to pay for Authorized Facilities. The amounts computed pursuant to Steps 4, 6, 7 and 8 shall be deposited into the appropriate fund as established under the Indenture and be used to redeem Outstanding Improvement Area No. 1 Bonds or make Debt Service payments. The amount computed pursuant to Step 9 shall be retained by the City for the payment of Administrative Fees and Expenses.

The Facilities Special Tax Prepayment Amount may be sufficient to redeem other than a $5,000 increment of Outstanding Improvement Area No. 1 Bonds. In such cases, the increment above $5,000 or integral multiple thereof will be retained in the appropriate fund established under the Indenture to be used with the next prepayment of Outstanding Improvement Area No. 1 Bonds or to make Debt Service payments.

Current year Facilities Special Taxes that are not yet paid will remain outstanding and will be collected in the manner billed. With respect to any Assessor's Parcel that has prepaid its Facilities Special Tax Obligation, the CFD Administrator shall cause a suitable notice to be recorded in compliance with the Act to indicate the prepayment of the Facilities Special Tax and the obligation of such Assessor's Parcel satisfied.

Notwithstanding the foregoing, no prepayment will be allowed unless the Maximum Facilities Special Tax that may be levied on Taxable Property both prior to and after the proposed prepayment is at least 1.1 times the maximum annual Debt Service on all Outstanding Improvement Area No. 1 Bonds plus annual Administrative Expenses, as reasonably estimated by the CFD Administrator.

2. Prepayment in Part
The Facilities Special Tax may be partially prepaid, provided that a partial prepayment may be made only after all authorized Improvement Area No. 1 Bonds have been issued and only if there are no delinquent Facilities Special Taxes with respect to such Assessor's Parcel at the time of partial prepayment. The amount 37 of 330
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of the prepayment shall be calculated as in Section J.1; except that a partial prepayment shall be calculated by the CFD Administrator according to the following formula:

PP = PE x F.

These terms have the following meaning:

PP = the partial prepayment
PE = the Facilities Special Tax Prepayment Amount calculated according to Section J.1
F = percentage by which the Facilities Special Tax shall be prepaid The Facilities Special Tax partial prepayment amount must be sufficient to redeem at least a $5,000 increment of Bonds.

The owner of any Assessor’s Parcel who desires such partial prepayment shall notify the CFD Administrator of such owner’s intent to partially prepay the Facilities Special Tax and the percentage by which the Facilities Special Tax shall be prepaid. The CFD Administrator shall provide the owner with a statement of the amount required for the partial prepayment of the Facilities Special Tax for an Assessor’s Parcel within 45 days of the request and may charge a fee for providing this service. With respect to any Assessor’s Parcel that is partially prepaid, the CFD Administrator shall (i) distribute the prepayment funds remitted according to Section J.1, and (ii) indicate in the records of Improvement Area No. 1 that there has been a partial prepayment of the Facilities Special Tax and that a portion of the Facilities Special Tax with respect to such Assessor’s Parcel, equal to the outstanding percentage (1.00 - F) of the remaining Maximum Facilities Special Tax, shall continue to be levied on such Assessor’s Parcel pursuant to Section C.

K. FACILITIES SPECIAL TAX REDUCTION
The following definitions apply to this Section K:
"Appraisal” means an appraisal or a letter updating a previous appraisal prepared by the MAI Appraiser which (a) sets forth the Land Use Classes constructed or expected to be constructed within Improvement Area No. 1, (b) sets forth the estimated number of constructed and expected residential dwelling units for each Land Use Class, (c) sets forth such MAI Appraiser’s estimate of the price point for each Land Use Class and (d) uses a date for establishing such price point that is no earlier than 60 days and no later than 180 days prior to the date the Appraisal is delivered to the CFD Administrator pursuant to this Section K. 38 of 330
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"Issuance Date” means the date a bond purchase contract related to the sale of the first series of Improvement Area No. 1 Bonds is entered into between the purchaser of the Improvement Area No. 1 Bonds and CFD No. 2026-1. "MAI Appraiser” means an appraiser licensed or otherwise qualified to do business in the State or firm of such appraisers selected by the City that (a) has substantial experience in performing appraisals for residential units within community facilities districts or otherwise estimating or confirming pricing for residential units in community facilities districts, (b) has recognized expertise in analyzing economic and real estate data that relates to the appraisal of residential units in community facilities districts, (c) is in fact independent and not under the control of CFD No. 2026-1 or the City, (d) does not have any substantial interest, direct or indirect, with or in (i) CFD No. 2026-1, (ii) the City, (iii) any owner of real property in CFD No. 2026-1, or (iv) any real property in CFD No. 2026-1, (e) is not connected with CFD No. 2026-1 or the City as an officer or employee thereof, but who may be regularly retained to make reports to CFD No. 2026-1 or the City, and (f) holds an American Institute of Real Estate Appraisers’ MAI designation. “Price Point Consultant” means any consultant or firm of such consultants selected by the City that (a) has substantial experience in performing price point studies for residential units within community facilities districts or otherwise estimating or confirming pricing for residential units in community facilities districts, (b) has recognized expertise in analyzing economic and real estate data that relates to the pricing of residential units in community facilities districts, (c) is in fact independent and not under the control of CFD No. 2026-1 or the City, (d) does not have any substantial interest, direct or indirect, with or in (i) CFD No. 2026-1, (ii) the City, (iii) any owner of real property in CFD No. 2026-1, or (iv) any real property in CFD No. 2026-1, and (e) is not connected with CFD No. 2026-1 or the City as an officer or employee thereof, but who may be regularly retained to make reports to CFD No. 2026-1 or the City.
“Price Point Study” means a price point study or a letter updating a previous price point study prepared by the Price Point Consultant which (a) sets forth the Land Use Classes constructed or expected to be constructed within Improvement Area No. 1, (b) sets forth the estimated number of constructed and expected residential dwelling units for each Land Use Class, (c) sets forth such Price Point Consultant’s estimate of the lowest base price point, excluding concessions, incentives, upgrades, or premiums, for each Land Use Class and (d) uses a date for establishing such price points that is no earlier than 60 days and no later than 180 days prior to the date the Price Point Study is delivered to the CFD Administrator pursuant to this Section K.
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"Total Effective Tax Rate” means, for a Land Use Class, the quotient of (a) the Total Tax Burden for such Land Use Class divided by (b) the lowest base price point, excluding concessions, incentives, upgrades, or premiums, for such Land Use Class, converted to a percentage.
“Total Tax Burden” means, for any Unit of Residential Property, the sum of the Assigned Facilities Special Tax, together with ad valorem property taxes, special assessments, special taxes for any overlapping community facilities district (assigned special taxes, if applicable), and any other taxes, fees and charges, and excluding services charges such as sewer and trash, which are collected by the County via property tax bills and which are payable from and secured by the property and excluding homeowner’s association assessments, assuming such Unit of Residential Property has been completed, sold and subject to such levies and impositions.

Facilities Special Tax Reduction Calculation
Prior to the issuance of the first series of Improvement Area No. 1 Bonds, the following steps shall be taken for each Land Use Class of Residential Property in Improvement Area No. 1:

At least 60 days prior to the expected Issuance Date of the first series of Improvement Area No. 1 Bonds, the City, on behalf of CFD No. 2026-1, shall determine, based on an Appraisal or a Price Point Study, whether or not the Total Effective Tax Rate for each Land Use Class as calculated by the CFD Administrator separately for each Land Use Class of Residential Property is less than or equal to 1.60%.

1. CFD No. 2026-1 shall cause an Appraisal or Price Point Study to be delivered to the CFD Administrator.
a. If the Total Effective Tax Rate for each Land Use Class is less than or equal to 1.60%, then there shall be no change in the Assigned Facilities Special Tax for such Land Use Class.
b. If the Total Effective Tax Rate for any Land Use Class is greater than

1.60%, the CFD Administrator shall calculate a revised Assigned Facilities Special Tax for such Land Use Class which revised Assigned Facilities Special Tax shall be the highest amount (rounded to the nearest whole dollar) that will not cause the Total Effective Tax Rate for any Land Use Class to exceed 1.60%. There shall be no adjustment made to the Special Tax rates of those Land Use Classes that do not have a Total Effective Tax Rate above 1.60% after the Appraisal or Price Point Study; there shall be no requirement to proportionately reduce all Land Use Classes if there is a reduction in some Land Use Classes. 40 of 330
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2. If the Assigned Facilities Special Tax for any Land Use Class is revised pursuant to step 1.b. above, the CFD Administrator shall calculate a revised Backup Facilities Special Tax for all property. The revised aggregate Backup Facilities Special Tax per Acre shall be an amount (rounded to the nearest whole dollar) equal to the aggregate Backup Facilities Special Tax per Acre as set forth in Section C above, reduced by a percentage equal to the weighted average percentage reduction in the Assigned Facilities Special Taxes for all Land Use Classes of Residential Property resulting from the calculations in steps 1.a. through 1.b. above. The weighted average percentage will be calculated by taking the sum of the products of the number of units constructed or expected to be constructed in each Land Use Class multiplied by the percentage change in the Assigned Facilities Special Tax (pursuant to step 1.b. above) for each Land Use Class (or 0 for Land Use Classes that are not changing). This amount is then divided by the total number of units constructed or expected to be constructed and converted to a percentage. Under no circumstances may the Backup Facilities Special Tax be increased.

3. If the Assigned Facilities Special Tax for any Land Use Class is revised pursuant to step 1.b. above, the CFD Administrator shall prepare and execute a Certificate of Reduction in Facilities Special Taxes substantially in the form of Attachment A hereto and shall deliver such Certificate of Reduction in Facilities Special Taxes to Improvement Area No. 1. The Certificate of Reduction in Facilities Special Taxes shall be completed for all Land Use Classes and shall set forth, as applicable, either (i) the reduced Assigned Facilities Special Tax for a Land Use Class as calculated pursuant to step 1.b. or (ii) the Assigned Facilities Special Tax as identified in Table 1 in Section C for a Land Use Class that was not revised as determined pursuant to step 1.a.; as well as the revised aggregate Backup Facilities Special Tax rate per Acre as calculated pursuant to step 2.

4. If the Issuance Date of the first series of Improvement Area No. 1 Bonds is within 120 days of the date of receipt of the Appraisal or a Price Point Study by the CFD Administrator, CFD No. 2026-1 shall execute the acknowledgement on such Certificate of Reduction in Special Taxes, dated as of the closing date of such Bonds, and upon the closing of such first series of Bonds, the Assigned Facilities Special Tax for each Land Use Class and the Backup Facilities Special Tax shall be, for all purposes, as set forth in such Certificate of Reduction in Facilities Special Taxes. If the Issuance Date of the first series of Bonds is not within 120 days of the date of receipt of the Appraisal or a Price Point Study by the CFD Administrator, such Certificate of Reduction in Facilities Special Taxes shall not be 41 of 330
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acknowledged by CFD No. 2026-1 and shall, as of such date, be void and of no further force and effect. In such case, if subsequently a first series of Improvement Area No. 1 Bonds is expected to be issued, at least 30 days prior to the expected Issuance Date of such first series of Improvement Area No. 1 Bonds, the CFD Administrator shall cause a new Appraisal or a Price Point Study to be delivered to the CFD Administrator and, following such delivery, steps 1 through 6 of this section shall be performed based on such new Appraisal or a Price Point Study.

5. As soon as practicable after the execution by CFD No. 2026-1 of the acknowledgement on the Certificate of Reduction in Facilities Special Taxes, CFD No. 2026-1 shall cause to be recorded in the records of the County Recorder an Amended Notice of Special Tax Lien for Improvement Area No. 1 reflecting the Assigned Facilities Special Taxes and the Backup Facilities Special Tax set forth in such Certificate of Reduction in Facilities Special Taxes.

6. If the Assigned Facilities Special Tax is not required to be changed for any Land Use Class based on the calculations performed under step 1 above, there shall be no reduction in the Facilities Special Tax, and no Certificate of Reduction in Facilities Special Taxes shall be required. However, the CFD Administrator shall prepare and deliver to CFD No. 2026-1 a Certificate of No Reduction in Facilities Special Taxes substantially in the form of Attachment B hereto dated as of the closing date of the first series of Bonds that states that the calculations required pursuant to this Section K have been made and that no changes to the Facilities Special Tax are necessary.

CFD No. 2026-1 and the CFD Administrator shall take no further actions under this Section K upon the earlier to occur of the following: (i) the execution of the acknowledgement by CFD No. 2026-1 on a Certificate of Reduction in Facilities Special Taxes pursuant to step 3; or (ii) the delivery by the CFD Administrator of a Certificate of No Reduction in Facilities Special Taxes pursuant to step 6.

L. TERM
The Facilities Special Tax shall be levied and collected as needed to fund the Annual Facilities Special Tax Requirement for up to 40 years from the initial levy of the Facilities Special Tax. In any event no Facilities Special Tax shall be levied for CFD No. 2026-1 after the 2065/66 Fiscal Year.

The Services Special Tax shall be levied and collected in perpetuity to fund the Annual Services Special Tax Requirement.
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A-24

ATTACHMENT A

CERTIFICATE OF REDUCTION IN FACILITIES SPECIAL TAXES
COMMUNITY FACILITIES DISTRICT NO. 2026-1
(STATION EAST FACILITIES AND SERVICES)
IMPROVEMENT AREA NO. 1

1. Pursuant to Section K of the Rate and Method of Apportionment of Special Taxes attached to the Notice of Special Tax Lien recorded in the Official Records of the County of Alameda as Document No. _________ on the ____ day of _________, 20__, the CFD Administrator hereby reduces the Maximum Facilities Special Tax for Developed Property for [certain or all] Land Use Classes within Improvement Area No. 1.
2 . The calculations made pursuant to Section K were based upon an Appraisal or a Price Point Study that was received by the CFD Administrator on __________________.

3. Table A-1 below shows the Assigned Facilities Special Tax for each Land Use Class after such reduction:

Table A-1
Reduced Assigned Facilities Special Taxes for Developed Property Fiscal Year _______
Land
Use
Class
Plan
Area Description
Assigned
Facilities
Special Tax
1 4 Residential Property $_____ per
Unit
2 5, 6, and
11 Residential Property $_____ per Unit
3 7 and 8 Residential Property $_____ per
Unit
4 9 and 10 Residential Property $_____0 per
Unit
5 n/a Accessory Dwelling
Unit $0 per Unit
6 n/a Non-Residential
Property $0 per Acre

4. The Backup Facilities Special Tax for Developed Property will equal Maximum Facilities Special Tax as determined in Section 5, below, when such property became Final Map Property.

5. The Maximum Facilities Special Tax for each Assessor’s Parcel of Final Map Property shall be the greater of (i) the amount derived by application of the Assigned Facilities Special Tax or (ii) the amount derived by application of the Backup Facilities Special Tax.
a. Assigned Facilities Special Tax
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The Assigned Facilities Special Tax for each Assessor’s Parcel of Final Map Property shall be $_____ per Residential Lot.
b. Backup Facilities Special Tax
The aggregate Backup Facilities Special Tax for each Assessor’s Parcel of Final Map Property shall be $_____ per Acre.

6. The Maximum Facilities Special Tax for each Assessor’s Parcel of Undeveloped Property, Taxable Property Owner Association Property, and Taxable Public Property shall be $_____ per Acre.

7. Upon execution of the certificate by the City, the CFD Administrator shall cause an amended notice of special tax lien for Improvement Area No. 1 to be recorded reflecting the modifications set forth herein.

8. By execution hereof, the undersigned acknowledges, on behalf of the City and CFD No. 2026-1, receipt of this certificate and modification of the Rate and Method of Apportionment of Special Taxes as set forth in this certificate.

Submitted

CFD ADMINISTRATOR
By: Date:
___________________
Community Facilities District No. 2026-1 of the City of Union City By: Date as of :
___________________
[closing date of Bonds]
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A-26

ATTACHMENT B

CERTIFICATE OF NO REDUCTION IN FACILITIES SPECIAL TAXES COMMUNITY FACILITIES DISTRICT NO. 2026-1
IMPROVEMENT AREA NO. 1

1. All calculations required pursuant to Section K of the Rate and Method of Apportionment have been made based upon an Appraisal or a Price Point Study that was received by the CFD Administrator on __________________.

2. Total Effective Tax Rate for all Land Use Classes is less than or equal to 1.60%.

3. The Maximum Facilities Special Tax for Developed Property within Improvement Area No. 1, including the Assigned Facilities Special Taxes and the Backup Facilities Special Tax set forth in Section C of the Rate and Method of Apportionment, shall remain in effect and not be reduced.

Submitted

CFD ADMINISTRATOR
By: Date as of:
_______
[closing date of Bonds]
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ATTACHMENT C

MAP OF PLAN AREAS
COMMUNITY FACILITIES DISTRICT NO. 2026-1
IMPROVEMENT AREA NO. 1
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EXHIBIT B

AUTHORIZED FACILITIES AND SERVICES

CITY OF UNION CITY
COMMUNITY FACILITIES DISTRICT NO. 2026-1
(STATION EAST FACILITIES AND SERVICES)

AUTHORIZED FACILITIES
The City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services), Improvement Area No. 1, and any Future Improvement Area (collectively, the “CFD”) is authorized to finance all or a portion of the costs of the facilities permitted under the Mello-Roos Community Facilities Act of 1982 (“Act”) and that are provided in connection with the development of the property located in the CFD, including, but not limited to, those described below.

The CFD is authorized to finance the purchase, construction, expansion, improvement, or rehabilitation of any real or other tangible property with an estimated useful life of five years or longer, together with the planning and design work that is directly related to the purchase, construction, expansion, or rehabilitation of any real or tangible property (collectively, the “Facilities”), including, but not be limited to, roadway and transportation facilities, water, sewer and storm drain facilities, parks, landscape, and open space, and school facilities. Examples of Facilities are described below.

Authorized Facilities include any facilities authorized by the Act that are financed in whole or in part by development impact fees and/or mitigation payments levied or collected in connection with development of the property, whether by the City or any other local agency. By way of example and not limitation, authorized facilities include, but are not limited to, facilities authorized by the Act to be funded by the following:
• City of Union City
• Union Sanitary Sewer District
• Alameda County Water District
• New Haven Unified School District
Roadway and Transportation Improvements
Authorized facilities include any and all on-site and off-site publicly-owned roadway and transportation facilities required to meet the needs of development within the CFD.

Eligible costs of these facilities include, but are not limited to, the following to the extent that they are capital costs of the facilities: Acquisition of land and easements; design; project management; payment and performance bond premiums; clearing, grubbing, and demolition; grading, soil import/export; paving (including slurry seal), and decorative/enhanced pavement concrete and/or pavers; bridge crossings and culverts; joint trenches, underground utilities and undergrounding of existing utilities; dry utilities and appurtenances; curbs, gutters, sidewalks, bike trails (including onsite and off-site); enhanced fencing, and access ramps; street lights; roundabouts; intersections, signalization, and traffic signal control systems; bus turnouts; signs and striping; winterization and erosion control; median and landscape corridor landscaping and irrigation; bus shelters; retaining walls; masonry walls; implementation and maintenance 48 of 330
of Stormwater Pollution Prevention Plan (SWPPP) measures; traffic control and agency fees required as a condition of development within the boundaries of the CFD; and other improvements related thereto where required.

Parks, Landscaping and Open Space
Authorized facilities include any and all on-site and off-site parks, landscaping and open space designed to meet the needs of development within the CFD. Eligible costs of these facilities include, but are not limited to, the following to the extent that they are capital costs of the facilities: Acquisition of land and easements; design; project management; grading; implementation and maintenance of SWPPP measures; potable water storage, groundwater wells, storage tanks, distribution facilities including pipelines and appurtenances and irrigation facilities, gate valves, flow meters, booster pump pressurization system, hardscape improvements (pavement), fencing, lighting at water storage tank sites, booster pumping stations, and groundwater wells; and other improvements related thereto.

Drainage System Improvements
Authorized facilities include any and all on-site and off-site drainage facilities required to meet the storage and conveyance needs of development within the CFD. Eligible costs of these facilities include, but are not limited to, the following to the extent that they are capital costs of the facilities: Acquisition of land and easements; design; project management; grading; implementation and maintenance of SWPPP measures; mains, pipelines and appurtenances; outfalls and water quality measures; temporary drainage facilities; detention/retention basins and drainage pretreatment facilities; drainage ways/channels; pump stations; landscaping and irrigation; stormwater hydromodification (including grading & demolition); access roads, gates, and fencing; striping and signage; and other improvements related thereto where required.

Water System and Irrigation Improvements
Authorized facilities include any and all on-site and off-site potable water system facilities designed to meet the needs of development within the CFD. Eligible costs of these facilities include, but are not limited to, the following to the extent that they are capital costs of the facilities: Acquisition of land and easements; design; project management; grading; implementation and maintenance of SWPPP measures; potable water storage, groundwater wells, storage tanks, distribution facilities including pipelines and appurtenances and irrigation facilities, gate valves, flow meters, booster pump pressurization system, hardscape improvements (pavement), fencing, lighting at water storage tank sites, booster pumping stations, and groundwater wells; and other improvements related thereto.

Recycled Water System Improvements
Authorized facilities include any and all on-site and off-site recycled water system facilities designed to meet the needs of development within the CFD. Eligible costs of these facilities include, but are not limited to, the following to the extent that they are capital costs of the facilities: Acquisition of land and easements; design; project management; grading; implementation and maintenance of SWPPP measures; recycled water storage, treatment and distribution facilities including pipelines and 49 of 330
appurtenances, gate valves, storage tanks, flow meters, booster pump pressurization system, hardscape improvements (pavement), fencing, lighting at water storage tank sites, booster pumping stations, and groundwater wells; and other improvements related thereto.

Wastewater System Improvements
Authorized facilities include any and all on-site and off-site publicly-owned facilities required to meet the wastewater conveyance needs of development within the CFD.

Eligible costs of these facilities include, but are not limited to, the following to the extent that they are capital costs of the facilities: Acquisition of land and easements; design; project management; grading; implementation and maintenance of SWPPP measures; pipelines and all appurtenances thereto; manholes; tie-in to existing main line; emergency storage for at lift station sites; force mains; lift stations; odor-control facilities; sewer treatment plant improvements; hardscape improvements (pavement), fencing, lighting at lift station sites; and other improvements related thereto where required.

Other
Any other facilities serving substantially the same purpose as the above-described facilities.

The foregoing description of the type of Facilities eligible to be financed is general in nature and includes any appurtenant work and incidental expenses related to the Facilities. The final nature and location of the facilities will be determined upon the preparation of final plans and specifications for such facilities.

AUTHORIZED SERVICES
The authorized services to be funded by the CFD are the services described in Section 53313 of the Act, including but not limited to performance by City employees or contractors of maintenance and operation activities. Maintenance as used herein includes replacement and the creation and funding of a reserve fund to pay for replacement of facilities. The CFD shall only fund authorized services to the extent that they are in addition to those provided to land within the CFD prior to the creation of the CFD.

Incidental Expenses
Also included as authorized expenditures for the CFD are: (1) CFD bond-related fees and costs, including but not limited to fees of the City, underwriters/placement agents, financial advisors, appraisals, reserve fund balance, capitalized interest, bond counsel, disclosure counsel, special tax consultant, bond and official statement printing and all other incidental expenses; and (2) CFD administrative fees, including fees of the City, the bond trustee/fiscal agent, and the special tax consultant, related to the CFD. 50 of 330
Draft
2 ACQUISITION AGREEMENT
by and between the

CITY OF UNION CITY
and

LENNAR HOMES OF CALIFORNIA, LLC
dated as of July 1, 2026
relating to:

Improvement Area No. 1 of the
City of Union City
Community Facilities District No. 2026-1
(Station East Facilities and Services)
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-iTABLE OF CONTENTS

ARTICLE I

DEFINITIONS
Section 1.01. Definition........................................................................................................1

ARTICLE II

RECITALS
Section 2.01. The CFD and the Improvement Areas...........................................................5 Section 2.02. The Development...........................................................................................5 Section 2.03. The Facilities and Fees..................................................................................6 Section 2.04. The Financing ................................................................................................6 Section 2.05. Available Amounts .........................................................................................6 Section 2.06. No Advantage to City Construction................................................................6 Section 2.07. Agreements....................................................................................................6

ARTICLE III

FUNDING
Section 3.01. City Proceedings............................................................................................6 Section 3.02. Bonds.............................................................................................................7 Section 3.03. Bond Proceeds ..............................................................................................7 Section 3.04. No Change in Obligations Under Conditions of Approval..............................7 Section 3.05. Refunding Bonds ...........................................................................................8 Section 3.06. Special Taxes ................................................................................................8

ARTICLE IV

CONSTRUCTION OF FACILITIES
Section 4.01. Plans..............................................................................................................8 Section 4.02. Duty of Developer to Construct......................................................................8 Section 4.03. Relationship to Public Works .........................................................................9 Section 4.04. Developer is Independent Contractor ..........................................................10 Section 4.05. Performance and Payment Bonds...............................................................11 Section 4.06. Contracts and Change Orders.....................................................................11 Section 4.07. Time for Completion.....................................................................................11

ARTICLE V

ACQUISITION AND PAYMENT
Section 5.01. Inspection.....................................................................................................12 Section 5.02. Agreement to Sell and Purchase Facilities ..................................................12 Section 5.03. Payment Requests.......................................................................................12 Section 5.04. Processing Payment Requests....................................................................13 Section 5.05. Payment.......................................................................................................13 Section 5.06. Restrictions on Payments ............................................................................14 Section 5.07. Use of Excess Funds in the Improvement Fund..........................................16 Section 5.08. Defective or Non-Conforming Work.............................................................16 Section 5.09. Modification of Discrete Components ..........................................................16

ARTICLE VI

OWNERSHIP AND TRANSFER OF FACILITIES
Section 6.01. Facilities to be Owned by the City- Conveyance of Acceptable Title to City 16
Section 6.02. Facilities Constructed on City Land .............................................................17 Section 6.03. Maintenance and Warranties.......................................................................17

ARTICLE VII

INSURANCE
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-iiSection 7.01. Insurance Requirements..............................................................................17 Section 7.02. General ........................................................................................................17

ARTICLE VIII

REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 8.01. Representations, Covenants and Warranties of the Developer...................18 Section 8.02. Modification of Discrete Components ..........................................................19

ARTICLE IX

TERMINATION
Section 9.01. No Bonds .....................................................................................................20 Section 9.02. Mutual Consent............................................................................................20 Section 9.03. City Election for Cause ................................................................................20 Section 9.04. Force Majeure..............................................................................................21

ARTICLE X

MISCELLANEOUS
Section 10.01. Limited Liability ............................................................................................22 Section 10.02. Excess Costs ...............................................................................................22 Section 10.03. Audit.............................................................................................................22 Section 10.04. Attorney’s Fees............................................................................................22 Section 10.05. Notices.........................................................................................................22 Section 10.06. Severability ..................................................................................................23 Section 10.07. Successors and Assigns..............................................................................23 Section 10.08. Other Agreements........................................................................................23 Section 10.09. Waiver..........................................................................................................24 Section 10.10. Merger..........................................................................................................24 Section 10.11. Parties in Interest.........................................................................................24 Section 10.12. Amendment..................................................................................................24 Section 10.13. Counterparts ................................................................................................24 Section 10.14. Governing Law.............................................................................................24

EXHIBIT A DESCRIPTION OF FACILITIES ELIGIBLE FOR FINANCING BY THE CFD

EXHIBIT B DESCRIPTION OF FACILITIES, DISCRETE COMPONENTS AND

ESTIMATED COSTS
EXHIBIT C-1 FORM OF PAYMENT REQUEST (FACILITIES)
EXHIBIT C-2 FORM OF PAYMENT REQUEST (FEES)

EXHIBIT D PUBLIC WORKS BID PROCEDURES

EXHIBIT E CONTRACTS ENTERED INTO BEFORE THE DATE OF THIS

ACQUISITION AGREEMENT
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ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT (the “Acquisition Agreement”), dated as of July 1, 2026, is by and between the City of Union City, California, a general law city and municipal corporation organized and existing under the Constitution and laws of the State of California (the “City”), for the proposed City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services) (“CFD”), and Lennar Homes of California, LLC, a California limited liability company (the “Developer”).

ARTICLE I

DEFINITIONS
Section 1.01. Definitions. Unless otherwise defined herein, the following terms shall have the meanings ascribed to them in this Section 1.01 for purposes of this Acquisition Agreement.
“Acceptable Title” means title to land or interest therein, in form acceptable to the public entity that will own and operate the applicable Facility, is free and clear of all liens, taxes, assessments, leases, easements and encumbrances, whether or not recorded, but subject to any exceptions determined by the Director (upon consultation with representatives of the public entity that will own and operate the applicable Facility, if other than the City) as not interfering with the actual or intended use of the land or interest therein. Notwithstanding the foregoing, an irrevocable offer of dedication may constitute land with an “Acceptable Title” if: (a) such offer is necessary to satisfy a condition to a tentative or final parcel map, (b) such offer is in a form acceptable to the Director, and (c) the Director has no reason to believe that such offer of dedication will not be accepted by the applicable public agency (but acceptance itself is not required. “Acceptance Date” means (a) with respect to any Facility owned by the City, the date the City Council takes final action to accept dedication of or transfer of title to such a Facility; and (b) with respect to all other Facilities, the date on which the Facilities have been accepted by the public entity that will own the Facility, or the date on which such public agency determines that the respective Facility has been completed in accordance with the approved Plans, in each case based on written advise from such public agency or based on such other evidence as the Director determines to be acceptable.
“Acquisition Agreement” means this Acquisition Agreement, together with any Supplement hereto.
“Act” means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 of Part 1, Division 2 of Title 5 of the Government Code of the State. “Actual Cost” means the substantiated hard and soft costs of a Facility or a Discrete Component, which costs may include: (a) the costs incurred by the Developer for the construction of the Facility or Discrete Component, including demolition and site grading costs directly related to such construction, general condition costs and general contractor fees (but only if the general contractor is not the Developer or an Affiliate of the Developer), (b) the costs incurred by the Developer in preparing the Plans for the Facility or Discrete Component and the related costs of design, engineering and environmental evaluations of the Facility or Discrete Component, (c) the fees paid to governmental agencies or public entities for obtaining permits, licenses or other 54 of 330
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governmental approvals for the Facility or Discrete Component, (d) professional costs incurred by the Developer associated with the Facility or Discrete Component, such as engineering, legal, accounting, plan check, permit, inspection, construction staking, materials testing, and similar professional services; (e) costs directly related to the construction and/or acquisition of the Facility or Discrete Component, such as costs of outside consultants or third-parties engaged to verify costs, and the payment, performance and/or maintenance bonds, and insurance costs (including costs of any title insurance required hereunder); (f) the actual, reasonable cost of compiling, reviewing, and preparing Payment Requests and the materials required to submit payment requests, paid by the Developer to both companies that the Developer has engaged (such as DPFG) and companies retained by the City to evaluate the Payment Requests (such as Harris and Associates), and (g) the out-of-pocket cost to the Developer of any real property or interest therein that the Developer must acquire from one or more entities that are not Affiliates of the Developer and which acquisition is required for the construction of a Facility and which real property or interest therein is required to be conveyed to the public entity that will own or operate such Facility. Actual Cost may also include an amount not in excess of five percent (5.0%) of the cost described in clause (a) of the preceding sentence in respect of any construction, project management or other similar fee, which fee may be payable to the Developer, any party related thereto or a third party. In no event, however, shall Actual Cost include any payment for any cost of carry or interest expense with respect to any construction loan obtained by the Developer or otherwise with respect to the Facilities or Discrete Components, or any premium paid to a contractor for early completion of any improvement.
“Administrative Expenses” means the expenses of the City incurred in connection with the administration of the CFD and the levy and collection of the Special Taxes, including any and all out-of-pocket expenses as well as an allocable portion of the salaries (and City overhead related thereto) of City Staff for time working on such matters. “Affiliate” of another Person means (a) a Person directly or indirectly owning, controlling, or holding with power to vote, 20% or more of the outstanding voting securities of such other Person, (b) any Person that has 20% or more of of its outstanding voting securities directly or indirectly owned, controlled, or held with power to vote, by such other Person, and (c) any Person directly or indirectly controlling, controlled by, or under common control with, such other Person; for purposes hereof, control means the power to exercise a controlling influence over the management or policies of a Person, unless such power is solely the result of an official position with such Person.
“Assigned Facilities Special Tax” shall have the meaning given such term in the Rate and Method of Apportionment.
“Available Amounts” means (i) proceeds of the Bonds deposited to the Improvement Fund to pay for the Facilities and Fees, (ii) Remainder Taxes deposited in the Remainder Taxes Project Account to pay for the Facilities and Fees (if any), and (iii) prepayments of special taxes that are required to be used for the costs of Facilities and Fees. “Bonds” means any bonds issued by the City for Improvement Area No. 1. “Business Day” means a day on which the City’s Public Works Department is open for business.
“CFD” means the City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services), established by the City Council of the City under the Act. 55 of 330
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“City” means the City of Union City, California, a general law city and municipal corporation organized and existing under the Constitution and laws of the State. “Conditions of Approval” means the conditions of approvals and mitigation measures imposed in connection with the granting of the land use entitlements for the development of land in the CFD, and any subdivision improvement, development or other agreement with the City relating to the development of the land in the CFD or the installation of the Facilities, or the payment of Fees, including but not limited to the Development Agreement and the Subdivision Improvement Agreement.
“County” means the County of Alameda, California.
“Developed Property” shall have the meaning given such term in the Rate and Method of Apportionment.
“Developer” means Lennar Homes of California, LLC, a California limited liability company, and its successors and assigns to the extent permitted under Section 10.07 hereof. “Developer Land Bank” means Millrose Properties California, LLC, a California limited liability company, and its successors and assigns.
“Development Agreement” means, as it applies to the property in Improvement Area No. 1 only, the Development Agreement, effective as of June 22, 2021, by and between the City and The Station East Owner, LLC, a Delaware limited liability company, together with the assignment(s) thereunder to Developer, and any amendment(s) thereto, as in effect from time to time.
“Director” means the Public Works Director of the City, or such person’s written designee acting as such under this Acquisition Agreement.
“Discrete Component” means a component of a Facility that the Director has agreed can be separately identified as a component of a completed Facility, and be the subject of a Payment Request hereunder. For Discrete Components of any Facility the purchase value of which is $1,000,000 or less, the Discrete Component must be a portion or phase of a Facility that is capable of serviceable use, as determined by the Director. The Discrete Components are shown on Exhibit B hereto, as it may be amended from time to time. “Eligible Facilities and Fees” means the facilities and fees described in Exhibit A hereto which are eligible to be financed by Improvement Area No. 1, as it may be amended from time to time. The Exhibit E Facilities/Costs are also described in Exhibit A. “Estimated Cost” means the estimated cost of a Facility, Discrete Component, or Fee as shown on Exhibit B hereto. Exhibit B shall also include the Exhibit E Facilities/Costs. “Exhibit E Facilities/Costs” means the Facilities and or costs that were bid prior to the date of this Acquisition Agreement and which are listed in Exhibit E attached hereto. “Facility” or “Facilities” means those Eligible Facilities and Fees listed in Exhibit B hereto, as amended from time to time. To the extent one or more of the entries on Exhibit E constitute Facilities, they shall also be included on Exhibit B; to the extent that one or more of the 56 of 330
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entries on Exhibit E are costs, to the extent applicable, such costs shall be part of the estimated costs of Facilities on Exhibit B.
“Fees” means fees to finance public infrastructure improvements required to be paid under the Development Agreement or Conditions of Approval, or that are necessary to develop the project, including fees payable to the City and other local agencies that pay for public infrastructure improvements authorized by the Act.
“Fiscal Agent” means the entity acting in the capacity as fiscal agent under any Fiscal Agent Agreement, or any successor thereto acting as fiscal agent under any Fiscal Agent Agreement.
“Fiscal Agent Agreement” means an indenture, trust agreement, or fiscal agent agreement between the City and the Fiscal Agent, providing for, among other matters, the issuance of the Bonds and the establishment of the Improvement Fund, as it may be amended from time to time, for Improvement Area No. 1.
“Fiscal Year” means the fiscal year of the City for accounting purposes. “Improvement Area No. 1” means Improvement Area No. 1 of the CFD. “Improvement Fund” means, for Improvement Area No. 1, from and after the issuance of any Bonds for Improvement Area No. 1, the Improvement Fund established by the Fiscal Agent Agreement.
“Payment Request” means a document, substantially in the form of (a) Exhibit C-1 hereto, to be used by the Developer in requesting payment of a Purchase Price for Facilities or (b) Exhibit C-2 hereto, to be used by the Developer in requesting payment with respect to Fees. “Person” means an individual, a corporation, a partnership, an association, a joint stock company, a trust, any unincorporated organization or a government or political subdivision thereof.
“Plans” means the plans, specifications, schedules and related construction contracts and supplemental agreements (change orders) for the Facilities and/or any Discrete Components thereof approved pursuant to the applicable standards of the entity that will own, operate or maintain the Facilities when completed and acquired; including with respect to Facilities to be owned by the City. As of the date of this Acquisition Agreement, the City standards for construction incorporate those set forth in the tStandard Specifications for City of Union City Public Works. “Principal Payment Date” means, either before or after Bonds are issued, September 1 of each year, regardless of whether principal payments are actually due in any particular year. “Purchase Price” means the amount paid by the City for a Facility and/ or any Discrete Components thereof determined in accordance with Article V hereof, being an amount equal to the Actual Cost of such Facility or Discrete Component, but subject to the limitations and reductions provided for in Article V.
“Rate and Method of Apportionment” means the rate and method of apportionment of special taxes for Improvement Area No. 1, as such rate and method of apportionment of special taxes may thereafter be altered in accordance with the Act. 57 of 330
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“Remainder Taxes” means, for Improvement Area No. 1, in each year, as of the day following the Principal Payment Date, all Special Taxes collected prior to such date in excess of the total of: (a) debt service on the outstanding Bonds for Improvement Area No. 1 in the current calendar year, if any; (b) priority and any other reasonable administrative costs that are payable by the City or expected to be payable by the City prior to the receipt of additional Special Tax proceeds for Improvement Area No. 1; and (c) amounts levied to replenish any reserve fund for Improvement Area No. 1 as of the Principal Payment Date, including amounts reserved for reasonable anticipated delinquencies, if any.
“Remainder Taxes Project Account” means for Improvement Area No. 1, the account maintained by or on behalf of City to hold all Remainder Taxes generated from Improvement Area No. 1 to be used for financing Facilities. The Remainder Taxes Project Account may be maintained as a component of any other fund maintained by the City and funds therein may be commingled with other City funds for investment and safekeeping purposes, so long as the City maintains separate records for the amounts deposited thereto, any investment earnings thereon, and any amounts withdrawn therefrom.
“Special Taxes” means the Facilities Special Tax (as defined in the Rate and Method) authorized to be levied by the City on property in Improvement Area No. 1 in accordance with the Rate and Method of Apportionment, pursuant to the Act and the CFD proceedings. “State” means the State of California.
“Subdivision Improvement Agreement” means each public improvement agreement (as referred to in Development Agreement), as applicable to the property in Improvement Area No. 1, to be entered into for the project.
“Substantially Completion” means, for any Discrete Component or Facility, that the Facility or Discrete Component has been inspected by the public entity that will own the Discrete Component or Facility and has been found to have been constructed in accordance with the applicable Plans, even though minor additional work (commonly referred to as “punch list items”) may be required before the applicable public agency will accept ownership of the Discrete Component or Facility.
“Supplement” means a written document amending, supplementing or otherwise modifying this Acquisition Agreement and any exhibit hereto, including any amendments to the list of Facilities and Discrete Components in Exhibit A or Exhibit B, and/or the addition to Exhibit A or Exhibit B of additional Facilities (and Discrete Components) to be financed with the Available Amounts. A Supplement that amends Exhibit A or Exhibit B does not require approval by the City Council or execution of an amendment, and the Supplement agreed to by the Developer and the City may be done administratively.

ARTICLE II

RECITALS
Section 2.01. The CFD and Improvement Area No. 1. The City Council of the City has conducted proceedings under the Act to establish the CFD and Improvement Area No. 1, , for the purpose of financing the acquisition, construction and installation of the Eligible Facilities and 58 of 330
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Fees. This Agreement is applicable to the acquisition and/or construction of the Facilities and Fees from the Available Amounts generated from Improvement Area No. 1.

Section 2.02. The Development. The Developer is developing the land located within Improvement Area No. 1.

Section 2.03. The Facilities and Fees. The Facilities are required under the Development Agreement, and the City and the Developer will benefit from a coordinated plan of design, engineering and construction of the Facilities and the development of the land located within Improvement Area No. 1. The Fees are payable under the Development Agreement or are otherwise required in connection with the development of the property in Improvement Area No.

1. The Developer acknowledges that the inclusion of Facilities in Exhibit A hereto in no way, in itself, obligates the City to issue any Bonds to acquire the Facilities from the Developer or reimburse the Developer for the Fees, or implies that the City has in any way engaged the Developer to construct the Facilities, except as specifically provided in this Acquisition Agreement.

Moreover, this Acquisition Agreement shall in no way, by itself, obligate the Developer to construct the Facilities. The Facilities which are the subject of acquisition by the City from the Developer under this Acquisition Agreement are only the Facilities listed in Exhibit B hereto, as such Exhibit may be amended and/or supplemented by any Supplement.

Section 2.04. The Financing. The Developer and the City wish to finance the acquisition of the Facilities by the City and reimbursement of the Fees, and the payment therefor by entering into this Acquisition Agreement for the acquisition of the Facilities, and payment for Discrete Components thereof as shown in Exhibit B hereto (as it may be amended and supplemented by any Supplement) with Available Amounts.

Section 2.05. Available Amounts. The City expects to issue the Bonds and levy Special Taxes under the Act, the Rate and Method of Apportionment, and the Fiscal Agent Agreement, the proceeds of which shall be used, in part, to finance the acquisition of all or a portion of the Facilities and reimbursement of the Fees.

Section 2.06. No Advantage to City Construction. The City, by its approval of this Acquisition Agreement, has determined that it will obtain no advantage from undertaking the construction by the City directly of the Facilities, and that the provisions of this Acquisition Agreement require that each Facility be constructed pursuant to Plans approved by the City (or other public entity that will own the respective Facility), and each Facility must be inspected by the City (or other public entity that will own the respective Facility) and found to be in compliance with applicable building codes and standards. The Developer hereby represents that it or one of its members has experience in the supervision of the construction of public facilities of the character of the Facilities.

Section 2.07. Agreements. In consideration of the mutual promises and covenants set forth herein, and for other valuable consideration the receipt and sufficiency of which are hereby acknowledged, the City and the Developer agree that the foregoing recitals, as applicable to each of them, are true and correct and further make the agreements set forth herein.

ARTICLE III

FUNDING
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Section 3.01. City Proceedings. The City has conducted all necessary proceedings under the Act for the formation of the CFD and the designation of Improvement Area No. 1 and the City will conduct all necessary proceedings under the law for the issuance, sale and delivery of the Bonds; provided, however, that nothing herein shall be construed as requiring the City to issue the Bonds or any series thereof, except as may be required under the Development Agreement. Upon the written request of the Developer, the Developer and the City staff shall meet regarding the amount, timing and other material aspects of the Bonds, but the legal proceedings and the principal amount, interest rates, maturity dates, and other terms and conditions, and timing of the sale of the Bonds shall be in all respects subject to the approval of the City Council of the City in compliance with the Development Agreement and this Acquisition Agreement. Each series of Bonds shall be sized based on projected Special Tax revenues to be levied and collected on property that, as of the date of the projection, is privately-owned.

Section 3.02. Bonds. The City, in connection with the formation of the CFD and the designation of Improvement Area No. 1, has authorized the CFD on behalf of Improvement Area No. 1 to incur bonded indebtedness, expected to be in the form of special tax bonds. The City shall not be obligated to pay the Purchase Price of the Facilities or any Discrete Components except from Available Amounts. The City makes no warranty, express or implied, that the Available Amounts will be sufficient for payment of the Purchase Price of all of the Facilities.

Section 3.03. Bond Proceeds. If Bonds are issued, the proceeds of the Bonds shall be deposited, held, invested, reinvested and disbursed as provided in the Fiscal Agent Agreement.

A portion of the proceeds of the Bonds (other than proceeds of refunding bonds) are expected to be set aside under the Fiscal Agent Agreement in the Improvement Fund. Moneys in the Improvement Fund shall be withdrawn therefrom in accordance with the provisions of the Fiscal Agent Agreement and the applicable provisions hereof for payment of all or a portion of the Actual Costs of the Facilities (including payment of the Purchase Price of Discrete Components thereof) and the payment of Fees, all as herein provided.

The Developer agrees that the City alone shall direct the investment of the funds on deposit in the funds and accounts established by or pursuant to the Fiscal Agent Agreement, including the Improvement Fund, and that the Developer has no right whatsoever to direct investments under the Fiscal Agent Agreement.

The City shall have no responsibility whatsoever to the Developer with respect to any investment of funds made by the Fiscal Agent under the Fiscal Agent Agreement, including any loss of all or a portion of the principal invested or any penalty for liquidation of an investment. Any such loss may diminish the amounts available in the Improvement Fund to pay the Purchase Price of Facilities (and Discrete Components) and Fees hereunder. The Developer further acknowledges that the obligation of any owner of real property in Improvement Area No. 1, including the Developer to the extent it owns any real property in Improvement Area No. 1, to pay special taxes levied in Improvement Area No. 1 is not in any way dependent on: (a) the availability of amounts in the Improvement Fund to pay for all or any portion of the Facilities (or Discrete Components) and Fees thereof, or (b) the alleged or actual misconduct of the City in the performance of its obligations under this Acquisition Agreement, the Fiscal Agent Agreement, the Development Agreement, any developer agreement or amendment thereto, any subdivision improvement agreement, or any other agreement to which the Developer and the City are signatories. As provided in Section 10.08, the foregoing provisions of this paragraph shall not in any way waive or affect the rights or obligations of the City or the Developer under the Development Agreement.
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Section 3.04. No Change in Obligations Under Conditions of Approval. The Developer acknowledges that any failure by the City to issue the Bonds, or any lack of availability of amounts in the Improvement Fund or the Remainder Taxes Project Account to pay the Purchase Price of Facilities (or Discrete Components) and Fees, shall (a) in no way diminish any obligation of the Developer with respect to the construction of or contributions for public facilities and mitigation measures required by the Conditions of Approval to which the Developer or any land within Improvement Area No. 1 is subject; or (b) diminish any obligation of the City under the Development Agreement (as provided in Section 10.08).

Section 3.05. Refunding Bonds. The City may, in its sole and absolute discretion, determine at any time to issue bonds the net proceeds of which are used to refund any outstanding Bonds (the term “refund” as used in this sentence, and the term “refunding” as used in the next sentence, includes any purchase in lieu of redemption of any Bonds). The Developer shall have no right whatsoever in connection with any such refunding bond issue, including but not limited to any right to any reduction in special taxes levied or to be levied by the CFD, or to any additional funds whether pursuant to this Acquisition Agreement or otherwise as a consequence of any such refunding.

Section 3.06. Remainder Special Taxes Project Account. The Rate and Method of Apportionment allows the levy of special taxes for Pay-As-You-Go Expenditures (as defined in the Rate and Method of Apportionment). To ensure that Eligible Facilities and Fees are financed in the CFD, the City shall levy special taxes on Developed Property within Improvement Area No. 1 at one-hundred percent (100%) of the Assigned Facilities Special Tax rate regardless of whether Bonds have been issued until the fifth fiscal year following the fiscal year in which the first series of Bonds for Improvement Area No. 1 were issued. If, for any reason, Bonds are not issued in Improvement Area No. 1, the City shall levy special taxes on Developed Property within Improvement Area No. 1 at one-hundred percent (100%) of the Assigned Facilities Special Tax rate until such time as all of the Eligible Facilities and Fees are financed in full. Annually, on the day following each Principal Payment Date, all Remainder Taxes for Improvement Area No. 1 (if any) will be deposited in the Remainder Taxes Project Account. Both before and after the issuance of Bonds, the City shall deposit any Remainder Taxes received by it, if any, in the Remainder Taxes Project Account.

ARTICLE IV

CONSTRUCTION OF FACILITIES
Section 4.01. Plans. To the extent that it has not already done so, the Developer shall cause Plans to be prepared for the Facilities. The Developer shall obtain the written approval of the Plans for each Facility in accordance with applicable resolutions, ordinances and regulations of the public entity that will own and operate the respective Facilities and, in any event, such approvals will be sought and given in accordance with the Conditions of Approval. Copies of all Plans shall be provided by the Developer to the Director (in an electronic format approved by the City) upon request therefor, and, in any event, as built drawings (in an electronic format approved by the City) and a written assignment of the Plans for any Facility to be owned by the City shall be provided to the City prior to its acceptance of the related Facility. 61 of 330
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Section 4.02. Duty of Developer to Construct. All Facilities to be acquired hereunder specified in Exhibit B hereto as amended from time to time, shall be constructed substantially in accordance with the approved Plans (including any supplemental agreements) by the Developer or by a licensed general contractor which is under the direct supervision of the Developer. The Developer shall perform all of its obligations hereunder and shall monitor the performance of any applicable general contractor to confirm that all operations with respect to the construction of Facilities are conducted in a good and workmanlike manner, with the standard of diligence and care normally employed by duly qualified persons utilizing their best efforts in the performance of comparable work and in accordance with generally accepted practices appropriate to the activities undertaken. The Developer shall require that each general contractor performing work in connection with the Facilities (and any Discrete Components thereof) employ at all times adequate staff or consultants with the requisite experience and applicable licenses and registrations necessary to administer and coordinate all work related to the design, engineering, acquisition, construction and installation of the Facilities (and any Discrete Components thereof) to be acquired by the City from the Developer hereunder. The Developer shall at all times have adequate staff or consultants with the requisite experience and licenses to discharge its obligations under this Acquisition Agreement.

The Developer shall be obligated: (a) to construct and cause conveyance to the applicable governmental agency all Facilities and Discrete Components thereof listed in Exhibit B hereto at the times and in the manner as set forth in the Development Approvals, and (b) to use its own funds to pay all costs thereof in excess of the Purchase Prices thereof to be paid therefor hereunder. As provided in Section 10.08, the foregoing provisions of this paragraph shall not in any way waive or affect the rights or obligations of either party to this Acquisition Agreement under the Development Agreement.

The Developer shall not be relieved of its obligation to construct each Facility and Discrete Component thereof listed in Exhibit B hereto and convey each Facility to the applicable governmental agency that will own and operate it in accordance with the terms of the Development Approvals, even if (a) because of the limitations imposed by Section 5.06 hereof, the Purchase Price for such Discrete Component or Facility is less than the Actual Cost, or cost to the Developer, of such Discrete Component or Facility, or (b) there are insufficient funds in the Improvement Fund and the Remainder Taxes Project Account to pay the Purchase Prices thereof; and, in any event, this Acquisition Agreement shall not affect any obligation of any owner of land in Improvement Area No. 1 under the Conditions of Approval or any other agreement or any other governmental approval to which any land within Improvement Area No. 1 is subject, with respect to the public improvements required in connection with the development of the land within Improvement Area No. 1. For those improvements that the Developer is obligated to construct and convey pursuant to the Development Approvals, the Developer acknowledges and agrees that it shall pay the costs thereof in excess of available monies in the Improvement Fund and the Remainder Taxes Project Account. As provided in Section 10.08, the foregoing provisions of this paragraph shall not in any way waive or affect the rights or obligations of either party to this Acquisition Agreement under the Development Agreement.

Section 4.03. Relationship to Public Works. This Acquisition Agreement is for the acquisition by the City of the Facilities and payment for the Facilities (including any Discrete Components thereof) listed in Exhibit B hereto from moneys in the Improvement Fund and the Remainder Taxes Project Account and is not intended to be a public works contract by the City for construction of the Facilities. Pursuant to Section 53313.5 of the Act, the City and the Developer agree that the CFD may only finance the purchase of facilities whose construction has been completed, as determined by the legislative body of the City, before the resolution of 62 of 330
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formation to establish the CFD is adopted, except that the CFD may finance the purchase of facilities completed after the adoption of the resolution of formation if the facility was constructed as if it had been constructed under the direction and supervision, or under the authority of, the local agency that will own or operate the facility. The City and the Developer agree that the Developer shall award all contracts for the construction of the Facilities and Discrete Components listed in Exhibit B hereto and that this Acquisition Agreement is necessary to assure the timely and satisfactory completion of the Facilities and compliance with the Act.

In furtherance of the foregoing, the Developer shall, or shall cause the Developer’s general contractor to, award all contracts and any subcontracts for construction of the Facilities (and any Discrete Components thereof) listed in Exhibit B hereto by means of a bid process that complies with the requirements set forth in Exhibit D hereto. In any event, bids for general contractors shall require that general contractors provide reasonable opportunity for local contractors to participate as subcontractors. Upon written request of the Director, the Developer shall provide an analysis of bids received for the construction of the Facilities. This Section 4.03 does not apply to materials or professional services. Notwithstanding the foregoing, Exhibit D does not apply to the Exhibit E Facilities/Costs, which are Facilities or costs that were bid and were under construction pursuant to contracts that were executed prior to the date of this Acquisition Agreement.

The Director may, in the Director’s discretion, waive in writing any bidding requirements with respect to long lead time materials, specialty materials or work, or similar items, if requested in writing by the Developer identifying the specific contract, and the Director shall be entitled to discuss the bidding process with the Developer at any time and from time to time, and to require reasonable changes thereto for future contracts if, in the judgment of the Director, said process is not resulting in competitive bids for the Facilities.

The Developer shall develop or cause to be developed and shall maintain or cause to be maintained a cost-loaded project schedule, using the critical path method, providing for all major project elements included in the construction of any Facility to be acquired hereunder, so that the whole project is scheduled in the most efficient manner. The Developer shall provide the Director with complete copies of the schedule and each update to the schedule for the Director to review.

The Developer shall provide the Director with a schedule showing the dates and times of regularly scheduled meetings to be held with contractors relating to the Facilities and any updates thereto, as well as three (3) days advance notice of any unscheduled meetings with contractors (provided, however, that the Developer shall endeavor to provide any feasible notice, verbal or otherwise, of any emergency meetings with contractors). The Director or the Director’s designated representative shall have the right to be present at such meetings, and to meet and confer with individual contractors in connection with change orders if deemed advisable by the Director. In addition, from time to time at the request of the Director and given reasonable notice thereof, the Developer shall meet and confer with the Director, other City Staff and consultants, and applicable contractors regarding matters arising hereunder with respect to the Facilities, the Discrete Components and the progress in the construction and acquisition of the same, and as to any other matter related to the Facilities or this Acquisition Agreement.

In addition to using City staff for such purposes, the City expects to employ an independent firm as a construction monitor and to otherwise assist the City in administering this Acquisition Agreement. The fees and expenses of any such firm and any successor or replacement firm engaged by the City for such purpose shall be payable from (a) Available Amounts, or (b) advances by the Developer under and as required by the Development Agreement. In the event that at any time there is no acting construction monitor engaged by the City, the City will 63 of 330
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designate a specific City Staff member as a primary contact of the City to interface with the Developer under this Acquisition Agreement.

Section 4.04. Developer is Independent Contractor. In performing this Acquisition Agreement, the Developer is an independent contractor and not the agent or employee of the City or the CFD. Neither the City nor the CFD shall be responsible for making any payments to any officer or employee of the Developer or any contractor, subcontractor, agent, consultant, employee or supplier selected by the Developer.

Section 4.05. Exhibit E Facilities. Notwithstanding anything herein to the contrary, the Exhibit E Facilities/Costs are the subject of contracts that were bid and/or executed prior to the date of this Acquisition Agreement. The Developer has provided documentation to the City that each of the Exhibit E Facilities/Costs received three or more bids for the work. The District will review these contracts and any related change orders, and then the City may determine that they may be financed pursuant to this Acquisition Agreement without complying with Exhibit D if the Director determines (i) the contractor listed in Exhibit E is a reputable contractor registered with the Department of Industrial Relations, (ii) the contract price is the lowest responsible bid to construct the Facilities or incur costs in accordance with the Developer’s development schedule (it being understood that the contract price does not have to be the lowest price to be competitive), (iii) the contract was entered into in an arms-length transaction with the Developer, and (iv) the contractor has no proprietary interest in the overall project.

Section 4.06. Performance and Payment Bonds. The Developer agrees to comply with all applicable performance and payment bonding requirements of the City (and other applicable public entities and/or public utilities) with respect to the construction of the Facilities. All contractors and/or subcontractors providing work in connection with the construction of Facilities shall provide a labor and materials and performance bonds which name the City (and the public agency, if different from the City, that will own any respective Facility) as an additional insured.

Section 4.07. Contracts and Change Orders. The Developer shall be responsible for entering into all contracts and any supplemental agreements (commonly referred to as “change orders”) required for the construction of the Facilities listed in Exhibit B hereto, as amended from time to time, and all such contracts and supplemental agreements shall be submitted to the Director. Prior approval of supplemental agreements by the Director shall only be required for such change orders (a) which materially alter the quality or character of the subject Facilities, or (b) which involve an amount equal to or greater than ten percent (10%) of the amount of the bid for the related Facility. Any such contract or supplemental agreement shall in any event be deemed approved if the Plans contemplating such changes are signed by the City.

Within five (5) Business Days of receipt by the Director of a contract or supplemental agreement that needs the prior approval of the Director, the Director will determine if the costs related to such contract or supplemental agreement, if the contract or supplemental agreement is actually approved by the Director, will be considered an Actual Cost that is payable as a portion of the Purchase Price of the related Facility. Within fifteen (15) Business Days of receipt by the Director of a contract or supplemental agreement that needs the prior approval of the Director, the Director will either (a) if no change is needed to the then-approved Plans for the respective Facility by reason of such contract or change order, approve or deny such contract or supplemental agreement (any such denial to be in writing, stating the reasons for denial and the actions, if any, that can be taken to obtain later approval), or (b) notify the Developer that it needs additional time (not to exceed an additional fifteen (15) Business Days) to approve or deny the contract or supplemental agreement. The Director will use a good faith effort to grant approvals 64 of 330
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or provide denials on a more expeditious basis in the event that the Developer identifies in writing that the subject contract or supplemental agreement is needed to address an emergency or critical path situation. To the extent that a supplemental agreement permitted by this Section 4.07 or otherwise approved by the Director increases the Actual Cost of a Discrete Component or Facility, such increased cost may be payable as part of the Purchase Price of the related Discrete Component or Facility as provided in Section 5.06(A) hereof.

Section 4.08. Time for Completion. The Developer agrees that this Acquisition Agreement is for the benefit of the City and the Developer and, therefore, the Developer represents that it expects the Facilities that are anticipated to be funded by a series of Bonds to be completed and to have requested payment for the Facilities under this Acquisition Agreement prior to the date which is thirty-three (33) calendar months from the date of the closing of the applicable series of the Bonds. Any failure to complete the Facilities within said time period shall not, however constitute a breach by the Developer of the terms of this Acquisition Agreement.

ARTICLE V

ACQUISITION AND PAYMENT
Section 5.01. Inspection. No payment hereunder shall be made by the City to the Developer for a Facility or Discrete Component thereof until the Facility or Discrete Component thereof has been inspected and found to be Substantially Completed in accordance with the approved Plans (including any supplemental agreements), and found to be in compliance with applicable building codes and standards, by the applicable public entity or utility. The applicable departments of the City shall make or cause to be made regular, on-going site inspections of the Facilities and any Discrete Components thereof to be acquired hereunder which are expected to be owned by the City in accordance with customary inspection practices of public agencies for similar public improvements, and consistent with the payment processing provisions of Section

5.04 below; provided that in no event shall the City incur any liability for any delay in the inspection of any Facilities or Discrete Components. For Facilities to be acquired by other public entities or utilities, the Developer shall be responsible for obtaining inspections by the applicable public agencies of the Facilities and any Discrete Components thereof to be owned by them and to take any required actions to correct all deficiencies identified by the inspectors. The Developer agrees to pay all inspection, permit and other similar fees applicable to construction of the Facilities and any Discrete Components thereof, subject to reimbursement therefor as an Actual Cost of the related Facility or Discrete Component.

Section 5.02. Agreement to Sell and Purchase Facilities. The Developer hereby agrees to convey the Facilities listed in Exhibit B hereto to the applicable public agency that will own the respective Facility or Discrete Component, and the City hereby agrees to use amounts in the Improvement Fund and the Remainder Taxes Project Account to pay the Purchase Prices thereof to the Developer, subject to the terms and conditions hereof.

The City shall not be obligated to finance the purchase of any Facility or Discrete Component until the Facility or Discrete Component has been Substantially Completed. The City has agreed hereunder that acceptance of a Facility or Discrete Component is not a requirement to pay the Purchase Price to the Developer for Facilities and Discrete Components of Facilities. 65 of 330
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In any event, the City shall not be obligated to pay the Purchase Price for any Facility or Discrete Component except from the moneys in the Improvement Fund and the Remainder Taxes Project Account.

Section 5.03. Payment Requests.
(a) In order to receive the Purchase Price for a Discrete Component, inspection thereof under Section 5.01 shall have been made and the Developer shall deliver to the Director a Payment Request in the form of Exhibit C-1 hereto for such Discrete Component, together with all attachments and exhibits required by Exhibit C-1 and this Section 5.03 to be included therewith (including, but not limited to Attachments 1 and 2 to Exhibit C-1).
(b) In order to receive the Purchase Price for a Facility (or the final Discrete Component thereof), inspection thereof under Section 5.01 shall have been made and the Developer shall deliver to the Director: (i) a Payment Request in the form of Exhibit C1 hereto for such Facility (or final Discrete Component thereof), together with all attachments and exhibits required by Exhibit C-1 and this Section 5.03 to be included therewith (including, but not limited to Attachments 1 and 2 to Exhibit C-1), (ii) if the property on which the Facility is located is not owned by the applicable public agency that will own the Facility or the subject of a recorded easement at the time of the request, a copy of the recorded documents conveying to the applicable public agency that will own the Facility Acceptable Title to the real property on, in or over which such Facility is located, as described in Section 6.01 hereof, (iii) a copy of the recorded notice of completion of such Facility (if applicable), and (iv) an assignment of the warranties and guaranties for such Facility, as described in Section 6.03 hereof, in a form acceptable to the Director.
(c) In order to receive payment with respect to Fees, the Developer shall deliver to the Director: (a) a Payment Request in the form of Exhibit C-2 hereto for such Fees, together with all attachments and exhibits required by Exhibit C-2 to be included therewith (including, but not limited to Attachment 1 to Exhibit C-2).

Section 5.04. Processing Payment Requests. Within ten (10) Business Days of receipt of any Payment Request, the Director will review the request for completeness and notify the Developer whether such Payment Request is complete, and, if not, the Director will provide in reasonable detail a description of what additional documentation must be provided. Within thirty (30) days following receipt of a complete Payment Request (and all accompanying documentation), the Director will, as applicable, (a) conduct a review in order to confirm that the Facility or Discrete Component identified therein was constructed in accordance with the Plans therefor, and to verify and approve the Actual Cost of such Facility or Discrete Component specified in such Payment Request; (b) confirm the matters certified in the Payment Request; and (c) provide a written approval or denial (specifying in reasonable detail the reason for any denial and the corrective action or actions needed to eliminate the factor or factors giving rise to the denial) of the request. The Developer agrees to cooperate with the Director in conducting each such review and to provide the Director with such additional information and documentation as is reasonably necessary for the Director to conclude each such review. If a Payment Request seeking reimbursement for more than one Facility or Discrete Component or Fee is denied, the Director shall state whether the Payment Request is nevertheless approved and complete for any one or more Facilities or Discrete Components or Fees and any such Facilities or Discrete 66 of 330
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Components or Fees shall be processed for payment under Section 5.05 notwithstanding such partial denial.

Section 5.05. Payment. Upon approval of the Payment Request by the Director, the Director promptly shall sign the Payment Request and forward the same to the City Finance Director. Upon receipt of the reviewed and fully signed Payment Request, the City Finance Director shall cause the same to be paid from amounts in the Improvement Fund and/or the Remainder Taxes Project Account. Prior to the issuance of Bonds, payments from the Remainder Taxes Project Account in respect of fully signed Payment Requests shall be made by the City only twice each year, on or after January 15 and July 15 of each year, but as to any such Payment Request no earlier than thirty (30) days after receipt by the City Finance Director of the fully signed Payment Request. After the issuance of Bonds, the City Finance Director shall use his best efforts to cause each fully signed Payment Request to be paid by the Fiscal Agent under the applicable provisions of the Fiscal Agent Agreement or from the Remainder Taxes Project Account, within thirty (30) days of receipt by the City Finance Director of the fully signed Payment Request. Any approved Payment Request not paid in full due to an insufficiency of funds in the Improvement Fund or Remainder Taxes Project Account shall be paid following additional deposits into the Improvement Fund or the Remainder Taxes Project Account.

The parties hereto acknowledge that (a) the Developer has been and will be constructing Discrete Components or Facilities prior to the availability of Available Amounts, the proceeds of which will be used to reimburse the Developer for those Discrete Components or Facilities, (b) the Developer may be submitting Payment Requests to the City in advance of the availability of Available Amounts, with knowledge that there may be insufficient funds available in the Improvement Fund and/or the Remainder Taxes Project Account for reimbursement, (c) the Discrete Components or Facilities that are the subject of the Payment Requests submitted when there are no proceeds or insufficient proceeds in the Improvement Fund and/or the Remainder Taxes Project Account will be inspected and reviewed by the Director as set forth in this Article V and that such Payment Requests will be reviewed by the Director in the manner set forth in Sections 5.03, 5.04 and 5.05, (d) the Director will forward any approved Payment Request to the City Finance Director as described in the preceding paragraph, and (e) all approved Payment Requests so submitted to the City Finance Director shall be payable as described in the preceding paragraph. The conveyance to the City or other applicable public agency of a Facility prior to the payment in full of the Purchase Price from Available Amounts shall not be construed as a dedication or gift, or a waiver of the unpaid balance of such Purchase Price, and such unpaid amount shall be paid only from funds available in the Improvement Fund and/or the Remainder Taxes Project Account.

The parties hereto acknowledge that the Developer or merchant builder may pay Fees prior to the availability of Available Amounts to pay such Fees. Any Fees paid by the Developer or a merchant builder for Improvement Area No. 1 shall be made with the understanding that such Fees will be reimbursed from the Available Amounts if, and when, such Available Amounts become available. The payment of Fees prior to the availability of the Available Amounts shall not be construed as a dedication or gift of the Fees, or a waiver of the return of the Fees, it being the intention that the Fees be paid by the Available Amounts to the extent of the Available Amounts.

The Purchase Price paid in one or more installments as Available Amounts become available hereunder for any Facility or Discrete Component shall constitute payment in full for such Facility or Discrete Component, including, without limitation, payment for all labor, materials, equipment, tools and services used or incorporated in the work, supervision, administration, 67 of 330
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overhead, expenses and any and all other things required, furnished or incurred for completion of such Facility or Discrete Component, as specified in the Plans.

Section 5.06. Restrictions on Payments. Notwithstanding any other provisions of this Acquisition Agreement, the following restrictions shall apply to any payments made to the Developer under Sections 5.02 and 5.05 hereof:

A. Amounts of Payments. Subject to the following paragraphs of this Section

5.06, payments for each Facility or Discrete Component will be made in the amount of the Purchase Price for such Facility or Discrete Component. Nothing herein shall require the City in any event (i) to pay more than the Actual Cost of a Facility or Discrete Component; or (ii) to make any payment beyond the Available Amounts. The parties hereto acknowledge and agree that all payments to the Developer for the Purchase Prices of Facilities and Discrete Components are intended to be reimbursements to the Developer for monies already expended or for immediate payment by the Developer (or directly by the City) to third parties in respect of such Facilities and/ or Discrete Components. Subject to the following paragraphs of this Section 5.06, payments for Fees will be made in the Actual Amount of such Fees.

B. Withholding Payments. The City shall be entitled to withhold any payment hereunder for a Facility (or Discrete Component thereof) or Fees if the Developer or any Affiliate (as such term is defined in Section 1.01 hereof) of the Developer is delinquent in the payment of ad valorem real property taxes, special assessments or taxes, or special taxes levied in Improvement Area No. 1 for which the Developer or such Affiliate is responsible. In the event of any such delinquency, the City shall only make payments hereunder directly to contractors or other third parties employed in connection with the construction of the Facilities or Discrete Components, until such time as the Developer provides the Director with evidence that all such delinquent taxes and assessments have been paid. Copies of all payment documents related to such direct payments to contractors or other third parties shall be provided to the Developer promptly after payment thereof.

The City shall be entitled to withhold any payment hereunder for a Discrete Component or Facility that is the subject of a Payment Request until it is satisfied that any and all claims for labor and materials have been paid by the Developer for the Discrete Component or Facility that is the subject of a Payment Request, or conditional lien releases have been provided by the Developer for such Discrete Component or Facility.

The City, in its discretion, may waive this limitation upon the provision by the Developer of letters of credit deemed satisfactory by the Director, upon consultation with the City Attorney, to assure payment of such claims.

The City shall be entitled to withhold payment for any Facility hereunder (or the final Discrete Component of any Facility) until (i) all inspections of such Facility or final Discrete Component have been completed and any identified deficiencies for such Facility or final Discrete Component have been corrected, and (ii) a Notice of Completion executed by the Developer, in a form acceptable to the Director, has been recorded for the Facility and general lien releases conditioned solely upon payment from the proceeds of the Bonds to be used to acquire such Facility (or final Discrete Component) have been submitted to the Director for the Facility. The City hereby agrees that the Developer shall have the right to post or cause the appropriate contractor or subcontractor to post a letter of credit with the City and/ or the public entity that will own the Facility to indemnify it for 68 of 330
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any losses sustained by the City and/ or such entity because of any liens that may exist at the time of acceptance of such a Facility, so long as such letter of credit is drawn on a bank and is otherwise in a form acceptable to the Director, upon consultation with the City Attorney, and the applicable public entity.

Nothing in this Acquisition Agreement shall be deemed to prohibit the Developer from contesting in good faith the validity or amount of any mechanics or materialman’s lien nor limit the remedies available to the Developer with respect thereto so long as such delay in performance shall not subject the Facilities or any Discrete Components thereof to foreclosure, forfeiture or sale. In the event that any such lien is contested, the Developer shall only be required to post or cause the delivery of a letter of credit in an amount equal to the amount in dispute with respect to any such contested lien, so long as such letter of credit is drawn on a bank and is otherwise in a form reasonably acceptable to the Director, upon consultation with the City Attorney.

Nothing in this Section 5.06 shall permit the City to withhold payment for any Facility or Discrete Component due to any infirmity or deficiency in any other Facility or Discrete Component for which a Payment Request is not being made.

C. Joint or Third-Party Payments. The City may make any payment jointly to the Developer and any mortgagee or trust deed beneficiary, contractor or supplier of materials, as their interests may appear, or solely to any such third party, if the Developer so requests the same in writing or as the City otherwise determines such joint or third party payment is necessary to obtain lien releases.

Section 5.07. Use of Excess Funds. If the construction by the Developer and acquisition by the City of all the Facilities listed in Exhibit B have been completed and the Purchase Prices with respect thereto have been paid from amounts in the Improvement Fund or the Remainder Taxes Project Account, and if all Fees have been financed, and funds remain on deposit in the Improvement Fund or the Remainder Taxes Project Account, the City shall notify the Developer in writing of the amount of funds remaining in the Improvement Fund or the Remainder Taxes Project Account and shall allow the Developer thirty (30) calendar days to submit a proposed Supplement to Exhibit B to this Acquisition Agreement to include Eligible Facilities and Fees not theretofore funded by the City. If such Supplement is approved by the City Council, the City shall retain the excess funds in the Improvement Fund or the Remainder Taxes Project Account as necessary to pay the Purchase Prices of the Eligible Facilities and Fees so added to Exhibit B. If such proposed amendment is not so approved, or if the remaining funds are in excess of what is needed to pay the Estimated Costs of such Eligible Facilities and Fees added to Exhibit B, such excess funds will be used to pay debt service on the Bonds as provided in the Fiscal Agent Agreement.

Section 5.08. Defective or Non-Conforming Work. If any of the work done or materials furnished for a Facility or Discrete Component are found by the Director to be defective or not in accordance with the applicable Plans: (a) and such finding is made prior to payment for the Purchase Price of such Facility or Discrete Component hereunder, the City may withhold payment of the Purchase Price for such Facility or Discrete Component until such defect or nonconformance is corrected to the satisfaction of the Director, or (b) and such finding is made after payment of the Purchase Price of such Facility or Discrete Component, the City and the Developer shall act in accordance with the City’s standard specification for public works construction (which are set forth in the Standard Specifications for City of Union City Public Works) and any applicable provisions of the Subdivision Improvement Agreement. 69 of 330
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Section 5.09. Modification of Discrete Components. Upon written request of the Developer, the Director shall consider modification of the description of any Discrete Component.

Any such modification shall be subject to the written approval of the Director, and shall not diminish the overall Facilities to be provided by the Developer hereunder (in a material way such that the change invalidates any of the assumptions used in the appraisal conducted to sell the Bonds). It is expected that any such modification will be solely for purposes of dividing up the work included in any Discrete Component for purposes of acceptance and payment, for example:
(a) separation of irrigation and landscaping from other components of a Discrete Component, (b) modifications to allow for payment for street improvements prior to completion of the final lift of paving, or (c) division of utility construction by utility work orders.

ARTICLE VI

OWNERSHIP AND TRANSFER OF FACILITIES
Section 6.01. Facilities to be Owned by the City; Conveyance of Acceptable Title to City. If applicable, Acceptable Title to all property on, in or over which each Facility to be owned by the City will be located, shall be transferred to the City by way of bill of sale, or dedication of such property, or easement thereon, if such conveyance of interest is approved by the City as being a sufficient interest therein to permit the City to properly own, operate and maintain such Facility located therein, thereon or thereover, and to permit the Developer to perform its obligations as set forth in this Acquisition Agreement. The Developer agrees to assist the City in obtaining such documents as are required to obtain Acceptable Title. Completion of the transfer of title to land shall be accomplished prior to the payment of the Purchase Price for a Facility (or final Discrete Component of a Facility) and shall be evidenced by recordation of the acceptance thereof by the City Council or the designee thereof. Notwithstanding the foregoing sentence, acceptance is not a requirement for the payment of the Purchase Price of Facilities or Discrete Components.

Section 6.02. Facilities Constructed on City Land. For Facilities to be acquired that are on land owned by, or the subject of an easement granted to, the City, the City shall grant to the Developer a permit to enter upon such land for purposes related to the construction (and maintenance pending acquisition) of the Facilities, in accordance with the terms and conditions of the Development Agreement. The provisions for inspection and acceptance of such Facilities otherwise provided herein shall apply.

Section 6.03. Maintenance and Warranties. The Developer shall maintain each Facility (and any Discrete Components thereof) in good and safe condition until the Acceptance Date of the Facility. Prior to the Acceptance Date, the Developer shall be responsible for performing any required maintenance on any completed Facility (and any Discrete Components thereof). On or before the Acceptance Date of the Facility, the Developer shall assign to the City all of the Developer’s rights in any warranties, guarantees, maintenance obligations or other evidence of contingent obligations of third persons with respect to such Facility. Any warranties, guarantees or other evidences of contingent obligations of third persons with respect to the Facilities to be acquired by the City shall be delivered to the Director as part of the transfer of title.

Following the Acceptance Date for a Facility, the Developer shall provide the improvement security for such Facility as described in Section 5 of the Subdivision Improvement Agreement, 70 of 330
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and shall correct any defects as described in Section 4 of the Subdivision Improvement Agreement; subject in any event to any applicable provisions of the Development Agreement.

ARTICLE VII

INSURANCE
Section 7.01. Insurance Requirements. The Developer shall, at all times prior to the final Acceptance Date of all Facilities, procure and maintain, at the Developer’s expense, insurance of the character and quality described in Section 8 of the Subdivision Improvement Agreement.

Section 7.02. General. The requirements of this Article VII as to the types, limits and City approval of insurance coverage to be maintained by the Developer are not intended to and shall not in any manner limit or qualify the liabilities and obligations assumed by the Developer under this Acquisition Agreement.

ARTICLE VIII

REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 8.01. Representations, Covenants and Warranties of the Developer. The Developer represents and warrants for the benefit of the City as follows:

A. Organization. The Developer is a California limited liability company duly organized and validly existing under the laws of the State of California, is in compliance with all applicable laws of the State, and has the power and authority to own its properties and assets and to carry on its business as now being conducted and as now contemplated in this Acquisition Agreement.

B. Authority. The Developer has the power and authority to enter into this Acquisition Agreement, and has taken all action necessary to cause this Acquisition Agreement to be executed and delivered, and this Acquisition Agreement has been duly and validly executed and delivered by the Developer.

C. Binding Obligation. This Acquisition Agreement is a legal, valid and binding obligation of the Developer, enforceable against the Developer in accordance with its terms, subject to bankruptcy and other equitable principles.

D. Compliance with Laws. The Developer shall not with knowledge commit, suffer or permit any act to be done in, upon or to the property in the CFD or the Facilities in material violation of any law, ordinance, rule, regulation or order of any governmental authority or any covenant, condition or restriction now or hereafter affecting the property in the CFD or the Facilities.

E. Requests for Payment. The Developer represents and warrants that (i) it will not request payment from the City for the acquisition of any improvements that are not part of the 71 of 330
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Facilities, and (ii) it will diligently follow all procedures set forth in this Acquisition Agreement with respect to the Payment Requests.

F. Financial Records. Until the final acceptance of the Facilities by the City, the Developer covenants to maintain proper books of record and account for the construction of the Facilities and all costs related thereto. Such accounting books related to the construction of the Facilities and the costs related thereto shall be maintained in accordance with generally accepted accounting principles or other accounting basis consistently applied, and such books of record and account related to the construction of the Facilities and the costs related thereto shall be available for inspection by the City or its agent at any reasonable time during regular business hours on reasonable notice.

G. Prevailing Wages. The Developer covenants that, with respect to any contracts or subcontracts for the construction of the Facilities and any Discrete Components thereof to be acquired from the Developer hereunder, it will comply with all City requirements relating to the payment of prevailing wages, as well as all other applicable State laws and regulations relating to the payment of prevailing wages. The Developer acknowledges that compliance includes, but is not limited to, the duty of each contractor and subcontractor to keep an accurate payroll record in accordance with Division 2, Part 7, Article 2 of the California Labor Code and as otherwise needed to comply with applicable City prevailing wage requirements, and to furnish such records in a timely manner upon request by the Director, the City Attorney or the California Department of Industrial Relations. Such compliance also includes the duty of the Developer to investigate, and, if substantiated, cause to be corrected, any alleged violation of applicable prevailing wage rules, regulations or statutes, or if not corrected to cooperate with the City to identify and impose such penalties as allowed by applicable State or City law or regulation. In furtherance of the foregoing, the Developer agrees to provide the Director, promptly following receipt of a written request therefor, with a certified payroll for all work for which payment has been or is then being requested under this Acquisition Agreement.

H. Plans. The Developer represents that it has obtained or will obtain approval of the Plans for the Facilities listed in Exhibit B to be acquired from the Developer hereunder from all appropriate departments of the City and any applicable utilities and agencies. The Developer further agrees that the Facilities listed in Exhibit B to be acquired from the Developer hereunder have been or will be constructed in full compliance with such approved Plans and any supplemental agreements (change orders) thereto, as approved in the same manner.

I. Land Owners. The Developer agrees that in the event that it sells any interest in any land owned by it within the boundaries of Improvement Area No. 1 to someone other than the Developer Land Bank, the Developer will (a) notify the purchaser in writing prior to the closing of any such sale of the existence of this Acquisition Agreement and the Developer’s rights and obligations hereunder with respect to the construction of and payment for the Facilities, (b) notify the purchaser in writing of the existence of Improvement Area No. 1 and the special tax lien in connection therewith, and (c) otherwise comply with any applicable notice provisions of the Act.

In addition, the Developer shall notify the City in writing of any such sale, indicating the legal description (or County Assessor’s parcel numbers) of the property sold and the purchaser of the property.

J. Additional Information. The Developer agrees to cooperate with all reasonable written requests for nonproprietary information by the Original Purchasers (as defined in the Fiscal Agent Agreement) of the Bonds or the City related to the status of construction of improvements 72 of 330
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within the CFD, the anticipated completion dates for future improvements, and any other matter material to the investment quality of the Bonds.

K. Continuing Disclosure. The Developer agrees to comply with all of its obligations under any continuing disclosure agreement executed by it in connection with the offering and sale of any of the Bonds, if any.

Section 8.02. Indemnification and Hold Harmless. The Developer shall indemnify, defend and hold harmless the City, the CFD, members of the City Council of the City, their officers, officials, employees and agents and each of them, from and against all actions, damages, claims, losses or expense of every type and description to which they may be subjected or put, by reason of, or resulting from (a) the breach of any provision of this Acquisition Agreement by the Developer, (b) the Developer’s or any other entity’s negligent design, engineering and/ or construction of any of the Facilities acquired from the Developer hereunder, (c) the Developer’s non-payment under contracts between the Developer and its consultants, engineer’s, advisors, contractors, subcontractors and suppliers in the provision of the Facilities, or (d) any claims of persons employed by the Developer or its agents to construct the Facilities.

Notwithstanding the foregoing, no defense, indemnification or hold harmless shall be required hereunder for any action, damage, claim, loss or expense directly attributable to the intentional acts, willful or other actionable misconduct, or negligence of the City, or its officers, directors, employees or agents hereunder. In the event of any conflict between the terms of this Section 8.02 and the provisions of the Development Agreement or the Subdivision Improvement Agreement, the conflict shall be resolved as provided in Section 10.08 below. Notwithstanding the foregoing, the Developer shall be relieved of any obligation by reason of clause (b) of the preceding paragraph from and after such times as the City receives an unconditional assignment of the rights of the Developer to proceed against the respective entity that designed, engineered and/ or constructed, as applicable, the respective Facility and the entity has acknowledged such assignment and the rights of the City to proceed directly against such entity. At the written request of the Developer, the City shall acknowledge in writing the receipt of any such unconditional assignment which so relieves any such obligation of the Developer.

No provision of this Acquisition Agreement shall in any way limit the Developer’s responsibility for payment of damages resulting from the operations of the Developer, its agents, employees or its contractors. Under no circumstances shall the Developer be liable for double indemnity.

ARTICLE IX

TERMINATION
Section 9.01. [THE AUTOMATIC TERMINATION IF BONDS AREN’T ISSUE IS INCOMPATIBLE WITH THE PAYGO PROVISIONS IN THE RMA AND THIS AGREEMENT. IF BONDS ARE NOT ISSUED, THEN PAYGO IS USED UNTIL THE FACILITIES ARE REPAID.

PLEASE RERUN TABLE OF CONTENTS]Mutual Consent. This Acquisition Agreement may be terminated by the mutual, written consent of the City and the Developer, in which event the City may let contracts for any remaining work related to the Facilities not theretofore acquired from the Developer hereunder, and use all or any portion of the monies in the Improvement Fund or the Remainder Taxes Project Account to pay for same, and the Developer shall have no claim or right 73 of 330
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to any further payments for the Purchase Price of Facilities or Discrete Components hereunder, except as otherwise may be provided in such written consent.

Section 9.02. City Election for Cause. The following events shall constitute grounds for the City, at its option, to terminate this Acquisition Agreement, without the consent of the Developer:
(a) The Developer shall voluntarily file for reorganization or other relief under any Federal or State bankruptcy or insolvency law.
(b) The Developer shall have any involuntary bankruptcy or insolvency action filed against it, or shall suffer a trustee in bankruptcy or insolvency or receiver to take possession of the assets of Developer, or shall suffer an attachment or levy of execution to be made against the property it owns within Improvement Area No. 1 (if any) unless, in any of such cases, such circumstance shall have been terminated or released within ninety (90) days thereafter. (c) So long as funds are on deposit in the Improvement Fund or the Remainder Taxes Project Account, the Developer shall abandon construction of the Facilities. Failure for a period of three consecutive months to undertake substantial work related to the construction of at least a portion of the Facilities being financed by the proceeds of an outstanding issue of Bonds, other than for a reason specified in Section 9.03 hereof, shall constitute an example of such abandonment.
(d) The Developer shall breach any material covenant or default in the performance of any material obligation hereunder.
(e) The Developer shall transfer any of its rights or obligations under this Acquisition Agreement without the prior written consent of the City. (f) The Developer shall have made any material misrepresentation or omission in any written materials furnished in connection with any preliminary official statement, official statement or bond purchase contract used in connection with the sale of any series of the Bonds or in any certificate attesting to the accuracy of sections in any such preliminary official statement or official statement.
(g) The Developer or any of its Affiliates shall at any time challenge the validity of the CFD or any of the Bonds, or the levy of special taxes within the CFD, other than on the grounds that such levy was not made in accordance with the terms of the Rate and Method of Apportionment of the Special Taxes.

If any such event occurs, the City shall give written notice of its knowledge thereof to the Developer, and the Developer agrees to meet and confer with the Director and other appropriate City staff and consultants within ten (10) business days of receipt of such notice as to options available to assure timely completion of the Facilities. Such options may include, but not be limited to the termination of this Acquisition Agreement by the City. If the City elects to terminate this Acquisition Agreement, the City shall first notify the Developer (and any mortgagee or trust deed beneficiary specified in writing by the Developer to the City to receive such notice) of the grounds for such termination and allow the Developer a minimum of sixty (60) days to eliminate or mitigate to the satisfaction of the Director the grounds for such termination. Such period may be extended if the Developer, to the reasonable satisfaction of the City, is proceeding with diligence to eliminate or mitigate such grounds for termination. If at the end of such period (and any extension thereof), 74 of 330
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as determined solely by the City, the Developer has not eliminated or completely mitigated such grounds, to the satisfaction of the City, the City may then terminate this Acquisition Agreement.

Notwithstanding the foregoing, so long as any event listed in any of clauses (a) through and including (g) above has occurred, notice of which has been given by the City to the Developer, and such event has not been cured or otherwise eliminated by the Developer, the City may in its discretion cease making payments for the Purchase Price of Facilities (or Discrete Components) or Fees under Article V hereof until such time as such event has been cured or otherwise eliminated to the satisfaction of the City.

Section 9.03. Force Majeure. Whenever performance is required of a party hereunder, that party shall use all due diligence and take all necessary measures in good faith to perform, but if completion of performance is delayed by reasons of floods, earthquakes or other acts of God, war, terrorism, civil commotion, riots, strikes, picketing, or other labor disputes, damage to work in progress by casualty, material shortages, or by other cause beyond the reasonable control of the party (financial inability excepted), then the specified time for performance shall be extended by the amount of the delay actually so caused.

ARTICLE X

MISCELLANEOUS
Section 10.01. Limited Liability. The Developer agrees that any and all obligations of the City arising out of or related to this Acquisition Agreement are special and limited obligations of the City and the City’s obligations to make any payments hereunder are restricted entirely to the moneys, if any, in the Improvement Fund and the Remainder Taxes Project Account and from no other source. No member of the City Council, or City staff member, employee or agent shall incur any liability hereunder to the Developer or any other party in their individual capacities by reason of their actions hereunder or execution hereof.

The City agrees that any and all obligations of the Developer arising out of or related to this Acquisition Agreement are obligations of the Developer and not of any director, officer or employee of the Developer, and none of them shall incur any liability hereunder to the City or any other party in their individual capacities by reason of their actions hereunder or execution hereof.

Section 10.02. Excess Costs. The Developer agrees to pay all costs of the Facilities that it is obligated to construct pursuant to the Conditions of Approval that are in excess of the moneys available therefor in the Improvement Fund and the Remainder Taxes Project Account. The foregoing provisions of this Section 10.02 shall not in any way waive or affect any financial obligations of the City under the Development Agreement.

Section 10.03. Audit. The Director and/or the Director of Finance of the City shall have the right, at any reasonable time during regular business hours on reasonable notice provided to the Developer, to review all books and records of the Developer pertaining to costs and expenses incurred by the Developer in to any of the Facilities (or any Discrete Components thereof), and any bids taken or received for the construction thereof or materials therefor.

Section 10.04. Attorney’s Fees. In the event of any litigation, including administrative proceedings, relating to this Agreement, including but not limited to any action or suit by any party, assignee or beneficiary against any other party, beneficiary or assignee, to 75 of 330
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enforce, interpret or seek relief from any provision or obligation arising out of this Agreement, the parties and litigants shall bear their own attorney’s fees and costs. No party or litigant shall be entitled to recover any attorneys’ fees or costs from any other party or litigant, regardless of which party or litigant might prevail.

Section 10.05. Notices. Any notice, payment or instrument required or permitted by this Acquisition Agreement to be given or delivered to either party shall be deemed to have been received when personally delivered, or transmitted by telecopy or facsimile transmission, or three Business Days following deposit of the same in any United States Post Office, registered or certified mail, postage prepaid, addressed as follows:

City or CFD: City of Union City
Department of Public Works
34009 Alvarado-Niles Road
Union City, CA 94587
Attention: Public Works Director
with a copy to: City of Union City
34009 Alvarado-Niles Road
Union City, CA 94587
Attention: Finance Director
and a copy to: City of Union City
34009 Alvarado-Niles Road
Union City, CA 94587
Attention: City Attorney
Developer: Lennar Homes of California, LLC
2603 Camino Ramon, Number 525
San Ramon, CA 94583
Attention: Greg Wilson
with a copy to: Robert M. Haight, Jr.

Cox, Castle & Nicholson LLP
50 California Street, Suite 3200
San Francisco, CA 94014
Each party may change its address or addresses for delivery of notice by delivering written notice of such change of address to the other parties.

Section 10.06. Severability. If any part of this Acquisition Agreement is held to be illegal or unenforceable by a court of competent jurisdiction, the remainder of this Acquisition Agreement shall be given effect to the fullest extent possible.

Section 10.07. Successors and Assigns. This Acquisition Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto. This Acquisition Agreement shall not be assigned by the Developer (except to affiliates of the Developer or the Developer Land Bank) without the prior written consent of the City, which consent shall not be unreasonably withheld or delayed. In connection with any such consent of the City, the City may condition its consent upon the acceptability of the financial condition of the proposed assignee, the assignee’s express assumption of all obligations of the Developer 76 of 330
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hereunder, and/ or upon any other factor which the City deems relevant in the circumstances. In any event, any such assignment shall be in writing, shall clearly identify the scope of the rights and/ or obligations assigned, and shall not be effective until approved in writing by the City. An assignment, if consented to by the City in writing, shall release the Developer from its obligations so assigned under this Acquisition Agreement. The foregoing assignment provisions do not apply to the assignment of the payment of the Purchase Price of Facilities or Fees.

Section 10.08. Other Agreements. The obligations of the Developer hereunder shall be those of a party hereto and not as an owner of property in the CFD. Nothing in this Acquisition Agreement (including but not limited to in Sections 3.03, 3.04, 4.02 and 10.02 hereof) shall be construed as affecting, and nothing in this Acquisition Agreement (including but not limited to in Sections 3.03, 3.04, 4.02 and 10.02 hereof) shall affect, the City’s or the Developer’s rights, or duties to perform their respective obligations, under other agreements (including but not limited to the Development Agreement and the Subdivision Improvement Agreement), use regulations, subdivision requirements or the Conditions of Approval relating to the development of the lands in Improvement Area No. 1. This Acquisition Agreement shall not confer any additional rights, or waive any rights given, by either party hereto under any development or other agreement to which either or both are a party. Notwithstanding the foregoing or any other provision of this Acquisition Agreement to the contrary, in the event of (a) a conflict between any specific provision of this Acquisition Agreement and the provisions of the Development Agreement, the provisions of the Development Agreement shall prevail; (b) a conflict between any specific provision of this Acquisition Agreement and the provisions of the Subdivision Improvement Agreement, the provisions of the Subdivision Improvement Agreement shall prevail; and (c) a conflict between any specific provision of this Acquisition Agreement and the provisions of the Development Agreement and the provisions of the Subdivision Improvement Agreement, the provisions of the Development Agreement shall prevail.

Section 10.09. Waiver. Failure by a party to insist upon the strict performance of any of the provisions of this Acquisition Agreement by the other party, or the failure by a party to exercise its rights upon the default of the other party, shall not constitute a waiver of such party’s right to insist and demand strict compliance by the other party with the terms of this Acquisition Agreement thereafter.

Section 10.10. Merger. No other agreement, statement or promise made by any party or any employee, officer or agent of any party with respect to any matters covered hereby that is not in writing and signed by all the parties to this Acquisition Agreement shall be binding.

Section 10.11. Parties in Interest. Nothing in this Acquisition Agreement, expressed or implied, is intended to or shall be construed to confer upon or to give to any person or entity other than the City, the CFD and the Developer any rights, remedies or claims under or by reason of this Acquisition Agreement or any covenants, conditions or stipulations hereof; and all covenants, conditions, promises, and agreements in this Acquisition Agreement contained by or on behalf of the City, the CFD or the Developer shall be for the sole and exclusive benefit of the City, the CFD and the Developer.

Section 10.12. Amendment. This Acquisition Agreement may be amended, from time to time, by written Supplement hereto and executed by both the City and the Developer.

Section 10.13. Counterparts. This Acquisition Agreement may be executed in counterparts, each of which shall be deemed an original. 77 of 330
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Section 10.14. Governing Law. The provisions of this Acquisition Agreement shall be governed by the laws of the State applicable to contracts made and performed in the State. [Signature Page Follows]
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[Signature Page to Acquisition Agreement –
City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services) IN WITNESS WHEREOF, the parties have executed this Acquisition Agreement as of the day and year first-above written.

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

Name:

Its:

CITY OF UNION CITY, for itself and on
behalf of the CITY OF UNION CITY
COMMUNITY FACILITIES DISTRICT NO.
2026-1 (STATION EAST FACILITIES AND

SERVICES)
By: ____________________________
Joan Malloy
City Manager
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ACQUISITION AGREEMENT

EXHIBIT A

DESCRIPTION OF FACILITIES ELIGIBLE FOR

FINANCING BY THE CFD

AUTHORIZED FACILITIES
The City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services), Improvement Area No. 1, and any Future Improvement Area (collectively, the “CFD”) is authorized to finance all or a portion of the costs of the facilities permitted under the Mello-Roos Community Facilities Act of 1982 (“Act”) and that are provided in connection with the development of the property located in the CFD, including, but not limited to, those described below.

The CFD is authorized to finance the purchase, construction, expansion, improvement, or rehabilitation of any real or other tangible property with an estimated useful life of five years or longer, together with the planning and design work that is directly related to the purchase, construction, expansion, or rehabilitation of any real or tangible property (collectively, the “Facilities”), including, but not be limited to, roadway and transportation facilities, water, sewer and storm drain facilities, parks, landscape, and open space, and school facilities. Examples of Facilities are described below.

Authorized Facilities include any facilities authorized by the Act that are financed in whole or in part by development impact fees and/or mitigation payments levied or collected in connection with development of the property, whether by the City or any other local agency. By way of example and not limitation, authorized facilities include, but are not limited to, facilities authorized by the Act to be funded by the following:
• City of Union City
• Union Sanitary Sewer District
• Alameda County Water District
• New Haven Unified School District
Roadway and Transportation Improvements
Authorized facilities include any and all on-site and off-site publicly-owned roadway and transportation facilities required to meet the needs of development within the CFD. Eligible costs of these facilities include, but are not limited to, the following to the extent that they are capital costs of the facilities: Acquisition of land and easements; design; project management; payment and performance bond premiums; clearing, grubbing, and demolition; grading, soil import/export; paving (including slurry seal), and decorative/enhanced pavement concrete and/or pavers; bridge crossings and culverts; joint trenches, underground utilities and undergrounding of existing utilities; dry utilities and appurtenances; curbs, gutters, sidewalks, bike trails (including onsite and off-site); enhanced fencing, and access ramps; street lights; roundabouts; intersections, signalization, and traffic signal control systems; bus turnouts; signs and striping; winterization and erosion control; median and landscape corridor landscaping and irrigation; bus shelters; retaining walls; masonry walls; implementation and maintenance of Stormwater Pollution Prevention Plan (SWPPP) measures; traffic control and agency fees required as a condition of development within the boundaries of the CFD; and other improvements related thereto where required. 80 of 330
A-2
Parks, Landscaping and Open Space
Authorized facilities include any and all on-site and off-site parks, landscaping and open space designed to meet the needs of development within the CFD. Eligible costs of these facilities include, but are not limited to, the following to the extent that they are capital costs of the facilities:

Acquisition of land and easements; design; project management; grading; implementation and maintenance of SWPPP measures; potable water storage, groundwater wells, storage tanks, distribution facilities including pipelines and appurtenances and irrigation facilities, gate valves, flow meters, booster pump pressurization system, hardscape improvements (pavement), fencing, lighting at water storage tank sites, booster pumping stations, and groundwater wells; and other improvements related thereto.

Drainage System Improvements
Authorized facilities include any and all on-site and off-site drainage facilities required to meet the storage and conveyance needs of development within the CFD. Eligible costs of these facilities include, but are not limited to, the following to the extent that they are capital costs of the facilities: Acquisition of land and easements; design; project management; grading; implementation and maintenance of SWPPP measures; mains, pipelines and appurtenances; outfalls and water quality measures; temporary drainage facilities; detention/retention basins and drainage pretreatment facilities; drainage ways/channels; pump stations; landscaping and irrigation; stormwater hydromodification (including grading & demolition); access roads, gates, and fencing; striping and signage; and other improvements related thereto where required.

Water System and Irrigation Improvements
Authorized facilities include any and all on-site and off-site potable water system facilities designed to meet the needs of development within the CFD. Eligible costs of these facilities include, but are not limited to, the following to the extent that they are capital costs of the facilities:

Acquisition of land and easements; design; project management; grading; implementation and maintenance of SWPPP measures; potable water storage, groundwater wells, storage tanks, distribution facilities including pipelines and appurtenances and irrigation facilities, gate valves, flow meters, booster pump pressurization system, hardscape improvements (pavement), fencing, lighting at water storage tank sites, booster pumping stations, and groundwater wells; and other improvements related thereto.

Recycled Water System Improvements
Authorized facilities include any and all on-site and off-site recycled water system facilities designed to meet the needs of development within the CFD. Eligible costs of these facilities include, but are not limited to, the following to the extent that they are capital costs of the facilities:

Acquisition of land and easements; design; project management; grading; implementation and maintenance of SWPPP measures; recycled water storage, treatment and distribution facilities including pipelines and appurtenances, gate valves, storage tanks, flow meters, booster pump pressurization system, hardscape improvements (pavement), fencing, lighting at water storage tank sites, booster pumping stations, and groundwater wells; and other improvements related thereto.

Wastewater System Improvements
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Authorized facilities include any and all on-site and off-site publicly-owned facilities required to meet the wastewater conveyance needs of development within the CFD. Eligible costs of these facilities include, but are not limited to, the following to the extent that they are capital costs of the facilities: Acquisition of land and easements; design; project management; grading; implementation and maintenance of SWPPP measures; pipelines and all appurtenances thereto; manholes; tie-in to existing main line; emergency storage for at lift station sites; force mains; lift stations; odor-control facilities; sewer treatment plant improvements; hardscape improvements (pavement), fencing, lighting at lift station sites; and other improvements related thereto where required.

Other
Any other facilities serving substantially the same purpose as the above-described facilities.

The foregoing description of the type of Facilities eligible to be financed is general in nature and includes any appurtenant work and incidental expenses related to the Facilities. The final nature and location of the facilities will be determined upon the preparation of final plans and specifications for such facilities.
82 of 330
B-1

ACQUISITION AGREEMENT

EXHIBIT B
DESCRIPTION OF FACILITIES, DISCRETE COMPONENTS AND ESTIMATED COSTS1 Roadway and Transportation Facilities:

The facilities consist of the following street improvements, including, but not limited to, grading, trenching, dry and wet utilities, final layer of finish surface, lighting striping, signage, curb, gutters and sidewalks:

Description of Streetwork Estimated Costs
(See Note 1)
8 th Street [between Decoto Road and Bradford Way] $2,235,771 9 th Street [between Decoto Road and Bradford Way] $2,210,005 Sakakihara Street [between 7th Street and 8th Street] $639,386 Wang Street [between Nishihira Street and Bradford Way] $694,555 Bradford Way [onsite between 8th Street and Parcel W] $805,162 Nishihira Street [between Wang Street and 9th Street] $832,724 Decoto Road [between Niles sub Railroad and 7th Street] $2,926,413 7 th Street [between Decoto Rd and Bradford, including full intersections] $1,137,000 Bradford Way [between 7th Street and Zwissig Way] $910,349 Totals $12,391,365
The estimated costs of the street facilities above do not include costs of facilities to be owned by either the Union Sanitary District or the Alameda County Water District.

Notes:

1. These are estimates only and the estimated cost shall not limit the financing of the Actual Costs of the Facilities and Discrete Components.

2. This Exhibit B may be amended at any time by the mutual written agreement of the Developer and the City, without requiring approval by the City Council, so long as the facilities added to Exhibit B pursuant to such amendment are authorized to be financed by the CFD.
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C-1

ACQUISITION AGREEMENT
EXHIBIT C-1

FORM OF PAYMENT REQUEST
(FACILITIES)
PAYMENT REQUEST NO. C-1-____
The undersigned representative of Lennar Homes of California, LLC (the “Developer”), hereby requests payment in the total amount of $_____________ for the Facilities (as defined in the Acquisition Agreement, dated as of July 1, 2026, between the City of Union City (the “City”) and the Developer (the “Acquisition Agreement”), or Discrete Components thereof (as described in Exhibit B to the Acquisition Agreement), all as more fully described in Attachment 1 hereto. In connection with this Payment Request, the undersigned hereby represents and warrants to the City as follows:

1. He(she) is a duly authorized officer of the Developer, qualified to execute this Payment Request for payment on behalf of the Developer and is knowledgeable as to the matters set forth herein.

2. To the extent that this payment request is with respect to a completed Facility (as defined in the Acquisition Agreement), the Developer has submitted to the Public Works Director of the City as-built drawings or similar plans and specifications, in an electronic format approved by the Director, for the items to be paid for as listed in Attachment 1 hereto with respect to any such completed Facility, and such drawings or plans and specifications, as applicable, are true, correct and complete. To the extent that this payment request is for a Discrete Component, the Developer has in his construction office a marked set of drawings or similar plans and specifications for the Discrete Components to be acquired as listed in Attachment 1 hereto, which drawings or plans and specifications, as applicable, are current and show all changes or modifications which have been made to date. The Developer will provide copies of all such drawings, plans and specifications to the City upon written request of the Director of Public Works of the City.

3. The Developer has submitted to the Public Works Director of the City soils reports and certifications by its engineer or surveyor with respect to the Facilities or Discrete Components thereof for which payment is requested.

4. The Developer has submitted to the Public Works Director of the City a copy of each construction contract for each of the Facilities or Discrete Components thereof for which payment is requested, along with a copy of each bid notice for each such contract and a copy of any supplemental agreement (change order) applicable to each such contract, together with the written approval of each such supplemental agreement if required by Section 4.07 of the Acquisition Agreement.

5. All costs of the Facilities or Discrete Components thereof for which payment is requested hereby are true and correct Actual Costs (as defined in the Acquisition Agreement) and have not been inflated in any respect. The items for which payment is requested have not been the subject of any prior payment request submitted to the City. 85 of 330
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6. The Developer has submitted or submits herewith to the Public Works Director of the City invoices, receipts, worksheets and other evidence of costs to construct the Facilities or Discrete Components thereof for which payment is requested, which are in sufficient detail to allow the Public Works Director of the City to verify the Actual Cost thereof and, if any of such invoices, receipts, worksheets or other evidence of costs include costs for facilities other than such Facilities or Discrete Components for which payment is requested, the Developer has submitted or submits herewith to the Public Works Director of the City a written description as to how the items and amounts in such invoices, receipts, worksheets and other evidence of costs have been allocated among such other facilities and the Facilities or Discrete Components for which payment is requested, together with evidence that such allocation is appropriate, correct and reasonable.

7. The Developer has submitted or submits herewith to the Public Works Director of the City evidence that each of the invoices, receipts, worksheets and other evidence of costs referred to in paragraph 6 above has been paid in full, which evidence is in the form of copies of cancelled checks, bank wire reports or such other form as the Public Works Director of the City has approved in writing.

8. There has not been filed with or served upon the Developer notice of any lien, right to lien or attachment upon, or claim affecting the right to receive, the payment of the Purchase Price of each Facility or Discrete Component for which payment is requested which has not been released or will not be released simultaneously with the payment of such obligation, other than materialmen’s or mechanics’ liens accruing by operation of law.

9. The Developer has submitted or submits herewith to the Public Works Director of the City copies of unconditional lien releases from all contractors, subcontractors and materialmen for all work with respect to each Facility or Discrete Component for which payment is requested.

10. The Developer represents and warrants that, as of the date hereof, there is not present on, under or in any Facility or Discrete Component for which payment is requested or the property on which such Facility or Discrete Component is located, or any portion thereof, any Hazardous Materials (as defined in the agreement referred to in clause (a) of the definition “Development Agreement” in Section 1.01 of the Acquisition Agreement), except for (a) any types or amounts that do not require remediation or mitigation under federal, state or local laws, ordinances, regulations, rules or decisions, (b) those that have been remediated or mitigated in full compliance with applicable federal, state or local laws, ordinances, regulations, rules or decisions, (c) those with respect to which ongoing remediation or mitigation is being performed in full compliance with applicable federal, state or local laws, ordinances, regulations, rules or decisions, (d) any types of amounts that do not present a human health risk or hazard to the public, and (e) if such property was, at the time of commencement of the acquisition, construction and installation of such Facility or Discrete Component, property of the City and, from such time of commencement through and including the date hereof, remained property of the City, those that were present on, under or in such property at such time of commencement.

11. The work in respect of each Facility or Discrete Component for which payment is requested is in compliance with all City requirements pertaining to the payment of prevailing wages, as well as any other applicable California laws relating to prevailing wages for the work to construct the Facilities or Discrete Components thereof for which payment is requested, and accurate payroll records have been maintained and all known governmental requests for certified payrolls have been satisfied.
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12. The Facilities or Discrete Components thereof for which payment is requested were constructed (a) in accordance with all applicable City standards (or, with respect to Facilities to be owned by a public entity other than the City, the applicable standards of that public entity) (b) in accordance with the requirements of the Acquisition Agreement, and (c) in accordance with the as-built drawings or plans and specifications, as applicable, referenced in paragraph 2 above.

13. The Developer is in compliance with the terms and provisions of the Acquisition Agreement and no portion of the amount being requested to be paid was previously paid.

14. The Purchase Price for each Facility or Discrete Components thereof (a detailed calculation of which is shown in an Attachment 2 hereto for each such Facility or Discrete Components thereof), has been calculated in conformance with the terms of Section 5.06 of the Acquisition Agreement.

15. Neither the Developer nor any Affiliate (as defined in the Acquisition Agreement) is in default in the payment of ad valorem real property taxes or special taxes or special assessments levied in the CFD (as defined in the Acquisition Agreement), except as follows:
______________________.

I hereby declare under penalty of perjury that the above representations and warranties are true and correct.

CITY:

Payment Request Approved for Submission
to the City Finance Director
By:

Public Works Director
DEVELOPER:

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

Name:

Title:

Date:
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C-4
ATTACHMENT 1 TO
EXHIBIT C-1
[list here all Facilities or Discrete Components for which payment is requested, and attach support documentation]
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ATTACHMENT 2 TO
EXHIBIT C-1

CALCULATION OF PURCHASE PRICE
[Use a separate sheet for each Facility or Discrete Component for which payment is being requested]

1. Description (by reference to Exhibit B to the Acquisition Agreement) of the Facility or Discrete Component ___________

2. Actual Cost (list here total of supporting invoices and/ or other documentation supporting determination of Actual Cost): $__________

3. Holdback for Lien releases (see Section 5.06(B) of the Acquisition Agreement) $__________

4. Total amount requested in respect of Facility or Discrete Component (amount listed in 2 less amount, if any, listed in 3) $__________ 89 of 330
C-6

ACQUISITION AGREEMENT
EXHIBIT C-2

FORM OF PAYMENT REQUEST
(FEES)
PAYMENT REQUEST NO. C-2-____
The undersigned representative of Lennar Homes of California, LLC (the “Developer”), hereby requests payment in the total amount of $_____________ for the Fees (as defined in the Acquisition Agreement, dated as of July 1, 2026, between the City of Union City (the “City”) and the Developer (the “Acquisition Agreement”), all as more fully described in Attachment 1 hereto.

In connection with this Payment Request, the undersigned hereby represents and warrants to the City as follows:

1. He(she) is a duly authorized officer of the Developer, qualified to execute this Payment Request for payment on behalf of the Developer and is knowledgeable as to the matters set forth herein.

2. The identity and amount of the Fees are described in Attachment 1.

3. The Developer has submitted or submits herewith to City one or both of the following related to this request for payment as applicable:
a. For Fees not already paid to the public agency, a payment request made payable to the public agencies for the fees and amounts identified in Attachment 1 to establish fee credits.
b. For Fees already paid to the public agency, evidence that Fees listed in Attachment 1 have been paid in full, which evidence is in the form of copies of cancelled checks or such other form of proof of payment, such as bank statements.

4. The Developer is in compliance with the terms and provisions of the Acquisition Agreement and represents that it has satisfied the conditions for the reimbursement or payment of Fees and that the Fees described in Attachment 1 have not been previously submitted for reimbursement or for the establishment of fee credits.

5. Neither the Developer nor any Affiliate (as defined in the Acquisition Agreement) is in default in the payment of ad valorem real property taxes or special taxes or special assessments levied in the CFD (as defined in the Acquisition Agreement), except as follows: ______________________.
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I hereby declare under penalty of perjury that the above representations and warranties are true and correct.

CITY:

Payment Request Approved for Submission
to the City Finance Director
By:

Public Works Director
DEVELOPER:

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

Name:

Title:

Date:
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C-8
ATTACHMENT 1 TO
EXHIBIT C-2
Public
Agency
Credit or
Reimbursement?
Description of
Financed Fees
Description of
Lots or Parcels
Total
Amount
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D-1

EXHIBIT D

PUBLIC WORKS BID PROCEDURES
Except for the Exhibit E Facilities/Costs, the City and the Developer hereby agree that the following procedure shall be followed prior to the award of construction contracts for Facilities and Discrete Components thereof that are subject to the Acquisition Agreement. The City acknowledges that the following procedures are not consistent with the City’s otherwise applicable Administrative Policies and Procedures, and that the following procedures shall supersede Administrative Policies and Procedures and a waiver is hereby granted to the extent that these procedures differ from the City’s Administrative Policies and Procedures. Notwithstanding this Exhibit D, the terms of this Exhibit D do not apply to the Exhibit E Facilities/Costs, which are Facilities or costs that were bid and were under construction pursuant to contracts that were executed prior to the date of this Acquisition Agreement.

1. Pre-qualification of Contractors. The Developer will, after consultation with the Director, develop prequalification standards, and create a list of not less than five (5) (unless mutually agreed to by the Director and the Developer to have fewer bidders, but not in any event less than three (3)), and not more than eight (8), contractors that are prequalified to bid for each contract related to the construction of a Facility or any Discrete Component thereof. All entities that are prequalified shall have all licenses, equipment, experience (of both the prime contractor and any key subcontractors) and bonding capacity necessary for the performance of the applicable work. The Developer will solicit bids from those contractors who met the prequalification requirements. The Developer shall provide the bid packages to any such prequalified contractors requesting the same. If bids are sought prior to pre-qualifying contractors, the Developer will include pre-qualification screening/ criteria/ application in the applicable bid package and require contractors to complete the pre-qualification application fully and accurately in order to be considered a responsive bidder.

2. Content of Bid Packages. The Developer shall submit proposed bid packages to the Director for review and comment not less than thirty (30) days prior to the dissemination of bid packages to prospective bidders, and shall address, to the satisfaction of the Director, any reasonable concerns or comments the Director has with respect to any bid package prior to its dissemination to prospective bidders. The Director shall promptly review all bid packages submitted to the Director, and shall work in good faith with the Developer to address any concerns or questions that the Director has with respect to the bid packages. In order to expedite the bidding process, where appropriate the Developer shall provide any contractors that pre-qualify with a preliminary bid package for the purpose of preparing their bids while final bid documents are being completed, approved and signed. Bid packages shall contain any terms required by this Acquisition Agreement and applicable law. Final bid documents will be issued as an addendum to the preliminary bid documents.

3. Type of Contract Requested. Each bid package will require that the contracts will be bid on a unit price basis, with an estimate of bid quantities included on the applicable bid sheet, consistent with the Plans. Upon written request of the Developer, the Director may agree, on a case-by-case basis, that bids may alternatively be made on the basis of all inclusive lump sum prices, with provisions for deductions based on unit prices and bid quantities that are less than originally estimated. Contracts shall provide that a five percent retention shall be held on contractors. While contractor suggested alternatives will be encouraged, any exclusions or exceptions to the base bid package will constitute a non-responsive bid that may be rejected. 93 of 330
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4. Receipt of Bids. The bids will be received by the Developer by the deadline set forth in the bid package. All bid information will be available for review by the Director.

5. Award of the Bid. The Developer shall award the construction contract to the lowest responsible bidder, except that upon mutual agreement of the Developer and the Director, the Developer may award the contract to a bidder that was not the low bidder. The Developer shall submit to the Director a report summarizing the bid process, the reasons for awarding to other than the low bidder, and the results thereof.
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E-1

EXHIBIT E

LIST OF FACILITIES/COSTS BID PRIOR TO DATE OF ACQUISITION AGREEMENT Improvement
Type Trade Contracted Trade Bid List Bid Process Low Bid? Rough & Fine
Grading DeSilva Gates

1.DeSilva Gates

2.Independent
Construction

3.Goodfellow
Link was
emailed
containing bid
documents
Yes
Wet Utilities DW Young

1.DW Young

2.Mountain
Cascade

3.Preston
Pipeline

4.Teichart
Link was
emailed
containing bid
documents
Yes
Concrete Murga, Strange &
Chalmers

1.Murga,
Strange &
Chalmers

2.MF Maher

3.Aparicio
Link was
emailed
containing bid
documents
Yes
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RESOLUTION NO. 2026-XXX

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UNION CITY

DEEMING IT NECESSARY TO INCUR BONDED INDEBTEDNESS IN

AND FOR CITY OF UNION CITY COMMUNITY FACILITIES DISTRICT NO. 2026-1 (STATION EAST FACILITIES AND SERVICES) IN AN AMOUNT NOT TO EXCEED $38,000,000 TO FINANCE THE

ACQUISITION AND CONSTRUCTION OF CERTAIN PUBLIC

FACILITIES
WHEREAS, the City Council (the “City Council”) of the City of Union City (the “City”) on May 26, 2026, adopted its Resolution No. 2026-074 (the “Resolution of Intention”), stating its intention to (i) form “City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services)” (the “CFD”), (ii) designate therein “Improvement Area No. 1 of the City of Union City Community Facilities District No. 2026- 1 (Station East Facilities and Services)” (“Improvement Area No. 1”), and (iii) establish “City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services) (Future Annexation Area)” (the “Future Annexation Area”), all pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, Chapter 2.5 of Part 1 of Division 2 of Title 5, commencing with Section 53311, of the California Government Code (the “Act”); and
WHEREAS, also in the Resolution of Intention, the City Council determined that it may be necessary to designate additional improvement areas in the CFD as a result of the annexation of territory from the Future Annexation Area (each, a “Future Improvement Area”) and to incur bonded indebtedness within the boundaries of the Future Improvement Area; and
WHEREAS, the City Council also adopted on May 26, 2026, its Resolution No. 2026-075 (the “Resolution of Intention to Incur Indebtedness”), stating its intention to incur bonded indebtedness and other debt (as defined in the Act) for the purpose of financing the costs of the facilities specified in the Resolution of Intention; and WHEREAS, the City Council noticed a public hearing to be held on the date hereof, in accordance with the Act and the Resolution of Intention; and WHEREAS, at the hearing all interested persons desiring to be heard on all matters pertaining to the formation of the CFD, Improvement Area No. 1, and the Future Annexation Area, the services and facilities to be provided therein, and the levy of said special taxes were heard and a full and fair hearing was held; and WHEREAS, at the hearing all interested persons desiring to be heard on matters set forth in the Resolution of Intention to Incur Indebtedness were heard and a full and fair hearing was held; and
WHEREAS, subsequent to the hearing, on the date hereof, the City Council adopted its resolution entitled, “Resolution of the City Council of the City of Union City to Form City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services), Designate Improvement Area No. 1 Therein and Establish a Future Annexation Area, and to Authorize the Levy of Special Taxes Therein to Finance Certain 96 of 330
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Station East CFD Resolution to Incur Debt

Public Services and the Acquisition and Construction of Certain Public Facilities” (the “Resolution of Formation”); and
WHEREAS, no written protests with respect to the matters set forth in the Resolution of Intention to Incur Indebtedness have been filed with the City Clerk.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Union City as follows:

1. The foregoing recitals are true and correct.

2. The City Council deems it necessary to incur bonded indebtedness for the CFD in an amount not to exceed $38,000,000 (the “Authorization”), initially allocated as follows: (i) for Improvement Area No. 1, the bonded indebtedness limit is $20,000,000 and (ii) for the portion of the CFD that is not currently in Improvement Area No. 1, the bonded indebtedness limit is not to exceed $18,000,000 (the “Future Improvement Area Indebtedness Limit”). Indebtedness subject to the Authorization shall only include indebtedness evidenced by bonds or notes and shall not include bonds described in Section 53364.2(e) of the Act.

Upon designation of a parcel or parcels annexed into the CFD from the Future Annexation Area as a Future Improvement Area, the Unanimous Consent shall include an authorization to incur bonded indebtedness for such Future Improvement Area in a maximum amount which does not exceed the Future Improvement Area Indebtedness Limit, net of the amount or amounts of the Future Improvement Area Indebtedness Limit previously established in connection with a prior annexation from the Future Annexation Area, which limit shall be set forth in a Unanimous Consent. Such allocation may be made without any requirement for further public hearings, City Council action or other additional proceedings, and the City shall include the Unanimous Consent in the CFD records.

3. The whole of Improvement Area No. 1 shall pay for the bonded indebtedness and other debt issued by the City for Improvement Area No. 1 through the levy of the facilities special tax for Improvement Area No. 1. The tax shall be apportioned in accordance with the rate and method of apportionment of special tax for Improvement Area No. 1. The whole of each Future Improvement Area shall pay for the bonded indebtedness and other debt issued by the City for such Future Improvement Area through the levy of the facilities special tax therein. The tax shall be apportioned in accordance with the formula approved via unanimous approval of parcel(s) annexing into such Future Improvement Area from the Future Annexation Area.

4. Indebtedness in the maximum amount set forth in Section 2 of this Resolution is hereby authorized for Improvement Area No. 1, subject to voter approval.

The bonds and other debt may be issued in one or more series and mature and bear interest at such rate or rates, payable semiannually or in such other manner, all as this City Council or its designee shall determine, at the time or times of sale of such bonds and other debt; provided, however, that the interest rate or rates shall not to exceed the maximum interest rate permitted by applicable law at the time of sale of the bonds and 97 of 330
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Station East CFD Resolution to Incur Debt

other debt, and the bonds and other debt or any series thereof shall have a maximum term of not to exceed 40 years.

Indebtedness in the maximum amount set forth in Section 2 of this Resolution is hereby authorized for the Future Improvement Areas, subject to voter approval evidenced by the applicable unanimous approval form(s). The bonds and other debt may be issued in one or more series and mature and bear interest at such rate or rates, payable semiannually or in such other manner, all as this City Council or its designee shall determine, at the time or times of sale of such bonds and other debt; provided, however, that the interest rate or rates shall not to exceed the maximum interest rate permitted by applicable law at the time of sale of the bonds and other debt, and the bonds and other debt or any series thereof shall have a maximum term of not to exceed 40 years.

5. The proposition of the City incurring the bonded indebtedness and other debt for Improvement Area No. 1 herein authorized shall be submitted to the respective qualified electors of Improvement Area No. 1, and shall be consolidated with elections on the proposition of levying the services special tax and facilities special tax within Improvement Area No. 1 and the establishment of an appropriations limit for Improvement Area No. 1 and the CFD pursuant to Section 53353.5 of the Act. The time, place and further particulars and conditions of such election shall be as specified by separate resolution of this City Council. In accordance with Section 53350 of the Act, approval of the limit for the incurrence of bonded indebtedness and other debt for any Future Improvement Area shall be submitted by the owner or owner(s) of parcels in such Future Improvement Area and specified in the applicable unanimous approval form(s), without any other proceedings or hearings required.

6. This Resolution shall take effect immediately upon its adoption. 98 of 330
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Station East CFD Resolution to Incur Debt

PASSED, APPROVED, AND ADOPTED by the City Council of the City of Union City at a regular meeting held on July 14, 2026, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED:

GARY SINGH
Mayor
ATTESTED: APPROVED AS TO FORM:

THAI NAM N. PHAM
City Clerk
KRISTOPHER J. KOKOTAYLO
City Attorney
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RESOLUTION NO. 2026-XXX

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UNION CITY

CALLING A SPECIAL ELECTION IN AND FOR THE CITY OF UNION CITY COMMUNITY FACILITIES DISTRICT NO. 2026-1 (STATION EAST

FACILITIES AND SERVICES)
WHEREAS, the City Council (the “City Council”) of the City of Union City (the “City”) on July 14, 2026, adopted its “Resolution of the City Council of the City of Union City to Form City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services), Designate Improvement Area No. 1 Therein and Establish a Future Annexation Area, and to Authorize the Levy of Special Taxes Therein to Finance Certain Public Services and the Acquisition and Construction of Certain Public Facilities” (the “Resolution of Formation”), to (i) form “City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services) (the “CFD”), (ii) designate therein “Improvement Area No. 1 of the City of Union City Community Facilities District No. 2026- 1 (Station East Facilities and Services)” (“Improvement Area No. 1”), (iii) establish “City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services) (Future Annexation Area)” (the “Future Annexation Area”), (iv) authorize the levy of a facilities special tax and a services special tax on property within Improvement Area No. 1, and (v) preliminarily establish an appropriations limit for Improvement Area No. 1 and the CFD, all pursuant to the Mello-Roos Community Facilities Act of 1982, Chapter 2.5 of Part 1 of Division 2 of Title 5, commencing with Section 53311, of the California Government Code (the “Act”); and
WHEREAS, on July 14, 2026, the City Council has also adopted its “Resolution of the City Council of the City of Union City Deeming It Necessary to Incur Bonded Indebtedness in and for City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services) in an Amount Not to Exceed $38,000,000 to Finance the Acquisition and Construction of Certain Public Facilities” (the “Resolution of Necessity”), determining the necessity to incur bonded indebtedness in the maximum aggregate principal amount of $38,000,000, initially allocated as follows: (i) $20,000,000 for Improvement Area No. 1 upon the security of the facilities special tax to be levied within Improvement Area No. 1 pursuant to the Act, and (ii) $18,000,000 for the portion of the CFD that is not currently in Improvement Area No. 1 upon the security of the facilities special tax to be levied within such area pursuant to the Act; and WHEREAS, pursuant to the provisions of the Resolution of Formation and the Resolution of Necessity, the propositions of the levy of the special taxes, the establishment of the appropriations limit, and the incurring of the bonded indebtedness shall be submitted to the qualified electors of Improvement Area No. 1 as required by the provisions of the Act;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Union City as follows:

1. Pursuant to Sections 53326, 53351, and 53325.7 of the Act, the issues of the levy of the special tax, the incurring of bonded indebtedness, and the establishment of the appropriations limit shall be submitted to the qualified electors (as defined below) of Improvement Area No. 1, at an election called therefor as provided below. 100 of 330
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Station East CFD Resolution Calling Election

2. The City Council hereby finds that fewer than 12 persons have been registered to vote within the territory of Improvement Area No. 1 for each of the 90 days preceding the close of the public hearings heretofore conducted and concluded by the City Council for the purposes of these proceedings. Accordingly, and pursuant to Section 53326 of the Act, the City Council finds that, for these proceedings, the qualified electors are the landowners within Improvement Area No. 1 and that the vote shall be by such landowners or their authorized representatives, each having one vote for each acre or portion thereof such landowner owns in Improvement Area No. 1 as of the close of the public hearings.

3. The City Council hereby calls a special election to consider the measures described in Section 1 above, which election shall be held on July 14, 2026, and the results thereof canvassed at the meeting of the City Council on July 14, 2026. The City Clerk is hereby designated as the official to conduct the election and to receive all ballots until 7:00 p.m. on the election date. It is hereby acknowledged that the City Clerk has on file the Resolution of Formation, a certified map of the boundaries of the CFD and Improvement Area No. 1, and a sufficient description to allow the City Clerk to determine the electors of the CFD/Improvement Area No. 1. Pursuant to Section 53327 of the Act, the election shall be conducted by messenger or mail-delivered ballot pursuant to Section 4000 of the California Elections Code. The City Council hereby finds that paragraphs (a), (b), and (c) (1) of Section 4000 and Section 4108 are applicable to this special election, except that Sections 53326 and 53327 of the Act shall govern for purposes of determining the date of the election.

4. As authorized by Section 53353.5 of the Act, the three propositions described in Section 1 above shall be combined into a single ballot measure, the form of which is attached hereto as Exhibit A and by this reference incorporated herein, and the form of ballot is hereby approved. The City Clerk is hereby authorized and directed to cause a ballot, in substantially the form of Exhibit A, to be delivered to each of the qualified electors of Improvement Area No. 1. Each ballot shall indicate the number of votes to be voted by the respective landowner to which the ballot pertains. Each ballot shall be accompanied by all supplies and written instructions necessary for its use and return.

5. The City Council hereby further finds that the provisions of Section 53326 of the Act requiring a minimum of 90 days following the adoption of the Resolution of Formation to elapse before the special election are for the protection of the qualified electors of Improvement Area No. 1. There is on file with the City Clerk a written waiver executed by all of the qualified electors of the CFD allowing for a shortening of the time for the special election to expedite the process of formation of the CFD and Improvement Area No. 1 and waiving any requirement for notice, analysis and arguments in connection with the election. Accordingly, the City Council finds and determines that the qualified electors have been fully apprised of, and have agreed to, the shortened time for the election and the waiver of analysis and argument, and have thereby been fully protected in these proceedings. The City Council also finds and determines that the City Clerk has concurred in the shortened time for the election. Analysis and arguments with respect to the ballot measures are hereby waived, as provided in Section 53327 of the Act.

6. The City Council hereby finds that the proposed debt issuance constitutes a “local bond measure” within the meaning of Sections 53410, et seq. of the California 101 of 330
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Station East CFD Resolution Calling Election

Government Code. As a result, the bond measure shall include the propositions set forth above and the following: (a) the specific purpose of the bonds shall be as set forth in the propositions; (b) any proceeds received from the sale of any bonds shall be applied only to the purposes set forth in the propositions; (c) the proceeds of any bonds shall be deposited into special accounts to be created therefor as part of the issuance of the bonds; and (d) the City shall cause a report to be prepared annually under Section 53411 of the Government Code.

7. Under Section 50075.1 of the Government Code, the following accountability provisions shall apply to the special taxes: (a) the provision and/or acquisition of the Facilities, the payment of debt service on the bonds and other debt and the incidental costs thereof, all as defined in the Resolution of Formation, shall constitute the specific single purpose; (b) the proceeds shall be applied only to the specific purposes identified in (a) above; (c) there shall be created special account(s) or funds(s) into which the proceeds shall be deposited; and (d) there shall be caused to be prepared an annual audit and report of the CFD.

8. This Resolution shall take effect immediately upon its adoption.

PASSED, APPROVED, AND ADOPTED by the City Council of the City of Union City at a regular meeting held on July 14, 2026, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED:

GARY SINGH
Mayor
ATTESTED: APPROVED AS TO FORM:

THAI NAM N. PHAM
City Clerk
KRISTOPHER J. KOKOTAYLO
City Attorney
Attachments:

1. Exhibit A – Form of Special Election Ballot
102 of 330
A-1

EXHIBIT A

CITY OF UNION CITY
COMMUNITY FACILITIES DISTRICT NO. 2026-1
(STATION EAST FACILITIES AND SERVICES)

SPECIAL ELECTION BALLOT
(Mailed-Ballot Election)
(OWNER NAME)
Improvement Area No. 1
This ballot is for a special, landowner election for the City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services). You must return this ballot in the enclosed postage paid envelope to the office of the City Clerk of the City no later than the hour of 7:00 p.m. on July 14, 2026, either by mail or in person. The City Clerk’s office is located at 34009 Alvarado-Niles Road, Union City, California 94587.

To vote, mark a cross (X) on the voting line after the word “YES” or after the word “NO.” All marks otherwise made are forbidden. All distinguishing marks are forbidden and make the ballot void. If you wrongly mark, tear, or deface this ballot, return it to the City Clerk and obtain another.

The estimated amount of money to be raised annually by this measure is $775,872 from the facilities special tax and $217,704 from the services special tax ($993,576 total) for fiscal year 2026-27, assuming full build-out, and escalating at 2% annually thereafter, for the duration of Improvement Area No. 1 of the CFD as set forth in the rate and method of apportionment of special taxes for Improvement Area No. 1.

BALLOT MEASURE: Shall the measure pursuant to which (i) the City of Union City will levy a facilities special tax and a services special tax solely on lands within Improvement Area No. 1 (“Improvement Area No. 1”) of the City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services) (the “CFD”) commencing in fiscal year 2026-27 in accordance with the rate and method of apportionment of special tax for Improvement Area No. 1 contained in the City’s resolution of formation for the CFD adopted on July 14, 2026 (“Resolution of Formation”), which Resolution of Formation is incorporated by this reference herein, (ii) the annual appropriations limit for the CFD is established in the amount of $38,000,000, and (iii) the City will issue bonds and incur other debt of up to $38,000,000 for the CFD, with $20,000,000 initially allocated for Improvement Area No. 1 and $18,000,000 initially allocated for the portion of the CFD that is not currently in Improvement Area No. 1, with interest at a rate or rates not to exceed the maximum interest rate permitted by law at 103 of 330
A-2
the time of sale of each series of such bonds, the proceeds of which bonds will be used to acquire and/or construct certain facilities and pay for the costs of issuing the bonds and related expenses, be adopted? YES: __________
NO: __________
By execution in the space provided below, you also indicate your waiver of (i) the time limit pertaining to the conduct of the election, (ii) any requirement for analysis and arguments with respect to the ballot measure, and (iii) any irregularity in the proceedings that may be claimed as a result of the vote or the application of such waivers.

Total Acreage: ____
Number of Votes: _____
[OWNER NAME]
By:

Name:

Title:
104 of 330

RESOLUTION NO. 2026-XXX

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UNION CITY

DECLARING ELECTION RESULTS OF CITY OF UNION CITY
COMMUNITY FACILITIES DISTRICT NO. 2026-1 (STATION EAST

FACILITIES AND SERVICES)
WHEREAS, the City Council (the “City Council”) of the City of Union City (the “City”) on July 14, 2026, adopted “Resolution of the City Council of the City of Union City to Form City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services), Designate Improvement Area No. 1 Therein and Establish a Future Annexation Area, and to Authorize the Levy of Special Taxes Therein to Finance Certain Public Services and the Acquisition and Construction of Certain Public Facilities” (the “Resolution of Formation”), to (i) form “City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services) (the “CFD”), (ii) designate therein “Improvement Area No. 1 of the City of Union City Community Facilities District No. 2026- 1 (Station East Facilities and Services)” (“Improvement Area No. 1”), (iii) establish “City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services) (Future Annexation Area)” (the “Future Annexation Area”), (iv) authorize the levy of a facilities special tax and a services special tax on property within Improvement Area No. 1, and (v) preliminarily establish an appropriations limit for the CFD, all pursuant to the Mello-Roos Community Facilities Act of 1982, Chapter 2.5 of Part 1 of Division 2 of Title 5, commencing with Section 53311, of the California Government Code (the “Act”); and
WHEREAS, the City Council has also adopted on July 14, 2026 a resolution titled “Resolution of the City Council of the City of Union City Deeming It Necessary to Incur Bonded Indebtedness in and for City of Union City Community Facilities District No. 2026- 1 (Station East Facilities and Services) in an Amount Not to Exceed $38,000,000 to Finance the Acquisition and Construction of Certain Public Facilities” (the “Resolution of Necessity”), determining the necessity to incur bonded indebtedness in the maximum aggregate principal amount of $38,000,000, initially allocated as follows: (i) $20,000,000 for Improvement Area No. 1 upon the security of the facilities special tax to be levied within Improvement Area No. 1 pursuant to the Act, and (ii) $18,000,000 for the portion of the CFD that is not currently in Improvement Area No. 1 upon the security of the facilities special tax to be levied within such area pursuant to the Act; and WHEREAS, under the provisions of the Resolution of Formation and the Resolution of Necessity, and pursuant to a resolution titled “Resolution of the City Council of the City of Union City Calling Special Election in and for City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services)” (the “Resolution Calling Election”) heretofore adopted by the City Council, the propositions of the levy of the special taxes, the establishment of the appropriations limit and the incurring of the bonded indebtedness were submitted to the qualified electors of the CFD as required by the provisions of the Act; and
105 of 330
Resolution No. 2026-XXX
Station East CFD Resolution Election Results

WHEREAS, pursuant to the terms of the Resolution Calling Election, which are by this reference incorporated herein, the special election has been held, and the City Clerk has on file a Canvass and Statement of Results of Election (the “Canvass”), a copy of which is attached hereto as Exhibit A; and
WHEREAS, the City Council has reviewed the Canvass, finds it appropriate, and wishes to complete its proceedings for the CFD;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Union City as follows:

1. The foregoing recitals are all true and correct.

2. The issues presented at the special election were the levy of a special taxes within Improvement Area No. 1 of the CFD, establishing an initial appropriations limit and the incurring of a bonded indebtedness in the maximum aggregate principal amount of $38,000,000, initially allocated as follows: (i) $20,000,000 for Improvement Area No. 1 upon the security of the facilities special tax to be levied within Improvement Area No. 1 pursuant to the Act, and (ii) $18,000,000 for the portion of the CFD that is not currently in Improvement Area No. 1, all pursuant to the Resolution of Formation and the Resolution of Necessity.

3. The City Council hereby approves the Canvass and finds that it shall be a permanent part of the record of its proceedings for the CFD and Improvement Area No.

1. Pursuant to the Canvass, the issues presented at the special election were approved by the qualified electors of the Improvement Area No. 1 by two-thirds (2/3) or more of the votes cast at the special election.

4. Pursuant to the voter approval, the CFD and Improvement Area No. 1 are hereby declared to be fully formed with the authority to levy the special taxes, to incur the approved bonded indebtedness, and to have the established appropriations limit, all as heretofore provided in these proceedings and in the Act. It is hereby found that all prior proceedings and actions taken by the City Council with respect to the CFD and Improvement Area No. 1 were valid and in conformity with the Act.

5. The City Council declares that the special taxes are lawfully authorized, and that the subject property within Improvement Area No. 1 is subject to the special taxes, and directs the City Clerk to complete, execute and cause a Notice of Special Tax Lien with respect to the property to be recorded in the office of the County Recorder of the County of Alameda in the form required by the Act, such recording to occur no later than 15 days following adoption by the City Council of this resolution.

6. This Resolution shall take effect immediately upon its adoption. 106 of 330
Resolution No. 2026-XXX
Station East CFD Resolution Election Results

PASSED, APPROVED, AND ADOPTED by the City Council of the City of Union City at a regular meeting held on July 14, 2026, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED:

GARY SINGH
Mayor
ATTESTED: APPROVED AS TO FORM:

THAI NAM N. PHAM
City Clerk
KRISTOPHER J. KOKOTAYLO
City Attorney
ATTACHMENTS:

1. Exhibit A – Form of Canvass and Statement of Results of Election 107 of 330
A-1

EXHIBIT A

CANVASS AND STATEMENT OF RESULTS OF ELECTION

CITY OF UNION CITY
COMMUNITY FACILITIES DISTRICT NO. 2026-1
(STATION EAST FACILITIES AND SERVICES)
IMPROVEMENT AREA NO. 1
I, the undersigned City Clerk of the City of Union City (the “City”) hereby certify:

I have personally received and assembled all ballots eligible to be cast in the special mailed-ballot, landowner election called by the City Council in its “Resolution of the City Council of the City of Union City Calling Special Election in and for City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services),” adopted July 14, 2026, and in accordance with my instructions contained in that Resolution, I hereby declare the election closed.

I personally, in the presence of the City Council, and members of the public and City staff, counted the ballots and certify the result of that count to be as follows:

BALLOT MEASURE: Shall the measure pursuant to which (i) the City of Union City will levy a facilities special tax and a services special tax solely on lands within Improvement Area No. 1 (“Improvement Area No. 1”) of the City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services) (the “CFD”) commencing in fiscal year 2026-27 in accordance with the rate and method of apportionment of special tax for Improvement Area No. 1 contained in the City’s resolution of formation for the CFD adopted on July 14, 2026 (“Resolution of Formation”), which Resolution of Formation is incorporated by this reference herein, (ii) the annual appropriations limit for the CFD is established in the amount of $38,000,000, and (iii) the City will issue bonds and incur other debt of up to $38,000,000 for the CFD, with $20,000,000 initially allocated for Improvement Area No. 1 and $18,000,000 initially allocated for the portion of the CFD that is not currently in Improvement Area No. 1, with interest at a rate or rates not to exceed the maximum interest rate permitted by law at the time of sale of each series of such bonds, the proceeds of which bonds will be used to acquire and/or construct certain facilities and pay for the costs of issuing the bonds and related expenses, be adopted? 108 of 330
A-2
QUALIFIED LANDOWNER VOTES: 22
TOTAL VOTES CAST “YES” _____
TOTAL VOTES CAST “NO” _____
TOTAL VOTES CAST _____
THE VOTES CAST “YES” EQUAL ______% OF THE TOTAL VOTES CAST.

I make this Certification on July 14, 2026.

THAI NAM PHAM, MMC, CPMC, City Clerk
109 of 330

ORDINANCE NO. 2026-XXX

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF UNION CITY

LEVYING SPECIAL TAXES WITHIN THE CITY OF UNION CITY
COMMUNITY FACILITIES DISTRICT NO. 2026-1 (STATION EAST

FACILITIES AND SERVICES)
WHEREAS, pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, Sections 53311, et. seq., of the California Government Code (the “Act”), on May 26, 2026, the City Council (the “City Council”) of the City of Union City (the “City”), adopted its Resolution No. 2026-074 (the “Resolution of Intention”) stating its intention to (i) form “City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services)” (the “CFD”), (ii) designate therein “Improvement Area No. 1 of the City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services)” (“Improvement Area No. 1”), and (iii) establish “City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services) (Future Annexation Area)” (the “Future Annexation Area”), to finance public services and the acquisition and construction of certain public facilities; and
WHEREAS, in the Resolution of Intention, this City Council determined that it may be necessary to designate additional improvement areas when territory in the Future Annexation Area annexes into the CFD (each, a “Future Improvement Area”); and WHEREAS, notice was published as required by the Act relative to the intention of this City Council to form the CFD, designate therein Improvement Area No. 1, and establish the Future Annexation Area, to provide for certain public services and public facilities and to incur bonded indebtedness for Improvement Area No. 1 and Future Improvement Areas; and
WHEREAS, this City Council has held noticed public hearings as required by the Act relative to (i) the determination to proceed with the formation of the CFD, the designation therein of Improvement Area No. 1, and the establishment of the Future Annexation Area, and the levy of a facilities special tax and a services special tax in Improvement Area No. 1 in accordance with the rate and method of apportionment of the special tax to be levied within Improvement Area No. 1 to finance a portion of the costs of the public services and public facilities, and (ii) the issuance of bonded indebtedness and other debt for Improvement Area No. 1 and Future Improvement Areas; and WHEREAS, at said hearing, all persons desiring to be heard on all matters pertaining to the formation of the CFD, the designation of Improvement Area No. 1, the establishment of the Future Annexation Area, the levy of said special taxes, and the incurring of bonded indebtedness were heard, substantial evidence was presented and considered by this City Council, and a full and fair hearing was held; and WHEREAS, subsequent to the hearing, this City Council adopted “RESOLUTION

OF THE CITY COUNCIL OF THE CITY OF UNION CITY TO FORM CITY OF UNION CITY COMMUNITY FACILITIES DISTRICT NO. 2026-1 (STATION EAST FACILITIES AND SERVICES), DESIGNATE IMPROVEMENT AREA NO. 1 THEREIN AND

ESTABLISH A FUTURE ANNEXATION AREA, AND TO AUTHORIZE THE LEVY OF

SPECIAL TAXES THEREIN TO FINANCE CERTAIN PUBLIC SERVICES AND THE ACQUISITION AND CONSTRUCTION OF CERTAIN PUBLIC FACILITIES” (THE 110 of 330
Ordinance No. 2026-XXX
Station East CFD Ordinance

“RESOLUTION OF FORMATION”), “RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF UNION CITY DEEMING IT NECESSARY TO INCUR BONDED

INDEBTEDNESS IN AND FOR CITY OF UNION CITY COMMUNITY FACILITIES DISTRICT NO. 2026-1 (STATION EAST FACILITIES AND SERVICES) IN AN AMOUNT NOT TO EXCEED $38,000,000 TO FINANCE THE ACQUISITION AND CONSTRUCTION OF CERTAIN PUBLIC FACILITIES” (THE “RESOLUTION OF NECESSITY”) and “RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UNION

CITY CALLING SPECIAL ELECTION IN AND FOR CITY OF UNION CITY COMMUNITY FACILITIES DISTRICT NO. 2026-1 (STATION EAST FACILITIES AND SERVICES)” (the “Resolution Calling Election”), which resolutions defined the public services (the “Services”) and the public facilities to be financed by the CFD (the “Facilities”), formed the CFD, designated therein Improvement Area No. 1, and established the Future Annexation Area, authorized the levy of the special taxes within Improvement Area No. 1, authorized the levy of the special taxes within the area to be annexed to the CFD from the Future Annexation Area upon a unanimous approval(s) from the owner(s) of parcels annexing into the CFD, determined the necessity to incur bonded indebtedness in Improvement Area No. 1 and areas within the CFD outside of Improvement Area No. 1, and called an election within Improvement Area No. 1 on the propositions of incurring indebtedness, levying a special tax, and establishing an appropriations limit within Improvement Area No. 1; and
WHEREAS, in accordance with the Resolution Calling Election, on July 14, 2026, a special election was held within Improvement Area No. 1 at which the eligible landowner-electors approved such propositions by the two-thirds vote required by the Act.

THE CITY COUNCIL OF THE CITY OF UNION CITY DOES ORDAIN AS FOLLOWS:

SECTION 1. Authorization of Levy of Special Tax. Pursuant to Government Code Sections 53328 and 53340, by the passage of this Ordinance, the City Council hereby authorizes and levies special taxes within the CFD (including any parcels in the Future Annexation Area that annex into the CFD) and each Future Improvement Area, if any, pursuant to the Act, at the rate and in accordance with the rate and method of apportionment of special tax for Improvement Area No. 1 of the CFD set forth as an exhibit to the Resolution of Formation or the rate and method of apportionment of special tax for the Future Improvement Area set forth in the Unanimous Approval(s) for such Future Improvement Area (each as may be amended, a “Rate and Method”), which Resolution of Formation and Unanimous Approval(s) are by this reference incorporated herein. For Future Improvement Areas, a different rate and method may be adopted if the annexed territory is designated as a separate improvement area, as provided in the Resolution of Formation. The special taxes for the payment of Facilities are hereby levied commencing in fiscal year 2026-27 and in each fiscal year thereafter as provided in each applicable Rate and Method. A facilities special tax shall not be levied to finance the Facilities after the fiscal year identified in the applicable Rate and Method, except that a special tax that was lawfully levied in or before the final tax year and that remains delinquent may be collected in subsequent years. The services' special tax may be levied in perpetuity.

SECTION 2. Implementation of Special Tax. The Finance Director of the City is hereby authorized and directed each fiscal year to determine the specific special tax rates 111 of 330
Ordinance No. 2026-XXX
Station East CFD Ordinance

and amounts to be levied for the next ensuing fiscal year for each parcel of real property within the CFD and each Future Improvement Area, if any, in the manner and as provided in the Resolution of Formation. The Finance Director of the City is hereby authorized and directed each fiscal year to determine the specific special tax rates and amounts to be levied for the next ensuing fiscal year for each parcel of real property within Improvement Area No. 1 and each Future Improvement Area, if any, in the manner and as provided in the Resolution of Formation.

SECTION 3. Future Adjustments. The appropriate officers and agents of the City and of the County of Alameda (the “County”) are authorized to make adjustments to the special tax roll prior to the final posting of the special taxes to the County tax roll each year, as may be necessary to achieve a correct match of the special tax levy with the assessor's parcel numbers finally utilized by the County in sending out property tax bills.

SECTION 4. Agreement. The City agrees that the County may deduct its reasonable and agreed charges for collecting the special taxes from the amounts collected, prior to remitting the balance of the special tax collections to the City.

SECTION 5. Method of Levy. The special taxes shall be collected in the same manner as ordinary ad valorem taxes are collected and shall have the same lien priority, and be subject to the same penalties and the same procedure and sale in cases of delinquency as provided for ad valorem taxes; provided, however, that this City Council may provide for other appropriate methods of collection by resolutions of this City Council.

In addition, the provisions of Section 53356.1 of the Act shall apply to delinquent special tax payments. The Finance Director of the City is hereby authorized and directed to provide all necessary information to the auditor/tax collector of the County in order to effect proper billing and collection of the special taxes, so that the special taxes shall be included on the secured property tax roll of the County for fiscal year 2026-27 (if applicable) and for each fiscal year thereafter as provided in each applicable Rate and Method.

SECTION 6. Severability. If any section, sub-section, subdivision, paragraph, clause, or phrase in this Ordinance, or any part thereof, is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity of the remaining sections or portions of this Ordinance or any part thereof. The City Council hereby declares that it would have passed each section, sub-section, subdivision, paragraph, sentence, clause, or phrase of this Ordinance, irrespective of the fact that any one or more sections, subsections, subdivisions, paragraphs, sentences, clauses, or phrases may be declared invalid or unconstitutional.

SECTION 7. Publication. The Mayor shall sign this Ordinance, and the City Clerk shall cause it to be published at least once in a newspaper of general circulation published and circulated in the City within fifteen (15) days after its passage. 112 of 330
Ordinance No. 2026-XXX
Station East CFD Ordinance

INTRODUCED by the City Council of the City of Union City at a regular meeting on July 14, 2026, PASSED, APPROVED, AND ADOPTED at a regular meeting held on July 28, 2026, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED:

GARY SINGH
Mayor
ATTESTED: APPROVED AS TO FORM:

THAI NAM N. PHAM
City Clerk
KRISTOPHER J. KOKOTAYLO
City Attorney
113 of 330
Community Facilities District No. 2026-1
Station East Facilities and Services
Agenda Item 3.1
114 of 330
2 What is a Community Facilities District (CFD)?
• Also called a Mello Roos District – a special purpose district created under the Mello-Roos Community Facilities Act of 1982
• Finances public infrastructure and services for a specific area
• Property owners within the CFD pay a special tax
• City has a CFD (CFD 2006-1, formed in 2007) for City
services (PD/FD services, Landscape maintenance)
115 of 330
3 Station East
Development
Plan
116 of 330
4 CFD 2026-1
• Two Components
§ Services CFD. Yearly assessment of $564 per unit; City can increase by up to 5% per year
§ Facilities CFD. Yearly assessment between $1,530 -
$2,496 per unit (varies by Unit type/size; broken down by Plan Area); City can increase by up to 2% per year
§ Lennar is proposing to utilize $12.5 Million in bond
funds for construction of new or upgrade to existing
streets to serve the development
117 of 330
5 • Adopted Resolution for Amended and Restated Goals and Policies per Mello-Roos Community Facilities Act of 1982 • Adopted Resolution declaring intent to form the CFD 2026-1 • Adopted Resolution declaring intention to incur a bonded indebtedness for CFD 2026-1
May 26, 2026 City Council Meeting Actions
118 of 330
6 CFD Formation Process
May 26, 2026
Step 1: Initiation
Adopt three resolutions:
• Updated Goals &
Policies
• Intent to Form CFD
• Intent to Incur Debt
Sets the boundaries &
schedules public hearing
July 14, 2026
Step 2: Public Hearings &
Election
City Council holds public
hearings on CFD formation
& bond issuance
A special election of
qualified voters is held
(currently only Lennar
Homes)
City declares election
results
Future
CFD Formed & Bonds
Issued
CFD officially formed.

Special taxes are levied.

Bonds issued up to $38M
when certain conditions
are met
1 2 3
119 of 330
7 Boundary
Map
120 of 330
8 Resolution to Form the CFD
• Includes the Rate and Method of Apportionment (RMA)
for the Facilities Special Tax and the Services Special Tax
• Establishes types of facilities and services proposed to be financed by the CFD
• Approves the Acquisition Agreement with Lennar
Homes
121 of 330
9 Resolution to Incur a Bonded Indebtedness
• Establishes an intent to incur bonded indebtedness
not to exceed $38 M
§ $20M for Improvement Area No. 1
§ $18M for the Future Improvement Area
• Property owners of the proposed CFD will be fully
responsible for paying all fees and expenses,
including all debt service payments and a special
tax for services
122 of 330
10 Resolution to Call Special Election
• Three propositions to the qualified electors: special tax levy, appropriations limit, bonded indebtedness
• Requires 2/3 vote of electors (i.e., property owners) • Currently only one property owner: Lennar Homes,
who holds all 22 votes
• Electors waived the 90-day waiting period –
Election held at City Council Meeting
123 of 330
11 Resolution Declaring Election Results
• City Clerk will tabulate the ballot(s) received
• City Council adopts Resolution certifying election
results
• Requires two-thirds approval of votes cast
• Notice of Special Tax Lien will be subsquently
recorded with Alameda County
124 of 330
12 Ordinance Levying Special Taxes
• First reading of the Ordinance – July 14, 2026
• Authorizes the annual special tax levy per the RMA
§ Facilities tax – FY 2026-27 through the final RMA
year
§ Services tax – may be levied in perpetuity
• Second reading and adoption: July 28, 2026
125 of 330
13 Staff Recommendation
Staff recommends the City Council:
• Open and close the Public Hearing
• Adopt the following three Resolutions:
§ Formation of CFD No. 2026-1 (Att.1)
§ Deem Necessary to Incur Bonded Indebtedness in an
Amount Not to Exceed $38,000,000, to Finance the
Acquisition and Construction of Certain Public
Facilities (Att. 2)
§ Call for Special Election for CFD No. 2026-1 (Att. 3) 126 of 330
14 Staff Recommendation
After ballot tabulation by City Clerk, staff further
recommends the City Council:
• Adopt Resolution certifying the Special Election Results (Att. 4); and
• Waiver of full reading and Introduction by Title only of the Ordinance Levying the Special Taxes within the
CFD (Att. 5)
127 of 330
City Council Staff Report Page 1 of 2 July 14, 2026
Staff Report
Agenda Item No. 3.2
DATE: July 14, 2026
TO: Honorable Mayor and Members of the City Council
FROM: Kris Kokotaylo, City Attorney
SUBJECT: Conduct a Public Hearing and Adopt a Resolution Approving the Adjusted Stormwater Fee and Ordering the Collection of the Fee on the Tax Roll

EXECUTIVE SUMMARY
Staff recommends that the City Council conduct a public hearing and adopt a Resolution approving the proposed adjusted Stormwater Fee and ordering collection of the fee on the property tax roll.

STRATEGIC PLAN ALIGNMENT
This report is in alignment with the following City Council priority:

Goal D: Environmental Sustainability and Infrastructure

BACKGROUND
The City of Union City (“City”) has historically collected the stormwater fee (the “Stormwater Fee”) with the solid waste fees on the property tax roll. Last year, the City transitioned the collection of the solid waste fees from the property tax roll to direct billing performed by Republic Services.

The City has collected its Stormwater Fee since 1994 or earlier. The City has consistently collected the Stormwater Fee and increased it pursuant to a schedule of adjustments, as further outlined below, since at least 1994. In some years, the City has elected not to increase the Stormwater Fee, even though it could have, pursuant to the established schedule of adjustments.

DISCUSSION
The City established a schedule of adjustments for the Stormwater Fee aligned with the annual index-based adjustment (the “CPI”). In some years, the City has elected not to adjust the fee. Staff recommends an adjustment to the fee for FY 2026-2027, consistent with the previously approved schedule of adjustments. The CPI increase for FY 2026- 128 of 330
Agenda Item No. 3.2
City Council Staff Report Page 2 of 2 July 14, 2026 6
1 7
2027 is 2.72%. This results in an increase to the Stormwater Fee from $84.26 per parcel to $86.55 per parcel.

Health & Safety Code Sections 5470, et seq. authorize the City Council to collect stormwater fees on the property tax roll with a two-thirds vote. This would require 4/5 of the City Council to vote for collection on the property tax roll. The City Council can simultaneously set the fee, based on the established schedule of adjustments, and vote to place the fee on the property tax roll.

The City has caused a written report to be prepared that includes a description of each parcel subject to the Stormwater Fee and the amount of the charge for each parcel for FY 2026-2027. The report will be filed with the City Clerk and maintained on file; it is not included as an attachment to this staff report.

FISCAL IMPACT
The proposed FY 2026-2027 Stormwater Fee levy is $1,377,876, based on the billing detail report prepared for filing with the City Clerk. This is an increase of $54,035 over the FY 2025-2026 levy. Actual collections may vary from the levy amount due to delinquencies, late payments, and other County collection adjustments.

RECOMMENDATION
Staff recommends that the City Council conduct a public hearing, adopt a Resolution approving the adjusted Stormwater Fee, and order collection of the fee on the property tax roll.

Prepared by: Juliet Vaughn, Associate
Submitted by: Kristopher Kokotaylo, City Attorney
Attachments

1. Draft Resolution
129 of 330

RESOLUTION NO. 2026-XXX

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UNION CITY

APPROVING THE ADJUSTED STORMWATER FEE AND ORDERING

THE COLLECTION OF THE FEE ON THE TAX ROLL
WHEREAS, Proposition 218 requires voter approval of taxes, fees, and assessments, except when the charge was in effect prior to November 6, 1996, the effective date of Proposition 218; and
WHEREAS, the City of Union City (“City”) adopted a Stormwater Fee prior to the enactment of Proposition 218 and has collected the fee since 1994 or earlier; and WHEREAS, the Stormwater fee is subject to annual adjustments based on a schedule of adjustments in place since at least 1994; and WHEREAS, the City desires to adjust the amount of the annual stormwater fee pursuant to the established schedule of adjustments and collect the Stormwater Fee on the tax roll; and
WHEREAS, the Stormwater Fee may be collected on the tax roll of Alameda County in accordance with the provisions of Section 5473.1 of the Health and Safety Code; and
WHEREAS, pursuant to Health and Safety Code Sections 5473 and 6520.10, charges, including delinquent charges, may also be collected on the tax roll of Alameda County; and
WHEREAS, the City has caused a written report to be prepared and filed with the City Clerk containing a description of each parcel of real property subject to the Stormwater Fee, together with the amount of the charge for each parcel for the fiscal year 2026-2027 computed in accordance with the schedule identified above; and WHEREAS, the City Council held a public hearing in conformance with Health and Safety Code Sections 5473.1 and 5473.2, heard and considered all objections or protests, and finds that the owners did not make protests of a majority of separate parcels of property described in the report; and
WHEREAS, California Health and Safety Code Section 5470 et seq. allows a legislative body, by a two-thirds vote, to establish the collection of fees or other charges on the tax roll.
130 of 330
Resolution No. 2026-XXX
Approving Adjustment of Stormwater Fee

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Union City as follows:

1. The recitals set forth above are found to be true and correct and are incorporated herein by reference.

2. The City Council approves the Stormwater Fees for fiscal year 2026-2027 at the rates specified in the Stormwater Fiscal Year 2026-2027 Report on file with the City Clerk.

3. The collection of the Stormwater Fee on the tax roll is hereby ordered pursuant to California Health and Safety Code Sections 5470 et seq., and the City Clerk is authorized and directed to file a copy of the stormwater fiscal year 2026-2027 report with the Auditor of Alameda County.

PASSED, APPROVED, AND ADOPTED by the City Council of the City of Union City at a regular meeting held on July 14, 2026, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED:

GARY SINGH
Mayor
ATTESTED: APPROVED AS TO FORM:

THAI NAM N. PHAM
City Clerk
KRISTOPHER J. KOKOTAYLO
City Attorney
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Item 3.2: Conduct A Public Hearing And
Adopt A Resolution Approving The
Adjusted Stormwater Fee And Ordering
The Collection Of The Fee On The Tax
Roll
132 of 330
2 Background
• The City adopted a stormwater fee that it has collected since 1994 or earlier.
• The fee is subject to annual adjustments based on an
index-based schedule of adjustments.
• Staff is recommending an adjustment to the fee for FY 2026-2027 which is consistent with the schedule of
adjustments previously approved.
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3 Background
• A written report containing a description of each property subject to the fee and the amount of the charge for each parcel is on file with the City Clerk.
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4 Approval of Rates and Collection
• The CPI increase for FY 2026-2027 is 2.72%. This
results in an increase to the Stormwater Fee from
$84.26 per parcel to $86.55 per parcel, bringing the total for fees to be collected in 2026-2027 to $1,377,876.
• State law authorizes the City Council to collect
stormwater fees on the property tax roll of Alameda
County with a public hearing and two-thirds vote.
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5 Staff Recommendation

1. Conduct Public Hearing

2. Adopt a Resolution approving the adjusted
Stormwater Fee and order the collection on the tax
roll.
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City Council Staff Report Page 1 of 9 July 14, 2026
Staff Report
Agenda Item No. 4.1
DATE: July 14, 2026
TO: Honorable Mayor and Members of the City Council
FROM: Joan Malloy, City Manager
SUBJECT: Adopt Two Resolutions:

1. Approving the Union Landing Property Owners Association Annual Report and Amending the City of Union City Revised Budget as Necessary for Consistency; and

2. Ordering Levy and Collection of Assessment for the Union Landing Property and Business Improvement District to Fund Services in Calendar Year 2027

EXECUTIVE SUMMARY
On an annual basis, the City Council reviews the Annual Report for the Union Landing Property and Business Improvement District (“ULPBID”) and takes action to order the levy and collection of assessments. These assessments are collected through the property tax roll and used to pay for security and marketing services within the district.

The assessment revenues are collected by the County Tax Assessor, remitted to the City, and distributed to the ULPBID.

Staff recommends the City Council:

1. Adopt a Resolution approving the Union Landing Property and Business Improvement District Annual Report with a four percent (4%) budget increase, and amending the City of Union City Revised Budget as necessary for consistency (Attachment 1: Draft Resolution), and

2. Adopt a Resolution ordering the levy and collection of assessments for the Union Landing Property Business Improvement District with a four percent (4%) budget increase to fund services in calendar year 2027 (Attachment 2: Draft Resolution)

STRATEGIC DISTRICT MANAGEMENT PLAN ALIGNMENT
This agenda item is aligned with the following:

Goal C, Strategy 4: Enhance the City’s partnership with Union Landing property owners and tenants to grow the vitality of the business district and revenue to the City. 137 of 330
Agenda Item No. 4.1
City Council Staff Report Page 2 of 9 July 14, 2026

BACKGROUND
The ULPBID is an assessment district established pursuant to the Property and Business Improvement District Law of 1994 to fund security, administration, marketing, and related services that support the continued vitality of the Union Landing Shopping Center.

The ULPBID was renewed for a five-year period from July 1, 2025, through June 30, 2030, and is governed by the ULPBID Management Plan (the “District Management Plan”). The District Management Plan includes an updated description of services, the annual budget, assessment methodology, and district management guidelines (Attachment 4).

ULPBID provides funding for the following services:
• Security Services: three dedicated Union City Police Officers, supplies and equipment, and a Police Substation to increase visibility and security in the area. • Administration & Compliance: management fees, legal and accounting services, and the costs associated with the annual renewal of the district. • Marketing & Promotions: social media and web page management, as well as coordinating community events and local promotions.

The budget tied to service costs establishes the amount of assessment fees to be collected.

The amount of the assessment paid by each property owner is determined by two different formulas. The Security Services formula includes the number of dispatched calls for service, building square footage, and lot size. For marketing services, a .50 benefit point per building square foot is used to determine the increased economic benefit for services provided. The City is one of the property owners, as the Union Landing Transit Center is included in the assessment district. For a detailed description of the formulas, see the District Management Plan (Attachment 4).

In most cases, assessment fees are passed through to tenants/business owners who have “Triple Net Lease Agreements”. These commercial leases require tenants to pay property taxes, building insurance, and maintenance costs in addition to base rent, utilities, and other charges. Accordingly, the Union Landing Property Owners Association's (“ULPOA”) Board of Directors (the “Directors”) carefully evaluates expenditures to control costs, avoid placing undue financial burden on tenants, and minimize the potential for vacancies.

The Annual Report is approved by the Directors and provides a review of services delivered during the current reporting period, proposed services for the upcoming year, and the projected budget needed to fund them.

To better align with the ULPOA’s operational needs and tax filing requirements, the ULPBID changed from a July-to-June fiscal year to a January-to-December fiscal year.

To accommodate this change, the Year 1 transition period for the ULPBID spans 18 months of service, from July 1, 2025, through December 31, 2026.

Changing to the January-to-December fiscal year also helps with the ULPOA’s operational cash flow. City staff provides the County Tax Assessor with assessment information in August, and the ULPBID assessments are collected through the property tax roll in two installments, with payments due on November 1 and February 1. The assessment revenues are collected by the County Tax Assessor, remitted to the City in 138 of 330
Agenda Item No. 4.1
City Council Staff Report Page 3 of 9 July 14, 2026
December, and the City will distribute the funds to the ULPBID in January, the start of their new fiscal year.

After the 18-month Year 1 transition, future Annual Reports presented to the City Council should be streamlined, as the ULPOA has more time between its December 31 fiscal year-end and July to prepare and present them.

DISCUSSION
On May 20, 2026, the ULPOA Directors approved the Annual Report, which summarizes the Year 1 transition period of July 1, 2025, through June 30, 2026, and proposes the Year 2 Budget for the period of January 1, 2027, through December 31, 2027. Approval of the Year 2 Budget allows the assessment amounts to be submitted to the County Tax Assessor and placed on the property tax roll in accordance with the required assessment schedule.

Because the initial fiscal period spans 18 months (July 1, 2025, through December 31, 2026), an additional end-of-first-year Annual Report update will be presented in December 2026, covering the remaining six months of the transition period.

The Year 1 Security and Marketing Services Budgets, Assessments, and Accomplishments for the transition period are as follows:

Table 1: Year 1 (18-month budget covering July 1, 2025, through December 31, 2026, Security & Marketing and Administrative Services)
ULPOA Budget Year 1
Jul 1, 25 to Dec 31, 26
Security Services Costs
Sworn Police Services Salaries $1,274,487.00
Vehicles and Equipment $36,244.50
Office Space Lease for Police Personnel $58,797.00
Supplies $16,548.00
Total Security Services Costs $1,386,076.50
Marketing Services Costs
Marketing and Events $165,750.00
Administration Costs $239,026.00
Marketing and Administration Cost $50,000.00
Total Marketing and Admin Costs $304,776.00
Total ULPBID Costs $1,690,852.50
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Table 2: Year 1 Assessments Levied/To Be Collected
Special Assessment Year 1
Jul 1, 25 to Dec 31, 26
Total ULPBID Costs $1,690,852.00
General Benefit-Security Services ($69,303.83)
General Benefit-Marketing and Administration Services ($6,095.52) Total Special Assessment $1,615,452.65
While the total ULPBID costs are $1,690,852, the City must contribute to the total cost by paying the “general benefit.” The general benefit is defined as the level of benefit (expressed in a percentage of the total assessments levied) to surrounding properties outside of the ULPBID from services provided by the ULPBID. Consistent with State law, this amount cannot be levied on Union Landing property owners. The total general benefit for Year 1 was $75,398, paid out of the City’s General Fund. For the breakdown on how the general benefit is calculated, see the District Management Plan (Attachment 4).

The total assessment levied on the Union Landing property owners for Year 1 was $1,615,452.65, which is the total ULPBID cost of $1,690,852 minus general benefits of $75,398.

Year 1 - Services and Accomplishments
Administrative Services
Since ULPBID's inception, City staff have served as the managing agent for ULPOA.

Effective July 1, 2025, management responsibilities began transitioning to Community Strong Strategies ("CSS"). Throughout the transition period, CSS worked collaboratively with City staff and the Directors to ensure continuity of services while strengthening the organization's independent administrative and operational capacity.

Key accomplishments during the transition included establishing independent banking and financial management systems, implementing enhanced bookkeeping and financial reporting procedures, maintaining investments in public safety services, and expanding marketing and promotional initiatives to support the district's businesses and community.

Following the successful completion of the transition, CSS assumed full management responsibilities for the ULPOA effective January 1, 2026.

Security Services
Consistent with the District Management Plan, assessment revenues continued to support enhanced public safety services provided through the Union City Police Department (“UCPD”). Public safety continues to represent the largest investment category within the ULPBID and remains a foundational component of the district's service delivery strategy. Assessment revenues support enhanced public safety services, including three dedicated officers, vehicles, equipment, operational support, and operation of the Union Landing Police Substation. These services supplement the City's broader public safety resources and help maintain a safe and welcoming environment for businesses, employees, customers, and visitors.

Having three dedicated officers at Union Landing allows for the following services to be 140 of 330
Agenda Item No. 4.1
City Council Staff Report Page 5 of 9 July 14, 2026
delivered:
• Enhanced Business Engagement: The UCPD continues to strengthen partnerships with the business community by maintaining regular engagement with business owners, managers, and property managers throughout the district. To enhance ongoing communication, UCPD publishes the Union Landing Newsletter, which provides updates on enforcement activities, crime trends, crime prevention strategies, and other public safety initiatives
• Proactive Patrols, Rapid Incident Response, Increased Police Visibility: These measures have resulted in a significant drop in dispatched calls for service, as reported in Table 3: Annual Crime Reduction Comparison Union Landing below. • Relocation of the Police Substation: This year, the Police Substation will open its doors on Courthouse Drive, a more visible location at the center. While this move resulted in costly tenant improvements paid for by UCPD with Supplemental Law Enforcement Services Funds, the return is the added value of crime reduction that comes with a more visible location on a major throughfare. • Automated License Plate Recognition (ALPR) Cameras: Approximately one-half of the City’s 20 cameras are strategically located within one-quarter mile of Union Landing. Camera expansion is planned for 2026-2027 to strategically enhance camera placement around Union Landing. In addition, a mobile ALPR trailer is available to be moved to address a specific location, and the patrol vehicles in Union Landing have ALPR capabilities. Having three dedicated officers in Union Landing supports the technology and ensures rapid response. The initial investment and ongoing subscription costs are covered by the City. • Community Engagement: The UCPD expends significant staff resources to engage the community and Union Landing servers as the City’s downtown in doing so. These activities included National Night Out, Shop with a Cop, and other community-focused programs that strengthen relationships among law enforcement, businesses, residents, and visitors while promoting a safe and welcoming environment
It is important to note that while assessment revenues support dedicated public safety resources, they do not cover the costs of the full range of City personnel and operational resources that contribute to public safety efforts within Union Landing, including supervisory staff, administrative personnel, emergency response resources, and other City departments that support district operations as needed.

One recent example demonstrates the UCPD's commitment to providing the highest level of public safety services to Union Landing businesses and property owners. Lieutenant Kanazeh recently led a collaborative effort to address a challenging situation involving an unhoused individual who had established a campsite on private property, including a tent, a substantial amount of debris, and an inoperable vehicle.

Rather than relying on a lengthy and costly court-ordered enforcement process, Lieutenant Kanazeh worked closely with neighboring businesses, the individual, and the City's homeless outreach team to develop a voluntary relocation plan. Through this coordinated, collaborative approach, the campsite was successfully removed, the individual was reunited with family members, and an opportunity was created for the individual to begin a path toward recovery. The matter was resolved in a manner that 141 of 330
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balanced compassion with the interests of Union Landing businesses and property owners while avoiding more costly enforcement actions.

Proactive Policing Results in Crime Reduction
Below is an overview of the results of enhanced Union Landing security services, showing the reduction in crime between 2024 and 2025 (annual years).

Table 3: Annual Crime Reduction Comparison Union Landing For a detailed review of Security Services Accomplishments, see the Annual Report (Attachment 1 – Exhibit A).

Marketing Services Accomplishments
Marketing and promotional services continued to play an important role in supporting Union Landing’s visibility, tenant engagement, and position as a regional shopping, dining, and entertainment destination. Consistent with the objectives outlined in the District Management Plan, marketing efforts focused on strengthening the district’s identity, increasing community engagement, supporting tenant promotion, and encouraging visitation through coordinated digital outreach and community-centered events.

To support these efforts, ULPOA partnered with Sparq Marketing to provide social media management, website administration, digital marketing, tenant outreach, promotional campaign development, event support, and analytics reporting.

ULPOA also supported a variety of community-oriented events and seasonal activations designed to strengthen community participation and encourage repeat visitation to the district. These efforts included Sama-Sama Fest, holiday-themed programming, and other promotional activities coordinated in partnership with marketing consultants, tenants, community organizations, and local stakeholders. These events helped reinforce 142 of 330
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Union Landing’s role as a community gathering place while creating additional opportunities to promote businesses operating within the district.

For a detailed review of Administration and Marketing Services Accomplishments, see the Annual Report (Attachment 1 – Exhibit A).

Looking Ahead: Proposed Year 2, FY 2027, Security and Marketing Services Budget and Projected Assessments
The proposed FY 2027 Budget was adopted by the Directors with an overall increase of

2.7 percent. However, the annual budget may be increased by up to 4 percent to account for inflation. The Directors may elect not to fund the Marketing and Administration Contingency Fund ($50,000 baseline). Eliminating this contingency would reduce the overall budget and lower the assessment fees.

The City Council may approve the budget as adopted by the Directors, with the 2.7 percent increase, or modify individual budget line items, provided that the overall adjustment does not exceed the authorized 4 percent increase. However, staff recommends increasing the Security Services budget by 4 percent to help cover public safety service costs, including the three dedicated UCPD officers. The 4 percent increase is necessary to address increases in police officers’ salaries, vehicle and equipment costs, the on-site police office, and supplies. If the Security Services budget is not increased by 4 percent, it would place an additional burden on the City’s General Fund.

Below are the budget proposals: the Directors' budget shows a 2.7 percent increase, and the City-recommended budget shows a 4 percent increase. 143 of 330
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Table 4: Calendar Year 2027 Security and Marketing Services Budget Increase Comparisons
Table 5: Estimated assessment from Year 2 (12-month budget covering January 1, 2027, through December 31, 2027, Security & Marketing and Administrative Services) Consistent with the District Management Plan, the General Benefit-Security Services is 5% of total Security Services, and the General Benefit-Marketing & Administration Services is 2% of total Marketing & Administration Services.

Description
Year 2 (1/1/2027-
12/31/2027)
Baseline
Budget*
Year 2 (1/1/2027-
12/31/2027)
Baseline Budget
plus 2.7%
Year 2 (1/1/2027-
12/31/2027)
Baseline Budget
plus 4.0%
Security Services Costs:

Sworn Police Services Salaries $849,658.00 $872,598.77 $883,644.32 Vehicles and Equipment $24,163.00 $24,815.40 $25,129.52 Office Space Lease for Police
Personnel $39,198.00 $40,256.35 $40,765.92
Supplies $11,032.00 $11,329.86 $11,473.28
Total Security Services Costs $924,051.00 $949,000.38 $961,013.04 Marketing & Administration Services Costs:

Marketing Services $110,500.00 $113,483.50 $114,920.00
Administration Costs $140,950.00 $140,950.00 $140,950.00 Marketing & Administration
Contingency $50,000.00 $51,350.00 $52,000.00
Less Prior Year Rollover Funds $0.00 $0.00 $0.00
Total Marketing & Administration
Services Costs $301,450.00 $305,783.50 $307,870.00
Total PBID Costs $1,225,501.00 $1,254,783.88 $1,268,883.04 *The Year 2 Baseline Budget does not include renewal fees and interim management costs Estimated Assessment
Year 2 (1/1/2027-
12/31/2027)
Baseline
Budget*
Year 2 (1/1/2027-
12/31/2027)
Baseline Budget
plus 2.7 %
Year 2 (1/1/2027-
12/31/2027)
Baseline Budget
plus 4.0 %
Total PBID Costs $1,225,501.00 $1,254,783.88 $1,268,883.04 General Benefit-Security Services ($46,202.23) ($47,449.69) ($48,050.32) General Benefit-Marketing &
Administration Services ($6,029.00) ($6,115.67) ($6,157.40) Total Estimated Special
Assessment $1,173,269.77 $1,201,218.52 $1,214,675.32
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The City Council will vote on and approve the Year 2 assessment (2.7% or 4% assessment).

FISCAL IMPACT
The Year 2, 4% option will pay for $961,013.04 security services provided by the Union City Police Department. This option will also pay for approximately $20,000 of City services, identified in the Annual Report as City Administration Fees.

To meet the total PBID budget, the City must contribute $48,050.32 for general benefitsecurity services and $6,157.40 for general benefit-Marketing & Administration Services.

These contributions will be made by the General Fund and are included in the City’s FY2026-2027 adopted budget.

RECOMMENDATION
Staff recommends that the City Council:

1. Adopt a Resolution approving the Union Landing Property and Business Improvement District Annual Report with a four percent (4%) budget increase, and amending the City of Union City Revised Budget as necessary for consistency; and

2. Adopt a Resolution ordering the levy and collection of the annual assessment for the Union Landing Property and Business Improvement District with a four percent (4%) budget increase, for Fiscal Year 2026-2027 to fund services in Calendar Year 2027.

Prepared by: Gloria Ortega, Economic Development Manager Submitted by: Carmela Campbell, Economic and Community Development Director Attachments:

1. Draft Resolution - Approving the Union Landing Property and Business Improvement District Annual Report
Exhibit A – Union Landing Property Owners Association Annual Report (July 1, 2025 – December 31, 2026)

2. Draft Resolution - Ordering the Levy and Collection of Assessments for the Union Landing Property and Business Improvement District
Exhibit A - Union Landing Property and Business Improvement District Annual Assessment Roll (4.0% budget increase)

3. Alternate Exhibit A - Union Landing Property and Business Improvement District Annual Assessment Roll (2.7% budget increase)

4. Union Landing Property and Business Improvement District Management Plan 145 of 330
RESOLUTION NO. 2026-XXX

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UNION CITY APPROVING THE UNION LANDING PROPERTY OWNERS’
ASSOCIATION ANNUAL REPORT FOR THE PERIOD OF JULY 1, 2025, THROUGH DECEMBER 31, 2026
WHEREAS, the City Council pursuant to the provisions of the Property and Business Improvement District Law of 1994, Part 7 of Divisions 18 of the Streets and Highways code of California (hereafter referred to as the “Code”), and in accordance with the provisions of the California Constitution, Article XIID conducted proceedings for the renewal/formation Union Landing Business Improvement District (hereafter referred to as the “ULPBID”), and the levy of annual assessments connected therewith; and WHEREAS, on July 8, 2025, the City Council held a full and fair public hearing regarding the renewal/formation of the ULPBID and the establishment of annual assessments and the maximum assessments required to pay for police and marketing services and management of the ULPBID for a five-year period beginning July 1, 2025, and ending June 30, 2030; and
WHEREAS, the City Council retained NBS to prepare a Management Plan (the “Plan”) for the ULPBID renewal to determine the special benefits received from the services provided and levy amounts as part of the formation of the ULPBID for the purpose of assisting with the Annual Levy of the ULPBID; and WHEREAS, pursuant to the Code and the Plan, the Union Landing Property Owners Association (the “Owners’ Association”) shall cause to be prepared an Annual Report (hereafter referred to as the “Report”) each fiscal year for which the assessment are to be levied and collected and said Report shall be filed with the City Clerk and contain any proposed changes to the ULPBID boundary; the improvements and activities to be provided; the estimated costs and method of assessments; the amount of any surplus or deficit; and contributions from other sources; and
WHEREAS, the Report is labeled Exhibit A attached hereto and made a part hereof; and
WHEREAS, this City Council has carefully examined and reviewed the Report as presented, and is satisfied with the Report, each and all of the budget items and documents as set forth therein, and is satisfied with the special benefits received from the improvements, operations, maintenance, and services to be performed within the ULPBID, as set forth in said Report.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF UNION CITY AS FOLLOWS:

Section 1: The Report as required by the Code and Plan, and presented to the City Council, consists of the following:
• The improvements, services, and activities to be provided for that fiscal year; 146 of 330
Resolution No. 2026-XXX
Resolution Approving ULPOA Annual Report