HomeMy WebLinkAbout6.1 Approval and Authorization of the City of Dublin and the Dublin Financing Authority to Execute the Sale and Issuance of 2021 Lease Revenue Bonds
STAFF REPORT
CITY COUNCIL
Page 1 of 5
Agenda Item 6.1
DATE: September 21, 2021
TO: Honorable Mayor and City Councilmembers
FROM: Linda Smith, City Manager
SUBJECT:
Approval and Authorization of the City of Dublin and the Dublin
Financing Authority to Execute the Sale and Issuance of 2021 Lease
Revenue Bonds with an Estimated Aggregate Principal Amount of Not-To-
Exceed $22 Million to Finance Energy Efficiency Capital Improvements
and Approving Form and Execution of Related Documents
Prepared by: Jay Baksa, Assistant Director of Administrative Services
EXECUTIVE SUMMARY:
The City Council will consider approving the sale and issuance of 2021 lease revenue bonds
with an estimated aggregate principal amount of not-to-exceed $22 million to finance energy
efficiency capital improvements, and approval of the execution of related documents. Draft
versions of these documents are attached.
STAFF RECOMMENDATION:
Conduct the public hearing, deliberate, adopt the Resolution Approving a Lease Financing
and the Issuance and Sale of Lease Revenue Bonds by the Dublin Financing Authority to
Finance Energy Efficiency Capital Improvements and Approving Related Documents and
Official Actions.
FINANCIAL IMPACT:
Payment of debt service of the bonds is a liability of the General Fund, and debt service
payments will be included as part of the annual budgeting process. A portion of the annual
debt service will be offset from energy cost savings that are anticipated from the energy
efficiency and related infrastructure improvement projects. In addition, approval of the
recommended actions will provide the City Manager the authority to amend the Fiscal Year
2021-22 budget to pay for the June 30, 2022 debt service payment. The estimated annual debt
service of the bonds is provided below. The actual schedule will be updated once the bonds
have been sold.
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2021 Lease Revenue Bonds
Estimated Annual Payments
FY
Ending
Principal
Interest
Total
06/30/2022 $465,000 $510,720 $975,720
06/30/2023 585,000 783,150 1,368,150
06/30/2024 615,000 753,900 1,368,900
06/30/2025 645,000 723,150 1,368,150
06/30/2026 675,000 690,900 1,365,900
06/30/2027 710,000 657,150 1,367,150
06/30/2028 745,000 621,650 1,366,650
06/30/2029 785,000 584,400 1,369,400
06/30/2030 820,000 545,150 1,365,150
06/30/2031 860,000 504,150 1,364,150
06/30/2032 905,000 461,150 1,366,150
06/30/2033 950,000 415,900 1,365,900
06/30/2034 1,000,000 368,400 1,368,400
06/30/2035 1,040,000 328,400 1,368,400
06/30/2036 1,080,000 286,800 1,366,800
06/30/2037 1,125,000 243,600 1,368,600
06/30/2038 1,170,000 198,600 1,368,600
06/30/2039 1,215,000 151,800 1,366,800
06/30/2040 1,265,000 103,200 1,368,200
06/30/2041 1,315,000 52,600 1,367,600
Totals $17,970,000 $8,984,770 $26,954,770
All financing-related costs will be paid from the bond proceeds. The estimated payment in
Fiscal Year 2021-22 is $975,720 and the estimated average annual payment is $1,367,318 from
Fiscal Years 2022-23 through 2040-41.
In addition, as discussed at the July 20, 2021 City Council meeting, the current Capital
Improvement Program (CIP), includes budgets allocated to various energy improvement
projects. Upon approval of the recommended actions, Staff will adjust the CIP to reduce
and/or shift those previously allocated funds into the Citywide Energy Improvements project.
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DESCRIPTION:
Background
At the July 20, 2021 meeting, the City Council conducted a public hearing and approved an
agreement with Willdan Energy Solutions to implement a package of Energy Efficiency and
Infrastructure Improvement Projects that were identified as part of an Investment Grade
Audit. The July 20 Staff Report is provided as Attachment 6. The City Council also directed
Staff to pursue the issuance of tax-exempt bonds to fund the projects, and specifically to do
the following:
• Prepare the required legal documents and identify the asset(s) to be pledged to
secure the bonds in August.
• Prepare the required financing documents including the Preliminary Official
Statement and Continuing Disclosure Certificate in August.
• Secure an underlying credit rating from Standard & Poor’s (S&P Global) in
September.
• Return to the City Council in September for approval of all required documents.
With the City Council’s feedback, Staff worked with the City’s financing team to select a 20-
year bond term with an average annual debt service of $1.3 million. The team also completed
a presentation to S&P Global Ratings to secure a credit rating for this bond issuance and is
awaiting those results. It should also be noted that approval of the recommended actions
discussed in this Staff Report is contingent upon the approval of the creation of the Dublin
Financing Authority, which is also on tonight’s agenda under a separate item.
City Council Actions Needed
Approval of the resolutions transmitted with this Staff Report will enable the financing team
program to proceed with issuance, sale, and delivery of up to $22 million in bonds to provide
financing for the projects, approves the use of bond proceeds to fund costs and expenses
related to the issuance of the bonds, and approves the following documents (Attachments 2 –
5):
• Site Lease - The Site Lease provides for the lease of City properties to the Authority in
exchange for a one-time upfront rental payment sufficient to finance the capital
improvement projects. The initial Leased Property consists of the City’s Civic Center
Complex located at 100 Civic Plaza.
• Lease Agreement - Under the Lease Agreement, the Authority will sublease the Leased
Property back to the City in exchange for semi-annual lease payment sufficient to pay
debt service due on the bonds. The lease payments made by the City under the Lease
Agreement will be assigned by the Authority to the Trustee and used by the Trustee to
pay debt service on the bonds as it becomes due.
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• Bond Purchase Agreement - The Bond Purchase Agreement is a contract between the
Authority, the City, and Hilltop Securities, Inc. as underwriter (the “Underwriter”),
whereby the Authority agrees to sell the bonds to the Underwriter and the Underwriter
agrees to buy the bonds from the Authority for resale to the public.
• Preliminary Official Statement - The Preliminary Official Statement is the offering
statement used by the Underwriter to inform the marketplace of the terms of the bonds
and contains all relevant information for the investor to decide whether to purchase
the bonds.
• Continuing Disclosure Certificate - Contained in the Preliminary Official Statement is
the form of the Continuing Disclosure Certificate, which requires the City to submit
annual continuing disclosure reports and notice of certain listed events to the
marketplace as long as the Bonds are outstanding.
Senate Bill 450 Analysis
Senate Bill 450, effective January 1, 2018, requires that the City Council and Authority be
furnished with a good faith estimate of (i) the true interest cost of the bonds (the rate
necessary to discount the amounts payable on the payment dates to the purchase price
received); (ii) the finance charge (the sum of all fees and charges paid to third parties); (iii) the
amount of proceeds received by the issuer (the gross proceeds less the finance charges and
any reserves or capitalized interest funded by the bonds); and (iv) the total payment amount
(the total of all debt service payments to maturity plus fees and charges not paid from bond
proceeds). For these bonds, the estimates are as follows: (i) true interest cost: 2.63%; (ii)
finance charge: $424,402; (iii) net proceeds $20,622,615; and (iv) total payment amount:
$27,040,270. The public shall have access to these estimates. These amounts are good faith
estimates provided by the City’s Underwriter, Hilltop Securities, based on a projected par
amount of bonds of $17,970,000, plus original issue premium of $3,077,017.10, given market
conditions as of August 20, 2021; the actual amounts are determined when the bonds are
priced and will vary from these estimates.
Next Steps
After tonight’s approvals, the working group anticipates posting the Preliminary Official
Statement to potential investors on September 23, 2021, pricing the bonds at the end of
September and closing the bonds in mid-October. At that time, bond proceeds will be
available to the City.
STRATEGIC PLAN INITIATIVE:
Strategy 2: Explore New City Revenue Streams for Long Term Financial Stability
Objective D: Continue to maintain strong fiscal policies.
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NOTICING REQUIREMENTS/PUBLIC OUTREACH:
A notice was placed in the East Bay Times on September 16, 2021, notifying the community
that the City Council will hold a public hearing to consider the proposed issuance of bonds by
the Dublin Financing Authority. The City Council Agenda was posted.
ATTACHMENTS:
1) Resolution Approving a Lease Financing and the Issuance and Sale of Lease Revenue
Bonds by the Dublin Financing Authority to Finance Energy Efficiency Capital Improvements
and Approving Related Documents and Official Actions
2) Site Lease
3) Lease Agreement
4) Bond Purchase Agreement
5) Preliminary Official Statement including Continuing Disclosure Certificate at Appendix D
6) July 20, 2021 Staff Report (without attachments)
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ATTACHMENT 1
Reso. No. XX-21, Item X.X, Adopted XX/XX/21 Page 1 of 5
RESOLUTION NO. XX-21
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
APPROVING A LEASE FINANCING AND THE ISSUANCE AND SALE OF LEASE REVENUE
BONDS BY THE DUBLIN FINANCING AUTHORITY TO FINANCE ENERGY EFFICIENCY
CAPITAL IMPROVEMENTS, AND APPROVING RELATED DOCUMENTS AND OFFICIAL
ACTIONS
WHEREAS, the City of Dublin (the “City”) desires to acquire and install energy efficiency
improvements to various City facilities (collectively, the “Project”), all which comprise capital
projects of benefit to the City and its citizens; and
WHEREAS, the Dublin Financing Authority (the “Authority”) was formed to, among other
things, assist the City finance municipal capital improvements; and
WHEREAS, in order to provide financing for a portion of the cost of the Project and
incidental expenses related thereto, the City has agreed to lease certain real property, consisting
of the City’s civic center complex located at 100 Civic Plaza (the “Leased Property”), to the
Authority as provided in a Site Lease, as defined herein; and
WHEREAS, in order to fund the Site Lease, the Authority proposes to issue and sell its
Dublin Financing Authority 2021 Lease Revenue Bonds in the aggregate principal amount of not
to exceed $22,000,000 (the “Bonds”) under Article 4 of Chapter 5, Division 7, Title 1 of the
Government Code of the State of California, commencing with Section 6584 of said Code (the
“Bond Law”); and
WHEREAS, in order to secure the payments of principal of and interest on the Bonds, the
Authority proposes to lease the Leased Property back to the City under a Lease Agreement (the
“Lease Agreement”), under which the City is obligated to pay semiannual lease payments as
rental for the Leased Property, and the Authority will assign substantially all of its rights under the
Lease Agreement to U.S. Bank National Association, as trustee for the Bonds; and
WHEREAS, to provide for development of the most favorable debt structure for the City
and to ensure the most favorable reception in the market place for the Bonds, the City has
requested the Authority to sell the Bonds through a negotiated sale pursuant to the terms of a
Bond Purchase Agreement (the “Bond Purchase Agreement”) between the Authority, the City and
Hilltop Securities, Inc., as underwriter (the “Underwriter”); and
WHEREAS, for purposes of the sale of the Bonds, the City has caused to be prepared an
Official Statement describing the Bonds, the preliminary form of which is on file with the City Clerk
and the City Council, with the aid of their staff, have undertaken such review of the Official
Statement as hereinafter described as is necessary to assure proper disclosure of all material
facts relating to the Bonds that are within the personal knowledge of City Council members and
the staff; and
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Reso. No. XX-21, Item X.X, Adopted XX/XX/21 Page 2 of 5
WHEREAS, as required by Section 6586.5 of the California Government Code, the City
has caused publication of a notice of a public hearing on the financing of the public capital
improvements included within the Project once at least five days prior to the hearing in a
newspaper of general circulation in the City; and
WHEREAS, the City Council held a public hearing at which all interested persons were
provided the opportunity to speak on the subject of financing such public capital improvements;
and
WHEREAS, in accordance with Government Code Section 5852.1, the following
information has been obtained and disclosed in the staff report for the Council action set forth
herein: (i) the estimated true interest cost of the Bonds, (ii) the estimated finance charge of the
Bonds, (iii) the estimated proceeds of the Bonds expected to be received, net of proceeds for
finance charges in (iv) above to paid from the principal amount of the Bonds, and (v) the estimated
total payment amount of the Bonds; and
WHEREAS, the City Council wishes at this time to approve all proceedings of the City
relating to the issuance and sale of the Bonds; and
WHEREAS, the first debt service payment is estimated to be made on June 30, 2022 and
the City’s Adopted Budget did not include appropriations to make the payment; and
WHEREAS, as presented at the July 20, 2021 City Council meeting, five Capital
Improvement Projects, included funds for energy efficiency projects, including GI0221 (Resiliency
and Disaster Preparedness Improvements), GI0521 (Library Tenant Improvements), GI0321
(Solar Canopies at the Wave), ST0417 (Dublin Ranch Street Light Improvements), GI0121
(Citywide Energy Improvements) which will need to be adjusted to account for the Energy
Efficiency Capital Improvement Project.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Dublin as follows:
Section 1. Issuance of Bonds. The City Council hereby approves the issuance of the
Bonds by the Authority under the Bond Law in the maximum principal amount of not to exceed
$22,000,000, for the purpose of financing the Project and incidental expenses related thereto.
The City Council hereby finds that issuance of the Bonds by the Authority for the purpose of
financing the Project will result in significant public benefits of the type described in Section 6586
of the California Government Code, including, but not limited to, energy cost savings, a more
efficient delivery of City services to residential and commercial developments within the City and
demonstrable savings in effective interest rate, bond preparation, bond underwriting and bond
issuance costs.
Section 2. Approval of Related Financing Agreements. The City Council hereby approves
each of the following agreements required for the issuance and sale of the Bonds, in substantially
the respective forms on file with the City Clerk together with any changes therein or additions
thereto deemed advisable by the City Manager, Assistant City Manager, Finance Director or any
of their designees (each, an “Authorized Officer”), whose execution thereof shall be conclusive
evidence of the approval of any such changes or additions. Such changes or additions may
include, but is not limited to, designating the City assets to be subject to the Lease Agreement or
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Reso. No. XX-21, Item X.X, Adopted XX/XX/21 Page 3 of 5
the form of the document creating the contemplated lease transaction, and providing that payment
of the Bonds be insured by a financial guaranty policy from a bond insurance company and/or
secured by a reserve surety policy, if in the judgment of an Authorized Officer such insurance
and/or reserve surety policy is in the best interest of the City. An Authorized Officer is hereby
authorized and directed for and on behalf of the City to execute, and the City Clerk is hereby
authorized and directed to attest, the final form of each such agreement, as follows:
Site Lease, between the City as lessor and the Authority as lessee, under which
the City leases the Leased Property to the Authority in consideration of the
payment of an upfront amount which will be applied by the City to finance a
portion of the Project;
Lease Agreement, between the Authority as lessor and the City as lessee, under
which the Authority leases the Leased Property back to the City and the City
agrees to pay semiannual lease payments to provide revenues with which to pay
principal of and interest on the Bonds when due; and
Continuing Disclosure Certificate, to be executed by the City, for and on behalf
of itself and the Authority, for the purpose of providing annual financial
information and notice of certain enumerated events to holders and beneficial
owners of the Bonds.
Section 3. Negotiated Sale of Bonds. The City Council hereby approves the negotiated
sale of the Bonds by the Authority to the Underwriter. The Bonds shall be sold pursuant to the
terms and provisions of the Bond Purchase Agreement among the Authority, the City and the
Underwriter in substantially the form on file with the City Clerk together with any changes therein
or additions thereto deemed advisable by an Authorized Officer. The true interest cost of the
Bonds shall not exceed 3.50% and the Underwriter’s discount shall not exceed 1.00%.
Section 4. Official Statement. The City Council hereby approves the preliminary Official
Statement describing the Bonds in substantially the form on file with the City Clerk. An Authorized
Officer is hereby authorized and directed to approve any changes in or additions to said
preliminary Official Statement, and to execute an appropriate certificate stating the City’s
determination that the preliminary Official Statement (together with any changes therein or
additions thereto) has been deemed nearly final within the meaning of Rule 15c2-12 of the
Securities Exchange Act of 1934. Distribution of the preliminary Official Statement by the
Underwriter is hereby approved. An Authorized Officer is hereby authorized and directed to
approve any changes in or additions to a final form of said Official Statement, and the execution
thereof by an Authorized Officer shall be conclusive evidence of approval of any such changes
and additions. The City Council hereby authorizes the distribution of the final Official Statement
by the Underwriter. The final Official Statement shall be executed on behalf of the City by the
Mayor or an Authorized Officer.
Section 5. Engagement of Municipal Advisor. The firm of Fieldman, Rolapp & Associates,
Inc. is hereby retained as municipal advisor to the City in connection with the issuance and sale
of the Bonds by the Authority. An Authorized Officer is authorized and directed on behalf of the
City to execute an agreement with said firm in a form as approved by an Authorized Officer.
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Reso. No. XX-21, Item X.X, Adopted XX/XX/21 Page 4 of 5
Section 6. Engagement of Bond and Disclosure Counsel. The firm of Jones Hall, A
Professional Law Corporation, is hereby retained as bond counsel and disclosure counsel to the
City and the Authority in connection with the issuance and sale of the Bonds by the Authority. An
Authorized Officer is authorized and directed on behalf of the City to execute an agreement with
said firm in a form as approved by an Authorized Officer.
Section 7. Official Actions. The Authorized Officers, the City Attorney, the City Clerk and
all other officers of the City are each authorized and directed on behalf of the City to make any
and all leases, assignments, certificates, requisitions, agreements, notices, consents, instruments
of conveyance or termination, warrants and other documents, which they or any of them deem
necessary or appropriate in order to consummate any of the transactions contemplated by the
agreements and documents approved under this Resolution. An Authorized Officer may revise
the identity of the Leased Property (including by adding thereto) as necessary in order to
accomplish the purposes of this Resolution. Whenever in this Resolution any officer of the City
is authorized to execute or countersign any document or take any action, such execution,
countersigning or action may be taken on behalf of such officer by any person designated by such
officer to act on his or her behalf in the case such officer is absent or unavailable.
Section 8. Effective Date. This Resolution shall take effect immediately upon its passage
and adoption.
BE IT FURTHER RESOLVED that the City Manager is hereby authorized to make
adjustments to the following CIPs, to account for the changes required by the Energy Efficiency
Capital Improvement Project, including GI0221 (Resiliency and Disaster Preparedness
Improvements), GI0521 (Library Tenant Improvements), GI0321 (Solar Canopies at the Wave),
ST0417 (Dublin Ranch Street Light Improvements), GI0121 (Citywide Energy Improvements);
and
BE IT FURTHER RESOLVED that the City Manager is hereby authorized to make a budget
adjustment to provide appropriations for the first debt service payment anticipated to be made by
June 30, 2022, in an estimated amount of $975,720, once the lease revenue bonds have been
sold and the actual debt service payment has been finalized.
PASSED, APPROVED, AND ADOPTED this 21st day of September 2021, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
__________________________
Mayor
ATTEST:
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Reso. No. XX-21, Item X.X, Adopted XX/XX/21 Page 5 of 5
__________________________
City Clerk
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Jones Hall Draft 9.3.21
RECORDING REQUESTED BY:
Stewart Title Guaranty Company
AND WHEN RECORDED RETURN TO:
Jones Hall, A Professional Law Corporation
Attn: James A Wawrzyniak, Jr.
475 Sansome Street, Suite 1700
San Francisco, California 94111
THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER
TAX UNDER SECTION 11929 OF THE CALIFORNIA REVENUE AND TAXATION
CODE. THIS DOCUMENT IS EXEMPT FROM RECORDING FEES UNDER SECTION
27383 OF THE CALIFORNIA GOVERNMENT CODE.
SITE LEASE
This SITE LEASE (this “Site Lease”), dated for convenience as of October 1, 2021,
is between the CITY OF DUBLIN, a municipal corporation duly organized and existing
under the laws of the State of California, as lessor, which acquired a portion of the
Leased Property as the City of Dublin, California, a municipal corporation (a political
subdivision organized and existing under the laws of the State of California) (the “City”),
and the DUBLIN FINANCING AUTHORITY, a joint exercise of powers authority organized and
existing under the laws of the State of California, as lessee (the “Authority”).
BACKGROUND:
1.The City is proceeding to acquire and install energy efficiency improvements
to various City facilities (collectively, the “Project”).
2.In order to provide funds to finance a portion of the costs of the Project, the
City has agreed to lease the real property more particularly described in Appendix A
attached hereto and by this reference incorporated herein, consisting of the City’s civic
center complex located at 100 Civic Plaza in the City (the “Leased Property”) to the
Authority under this Site Lease, pursuant to which the Authority agrees to make an initial
rental payment (as described herein, the “Site Lease Payment”) which is sufficient to
provide funds for such purposes.
3.The Authority has authorized the issuance of its Dublin Financing Authority
2021 Lease Revenue Bonds (Capital Projects) in the aggregate principal amount of
$___________ (the “Bonds”) under an Indenture of Trust dated as of October 1, 2021
(the “Indenture”), between the Authority and U.S. Bank National Association, as trustee
(the “Trustee”), for the purpose of providing the funds to enable the Authority to pay the
Site Lease Payment to the City in accordance with this Site Lease.
4.In order to provide revenues which are sufficient to enable the Authority to
pay debt service on the Bonds, the Authority has agreed to lease the Leased Property
ATTACHMENT 2
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back to the City under a Lease Agreement dated as of October 1, 2021 (the “Lease”),
which has been recorded concurrently herewith, under which the City has agreed to pay
semiannual Lease Payments as the rental for the Leased Property thereunder.
5. The lease payments made by the City under the Lease have been assigned
by the Authority to Trustee for the security of the Bonds under an Assignment
Agreement dated as of October 1, 2021, between the Authority as assignor and the
Trustee as assignee, which has been recorded concurrently herewith.
AGREEMENT:
In consideration of the above premises and of the mutual promises and
covenants herein contained and for other valuable consideration, the parties hereto do
hereby agree as follows:
SECTION 1. Lease of Property to Authority. The City hereby leases the Leased
Property to the Authority and the Authority hereby leases the Leased Property from the
City, on the terms and conditions hereinafter set forth.
SECTION 2. Term; Possession. The term of this Site Lease commences on the
Closing Date and ends on the date on which the Indenture is discharged in accordance
with Section 13.01 thereof, but under any circumstances not later than June 1, ______.
The provisions of this Section 2 are subject in all respects to any other provisions of this
Site Lease relating to the termination hereof.
SECTION 3. Rental. The Authority shall pay to the City as and for rental of the
Leased Property hereunder, the sum of $___________ (the “Site Lease Payment”). The
Site Lease Payment is due and payable upon the issuance of the Bonds and the
execution and delivery hereof, and will be paid from the proceeds of the Bonds. The
Authority and the City hereby find and determine that the total amount of the Site Lease
Payment does not exceed the fair market value of the leasehold interest in the Leased
Property which is conveyed hereunder by the City to the Authority. No other amount of
rental is due and payable by the Authority for the use and occupancy of the Leased
Property under this Site Lease.
As provided in the Indenture, a portion of the proceeds of the Bonds will be
applied to make the Site Lease Payment by depositing the full amount thereof into the
Project Fund which is held and administered by the City under the Indenture. Amounts
on deposit in the Project Fund shall be disbursed by the City from time to time for the
purpose of paying Project Costs in accordance with the Indenture.
SECTION 4. Leaseback to City. The Authority shall lease the Leased Property
back to the City under the Lease.
SECTION 5. Assignments and Subleases. Unless the City is in default under the
Lease, the Authority may not assign its rights under this Site Lease or sublet all or any
portion of the Leased Property, except as provided in the Assignment Agreement and in
the Lease, without the prior written consent of the City.
ATTACHMENT 3
132
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SECTION 6. Substitution or Release of Property. If the City exercises its option
under Section 3.3 of the Lease to substitute property for the Leased Property in whole or
in part, such substitution shall also operate to substitute property for the Leased Property
which is leased hereunder. If the City exercises its option under Section 3.4 of the
Lease to release a portion of the Leased Property from the Lease, such substitution shall
also operate to release such portion of the Leased Property hereunder. The description
of the Leased Property which is leased under the Lease shall conform at all times to the
description of the Leased Property which is leased hereunder.
SECTION 7. Right of Entry. The City reserves the right for any of its duly
authorized representatives to enter upon the Leased Property, or any portion thereof, at
any reasonable time to inspect the same or to make any repairs, improvements or
changes necessary for the preservation thereof.
SECTION 8. Termination. The Authority agrees, upon the termination of this Site
Lease, to quit and surrender the Leased Property in the same good order and condition
as the Leased Property was in at the time of commencement of the term hereof,
reasonable wear and tear excepted, and agrees that all buildings, improvements and
structures then existing upon the Leased Property shall remain thereon and title thereto
shall vest thereupon in the City for no additional consideration.
SECTION 9. Default. If the Authority defaults in the performance of any obligation
on its part to be performed under the terms of this Site Lease, which default continues
for 30 days following notice and demand for correction thereof to the Authority, the City
may exercise any and all remedies granted by law, except that no merger of this Site
Lease and of the Lease shall be deemed to occur as a result thereof and no such
remedy may include termination hereof; provided, however, that so long as the Lease
remains in effect, the Lease Payments payable by the City under the Lease shall
continue to be paid to the Trustee.
SECTION 10. Quiet Enjoyment. The Authority at all times during the term of this
Site Lease shall peaceably and quietly have, hold and enjoy all of the Leased Property,
subject to the provisions of the Lease and subject only to Permitted Encumbrances (as
that term is defined in the Lease).
SECTION 11. Waiver of Personal Liability. All liabilities under this Site Lease on
the part of the Authority are solely corporate liabilities of the Authority as a public entity,
and the City hereby releases each and every member and officer of the Authority of and
from any personal or individual liability under this Site Lease. No member or officer of
the Authority or its governing board shall at any time or under any circumstances be
individually or personally liable under this Site Lease for anything done or omitted to be
done by the Authority hereunder.
SECTION 12. Taxes. The City covenants and agrees to pay any and all
assessments of any kind or character and also all taxes, including possessory interest
taxes, levied or assessed upon the Leased Property and any improvements thereon.
SECTION 13. Eminent Domain. If the whole or any part of the Leased Property or
any improvements thereon is taken by eminent domain proceedings, the interest of the
Authority shall be recognized and is hereby determined to be the amount of the then
ATTACHMENT 3
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unpaid Lease Payments payable under the Lease and the balance of the award, if any,
shall be paid to the City.
SECTION 14. Partial Invalidity. If any one or more of the terms, provisions,
covenants or conditions of this Site Lease shall to any extent be declared invalid,
unenforceable, void or voidable for any reason whatsoever by a court of competent
jurisdiction, the finding or order or decree of which becomes final, none of the remaining
terms, provisions, covenants and conditions of this Site Lease shall be affected thereby,
and each provision of this Site Lease shall be valid and enforceable to the fullest extent
permitted by law.
SECTION 15. Notices. Any notice, request, complaint, demand or other
communication under this Site Lease shall be given by first class mail or personal
delivery to the party entitled thereto at its address set forth below, or by telecopy, telex or
other form of telecommunication, at its number set forth below. Notice shall be effective
either (a) upon transmission by telecopy, telex or other form of telecommunication, (b)
48 hours after deposit in the United States mail, postage prepaid, or (c) in the case of
personal delivery to any person, upon actual receipt. The City, the Authority and the
Trustee may, by written notice to the other parties, from time to time modify the address
or number to which communications are to be given hereunder.
If to the Authority or the City: City of Dublin
Attention: Assistant City Manager
100 Civic Plaza
Dublin, CA 94568
If to the Trustee: U.S. Bank National Association
Attention: Global Corporate Trust
One California Street, Suite 1000
San Francisco, California 94111
SECTION 16. Amendment of this Site Lease. The Authority and the City may at
any time amend or modify any of the provisions of this Site Lease, but only (a) with the
prior written consent of the Owners of a majority in aggregate principal amount of the
Outstanding Bonds; or (b) without the consent of any of the Bond Owners, but only if
such amendment or modification is for any one or more of the following purposes:
(i)to make cure any ambiguity, or to cure, correct or supplement any
defective provision contained herein, or in any other respect
whatsoever as the Authority and the City may deem necessary or
desirable, provided that, in the opinion of Bond Counsel, such
modifications or amendments do not materially adversely affect the
interests of the Owners of the Bonds;
(ii)to amend any provision hereof relating to the Tax Code, to any
extent whatsoever but only if and to the extent such amendment will
not adversely affect the exclusion from gross income of interest on
the Bonds under the Tax Code, in the opinion of Bond Counsel;
(iii)to conform to any amendment of the Indenture which is made
thereto in accordance with Section 9.01 of the Indenture; or
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(iv)for the purpose of effectuating any substitution or release of
property under Section 6.
SECTION 17. Governing Law. This Site Lease shall be construed in accordance
with and governed by the laws of the State of California.
SECTION 18. Third Party Beneficiary. The Trustee is hereby made a third party
beneficiary under this Site Lease with all rights of a third party beneficiary.
SECTION 19. Binding Effect. This Site Lease inures to the benefit of and is
binding upon the Authority, the City and their respective successors and assigns,
subject, however, to the limitations contained herein.
SECTION 20. Section Headings. All section headings contained herein are for
convenience of reference only and are not intended to define or limit the scope of any
provision of this Site Lease.
SECTION 21. Execution in Counterparts. This Site Lease may be executed in
any number of counterparts, each of which shall be deemed to be an original but all
together shall constitute but one and the same lease. It is also agreed that separate
counterparts of this Site Lease may be separately executed by the Authority and the
City, all with the same force and effect as though the same counterpart had been
executed by both the Authority and the City.
SECTION 22. Defined Terms . All capitalized terms used herein and not otherwise
defined have the respective meanings given those terms in the Indenture.
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[Signature Page to Site Lease dated as of Se]
IN WITNESS WHEREOF, the City and the Authority have caused this Site Lease
to be executed by their respective officers thereunto duly authorized, all as of the day
and year first above written.
DUBLIN FINANCING AUTHORITY
By:
Authorized Officer
CITY OF DUBLIN
By:
Assistant City Manager
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A-1
APPENDIX A
DESCRIPTION OF THE LEASED PROPERTY
The Leased Property consists of that certain real property situated in the City of
Dublin, County of Alameda, State of California, which is more particularly described as
follows:
APN: ____________
(End of Legal Description)
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Jones Hall Draft 9.3.21
RECORDING REQUESTED BY:
Chicago Title Company
AND WHEN RECORDED RETURN TO:
Jones Hall, A Professional Law Corporation
Attn: James A Wawrzyniak, Jr.
475 Sansome Street, Suite 1700
San Francisco, California 94111
THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX
UNDER SECTION 11922 OF THE CALIFORNIA REVENUE AND TAXATION CODE. THIS
DOCUMENT IS EXEMPT FROM RECORDING FEES UNDER SECTION 27383 OF THE
CALIFORNIA GOVERNMENT CODE.
LEASE AGREEMENT
Dated as of October 1, 2021
between the
DUBLIN FINANCING AUTHORITY,
as lessor
and the
CITY OF DUBLIN,
as lessee
Relating to
$_________
Dublin Financing Authority
2021 Lease Revenue Bonds
(Capital Projects)
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TABLE OF CONTENTS
ARTICLE I:
DEFINITIONS; RULES OF INTERPRETATION:
SECTION 1.1. Definitions.................................................................................................................... 2
SECTION 1.2. Interpretation ............................................................................................................... 2
ARTICLE II:
COVENANTS, REPRESENTATIONS AND WARRANTIES:
SECTION 2.1. Covenants, Representations and Warranties of the City ............................................... 2
SECTION 2.2. Covenants, Representations and Warranties of the Board............................................ 4
ARTICLE III:
DEPOSIT AND APPLICATION OF FUNDS; SUBSTITUTION
AND RELEASE OF PROPERTY
SECTION 3.1. Deposit of Moneys ....................................................................................................... 5
SECTION 3.2. Acquisition and Construction of Project ........................................................................ 5
SECTION 3.3. Substitution of Property ................................................................................................ 5
SECTION 3.4. Release of Property ..................................................................................................... 6
ARTICLE IV:
LEASE OF LEASED PROPERTY; TERM OF THIS LEASE;
LEASE PAYMENTS:
SECTION 4.1. Lease of Leased Property ............................................................................................ 7
SECTION 4.2. Term ........................................................................................................................... 7
SECTION 4.3. Lease Payments .......................................................................................................... 7
SECTION 4.4. Source of Payments; Covenant to Budget and Appropriate .......................................... 8
SECTION 4.5. Additional Rental Payments ......................................................................................... 8
SECTION 4.6. Quiet Enjoyment .......................................................................................................... 9
SECTION 4.7. Title ............................................................................................................................. 9
ARTICLE V:
MAINTENANCE; TAXES; INSURANCE; AND OTHER
MATTERS:
SECTION 5.1. Maintenance, Utilities, Taxes and Assessments ......................................................... 10
SECTION 5.2. Modification of Leased Property ................................................................................. 10
SECTION 5.3. Liability and Property Damage Insurance ................................................................... 11
SECTION 5.4. Casualty Insurance .................................................................................................... 11
SECTION 5.5. Rental Interruption Insurance ..................................................................................... 11
SECTION 5.6. Recordation Hereof; Title Insurance ........................................................................... 12
SECTION 5.7. Insurance Net Proceeds; Form of Policies .................................................................. 12
SECTION 5.8. Installation of City’s Personal Property ....................................................................... 12
SECTION 5.9. Liens ......................................................................................................................... 12
SECTION 5.10. Advances................................................................................................................. 13
ARTICLE VI:
DAMAGE, DESTRUCTION AND EMINENT DOMAIN; USE OF
NET PROCEEDS:
SECTION 6.1. Application of Net Proceeds ....................................................................................... 13
SECTION 6.2. Termination or Abatement Due to Eminent Domain .................................................... 13
SECTION 6.3. Abatement Due to Damage or Destruction ................................................................. 13
ARTICLE VII:
OTHER COVENANTS OF THE CITY:
SECTION 7.1. Disclaimer of Warranties ............................................................................................ 14
SECTION 7.2. Access to the Leased Property .................................................................................. 14
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SECTION 7.3. Release and Indemnification Covenants .................................................................... 14
SECTION 7.4. Assignment and Subleasing by the City ..................................................................... 15
SECTION 7.5. Amendment Hereof .................................................................................................... 15
SECTION 7.6. Tax Covenants .......................................................................................................... 16
SECTION 7.7. Continuing Disclosure ................................................................................................ 17
ARTICLE VIII:
EVENTS OF DEFAULT AND REMEDIES:
SECTION 8.1. Events of Default Defined .......................................................................................... 18
SECTION 8.2. Remedies on Default ................................................................................................. 18
SECTION 8.3. No Remedy Exclusive ................................................................................................ 20
SECTION 8.4. Agreement to Pay Attorneys' Fees and Expenses ...................................................... 20
SECTION 8.5. No Additional Waiver Implied by One Waiver ............................................................. 20
SECTION 8.6. Application of Proceeds ............................................................................................. 20
SECTION 8.7. Trustee and Bond Owners to Exercise Rights ............................................................ 20
ARTICLE IX:
PREPAYMENT OF LEASE PAYMENTS:
SECTION 9.1. Security Deposit ........................................................................................................ 21
SECTION 9.2. Prepayment ................................................................................................................ 21
SECTION 9.3. Mandatory Prepayment From Net Proceeds of Insurance or Eminent
Domain .................................................................................................................. 21
SECTION 9.4. Credit for Amounts on Deposit ................................................................................... 22
ARTICLE X:
MISCELLANEOUS:
SECTION 10.1. Notices .................................................................................................................... 22
SECTION 10.2. Binding Effect .......................................................................................................... 22
SECTION 10.3. Severability .............................................................................................................. 22
SECTION 10.4. Net-net-net Lease .................................................................................................... 22
SECTION 10.5. Third Party Beneficiary ............................................................................................. 22
SECTION 10.6. Further Assurances and Corrective Instruments ....................................................... 22
SECTION 10.7. Execution in Counterparts. ....................................................................................... 23
SECTION 10.8. Applicable Law ........................................................................................................ 23
SECTION 10.9. Board and City Representatives ............................................................................... 23
SECTION 10.10. Captions ................................................................................................................ 23
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LEASE AGREEMENT
This LEASE AGREEMENT (this “Lease”), dated for convenience as of October 1,
2021, is between the DUBLIN FINANCING AUTHORITY, a joint exercise of powers authority
organized and existing under the laws of the State of California, as lessor (the
“Authority”), and the CITY OF DUBLIN, a municipal corporation duly organized and existing
under the laws of the State of California, as lessee (the “City”).
BACKGROUND:
1. The City is proceeding to acquire and install energy efficiency improvements
to various City facilities (collectively, the “Project”).
2. In order to provide funds to finance a portion of the costs of the Project, the
City has agreed to lease the real propert y more particularly described in Appendix A
attached hereto and by this reference incorporated herein, consisting of the City’s civic
center complex located at 100 Civic Plaza in the City (the “Leased Property”) to the
Authority under a Site Lease dated as of October 1, 2021 wh ich has been recorded
concurrently herewith (the “Site Lease”), under which the Authority agrees to make an
initial rental payment (the “Site Lease Payment”) which is sufficient to provide funds for
such purposes.
3. The Authority has authorized the issuance of its Dublin Financing Authority
2021 Lease Revenue Bonds (Capital Projects) in the aggregate principal amount of
$__________ (the “Bonds”) under an Indenture of Trust dated as of October 1, 2021
(the “Indenture”), between the Authority and U.S. Bank National Association, as trustee
(the “Trustee”), and under the provisions of Article 4 of Chapter 5, Division 7, Title 1 of
the Government Code of the State of California, commencing with Section 6584 of said
Code (the “Bond Law”), for the purpose of providing the funds to enable the Authority to
pay the Site Lease Payment to the City in accordance with the Site Lease.
4. In order to provide revenues which are sufficient to enable the Authority to
pay debt service on the Bonds, the Authority has agreed to lease the Leased Property
back to the City under this Lease, under which the City agrees to pay semiannual Lease
Payments as the rental for the Leased Property hereunder.
5. The lease payments made by the City under this Lease have been assigned
by the Authority to the Trustee for the security of the Bonds under an Assignment
Agreement dated as of October 1, 2021 , between the Authority as assignor and the
Trustee as assignee, which has been recorded concurrently herewith.
6. The City and the Authority have found and determined that all acts and
proceedings required by law necessary to make this Lease, when executed by the City
and the Authority, the valid, binding and legal obligations of the City and the Authority,
and to constitute this Lease a valid and binding agreement for the uses and purposes
herein set forth in accordance with its terms, have been done and taken, and the
execution and delivery of this Lease have been in all respects duly authorized.
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AGREEMENT:
In consideration of the material covenants contained in this Lease, the parties
hereto hereby formally covenant, agree and bind themselves as follows:
ARTICLE I
DEFINITIONS; RULES OF INTERPRETATION
SECTION 1.1. Definitions. Unless the context clearly otherwise requires or unless
otherwise defined herein, the capitalized terms in this Lease have the respective
meanings given them in the Indenture.
SECTION 1.2. Interpretation.
(a) Unless the context otherwise indicates, words expressed in the singular
includes the plural and vice versa and the use of the neuter, masculine, or feminine
gender is for convenience only and includes the neuter, masculine or feminine gender,
as appropriate.
(b) Headings of articles and sections herein and the table of contents hereof
are solely for convenience of reference, do not constitute a part hereof and do not affect
the meaning, construction or effect hereof.
(c) All references herein to “Articles,” “Sections” and other subdivisions are to
the corresponding Articles, Sections or subdivisions of this Lease; the words “herein,”
“hereof,” “hereby,” “hereunder” and other words of similar import refer to this Lease as a
whole and not to any particular Article, Section or subdivision hereof.
ARTICLE II
COVENANTS, REPRESENTATIONS AND WARRANTIES
SECTION 2.1. Covenants, Representations and Warranties of the City. The City
makes the following covenants, representations and warranties to the Authority and the
Trustee as of the date of the execution and delivery of this Lease:
(a) Due Organization and Existence. The City is a municipal corporation duly
organized and validly existing under the laws of the State of California, has
full legal right, power and authority under the laws of the State of California
to enter into the Site Lease and this Lease and to carry out and
consummate all transactions contemplated hereby, and by proper action
the City has duly authorized the execution and delivery of the Site Lease
and this Lease.
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(b) Due Execution. The representatives of the City executing the Site Lease
and this Lease have been fully authorized to execute the same under a
resolution duly adopted by the City Council of the City.
(c) Valid, Binding and Enforceable Obligations. The Site Lease and this Lease
have been duly authorized, executed and delivered by the City and
constitute the legal, valid and binding obligations of the City enforceable
against the City in accordance with their respective terms.
(d) No Conflicts. The execution and delivery of the Site Lease and this Lease,
the consummation of the transactions therein and herein contemplated and
the fulfillment of or compliance with the terms and conditions thereof and
hereof, do not and will not conflict with or constitute a violation or breach of
or default (with due notice or the passage of time or both) under any
applicable law or administrative rule or regulation, or any applicable court or
administrative decree or order, or any indenture, mortgage, deed of trust,
lease, contract or other agreement or instrument to which the City is a party
or by which it or its properties are otherwise subject or bound, or result in
the creation or imposition of any prohibited lien, charge or encumbrance of
any nature whatsoever upon any of the property or assets of the City, which
conflict, violation, breach, default, lien, charge or encumbrance would have
consequences that would materially and adversely affect the
consummation of the transactions contemplated by the Site Lease and this
Lease or the financial condition, assets, properties or operations of the City.
(e) Consents and Approvals. No consent or approval of any trustee or holder
of any indebtedness of the City or of the voters of the City, and no consent,
permission, authorization, order or license of, or filing or registration with,
any governmental authority is necessary in connection with the execution
and delivery of the Site Lease and this Lease, or the consummation of any
transaction therein and herein contemplated, except as have been obtained
or made and as are in full force and effect.
(f) No Litigation. There is no action, suit, proceeding, inquiry or investigation
before or by any court or federal, state, municipal or other governmental
authority pending or, to the knowledge of the City after reasonable
investigation, threatened against or affecting the City or the assets,
properties or operations of the City which, if determined adversely to the
City or its interests, would have a material and adverse effect upon the
consummation of the transactions contemplated by or the validity of the
Site Lease and this Lease, or upon the financial condition, assets,
properties or operations of the City, and the City is not in default with
respect to any order or decree of any court or any order, regulation or
demand of any federal, state, municipal or other governmental authority,
which default might have consequences that would materially and
adversely affect the consummation of the transactions contemplated by the
Site Lease and this Lease or the financial conditions, assets, properties or
operations of the City.
ATTACHMENT 4
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SECTION 2.2. Covenants, Representations and Warranties of the Authority. The
Authority makes the following covenants, representations and warranties to the City and
the Trustee as of the date of the execution and delivery of this Lease:
(a) Due Organization and Existence. The Authority is a public body corporate
and politic duly organized and existing under the Bond Law and under the
laws of the State of California; has power to enter into this Lease, the Site
Lease, the Assignment Agreement and the Indenture; is possessed of full
power to own and hold, improve and equip real and personal property, and
to lease the same; and has duly authorized the execution and delivery of
each of the aforesaid agreements and such agreements constitute the
legal, valid and binding obligations of the Authority, enforceable against the
Authority in accordance with their respective terms.
(b) Due Execution. The representatives of the Authority executing this Lease,
the Site Lease, the Assignment Agreement and the Indenture are fully
authorized to execute the same pursuant to official action taken by the
governing body of the Authority.
(c) Valid, Binding and Enforceable Obligations. This Lease, the Site Lease,
the Assignment Agreement and the Indenture have been duly authorized,
executed and delivered by the Authority and constitute the legal, valid and
binding agreements of the Authority, enforceable against the Authority in
accordance with their respective terms.
(d) No Conflicts. The execution and delivery of this Lease, the Site Lease, the
Assignment Agreement and the Indenture, the consummation of the
transactions herein and therein contemplated and the fulfillment of or
compliance with the terms and conditions hereof, do not and will not conflict
with or constitute a violation or breach of or default (with due notice or the
passage of time or both) under any applicable law or administrative rule or
regulation, or any applicable court or administrative decree or order, or any
indenture, mortgage, deed of trust, lease, contract or other agreement or
instrument to which the Authority is a party or by which it or its properties
are otherwise subject or bound, or result in the creation or imposition of any
prohibited lien, charge or encumbrance of any nature whatsoever upon any
of the property or assets of the Authority, which conflict, violation, breach,
default, lien, charge or encumbrance would have consequences that would
materially and adversely affect the consummation of the transactions
contemplated by this Lease, the Site Lease, the Assignment Agreement
and the Indenture or the financial condition, assets, properties or operations
of the Authority.
(e) Consents and Approvals. No consent or approval of any trustee or holder
of any indebtedness of the Authority, and no consent, permission,
authorization, order or license of, or filing or registration with, any
governmental authority is necessary in connection with the execution and
delivery of this Lease, the Site Lease, the Assignment Agreement or the
Indenture, or the consummation of any transaction herein or therein
contemplated, except as have been obtained or made and as are in full
force and effect.
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(f) No Litigation. There is no action, suit, proceeding, inquiry or investigation
before or by any court or federal, state, municipal or other governmental
authority pending or, to the knowledge of the Authority after reasonable
investigation, threatened against or affecting the Authority or the assets,
properties or operations of the Authority which, if determined adversely to
the Authority or its interests, would have a material and adverse effect upon
the consummation of the transactions contemplated by or the validity of this
Lease, the Site Lease, the Assignment Agreement or the Indenture, or
upon the financial condition, assets, properties or operations of the
Authority, and the Authority is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal,
state, municipal or other governmental authority, which default might have
consequences that would materially and adversely affect the
consummation of the transactions contemplated by this Lease, the Site
Lease, the Assignment Agreement or the Indenture or the financial
conditions, assets, properties or operations of the Authority.
ARTICLE III
DEPOSIT AND APPLICATION OF FUNDS; SUBSTITUTION
AND RELEASE OF PROPERTY
SECTION 3.1. Deposit of Moneys. On the Closing Date, the Authority will cause
the proceeds of sale of the Bonds to be deposited with the Trustee. The Trustee shall
deposit those proceeds in accordance with Section 3.01 of the Indenture.
SECTION 3.2. Acquisition and Construction of Project. As provided in Section
3.02 of the Indenture, a portion of the proceeds of sale of the Bonds will be applied to
pay the Site Lease Payment to the City in accordance with Section 3 of the Site Lease.
The Site Lease Payment shall be deposited into the Project Fund, which is established
under the Indenture, to be disbursed for the purpose of paying Project Costs. Upon the
completion of the Project, the City shall file a Written Certificate of the City with the
Trustee, which Written Certificate shall identify the amount (if any) to be retained in the
Project Fund to pay remaining Project Costs.
SECTION 3.3. Substitution of Property. The City has the option at any time and
from time to time, to substitute other real property (the “Substitute Property”) for the
Leased Property or any portion thereof (the “Former Property”), upon satisfaction of all of
the following requirements which are hereby declared to be conditions precedent to such
substitution:
(a) No Event of Default has occurred and is continuing.
(b) The City has filed with the Authority and the Trustee, and caused to be
recorded in the office of the Alameda County Recorder, sufficient
memorialization of an amendment of this Lease, the Site Lease and the
Assignment Agreement, which adds the legal description of the Substitute
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Property to Appendix A and deletes therefrom the legal description of the
Former Property.
(c) The City has obtained a CLTA policy of title insurance insuring the City’s
leasehold estate hereunder in the Substitute Property, subject only to
Permitted Encumbrances, in an amount at least equal to the estimated
value thereof.
(d) The City has certified in writing to the Authority and the Trustee that the
Substitute Property serves the municipal purposes of the City and
constitutes property which the City is permitted to lease under the laws of
the State of California, and has been determined to be important to the
proper, efficient and economic operation of the City and to serve a proper
governmental function of the City.
(e) The Substitute Property does not cause the City to violate any of its
covenants, representations and warranties made herein.
(f) The City has filed with the Authority and the Trustee a written certificate of
the City or other written evidence stating that the estimated fair rental value
of the Leased Property following the substitution will be at least equal to the
aggregate principal amount of the Bonds then outstanding, and that the
useful life of the Substitute Property at least extends to the stated
termination date of this Lease.
Upon the satisfaction of all such conditions precedent, the Term of this Lease will
thereupon end as to the Former Property and commence as to the Substitute Property,
and all references to the Former Property will apply with full force and effect to the
Substitute Property. The City is not entitled to any reduction, diminution, extension or
other modification of the Lease Payments whatsoever as a result of any substitution of
property under this Section. The Authority and the City will execute, deliver and cause
to be recorded all documents required to discharge the Site Lease, this Lease and the
Assignment Agreement of record against the Former Property and to cause the
Substitute Property to become subject to all of the terms and conditions of the Site
Lease, this Lease and the Assignment Agreement.
SECTION 3.4. Release of Property. The City has the option at any time and from
time to time to release any portion of the Leased Property from this Lease (the
“Released Property”) provided that the City has satisfied all of the following requirements
which are hereby declared to be conditions precedent to such release:
(a) No Event of Default has occurred and is continuing.
(b) The City has filed with the Authority and the Trustee, and caused to be
recorded in the office of the Alameda County Recorder, sufficient
memorialization of an amendment of this Lease, the Site Lease and the
Assignment Agreement, which removes the Released Property therefrom.
(c) The City has certified in writing to the Authority and the Trustee that the
value of the property which remains subject to this Lease following such
release is at least equal to the then outstanding principal amount of the
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Bonds, and the fair rental value of the property which remains subject to
this Lease following such release is at least equal to the Lease Payments
thereafter coming due and payable hereunder.
Upon the satisfaction of all such conditions precedent, the Term of this Lease will
thereupon end as to the Released Property. The City is not entitled to any reduction,
diminution, extension or other modification of the Lease Payments whatsoever as a
result of such release. The Authority and the City shall execute, deliver and cause to be
recorded all documents required to discharge the Site Lease, this Lease and the
Assignment Agreement of record against the Released Property.
ARTICLE IV
LEASE OF LEASED PROPERTY; TERM OF THIS LEASE;
LEASE PAYMENTS
SECTION 4.1. Lease of Leased Property. The Authority hereby leases the
Leased Property to the City and the City hereby leases the Leased Property from the
Authority, upon the terms and conditions set forth in this Lease.
SECTION 4.2. Term. The Term of this Lease commences on the Closing Date
and ends on the date on which the Indenture is discharged in accordance with Section
10.01 thereof, but under any circumstances not later than June 1, ____. The provisions
of this Section are subject to the provisions of Section 6.2 relating to abatement and the
taking in eminent domain of the Leased Property in whole or in part.
SECTION 4.3. Lease Payments.
(a) Obligation to Pay. Subject to the provisions of Sections 6.2 and 6.3 and the
provisions of Article IX, the City agrees to pay to the Authority, its successors and
assigns, the Lease Payments in the respective amounts specified in Appendix B
attached to this Lease, to be due and payable in immediately available funds on the
Interest Payment Dates immediately following each of the respective Lease Payment
Dates specified in Appendix B, and to be deposited by the City with the Trustee on each
of the Lease Payment Dates specified in Appendix B. Any amount held in the Bond
Fund, the Interest Account and the Principal Account on any Lease Payment Date (other
than amounts resulting from the prepayment of the Lease Payments in part but not in
whole under Article IX, and amounts required for payment of past due principal or
interest on any Bonds not presented for payment) will be credited towards the Lease
Payment then required to be paid hereunder. The City is not required to deposit any
Lease Payment with the Trustee on any Lease Payment Date if the amounts then held in
the Bond Fund, the Interest Account and the Principal Account are at least equal to the
Lease Payment then required to be deposited with the Trustee. The Lease Payments
payable in any Rental Period are for the use of the Leased Property during that Rental
Period.
(b) Effect of Prepayment. If the City prepays all Lease Payments in full under
Section 9.2, the City’s obligations under this Section will thereupon cease and terminate.
If the City prepays the Lease Payments in part but not in whole under Section 9.2, the
principal components of the remaining Lease Payments will be reduced in integral
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multiples of $5,000 among Lease Payment Dates on a basis which corresponds to the
principal maturities of the Bonds which are redeemed thereby; and the interest
component of each remaining Lease Payment will be reduced by the aggregate
corresponding amount of interest which would otherwise be payable with respect to the
Bonds thereby redeemed under Section 4.01 of the Indenture.
(c) Rate on Overdue Payments. If the City fails to make any of the payments
required in this Section, the payment in default will continue as an obligation of the City
until the amount in default has been fully paid, and the City agrees to pay the same with
interest thereon, from the date of default to the date of payment at the highest rate of
interest on any Outstanding Bond.
(d) Fair Rental Value. The aggregate amount of the Lease Payments and
Additional Rental Payments coming due and payable during each Rental Period
constitute the total rental for the Leased Property for such Rental Period, and are
payable by the City in each Rental Period for and in consideration of the right of the use
and occupancy of, and the continued quiet use and enjoyment of the Leased Property
during each Rental Period. The parties hereto have agreed and determined that the
total Lease Payments represent the fair rental value of the Leased Property. In making
that determination, consideration has been given to the estimated value of the Leased
Property, other obligations of the City and the Authority under this Lease, the uses and
purposes which may be served by the Leased Property and the benefits therefrom which
will accrue to the City and the general public.
(e) Assignment. The City understands and agrees that all Lease Payments
have been assigned by the Authority to the Trustee in trust, under the Assignment
Agreement, for the benefit of the Owners of the Bonds, and the City hereby assents to
such assignment. The Authority hereby directs the City, and the City hereby agrees to
pay to the Trustee at its Office, all payments payable by the City under this Section and
all amounts payable by the City under Article IX.
SECTION 4.4. Source of Payments; Covenant to Budget and Appropriate. The
Lease Payments are payable from any source of available funds of the City, subject to
the provisions of Section 6.3. The City covenants to take all actions required to include
the Lease Payments in each of its budgets during the Term of this Lease and to make
the necessary appropriations for all Lease Payments and Additional Rental Payments.
The foregoing covenant of the City contained constitutes a duty imposed by law and
each and every public official of the City is required to take all actions required by law in
the performance of the official duty of such officials to enable the City to carry out and
perform the covenants and agreements in this Lease agreed to be carried out and
performed by the City.
SECTION 4.5. Additional Rental Payments. In addition to the Lease Payments,
the City shall pay when due the following amounts of Additional Rental Payments in
consideration of the lease of the Leased Property by the City from the Authority
hereunder:
(a) All fees and expenses incurred by the Authority in connection with or by
reason of its leasehold estate in the Leased Property, when due;
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(b) All reasonable compensation to the Trustee for all services rendered under
the Indenture and for all reasonable expenses, charges, costs, liabilities,
legal fees and other disbursements incurred in and about the performance
of its powers and duties under the Indenture;
(c) The reasonable fees and expenses of such accountants, consultants,
attorneys and other experts as may be engaged by the Authority or the
Trustee to prepare audits, financial statements, reports, opinions or provide
such other services required under this Lease or the Indenture;
(d) Amounts coming due and payable as Excess Investment Earnings in
accordance with Section 7.6(e); and
(e) The reasonable out-of-pocket expenses of the Authority in connection with
the execution and delivery of this Lease or the Indenture, or in connection
with the issuance of the Bonds, including but not limited to any and all
expenses incurred in connection with the authorization, sale and delivery of
the Bonds, or incurred by the Authority in connection with any litigation
which may at any time be instituted involving this Lease, the Bonds, the
Indenture or any of the other documents contemplated hereby or thereby,
or otherwise incurred in connection with the administration of this Lease.
SECTION 4.6. Quiet Enjoyment. Throughout the Term of this Lease, the Authority
shall provide the City with quiet use and enjoyment of the Leased Property and the City
will peaceably and quietly have and hold and enjoy the Leased Property, without suit,
trouble or hindrance from the Authority, except as expressly set forth in this Lease. The
Authority will, at the request of the City and at the City’s cost, join in any legal action in
which the City asserts its right to such possession and enjoyment to the extent the
Authority may lawfully do so. Notwithstanding the foregoing, the Authority has the right
to inspect the Leased Property as provided in Section 7.2.
SECTION 4.7. Title. Upon the termination of this Lease (other than under Section
8.2(b) hereof), all right, title and interest of the Authority in and to the Leased Property
transfers to and vests in the City. The Authority shall take any and all steps and execute
and record any and all documents reasonably required by the City to consummate any
such transfer of title.
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ARTICLE V
MAINTENANCE; TAXES; INSURANCE; AND OTHER MATTERS
SECTION 5.1. Maintenance, Utilities, Taxes and Assessments. Throughout the
Term of this Lease, as part of the consideration for the rental of the Leased Property, all
improvement, repair and maintenance of the Leased Property are the responsibility of
the City, and the City will pay for or otherwise arrange for the payment of all utility
services supplied to the Leased Property, which may include, without limitation, janitor
service, security, power, gas, telephone, light, heating, water and all other utility
services, and will pay for or otherwise arrange for the payment of the cost of the repair
and replacement of the Leased Property resulting from ordinary wear and tear or want of
care on the part of the City or any assignee or sublessee thereof. In exchange for the
Lease Payments herein provided, the Authority agrees to provide only the Leased
Property. The City waives the benefits of subsections 1 and 2 of Section 1932, Section
1933(4) and Sections 1941 and 1942 of the California Civil Code, but such waiver does
not limit any of the rights of the City under the terms of this Lease.
The City shall also pay or cause to be paid all taxes and assessments of any
type or nature, if any, charged to the Authority or the City affecting the Leased Property
or the respective interests or estates therein; provided that with respect to special
assessments or other governmental charges that may lawfully be paid in installments
over a period of years, the City shall pay only such installments as are required to be
paid during the Term of this Lease as and when the same become due.
The City may, at its expense and in its name, in good faith contest any such
taxes, assessments, utility and other charges and, in the event of any such contest, may
permit the taxes, assessments or other charges so contested to remain unpaid during
the period of such contest and any appeal therefrom unless the Authority notifies the
City that, in its reasonable opinion, by nonpayment of any such items the interest of the
Authority in the Leased Property will be materially endangered or the Leased Property or
any part thereof will be subject to loss or forfeiture, in which event the City shall promptly
pay such taxes, assessments or charges or provide the Authority with full security
against any loss which may result from nonpayment, in form satisfactory to the Authority
and the Trustee.
SECTION 5.2. Modification of Leased Property. The City has the right, at its own
expense, to make additions, modifications and improvements to the Leased Property or
any portion thereof. All additions, modifications and improvements to the Leased
Property will thereafter comprise part of the Leased Property and become subject to the
provisions of this Lease. Such additions, modifications and improvements may not in
any way damage the Leased Property, or cause the Leased Property to be used for
purposes other than those authorized under the provisions of state and federal law; and
the Leased Property, upon completion of any additions, modifications and improvements
made thereto under this Section, must be of a value which is not substantially less than
the value thereof immediately prior to the making of such additions, modifications and
improvements. The City will not permit any mechanic’s or other lien to be established or
remain against the Leased Property for labor or materials furnished in connection with
any remodeling, additions, modifications, improvements, repairs, renewals or
replacements made by the City under this Section; except that if any such lien is
established and the City first notifies or causes to be notified the Authority of the City’s
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intention to do so, the City may in good faith contest any lien filed or established against
the Leased Property, and in such event may permit the items so contested to remain
undischarged and unsatisfied during the period of such contest and any appeal
therefrom and shall provide the Authority with full security against any loss or forfeiture
which might arise from the nonpayment of any such item, in form satisfactory to the
Authority. The Authority will cooperate fully in any such contest, upon the request and at
the expense of the City.
SECTION 5.3. Liability and Property Damage Insurance. The City shall maintain
or cause to be maintained throughout the Term of this Lease, a standard commercial
general liability insurance policy or policies in protection of the Authority, the City, and
their respective members, officers, agents, employees and assigns. Said policy or
policies shall provide for indemnification of said parties against direct or contingent loss
or liability for damages for bodily and personal injury, death or property damage
occasioned by reason of the operation of the Leased Property. Such policy or policies
shall provide coverage in such liability limits and be subject to such deductibles as the
City deems adequate and prudent. Such insurance may be maintained as part of or in
conjunction with any other insurance coverage carried by the City, and may be
maintained in whole or in part in the form of self-insurance by the City, subject to the
provisions of Section 5.7, or in the form of the participation by the City in a joint powers
agency or other program providing pooled insurance. The proceeds of such liability
insurance must be applied toward extinguishment or satisfaction of the liability with
respect to which paid.
SECTION 5.4. Casualty Insurance. The City shall procure and maintain, or cause
to be procured and maintained, throughout the Term of this Lease, casualty insurance
against loss or damage to all buildings situated on the Leased Property, in an amount at
least equal to the lesser of (a) 100% of the replacement value of the insured buildings, or
(b) 100% of the aggregate principal amount of the Outstanding Bonds. Such insurance
must, as nearly as practicable, cover loss or damage by explosion, windstorm, riot,
aircraft, vehicle damage, smoke and such other hazards as are normally covered by
such insurance, and must include earthquake insurance if available at reasonable cost
from reputable insurers in the judgment of the City. Such insurance may be subject to
such deductibles as the City deems adequate and prudent. Such insurance may be
maintained as part of or in conjunction with any other insurance coverage carried by the
City, and may be maintained in whole or in part in the form of the participation by the
City in a joint powers agency or other program providing pooled insurance; provided that
such insurance may not be maintained by the City in the form of self-insurance. The Net
Proceeds of such insurance must be applied as provided in Section 6.1.
SECTION 5.5. Rental Interruption Insurance. The City shall procure and maintain,
or cause to be procured and maintained, throughout the Term of this Lease, rental
interruption or use and occupancy insurance to cover loss, total or partial, of the use of
any portion of the Leased Property constituting buildings or other improvements as a
result of any of the hazards covered in the insurance required by Section 5.4, in an
amount at least equal to the maximum such Lease Payments coming due and payable
during any consecutive two Fiscal Years. Such insurance may be maintained as part of
or in conjunction with any other insurance coverage carried by the City, and may be
maintained in whole or in part in the form of the participation by the City in a joint powers
agency or other program providing pooled insurance; provided that such insurance may
not be maintained by the City in the form of self-insurance. The Net Proceeds of such
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insurance, if any, must be paid to the Trustee and deposited in the Bond Fund, to be
applied as a credit towards the payment of the Lease Payments allocable to the insured
improvements as the same become due and payable.
SECTION 5.6. Recordation Hereof; Title Insurance. On or before the Closing
Date the City shall, at its expense, (a) cause the Site Lease, the Assignment Agreement
and this Lease, or a memorandum hereof or thereof in form and substance approved by
Bond Counsel, to be recorded in the office of the Alameda County Recorder, and (b)
obtain a CLTA title insurance policy insuring the City’s leasehold estate hereunder in the
Leased Property, subject only to Permitted Encumbrances, in an amount at least equal
to the aggregate principal amount of the Bonds. All Net Proceeds received under any
such title insurance policy must be deposited with the Trustee in the Bond Fund to be
credited towards the prepayment of the remaining Lease Payments under Section 9.4.
SECTION 5.7. Insurance Net Proceeds; Form of Policies. Each policy of
insurance maintained under Sections 5.4, 5.5 and 5.6 must name the Trustee as loss
payee so as to provide that all proceeds thereunder are payable to the Trustee. The
City shall pay or cause to be paid when due the premiums for all insurance policies
required by this Lease. All such policies shall provide that the Trustee is given 30 days’
notice of each expiration, any intended cancellation thereof or reduction of the coverage
provided thereby. The City must file with the Trustee annually, within 90 days following
the close of each Fiscal Year, a certificate of the City stating that all policies of insurance
required hereunder are then in full force and effect. The Trustee has no responsibility for
the sufficiency, adequacy or amount of any insurance or self-insurance herein required
and is fully protected in accepting payment on account of such insurance or any
adjustment, compromise or settlement of any loss.
If any insurance maintained under Section 5.3 is provided in the form of self-
insurance, the City must file with the Trustee annually, within 90 days following the close
of each Fiscal Year, a statement of the risk manager of the City or an independent
insurance adviser engaged by the City identifying the extent of such self-insurance and
stating the determination that the City maintains sufficient reserves with respect thereto.
If any such insurance is provided in the form of self-insurance by the City, the City has
no obligation to make any payment with respect to any insured event except from those
reserves.
SECTION 5.8. Installation of City’s Personal Property. The City may at any time
and from time to time, in its sole discretion and at its own expense, install or permit to be
installed other items of equipment or other personal property in or upon the Leased
Property. All such items shall remain the sole property of the City, in which neither the
Authority nor the Trustee has any interest, and may be modified or removed by the City
at any time, provided that the City must repair all damage to the Leased Property
resulting from the installation, modification or removal of any such items. Nothing in this
Lease prevents the City from purchasing or leasing items to be installed under this
Section under a lease or conditional sale agreement, or subject to a vendor’s lien or
security agreement, as security for the unpaid portion of the purchase price thereof, so
long as no such lien or security interest attaches to any part of the Leased Property.
SECTION 5.9. Liens. The City may not, directly or indirectly, create, incur,
assume or suffer to exist any mortgage, pledge, lien, charge, encumbrance or claim on
or with respect to the Leased Property, other than as herein contemplated and except for
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such encumbrances as the City certifies in writing to the Trustee do not materially and
adversely affect the leasehold estate of the City in the Leased Property hereunder. If
any such mortgage, pledge, lien, charge, encumbrance or claim does materially and
adversely affect the leasehold estate of the City in the Leased Property hereunder, the
City will promptly, at its own expense, take such action as may be necessary to duly
discharge or remove any such mortgage, pledge, lien, charge, encumbrance or claim,
for which it is responsible; provided that the City is not required to do so prior to the time
when such mortgage, pledge, lien, charge, encumbrance or claim actually causes such
material adverse effect. The City will reimburse the Authority for any expense incurred
by it in order to discharge or remove any such mortgage, pledge, lien, charge,
encumbrance or claim.
SECTION 5.10. Advances. If the City fails to perform any of its obligations under
this Article V, the Authority may (but is not required to) take such action as it deems
necessary to cure such failure, including the advancement of money, and the City shall
repay all such advances as Additional Rental Payments hereunder, with interest at the
rate set forth in Section 4.3(c).
ARTICLE VI
DAMAGE, DESTRUCTION AND EMINENT DOMAIN; USE OF NET
PROCEEDS
SECTION 6.1. Application of Net Proceeds. The Trustee, as assignee of the
Authority under the Assignment Agreement, has the right to receive all Net Proceeds.
As provided in the Indenture, the Trustee will deposit all Net Proceeds in the Insurance
and Condemnation Fund to be applied as set forth in Section 5.07 of the Indenture.
SECTION 6.2. Termination or Abatement Due to Eminent Domain.
(a) If the Leased Property is taken permanently under the power of eminent
domain or sold to a government threatening to exercise the power of eminent domain,
the Term of this Lease thereupon ceases as of the day possession is taken.
(b) If less than all of the Leased Property is taken permanently and the
remainder is useable for the City’s purposes, or if the Leased Property is taken
temporarily, under the power of eminent domain, then:
(i) this Lease continues in full force and effect with respect thereto and
does not terminate by virtue of such taking, and the parties waive the
benefit of any law to the contrary, and
(ii) the Lease Payments are subject to abatement in an amount
determined by the City such that the resulting Lease Payments
represent fair consideration for the use and occupancy of the
remaining usable portions of the Leased Property.
SECTION 6.3. Abatement Due to Damage or Destruction. The Lease Payments
are subject to abatement during any period in which by reason of damage or destruction
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(other than by eminent domain which is hereinbefore provided for) there is substantial
interference with the use and occupancy by the City of the Leased Property or any
portion thereof. The Lease Payments are subject to abatement in an amount
determined by the City, such that the resulting Lease Payments represent fair
consideration for the use and occupancy of the remaining usable portions of the Leased
Property not damaged or destroyed. Such abatement will continue for the period
commencing with such damage or destruction and ending with the substantial
completion of the work of repair or reconstruction. In the event of any such damage or
destruction, this Lease continues in full force and effect and the City waives any right to
terminate this Lease by virtue of any such damage and destruction.
ARTICLE VII
OTHER COVENANTS OF THE CITY
SECTION 7.1. Disclaimer of Warranties. THE AUTHORITY MAKES NO
AGREEMENT, WARRANTY OR REPRESENTATION, EITHER EXPRESS OR
IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR PURPOSE OR FITNESS FOR THE USE
CONTEMPLATED BY THE CITY OF THE LEASED PROPERTY OR ANY PORTION
THEREOF, OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT
TO THE LEASED PROPERTY OR ANY PORTION THEREOF. THE CITY
ACKNOWLEDGES THAT THE AUTHORITY IS NOT A MANUFACTURER OF ANY
PORTION OF THE LEASED PROPERTY OR A DEALER THEREIN, THAT THE CITY
LEASES THE LEASED PROPERTY AS-IS, IT BEING AGREED THAT ALL OF THE
AFOREMENTIONED RISKS ARE TO BE BORNE BY THE CITY. The Authority has no
liability for incidental, indirect, special or consequential damages, in connection with or
arising out of this Lease for the existence, furnishing, functioning or use of the Leased
Property by the City.
SECTION 7.2. Access to the Leased Property. The City agrees that the Authority
and any Authorized Representative of the Authority, and the Authority’s successors or
assigns, have the right at all reasonable times to enter upon and to examine and inspect
the Leased Property or any part thereof. The City further agrees that the Authority, any
Board Representative and the Authority’s successors or assigns may have such rights of
access to the Leased Property or any component thereof as reasonably necessary to
cause the proper maintenance of the Leased Property if the City fails to perform its
obligations hereunder; provided, however, that neither the Authority nor any of its
assigns has any obligation to cause such proper maintenance.
SECTION 7.3. Release and Indemnification Covenants. The City agrees to
indemnify the Authority, the Trustee and their respective officers, agents, successors
and assigns, against all claims, losses and damages, including legal fees and expenses,
arising out of any of the following:
(a) the use, maintenance, condition or management of, or from any work or
thing done on the Leased Property by the City,
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(b) any breach or default on the part of the City in the performance of any of its
obligations under this Lease,
(c) any negligence or willful misconduct of the City or of any of its agents,
contractors, servants, employees or licensees with respect to the Leased
Property,
(d) any intentional misconduct or negligence of any sublessee of the City with
respect to the Leased Property,
(e) the acquisition, construction, improvement and equipping of the Leased
Property, or the authorization of payment of the costs thereof, or
(f) the acceptance and performance of the duties of the Trustee under the
Indenture and under this Lease.
No indemnification is made under this Section or elsewhere in this Lease for
willful misconduct or negligence under this Lease by the Authority, the Trustee or their
respective officers, agents, employees, successors or assigns.
SECTION 7.4. Assignment and Subleasing by the City. This Lease may not be
assigned by the City, other than to an entity which succeeds to the interests of the City
as a municipal corporation. The City may sublease the Leased Property, or any portion
thereof, subject to all of the following conditions:
(a) This Lease and the obligation of the City to make Lease Payments
hereunder must remain obligations of the City.
(b) The City must, within 30 days after the delivery thereof, furnish or
cause to be furnished to the Authority and the Trustee a true and
complete copy of such sublease.
(c) No such sublease by the City may cause the Leased Property to be
used for a purpose which is not authorized under the provisions of
the laws of the State of California.
(d) The City must furnish to the Authority and the Trustee a written
opinion of Bond Counsel stating that such sublease does not cause
the interest components of the Lease Payments to become included
in gross income for purposes of federal income taxation or to
become subject to personal income taxation by the State of
California.
SECTION 7.5. Amendment Hereof. The Authority and the City may at any time
amend or modify any of the provisions of this Lease, but only: (a) with the prior written
consents of the Owners of a majority in aggregate principal amount of the Outstanding
Bonds; or (b) without the consent of the Trustee or any of the Bond Owners, but only if
such amendment or modification is for any one or more of the following purposes:
(i) to add to the covenants and agreements of the City contained in this Lease,
other covenants and agreements thereafter to be observed, or to limit or
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surrender any rights or power herein reserved to or conferred upon the
City;
(ii) to make such provisions for the purpose of curing any ambiguity, or of
curing, correcting or supplementing any defective provision contained
herein, to conform to the original intention of the City and the Authority;
(iii) to modify, amend or supplement this Lease in such manner as to
assure that the interest on the Bonds remains excluded from gross
income under the Tax Code;
(iv) to amend the description of the Leased Property to reflect accurately the
property originally intended to be included therein, or in connection with any
substitution or release of property under Sections 3.3 or 3.4;
(v) to obligate the City to pay additional amounts of rental for the use and
occupancy of the Leased Property, but only if (A) such additional rent
payments are pledged or assigned for the payment of any bonds, notes or
other obligations the proceeds of which are applied to finance or refinance
the acquisition or construction of any real or personal property for which the
City is authorized to expend funds subject to its control, (B) the City has
filed with the Trustee a written certificate stating that the estimated value of
the Leased Property is, or following the completion of the acquisition and
construction of any improvements to be financed from the proceeds of such
bonds, notes or other obligations will be, at least equal to the aggregate
original principal amount of the Bonds and all such other bonds, notes or
other obligations, and (C) the City has filed with the Trustee written
evidence that the amendments made under this clause (v) will not of
themselves cause a reduction or withdrawal of any rating then assigned to
the Bonds;
(vi) in any respect whatsoever as the Authority and the City deem necessary or
desirable to facilitate the issuance of Additional Bonds as permitted under
the Indenture; or
(vii) in any other respect whatsoever as the Authority and the City deem
necessary or desirable, if in the opinion of Bond Counsel such
modifications or amendments do not materially adversely affect the
interests of the Owners of the Bonds.
No such modification or amendment may (a) extend or have the effect of
extending any Lease Payment Date or reducing any Lease Payment or any premium
payable upon the prepayment thereof, without the express consent of the Owners of the
affected Bonds, or (b) modify any of the rights or obligations of the Trustee without its
written assent thereto.
SECTION 7.6. Tax Covenants.
(a) Private Business Use Limitation. The City shall assure that the proceeds of
the Bonds are not used in a manner which would cause the Bonds to satisfy the private
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business tests of Section 141(b) of the Tax Code or the private loan financing test of
Section 141(c) of the Tax Code.
(b) Federal Guarantee Prohibition. The City may not take any action or permit
or suffer any action to be taken if the result of the same would be to cause the Bonds to
be “federally guaranteed” within the meaning of Section 149(b) of the Tax Code.
(c) No Arbitrage. The City may not take, or permit or suffer to be taken by the
Trustee or otherwise, any action with respect to the proceeds of the Bonds or of any
other obligations which, if such action had been reasonably expected to have been
taken, or had been deliberately and intentionally taken, on the Closing Date, would have
caused the Bonds to be “arbitrage bonds” within the meaning of Section 148(a) of the
Tax Code.
(d) Maintenance of Tax Exemption. The City shall take all actions necessary to
assure the exclusion of interest on the Bonds from the gross income of the Owners of
the Bonds to the same extent as such interest is permitted to be excluded from gross
income under the Tax Code as in effect on the Closing Date.
(e) Rebate of Excess Investment Earnings to United States. The City shall
calculate or cause to be calculated the Excess Investment Earnings in all respects at the
times and in the manner required under the Tax Code. The City shall pay the full
amount of Excess Investment Earnings to the United States of America in such
amounts, at such times and in such manner as may be required under the Tax Code.
Such payments shall be made by the City from any source of legally available funds of
the City, and shall constitute Additional Rental Payments hereunder.
The City shall keep or cause to be kept, and retain or cause to be retained for a
period of six years following the retirement of the Bonds, records of the determinations
made under this subsection (e). In order to provide for the administration of this
subsection (e), the City may provide for the employment of independent attorneys,
accountants and consultants compensated on such reasonable basis as the City may
deem appropriate. The Trustee has no duty or obligation to monitor or enforce
compliance by the City of any of the requirements under this subsection (e).
SECTION 7.7. Continuing Disclosure. The City shall comply with and carry out all
of the provisions of the Continuing Disclosure Certificate executed by the City as of the
Closing Date, as originally executed and as it may be amended from time to time in
accordance with its terms. Notwithstanding any other provision of this Lease, failure of
the City to comply with such Continuing Disclosure Certificate will not constitute an
Event of Default, although any Participating Underwriter (as that term is defined in such
Continuing Disclosure Certificate) or any Owner or beneficial owner of the Bonds may
take such actions as may be necessary and appropriate to compel performance by the
City of its obligations under this Section, including seeking mandate or specific
performance by court order.
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ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
SECTION 8.1. Events of Default Defined. Any one or more of the following events
constitute an Event of Default hereunder:
(a) Failure by the City to pay any Lease Payment or other payment required to
be paid hereunder at the time specified herein.
(b) Failure by the City to observe and perform any covenant, condition or
agreement on its part to be observed or performed, other than as referred
to in the preceding subsection (a), for a period of 30 days after written
notice specifying such failure and requesting that it be remedied has been
given to the City by the Authority or the Trustee. If in the reasonable
opinion of the City the failure stated in the notice can be corrected, but not
within such 30 day period, the failure will not constitute an Event of Default
if the City commences to cure the failure within such 30 day period and
thereafter diligently and in good faith cures the failure in a reasonable
period of time.
(c) The filing by the City of a voluntary petition in bankruptcy, or failure by the
City promptly to lift any execution, garnishment or attachment, or
adjudication of the City as a bankrupt, or assignment by the City for the
benefit of creditors, or the entry by the City into an agreement of
composition with creditors, or the approval by a court of competent
jurisdiction of a petition applicable to the City in any proceedings instituted
under the provisions of the Federal Bankruptcy Code, as amended, or
under any similar acts which may hereafter be enacted.
SECTION 8.2. Remedies on Default. Whenever any Event of Default has
happened and is continuing, the Authority may exercise any and all remedies available
under law or granted under this Lease. Notwithstanding anything herein or in the
Indenture to the contrary, neither the Authority nor the Trustee may accelerate the Lease
Payments or otherwise declare any Lease Payments not then in default to be
immediately due and payable. Each covenant hereof to be kept and performed by the
City is expressly made a condition and upon the breach thereof the Authority may
exercise any and all rights granted hereunder; except that no termination of this Lease
may be effected either by operation of law or acts of the parties hereto, except only in
the manner herein expressly provided. Upon the occurrence and during the continuance
of any Event of Default, the Authority may exercise each and every one of the following
remedies, subject in all respects to the limitations set forth in Section 8.3.
(a) Enforcement of Payments Without Termination. If the Authority does not
elect to terminate this Lease in the manner hereinafter provided for in
subparagraph (b) hereof, the City agrees to and shall remain liable for the
payment of all Lease Payments and the performance of all conditions
herein contained and shall reimburse the Authority for any deficiency
arising out of the re-leasing of the Leased Property, or, if the Authority is
unable to re-lease the Leased Property, then for the full amount of all Lease
Payments to the end of the Term of this Lease, but said Lease Payments
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and/or deficiency shall be payable only at the same time and in the same
manner as hereinabove provided for the payment of Lease Payments
hereunder, notwithstanding such entry or re-entry by the Authority or any
suit in unlawful detainer, or otherwise, brought by the Authority for the
purpose of effecting such re-entry or obtaining possession of the Leased
Property or the exercise of any other remedy by the Authority. The City
hereby irrevocably appoints the Authority as the agent and attorney-in-fact
of the City to enter upon and re-lease the Leased Property upon the
occurrence and continuation of an Event of Default and to remove all
personal property whatsoever situated upon the Leased Property, to place
the Leased Property in storage or other suitable place in the County of
Alameda for the account of and at the expense of the City, and the City
hereby exempts and agrees to save harmless the Authority from any costs,
loss or damage whatsoever arising or occasioned by any such entry upon
and re-leasing of the Leased Property and the removal and storage of the
Leased Property by the Authority or its duly authorized agents in
accordance with the provisions herein contained. The City agrees that the
terms of this Lease constitute full and sufficient notice of the right of the
Authority to re-lease the Leased Property in the event of such re-entry
without effecting a surrender of this Lease, and further agrees that no acts
of the Authority in effecting such re-leasing shall constitute a surrender or
termination of this Lease irrespective of the term for which such re-leasing
is made or the terms and conditions of such re-leasing, or otherwise, but
that, on the contrary, in the event of such default by the City the right to
terminate this Lease shall vest in the Authority to be effected in the sole
and exclusive manner hereinafter provided for in subparagraph (b) hereof.
The City agrees to surrender and quit possession of the Leased Property
upon demand of the Authority for the purpose of enabling the Leased
Property to be re-let under this paragraph, and the City further waives the
right to any rental obtained by the Authority in excess of the Lease
Payments and hereby conveys and releases such excess to the Authority
as compensation to the Authority for its services in re-leasing the Leased
Property.
(b) Termination of Lease. If an Event of Default occurs and is continuing
hereunder, the Authority at its option may terminate this Lease and re-lease
all or any portion of the Leased Property. If the Authority terminates this
Lease at its option and in the manner hereinafter provided on account of
default by the City (and notwithstanding any re-entry upon the Leased
Property by the Authority in any manner whatsoever or the re-leasing of the
Leased Property), the City nevertheless agrees to pay to the Authority all
costs, loss or damages howsoever arising or occurring payable at the same
time and in the same manner as is herein provided in the case of payment
of Lease Payments and Additional Rental Payments. Any surplus received
by the Authority from such re-leasing shall be deposited in the Bond Fund.
Neither notice to pay rent or to deliver up possession of the premises given
under law nor any proceeding in unlawful detainer taken by the Authority
shall of itself operate to terminate this Lease, and no termination of this
Lease on account of default by the City shall be or become effective by
operation of law, or otherwise, unless and until the Authority shall have
given written notice to the City of the election on the part of the Authority to
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terminate this Lease. The City covenants and agrees that no surrender of
the Leased Property, or of the remainder of the Term hereof or any
termination of this Lease shall be valid in any manner or for any purpose
whatsoever unless stated or accepted by the Authority by such written
notice.
(c) Proceedings at Law or In Equity. If an Event of Default occurs and
continues hereunder, the Authority may take whatever action at law or in
equity may appear necessary or desirable to collect the amounts then due
and thereafter to become due hereunder or to enforce any other of its rights
hereunder.
SECTION 8.3. No Remedy Exclusive. No remedy herein conferred upon or
reserved to the Authority is intended to be exclusive and every such remedy is
cumulative and in addition to every other remedy given under this Lease or now or
hereafter existing at law or in equity. No delay or omission to exercise any right or
power accruing upon the occurrence of any Event of Default impairs any such right or
power or operates as a waiver thereof, but any such right and power may be exercised
from time to time and as often as may be deemed expedient. In order to entitle the
Authority to exercise any remedy reserved to it in this Article VIII it is not necessary to
give any notice, other than as expressly required in this Article VIII or by law.
SECTION 8.4. Agreement to Pay Attorneys’ Fees and Expenses. If the Authority
or the City defaults under any of the provisions of this Lease and the nondefaulting party
employs attorneys or incurs other expenses for the collection of moneys or the
enforcement or performance or observance of any obligation or agreement on the part of
the defaulting party herein contained, the defaulting party will on demand therefor pay to
the nondefaulting party the reasonable fees of such attorneys and such other expenses
so incurred by the nondefaulting party.
SECTION 8.5. No Additional Waiver Implied by One Waiver. If the Authority or
the City breaches any agreement in this Lease and thereafter the other party waives
thebreach, such waiver is limited to the particular Breach so waived and does not
operate to waive any other breach hereunder.
SECTION 8.6. Application of Proceeds. All net proceeds received from the re-
lease of the Leased Property under this Article VIII, and all other amounts derived by the
Authority or the Trustee as a result of the occurrence of an Event of Default, must be
paid to and applied by the Trustee in accordance with Section 7.03 of the Indenture.
SECTION 8.7. Trustee and Bond Owners to Exercise Rights. Such rights and
remedies as are given to the Authority under this Article VIII have been assigned by the
Authority to the Trustee under the Assignment Agreement for the benefit of the Bond
Owners, to which assignment the City hereby consents. The Trustee and the Bond
Owners shall exercise such rights and remedies in accordance with the Indenture.
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ARTICLE IX
PREPAYMENT OF LEASE PAYMENTS
SECTION 9.1. Security Deposit. Notwithstanding any other provision of this
Lease, the City may on any date secure the payment of the Lease Payments allocable to
the Leased Property in whole or in part by depositing with the Trustee an amount of cash
which, together with other available amounts on deposit in the funds and accounts
established under the Indenture, is either:
(a) sufficient to pay such Lease Payments, including the principal and interest
components thereof, in accordance with the Lease Payment schedule set
forth in Appendix B, or
(b) invested in whole or in part in non-callable Federal Securities in such
amount as will, in the opinion of an independent certified public accountant,
together with interest to accrue thereon and together with any cash which is
so deposited, be fully sufficient to pay such Lease Payments when due
under Section 4.3(a), as the City instructs at the time of said deposit.
If the City makes a security deposit under this Section with respect to all unpaid
Lease Payments, and notwithstanding the provisions of Section 4.2, (a) the Term of this
Lease will continue, (b) all obligations of the City under this Lease, and all security
provided by this Lease for said Lease Payments, will thereupon cease and terminate,
excepting only the obligation of the City to make, or cause to be made all of said Lease
Payments from such security deposit, and (c) under Section 4.7, title to the Leased
Property will vest in the City on the date of said deposit automatically and without further
action by the City or the Authority. Said security deposit constitutes a special fund for
the payment of Lease Payments in accordance with the provisions of this Lease.
SECTION 9.2. Prepayment. The City has the option to prepay the principal
components of the Lease Payments in as described under Section 4.01(a) of the
Indenture. Such prepayment price shall be deposited by the Trustee in the Redemption
Fund to be applied to the redemption of Bonds under Section 4.01(a) of the Indenture.
The City shall give written notice to the Authority and the Trustee of its intention to
prepay the Lease Payments under this Section at least 45 days prior to the prepayment
date, or such shorter period of time as may be acceptable to the Trustee in its sole
discretion, such notice being solely for the convenience of the Trustee. Additionally, this
Lease is subject to extraordinary mandatory prepayment as described under Section
4.01(c) of the Indenture.
SECTION 9.3. Mandatory Prepayment From Net Proceeds of Insurance or
Eminent Domain. The City shall prepay the principal components of the Lease
Payments allocable to the Leased Property in whole or in part on any date, from and to
the extent of any Net Proceeds of insurance award or eminent domain award with
respect to the Leased Property theretofore deposited in the Redemption Fund for that
purpose under Article VI hereof and Section 5.07 of the Indenture. Such Net Proceeds,
to the extent remaining after payment of any delinquent Lease Payments, will be
credited towards the City’s obligations under this Section and applied to the
corresponding redemption of Bonds under Section 4.01 of the Indenture on the next
available redemption date.
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SECTION 9.4. Credit for Amounts on Deposit. If the principal components of the
Lease Payments are prepaid in full under this Article IX, such that the Indenture is
discharged by its terms as a result of such prepayment, at the written election of the City
filed with the Trustee any or all amounts then on deposit in the Bond Fund (and the
accounts therein) will be credited towards the amounts then required to be so prepaid.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Notices. Any notice, request, complaint, demand or other
communication under this Lease shall be given by first class mail or personal delivery to
the party entitled thereto at its address set forth below, or by facsimile transmission or
other form of telecommunication, at its number set forth below. Notice shall be effective
either (a) upon transmission by facsimile transmission or other form of
telecommunication, (b) 48 hours after deposit in the United States of America first class
mail, postage prepaid, or (c) in the case of personal delivery to any person, upon actual
receipt. The Authority, the City or the Trustee may, by written notice to the other parties,
from time to time modify the address or number to which communications are to be
given hereunder.
If to the City City of Dublin
or the Authority: Attention: Assistant City Manager
100 Civic Plaza
Dublin, CA 94568
If to the Trustee: U.S. Bank National Association
Attention: Global Corporate Trust
One California Street, Suite 1000
San Francisco, California 94111
SECTION 10.2. Binding Effect. This Lease inures to the benefit of and binds the
Authority, the City and their respective successors and assigns.
SECTION 10.3. Severability. If any provision of this Lease is held invalid or
unenforceable by any court of competent jurisdiction, such holding will not invalidate or
render unenforceable any other provision hereof.
SECTION 10.4. Net-net-net Lease. This Lease is deemed and construed to be a
“net-net-net lease” and the City hereby agrees that the Lease Payments are an absolute
net return to the Authority, free and clear of any expenses, charges or set-offs
whatsoever.
SECTION 10.5. Third Party Beneficiary. The Trustee is hereby made a third party
beneficiary hereunder with all rights of a third party beneficiary.
SECTION 10.6. Further Assurances and Corrective Instruments. The Authority
and the City shall, from time to time, execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered, such supplements hereto and such further
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instruments as may reasonably be required for correcting any inadequate or incorrect
description of the Leased Property hereby leased or intended so to be or for carrying out
the expressed intention of this Lease.
SECTION 10.7. Execution in Counterparts. This Lease may be executed in
several counterparts, each of which is an original and all of which constitute but one and
the same instrument.
SECTION 10.8. Applicable Law. This Lease is governed by and construed in
accordance with the laws of the State of California.
SECTION 10.9. Board and City Representatives. Whenever under the provisions
of this Lease the approval of the Authority or the City is required, or the Authority or the
City is required to take some action at the request of the other, such approval or such
request shall be given for the Authority and for the City by an Authorized Representative
thereof, and any party hereto may conclusively rely upon any such approval or request.
SECTION 10.10. Captions. The captions or headings in this Lease are for
convenience only and in no way define, limit or describe the scope or intent of any
provisions or Section of this Lease.
Remainder of page intentionally left blank. Signatures on next page.
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[Signature Page to Lease Agreement dated as of October 1, 2021]
IN WITNESS WHEREOF, the Authority and the City have caused this Lease to
be executed in their respective names by their duly authorized officers, all as of the date
first above written.
DUBLIN FINANCING AUTHORITY
By:
Executive Director
CITY OF DUBLIN
By:
Assistant City Manager
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A-1
APPENDIX A
DESCRIPTION OF THE LEASED PROPERTY
The Leased Property consists of that certain real property situated in the City of
Dublin, County of Alameda, State of California, which is more particularly described as
follows:
APN: ______________
(End of Legal Description)
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B-1
APPENDIX B
SCHEDULE OF LEASE PAYMENTS
Lease
Payment Date *
Principal
Component
Interest
Component
Aggregate
Lease Payment
Annual Aggregate
Lease Payment
* Lease Payment Dates are the 5th Business Day immediately preceding each date listed in the
schedule.
** A portion of the Interest Components payable through June 1, ____ has been capitalized and
deposited with the Trustee as follows: June 1, _____ ($_______); December 1, _____
($_______); and June 1, _____ ($_______).
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Draft of August 17, 2021
$_________
DUBLIN FINANCING AUTHORITY 2021 LEASE REVENUE BONDS (Capital Projects)
PURCHASE CONTRACT
September __, 2021
Dublin Financing Authority
100 Civic Plaza
Dublin, California 94568
City of Dublin
100 Civic Plaza
Dublin, California 94568
Ladies and Gentlemen:
The undersigned, Hilltop Securities, Inc. (the “Underwriter”) offers to enter into
this Purchase Contract (the “Purchase Contract”) with you, the Dublin Financing Authority (the
“Authority”) and the City of Dublin (the “City”), and upon acceptance hereof, this offer will
become binding upon the Authority, the City, and the Underwriter. This offer is made subject to
acceptance by delivery of an executed counterpart hereof at or prior to 11:59 p.m., Pacific time,
on this date or on such later date as shall have been consented to by the parties hereto.
Capitalized terms used but not defined herein shall have the meanings given to such terms in the
Indenture of Trust, dated as of October 1, 2021 (the “Indenture”), between the Authority and U.S.
Bank National Association, as trustee (the “Trustee”).
1. Purchase, Sale and Delivery of the Bonds.
(a) Upon the basis of the representations, warranties and agreements herein set forth
and subject to the terms and conditions contained herein, the Underwriter hereby agrees to
purchase from the Authority, and the Authority hereby agrees to sell to the Underwriter, all (but
not less than all) of the $__________ aggregate principal amount of the Dublin Financing
Authority Lease Revenue Bonds (Capital Projects) (the “Bonds”), dated the date of delivery of
the Bonds, bearing interest at the rates and maturing on the dates in the principal amounts, and
subject to redemption, as set forth in Exhibit A attached hereto. The Underwriter will purchase
the Bonds at an aggregate price of $________ (being the aggregate principal amount of the
Bonds of $_________, plus/less a [net] original issue premium/[net]discount of $__________,
less an Underwriter’s discount of $_________).
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The Bonds shall be substantially in the form described in, shall be issued and
secured under the provisions of, and shall be payable as provided in, the Indenture.
The Authority approved the issuance of the Bonds pursuant to a resolution
adopted on ________, 2021 (the “Authority Resolution”), and the City approved the issuance of
the Bonds pursuant to a resolution adopted on _______, 2021 (the “City Resolution”).
The proceeds from the sale of the Bonds will be used in accordance with the
Indenture (i) to provide funds to finance energy efficiency improvement projects being
undertaken by the City (herein the “Project”), and (ii) to pay costs of issuance of the Bonds, all
as more fully described in the Official Statement under the caption, “FINANCING PLAN.” In
order to provide revenues to pay debt service on the Bonds, the City and the Authority are
entering into a Lease Agreement, dated as of October 1, 2021 (the “Lease”) and a Site Lease,
dated October 1, 2021 (the “Site Lease”), pursuant to which the Authority will lease certain real
property and improvements (the “Leased Property”) to the Authority, and the Authority will
lease the Leased Property back to the City in return for semi-annual Lease Payments that are
secured by a pledge of, and lien on the Revenues of, the Project.
(b) The Authority will cooperate in the preparation and delivery to the Underwriter of
the Official Statement, dated the date hereof, substantially in the form of the Preliminary Official
Statement relating to the Bonds, dated ________, 2021 (the “Preliminary Official Statement”),
with only such changes therein as have been accepted by the Underwriter and approved by Jones
Hall, a Professional Law Corporation (“Bond Counsel”) (the Preliminary Official Statement with
such changes, and including the cover page and all appendices, exhibits, reports and statements
included therein or attached thereto, as then supplemented in accordance with this Purchase
Contract, being herein called the “Official Statement”), signed on behalf of the Authority by the
[Director] of the Authority or other authorized official of the Authority, in such quantities as the
Underwriter shall request. The Authority confirms that the information contained in the
Preliminary Official Statement was deemed to be final as of its date for purposes of Rule
15c2-12 promulgated under the Securities Exchange Act of 1934 (“Rule 15c2-12”), except for
any information permitted to be omitted therefrom by Rule 15c2-12, and represents and warrants
that information contained in the Official Statement is deemed final as of the date hereof
for purposes of Rule 15c2-12. The City will undertake, pursuant to the Continuing Disclosure
Certificate, dated as of __________, 2021 (the “Continuing Disclosure Certificate”), between the
City and the Dissemination Agent (as defined therein), to provide certain annual information and
notices of the occurrence of certain enumerated events. A description of this undertaking is set
forth in the Official Statement.
(c) At 8:00 a.m., Pacific time, on ________, 2021 or at such other time or on such
earlier or later date as we may mutually agree upon (the “Closing Date”), the Authority will
deliver or cause to be delivered to The Depository Trust Company (“DTC”) for the account of
the Underwriter in New York, New York, or at such other place as we may mutually agree upon,
the Bonds in definitive form, bearing proper CUSIP numbers, duly executed and authenticated,
and to the offices of Bond Counsel in San Francisco, California the other documents hereinafter
mentioned; and, subject to the conditions of this Purchase Contract, the Underwriter will accept
such delivery and pay the purchase price of the Bonds as set forth in paragraph (a) of this Section
by certified or official bank check or by wiring funds (which payment in any event shall be in
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immediately available funds) payable to the order of the Trustee (such delivery and payment
being herein referred to as the “Closing”). Upon initial issuance, the ownership of the Bonds
will be registered in the name of Cede & Co., as nominee of DTC, and will be in the form of a
separate, single, fully-registered Bond for each maturity.
(d) The Underwriter has entered into this Purchase Contract in reliance upon the
representations and warranties of the Authority and the City contained herein, the certificates of
the Authority and the City and the Trustee to be delivered pursuant hereto, and the opinions of
Bond Counsel, Disclosure Counsel (as hereinafter defined), counsel to the City, and counsel to
the Trustee required to be delivered hereby.
(e) The Underwriter agrees to assist the Authority in establishing the issue price of
the Bonds and shall execute and deliver to the Authority at Closing an “issue price” or similar
certificate, together with the supporting pricing wires or equivalent communication, substantially
in a form approved by Bond Counsel, with such modifications as may be appropriate or
necessary in the reasonable judgment of the Underwriter, the Authority, and Bond Counsel to
accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to
the public of the Bonds. All actions to be taken by the Authority under this subsection to
establish the issue price of the Bonds may be taken on behalf of the Authority by the Authority’s
municipal advisor, Fieldman, Rolapp & Associates, and any notice or report to be provided to the
Authority may be provided to such municipal advisor.
Except as otherwise set forth in Schedule 1 to Exhibit A attached hereto, the Authority
will treat the first price at which ten percent of each maturity of the Bonds (the “ten percent test”)
is sold to the public as the issue price of that maturity (if different interest rates apply within a
maturity, each separate CUSIP number within that maturity will be subject to the ten percent
test). At or promptly after the execution of this Agreement, the Underwriter will report to the
Authority the price or prices at which it has sold to the public each maturity of the Bonds. If at
that time the ten percent test has not been satisfied as to any maturity of the Bonds, the
Underwriter agrees to promptly report to the Authority the prices at which it sells the unsold
Bonds of that maturity to the public. That reporting obligation shall continue, whether or not the
Closing Date has occurred, until the ten percent test has been satisfied as to the Bonds of that
maturity or until all Bonds of that maturity have been sold to the public.
The underwriter confirms that on or before the date of this Agreement it will offer the
Bonds to the public at the offering price or prices (the “initial offering price”), or at the
corresponding yield or yields set forth in Schedule 1 to Exhibit A attached hereto, except as
otherwise set forth therein. Schedule 1 also will set forth, as of the date of this Agreement, the
maturities, if any, of the Bonds for which the ten percent test has not been satisfied and for which
the Authority and the Underwriter agree that the restrictions set forth in the next sentence shall
apply, which will allow the Authority to treat the initial offering price to the public of each such
maturity as of the sale date as the issue price of that maturity (the “hold hold-the-offering-price
rule”). So long as the hold-the-offering-price rule remains applicable to any maturity of the
Bonds, the Underwriter will neither offer nor sell unsold Bonds of that maturity to any person at
a price that is higher than the initial offering price to the public during the period starting on the
sale date and ending on the earlier to occur of (i) the close of the fifth business day after the sale
date; or (ii) the date on which the Underwriter has sold at least ten percent of that maturity of the
Bonds to the public at a price that is no higher than the initial offering price to the public.
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The Underwriter acknowledges that sales of any Bonds to any person that is a related
party to the Underwriter shall not constitute sales to the public for purposes of this subsection. A
“related party” shall be defined as set forth in 26 CFR 1.150-1 (b).
2. Representations, Warranties and Agreements of the Authority.
The Authority represents and warrants to and agrees with the Underwriter that:
(a) The Authority is, and will be at the Closing Date, duly organized and existing
under the laws of the State of California as a joint powers authority, has the full power and
authority to issue the Bonds, to adopt the Authority Resolution, to enter into the Indenture, the
Lease, the Site Lease, and this Purchase Contract and to perform its obligations under the
Indenture, the Lease, the Site Lease, and this Purchase Contract, and when executed and
delivered by the respective parties thereto, the Indenture, the Lease, the Site Lease, and this
Purchase Contract will constitute the legal, valid and binding obligations of the Authority
enforceable in accordance with their respective terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance,
moratorium and other similar laws related to or affecting creditors’ rights generally and to the
application of equitable principles as the court having jurisdiction may impose, regardless of
whether such proceeding is considered a proceeding in equity or law, to the exercise of judicial
discretion in appropriate cases, and to the limitations on legal remedies against governmental
entities in the State of California and by matters of public policy;
(b) When delivered to and paid for by the Underwriter at the Closing in accordance
with the provisions of this Purchase Contract and assuming proper authentication by the Trustee
by the manual signature of an authorized officer thereof, the Bonds will have been duly
authorized, executed, issued, and delivered and will constitute valid and binding limited
obligations of the Authority, enforceable in accordance with their terms and entitled to the
benefit and security of the Indenture;
(c) By official action of the Authority prior to or concurrently with the acceptance
hereof, the Authority has authorized and approved the distribution of the Preliminary Official
Statement, authorized and approved the distribution of the Official Statement, and authorized and
approved the execution and delivery of, and the performance by the Authority of, the obligations
on its part contained in, the Bonds, the Indenture, the Lease, the Site Lease, and this Purchase
Contract, and the consummation by the Authority of all other transactions on its part
contemplated by the Official Statement and this Purchase Contract;
(d) There is no action, suit, proceeding, inquiry or investigation, at law or in equity,
before or by any court, governmental agency, public board or body, pending (with service of
process against the Authority having been accomplished) or known to the Authority to be
threatened against the Authority, seeking to restrain or enjoin the issuance, sale, execution or
delivery of the Bonds, or in any way contesting or affecting any proceedings of the Authority
taken concerning the issuance or sale thereof, the adoption of the Authority Resolution, the
pledge or application of any moneys or security provided for the payment of the Bonds, or in any
way contesting the validity or enforceability of the Bonds, the Indenture, the Lease, the Site
Lease, or this Purchase Contract, or contesting in any way the completeness or accuracy of
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the Preliminary Official Statement or the Official Statement, as amended or supplemented, or the
existence or powers of the Authority relating to the issuance of the Bonds;
(e) As of the date thereof and as of the date hereof, the statements and information
contained in the Preliminary Official Statement entitled “INTRODUCTION,” insofar as such
statements pertain to the Authority, and “THE AUTHORITY,” and the statements and
information in the Official Statement entitled “INTRODUCTION,” insofar as such statements
pertain to the Authority, and “THE AUTHORITY” were and will be true, correct and complete
in all material respects, and did not and will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make the statements and
information therein, in light of the circumstances under which they were made, not misleading.
(f) The Authority will furnish such information, execute such instruments and take
such other action in cooperation with the Underwriter as the Underwriter may reasonably request
in endeavoring (i) to qualify the Bonds for offer and sale under the Blue Sky or other securities
laws and regulations of such states and other jurisdictions of the United States as the Underwriter
may designate, and (ii) to determine the eligibility of the Bonds for investment under the laws of
such states and other jurisdictions, and subject to Section 7 hereof, will use its best efforts to
continue such qualification in effect so long as required for distribution of the Bonds; provided,
however, that in no event shall the Authority be required to qualify as a foreign corporation in
any such state or take any action that would subject it to general, special or unlimited service of
process in any jurisdiction in which it is not now so subject;
(g) To the best knowledge of the Authority, the adoption of the Authority Resolution
will not, and the execution and delivery by the Authority of the Bonds, the Indenture, the Lease,
the Site Lease, and this Purchase Contract (collectively, the “Authority Documents”) and
compliance with the provisions on the Authority’s part contained therein will not, in any material
respect, conflict with or constitute on the part of the Authority a breach of or default under any
material law, administrative regulation, court order, judgment, decree, loan agreement, indenture,
bond, note, resolution, agreement or other instrument to which the Authority is a party or by
which it is bound, which breach or default would have a material adverse effect on the
Authority’s ability to perform its obligations under the Authority Documents;
(h) The Authority is not in breach of or in default under any applicable material law
or administrative regulation of the State of California or the United States or any applicable
material judgment or decree or any material loan agreement, indenture, bond, note, resolution,
agreement or other instrument to which the Authority is a party or is otherwise subject, which
breach or default would have a material adverse effect on the Authority’s ability to perform its
obligations under the Authority Documents, and no event has occurred and is continuing which,
with the passage of time or the giving of notice, or both, would constitute a breach of or a default
or an event of default under any such instrument, which breach or default would have a material
adverse effect on the Authority’s ability to perform its obligations under the Authority
Documents;
(i) The Authority covenants that it will not take any action that would cause interest
on the Bonds to be included in gross income for federal income tax purposes; and
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(j) If between the date of this Purchase Contract and up to and including the 25th day
following the end of the underwriting period (as such term is defined in Rule 15c2-12) (i) an
event occurs, of which the Authority has knowledge, which might or would cause the
information in the Official Statement, as then supplemented or amended, to contain an untrue
statement of a material fact or to omit to state a material fact required to be stated therein or
necessary to make such information therein, in the light of the circumstances under which it was
presented, not misleading, or (ii) if the Authority is otherwise requested to amend, supplement or
otherwise change the Official Statement, the Authority will notify the Underwriter, and if in the
reasonable opinion of the Underwriter such event requires the preparation and publication of a
supplement or amendment to the Official Statement, the Authority will participate in the
amendment or supplement in a form and in a manner approved by the Underwriter and counsel
to the Authority, provided all expenses thereby incurred will be paid by the Authority and
provided further that, for purposes of this provision, the end of the underwriting period shall be
the Closing Date unless the Underwriter on or prior to the Closing provides written notice to the
contrary to the Authority; and
For twenty-five (25) days from the date of the end of the underwriting period (as
such term is defined in Rule l5c2-12), (i) the Authority will not participate in the issuance of any
amendment of or supplement to the Official Statement to which, after being furnished with a
copy, the Trustee or the Underwriter shall reasonably object in writing or which shall be
disapproved by any of their respective counsel, and (ii) if any event relating to or affecting the
Authority shall occur as a result of which it is necessary, in the opinion of counsel for the
Underwriter, to amend or supplement the Official Statement in order to make the Official
Statement not misleading in light of the circumstances existing at the time it is delivered to a
purchaser, the Authority will forthwith prepare and furnish to the Underwriter and the City (at
the expense of the Authority for twenty-five (25) days from the date of Closing, and thereafter at
the expense of the Underwriter) a reasonable number of copies of an amendment of or
supplement to the Official Statement (in form and substance satisfactory to counsel for the
Underwriter and counsel to the Authority) which will amend or supplement the Official
Statement so that it will not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light of the circumstances
existing at the time the Official Statement is delivered to a purchaser, not misleading. For
purposes of this subsection, the Authority will furnish such information with respect to itself as
the Underwriter may from time-to-time reasonably request.
The execution and delivery of this Purchase Contract by the Authority shall
constitute a representation by the Authority to the Underwriter that the representations,
warranties and agreements contained in this Section 2 are true as of the date hereof; provided that
as to information furnished by the City pursuant to this Purchase Contract or otherwise and in the
Preliminary Official Statement and in the Official Statement, the Authority is relying on such
information in making the Authority’s representations, warranties and agreements; and as to all
matters of law, other than federal tax and securities laws, the Authority is relying on the advice
of counsel to the Authority; and as to matters of federal tax law and securities laws, the Authority
is relying on the advice of Bond Counsel; and provided further that no member of the governing
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body or officer, employee or agent of the Authority shall be individually liable for the breach of
any representation, warranty or agreement contained herein.
3. Representations, Warranties and Agreements of the City.
The City represents and warrants to and agrees with the Underwriter that:
(a) The City is, and will be at the Closing Date, duly organized and existing under the
laws of the State of California, has the full power and authority to adopt the City Resolution, to
enter into the Lease, the Site Lease, the Continuing Disclosure Certificate, and this Purchase
Contract (collectively, the “City Documents”) and to perform its obligations under the City
Documents, and when executed and delivered by the respective parties thereto, the City
Documents will constitute the legal, valid and binding obligations of the City enforceable in
accordance with their respective terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and
other similar laws related to or affecting creditors’ rights generally and to the application of
equitable principles as the court having jurisdiction may impose, regardless of whether such
proceeding is considered a proceeding in equity or law, to the exercise of judicial discretion in
appropriate cases, and to the limitations on legal remedies against governmental entities in the
State of California and by matters of public policy;
(b) By official action of the City prior to or concurrently with the acceptance hereof, the
City has authorized and approved the distribution of the Preliminary Official Statement,
authorized and approved the distribution of the Official Statement, and authorized and approved
the execution and delivery of, and the performance by the City of, the obligations on its part
contained in, the City Documents, and the consummation by the City of all other transactions on
its part contemplated by the Official Statement and this Purchase Contract;
(c) There is no action, suit, proceeding, inquiry or investigation, at law or in equity,
before or by any court, governmental agency, public board or body, pending (with service of
process against the City having been accomplished) or known to the City to be threatened against
the City, seeking to restrain or enjoin the issuance, sale, execution or delivery of the Bonds, or in
any way contesting of affecting any proceedings of the City taken concerning the issuance or
sale thereof, the adoption of the City Resolution, the pledge or application of any moneys or
security provided for the payment of the Bonds, or in any way contesting the validity or
enforceability of the Bonds or any of the City Documents, or contesting in any way the
completeness or accuracy of the Preliminary Official Statement or the Official Statement, as
amended or supplemented, or the existence or powers of the City relating to the issuance of the
Bonds;
(d) As of the date thereof and as of the date hereof, the statements and information
contained in the Preliminary Official Statement (excluding information about The Depository
Trust Company and its book-entry only system and the information in the sections entitled
“INRODUCTION,” insofar as such statements pertain to the Authority, and “THE
AUTHORITY,” and the statements and information in the Official Statement entitled
“INTRODUCTION,” insofar as such statements pertain to the Authority, and “THE
AUTHORITY,” as to which no opinion is expressed) were and will be true, correct and complete
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in all material respects, and did not and will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make the statements and
information therein, in light of the circumstances under which they were made, not misleading.
(e) To the best knowledge of the City, the adoption of the City Resolution will not,
and the execution and delivery by the City of the City Documents and compliance with the
provisions on the City’s part contained therein will not, in any material respect, conflict with or
constitute on the part of the City a breach of or default under any material law, administrative
regulation, court order, judgment, decree, loan agreement, indenture, bond, note, resolution,
agreement or other instrument to which the City is a party or by which it is bound, which breach
or default would have a material adverse effect on the City’s ability to perform its obligations
under the City Documents;
(f) The City is not in breach of or in default under any applicable material law or
administrative regulation of the State of California or the United States or any applicable
material judgment or decree or any material loan agreement, indenture, bond, note, resolution,
agreement or other instrument to which the City is a party or is otherwise subject, which breach
or default would have a material adverse effect on the City’s ability to perform its obligations
under the City Documents, and no event has occurred and is continuing which, with the passage
of time or the giving of notice, or both, would constitute a breach of or a default or an event of
default under any such instrument, which breach or default would have a material adverse effect
on the City’s ability to perform its obligations under the City Documents;
(g) The City covenants that it will not take any action that would cause interest on the
Bonds to be included in gross income for federal income tax purposes;
(h) The Annual Financial Statements of the City presents fairly, in all material
respects, the financial position of the City as of June 30, 2020 and the results from operations for
the year then ended in conformity with generally accepted accounting principles generally
applied to similar entities, and the City has not incurred any material liability, direct or
contingent, nor has there been any material adverse change in the financial position, results of
operation or condition, financial or otherwise, since June 30, 2020 that is not described in the
Official Statement, whether or not arising from transactions in the ordinary course of business;
and
(i) If between the date of this Purchase Contract and up to and including the 25th day
following the end of the underwriting period (as such term is defined in Rule 15c2-12) (i) an
event occurs, of which the City has knowledge, which might or would cause the information in
the Official Statement, as then supplemented or amended, to contain an untrue statement of a
material fact or to omit to state a material fact required to be stated therein or necessary to make
such information therein, in the light of the circumstances under which it was presented, not
misleading, or (ii) if the City is otherwise requested to amend, supplement or otherwise change
the Official Statement, the City will notify the Underwriter, and if in the reasonable opinion of
the Underwriter such event requires the preparation and publication of a supplement or
amendment to the Official Statement, the City will participate in the amendment or supplement
in a form and in a manner approved by the Underwriter and counsel to the City, provided all
expenses thereby incurred will be paid by the City and provided further that, for purposes of this
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provision, the end of the underwriting period shall be the Closing Date unless the Underwriter on
or prior to the Closing provides written notice to the contrary to the City; and
For twenty-five (25) days from the date of the end of the underwriting period (as
such term is defined in Rule l5c2-12), (i) the City will not participate in the issuance of any
amendment of or supplement to the Official Statement to which, after being furnished with a
copy, the Trustee or the Underwriter shall reasonably object in writing or which shall be
disapproved by any of their respective counsel, and (ii) if any event relating to or affecting the
City shall occur as a result of which it is necessary, in the opinion of counsel for the Underwriter,
to amend or supplement the Official Statement in order to make the Official Statement not
misleading in light of the circumstances existing at the time it is delivered to a purchaser, the
City will forthwith prepare and furnish to the Underwriter (at the expense of the City for twenty-
five (25) days from the date of Closing, and thereafter at the expense of the Underwriter) a
reasonable number of copies of an amendment of or supplement to the Official Statement (in
form and substance satisfactory to counsel for the Underwriter and counsel to the City) which
will amend or supplement the Official Statement so that it will not contain an untrue statement of
a material fact or omit to state a material fact necessary in order to make the statements therein,
in light of the circumstances existing at the time the Official Statement is delivered to a
purchaser, not misleading. For purposes of this subsection, the City will furnish such
information with respect to itself as the Underwriter may from time to time reasonably request.
The execution and delivery of this Purchase Contract by the City shall constitute a
representation by the City to the Underwriter that the representations, warranties and agreements
contained in this Section 3 are true as of the date hereof; provided that as to information
furnished by the Authority pursuant to this Purchase Contract or otherwise and in the Preliminary
Official Statement and in the Official Statement, the City is relying on such information in
making the City’s representations, warranties and agreements; and as to all matters of law, other
than federal tax and securities laws, the City is relying on the advice of counsel to the City; and
as to matters of federal tax law and securities laws, the City is relying on the advice of Bond
Counsel; and provided further that no member of the governing body or officer, employee or
agent of the City shall be individually liable for the breach of any representation, warranty or
agreement contained herein.
4. Conditions to the Obligations of the Underwriter.
The obligation of the Underwriter to accept delivery of and pay for the Bonds on
the Closing Date shall be subject, at the option of the Underwriter, (i) to the accuracy in all
material respects of the representations, warranties and agreements on the part of the Authority
and the City contained herein as of the date hereof and as of the Closing Date, to the accuracy in
all material respects of the statements of the officers and other officials of the Authority and the
City made in any certificates or other documents furnished pursuant to the provisions hereof, and
to the performance by the Authority and the City of its obligations to be performed hereunder at
or prior to the Closing Date; and (ii) to the following additional conditions:
(a) At the time of Closing, the Authority Documents and the City Documents shall be in
full force and effect as valid, binding and enforceable agreements between or among the various
parties thereto, and this Purchase Contract and the remainder of the Authority Documents and
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City Documents shall not have been amended, modified or supplemented, except as described
herein or as may otherwise have been agreed to in writing by the Underwriter, and there shall
have been taken in connection with the issuance of the Bonds and with the transactions
contemplated thereby and by this Purchase Contract, all such actions as, in the opinion of Bond
Counsel, shall be necessary and appropriate;
(b) As of the Closing Date, the Official Statement shall not have been amended, modified
or supplemented, except as may have been agreed to in writing by the Underwriter;
(c) Between the date hereof and the Closing Date, none of the following shall have
occurred:
(1) legislation enacted in the Congress or in the legislature of the State of
California, or a decision rendered by a court established under Article III of the Constitution of
the United States or under the Constitution of the State of California, as the case may be, or by
the Tax Court of the United States, or an order, ruling, regulation (final or temporary) or official
or staff statement issued or made:
(A) by or on behalf of the Treasury Department of the United States or
the Internal Revenue Service, or any agency, commission or instrumentality of the State of
California, with the purpose or effect, directly or indirectly, of imposing federal income taxation
or State of California personal income taxation, respectively, upon the System Revenues (as
defined in the Indenture) as would be received by the Authority or the Trustee or upon such
interest as would be received by the holders of the Bonds or obligations of the general character
of the Bonds, or
(B) by or on behalf of the Securities and Exchange Commission, or
any other governmental agency having jurisdiction of the subject matter, to the effect that
obligations of the general character of the Bonds or the Bonds are not exempt from registration
under the Securities Act of 1933, as amended (the “Securities Act”), or that the Indenture is not
exempt from qualification under the Trust Indenture Act of 1939, as amended (the “Trust
Indenture Act”),
which, in either case, in the reasonable judgment of the Underwriter, would have a material and
adverse effect on the market price or marketability, at the initial offering prices set forth in the
Official Statement, of the Bonds;
(2) the declaration of war or the material outbreak or material escalation of
existing military hostilities involving the United States or the occurrence of any other national
emergency or calamity relating to the effective operation of the government of or the financial
community in the United States, which, in the reasonable judgment of the Underwriter, would
have a material and adverse effect on the market price or marketability, at the initial offering
prices set forth in the Official Statement, of the Bonds;
(3) the declaration of a general banking moratorium by federal, New York or
California authorities, or the general suspension of trading on any national securities exchange,
which, in the reasonable judgment of the Underwriter, would have a material and adverse effect
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on the market price or marketability, at the initial offering prices set forth in the Official
Statement, of the Bonds;
(4) the imposition by the New York Stock Exchange or other national
securities exchange, or any governmental authority, of any material restrictions not now in force
with respect to the Bonds or obligations of the general character of the Bonds or securities
generally, or the material increase of any such restrictions now in force, including those relating
to the extension of credit by, or the charge to the net capital requirements of, underwriters;
(5) an order, decree or injunction of any court of competent jurisdiction, or
order, ruling, regulation or official or staff statement by the Securities and Exchange
Commission, or any other governmental agency having jurisdiction of the subject matter, issued
or made to the effect that the issuance, offering or sale of obligations of the general character of
the Bonds, or the issuance, offering or sale of the Bonds, including any or all underlying
obligations, as contemplated hereby or by the Official Statement, is or would be in violation of
the federal securities laws as amended and then in effect;
(6) the withdrawal or downgrading of the rating on the Bonds to less than
“__” by S&P Global Ratings, a division of Standard & Poor’s Financial Services LLC (“S&P”);
(7) any event occurring, or information becoming known which, in the
reasonable judgment of the Underwriter, makes untrue in any material respect any statement or
information contained in the Official Statement, or has the effect that the Official Statement
contains any untrue statement of material fact or omits to state a material fact required to be
stated therein or necessary to make the statements or information therein, in the light of the
circumstances under which they were made, not misleading, and the Authority or the City refuse
to amend or supplement the Official Statement to correct such statements or information;
(8) any amendment to the federal or California Constitution or action by any
federal or California court, legislative body, regulatory body or other authority materially
adversely affecting the tax status of the City or the Authority, their property, income or securities
(or interest thereon), or the validity or enforceability of the Indenture, the other Authority
Documents, the City Documents, or the Official Statement; or
(9) any adverse event occurs with respect to the affairs of the Authority, the
City or the Trustee, which, in the reasonable judgment of the Underwriter, would have a material
and adverse effect on the market price or marketability, at the initial offering prices set forth in
the Official Statement, of the Bonds.
(d) At or prior to the Closing Date, the Underwriter shall have received the following
documents, in each case satisfactory in form and substance to the Underwriter:
(1) The Indenture, the Lease, the Site Lease, and the Continuing Disclosure
Certificate, duly executed and delivered by the respective parties thereto, with only such
amendments, modifications or supplements as may have been agreed to in writing by the
Underwriter;
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(2) The Official Statement, executed on behalf of the Authority by its
[Director] or another authorized official of the Authority;
(3) An approving opinion of Bond Counsel, dated the Closing Date and
addressed to the Authority, in substantially the form attached to the Official Statement as
APPENDIX E, together with a reliance letter addressed to the Underwriter;
(4) a supplemental opinion of Bond Counsel, dated the Closing Date and
addressed to the Underwriter and the Authority, to the effect that (i) the Authority Documents
have been duly authorized, executed and delivered by the Authority, and, assuming such
agreements constitute a valid and binding obligation of the other respective parties thereto,
constitute the legally valid and binding agreements of the Authority enforceable in accordance
with their respective terms, except as enforcement may be limited by bankruptcy, moratorium,
insolvency or other laws affecting creditor’s rights or remedies and may be subject to general
principles of equity (regardless of whether such enforceability is considered in equity or at law);
(ii) the Bonds are not subject to the registration requirements of the Securities Act of 1933, as
amended, and the Indenture is exempt from qualification under the Trust Indenture Act of 1939,
as amended; and (iii) the information contained in the Official Statement on the cover and under
the captions “INTRODUCTION,” “THE BONDS” (other than information relating to DTC and
its Book-Entry Only System), “SECURITY FOR THE BONDS,” “TAX MATTERS” and
APPENDICES C and F thereof is accurate, insofar as such information purports to summarize or
replicate certain provisions of the Act, the Bonds and the Indenture and the exclusion from gross
income for federal income tax purposes and exemption from State of California personal income
taxes of interest on the Bonds;;
(5) An opinion of counsel to the City, dated the Closing Date and addressed to
the City and the Underwriter, to the effect that (i) to its current actual knowledge and except as
disclosed in the Official Statement, no action, suit, proceeding, inquiry or investigation, at law or
in equity, before or by any court, regulatory agency, public board or body is pending with respect
to which the City has been served with process or is known to such counsel to be threatened, as
to which the City is or would be a party, which would materially adversely affect the ability of
the City to perform its obligations under the City Documents, or which seeks to restrain or enjoin
the issuance, sale and delivery of the Bonds or exclusion from gross income for federal income
tax purposes or State of California personal income taxes of interest on the Bonds, or the
application of the proceeds thereof in accordance with the Indenture, or which in any way
contests or affects the validity or enforceability of the Bonds, the City Documents or the
accuracy of the Official Statement, or any action of the City contemplated by any of said
documents; (ii) the City is duly organized and validly existing as a public entity under the laws
of the State of California, and the City has full legal right, power and authority to perform all of
its obligations under the City Documents; (iii) the City has obtained all approvals, consents,
authorizations, elections and orders of or filings or registrations with any California
governmental authority, board, agency or commission having jurisdiction that constitute a
condition precedent to the commencement of the Project or the performance by the City of its
obligations thereunder or under the Indenture, except that no opinion need be expressed
regarding compliance with blue sky or other securities laws or regulations; (iv) the City
Council has duly and validly adopted the City Documents at meetings of the City Council that
were called and held pursuant to law and with all public notice required by law and at which
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a quorum was present and acting throughout, and the City Documents are now in full force and
effect and have not been amended; and (v) the City has duly authorized, executed and delivered
the City Documents and has duly authorized the preparation and delivery of the Official
Statement;
(6) An opinion of Jones Hall, A Professional Law Corporation, as Disclosure
Counsel, dated the Closing Date and addressed to the Authority, the City and Underwriter, to the
effect that nothing has come to such counsel’s attention that would lead them to believe that the
Official Statement, as of its date and as of the Closing Date (but excluding therefrom the
appendices thereto, financial statements and statistical data, and information regarding The
Depository Trust Company and its book-entry system, as to which no opinion need be
expressed), contains an untrue statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances under which they were
made, not misleading;
(7) An opinion of Rossi A. Russell, Esq., counsel to the Underwriter, dated
the Closing Date and addressed to the Underwriter, to the effect that (i) the Bonds are exempt
from the registration requirements of the Securities Act of 1933, as amended, and the Indenture
is exempt from qualification under the Trust Indenture Act of 1939, as amended; and (ii) without
having undertaken to determine independently the accuracy or completeness of the statements
contained in the Official Statement, but on the basis of his participation in conferences with
representatives of the Authority, the City, Bond Counsel, Disclosure Counsel, representatives of
the Underwriter, and others, and his examination of certain documents, nothing has come to his
attention that has led him to believe that the Official Statement as of its date and as of the
Closing Date contained any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (except that no opinion or belief
need to be expressed as to any information relating to The Depository Trust Company, or any
information relating to CUSIP numbers, or with respect to any financial or statistical data or
forecasts or estimates or assumptions or any expressions of opinion or appraised or assessed
valuations);
(8) A certificate of the [Director] of the Authority, or such other authorized
official of the Authority as is acceptable to the Underwriter, dated the Closing Date, to the effect
that:
(A) the representations and warranties made by the Authority herein
are true and correct as of the Closing Date with the same effect as if made on the Closing Date;
and
(B) no event affecting the Authority has occurred since the date of the
Official Statement that either (i) makes untrue or incorrect in any material respect as of the
Closing Date any statement or information contained in the Official Statement concerning the
Authority, or (ii) is not reflected in the Official Statement but should be reflected therein in order
to make the statements and information therein concerning the Authority not misleading in any
material respect;
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(9) A certificate of the City Manager, or such other authorized official of the
City as is acceptable to the Underwriter, dated the Closing Date, to the effect that:
(A) the representations and warranties made by the City herein are true
and correct as of the Closing Date with the same effect as if made on the Closing Date; and
(B) no event affecting the City has occurred since the date of the
Official Statement that either (i) makes untrue or incorrect in any material respect as of the
Closing Date any statement or information contained in the Official Statement concerning the
City, or (ii) is not reflected in the Official Statement but should be reflected therein in order to
make the statements and information therein concerning the City not misleading in any material
respect;
(10) A certified copy of the Authority Resolution and the City Resolution;
(11) A certificate of the Authority and the City pursuant to Rule 15c2-12,
relating to the Preliminary Official Statement, in form and substance satisfactory to the
Underwriter;
(12) A certificate of the Trustee and an opinion of counsel to the Trustee, each
dated the Closing Date and addressed to the Authority, the City and the Underwriter, to the effect
that the Trustee has authorized the execution and delivery of the Indenture and that the Indenture
is a valid and binding obligation of the Trustee enforceable in accordance with its terms;
(13) An Internal Revenue Service Form 8038, executed by the Authority;
(14) Satisfactory evidence that the Bonds have been rated “___” by S&P; and
(15) Such additional legal opinions, certificates, proceedings, instruments and
other documents as the Underwriter or Bond Counsel may reasonably request to evidence
compliance by the Authority with legal requirements, the truth and accuracy, as of the Closing
Date, of the representations of the Authority contained herein, and the due performance or
satisfaction by the Authority at or prior to such time of all agreements then to be performed and
all conditions then to be satisfied by the Authority.
5. Conditions to the Obligations of the Authority.
The obligations of the Authority to issue and deliver the Bonds on the Closing
Date shall be subject, at the option of the Authority, to the performance by the Underwriter of its
obligations to be performed hereunder at or prior to the Closing Date and to the following
additional conditions:
(a) The Indenture, the Lease, the Site Lease, and this Purchase Contract, respectively,
shall have been executed by the other parties thereto;
(b) No order, decree, injunction, ruling or regulation of any court, regulatory agency,
public board or body shall have been issued, nor shall any legislation have been enacted, with the
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purpose or effect, directly or indirectly, of prohibiting the offering, sale or issuance of the Bonds
as contemplated hereby or by the Official Statement; and
(c) The documents contemplated by Section 4(d), the forms of which are set forth
herein, shall have been delivered substantially in the forms set forth herein.
6. Expenses.
All reasonable expenses, fees and costs of the Authority and the City incident to
the performance of their obligations in connection with the authorization, issuance and sale of
the Bonds to the Underwriter, including printing costs of outside printing companies incurred in
connection with printing the Bonds and preparing the Official Statement, fees and expenses of
consultants, fees and expenses of counsel for the Authority and the City, if any, fees and
expenses of the Trustee and of the Trustee’s counsel (if any), fees of DTC, fees and expenses of
rating agencies, insurance policy premiums, if any, any out-of-pocket disbursements of the
Authority and the City, and fees and expenses of Bond Counsel and Underwriter’s counsel shall
be paid by the Authority and/or the City. All fees and expenses to be paid by the Authority
and/or the City pursuant to this Purchase Contract may be paid from Bond proceeds to the extent
permitted under federal tax law. All expenses of selling the Bonds, and all out-of- pocket
expenses of the Underwriter, including travel and other expenses, CUSIP Service Bureau
charges, California Debt and Investment Advisory Commission fees, and blue sky fees, if any,
shall be paid by the Underwriter.
7. Termination.
This Purchase Contract may be terminated by the Underwriter if any of the
conditions specified in Section 4 hereof shall not have been fulfilled by the Closing, upon written
notice of such termination to the Authority. This Purchase Contract may be terminated by the
Authority if any of the conditions specified in Section 5 hereof shall not have been fulfilled by
the Closing, upon written notice of such termination to the Underwriter.
Any notice of termination pursuant to this Section 6 shall be given in the manner
provided in Section 9 hereof. If this Purchase Contract shall be terminated as provided in the
first paragraph of this Section 7, such termination shall be without liability of the Authority or
the Underwriter, except as to the expenses in Section 5 above.
8. Indemnification.
(a) To the extent permitted by law, the City agrees to indemnify and hold harmless
the Underwriter and each person, if any, who controls (as such term is defined in Section 15 of
the Securities Act) the Underwriter and the members, past, present and future directors, officers,
agents and employees of the Underwriter (collectively, the “Indemnified Persons,”) from and
against any and all judgments, losses, claims, damages or liabilities, joint or several, to which
any Indemnified Person may become subject insofar as such judgments, losses, claims, damages
or liabilities (or actions in respect thereof) arise out of, or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the Official Statement, or that arise out of
or are based upon the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading with respect to the
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information contained therein (except for the information set forth under the caption
“UNDERWRITING”).
(b) Promptly after receipt by an Indemnified Person of notice of the assertion of any
claim or the commencement of any action, such Indemnified Person shall, if a claim in respect
thereof is to be made against the City, notify the City in writing of the assertion or
commencement thereof. In case any such action shall be brought against any Indemnified
Person, and such Indemnified Person shall notify the City of the commencement thereof, the City
shall be entitled to participate in and, to the extent that either wishes, to assume the defense
thereof, with counsel reasonably satisfactory to such Indemnified Person, and after notice from
the City to such Indemnified Person of its election so to assume the defense thereof, the City
shall not be liable to such Indemnified Person for any legal or other expenses subsequently
incurred by such Indemnified Person in connection with the defense thereof; provided, however,
that if the named parties to any such action (including any impleaded parties) include the
Indemnified Person and the City, and the Indemnified Person reasonably concludes that there
may be one or more legal defenses available to it which are different from or additional to those
available to the City, then the Indemnified Persons shall have the right to select separate counsel
to assume such legal defense and to otherwise participate in the defense of such action on behalf
of itself.
(c) In order to provide for just and equitable contribution in circumstances in which
the indemnification under paragraph (a) is for any reason held to be unavailable from the City, to
the extent permitted by law, the City and the Underwriter shall contribute to the aggregate losses,
claims, damages and liabilities (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or proceeding or any
claims asserted, to which the City and the Underwriter may be subject), in such proportion that
the Underwriter is jointly responsible for that portion represented by the percentage that the
underwriting discount set forth in the Official Statement bears to the public offering price
appearing thereon and the City is responsible for the balance; provided, however, that no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this paragraph, each officer, agent and employee of the
Underwriter and each person, if any, who controls the respective Underwriter within the meaning
of the Securities Act shall have the same rights to contribution as that of the Underwriter. Any
party entitled to contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for contribution may be
made against another party or parties under this paragraph, notify such party or parties from
whom contribution may be sought, but the omission so to notify shall not relieve the party or
parties from whom contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this paragraph. No party shall be liable for contribution with
respect to any action or claim settled without its consent.
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9. Notices.
Any notice or other communication to be given to the Authority or the City under
this Purchase Contract may be given by delivering the same in writing at the address of the
Authority or the City set forth above; any notice or other communication to be given to the
Underwriter may be given by delivering the same to Hilltop Securities, Inc., 50 California Street,
Suite 2650, San Francisco, California 94111.
10. Governing Law.
The laws of the State of California govern all matters arising out of or relating to
this Purchase Contract, including, without limitation, its validity, interpretation, construction,
performance, and enforcement.
11. Arms-Length Transaction.
The City and the Underwriter acknowledge and agree that (i) the purchase and
sale of the Bonds pursuant to this Purchase Contract is an arm’s-length, commercial transaction
between the City and the Underwriter in which the Underwriter is acting solely as a principal and
is not acting as an agent, advisor or fiduciary of the City, (ii) the Underwriter has not assumed
any advisory or fiduciary responsibility to the City with respect to this Purchase Contract, the
offering of the Bonds and the discussions, undertakings and procedures leading thereto
(irrespective of whether the Underwriter, or any affiliate of the Underwriter, has provided other
services or is currently providing other services to the City on other matters), (iii) the only
contractual obligations the Underwriter has to the City with respect to the transactions
contemplated hereby are those set forth in this Purchase Contract, (iv) the Underwriter has
financial and other interests that differ from those of the City, and (v) the City has consulted with
its own legal, accounting, tax, financial and other advisors, as applicable, to the extent they have
deemed appropriate. Nothing in the foregoing paragraph is intended to limit the Underwriter’s
obligations of fair dealing under MSRB Rule G-17.
12. Miscellaneous.
This Purchase Contract is made solely for the benefit of the Authority, the City,
and the Underwriter, and no other person shall acquire or have any right hereunder or by virtue
hereof except as expressly provided herein. All representations, warranties and agreements of
the Authority and the City in this Purchase Contract shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Underwriter and shall survive
the delivery of and payment for the Bonds. This Purchase Contract may be executed in several
counterparts, each of which shall be regarded as an original and all of which shall constitute one
and the same agreement.
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If the foregoing is in accordance with your understanding of our agreement, please
sign and return to the Underwriter the enclosed duplicate hereof whereupon it will become a
binding agreement among the Authority, the City, and the Underwriter.
HILLTOP SECURITIES, INC.
as Underwriter
By: __________________________
Authorized Officer
Accepted and Agreed to:
DUBLIN FINANCING AUTHORITY
By: ____________________________
[Director]
CITY OF DUBLIN
By: ____________________________
Authorized Officer
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A-1
ATTACHMENT 4
EXHIBIT A
Maturity Schedule
$___________
Dublin Financing Authority 2021
Lease Revenue Bonds
(Capital Projects)
MATURITY DATES, PRINCIPAL AMOUNTS, INTEREST RATES
AND YIELDS FOR THE BONDS
Serial Bonds
Maturity
(Jun1 1)
Principal
Amount
Interest
Rate
Yield
2022 $ % %
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
$________ ___% Term Bond due June 1, 20__ to Yield ____%*
* Yield to June 1, 20__ par call.
185
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ATTACHMENT 4
REDEMPTION PROVISIONS FOR THE BONDS
(a) Optional Redemption. The Bonds maturing on or before June 1, _____,
are not subject to redemption prior to their respective stated maturities. The Bonds maturing on
or after June 1, 20__, are subject to redemption in whole, or in part at the election of the
Authority among maturities on such basis as shall be designated by the Authority and by lot
within a maturity, at the option of the Authority, on any date on or after June 1, 20__, from
any available source of funds, at a redemption price equal to the principal thereof to be redeemed
together with accrued interest thereon to the redemption date, without premium.
(b) Mandatory Sinking Fund Redemption. The Bonds maturing June 1,
20__are subject to mandatory redemption in part by lot, at a redemption price equal to 100% of
the principal amount thereof to be redeemed, without premium, in the aggregate respective
principal amounts and on June 1 in the respective years as set forth in the following table;
provided, however, that if some but not all of the Bonds have been optionally redeemed, the total
amount of all future sinking fund payments shall be reduced by the aggregate principal amount
of the Bonds so redeemed, to be allocated among such sinking fund payments in integral
multiples of $5,000 as determined by the Authority (as set forth in a schedule provided by the
Authority to the Trustee).
Term Bonds Maturing July 1, 2047
Sinking Fund
Redemption Date Principal Amount
(June 1) To Be Redeemed
$
(Maturity)
(c) Extraordinary Mandatory Redemption. The Bonds are subject to
mandatory redemption prior to maturity in whole or in part, among maturities as determined by
the Authority, on any date, at a redemption price equal to 100% of the principal amount thereof
to be redeemed (plus accrued but unpaid interest to the redemption date), without premium, from
Net Proceeds received from amounts deposited in the Insurance and Condemnation Fund under
the Indenture, and any other funds available under the Indenture for purposes of that fund.
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ATTACHMENT 4
Schedule 1
Initial Offering Prices
Maturity (June 1) Par Value Price Coupon Yield
2022 $ % % %
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
* The ten percent test has not been satisfied for this maturity and the “hold-the-offering-price rule” is
in effect with respect thereto.
** Yield to June 1, 20__ par call.
.
187
Jones Hall Draft of September 3, 2021
PRELIMINARY OFFICIAL STATEMENT DATED SEPTEMBER __, 2021
NEW ISSUE - FULL BOOK-ENTRY RATING: S&P: “___”
See “RATING”
In the opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, subject, however to certain
qualifications described herein, under existing law, the interest on the Bonds is excluded from gross income for federal income tax
purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax. In the further opinion of
Bond Counsel, such interest is exempt from California personal income taxes. See “TAX MATTERS.”
$________*
DUBLIN FINANCING AUTHORITY
2021 Lease Revenue Bonds
(Capital Projects)
Dated: Date of Delivery Due: June 1, as shown on inside cover
Authority for Issuance. The bonds captioned above (the “Bonds”) are being issued by the Dublin Financing Authority, a joint
exercise of powers agency existing under the laws of the State of California (the “Authority”), pursuant to a resolution adopted by the
Board of Directors of the Authority on September 21, 2021, and an Indenture of Trust dated as of October 1, 2021 (the “Indenture”) by
and between the Authority and U.S. Bank National Association, as trustee (the “Trustee”). See “THE BONDS – Authority for Issuance.”
Use of Proceeds. The Bonds are being issued to (i) finance energy efficiency improvement projects being undertaken by the City of
Dublin, California (the “City”), and (ii) pay the costs of issuing the Bonds. See “FINANCING PLAN.”
Security for the Bonds. Under the Indenture, the Bonds are payable from and secured by a first pledge of and lien on “Revenues”
(as defined in this Official Statement) received by the Authority under the Lease Agreement dated as of October 1, 2021, by and between
the Authority, as lessor, and the City, as lessee (the “Lease”), consisting primarily of semi-annual lease payments (the “Lease Payments”)
made by the City under the Lease with respect to the lease of certain real property, as further described in this Official Statement. The
Bonds are also secured by certain funds on deposit under the Indenture. See “SECURITY FOR THE BONDS.”
No Reserve Fund. Neither the Authority nor the City will fund a reserve fund for the Bonds.
Bond Terms; Book-Entry Only. The Bonds will bear interest at the rates shown on the inside cover page, payable semiannually on
June 1 and December 1 of each year, commencing on June 1, 2022, and will be issued in fully registered form without coupons in the
denomination of $5,000 or any integral multiple of $5,000. The Bonds will be issued in book-entry only form, initially registered in the
name of Cede & Co., as nominee of The Depository Trust Company (“DTC”). Purchasers of the Bonds will not receive certificates
representing their interests in the Bonds. Payments of the principal of, premium, if any, and interest on the Bonds will be made to DTC,
which is obligated in turn to remit such principal, premium, if any, and interest to its DTC Participants for subsequent disbursement to the
beneficial owners of the Bonds. See “THE BONDS – General Provisions.”
Redemption. The Bonds are subject to redemption prior to maturity. See “THE BONDS – Redemption.”
NEITHER THE BONDS, NOR THE OBLIGATION OF THE AUTHORITY TO PAY PRINCIPAL OF OR INTEREST THEREON, NOR
THE OBLIGATION OF THE CITY TO MAKE THE LEASE PAYMENTS, CONSTITUTE A DEBT OR A LIABILITY OF THE AUTHORITY,
THE CITY, THE STATE OF CALIFORNIA OR ANY OF ITS POLITICAL SUBDIVISIONS WITHIN THE MEANING OF ANY
CONSTITUTIONAL LIMITATION ON INDEBTEDNESS, OR A PLEDGE OF THE FULL FAITH AN D CREDIT OF THE CITY. THE
BONDS ARE SECURED SOLELY BY THE PLEDGE OF REVENUES AND CERTAIN FUNDS HELD UNDER THE INDENTURE. THE
BONDS ARE NOT SECURED BY A PLEDGE OF THE TAXIN G POWER OF THE CITY.
MATURITY SCHEDULE
(see inside cover)
THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR GENERAL REFERENCE ONLY. IT IS NOT A SUMMARY OF
THIS ISSUE OF BONDS. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL
TO THE MAKING OF AN INFORMED INVESTMENT DECISION WITH RESPECT TO THE PURCHASE OF THE BONDS.
The Bonds are offered when, as and if issued and received by the Underwriter and subject to the approval as to their legality by
Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel. Certain legal matters will also be passed upon for
the Authority and the City by Jones Hall, A Professional Law Corporation, as Disclosure Counsel. Certain legal matters will be passed
upon for the City by the City Attorney. Certain legal matters will be passed upon for the Underwriter by its counsel, Rossi A. Russell,
Esq., Los Angeles, California. It is anticipated that the Bonds will be delivered in book-entry form through the facilities of DTC on or about
October __, 2021.
[Hilltop logo]
The date of this Official Statement is: ______, 2021.
*Preliminary; subject to change.This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted prior to the time the Official Statement is delivered in final form. Under no circumstances will this Preliminary Official Statement constitute an offer to sell or a solicitation of an offer to buy nor will there be any sale of these securities in any jurisdiction in which such offer solicitation or sale would be unlawful.ATTACHMENT 5
188
MATURITY SCHEDULE
$_________ Serial Bonds
(Base CUSIP†: ______)
Maturity Principal Interest
(June 1) Amount Rate Yield Price CUSIP†
$___________ ____% Term Bonds due June 1, 20___; Price: _____%; Yield: ______;
CUSIP†: _______
† Copyright American Bankers Association. CUSIP data herein are provided by Standard & Poor’s CUSIP Service Bureau, a
division of The McGraw-Hill Companies, Inc., and are provided for convenience of reference only. Neither the City, the Authority nor
the Underwriter assumes any responsibility for the accuracy of these CUSIP data.
* Preliminary; subject to change.
ATTACHMENT 8
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DUBLIN FINANCING AUTHORITY
CITY OF DUBLIN
(ALAMEDA COUNTY, CALIFORNIA)
Board of Directors of the Authority/
City Council of the City
Melissa Hernandez, Chair/Mayor
Shawn Kumagai, Vice-Chair/Vice-Mayor
Jean Josey, Boardmember/Councilmember
Sherry Hu, Boardmember/Councilmember
Michael McCorriston, Boardmember/Councilmember
Authority/City Officials
Linda Smith, City Manager
Colleen Tribby, Assistant City Manager
Lisa Hisatomi, Administrative Services Director/Finance Director
Marsha Moore, MMC, City Clerk
______________________________________
SPECIAL SERVICES
Bond Counsel and Disclosure Counsel
Jones Hall, A Professional Law Corporation
San Francisco, California
Municipal Advisor
Fieldman, Rolapp & Associates, Inc.
San Francisco, California
Trustee
U.S. Bank National Association
San Francisco, California
ATTACHMENT 8
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GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT
Use of Official Statement. This Official Statement is submitted in connection with the sale of the Bonds referred to
herein and may not be reproduced or used, in whole or in part, for any other purpose. This Official Statement is not
to be construed as a contract with the purchasers of the Bonds.
Estimates and Forecasts. When used in this Official Statement and in any continuing disclosure by the City, in any
press release and in any oral statement made with the approval of an authorized officer of the City, the words or
phrases “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “forecast,” “expect,”
“intend” and similar expressions identify “forward looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties that could cause actual results
to differ materially from those contemplated in such forward-looking statements. Any forecast is subject to such
uncertainties. Inevitably, some assumptions used to develop the forecasts will not be realized and unanticipated
events and circumstances may occur. Therefore, there are likely to be differences between forecasts and actual
results, and those differences may be material. The information and expressions of opinion herein are subject to
change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under
any circumstances, give rise to any implication that there has been no change in the affairs of the City since the date
hereof.
Limit of Offering. No dealer, broker, salesperson or other person has been authorized by the City or the Underwriter
to give any information or to make any representations other than those contained herein and, if given or made, such
other information or representation must not be relied upon as having been authorized by any of the foregoing. This
Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of
the Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or
sale.
Limited Scope of Information. The City has obtained certain information set forth herein from sources which are
believed to be reliable, but such information is neither guaranteed as to accuracy or completeness, nor to be
construed as a representation of such by the City. The information and expressions of opinions herein are subject to
change without notice and neither delivery of this Official Statement nor any sale made hereunder shall, under any
circumstances, create any implication that there has been no change in the affairs of the City since the date hereof.
All summaries of or references to the documents referred to in this Official Statement are made subject to the
provisions of such documents and do not purport to be complete statements of any or all of such provisions. All
capitalized terms used herein, unless noted otherwise, have the meanings given in the Indenture.
The Underwriter has provided the following sentence for inclusion in this Official Statement: The Underwriter has
reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors
under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter
does not guarantee the accuracy or completeness of such information.
Stabilization of Prices. In connection with this offering, the Underwriter may overallot or effect transactions which
stabilize or maintain the market price of the Bonds at a level above that which might otherwise prevail in the open
market. Such stabilizing, if commenced, may be discontinued at any time. The Underwriter may offer and sell the
Bonds to certain dealers and others at prices lower than the public offering prices set forth on the cover page hereof
and said public offering prices may be changed from time to time by the Underwriter.
THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN
RELIANCE UPON AN EXCEPTION FROM THE REGISTRATION REQUIREMENTS CONTAINED IN SUCH ACT.
THE BONDS HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE.
ATTACHMENT 8
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i
TABLE OF CONTENTS
INTRODUCTION .............................................. 1
FINANCING PLAN ........................................... 3
The Project ................................................... 3
Estimated Sources and Uses ........................ 3
THE LEASED PROPERTY ............................... 4
Leased Property ........................................... 4
Substitution and Release .............................. 4
DEBT SERVICE SCHEDULE ........................... 6
THE BONDS .................................................... 7
Authority for Issuance ................................... 7
General Provisions ....................................... 7
Transfer, Registration and Exchange ............ 8
Redemption .................................................. 9
Book-Entry Only System ............................. 10
SECURITY FOR THE BONDS ....................... 11
Revenues; Pledge of Revenues .................. 11
Assignment to Trustee ................................ 11
Allocation of Funds by Trustee .................... 12
Lease Payments ......................................... 12
Limited Obligation ....................................... 14
Additional Bonds ........................................ 14
Source of Lease Payments; Covenant to
Budget and Appropriate .......................... 14
Abatement .................................................. 15
Property Insurance ..................................... 15
THE AUTHORITY .......................................... 17
THE CITY ...................................................... 18
General ...................................................... 18
City Government ........................................ 18
CITY FINANCIAL INFORMATION .................. 19
Budgetary Process and Administration ....... 19
Fiscal Policies............................................. 19
City Budgets for Fiscal Years 2020-21 and
2021-22 .................................................. 20
Financial Statements .................................. 22
Revenues Available for Lease Payments .... 25
Property Taxes ........................................... 25
Sales & Use Taxes ..................................... 30
Other Sources of General Fund Revenues.. 32
Direct and Overlapping Debt ....................... 33
Long-Term Obligations Payable Out of
General Fund ......................................... 34
Investment Policy and Portfolio .................. 34
Employee Relations ................................... 34
Pension Plans ............................................ 34
Other Post-Employment Benefits (OPEB)... 37
Risk Management ...................................... 38
CONSTITUTIONAL AND STATUTORY
LIMITATIONS ON TAXES AND
APPROPRIATIONS ................................... 39
Article XIIIA of the State Constitution .......... 39
Article XIIIB of the State Constitution .......... 40
Articles XIIIC and XIIID of the State
Constitution ............................................ 40
Proposition 1A; Proposition 22 ................... 41
Unitary Property ......................................... 42
Possible Future Initiatives .......................... 42
BOND OWNERS’ RISKS ............................... 42
No Pledge of Taxes.................................... 43
Additional Obligations of the City ................ 43
No Reserve Fund ....................................... 44
Default ....................................................... 44
Abatement ................................................. 44
Property Taxes........................................... 45
Sales Taxes ............................................... 46
Natural Calamities ...................................... 46
COVID-19 Pandemic .................................. 47
Cyber Security ........................................... 47
Limitations on Remedies Available to Bond
Owners .................................................. 48
Loss of Tax-Exemption............................... 48
Secondary Market for Bonds ...................... 48
TAX MATTERS ............................................. 49
CERTAIN LEGAL MATTERS ......................... 50
LITIGATION................................................... 50
RATING ......................................................... 51
CONTINUING DISCLOSURE ........................ 51
MUNICIPAL ADVISOR .................................. 51
UNDERWRITING .......................................... 52
PROFESSIONAL SERVICES ........................ 52
EXECUTION.................................................. 52
APPENDIX A: AUDITED FINANCIAL STATEMENTS OF THE CITY FOR THE FISCAL YEAR ENDED JUNE
30, 2020
APPENDIX B: GENERAL INFORMATION ABOUT THE CITY OF DUBLIN AND THE COUNTY OF ALAMEDA
APPENDIX C: SUMMARY OF PRINCIPAL LEGAL DOCUMENTS
APPENDIX D: FORM OF CONTINUING DISCLOSURE CERTIFICATE
APPENDIX E: FORM OF OPINION OF BOND COUNSEL
APPENDIX F: DTC AND THE BOOK-ENTRY ONLY SYSTEM
ATTACHMENT 8
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[Insert Regional Location Map]
ATTACHMENT 8
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__________________________________
OFFICIAL STATEMENT
__________________________________
$________*
DUBLIN FINANCING AUTHORITY
2021 Lease Revenue Bonds
(Capital Projects)
INTRODUCTION
This introduction is not a summary of this Official Statement. It is only a brief description
of and guide to, and is qualified by, more complete and detailed information contained in the
entire Official Statement, including the cover page and appendices hereto, and the documents
summarized or described herein. A full review should be made of the entire Official Statement.
The offering of the Bonds to potential investors is made only by means of the entire Official
Statement.
Capitalized terms used but not defined in this Official Statement have the meanings set
forth in the Indenture (as defined below). See “APPENDIX C – SUMMARY OF PRINCIPAL
LEGAL DOCUMENTS.”
Authority for Issuance. The Dublin Financing Authority (the “Authority”) is issuing the
bonds captioned above (the “Bonds”) under the Marks-Roos Local Bond Pooling Act of 1985,
constituting Article 4 (commencing with Section 6584) of Chapter 5, Division 7, Title 1 of the
California Government Code (the “Law”), a resolution adopted by the Board of Directors (the
“Board”) of the Authority on September 21, 2021 (the “Authority Resolution”), a resolution
adopted by the City Council (the “City Council”) of the City of Dublin (the “City”) on September
21, 2021 (the “City Resolution”), and an Indenture of Trust (the “Indenture”) dated as of
October 1, 2021, by and between the Authority and U.S. Bank National Association, as trustee
(the “Trustee”).
The Authority and the City. The Authority is a joint exercise of powers authority
established by the City and the California Statewide Communities Development Authority
pursuant to a Joint Exercise of Powers Agreement, dated as of September 1, 2021, for the
purpose, among others, of having the Authority issue its bonds to finance the acquisition,
construction and improvement of certain public capital improvements. The City was
incorporated in 1982 as a general law city located in the County of Alameda (the “County”), and
had an estimated population according to the State Department of Finance as of January 1,
2021 of 64,695. For additional background, and certain demographic and economic information
regarding the City and the County, see APPENDIX B.
* Preliminary; subject to change.
ATTACHMENT 8
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Bond Terms; Book-Entry Only. The Bonds will bear interest at the rates shown on the
inside cover page, payable semiannually on June 1 and December 1 of each year, commencing
on June 1, 2022. The Bond s will be issued in fully registered form, registered in the name of
The Depository Trust Company (“DTC”), or its nominee, which will act as securities depository
for the Bonds. Purchasers of the Bond s will not receive certificates representing the Bond s that
are purchased. See “THE BONDS – Book-Entry Only System” and “APPENDIX F – DTC AND
THE BOOK-ENTRY ONLY SYSTEM.”
Purpose of the Bonds. The Bond s are being issued to (i) finance energy efficiency
improvement projects being undertaken by the City, and (ii) pay the costs of issuing the Bonds.
See “FINANCING PLAN.”
Security for the Bonds and Pledge of Revenues. Under the Indenture, the Bond s are
payable from and secured by a first pledge of and lien on “Revenues” (as defined in this Official
Statement) received by the Authority under the Lease Agreement dated as of October 1, 2021,
between the Authority, as lessor, and the City, as lessee (the “Lease”), consisting primarily of
semi-annual lease payments (the “Lease Payments”) made by the City under the Lease. The
Bonds are also secured by certain funds on deposit under the Indenture. See “SECURITY FOR
THE BONDS.”
The City and the Authority will enter into a Site Lease dated as of October 1, 2021 (the
“Site Lease”), under which the City will lease certain real property to the Authority, consisting of
the City of Dublin Civic Center located at 100 Civic Plaza in the City (the “Leased Property ”),
as further described herein under the caption “THE LEASED PROPERTY,” in return for a single
initial Site Lease Payment. Concurrently, the City and the Authority will enter into the Lease,
under which the Authority will lease the Leased Property back to the City in return for semi-
annual Lease Payments. See “SECURITY FOR THE BONDS” and “THE LEASED PROPERTY”
below.
No Reserve Fund. Neither the Authority nor the City will fund a reserve fund for the
Bonds.
Redemption. The Bond s are subject to redemption prior to their stated maturity dates.
See “THE BONDS – Redemption.”
Abatement. The Lease Payments are subject to complete or partial abatement in the
event and to the extent that there is substantial interference with the City’s use and possession
of the Leased Property or any portion thereof. If the Lease Payments are abated under the
Lease, the Bond Owners would receive less than the full amount of principal of and interest on
the Bonds. To the extent proceeds of rental interruption insurance are available, Lease
Payments (or a portion thereof) may be made from those proceeds during periods of
abatement. See “SECURITY FOR THE BONDS – Abatement” and “BOND OWNERS’ RISKS.”
Risks of Investment; COVID -19 Pandemic. Debt service on the Bond s is payable only
from Lease Payments and other amounts payable by the City to the Authority under the Lease.
The Lease Payments are payable from revenues available in the City’s general fund, which
revenues may be materially adversely affected by numerous factors outside the City’s control,
including the ongoing COVID-19 pandemic and the governmental responses to the pandemic.
For a discussion of some of the risks associated with the purchase of the Bonds, see “BOND
OWNERS’ RISKS.”
ATTACHMENT 8
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NEITHER THE BONDS, THE OBLIGATION OF THE AUTHORITY TO PAY PRINCIPAL
OF OR INTEREST THEREON, NOR THE OBLIGATION OF THE CITY TO MAKE THE LEASE
PAYMENTS, CONSTITUTE A DEBT OR A LIABILITY OF THE AUTHORITY, THE CITY, THE
STATE OR ANY OF ITS POLITICAL SUBDIVISIONS WITHIN THE MEANING OF ANY
CONSTITUTIONAL LIMITATION ON INDEBTEDNESS, OR A PLEDGE OF THE FULL FAITH
AND CREDIT OF THE CITY. THE BONDS ARE SECURED SOLELY BY THE PLEDGE OF
REVENUES AND CERTAIN FUNDS HELD UNDER THE INDENTURE. THE BONDS ARE
NOT SECURED BY A PLEDGE OF THE TAXING POWER OF THE CITY.
FINANCING PLAN
The Bonds are being issued to (i) finance the Project, and (ii) pay the costs of issuing the
Bonds.
The Project
The Project consists of energy efficiency improvements being undertaken at various
City-owned facilities pursuant to a contract with Willdan Energy Solutions. The improvements
are intended to result in energy saving for the City, and generally consist of (i) mechanical
HVAC and controls upgrades, (ii) lighting & controls upgrades, and (iii) renewable, resiliency &
disaster preparedness projects. The improvements are anticipated to be installed at the Dublin
Library, Senior Center, Shannon Community Center, Fire Station 16, Fire Station 17, Fire
Station 18, Heritage Park & Museum, The Dublin Wave, and various sports parks and ballfields.
LED streetlight upgrades are also anticipated to be part of the Project.
The total cost of the Project is estimated at $21.2 million, of which $20.6 million is
expected to be funded with the net proceeds of the Bonds, and the remainder from funds
already spent by the City or available to the City to be spent on future costs as part of its Capital
Improvement Program (CIP).
Estimated Sources and Uses
The estimated sources and uses of funds relating to the Bonds are as follows:
Sources:
Principal Amount of Bonds $
Plus (Less): [Net] Original Issue Premium (Discount)
TOTAL SOURCES $
Uses:
Project Fund $
Costs of Issuance(1)
TOTAL USES $
(1) Represents funds to be used to pay Costs of Issuance, which include legal fees, municipal advisor fees, title
insurance, printing costs, rating agency fees, Underwriter’s discount and other costs of issuing the Bonds.
ATTACHMENT 8
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THE LEASED PROPERTY
Leased Property
The Leased Property consists of the Dublin Civic Center located at 100 Civic Plaza
within the City. The 53,000 square-foot building consists of two semicircular wings surrounding
an inner courtyard, fountain and 68-foot clock tower. The structure itself is a steel frame with an
Arizona sandstone exterior. The Civic Center houses the City’s administrative offices, City
Council Chambers and the Regional Meeting Room; it also serves as a place for members of
the public to gather for community events. In 2020, space in the Civic Center previously used
by the police department was transformed and renovated into a Cultural Arts Center and related
administrative offices for the Parks and Community Services Department. The current insured
value of the Civic Center, not including the land on which it sits or any personal property located
within, is approximately $25.7 million. [CONFIRM]
The City may install or permit to be installed other items of equipment or other personal
property in or upon the Leased Property. All such items will remain the sole property of the City
and may be modified or removed by the City at any time, provided that the City must repair all
damage to the Leased Property resulting from the installation, modification or removal of any
such items. In addition, the Lease provides that, subject to the conditions therein regarding
value, other real property may be substituted for the initial Leased Property under the Lease.
See “–Substitution and Release of Leased Property,” below.
Substitution and Release
Release of Leased Property. Under the Lease, the City has the option at any time and
from time to time to release any portion of the Leased Property from the Lease (the “Released
Property”) provided that the City has satisfied all of the requirements under the Lease that are
conditions precedent to such removal, which include (among others) the following: the City must
file with the Authority and the Trustee, and cause to be recorded in the office of the Alameda
County Recorder sufficient memorialization of, an amendment of the Lease, the Site Lease and
the Assignment Agreement that removes the Released Property from the Site Lease, the Lease
and the Assignment Agreement, and the City must certify in writing to the Authority and the
Trustee that the value of the property that remains subject to the Lease following such release is
at least equal to the then outstanding principal amount of the Bonds, and the fair rental value of
the property that remains subject to the Lease following such release is at least equal to the
Lease Payments thereafter coming due and payable thereunder. Upon the satisfaction of all the
conditions precedent set forth in the Lease, the term of the Lease will end as to the Released
Property. The City is not entitled to any reduction, diminution, extension or other modification of
the Lease Payments whatsoever as a result of such release.
Substitution of Lease Property. Under the Lease, the City has the option at any time
and from time to time, to substitute other real property (the “Substitute Property”) for the
Leased Property or any portion thereof (the “Former Property”), upon satisfaction of all of the
conditions set forth in the Lease, which include (among others) the following:
• The City must file with the Authority and the Trustee, and cause to be recorded in
the office of the Alameda County Recorder sufficient memorialization of, an amendment of
the Site Lease, Lease and Assignment Agreement that adds the legal description of the
Substitute Property and deletes therefrom the legal description of the Former Property.
ATTACHMENT 8
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• The City must certify in writing to the Authority and the Trustee that the Substitute
Property serves the municipal purposes of the City and constitutes property which the City is
permitted to lease under the laws of the State of California, and has been determined to be
important to the proper, efficient and economic operation of the City and to serve a proper
governmental function of the City.
• The City must file with the Authority and the Trustee a written certificate of the
City or other written evidence stating that the estimated fair rental value of the Leased
Property following the substitution will be at least equal to the aggregate principal amount of
the Bonds then outstanding, and that the useful life of the Substitute Property at least
extends to the stated termination date of the Lease.
Upon the satisfaction of all the conditions precedent contained in the Lease, the term of
the Lease will end as to the Former Property and commence as to the Substitute Property, and
all references to the Former Property will apply with full force and effect to the Substitute
Property. The City is not entitled to any reduction, diminution, extension or other modification of
the Lease Payments whatsoever as a result of any substitution of property under this provision
of the Lease.
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DEBT SERVICE SCHEDULE
The table below shows annual debt service payments on the Bonds.
Year Ending
June 1
Principal
Interest
Total
Debt Service
Total:
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THE BONDS
This section provides summaries of the Bonds and certain provisions of the Indenture.
See APPENDIX C for a more complete summary of the Indenture. Capitalized terms used but
not defined in this section have the meanings given in APPENDIX C.
Authority for Issuance
The Bonds are being issued under the Law, the Indenture, the Authority Resolution, and
the City Resolution.
General Provisions
Bond Terms. The Bonds will be dated their date of delivery and issued in fully
registered form without coupons in denominations of $5,000 or any integral multiple of $5,000.
The Bonds will mature in the amounts and on the dates, and bear interest at the annual rates,
set forth on the inside cover page of this Official Statement.
Payments of Principal and Interest. Interest on the Bonds will be payable on June 1
and December 1 in each year, beginning June 1, 2022 (each an “Interest Payment Date”).
Interest on the Bonds is payable from the Interest Payment Date next preceding the date of its
authentication unless: a Bond is authenticated on or before an Interest Payment Date and after
the close of business on the preceding Record Date, in which event it will bear interest from
such Interest Payment Date, a Bond is authenticated on or before 15 days prior to the first
Interest Payment Date, in which event interest thereon will be payable from the Closing Date, or
interest on any Bond is in default as of the date of authentication thereof, in which event interest
thereon will be payable from the date to which interest has been paid in full, payable on each
Interest Payment Date.
Interest is computed on the basis of a 360-day year composed of 12 months of 30 days
each and payable on each Interest Payment Date to the persons in whose names the
ownership of the Bond s is registered on the Registration Books at the close of business on the
immediately preceding Record Date, except as provided below. Interest on any Bond which is
not punctually paid or duly provided for on any Interest Payment Date is payable to the person
in whose name the ownership of such Bond is registered on the Registration Books at the close
of business on a special record date for the payment of such defaulted interest to be fixed by
the Trustee, notice of which is given to such Owner by first-class mail not less than 10 days
prior to such special record date.
The Trustee will pay interest on the Bonds by check of the Trustee mailed by first class
mail, postage prepaid, on each Interest Payment Date to the Owners of the Bonds at their
respective addresses shown on the Registration Books as of the close of business on the
preceding Record Date. At the written request of the Owner of Bonds in an aggregate principal
amount of at least $1,000,000, which written request is on file with the Trustee as of any Record
Date, the Trustee will pay interest on such Bonds on each succeeding Interest Payment Date by
wire transfer in immediately available funds to such account of a financial institution within the
United States of America as specified in such written request, which written request will remain
in effect until rescinded in writing by the Owner.
While the Bonds are subject to the book-entry system, the principal, interest and any
redemption premium with respect to the Bonds will be paid by the Trustee to DTC for
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subsequent disbursement to beneficial owners of the Bonds. See “– Book-Entry Only System”
below.
Record Date. Under the Indenture, “Record Date” means, with respect to any Interest
Payment Date, the 15th calendar day of the month preceding such Interest Payment Date,
whether or not such day is a Business Day.
Transfer, Registration and Exchange
The following provisions regarding the exchange and transfer of the Bonds apply only
during any period in which the Bonds are not subject to DTC’s book-entry system. While the
Bonds are subject to DTC’s book-entry system, their exchange and transfer will be effected
through DTC and the Participants and will be subject to the procedures, rules and requirements
established by DTC. See “APPENDIX F – DTC AND THE BOOK-ENTRY ONLY SYSTEM.”
Bond Register. The Trustee will keep or cause to be kept, at the Office of the Trustee,
sufficient records for the registration and transfer of ownership of the Bond s, which will upon
reasonable notice as agreed to by the Trustee, be open to inspection during regular business
hours by the Authority; and, upon presentation for such purpose, the Trustee will, under such
reasonable regulations as it may prescribe, register or transfer or cause to be registered or
transferred, on such records, the ownership of the Bonds as provided in the Indenture.
Transfer and Exchange. Any Bond may, in accordance with its terms, be transferred,
upon the Registration Books, by the person in whose name it is registered, in person or by a
duly authorized attorney of such person, upon surrender of such Bond to the Trustee at its
Office for cancellation, accompanied by delivery of a written instrument of transfer in a form
acceptable to the Trustee, duly executed. The Trustee will require the Owner requesting such
transfer to pay any tax or other governmental charge required to be paid with respect to such
transfer.
Whenever any Bond is or Bonds are surrendered for transfer, the Authority will execute
and the Trustee will authenticate and deliver to the transferee a new Bond or Bond s of like
series, interest rate, maturity and aggregate principal amount. The Authority will pay the cost of
printing Bonds and any services rendered or expenses incurred by the Trustee in connection
with any transfer of Bonds.
The Bond s may be exchanged at the Office of the Trustee for a like aggregate principal
amount of Bonds of other authorized denominations and of the same series, interest rate and
maturity. The Trustee will require the Owner requesting such exchange to pay any tax or other
governmental charge required to be paid with respect to such exchange. The Authority will pay
the cost of printing Bonds and any services rendered or expenses incurred by the Trustee in
connection with any exchange of Bonds.
The Trustee may refuse to transfer or exchange, under the provisions of the Indenture
described above, any Bond s selected by the Trustee for redemption under the Indenture, or any
Bonds during the period established by the Trustee for the selection of Bond s for redemption.
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Redemption*
Optional Redemption. The Bonds maturing on or before June 1, 2029 are not subject
to redemption prior to their respective stated maturities. The Bonds maturing on or after June 1,
2030 are subject to redemption in whole, or in part at the at the election of the Authority among
maturities on such basis as designated by the Authority and by lot within a maturity, at the
option of the Authority, on any date on or after June 1, 2029, from any available source of funds,
at a redemption price equal to 100% of the principal amount thereof to be redeemed together
with accrued interest thereon to the redemption date, without premium.
Mandatory Sinking Fund Redemption. The Bonds maturing June 1, 20__ (the “Term
Bonds”) are subject to mandatory redemption in part by lot, at a redemption price equal to
100% of the principal amount thereof to be redeemed, without premium, in the aggregate
respective principal amounts and on June 1 in the respective years as set forth in the following
table; provided, however, that if some but not all of the Term Bonds have been optionally
redeemed, the total amount of all future sinking fund payments shall be reduced by the
aggregate principal amount of the Term Bonds so redeemed, to be allocated among such
sinking fund payments in integral multiples of $5,000 as determined by the Authority (as set
forth in a schedule provided by the Authority to the Trustee).
Term Bonds Maturing June 1, 20__
Sinking Fund
Redemption Date
(June 1)
Principal Amount
To Be Redeemed
Extraordinary Mandatory Redemption. The Bonds are subject to mandatory
redemption prior to maturity in whole or in part, among maturities as determined by the
Authority, on any date, at a redemption price equal to 100% of the principal amount thereof to
be redeemed (plus accrued but unpaid interest to the redemption date), without premium, from
Net Proceeds received under from amounts deposited in the Insurance and Condemnation
Fund under the Indenture, and any other funds available under the Indenture for purposes of
that fund.
Selection of Bonds for Redemption. Whenever provision is made in the Indenture for
the redemption of less than all of the Bonds of a single maturity, the Trustee will select the
Bonds of that maturity to be redeemed by lot in any manner which the Trustee in its sole
discretion deems appropriate. For purposes of such selection, the Trustee will treat each Bond
as consisting of separate $5,000 portions and each such portion will be subject to redemption
as if such portion were a separate Bond.
Notice of Redemption. The Trustee will give notice of redemption of the Bond s by first
class mail, postage prepaid, not less than 20 nor more than 60 days before any redemption
* Preliminary; subject to change.
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date, to the respective Owners of any Bonds designated for redemption at their addresses
appearing on the Registration Books and to one or more Securities Depositories and to the
Municipal Securities Rulemaking Board.
Neither the failure to receive any notice nor any defect therein will affect the sufficiency
of the proceedings for such redemption or the cessation of accrual of interest from and after the
redemption date. Notice of redemption of Bonds will be given by the Trustee, at the expense of
the Authority, for and on behalf of the Authority.
However, while the Bond s are subject to DTC’s book-entry system, the Trustee will be
required to give notice of redemption only to DTC as provided in the letter of representations
executed by the Authority and received and accepted by DTC. DTC and the Participants will
have sole responsibility for providing any such notice of redemption to the beneficial owners of
the Bond s to be redeemed. Any failure of DTC to notify any Participant, or any failure of
Participants to notify the Beneficial Owner of any Bonds to be redeemed, of a notice of
redemption or its content or effect will not affect the validity of the notice of redemption, or alter
the effect of redemption set forth in the Indenture.
Rescission of Redemption Notice. The Authority has the right to rescind any notice of
the redemption of Bonds under the Indenture by written notice to the Trustee on or prior to the
dated fixed for redemption. Any notice of redemption will be cancelled and annulled if for any
reason funds will not be or are not available on the date fixed for redemption for the payment in
full of the Bonds then called for redemption, and such cancellation will not constitute an Event of
Default. The Authority and the Trustee have no liability to the Bond Owners or any other party
related to or arising from such rescission of redemption. The Trustee will mail notice of such
rescission of redemption in the same manner as the original notice of redemption was sent
under the Indenture.
Effect of Redemption. When notice of redemption has been duly given as set forth in
the Indenture, and moneys for payment of the redemption price of, together with interest
accrued to the date fixed for redemption on, including any applicable premium, the Bonds (or
portions thereof) so called for redemption being held by the Trustee, on the redemption date
designated in such notice, the Bonds (or portions thereof) so called for redemption will become
due and payable, interest on the Bonds so called for redemption will cease to accrue, those
Bonds (or portions thereof) will cease to be entitled to any benefit or security under the
Indenture, and the Owners of those Bonds will have no rights in respect thereof except to
receive payment of the redemption price thereof.
Book-Entry Only System
The Bonds will be issued as fully registered bonds in book-entry only form, registered in
the name of Cede & Co. as nominee of DTC, and will be available to ultimate purchasers in the
denomination of $5,000 or any integral multiple of $5,000, under the book-entry system
maintained by DTC. While the Bonds are subject to the book-entry system, the principal,
interest and any redemption premium with respect to a Bond will be paid by the Trustee to DTC,
which in turn is obligated to remit such payment to its DTC Participants for subsequent
disbursement to Beneficial Owners of the Bonds. Purchasers of the Bonds will not receive
certificates representing their interests therein, which will be held at DTC.
See “APPENDIX F – DTC AND THE BOOK-ENTRY ONLY SYSTEM” for further
information regarding DTC and the book-entry system.
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SECURITY FOR THE BONDS
The principal of and interest on the Bonds are not a debt of the Authority or the City, nor
a legal or equitable pledge, charge, lien or encumbrance, upon any of their respective property,
or upon any of their income, receipts, or revenues except the Revenues and other amounts
pledged under the Indenture.
This section provides summaries of the security for the Bonds and certain provisions of
the Indenture, the Lease and the Site Lease. See “APPENDIX C – Summary of Principal Legal
Documents” for a more complete summary of the Indenture, the Lease and the Site Lease.
Capitalized terms used but not defined in this section have the meanings given in APPENDIX C.
Revenues; Pledge of Revenues
Pledge of Revenues and Other Amounts. Under the Indenture, subject only to the
provisions of the Indenture permitting the application thereof for the purposes and on the terms
and conditions set forth therein, all of the Revenues and all amounts (including proceeds of the
sale of the Bonds) held in any fund or account established under the Indenture are pledged to
secure the payment of the principal of and interest and premium (if any) on the Bonds in
accordance with their terms and the provisions of the Indenture. This pledge constitutes a lien
on and security interest in the Revenues and such amounts and will attach, be perfected and be
valid and binding from and after the Closing Date, without the need for any physical delivery
thereof or further act.
Definition of Revenues. “Revenues” are defined in the Indenture as follows:
(a) all amounts received by the Authority or the Trustee under or with respect
to the Lease, including, without limiting the generality of the foregoing, all of the Lease
Payments (including both timely and delinquent payments, any late charges, and
whether paid from any source), but excluding (i) any amounts the City is obligated to pay
under the Lease as additional amounts of rental for the use and occupancy of the
Leased Property if such additional amounts of rental are pledged or assigned for the
payment of any bonds (other than the Bonds or Additional Bonds), notes, leases or other
obligations, and (ii) any Additional Rental Payments (described below); and
(b) all interest, profits or other income derived from the investment of
amounts in any fund or account established under the Indenture.
Assignment to Trustee
Under the Assignment Agreement, the Authority will transfer to the Trustee all of the
rights of the Authority in the Lease (other than the rights of the Authority under the provisions of
the Lease regarding Additional Rental Payments, repayment of advances, indemnification, and
the payment of attorneys’ fees). The Trustee is entitled to collect and receive all of the
Revenues, and any Revenues collected or received by the Authority will be deemed to be held,
and to have been collected or received, by the Authority as the agent of the Trustee and will
immediately be paid by the Authority to the Trustee. The Trustee is also entitled to and will,
subject to the provisions of the Indenture regarding duties of the Trustee, take all steps, actions
and proceedings which the Trustee determines to be reasonably necessary in its judgment to
enforce, either jointly with the Authority or separately, all of the rights of the Authority and all of
the obligations of the City under the Lease.
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Allocation of Funds by Trustee
Deposit of Revenues into Bond Fund. All Revenues shall be promptly deposited by
the Trustee upon receipt thereof in a special fund designated as the “Bond Fund” which the
Trustee shall establish, maintain and hold in trust; except that all moneys received by the
Trustee and required under the Indenture or under the Lease to be deposited in the Redemption
Fund or the Insurance and Condemnation Fund shall be promptly deposited in such funds. All
Revenues deposited with the Trustee shall be held, disbursed, allocated and applied by the
Trustee only as provided in the Indenture. Any surplus remaining in the Bond Fund, after
payment in full of (i) the principal of and interest on the Bonds or provision therefore under the
Indenture, and (ii) any applicable fees and expenses to the Trustee, shall be withdrawn by the
Trustee and remitted to the City.
Transfers from the Bond Fund. On or before each Interest Payment Date, the Trustee
will transfer from the Bond Fund and deposit into the following respective accounts (each of
which the Trustee will establish and maintain within the Bond Fund), the following amounts in
the following order of priority:
Deposit to Interest Account. The Trustee will deposit in the Interest Account an
amount required to cause the aggregate amount on deposit in the Interest Account to be
at least equal to the amount of interest becoming due and payable on such Interest
Payment Date on all Bonds then Outstanding.
Deposit to Principal Account. The Trustee will deposit in the Principal Account
an amount required to cause the aggregate amount on deposit in the Principal Account
to equal the principal amount of the Bonds coming due and payable on such Interest
Payment Date.
Application of Accounts within Bond Fund.
Application of Interest Account. All amounts in the Interest Account will be used
and withdrawn by the Trustee solely for the purpose of paying interest on the Bonds as it
comes due and payable (including accrued interest on any Bonds purchased or
redeemed prior to maturity).
Application of Principal Account. All amounts in the Principal Account will be
used and withdrawn by the Trustee solely to pay the principal amount of the Bonds at
their respective maturity dates.
Application of Redemption Fund. The Trustee shall establish and maintain the
Redemption Fund, into which the Trustee shall deposit a portion of the Revenues received, in
accordance with a Written Request of the Authority, amounts in which shall be used and
withdrawn by the Trustee solely for the purpose of paying the principal and premium (if any) of
any Bonds to be optionally redeemed under the Indenture.
Lease Payments
Requirement to Make Lease Payments. Under the Lease, subject to the provisions of
the Lease concerning rental abatement (see – “Abatement,” below) and prepayment of Lease
Payments, the City agrees to pay to the Authority, its successors and assigns, the Lease
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Payments in the respective amounts specified in the Lease, to be due and payable in
immediately available funds on the Interest Payment Dates immediately following each of the
respective Lease Payment Dates specified in the Lease, and to be deposited by the City with
the Trustee on each of the Lease Payment Dates specified in the Lease (defined as the 5th
Business Day immediately preceding each Interest Payment Date).
Any amount held in the Bond Fund, the Interest Account and the Principal Account on
any Lease Payment Date (other than amounts resulting from the prepayment of the Lease
Payments in part but not in whole under the Lease, and amounts required for payment of past
due principal or interest on any Bonds not presented for payment) will be credited towards the
Lease Payment then required to be paid hereunder.
The City is not required to deposit any Lease Payment with the Trustee on any Lease
Payment Date if the amounts then held in the Bond Fund, the Interest Account and the Principal
Account are at least equal to the Lease Payment then required to be deposited with the Trustee.
The Lease Payments payable in any Rental Period are for the use of the Leased
Property during that Rental Period.
Rate on Overdue Lease Payments. If the City fails to make any of the payments of
Lease Payments required in the Lease, the payment in default will continue as an obligation of
the City until the amount in default has been fully paid, and the City agrees to pay the same with
interest thereon, from the date of default to the date of payment at the highest rate of interest on
any Outstanding Bond.
Fair Rental Value. The aggregate amount of the Lease Payments and Additional
Rental Payments coming due and payable during each Rental Period constitute the total rental
for the Leased Property for such Rental Period, and are payable by the City in each Rental
Period for and in consideration of the right of the use and occupancy of, and the continued quiet
use and enjoyment of the Leased Property during each Rental Period. The Authority and the
City have agreed and determined that the total Lease Payments represent the fair rental value
of the Leased Property. In making that determination, consideration has been given to the
estimated value of the Leased Property, other obligations of the City and the Authority under the
Lease, the uses and purposes which may be served by the Leased Property and the benefits
therefrom which will accrue to the City and the general public.
Additional Rental Payments. In addition to the Lease Payments, the City shall pay
when due the following amounts of Additional Rental Payments in consideration of the lease of
the Leased Property by the City from the Authority:
(a) All fees and expenses incurred by the Authority in connection with or by reason of
its leasehold estate in the Leased Property, when due;
(b) All reasonable compensation to the Trustee for all services rendered under the
Indenture and for all reasonable expenses, charges, costs, liabilities, legal fees
and other disbursements incurred in and about the performance of its powers and
duties under the Indenture;
(c) The reasonable fees and expenses of such accountants, consultants, attorneys
and other experts as may be engaged by the Authority or the Trustee to prepare
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audits, financial statements, reports, opinions or provide such other services
required under the Lease or the Indenture;
(d) Amounts coming due and payable as Excess Investment Earnings in accordance
with the Lease; and
(e) The reasonable out-of-pocket expenses of the Authority in connection with the
execution and delivery of the Lease or the Indenture, or in connection with the
issuance of the Bonds, including but not limited to any and all expenses incurred in
connection with the authorization, sale and delivery of the Bonds, or incurred by
the Authority in connection with any litigation which may at any time be instituted
involving the Lease, the Bonds, the Indenture or any of the other documents
contemplated thereby, or otherwise incurred in connection with the administration
of the Lease.
Limited Obligation
THE OBLIGATION OF THE CITY TO MAKE THE LEASE PAYMENTS DOES NOT
CONSTITUTE A DEBT OF THE CITY, THE AUTHORITY OR THE STATE OR OF ANY
POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL
OR STATUTORY DEBT LIMIT OR RESTRICTION, AND DOES NOT CONSTITUTE AN
OBLIGATION FOR WHICH THE CITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF
TAXATION OR FOR WHICH THE CITY HAS LEVIED OR PLEDGED ANY FORM OF
TAXATION.
Additional Bonds
In addition to the Bonds, the Authority may establish one or more other issues of
Additional Bonds secured and payable from the Revenues on a parity with the Bonds, and may
issue and deliver such Additional Bonds in such principal amount as shall be determined by the
Authority, but only upon compliance by the Authority with specific conditions set forth in the
Indenture, which are conditions precedent to the issuance of such Additional Bonds and include
the following:
(a) The Authority shall have entered into an amendment to the Lease, in and
by which the City obligates itself in the manner provided in the Lease to make Lease
Payments for the lease of the Leased Property at the times and in the amounts sufficient
to provide for the payment of the principal of and interest on such Additional Bonds as
such principal and interest become due and to make all other payments in the manner
provided in the Lease, and the City shall certify in writing, that such Lease Payments, as
amended, in any year shall not exceed the then fair rental value of the Leased Property.
(b) If necessary to ensure that the Lease Payments payable after the
issuance of Additional Bonds does not exceed the fair rental value of the Leased
Property in any year, the Authority and the City shall have amended the Lease to add
additional property to the Leased Property.
Source of Lease Payments; Covenant to Budget and Appropriate
The Lease Payments are payable from any source of available funds of the City, subject
to the provisions of the Lease regarding abatement. See “– Abatement” herein.
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Under the Lease, the City covenants to take all actions required to include the Lease
Payments in each of its budgets during the Term of the Lease and to make the necessary
appropriations for all Lease Payments and Additional Rental Payments. This covenant of the
City constitutes a duty imposed by law and each and every public official of the City is required
to take all actions required by law in the performance of the official duty of such officials to
enable the City to carry out and perform the covenants and agreements in the Lease agreed to
be carried out and performed by the City.
Abatement
Termination or Abatement Due to Eminent Domain. Under the Lease, if the Leased
Property is taken permanently under the power of eminent domain or sold to a government
threatening to exercise the power of eminent domain, the Term of the Lease thereupon ceases
as of the day possession is taken. If less than all of the Leased Property is taken permanently,
or if the Leased Property is taken temporarily, under the power of eminent domain, then:
(a) the Lease will continue in full force and effect with respect thereto and
does not terminate by virtue of such taking, and the parties waive the benefit of any law
to the contrary; and
(b) the Lease Payments are subject to abatement in an amount determined
by the City such that the resulting Lease Payments represent fair consideration for the
use and occupancy of the remaining usable portions of the Leased Property.
Abatement Due to Damage or Destruction. The Lease Payments are subject to
abatement during any period in which by reason of damage or destruction (other than by
eminent domain as described above) there is substantial interference with the use and
occupancy by the City of the Leased Property or any portion thereof.
The Lease Payments are subject to abatement in an amount determined by the City
such that the resulting Lease Payments represent fair consideration for the use and occupancy
of the remaining usable portions of the Leased Property not damaged or destroyed. Such
abatement will continue for the period commencing with such damage or destruction and ending
with the substantial completion of the work of repair or reconstruction.
If any such damage or destruction occurs, the Lease continues in full force and effect
and the City waives any right to terminate this Lease by virtue of any such damage and
destruction.
Property Insurance
Liability and Property Damage Insurance. Under the Lease, the City is required to
maintain or cause to be maintained throughout the Term of the Lease, but only if and to the
extent available from reputable insurers at reasonable cost in the reasonable opinion of the City,
a standard commercial general liability insurance policy or policies in protection of the Authority,
the City, and their respective members, officers, agents, employees and assigns.
Such policy or policies must provide for indemnification of said parties against direct or
contingent loss or liability for damages for bodily and personal injury, death or property damage
occasioned by reason of the operation of the Leased Property. Such policy or policies must
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provide coverage in such liability limits and be subject to such deductibles as the City deems
adequate and prudent.
Such insurance may be maintained as part of or in conjunction with any other insurance
coverage carried by the City, and may be maintained in whole or in part in the form of self-
insurance by the City, subject to the provisions of the Lease regarding self-insurance, or in the
form of the participation by the City in a joint powers agency or other program providing pooled
insurance. The proceeds of such liability insurance must be applied toward extinguishment or
satisfaction of the liability with respect to which paid.
Casualty Insurance. Under the Lease, the City is required to procure and maintain, or
cause to be procured and maintained, throughout the Term of the Lease, casualty insurance
against loss or damage to all buildings situated on the Leased Property, in an amount at least
equal to the lesser of (a) 100% of the replacement value of the insured buildings, or (b) 100% of
the aggregate principal amount of the Outstanding Bonds.
Such insurance must, as nearly as practicable, cover loss or damage by explosion,
windstorm, riot, aircraft, vehicle damage, fire and such other hazards as are normally covered
by such insurance, and must include earthquake insurance if available at reasonable cost from
reputable insurers in the judgment of the City. Such insurance may be subject to such
deductibles as the City deems adequate and prudent.
Such insurance may be maintained as part of or in conjunction with any other insurance
coverage carried by the City, and may be maintained in whole or in part in the form of the
participation by the City in a joint powers agency or other program providing pooled insurance;
provided that such insurance may not be maintained by the City in the form of self-insurance.
The Net Proceeds of such insurance must be applied as provided in the Lease .
Rental Interruption Insurance. Under the Lease, the City is required to procure and
maintain, or cause to be procured and maintained, throughout the Term of the Lease, rental
interruption or use and occupancy insurance to cover loss, total or partial, of the use of any
portion of the Leased Property constituting buildings or other improvements as a result of any of
the hazards covered in the casualty insurance requirements described above, in an amount at
least equal to the maximum such Lease Payments coming due and payable during any
consecutive two Fiscal Years.
Such insurance may be maintained as part of or in conjunction with any other insurance
coverage carried by the City, and may be maintained in whole or in part in the form of the
participation by the City in a joint powers agency or other program providing pooled insurance;
provided that such insurance may not be maintained by the City in the form of self-insurance.
The Net Proceeds of such insurance, if any, must be paid to the Trustee and deposited in the
Bond Fund, to be applied as a credit towards the payment of the Lease Payments allocable to
the insured improvements as they become due and payable.
Title Insurance. On or before the Closing Date the City shall, at its expense, (a) cause
the Site Lease, the Assignment Agreement and the Lease, or a memorandum hereof or thereof
in form and substance approved by Bond Counsel, to be recorded in the office of the Alameda
County Recorder, and (b) obtain a CLTA title insurance policy insuring the City’s leasehold
estate hereunder in the Leased Property, subject only to Permitted Encumbrances, in an
amount at least equal to the aggregate principal amount of the Bonds. All Net Proceeds
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received under any such title insurance policy must be deposited with the Trustee in the Bond
Fund to be credited towards the prepayment of the remaining Lease Payments.
Insurance Net Proceeds; Form of Policies. Each policy of casualty insurance, rental
interruption insurance and title insurance maintained under the Lease must name the Trustee
as loss payee so as to provide that all proceeds thereunder are payable to the Trustee. The
City shall pay or cause to be paid when due the premiums for all insurance policies required by
the Lease. All such policies shall provide that the Trustee is given 30 days’ notice of each
expiration, any intended cancellation thereof or reduction of the coverage provided thereby.
The City must file with the Trustee annually, within 90 days following the close of each
Fiscal Year, a certificate of the City stating that all policies of insurance required under the
Lease are then in full force and effect. The Trustee has no responsibility for the sufficiency,
adequacy or amount of any insurance or self-insurance herein required and is fully protected in
accepting payment on account of such insurance or any adjustment, compromise or settlement
of any loss.
If any liability and property damage insurance maintained under the Lease is provided in
the form of self-insurance, the City must file with the Trustee annually, within 90 days following
the close of each Fiscal Year, a statement of the risk manager of the City or an independent
insurance adviser engaged by the City identifying the extent of such self-insurance and stating
the determination that the City maintains sufficient reserves with respect thereto. If any such
insurance is provided in the form of self-insurance by the City, the City has no obligation to
make any payment with respect to any insured event except from those reserves.
THE AUTHORITY
The Authority was created by the City and the California Statewide Communities
Development Authority pursuant to Joint Exercise of Powers Agreement, dated as of September
1, 2021, for the purpose, among others, of having the Authority issue its bonds to finance the
acquisition, construction and improvement of certain public capital improvements in the City.
The members of the City Council serve as the governing board of the Authority, and certain City
staff serve as the officers of the Authority. The Joint Exercise of Powers Agreement was
entered into under Article 1 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1
of the Government Code of the State of California. The Authority is a separate entity
constituting a public instrumentality of the State of California.
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THE CITY
General
The City was incorporated in 1982, and is a suburban city of the San Francisco East Bay
and Tri-Valley regions of the County. It is located approximately 35 miles east of downtown San
Francisco, 23 miles east of downtown Oakland, and 31 miles north of downtown San José. The
City provides a full range of municipal services, including police, fire, neighborhood services,
public improvements, planning, building and public facility inspection, engineering, water and
sewer utilities, redevelopment, and general administrative services. Police services are
provided via contract with the Alameda County Sheriff’s Office, and fire services are provided
via contract with the Alameda County Fire Department.
For additional background, and certain demographic and economic information
regarding the City and the County, see APPENDIX B.
City Government
The City is a general law city and operates under a Council-Manager form of
government. The City Council, which is comprised of five members, is the City’s political and
legislative body and is empowered by the general laws of the State of California to formulate
City-wide policy, including a fiscal program, City services and appointment of the City Manager
and the City Attorney.
City Council. The City Council consists of five members (four City Councilmembers
and the Mayor) elected at large by the voters of the City. The City Council is responsible for
enacting legislation, establishing policies, and providing guidance and direction for actions
which affect the quality of life in the City. Local elected officials also represent the City at a
variety of forums at the county, regional, state, and national levels in order to make certain that
the interests of the City of Dublin and cities in general are promoted. The current members of
the City Council are as follows:
Name and Office Current Term Expires
Melissa Hernandez, Mayor December 2022
Shawn Kumagi, Vice-Mayor December 2022
Sherry Hu, Council Member December 2024
Jean Josey, Council Member December 2022
Michael McCorriston, Council Member December 2024
Key City Staff. City staff are responsible for the operations of the City. The City
Manager is responsible for the day-to-day administration of City business and the coordination
of all City departments, and is assisted in that role by the Assistant City Manager. The
Administrative Services Director provides oversight of all financial and also provides support to
the City Manager’s Office on administrative projects such as contract reviews and negotiations.
Brief biographies of key members of City staff follow.
Linda Smith, City Manager. Linda Smith was appointed by the City Council as
City Manager in November 2019. Before that, she served as Assistant City Manager in
the City and has been with the City for more than 10 years. She started her career in
local government with the City of Tracy, and has nearly 20 years of experience in local
government overall.
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Colleen Tribby, Assistant City Manager. Colleen Tribby has served as Assistant
City Manager since December 2019, when she was selected to replace Linda Smith
upon Ms. Smith’s appointment as City Manager. Before that, she served as
Administrative Services Director for the City. Ms. Tribby started her career in local
government with the City of South San Francisco and has more than 16 years of local
government experience.
Lisa Hisatomi, Administrative Services Director/Finance Director. Lisa Hisatomi
has served as Administrative Services Director/Finance Director since December 2019.
Prior to that, she was the Assistant Administrative Services Director/Budget. She started
her career at the City in 2001, before leaving for a position with the Alameda County Fire
Department in 2007 and returning to the City in 2012. In total, she has more than 20
years of local government experience.
CITY FINANCIAL INFORMATION
Budgetary Process and Administration
Annual Budget Adoption. Prior to June 30 of each year, the City Manager submits to
the City Council a proposed operating budget for the fiscal year commencing July 1. The
operating budget includes proposed expenditures and the means of financing them. The public
is given an opportunity to comment on the budget at a noticed City Council meeting. Prior to
July 1, the budget is legally enacted through passage of a resolution. During the fiscal year, the
City Manager is authorized to transfer budgeted amounts between line items, provided that the
transfer is within the same fund, regardless of the specific department activity. This includes the
authority to transfer from the General Fund budgeted contingency amounts that are approved
by the City Council during the budget adoption. The City Manager is authorized to increase
revenue and expenditure budget for various departmental functions when the net budget impact
is zero. The City Manager is authorized to increase the appropriations for the following fiscal
year in an amount not to exceed the amount of funds encumbered or designated by the City
Manager as needed for expenses that did not occur prior to the year-end but are expected to be
expended in the next year consistent with the original purpose.
As part of the annual budget adoption process, the City Council authorizes the carry-
over unexpended capital project appropriations, for those projects where work and expenditures
will continue in the subsequent year. Formal budgetary integration is employed as a
management control device during the year for the general fund, special revenue funds and
capital projects funds. Budgets for the general, special revenue and capital projects funds are
adopted on a basis consistent with generally accepted accounting principles in the United
States. No major capital projects funds incurred expenditures in excess of their budgets for the
year ended June 30, 2020.
Fiscal Policies
General – Types of Policies. The City Council adopted a new, two-year Strategic Plan
in 2020 for Fiscal Years 2020-21 and 2021-22. Five specific strategies were identified to
establish the framework and overarching policy focus for the delivery of public services to the
community; these are contained in the City’s budget document. Adjustments to programs
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presented by the City Manager in the budget were tied to the prioritization of elements within the
Strategic Plan.
Reserve Policies – Types of Reserves. The City’s Reserve Policy requires the City to
maintain unrestricted General Fund moneys, for cash flow purposes, at least equal to two
months of budgeted operating expenditures (with a goal to achieve a maximum of four months).
As of June 30, 2020, the cash flow reserves, which are part of the Unassigned Fund Balance,
were above the minimum at approximately eight months, which were over the maximum desired
target of four months. Funds may be appropriated as to undesignated capital contribution by
designation from the City Council only for high priority one-time capital expenditures provided
the minimum fund balance would remain.
Reserve Policies – General Fund Reserve Balances . The following table shows
current and projected balances in various General Fund reserve categories as of June 2021.
City of Dublin – General Fund Reserves
Type of Reserve
Actual
2019-20
Adopted
Budget
2020-21
Adopted Budget
2021-22
Projected
2021-22
Nonspendable $13,061 $12,818 $12,818 $13,061
Restricted 1,938,000 2,379,000 2,379,000 2,820,000
Committed 57,828,474 37,184,794 37,184,794 39,722,291
Assigned 64,390,838 44,575,083 44,264,228 58,593,750
Unassigned 66,478,851 84,745,958 91,419,531 85,902,082
Total Avail.
Reserves
$190,649,224 $168,897,653 $175,260,371 $187,051,184
_____________
Source: City of Dublin - Adopted Budgets 2020-21 and 2021-22.
City Budgets for Fiscal Years 2020-21 and 2021-22
Adopted Budget and Amendments for Fiscal Years 2020-21 and 2021-22. A two-
year budget is presented to the City Council prior to the beginning of the budget cycle. The
Operating Budget is adopted by the City Council on an annual basis. During mid-cycle, a review
and update are prepared and presented to the City Council for the adoption of the second year’s
budget. The fiscal year begins on July 1 and ends June 30. Operating budgets are controlled at
the department level and fund level. The City Council may amend the budget during the fiscal
year.
The Capital Improvement Program (“CIP”) is adopted on a multi-year project basis,
where funds for specific projects receive an annual appropriation and any unused appropriation
may be re-appropriated the following year. The projects are budgeted and built in phases, so as
to allow for future planning and budgeting. CIP project budgets are adopted and controlled at
the project level and funding source level.
The City Manager may increase expense and revenue budgets for both operating
budgets where there is a zero net impact on the fund, appropriate funds from Committed and
Assigned fund balances that have been approved by the City Council for specific purposes, and
transfer between capital improvement projects where the funding source is the same. All other
budgetary changes after budget adoption are subject to approval by the City Council.
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In addition to budget amendments that may occur during the fiscal year, the
Administrative Services Director prepares and presents a quarterly review of expenditures and
revenues to the City Council. At that time, the Administrative Services Director may recommend
budget amendments to the City Council for their consideration.
Adopted Budget Comparison. The table below shows the City’s adopted and
amended operating budget revenues and expenditures for the General Fund for Fiscal Years
2020-21 and 2021-22.
TABLE 1
City of Dublin General Fund Budget Summary
Fiscal Years 2020-21 and 2021-22(2)
2020-21
Adopted Budget
2020-21
Amended Budget
2021-22
Forecast
2021-22
Adopted Budget
Revenues
Property Tax $48,896,000 $50,396,000 $50,519,170 $52,763,000
Sales & Use Tax 19,595,050 21,595,050 20,182,902 22,528,000
Sales Tax Reimbursements (610,000) (610,000) (610,000) (610,000)
Development Revenue 6,936,677 7,180,167 5,579,229 7,706,918
Transient Occupancy Tax 1,000,000 650,000 1,500,000 750,000
Other Taxes 5,676,387 5,767,387 5,842,706 5,732,706
License & Permits 238,506 340,506 238,006 313,434
Fines & Penalties 107,432 62,432 107,432 107,432
Interest Earnings 1,600,000 1,600,000 1,200,000 1,200,000
Rentals and Leases 1,329,966 806,887 1,346,678 1,020,768
Intergovernmental 250,000 250,000 250,000 285,000
Charges for Services 6,236,759 4,401,546 7,151,631 5,283,291
Community Benefit Payments -- 441,000 -- --
Other Revenues 1,077,242 1,363,064 1,194,191 1,317,231
Operating Transfers-In 56,600 56,600 56,600 56,600
Total Revenues 92,390,619 94,300,639 94,558,545 98,454,380
Expenditures
Salaries & Wages 10,886,254 11,229,600 12,072,997 12,772,605
Benefits 6,016,602 5,146,893 6,334,623 5,372,411
Services and Supplies 3,892,941 3,937,317 4,007,570 4,110,511
Internal Service Fund Changes 3,685,244 3,685,246 3,602,707 3,907,322
Utilities 2,925,055 2,904,151 3,029,694 3,045,467
Contracted Services(1) 53,053,166 55,960,499 54,520,915 54,367,886
Capital Outlay 397,883 1,246,788 118,787 118,677
Contingency & Miscellaneous 222,605 283,605 222,985 222,985
Contribution to OPEB and PERS 1,000,000 3,000,000 1,000,000 1,000,000
Transfers Out to CIPs 1,231,570 17,911,548 2,285,550 4,038,550
Contribution to ISF 1,000,000 1,000,000 1,000,000 1,000,000
Total Expenditures 84,311,320 106,305,647 88,195,827 89,956,413
Total General Fund Balance $168,897,653 $178,553,217 $175,260,371 $187,051,184
___________________
(1) Contracted services include Police Services and Fire Services provided through the County.
(2) Totals may not foot due to rounding.
Source: City of Dublin - 2020-21 and 2021-22 Adopted and Amended Budgets.
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Financial Statements
Overview. Set forth in the following tables are the City’s General Fund balance sheets
and statements of revenues, expenditures, and changes in General Fund Balance for fiscal
years 2015-16 through 2019-20, which are based on the City’s audited financial statements.
The balance sheets and statements presented in this Official Statement are subject to the
various notes attached to the City’s financial statements for the respective years. The City’s
Comprehensive Annual Financial Report (“CAFR”) for Fiscal Year 2019-20, is set forth in
Appendix A.
Changes in General Fund Balance Sheets. As shown in the following table, the total
assets increased $28.4 million, due primarily to increases in cash and investments which is part
of current assets, and capital assets. Total liabilities decreased in Fiscal Year 2019-20 with a
net difference of $2.0 million from the prior year. See “– Fiscal Policies” for additional details on
the various reserves held by the City with respect to its General Fund and “-Adopted Budget
and Amendments for Fiscal Years 2020-21 and 2021-22” for details
TABLE 2
City of Dublin
General Fund Balance Sheets
Fiscal Years 2015-16 through 2019-20 (Audited)
2015-16 2016-17 2017-18 2018-19 2019-20
Assets
Cash and investments $112,073,425 $112,768,301 $129,778,090 $166,333,880 $188,551,452
Accounts receivable 8,670,985 6,205,961 6,084,426 7,227,068 6,432,948
Accrued interest receivable 509,342 676,732 927,381 1,211,110 1,198,623
Due from other funds 1,663,105 13,733,147 18,525,920 13,839,831 11,887,385
Advances to ISF PERS side fund 549,949 159,616 -- -- --
Advances to other funds 80,673 -- -- -- --
Prepaids 39,262 14,742 7,391 12,818 13,061
Total Assets 123,586,741 133,558,499 155,323,208 188,624,707 208,083,469
Liabilities
Accounts payable 10,654,666 7,732,782 10,201,052 11,112,853 12,193,455
Accrued wages and other payroll liabs. 512,183 23,494 160,346 451,415 332,385
Deposits payable 2,843,197 2,152,144 1,059,581 3,979,129 3,611,407
Other payables 179,421 288,410 449,961 460,000 137,500
Unearned revenues 190,086 922,845 1,316,440 1,372,375 1,159,501
Total Liabilities 14,379,553 11,119,675 13,187,380 17,375,772 17,434,248
Deferred Inflow of Resources
Unavailable revenue 23,162 23,162 23,162 23,162 --
Total Deferred Inflow of Resources 23,162 23,162 23,162 23,162 --
Fund Balances
Nonspendable 729,883 198,878 7,391 12,818 13,061
Restricted 579,000 1,762,000 1,938,000 1,938,000 1,938,000
Committed 38,928,755 36,213,714 43,740,492 47,267,326 57,828,475
Assigned 39,078,695 50,126,807 57,267,840 60,771,810 64,004,658
Unassigned 29,867,693 34,114,263 39,158,943 61,235,819 66,865,027
Total Fund Balance 109,184,026 122,415,662 142,112,666 171,225,773 190,649,221
Total Liabilities & Fund Balance $123,586,741 $133,558,499 $155,323,208 $188,624,707 $208,083,469
_____________
Source: City of Dublin - audited financial statements for fiscal years 2015-16 through 2019-20.
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Changes in General Fund Revenues, Expenditures and Fund Balance. As shown in
the following table, General Fund revenues decreased by about $31.5 million (19.9%) from
Fiscal Year’s 2018-19 to 2019-20.
Charges for Services decreased $5.3 million due to the March 2020 shelter-in-place
order. The City experienced a significant decrease in Parks and Recreation program revenues
as many recreation programs were cancelled; and the slowdown of development activities prior
to the outbreak of COVID-19, which was exacerbated by the pandemic and industry shutdown,
contributed to development revenue losses.
Capital Grants and Contributions decreased $25.3 million due to a one-time $12.6
million asset contribution from the developer for the dedication of Jordan Ranch Neighborhood
Park to the City in the prior year, and a decrease in developer in-lieu fees by $10 million due to
the timing of development activities and the impact of the COVID-19 pandemic.
Property Taxes increased $4.8 million, resulting from an increase to overall assessed
property valuations from the number of new homes built since prior fiscal year, the number of
property sales, and the annual increase to taxable valuations.
Sales Taxes decreased $3.8 million as the result of non-recurring revenue in prior year,
flattening sales in the Autos and Transportation sector, and the overall decline related to the
COVID-19 pandemic and related shutdowns.
Despite the impact of the COVID-19 pandemic, the City finished Fiscal Year 2019-20
with a General Fund surplus of approximately $19.4 million. General Fund transfers, long-term
fiscal sustainability remain at the forefront of budget discussions. Despite the continued growth
in property tax that occurred prior to COVID-19, declining sales tax and development revenues,
the rising costs of contracted services, and the potential for a prolonged recovery from the
impacts of COVID-19 are projected to result in the City facing a deficit beginning in Fiscal Year
2026-27.
The COVID-19 pandemic remains ongoing and no assurance can be given that the
City’s future General Fund finances will not be negatively impacted by the pandemic. See
“RISK FACTORS – COVID-19 Pandemic.”
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TABLE 3
City of Dublin
Statements of Revenues, Expenditures and Changes in General Fund Balance
Fiscal Years 2015-16 through 2019-20 (Audited)
2015-16 2016-17 2017-18 2018-19 2019-20
Revenues
Property taxes $33,598,601 $36,964,784 $40,628,040 $44,293,602 $49,086,335
Sales taxes 20,938,826 20,001,379 19,723,665 24,725,974 21,032,455
Other taxes 6,606,015 6,834,545 7,366,201 8,223,510 7,280,323
Intergovernmental 324,075 258,509 153,834 287,811 306,425
Licenses and fines 6,139,420 7,770,259 7,706,579 6,631,083 3,904,684
Charges for services 10,130,794 10,174,420 13,407,066 11,848,472 8,692,809
Interest 2,937,978 (874,600) (819,161) 8,216,407 10,085,706
Use of money and property 1,114,747 1,119,166 1,243,389 1,100,888 974,392
Fines and forfeitures 116,016 94,205 134,022 130,993 85,128
Developer fees -- -- 87,403 155,643 36,248
Other revenues 1,021,569 1,602,961 1,589,820 1,658,758 1,387,848
Total Revenues 82,928,041 83,945,628 91,220,858 107,273,141 102,872,533
Expenditures
Current:
General Government 15,753,512 7,957,029 7,300,935 8,780,197 14,447,789
Police 17,647,757 17,073,275 19,211,349 21,723,243 22,058,087
Fire 11,923,462 13,092,409 13,097,284 14,072,425 14,069,273
Public works 6,869,460 11,620,147 8,841,446 12,704,232 11,915,994
Park and community services 10,749,113 8,812,595 13,547,216 9,486,704 7,135,822
Economic development 604,777 891,602 664,909 877,691 --
Community development 5,449,222 5,731,121 6,284,307 5,255,497 4,624,920
Total expenditures 69,047,303 65,178,178 68,947,446 72,899,989 74,251,885
Excess (deficiency) of revenues
over (under) expenditures 13,880,738 18,767,450 22,273,412 34,373,152 28,620,648
Other financing sources(uses)
Transfers in 5,801 6,600 110,151 118,598 37,098
Transfers out (2,409,007) (5,542,414) (2,686,559) (5,378,643) (9,234,298)
Total other fin. sources (uses) (2,403,206) (5,535,814) (2,576,408) (5,260,045) (9,197,200)
Net change in fund balance 11,477,532 13,231,636 19,697,004 29,113,107 19,423,448
Fund balance, beginning 97,706,494 109,184,026 122,415,662 142,112,666 171,225,773
Fund balance, ending $109,184,026 $122,415,662 $142,112,666 $171,225,773 $190,649,221
____________
Source: City of Dublin - audited financial statements for fiscal years 2015-16 through 2019-20.
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Revenues Available for Lease Payments
The City will make Lease Payments on each Lease Payment Date from moneys held in
the General Fund that are available for general government purposes. The following table
shows such revenues received by the City for the prior three fiscal years for which audited
financial statements are available.
TABLE 4
City of Dublin
General Fund Revenues by Revenue Source
Fiscal Years 2017-18 through 2019-20 (Audited)
2017-18 2018-19 2019-20
Category Revenues
% of
Total Revenues
% of
Total Revenues
% of
Total
Property taxes $40,628,040 44.5% $44,293,602 41.3% $49,086,335 47.7%
Sales taxes 19,723,665 21.6% 24,725,974 23.0% 21,032,455 20.4%
Other taxes 7,366,201 8.1% 8,223,510 7.7% 7,280,323 7.1%
Licenses and fines 7,706,579 8.4% 6,631,083 6.2% 3,904,684 3.8%
Charges for services 13,407,066 14.7% 11,848,472 11.0% 8,692,809 8.5%
Other(1) 2,389,307 2.6% 11,550,500 10.8% 12,875,747 12.5%
Total 91,220,858 100.0% 107,273,141 100% 102,872,353 100%
________________
(1) “Other” includes (i) Intergovernmental, (ii) Use of money and property, (iii) Fines and Forfeitures, (iv) Developer fees and (v) Other Revenues.
Source: City of Dublin - audited financial statements 2017-18 through 2019-20 .
Property Taxes
Property Taxes represent the largest source of revenues to the City’s General Fund,
accounting for more than 40% of total General Fund revenues over the past three fiscal years.
Property taxes represent a very stable source of revenue to the City, and are based in large part
on assessed valuations of property located in the City. For Fiscal Year 2019-20, property tax
revenue totaled $49.1 million.
General Method of Property Tax Calculations. Proposition 13, passed in 1978,
established the current property tax regime for local agencies, including the City, throughout the
State. Under Proposition 13, subject to voter-approved debt and certain other exceptions, the
base property tax rate on a parcel is limited to 1% of its assessed value and the property tax
collected by this 1% County-wide rate is shared by the local agencies eligible to receive
property taxes within the applicable County pursuant to applicable State law. Under Proposition
13, the 1975-76 fiscal year serves as the original base year used in determining the assessment
for real property. Thereafter, annual increases to the base year value are limited to the inflation
rate, as measured by the California Consumer Price Index, or 2%, whichever is less. A new
base year value, however, is also established whenever a property, or portion thereof, has had
a change in ownership or has been newly constructed. See “CONSTITUTIONAL AND
STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS – Article XIIIA of the State
Constitution” for additional information.
Proposition 8, enacted in 1978, allows for a temporary reduction in assessed value when
a property suffers a “decline-in-value.” As of the January 1st (lien date) each year, the Assessor
must enroll either a property’s Proposition 13 value (adjusted annually for inflation by no more
than 2%) or its current market value, whichever is less. When the current market value replaces
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the higher Proposition 13 value, the lower value is commonly referred to as a “Proposition 8
Value.” “Proposition 8 values” are temporary and, once enrolled, must be reviewed annually by
the assessor until the Proposition 13 adjusted base year value is enrolled.
The California Tax on Commercial and Industrial Properties for Education and Local
Government Funding Initiative has qualified to appear on the ballot in California as an initiated
Constitutional amendment on November 3, 2020. The ballot initiative would amend the State
Constitution to require commercial and industrial properties, except those zoned as commercial
agriculture, to be taxed based on their market value. The proposal to assess taxes on
commercial and industrial properties at market value, while continuing to assess taxes on
residential properties based on purchase price as described above, is known as “split roll.” At
this time, the City is unable to determine the likelihood of passage of the measure or the impact
on the City’s property tax receipts from passage.
Levy and Collection of Property Taxes. Property taxes are levied for each fiscal year
on taxable real and personal property as of the preceding January 1. For assessment and
collection purposes, property is classified either as “secured” or “unsecured” and is listed
accordingly on separate parts of the assessment roll. The “secured roll” is that part of the
assessment roll containing State-assessed public utilities property and real property the taxes
on which have a viable tax lien, in the opinion of the County Assessor, to secure payment of the
taxes. Other property is assessed on the “unsecured roll.”
Property taxes on the secured roll are due in two installments, on November 1 and
February 1 of each fiscal year, and become delinquent on December 10 and April 10,
respectively. A penalty of 10% attaches immediately to all delinquent payments. Property on the
secured roll with respect to which taxes are delinquent become tax defaulted on or about June
30 of the fiscal year. Such property may thereafter be redeemed by payment of a penalty of 1%
per month to the time of redemption, plus costs and a redemption fee. If taxes are unpaid for a
period of five years or more, the property is deeded to the State and may be sold at public
auction.
Property taxes on the unsecured roll are due as of the January 1 lien dates and become
delinquent on August 31. A 10% penalty attaches to delinquent unsecured taxes. If unsecured
taxes are unpaid at 5:00 p.m. on October 31, an additional penalty of 1% attaches to them on
the first day of each month until paid. The County has four ways of collecting delinquent
unsecured personal property taxes: (1) a civil action against the taxpayer; (2) filing a judgment
in the office of the County Clerk specifying certain facts in order to obtain a lien on certain
property of the taxpayer; (3) filing a certificate of delinquency for record in the County
Recorder’s office in order to obtain a lien on certain property of the taxpayer; and (4) seizure
and sale of personal property, improvements or possessory interests belonging or assessed to
the assessee.
Beginning in 1978-79, Proposition 13 and its implementing legislation shifted the function
of property tax allocation to the counties, except for levies to support prior voted debt, and
prescribed how levies on county-wide property values are to be shared with local taxing entities
within each county.
Property Tax Delinquencies; Teeter Plan. Certain counties in the State of California,
including Alameda, offer a statutory program entitled Alternate Method of Distribution of Tax
Levies and Collections and of Tax Sale Proceeds (the “Teeter Plan”). Under the Teeter Plan
local taxing entities receive 100% of their tax levies net of delinquencies, but do not receive
interest or penalties on delinquent taxes collected by the county. The County includes the City’s
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1% ad valorem property tax collections in its Teeter Plan. Consequently, the City’s receipt of
property taxes is equal to 100% of the amount levied. There is no assurance that the County
will continue the Teeter Plan or that the City will continue to participate in the Teeter Plan.
Delinquencies in the payment of property taxes could have an adverse effect on the ability of
the City to make Lease Payments should the County discontinue the Teeter Plan or the City
withdraw from or not be able to continue in the Teeter Plan.
Historical Assessed Valuations. The tables below presents the assessed valuation of
taxable property in the City from fiscal year 2012-13 through fiscal year 2021-22 and the
secured charges and delinquencies for fiscal years 2015-16 through 2019-20.
TABLE 5
City of Dublin
Assessed Value of Taxable Property
Fiscal Years 2012-13 through 2021-22
Fiscal Year Local Secured Utility Unsecured Total %Change
2012-13 $8,580,543,336 $1,019,152 $209,226,467 $8,790,788,955 --%
2013-14 9,429,128,713 1,019,152 213,130,165 9,643,278,030 9.7
2014-15 10,884,743,958 204,575 229,047,093 11,113,995,626 15.3
2015-16 12,371,070,111 204,575 225,961,460 12,597,236,146 13.3
2016-17 13,488,979,646 204,575 253,439,838 13,742,624,059 9.1
2017-18 14,535,176,956 233,800 265,684,826 14,801,095,582 7.7
2018-19 15,963,487,012 233,800 254,497,602 16,218,218,414 9.6
2019-20 17,642,176,389 233,800 261,651,806 17,904,061,995 10.4
2020-21 18,884,777,415 233,800 360,656,954 19,245,668,169 7.5
2021-22 19,655,802,730 409,150 325,827,394 19,982,039,274 3.8
Source: California Municipal Statistics, Inc.
TABLE 6
City of Dublin
Secured Tax Charges and Delinquencies
Fiscal Years 2015-16 through 2019-20
Fiscal Year
Secured Tax
Charge(1)
Amt. Del.
June 30
% Del.
June 30
2015-16 $27,778,905.07 $339,678.02 1.22%
2016-17 30,383,323.68 323,406.76 1.06
2017-18 32,960,111.68 282,393.34 0.86
2018-19 36,146,224.63 305,555.08 0.85
2019-20 39,807,012.85 408,625.98 1.03
(1) 1% General Fund apportionment.
Source: California Municipal Statistics, Inc.
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Assessed Valuations and Parcels by Land Use. The following table shows secured
assessed valuations and parcels by land use for Fiscal Year 2020-21. As shown in the table,
approximately 97% of the parcels in the City, representing almost 85% of the assessed
valuation in the City, has residential uses. The local secured assessed valuation does not tie to
Table 5 given a different source of the data.
Table 7
City of Dublin
Secured Assessed Valuation and Parcels by Land Use
Fiscal Year 2020-21
2021-22 % of No. of % of
Non-Residential: Assessed Valuation(1) Total Parcels Total
Agricultural/Rural $ 10,202,833 0.05% 38 0.17%
Commercial/Office 2,109,382,945 10.73 293 1.31
Vacant Commercial 381,220,135 1.94 44 0.20
Industrial 339,571,155 1.73 56 0.25
Vacant Industrial 91,602,794 0.47 5 0.02
Recreational 14,269,123 0.07 16 0.07
Government/Social/Institutional 69,293,046 0.35 329 1.48
Subtotal Non-Residential $3,015,542,031 15.34% 781 3.50%
Residential:
Single Family Residence $11,229,838,258 57.13% 12,859 57.66%
Condominium/Townhouse 3,686,374,743 18.75 6,554 29.39
2-4 Residential Units 36,928,274 0.19 55 0.25
5+ Residential Units/Apartments1,251,570,088 6.37 27 0.12
Mobile Homes 1,276,808 0.01 27 0.12
Vacant Residential 434,272,528 2.21 1,997 8.96
Subtotal Residential $16,640,260,699 84.66% 21,519 96.50%
Total $19,655,802,730 100.00% 22,300 100.00%
(1) Local Secured Assessed Valuation, excluding tax-exempt property.
Source: California Municipal Statistics, Inc.
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Principal Property Taxpayers. The top twenty largest local secured property taxpayers
in the City, as shown on the 2021-22 secured tax roll, are listed in the table below. For fiscal
year 2021-22, the total assessed valuation of the twenty largest local secured taxpayers is
11.82% of the total City fiscal year 2021-22 assessed valuation of $19,655,802,730. See “–
Property Taxes” above for additional information on the levy and collection of property taxes in
the City. The local secured assessed valuation does not tie to Table 5 given a different source
of the data.
TABLE 8
City of Dublin
Principal Property Taxpayers (Secured Roll)
Fiscal Year 2021-22
2021-22 % of
Property Owner Primary Land Use Assessed Valuation Total (1)
1. Kaiser Foundation Hospitals Medical Offices $ 280,812,848 1.43%
2. Avalon Dublin Station II LP Apartments 176,623,341 0.90
3. Dublin Crossing LLC Residential Development 149,812,637 0.76
4. GH Pacvest LLC Commercial Land 143,693,765 0.73
5. Ross Dress for Less Inc. Office Building 128,983,385 0.66
6. 4800 Tassajara Road Apartments Investors Apartments 128,178,499 0.65
7. Dublin Station Owner LLC Apartments 122,877,517 0.63
8. Dublin Corporate Center Owner LLC Office Building 116,926,847 0.59
9. Essex Dublin Owner LP Apartments 110,905,485 0.56
10. Oak Cottonwood 2017 LLC Apartments 103,812,950 0.53
11. Dublin Apartment Properties LLC Apartments 102,272,266 0.52
12. Bere Island Properties I LLC Apartments 99,052,705 0.50
13. Tishman Speyer Archstone Smith Emerald Apartments 95,290,662 0.48
14. Carl Zeiss Pension Trust Properties LLC Industrial Land 87,206,598 0.44
15. Bit Holdings Sixth-Three Inc. Shopping Center 85,028,434 0.43
16. Bel Brook Apartments Apartments 84,676,673 0.43
17. SCS Development Co. & Santa Clara ValleyCommercial Land 82,748,100 0.42
18. IGEP Park Place LLC Office Building 79,111,188 0.40
19. ASVRF Dublin Place LP Shopping Center 78,488,271 0.40
20. CCF BKM Sierra Trinity LLC Industrial 67,289,976 0.34
$2,323,792,147 11.82%
(1) 2021-22 Local Secured Assessed Valuation: $19,655,802,730.
Source: California Municipal Statistics, Inc.
New Developments – Specific Plans. The City utilizes specific plans as a tool to
implement the guiding policies contained in the General Plan. The City has adopted four specific
plans that encompass a specific geographic area of the City. Each specific plan contains
policies and design guidelines that are tailored to implement the community’s vision for the
future of these areas and to ensure a coordinated development scheme. Physical improvements
to property within each of these plan areas must comply with the policies contained in the
General Plan and the corresponding specific plan. The following provides a brief description to
the specific plans.
Downtown Dublin Specific Plan. Guides the creation of a vibrant and dynamic
commercial and mixed-use center that provides a wide array of opportunities for
shopping, services, dining, working, living, and entertainment in a pedestrian-friendly
and aesthetically pleasing setting.
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Dublin Village Historic Area Specific Plan. Guides future development in the
specific plan area to be sensitive to the area’s historic past and to preserve and enhance
the area’s historical, cultural, and archaeological resources.
Eastern Dublin Specific Plan. Provides a planning framework for the future
growth and development of approximately 3,300 acres that lies to the east of the Camp
Parks Reserve Forces Training Area.
Dublin Crossing Specific Plan. Located in the heart of the City, Dublin Crossing
will be a vibrant neighborhood where people can work, live, and play. The large central
park will serve as a gathering place for the entire city, with direct access to the Iron
Horse Regional Trail and links to the Dublin/Pleasanton BART station.
Sales & Use Taxes
Sales & Use Taxes typically represent the 2nd largest source of revenues to the City’s
General Fund, accounting for around 20% of total General Fund revenues over the past three
fiscal years for which audited financial statements are available. Sales & uses taxes are less
stable sources of revenues to the City, given that they are based on consumer spending within
the City which is impacted by a variety of factors including the overall economy and other
factors. For example, the COVID-19 pandemic has, and is expected to continue to, materially
adversely impact sales and use taxes collected by the City. See “RISK FACTORS – COVID-19
Pandemic.”
Taxable transactions in the City are currently subject to the following sales and use tax,
of which the City’s share is only a portion. The City collects a percentage of taxable sales in the
City (minus certain administrative costs) pursuant to the Bradley-Burns Uniform Local Sales and
Use Tax (the “Sales Tax Law”). The State collects and administers the sales tax under the
Sales Tax Law, and makes distributions on taxes collected within the City, as shown in the
following table.
TABLE 9
City of Dublin
Sales Tax Rate
Effective July 1, 2021
Statewide Rate 7.25%
Alameda County Children’s Health and Child Care Transactions and Use Tax 0.50
Alameda County Essential Health Care Services Transactions and Use Tax 0.50
Alameda County Transactions and Use Tax 0.50
Alameda County Transportation Improvement Authority 0.50
Alameda County Transportation Commission Transactions and Use Tax 0.50
Bay Area Rapid Transits District 0.50
Total 10.25%
____________
Source: California Department of Tax and Fee Administration.
Sales and use taxes are complementary taxes; when one applies, the other does not. In
general, the statewide sales tax applies to gross receipts of retailers from the sale of tangible
personal property in the State. The use tax is imposed on the purchase, for storage, use or
other consumption in the State of tangible personal property from any retailer. The use tax
generally applies to purchases of personal property from a retailer outside the State where the
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use will occur within the State. The sales tax is imposed upon the same transactions and items
as the statewide sales tax and the statewide use tax.
Certain transactions are exempt from the State sales tax, including sales of the following
products:
• food products for home consumption;
• prescription medicine;
• newspapers and periodicals;
• edible livestock and their feed;
• seed and fertilizer used in raising food for human consumption; and
• gas, electricity and water when delivered to consumers through mains,
lines and pipes.
This is not an exhaustive list of exempt transactions. A comprehensive list can be found
in the State Board of Equalization’s Publication No. 61 (February 2017) entitled “Sales and Use
Taxes: Exemptions and Exclusions,” which can be found on the State Board of Equalization’s
website at http://www.boe.ca.gov/. The reference to this Internet website is provided for
reference and convenience only. The information contained within the website may not be
current, has not been reviewed by the City and is not incorporated in this Official Statement by
reference.
Sales Tax Collection Procedures. Collection of the sales and use tax is administered
by the California Department of Tax and Fee Administration (the “CDTFA”). This process was
formerly administered by the State Board of Equalization. The Taxpayer Transparency and
Fairness Act of 2017, which took effect July 1, 2017, restructured the State Board of
Equalization and separated its functions among three separate entities: the State Board of
Equalization, the CDTFA and the Office of Tax Appeals. The State Board of Equalization will
continue to perform the duties assigned to it by the State Constitution, while all other duties will
be transferred to the newly established CDTFA and the Office of Tax Appeals. CDTFA will
handle most of the taxes and fees previously collected by the State Board of Equalization,
including sales and use tax.
Under the Sales and Use Tax Law, all sales and use taxes collected by the CDTFA
under a contract with any city, city and county, or county are required to be transmitted by the
CDTFA to such city, city and county, or county periodically as promptly as feasible. These
transmittals are required to be made at least twice in each calendar quarter.
Under its procedures, the CDTFA projects receipts of the sales and use tax on a
quarterly basis and remits an advance of the receipts of the sales and use tax to the City on a
monthly basis. The amount of each monthly advance is based upon the CDTFA’s quarterly
projection. During the last month of each quarter, the CDTFA adjusts the amount remitted to
reflect the actual receipts of the sales and use tax for the previous quarter.
The CDTFA receives an administrative fee based on the cost of services provided by the
Board to the City in administering the City’s sales tax, which is deducted from revenue
generated by the sales and use tax before it is distributed to the City.
As part of the State government’s response to the COVID-19 pandemic, certain
businesses were able to defer the payment of their sales taxes due to the City.
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Historic Taxable Transactions. The following table shows historical taxable
transactions in the City for the most recent five years available.
TABLE 10
City of Dublin
Taxable Transactions
Fiscal Years 2015 through 2019(1)
(In Thousands)
2015 2016 2017 2018 2019
Motor Vehicle and Parts Dealers $559,001 $596,385 $588,581 $713,994 $688,453
Home Furnishings and Appliances 146,190 146,384 137,597 144,376 138,193
Building Materials 81,373 92,616 96,565 92,547 95,266
Food and beverage stores 35,827 39,253 40,111 41,139 42,497
Gasoline stations 93,774 87,957 100,203 112,996 112,110
Apparel stores 79,687 93,976 93,410 92,052 89,698
General merchandise stores 71,400 70,946 71,267 72,748 74,321
Food services and drinking places 179,042 190,447 197,903 212,914 215,830
Other retail stores 132,910 130,026 123,943 120,638 110,117
All other outlets 304,341 308,785 317,113 379,773 412,027
Total All Outlets $1,683,547 $1,756,776 $1,766,693 $1,983,177 $1,978,513
____________________
(1) Most current information available.
Source: California Department of Tax and Fee Administration.
Other Sources of General Fund Revenues
Other Taxes. The largest component of this category consists of franchise taxes levied
on businesses that operate under franchises granted by the City, such as cable television. This
category also includes transient occupancy tax (“TOT”) levied on transients staying at short -
term lodgings in the City, such as hotels and motels, and revenues generated by a real property
transfer tax levied on property transfers.
Charges for Services. Charges for Services is the revenue category used to account
for fees and charges assessed to users of City services, such as recreation and park
department activities. This category saw a significant decrease in Fiscal Year 2020-21 due to
the COVID-19 pandemic. See “RISK FACTORS – COVID-19 Pandemic.”
Licenses and Permits. Licenses and Permits is the revenue category used to account
for fees and charges assessed to individuals and businesses in need of a license or permit from
the City. This category saw a significant decrease in Fiscal Year 2020-21 due to the COVID-19
pandemic. See “RISK FACTORS – COVID-19 Pandemic.”
Other. Various smaller revenues items are lumped together in the “Other” category
shown in Table 4, above. These revenue sources include (i) Intergovernmental, (ii) Use of
money and property, (iii) Fines and forfeitures, (iv) Developer fees, and (v) Other Revenues.
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Direct and Overlapping Debt
Set forth on the following page is a direct and overlapping debt report for the City (the
“Debt Report”) prepared by California Municipal Statistics, Inc. The Debt Report is included for
general information purposes only. The City has not reviewed the Debt Report for
completeness or accuracy and makes no representations in connection therewith. The Debt
Report generally includes long term obligations sold in the public credit markets by public
agencies whose boundaries overlap the boundaries of the City in whole or in part. Such long-
term obligations generally are not payable from revenues of the City (except as indicated) nor
are they necessarily obligations secured by land within the City. In many cases long-term
obligations issued by a public agency are payable from the general fund or other revenues of
such public agency. Neither the City, the Authority nor the Underwriter has verified this
information.
TABLE 11
City of Dublin
Direct and Overlapping Debt Statement
(as of August 1, 2021)
2021-22 Assessed Valuation: $19,249,310,679
OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable Debt 8/1/21
Alameda County 5.765% $10,592,899
Bay Area Rapid Transit District 2.247 (1) 41,228,855
Chabot-Las Positas Community College District 13.697(1) 79,841,183
Dublin Unified School District 99.983 526,548,739
East Bay Regional Park District 3.532(1) 4,703,564
City of Dublin Community Facilities District No. 2015-1 100.000 70,265,000
California Statewide Communities Development Authority 1915 Act Bonds 100.000 829,151
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $734,009,391
DIRECT AND OVERLAPPING GENERAL FUND DEBT:
Alameda County General Fund Obligations 5.765% $45,550,562
Alameda-Contra Costa Transit District Certificates of Participation 0.180(1) 20,979
City of Dublin 100.000 0(2)
TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT $45,571,541
COMBINED TOTAL DEBT $779,580,932(3)
Ratios to 2021-22 Assessed Valuation:
Direct Debt ($0) ..................................................................... 0.00%
Total Direct and Overlapping Tax and Assessment Debt ......... 3.67%
Combined Total Debt............................................................... 3.90%
____________________________________
(1) 2020-21 ratios.
(2) Excludes issue to be sold.
(3) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations.
Source: California Municipal Statistics, Inc.
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Long-Term Obligations Payable Out of General Fund
The City currently has no other lease revenue bonds or similar long-term obligations
payable from the General Fund.
Investment Policy and Portfolio
The City pools cash from all sources and all funds, except certain specific investments
within funds and cash with fiscal agents, so that it can be invested at the maximum yield,
consistent with safety and liquidity, while individual funds can make expenditures at any time.
The City and its fiscal agents invest in individual investments and in investment pools.
Individual investments are evidenced by specific identifiable pieces of paper called security
instruments, or by an electronic entry registering the owner in the records of the institution
issuing the security, called the book entry system. Individual investments are generally made by
the City’s fiscal agents as required under its debt issues. In order to maximize security, the City
employs the Trust Department of a bank as the custodian of all City managed investments,
regardless of their form.
The City’s investments are carried at fair value, as required by generally accepted
accounting principles. The City adjusts the carrying value of its investments to reflect their fair
value at each fiscal year end, and it includes the effects of these adjustments in income for that
fiscal year. For additional information concerning the City investments, see “APPENDIX A –
Audited Financial Statements for Fiscal Year Ended June 30, 2020 – Cash and Investments.”
Employee Relations
The City’s relations with its employees are generally considered good, and the City has
not experienced a work stoppage or similar event in the past 5 years. The City’s current
adopted budget for Fiscal Year 2021-22 includes 96 full-time-equivalent (“FTE”) employees and
146.45 contracted employees. None of these employees are part of a collective bargaining
agreement.
As noted above, police services in the City are provided via contract with the Alameda
County Sheriff’s Office, and fire services in the City are provided via contract with the Alameda
County Fire Department.
Pension Plans
This caption contains certain information relating to California Public Employees’
Retirement System (“CalPERS”). The information is primarily derived from information
produced by CalPERS, its independent accountants and actuaries. The City has not
independently verified the information provided by CalPERS and makes no representations and
expresses no opinion as to the accuracy of the information provided by CalPERS.
The comprehensive annual financial reports of CalPERS are available on its Internet
website at www.calpers.ca.gov. The CalPERS website also contains CalPERS’ most recent
actuarial valuation reports and other information concerning benefits and other matters. Such
information is not incorporated by reference in this Official Statement. None of the Authority,
City or Underwriter can guarantee the accuracy of such information. Actuarial assessments are
“forward-looking” statements that reflect the judgment of the fiduciaries of the pension plans,
and are based upon a variety of assumptions, one or more of which may not materialize or may
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be changed in the future. Actuarial assessments will change with the future experience of the
pension plans.
Plan Description and Summary of Balances by Plan. All qualified permanent and
probationary employees are eligible to participate in the City’s Miscellaneous (all other)
Employee Pension Rate Plan. The City’s Miscellaneous Rate Plan is part of the public agency
cost-sharing multiple-employer defined benefit pension plan (“PERF C”), which is administered
by the CalPERS. PERF C consists of a miscellaneous pool and a safety pool (also referred to
as “risk pools”), which comprised individual employer miscellaneous and safety rate plans,
respectively. Individual employers may sponsor more than one miscellaneous and safety rate
plan. The employer participates in one cost-sharing multiple-employer defined benefit pension
plan regardless of the number of rate plans the employer sponsors. The City sponsors two rate
plans (miscellaneous). Benefit provisions under the Plan are established by State statute and
City resolution. CalPERS issues publicly available reports that include a full description of the
pension plan regarding benefit provisions, assumptions and membership information that can
be found on the CalPERS website.
PEPRA. On September 12, 2012, the California Governor signed AB 340, a bill that
enacted the California Public Employees’ Pension Reform Act of 2012 (“PEPRA”) and that also
amended various sections of the California Education and Government Codes, including the
County Employees Retirement Law of 1937. Effective January 1, 2013, PEPRA: (i) requires
public retirement systems and their participating employers to share equally with employees the
normal cost rate for such retirement systems; (ii) prohibits employers from paying employer paid
member contributions to such retirement systems for employees hired after January 1, 2013; (iii)
establishes a compulsory maximum non safety benefit formula of 2.5% at age 67; (iv) defines
final compensation as the highest average annual pensionable compensation earned during a
36 month period; and (v) caps pensionable income at $110,100 ($132,120 for employees not
enrolled in Social Security) subject to Consumer Price Index increases. Other provisions
reduce the risk of the City incurring additional unfunded liabilities, including prohibiting
retroactive benefits increases, generally prohibiting contribution holidays, and prohibiting
purchases of additional non-qualified service credit.
Benefits Provided. CalPERS provides service retirement and disability benefits, annual
cost of living adjustments and death benefits to plan members, who must be public employees
and beneficiaries. Benefits are based on years of credited service, equal to one year of full time
employment. All members are eligible for non-duty disability benefits after 10 years of service.
The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or
the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are
applied as specified by the Public Employees’ Retirement Law. PEPRA is applicable to
employees new to CalPERS and hired after December 31, 2012.
The provisions and benefits of each Plan that were in effect at June 30, 2020, are
summarized in the following table.
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Miscellaneous Plan
Miscellaneous Miscellaneous PEPRA
Hire Date Prior to January 1, 2013 On or After January 1, 2013
Benefit Formula 2.7% @ 55 2% @ 62
Benefit Vesting Schedule 5 years of service 5 years of service
Benefit Payments Monthly for life Monthly for life
Retirement Age 55 62
Monthly Benefits, As a % of Eligible
Compensation 2.70% 2.00%
Required Employee Contribution Rates 8.00% 6.250%
Required Employer Contributions Rates 13.182% 6.999%
Required unfunded liability payment $910,035 $2,686
_____________
Source: Dublin Audit Fiscal Year ended June 30, 2020.
Contributions. Section 20814(c) of the California Public Employees’ Retirement Law
requires that the employer contribution rates for all public employers be determined on an
annual basis by the actuary and shall be effective on the July 1 following notice of a change in
the rate. Funding contributions for the Plan are determined annually on an actuarial basis as of
June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to
finance the costs of benefits earned by employees during the year, with an additional amount to
finance any unfunded accrued liability. The City is required to contribute the difference between
the actuarially determined rate and the contribution rate of employees.
For the measurement period ended June 30, 2019, the City’s contributions to the Plan
were $1,241,065.
CalPERS Actuarial Assumptions and Policies . The Board of Administration has
adopted policies aimed at stabilizing rising employer costs and mitigating the impact of recent
investment declines. These policies are used to set employer contribution rates for each city. In
recent years the Board of Administration has made significant changes to its actuarial
assumptions and policies. On December 21, 2016, the Board of Administration voted to lower
its discount rate to 7.0% over the subsequent three years according to the following schedule.
Fiscal Year Discount Rate
2018-19 7.375%
2019-20 7.250
2020-21 7.000
For public agencies like the City, the new discount rate took effect on July 1, 2018.
Lowering the discount rate means employers that contract with CalPERS to administer their
pension plans will see increases in their normal costs and unfunded actuarial liabilities. Active
members hired after January 1, 2013 will also see their contribution rates rise. The three-year
reduction of the discount rate will result in average employer rate increases of about 1 percent
to 3 percent of normal cost as a percent of payroll for most miscellaneous retirement plans, and
a 2 percent to 5 percent increase for most safety plans. Additionally, many CalPERS employers
will see a 30 to 40 percent increase in their current unfunded accrued liability payments. These
payments are made to amortize unfunded liabilities over 20 years to bring the pension fund to a
fully funded status over the long-term.
On February 13, 2018, the Board of Administration voted to shorten the period over which
CalPERS will amortize actuarial gains and losses from 30 years to 20 years for new pension
liabilities, effective for the June 30, 2019 actuarial valuations. Amortization payments for all
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unfunded accrued liability bases will be computed to remain a level dollar amount throughout
the amortization period, and certain 5-year ramp-up and ramp-down periods will be
eliminated. As a result of the shorter amortization period and elimination of certain 5-year ramp-
up and ramp-down periods, the contributions required to be made by employers, including the
City with respect to the Plans, are anticipated to increase further beginning in fiscal year 2020-
21.
Net Pension Liability. As of June 30, 2020, the City report $15,505,908 in net pension
liabilities for its proportionate share of the net pension liability of the Plan.
Deferred Compensation Plan. City employees may defer a portion of their compensation
under a City sponsored deferred compensation plan created in accordance with Internal
Revenue Code Section 457. Under this plan, participants are not taxed on the deferred portion
of their compensation until it is distributed to them; distributions may be made only at
termination of employment, retirement, death, or in an emergency as defined by the Plan. In
accordance with GASB Statement No. 32, the funds have been placed in a trust administered
by ICMA Retirement Corporation and are not available to the City’s general creditors.
Accordingly, the City does not report the assets in the financial statements.
Other Post-Employment Benefits (OPEB)
City of Dublin Retiree Health Plan. The City provides a single-employer defined
benefit healthcare plan administered by CalPERS (the “OPEB Plan”). The plan provides
medical insurance benefits to eligible retirees and their eligible dependents in accordance with
Public Employee Retirement Law (Article 2). The Public Employees Retirement System Board
of Administration has the responsibility to approve health benefit plans and may contract with
carriers offering health benefit plans. The Board of Administration is responsible for adopting all
rules and regulations, including the scope and content of basic health plans.
Contributions. There is no requirement imposed by CalPERS, to contribute any
amount beyond the pay-as you- go contributions. The cost of monthly insurance premiums may
be shared between the retiree and the City. The contribution and cost sharing varies depending
on: date of hire; the dependent status; and plan selected. The City contributes PEMHCA to
retirees hired after January 1, 2016. A minimum employer monthly contribution requirement is
established and may be amended by the CalPERS Board of Administration and applicable laws.
Within the parameters of the law, individual contracting agencies, such as the City, are allowed
to establish and amend the level of contributions made by the employer towards the monthly
cost of the plans. Changes to the employer contribution rate towards retiree benefits are
recorded in a resolution adopted by the City Council. For the measurement period 2018-19, the
City contributed $1,116,396. The City also had 67 inactive employees or beneficiaries receiving
benefits, 5 inactive but not yet receiving benefits and 92 active employees.
Net OPEB Liability. The City’s net OPEB liability for its OEPB Plan is shown in the
following table.
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Total
OPEB Liability
Plan
Fiduciary
Net Position
Net OPEB
Liability/(Asset)
Balance at June 30, 2019 $18,304,030 $20,028,771 $(1,724,741)
Changes in the Year:
Service Cost 843,905 -- 843,905
Interest on the Total Pension Liability 1,169,182 -- 1,169,182
Differences Between Actual & Expected
Experience (1,450,926) -- (1,450,926)
Changes in assumptions (716,501) -- (716,501)
Changes in benefit terms -- -- --
Contribution-employer -- 1,073,623 (1,073,623)
Contribution-employee -- -- --
Net Investment Income -- 1,244,479 (1,244,479)
Administrative expenses -- (6,155) 6,155
Benefit Payments, Including Refunds of
Employee Contr. (882,052) (882,052) --
Net Changes (1,036,932) 1,429,895 (2,466,287)
Balance at June 30, 2020 $17,267,638 $21,458,666 $(4,191,028)
_____________
Source: Dublin Audit Fiscal Year ended June 30, 2020.
See APPENDIX A, Note 10 and Note 11 for additional details regarding the City’s
pension plan and OPEB Plan, respectively.
Risk Management
The City participates in the Pooled Liability Assurance Network Joint Powers Authority
(“PLAN JPA”), a joint powers authority established to provide liability insurance coverage,
claims and risk management, and legal defense to its participating members. The liability
insurance coverage is provided by a combination self-insurance collectively funded by PLAN
JPA and the purchase of commercial insurance for large losses.
PLAN JPA provides the first $5 million of coverage as self-funded general liability and
automobile liability coverage per occurrence. PLAN JPA purchases commercial excess liability
insurance in two layers of $10 million and $15 million each to provide total coverage of claims
up to $30 million per occurrence. The City has a deductible of $50,000 per occurrence. PLAN
JPA also provides $2 million of employee bonds (theft coverage) in excess of a $10,000
deductible. PLAN JPA also provides property insurance coverage. This coverage also
comprises self-insured layer combined with commercial insurance. The first $100,000 of losses
are self-funded by PLAN JPA from premiums collected from the participants in the program.
PLAN JPA purchases an insurance policy to cover losses above $100,000 per occurrence and
the annual aggregate losses of the pool are insured above $225,000. The insurance provides
coverage for property damage among all participants to $1 billion. The City deductible for
property and vehicle losses is $5,000. For any single loss in excess of $25,000 the deductible is
waived.
The City’s annual contributions to PLAN JPA are calculated based on the ratio of the
City’s payroll to the total payrolls of all entities participating in the program and the City’s loss
experience. Actual surpluses or losses are shared according to a formula developed from
overall costs and spread to member entities on a percentage basis. See APPENDIX A Note 12
for additional details.
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CONSTITUTIONAL AND STATUTORY
LIMITATIONS ON TAXES AND APPROPRIATIONS
The constitutional and statutory provisions discussed in this section have the potential to
affect the ability of the City to levy taxes and spend tax proceeds for operating and other
purposes.
Article XIIIA of the State Constitution
Section 1(a) of Article XIIIA of the State Constitution limits the maximum ad valorem tax
on real property to 1% of full cash value (as defined in Section 2 of Article XIIIA), to be collected
by counties and apportioned according to law. Section 1(b) of Article XIIIA provides that the 1%
limitation does not apply to ad valorem taxes to pay interest or redemption charges on (1)
indebtedness approved by the voters prior to June 1, 1978 or (2) any bonded indebtedness for
the acquisition or improvement of real property approved on or after June 1, 1978, by two thirds
of the votes cast by the voters voting on the Proposition. Section 2 of Article XIIIA defines “full
cash value” to mean “the county assessor’s valuation of real property as shown on the 1975–76
tax bill under ‘full cash value’ or, thereafter, the appraised value of real property when
purchased, newly constructed, or a change in ownership has occurred after the 1975
assessment.” The full cash value may be adjusted annually to reflect inflation at a rate not to
exceed 2% per year, or to reflect a reduction in the consumer price index or comparable data for
the area under taxing jurisdiction or reduced in the event of declining property value caused by
substantial damage, destruction or other factors. Legislation enacted by the State Legislature to
implement Article XIIIA provides that notwithstanding any other law, local agencies may not levy
any ad valorem property tax except to pay debt service on indebtedness approved by the voters
as described above.
The voters of the State subsequently approved various measures that further amended
Article XIIIA. One such amendment generally provides that the purchase or transfer of (i) real
property between spouses or (ii) the principal residence and the first $1,000,000 of the full cash
value of other real property between parents and children, does not constitute a “purchase” or
“change of ownership” triggering reassessment under Article XIIIA. This amendment could
serve to reduce the property-tax revenues of the City. Other amendments permitted the State
Legislature to allow persons over 55 or “severely disabled homeowners” who sell their
residences and buy or build another of equal or lesser value within two years in the same
county, to transfer the old residence’s assessed value to the new residence.
In the November 1990 election, the voters approved the amendment of Article XIIIA to
permit the State Legislature to exclude from the definition of “newly constructed” the
construction or installation of seismic retrofitting improvements or improvements utilizing
earthquake hazard mitigation technologies constructed or installed in existing buildings after
November 6, 1990.
Article XIIIA has also been amended to permit reduction of the “full cash value” base in
the event of declining property values caused by damage, destruction or other factors, provided
that there would be no increase in the “full cash value” base in the event of reconstruction of
property damaged or destroyed in a disaster.
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Article XIIIB of the State Constitution
Article XIIIB of the State Constitution limits the annual appropriations of the State and of
any city, county, school district, special district, authority or other political subdivision of the
State to the appropriations limit for the prior Fiscal Year, as adjusted for changes in the cost of
living, population and services for which the fiscal responsibility is shifted to or from the
governmental entity. The “base year” for establishing this appropriations limit is the 1978–79
Fiscal Year. The appropriations limit may also be adjusted in emergency circumstances, subject
to limitations.
Appropriations of an entity of local government subject to Article XIIIB generally include
authorizations to expend during a Fiscal Year the “proceeds of taxes” levied by or for the entity,
exclusive of certain State subventions, refunds of taxes, and benefit payments from retirement,
unemployment insurance and disability insurance funds. “Proceeds of taxes” include but are not
limited to, all tax revenues, certain State subventions received by the local governmental entity
and the proceeds to the local governmental entity from (1) regulatory licenses, user charges,
and user fees (to the extent that such proceeds exceed the cost of providing the service or
regulation) and (2) the investment of tax revenues. Article XIIIB provides that if a governmental
entity’s revenues in any year exceed the amounts permitted to be spent, the excess must be
returned by revising tax rates or fee schedules over the subsequent two fiscal years.
Article XIIIB does not limit the appropriation of moneys to pay debt service on
indebtedness existing or authorized as of January 1, 1979, or for bonded indebtedness
approved thereafter by a vote of the electors of the issuing entity at an election held for that
purpose, or appropriations for certain other limited purposes. Furthermore, Article XIIIB was
amended in 1990 to exclude from the appropriations limit “all qualified capital outlay projects, as
defined by the Legislature” from proceeds of taxes. The Legislature has defined “qualified
capital outlay project” to mean a fixed asset (including land and construction) with a useful life of
10 or more years and a value which equals or exceeds $100,000. As a result of this
amendment, the appropriations to pay the lease payments on the City’s long term General Fund
lease obligations are generally excluded from the City’s appropriations limit. The City has never
exceeded its appropriations limit.
Articles XIIIC and XIIID of the State Constitution
General. On November 5, 1996, the voters of the State approved Proposition 218,
known as the “Right to Vote on Taxes Act.” Proposition 218 adds Articles XIIIC and XIIID to the
California Constitution and contains a number of interrelated provisions affecting the ability of
the City to levy and collect both existing and future taxes, assessments, fees and charges.
On November 2, 2010, California voters approved Proposition 26, entitled the
“Supermajority Vote to Pass New Taxes and Fees Act.” Section 1 of Proposition 26 declares
that Proposition 26 is intended to limit the ability of the State Legislature and local government
to circumvent existing restrictions on increasing taxes by defining the new or expanded taxes as
“fees.” Proposition 26 amended Articles XIIIA and XIIIC of the State Constitution. The
amendments to Article XIIIA limit the ability of the State Legislature to impose higher taxes (as
defined in Proposition 26) without a two-thirds vote of the Legislature. The amendments to
Article XIIIC define “taxes” that are subject to voter approval as “any levy, charge, or exaction of
any kind imposed by a local government,” with certain exceptions.
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Taxes. Article XIIIC requires that all new local taxes be submitted to the electorate
before they become effective. Taxes for general governmental purposes of the City (“general
taxes”) require a majority vote; taxes for specific purposes (“special taxes”), even if deposited in
the City’s General Fund, require a two-thirds vote.
Property-Related Fees and Charges. Article XIIID also adds several provisions making
it generally more difficult for local agencies to levy and maintain property-related fees, charges,
and assessments for municipal services and programs. These provisions include, among other
things, (i) a prohibition against assessments which exceed the reasonable cost of the
proportional special benefit conferred on a parcel, (ii) a requirement that assessments must
confer a “special benefit,” as defined in Article XIIID, over and above any general benefits
conferred, (iii) a majority protest procedure for assessments which involves the mailing of notice
and a ballot to the record owner of each affected parcel, a public hearing and the tabulation of
ballots weighted according to the proportional financial obligation of the affected party, and (iv) a
prohibition against fees and charges which are used for general governmental services,
including police, fire or library services, where the service is available to the public at large in
substantially the same manner as it is to property owners.
Reduction or Repeal of Taxes, Assessments, Fees and Charges. Article XIIIC also
removes limitations on the initiative power in matters of reducing or repealing local taxes,
assessments, fees or charges. No assurance can be given that the voters of the City will not, in
the future, approve an initiative or initiatives which reduce or repeal local taxes, assessments,
fees or charges currently comprising a substantial part of the City’s General Fund. If such
repeal or reduction occurs, the City’s ability to pay debt service on the Bonds could be adversely
affected.
Burden of Proof. Article XIIIC provides that local government “bears the burden of
proving by a preponderance of the evidence that a levy, charge, or other exaction is not a tax,
that the amount is no more than necessary to cover the reasonable costs of the governmental
activity, and that the manner in which those costs are allocated to a payor bear a fair or
reasonable relationship to the payor’s burdens on, or benefits received from, the governmental
activity.” Similarly, Article XIIID provides that in “any legal action contesting the validity of a fee
or charge, the burden shall be on the agency to demonstrate compliance” with Article XIIID.
Judicial Interpretation of Proposition 218. The interpretation and application of
Articles XIIIC and XIIID will ultimately be determined by the courts, and it is not possible at this
time to predict with certainty the outcome of such determination.
Impact on City’s General Fund. The City does not believe that any material source of
General Fund revenue is subject to challenge under Proposition 218 or Proposition 26.
The approval requirements of Articles XIIIC and XIIID reduce the flexibility of the City to
raise revenues for the General Fund, and no assurance can be given that the City will be able to
impose, extend or increase the taxes, fees, charges or taxes in the future that it may need to
meet increased expenditure needs.
Proposition 1A; Proposition 22
Proposition 1A. Proposition 1A, proposed by the Legislature in connection with the
State’s Fiscal Year 2004-05 Budget, approved by the voters in November 2004 and generally
effective in Fiscal Year 2006-07, provided that the State may not reduce any local sales tax rate,
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limit existing local government authority to levy a sales tax rate or change the allocation of local
sales tax revenues, subject to certain exceptions. Proposition 1A generally prohibited the State
from shifting to schools or community colleges any share of property tax revenues allocated to
local governments for any Fiscal Year, as set forth under the laws in effect as of November 3,
2004. Any change in the allocation of property tax revenues among local governments within a
county had to be approved by two-thirds of both houses of the Legislature.
Proposition 22. Proposition 22, entitled “The Local Taxpayer, Public Safety and
Transportation Protection Act,” was approved by the voters of the State in November 2010.
Proposition 22 eliminates or reduces the State’s authority to (i) temporarily shift property taxes
from cities, counties and special districts to schools, (ii) use vehicle license fee revenues to
reimburse local governments for State-mandated costs (the State will have to use other
revenues to reimburse local governments), (iii) redirect property tax increment from
redevelopment agencies to any other local government, (iv) use State fuel tax revenues to pay
debt service on State transportation bonds, or (v) borrow or change the distribution of State fuel
tax revenues.
Unitary Property
AB 454 (Chapter 921, Statutes of 1986) provides that revenues derived from most utility
property assessed by the State Board of Equalization (“Unitary Property”), commencing with the
1988–89 Fiscal Year, are allocated as follows: (i) each jurisdiction will receive up to 102% of its
prior year State–assessed revenue; and (ii) if county–wide revenues generated from Unitary
Property are less than the previous year’s revenues or greater than 102% of the previous year’s
revenues, each jurisdiction will share the burden of the shortfall or benefit of the excess
revenues by a specified formula. This provision applies to all Unitary Property except railroads,
whose valuation will continue to be allocated to individual tax rate areas.
The provisions of AB 454 do not constitute an elimination of the assessment of any
State–assessed properties nor a revision of the methods of assessing utilities by the State
Board of Equalization. Generally, AB 454 allows valuation growth or decline of Unitary Property
to be shared by all jurisdictions in a county.
Possible Future Initiatives
Article XIIIA, Article XIIIB and Propositions 218, 26, IA and 22 were each adopted as
measures that qualified for the ballot pursuant to the State’s initiative process. From time to
time, other initiative measures could be adopted, further affecting the City’s revenues or its
ability to expend revenues.
BOND OWNERS’ RISKS
The following describes certain special considerations and risk factors affecting the
payment of and security for the Bonds. The following discussion is not meant to be an
exhaustive list of the risks associated with the purchase of any Bonds and does not necessarily
reflect the relative importance of the various risks. Potential investors in the Bonds are advised
to consider the following special factors along with all other information in this Official Statement
in evaluating the Bonds. There can be no assurance that other considerations will not
materialize in the future.
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No Pledge of Taxes
General. The obligation of the City to pay the Lease Payments and Additional Rental
Payments does not constitute an obligation of the City for which the City is obligated to levy or
pledge any form of taxation or for which the City has levied or pledged any form of taxation.
The obligation of the City to pay Lease Payments and Additional Rental Payments does not
constitute a debt or indebtedness of the City, the State of California or any of its political
subdivisions within the meaning of any constitutional or statutory debt limitation or restriction.
Limitations on Taxes and Fees. Certain taxes, assessments, fees and charges
presently imposed by the City could be subject to the voter approval requirements of Article
XIIIC and Article XIIID of the State Constitution. Based upon the outcome of an election by the
voters, such fees, charges, assessments and taxes might no longer be permitted to be imposed,
or may be reduced or eliminated and new taxes, assessments fees and charges may not be
approved. The City has assessed the potential impact on its financial condition of the provisions
of Article XIIIC and Article XIIID of the State Constitution respecting the imposition and increase
of taxes, fees, charges and assessments and does not believe that an election by the voters to
reduce or eliminate the imposition of certain existing fees, charges, assessments and taxes
would substantially affect its financial condition. However, the City believes that if the initiative
power was exercised so that all local taxes, assessments, fees and charges that may be subject
to Article XIIIC and Article XIIID of the State Constitution are eliminated or substantially reduced,
the financial condition of the City, including its General Fund, could be materially adversely
affected.
Although the City does not currently anticipate that the provisions of Article XIIIC and
Article XIIID of the State Constitution would adversely affect its ability to pay Lease Payments
and its other obligations payable from the General Fund, no assurance can be given regarding
the ultimate interpretation or effect of Article XIIIC and Article XIIID of the State Constitution on
the City’s finances. See “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES
AND APPROPRIATIONS.”
Additional Obligations of the City
General. The City is permitted to enter into other obligations which constitute additional
charges against its revenues without the consent of Owners of the Bonds, and may in the future
be subject to liabilities payable from the general fund (some of which are described below). To
the extent that additional obligations are incurred by (or imposed upon) the City, the funds
available to pay Lease Payments may be decreased.
The Lease Payments and other payments due under the Lease (including payment of
costs of repair and maintenance of the Leased Property, taxes and other governmental charges
levied against the Leased Property) are payable from funds lawfully available to the City. If the
amounts that the City is obligated to pay in a fiscal year exceed the City’s revenues for such
year, the City may choose to make some payments rather than making other payments,
including Lease Payments and Additional Rental Payments, based on the perceived needs of
the City. The same result could occur if, because of California Constitutional limits on
expenditures, the City is not permitted to appropriate and spend all of its available revenues or
is required to expend available revenues to preserve the public health, safety and welfare.
Litigation. The City is subject to litigation arising in the normal course of business.
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CalPERS Obligations. Many cities and other local agencies in the State have been
faced with increased payments due to CalPERS in recent years. The City, like many other
cities and local agencies in the State, is responsible for payments to CalPERS for its share of
employee pension costs. Amounts owed to CalPERS for pension costs have increased in
recent years and are expected to continue to increase, as CalPERS implements changes to its
discount rate and other methodologies for calculating pension costs. See “THE CITY – Pension
Plans” for additional information on CalPERS.
No Reserve Fund
No reserve fund will be established and maintained with respect to the Bonds. As a
result, in the event on non-appropriation or non-payment of the Lease Payments in full when
due, no other source of funds will be available to make payments of debt service Bonds while
remedial actions are taken with respect to such non-appropriation or non-payment.
Default
Whenever any event of default referred to in the Lease happens and continues, the
Trustee (as assignee of the Authority) is authorized under the terms of the Lease to exercise
any and all remedies available under law or granted under the Lease. See “APPENDIX C –
SUMMARY OF PRINCIPAL LEGAL DOCUMENTS” for a detailed description of available
remedies in the case of a default under the Lease.
If a default occurs, there is no remedy of acceleration of the total Lease Payments due
over the term of the Lease. The Trustee is not empowered to sell the Leased Property and use
the proceeds of such sale to prepay the Bonds or pay debt service on the Bonds.
The City will be liable only for Lease Payments on an annual basis and, in the event of a
default, the Trustee would be required to seek a separate judgment each year for that year’s
defaulted Lease Payments. Any such suit for money damages would be subject to limitations
on legal remedies against municipalities in the State, including a limitation on enforcement of
judgments against funds of a fiscal year other than the fiscal year in which the Lease Payments
were due and against funds needed to serve the public welfare and interest.
Abatement
Under certain circumstances related to damage, destruction, condemnation or title
defects which cause a substantial interference with the use and possession of the Leased
Property, the City’s obligation to make Lease Payments will be subject to full or partial
abatement and could result in the Trustee having inadequate funds to pay the principal and
interest on the Bonds as and when due. See “SECURITY FOR THE BONDS – Abatement” and
“APPENDIX C – SUMMARY OF PRINCIPAL LEGAL DOCUMENTS.”
Although the City is required under the Lease to maintain property and liability insurance
with respect to the Leased Property, the required insurance coverage is subject to certain
conditions and restrictions. See “SECURITY FOR THE BONDS – Property Insurance.”
In addition, the City is required to use the proceeds of rental interruption insurance
maintained under the Lease to make debt service payments on the Bonds during any period of
abatement. See “SECURITY FOR THE BONDS – Property Insurance.” However, there is no
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assurance that the City will receive proceeds of rental interruption insurance in time to make
debt service payments on the Bonds when due.
Property Taxes
Property taxes are typically the largest source of General Fund revenue to the City.
Levy and Collection. The City does not have any independent power to levy and
collect property taxes. Any reduction in the tax rate or the implementation of any constitutional
or legislative property tax decrease could reduce the City’s property tax revenues, and
accordingly, could have an adverse impact on the ability of the City to make Lease Payments.
Likewise, delinquencies in the payment of property taxes could have an adverse effect on the
City’s ability to pay principal of and interest on the Bonds when due.
Reduction in Inflationary Rate. Article XIIIA of the California Constitution provides that
the full cash value base of real property used in determining assessed value may be adjusted
from year to year to reflect the inflationary rate, not to exceed a 2% increase for any given year,
or may be reduced to reflect a reduction in the consumer price index or comparable local data.
See “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND
APPROPRIATIONS.” Such measure is computed on a calendar year basis. Because Article
XIIIA limits inflationary assessed value adjustments to the lesser of the actual inflationary rate or
2%, there have been years in which the assessed values were adjusted by actual inflationary
rates, which were less than 2%. Since Article XIIIA was approved, the annual adjustment for
inflation has fallen below the 2% limitation a limited number of times.
The City is unable to predict if any adjustments to the full cash value base of real
property within the City, whether an increase or a reduction, will be realized in the future.
Appeals of Assessed Values. There are two types of appeals of assessed values that
could adversely impact property tax revenues:
Proposition 8 Appeals. Most of the appeals that might be filed in the City would
be based on Section 51 of the Revenue and Taxation Code, which requires that for each
lien date the value of real property must be the lesser of its base year value annually
adjusted by the inflation factor pursuant to Article XIIIA of the State Constitution or its full
cash value, taking into account reductions in value due to damage, destruction,
depreciation, obsolescence, removal of property or other factors causing a decline in
value.
Under California law, property owners may apply for a reduction of their property
tax assessment by filing a written application with the appropriate county board of
equalization or assessment appeals board. In most cases, the appeal is filed because
the applicant believes that present market conditions (such as residential home prices)
cause the property to be worth less than its current assessed value. These market-
driven appeals are known as Proposition 8 appeals.
Any reduction in the assessment ultimately granted as a Proposition 8 appeal
applies to the year for which application is made and during which the written application
was filed. These reductions are often temporary and are adjusted back to their original
values when market conditions improve. Once the property has regained its prior value,
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adjusted for inflation, it once again is subject to the annual inflationary factor growth rate
allowed under Article XIIIA.
Base Year Appeals. A second type of assessment appeal is called a base year
appeal, where the property owners challenge the original (basis) value of their property.
Appeals for reduction in the “base year” value of an assessment, if successful, reduce
the assessment for the year in which the appeal is taken and prospectively thereafter.
The base year is determined by the completion date of new construction or the date of
change of ownership. Any base year appeal must be made within four years of the
change of ownership or new construction date.
No assurance can be given that property tax appeals in the future will not significantly
reduce the City’s property tax revenues.
Sales Taxes
Sales tax revenues are typically the second largest source of revenue to the City, behind
property taxes. Sales tax revenues are based upon the gross receipts of retail sales of tangible
goods and products by retailers with taxable transactions in the City, which could be impacted
by a variety of factors. See “– COVID-19 pandemic.”
For example, before final maturity of the Bonds, the City may enter into an economic
recession. In times of economic recession, the gross receipts of retailers often decline, and
such a decline would cause the sales tax revenues received by the City to also decline.
In addition, changes or amendments in the laws applicable to the City’s receipt of sales
tax revenues, whether implemented by State legislative action or voter initiative, could have an
adverse effect on sales tax revenues received by the City. For example, many categories of
transactions are exempt from the statewide sales tax, and additional categories could be added
in the future. Currently, most sales of food products for human consumption are exempt; this
exemption, however, does not apply to liquor or to restaurant meals. The rate of sales tax
levied on taxable transactions in the City or the fee charged by the CDTFA for administering the
City’s sales tax could also be changed.
Natural Calamities
General. Natural disasters, such as seismic events, flooding, landslides or wildfires,
could affect economic activity in the City, and could have a negative impact on City finances.
There can be no assurance that the occurrence of any natural calamity would not cause
substantial interference to and costs for the City or impact the Leased Property.
Seismic. The City is located in a seismically active area of California. If there were to
be an occurrence of severe seismic activity in the area of the City, such an occurrence may
adversely affect economic activity in the City, and could have a negative impact on City
finances. The City could be at risk from strong ground motion and secondary effects related to
a seismic event, including ground failure (such as landslide, liquefaction, lateral spreading,
lurching and differential settlement) and seismically induced flooding (such as flooding from a
tsunami or dam failure).
Wildfires. Although the City is not located within a Fire Hazard Severity Zone as
established by CAL FIRE (https://egis.fire.ca.gov/FHSZ), there are areas adjacent to the City
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that are open space parklands and more susceptible to wildfires. In addition, many areas of
northern California have suffered from major wildfires in recent years, including numerous
wildfires in northern California in 2020 and in 2021. In addition to their direct impact on health
and safety and property damage in California, the smoke from many of these wildfires has
impacted the quality of life in the Bay Area, and the City and may have short-term and future
impacts on commercial activity in the City. The fires have been driven in large measure by
drought conditions and low humidity. Experts expect that California will continue to be subject
to wildfire conditions year over year as a result in changing weather patterns due to climate
change.
Droughts. California is subject to droughts from time-to-time. On April 1, 2015, for the
first time in California’s history, Governor Edmund G. Brown directed the State Water
Resources Control Board to implement mandatory water reductions in cities and towns across
California to reduce water usage by 25%. Following a wet winter in 2016-17, most of the
mandatory water reductions were lifted, only to return again in 2021 following unusually dry
years.
Climate Change. City finances may be negatively impacted by climate change. Local
impacts of climate change are not definitive, but parcels in the City could experience changes to
local and regional weather patterns; increased risk of flooding; and water restrictions. See, for
example, the discussions above regarding wildfires and droughts.
COVID-19 Pandemic
The spread of COVID-19 has impacted governments, businesses and people in a
manner that is having negative effects on global and local economies. There can be no
assurances that the spread of COVID-19 and/or responses intended to slow the spread of
COVID-19 such as declining business and travel activity, will not materially adversely impact the
state and national economies and, accordingly, materially adversely impact the financial
condition of the City and the City’s General Fund. In addition, the City may experience
increased personnel costs and/or reduced revenues due to the COVID-19 situation and the
related impact on economic and other activity in and around the City.
Cyber Security
The City, like many other public and private entities, relies on computer and other digital
networks and systems to conduct its operations. As a recipient and provider of personal, private
or other sensitive electronic information, the City is potentially subject to multiple cyber threats,
including without limitation hacking, viruses, ransomware, malware and other attacks. The City
maintains insurance coverage for loss resulting from cyber security incidents, however no
assurance can be given that the City’s efforts to manage cyber threats and attacks will be
successful in all cases, or that any such attack will not materially impact the operations or
finances of the City, or the administration of the Bonds. The City is also reliant on other entities
and service providers in connection with the administration of the Bonds, including without
limitation the County tax collector for the levy and collection of Special Taxes, the Trustee, and
the dissemination agent. No assurance can be given that the City and/or the other entities will
not be affected by cyber threats and attacks in a manner that may affect the Bond owners.
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Limitations on Remedies Available to Bond Owners
The ability of the City to comply with its covenants under the Lease may be adversely
affected by actions and events outside of the control of the City, and may be adversely affected
by actions taken (or not taken) by voters, property owners, taxpayers or payers of assessments,
fees and charges. See “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES
AND APPROPRIATIONS” above. Furthermore, any remedies available to the owners of the
Bonds upon the occurrence of an event of default under the Lease or the Indenture are in many
respects dependent upon judicial actions, which are often subject to discretion and delay and
could prove both expensive and time consuming to obtain.
In addition to the limitations on Bondowner remedies contained in the Lease and the
Indenture, the rights and obligations under the Bonds, the Lease and the Indenture may be
subject to the following: the United States Bankruptcy Code and applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws relating to or affecting the enforcement
of creditors’ rights generally, now or hereafter in effect; usual equity principles which may limit
the specific enforcement under State law of certain remedies; the exercise by the United States
of America of the powers delegated to it by the Federal Constitution; and the reasonable and
necessary exercise, in certain exceptional situations, of the police power inherent in the
sovereignty of the State and its governmental bodies in the interest of serving a significant and
legitimate public purpose. Bankruptcy proceedings, or the exercise of powers by the federal or
state government, if initiated, could subject the Owners of the Bond s to judicial discretion and
interpretation of their rights in bankruptcy or otherwise, and consequently may entail risks of
delay, limitation or modification of their rights.
The opinion to be delivered by Bond Counsel, concurrently with the issuance of the
Bonds, will include a qualification that the rights of the owners of the Bond s and the
enforceability of the Bond s and the Indenture, the Lease and the Site Lease may be subject to
bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’
rights heretofore or hereafter enacted and may also be subject to the exercise of judicial
discretion in accordance with principles of equity or otherwise in appropriate cases. See
“APPENDIX E — FORM OF OPINION OF BOND COUNSEL.”
Loss of Tax-Exemption
As discussed under the caption “TAX MATTERS,” interest on the Bond s could become
includable in gross income for purposes of federal income taxation retroactive to the date the
Bonds were issued, as a result of future acts or omissions of the City or the City in violation of
their respective covenants in the Lease and the Indenture. Should such an event of taxability
occur, the Bonds are not subject to special redemption and will remain Outstanding until
maturity or until redeemed under other provisions set forth in the Indenture.
Secondary Market for Bonds
There can be no guarantee that there will be a secondary market for the Bond s or, if a
secondary market exists, that any Bond s can be sold for any particular price. Occasionally,
because of general market conditions or because of adverse history or economic prospects
connected with a particular issue, secondary marketing practices in connection with a particular
issue are suspended or terminated. Additionally, prices of issues for which a market is being
made will depend upon then-prevailing circumstances. Such prices could be substantially
different from the original purchase price.
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TAX MATTERS
Federal Tax Status. In the opinion of Jones Hall, A Professional Law Corporation, San
Francisco, California, Bond Counsel, subject, however to the qualifications set forth below,
under existing law, the interest on the Bonds is excluded from gross income for federal income
tax purposes and such interest is not an item of tax preference for purposes of the federal
alternative minimum tax.
The opinions set forth in the preceding paragraph are subject to the condition that the
City comply with all requirements of the Internal Revenue Code of 1986, as amended (the “Tax
Code”) that must be satisfied subsequent to the issuance of the Bonds in order that the interest
thereon be, and continue to be, excludable from gross income for federal income tax purposes.
The City has made certain representations and covenants in order to comply with each such
requirement. Inaccuracy of those representations, or failure to comply with certain of those
covenants, may cause the inclusion of such interest in gross income for federal income tax
purposes, which may be retroactive to the date of issuance of the Bonds.
Tax Treatment of Original Issue Discount and Premium. If the initial offering price to
the public at which a Bond is sold is less than the amount payable at maturity thereof, then such
difference constitutes “original issue discount” for purposes of federal income taxes and State of
California personal income taxes. If the initial offering price to the public at which a Bond is sold
is greater than the amount payable at maturity thereof, then such difference constitutes “bond
premium” for purposes of federal income taxes and State of California personal income taxes.
Under the Tax Code, original issue discount is treated as interest excluded from federal
gross income and exempt from State of California personal income taxes to the extent properly
allocable to each owner thereof subject to the limitations described in the first paragraph of this
section. The original issue discount accrues over the term to maturity of the Bond on the basis
of a constant interest rate compounded on each interest or principal payment date (with straight-
line interpolations between compounding dates). The amount of original issue discount
accruing during each period is added to the adjusted basis of such Bonds to determine taxable
gain upon disposition (including sale, redemption, or payment on maturity) of such Bond. The
Tax Code contains certain provisions relating to the accrual of original issue discount in the
case of purchasers of the Bonds who purchase the Bonds after the initial offering of a
substantial amount of such maturity. Owners of such Bonds should consult their own tax
advisors with respect to the tax consequences of ownership of Bonds with original issue
discount, including the treatment of purchasers who do not purchase in the original offering to
the public at the first price at which a substantial amount of such Bonds is sold to the public.
Under the Tax Code, bond premium is amortized on an annual basis over the term of the
Bond (said term being the shorter of the Bond’s maturity date or its call date). The amount of
bond premium amortized each year reduces the adjusted basis of the owner of the Bond for
purposes of determining taxable gain or loss upon disposition. The amount of bond premium on
a Bond is amortized each year over the term to maturity of the Bond on the basis of a constant
interest rate compounded on each interest or principal payment date (with straight-line
interpolations between compounding dates). Amortized Bond premium is not deductible for
federal income tax purposes. Owners of premium Bonds, including purchasers who do not
purchase in the original offering, should consult their own tax advisors with respect to State of
California personal income tax and federal income tax consequences of owning such Bonds.
ATTACHMENT 8
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California Tax Status. In the further opinion of Bond Counsel, interest on the Bonds is
exempt from California personal income taxes.
Other Tax Considerations. Current and future legislative proposals, if enacted into
law, clarification of the Tax Code or court decisions may cause interest on the Bonds to be
subject, directly or indirectly, to federal income taxation or to be subject to or exempted from
state income taxation, or otherwise prevent beneficial owners from realizing the full current
benefit of the tax status of such interest. The introduction or enactment of any such legislative
proposals, clarification of the Tax Code or court decisions may also affect the market price for,
or marketability of, the Bonds. It cannot be predicted whether or in what form any such proposal
might be enacted or whether, if enacted, such legislation would apply to bonds issued prior to
enactment.
The opinions expressed by Bond Counsel are based upon existing legislation and
regulations as interpreted by relevant judicial and regulatory authorities as of the date of such
opinion, and Bond Counsel has expressed no opinion with respect to any proposed legislation
or as to the tax treatment of interest on the Bonds, or as to the consequences of owning or
receiving interest on the Bonds, as of any future date. Prospective purchasers of the Bonds
should consult their own tax advisors regarding any pending or proposed federal or state tax
legislation, regulations or litigation, as to which Bond Counsel expresses no opinion.
Owners of the Bonds should also be aware that the ownership or disposition of, or the
accrual or receipt of interest on, the Bonds may have federal or state tax consequences other
than as described above. Other than as expressly described above, Bond Counsel expresses
no opinion regarding other federal or state tax consequences arising with respect to the Bonds,
the ownership, sale or disposition of the Bonds, or the amount, accrual or receipt of interest on
the Bonds.
CERTAIN LEGAL MATTERS
Jones Hall, A Professional Law Corporation, Bond Counsel, will render an opinion with
respect to the validity of the Bonds, the form of which is set forth in “APPENDIX E — FORM OF
OPINION OF BOND COUNSEL.” Certain legal matters will also be passed upon for the City
and the Authority by Jones Hall, as Disclosure Counsel. Certain legal matters will be passed
upon for the City by the City Attorney.
LITIGATION
Except as may otherwise be set forth in this Official Statement, to the best knowledge of
the City, there is no action, suit, proceeding, inquiry or investigation before or by any court or
federal, state, municipal or other governmental authority pending and notice of which has been
served on and received by the City or, to the knowledge of the City, threatened against or
affecting the City or the assets, properties or operations of the City which, if determined
adversely to the City or its interests, would have a material and adverse effect upon the
consummation of the transactions contemplated by or the validity of the Lease, the Site Lease
or the Indenture, or upon the financial condition, assets, properties or operations of the City, and
the City is not in default with respect to any order or decree of any court or any order, regulation
or demand of any federal, state, municipal or other governmental authority, which default might
have consequences that would materially adversely affect the consummation of the transactions
ATTACHMENT 8
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contemplated by the Lease, the Site Lease or the Indenture, or the financial conditions, assets,
properties or operations of the City, including but not limited to the payment and performance of
the City’s obligations under the Lease.
RATING
S&P Global Ratings (“S&P”), a division of Standard & Poor’s Financial Services LLC has
assigned its municipal bond rating of “___” to the Bonds. This rating reflects only the views of
S&P, and an explanation of the significance of this rating, and any outlook assigned to or
associated with this rating, should be obtained from S&P. Generally, a rating agency bases its
rating on the information and materials furnished to it and on investigations, studies and
assumptions of its own. The City has provided certain additional information and materials to
the rating agency (some of which does not appear in this Official Statement). There is no
assurance that this rating will continue for any given period of time or that this rating will not be
revised downward or withdrawn entirely by the rating agency, if in the judgment of the rating
agency, circumstances so warrant. Any such downward revision or withdrawal of any rating on
the Bonds may have an adverse effect on the market price or marketability of the Bonds.
CONTINUING DISCLOSURE
The City will covenant for the benefit of owners of the Bonds to provide certain financial
information and operating data by not later than nine months after the end of the City’s fiscal
year, or March 31, of each year (based on the City’s current fiscal year-end of June 30),
commencing March 31, 2022, with the report for the 2020-21 fiscal year (the “Annual Report”)
and to provide notices of the occurrence of certain listed events.
These covenants have been made in order to assist the Underwriter in complying with
Securities Exchange Commission Rule 15c2-12(b)(5) (the “Rule”). The specific nature of the
information to be contained in the Annual Report or the notices of listed events by the City is set
forth in “APPENDIX D – Form of Continuing Disclosure Certificate.”
The City has previously entered into continuing disclosure undertakings under the Rule
in connection with the issuance of long-term obligations. To the best of the City’s knowledge, it
has complied in all material respects with its prior continuing disclosure obligations during the
past five years. The City has retained Goodwin Consulting Group Inc., as dissemination agent,
in connection with entering into its undertaking under the Rule related to the Bonds.
MUNICIPAL ADVISOR
The City and the Authority have retained Fieldman, Rolapp & Associates, Inc., of San
Francisco, California, as municipal advisor (the “Municipal Advisor”) in connection with the
offering of the Bonds. All financial and other information presented in this Official Statement has
been provided by the City and the Authority from their records, except for information expressly
attributed to other sources. The Municipal Advisor takes no responsibility for the accuracy or
completeness of the data provided by the City, Authority or others and has not undertaken to
make an independent verification or does not assume responsibility for the accuracy,
completeness, or fairness of the information contained in this Official Statement. The fee of the
Municipal Advisor is contingent upon the successful closing of the Bonds.
ATTACHMENT 8
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UNDERWRITING
Hilltop Securities, Inc. (the “Underwriter”), has entered into a Bond Purchase
Agreement with the Authority under which it will purchase the Bonds at a purchase price of
$________________ (which is equal to the par amount of the Bond s, less an Underwriter’s
discount of $_____________, and plus (less) a net original issue premium (discount) of
$____________).
The Underwriter will be obligated to take and pay for all of the Bond s if any are taken.
The Underwriter intends to offer the Bonds to the public at the offering prices set forth on the
inside cover page of this Official Statement. After the initial public offering, the public offering
price may be varied from time to time by the Underwriter.
PROFESSIONAL SERVICES
In connection with the issuance of the Bond s, fees payable to the following professionals
involved in the offering are contingent upon the issuance and delivery of the Bonds: Jones Hall,
A Professional Law Corporation, as Bond Counsel and Disclosure Counsel; Fieldman, Rolapp &
Associates, Inc., San Francisco, California, as municipal advisor to the Authority and the City;
Rossi A. Russel, Esq., as counsel to the Underwriter; and U.S. Bank National Association, as
Trustee.
EXECUTION
The execution of this Official Statement and its delivery have been authorized by the
Board of the Authority and the City Council of the City.
DUBLIN FINANCING AUTHORITY
By:
Treasurer
CITY OF DUBLIN
By:
Administrative Services Director/
Finance Director
ATTACHMENT 8
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APPENDIX A
AUDITED FINANCIAL STATEMENTS
FOR FISCAL YEAR ENDING JUNE 30, 2020
ATTACHMENT 8
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APPENDIX B
GENERAL INFORMATION ABOUT THE CITY OF DUBLIN
AND THE COUNTY OF ALAMEDA
The following information concerning the City of Dublin (the “City”) and the County of
Alameda (the “County”) is included for the purpose of general reference only. The Bonds are
not a debt of the County, the City, the State of California (the “State”) or any of its political
subdivisions, and neither the County, the City, the State nor any of its political subdivisions is
liable therefor. The City and the Underwriter take no responsibility for the accuracy or
completeness of such information.
General
The City. Incorporated in 1982, the City is a suburban city of the San Francisco East
Bay and Tri-Valley regions of the County. It is located approximately 35 miles east of downtown
San Francisco, 23 miles east of downtown Oakland, and 31 miles north of downtown San José.
The City operates under the Council-Manager form of government. Policy making and
legislative authority are vested in the City Council, which consists of an elected Mayor, who
serves a two-year term, and four Council members each elected to a four-year term.
The County. The County is located on the east side of the San Francisco Bay, south of
the City of Oakland and approximately ten miles west of the City of San Francisco. Access to
San Francisco is provided by the San Francisco Bay Bridge, AC Transit and Bay Area Rapid
Transit (“BART”). The northern part of Alameda County has direct access to San Francisco
Bay and the City of San Francisco. It is highly diversified with residential areas, as well as
traditional heavy industry, the University of California at Berkeley, the Port of Oakland, and
sophisticated manufacturing, computer services and biotechnology firms. The middle of the
County is also highly developed including older established residential and industrial areas. The
southeastern corner of the County has seen strong growth in residential development and
manufacturing. Many high-tech firms have moved from neighboring Silicon Valley in Santa Clara
County to this area. The southwestern corner of the County has seen the most development in
recent years due to land availability. Agriculture and the rural characteristics of this area are
disappearing as the region maintains its position as the fastest growing residential, commercial
and industrial part of the County.
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Population
The following table lists population estimates for the City, the County and the State for
the last five years, as of January 1 each year.
CITY OF DUBLIN, COUNTY OF ALAMEDA, STATE OF CALIFORNIA
Population Estimates
Years 2017 through 2021, as of January 1
Year City of Dublin Alameda County State of California
2017 60,487 1,646,405 39,500,973
2018 61,874 1,656,884 39,740,508
2019 64,577 1,669,301 39,927,315
2020 65,716 1,670,834 39,782,870
2021 64,695 1,656,591 39,466,855
Source: State Department of Finance estimates (as of January 1).
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Industry and Employment
The District is included in the Oakland-Hayward-Berkeley Metropolitan Division (“MD”).
The unemployment rate in the Oakland-Hayward-Berkeley MD was 6.4 percent in April 2021,
down from a revised 6.5 percent in March 2021, and below the year-ago estimate of 14.8
percent. This compares with an unadjusted unemployment rate of 8.1 percent for California and
5.7 percent for the nation during the same period. The unemployment rate was 6.3 percent in
Alameda County and 6.6 percent in Contra Costa County.
The table below list employment by industry group for Alameda and Contra Costa
Counties for the years 2016 to 2020.
OAKLAND-HAYWARD-BERKELEY MD
(Alameda and Contra Costa Counties)
Annual Averages Civilian Labor Force, Employment and Unemployment,
Employment by Industry
(March 2020 Benchmark)
2016 2017 2018 2019 2020
Civilian Labor Force (1) 1,385,000 1,396,900 1,401,800 1,400,800 1,355,100
Employment 1,324,400 1,344,300 1,357,900 1,358,000 1,235,600
Unemployment 60,600 52,600 43,900 42,800 119,400
Unemployment Rate 4.4% 3.8% 3.1% 3.1% 8.8%
Wage and Salary Employment: (2)
Agriculture 1,300 1,400 1,300 1,400 1,500
Mining and Logging 300 200 200 200 200
Construction 67,900 71,200 74,900 75,500 70,400
Manufacturing 91,300 95,700 100,600 101,000 98,200
Wholesale Trade 48,100 48,700 47,500 45,400 42,000
Retail Trade 113,400 114,400 114,400 111,700 100,500
Transportation, Warehousing, Utilities 39,700 41,300 42,300 43,700 45,100
Information 26,500 26,900 27,600 27,600 25,800
Finance and Insurance 38,900 38,900 37,500 37,200 36,000
Real Estate and Rental and Leasing 16,900 17,400 17,800 18,100 16,700
Professional and Business Services 181,100 184,500 189,500 193,200 184,600
Educational and Health Services 185,900 191,500 194,300 198,400 189,800
Leisure and Hospitality 111,700 114,900 117,700 121,000 84,100
Other Services 39,100 40,200 41,000 41,200 32,900
Federal Government 13,900 13,800 13,400 13,400 14,100
State Government 39,700 39,300 39,400 39,600 38,000
Local Government 119,800 121,500 121,800 121,800 113,800
Total, All Industries (3) 1,135,400 1,161,800 1,181,300 1,190,400 1,093,700
(1) Labor force data is by place of residence; includes self-employed individuals, unpaid family workers, household domestic
workers, and workers on strike.
(2) Industry employment is by place of work; excludes self-employed individuals, unpaid family workers, household domestic
workers, and workers on strike.
(3) Totals may not add due to rounding.
Source: State of California Employment Development Department.
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Principal Employers
The following table lists the principal employers within the City for fiscal year 2019-20.
CITY OF DUBLIN
Principal Employers – Fiscal Year 2019-20
Employer Name
No. of
Employees
U.S. Government & Federal Correction Institute 1,400
County of Alameda 1,165
Dublin Unified School District 1,115
Ross Stores Headquarters 1,100
Kaiser Permanente 510
Zeiss Meditec 450
TriNet 400
Target Stores 380
Patelco Credit Union 380
City of Dublin 332
Source: City of Dublin. Comprehensive Annual Financial Report for fiscal year ended June 30, 2020.
The following table lists, in alphabetical order, the largest manufacturing and non-
manufacturing employers within the County as of July 2021.
COUNTY OF ALAMEDA
Major Employers – July 2021
Employer Name Location Industry
Alameda County Law Enforcement Oakland Government Offices-County
Alameda County Sheriff’s Dept San Leandro Government Offices-County
Alameda County Sheriff’s Ofc Oakland Sheriff
Alta Bates Summit Med Ctr Alta Berkeley Hospitals
BART Oakland Transportation
California State Univ East Bay Hayward Schools-Universities & Colleges Academic
Dell EMC Pleasanton Computer Storage Devices (mfrs)
East Bay Mud Oakland Water & Sewage Companies-Utility
Ebmud Oakland Utilities
Grifols Diagnostic Solutions Emeryville Pharmaceutical Research Laboratories
Highland Hospital Oakland Hospitals
Kaiser Permanente Oakland Med Oakland Hospitals
Lawerence Berkeley Lab Berkeley Laboratories-Research & Development
Lawrence Livermore Natl Lab Livermore University-College Dept/Facility/Office
Lifescan Inc Fremont Physicians & Surgeons Equip & Supls-Mfrs
Oakland Police Patrol Div Oakland Police Departments
Sanfrancisco Bayarea Rapid Oakland Transit Lines
Transportation Dept-California Oakland Government Offices-State
UCSF Benioff Children’s Hosp Oakland Hospitals
University of CA Berkeley Berkeley Schools-Universities & Colleges Academic
University of CA-BERKELEY Berkeley University-College Dept/Facility/Office
University-Ca-Berkeley Dept Berkeley University-College Dept/Facility/Office
Valley Care Health System Livermore Health Services
Washington Hospital Healthcare Fremont Hospitals
Western Digital Corp Fremont Computer Storage Devices (mfrs)
Source: State of California Employment Development Department, extracted from the America’s Labor Market Information System
(ALMIS) Employer Database, 2021 1st Edition.
ATTACHMENT 8
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Effective Buying Income
“Effective Buying Income” is defined as personal income less personal tax and nontax
payments, a number often referred to as “disposable” or “after-tax” income. Personal income is
the aggregate of wages and salaries, other labor-related income (such as employer
contributions to private pension funds), proprietor’s income, rental income (which includes
imputed rental income of owner-occupants of non-farm dwellings), dividends paid by
corporations, interest income from all sources, and transfer payments (such as pensions and
welfare assistance). Deducted from this total are personal taxes (federal, state and local),
nontax payments (fines, fees, penalties, etc.) and personal contributions to social insurance.
According to U.S. government definitions, the resultant figure is commonly known as
“disposable personal income.”
The following table summarizes the total effective buying income for the City, the
County, the State, and the United States for the period 2017 through 2021.
CITY OF DUBLIN, ALAMEDA COUNTY,
STATE OF CALIFORNIA AND UNITED STATES
EFFECTIVE BUYING INCOME
As of January 1, 2017 through 2021
Year
Area
Total Effective
Buying Income
(000’s Omitted)
Median Household
Effective
Buying Income
2017 City of Dublin $2,278,236 $95,456
Alameda County 56,091,066 67,631
California 1,036,142,723 55,681
United States 8,132,748,136 48,043
2018 City of Dublin $2,539,820 $101,932
Alameda County 61,987,949 73,633
California 1,113,648,181 59,646
United States 8,640,770,229 50,735
2019 City of Dublin $3,024,338 $111,857
Alameda County 67,609,653 79,446
California 1,183,264,399 62,637
United States 9,017,967,563 52,841
2020 City of Dublin $3,528,085 $121,648
Alameda County 72,243,436 84,435
California 1,243,564,816 65,870
United States 9,487,165,436 55,303
2021 City of Dublin $3,821,704 $126,662
Alameda County 77,794,202 88,389
California 1,290,894,604 67,956
United States 9,809,944,764 56,790
_________________
Source: The Nielsen Company (US), Inc for years 2017 and 2018; Claritas, LLC for 2019 through 2021.
ATTACHMENT 8
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Commercial Activity
A summary of historic taxable sales within the City and the County during the past five
years in which data is available is shown in the following tables.
Total taxable sales during calendar year 2020 in the City were reported to be
$1,615,174,238, a 18.06% decrease in total taxable sales of $1,971,228,332 reported during the
calendar year 2019.
CITY OF DUBLIN
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions
Calendar Years 2016 through 2020
(Dollars in Thousands)
Retail Stores Total All Outlets
Number
of Permits
Taxable
Transactions
Number
of Permits
Taxable
Transactions
2016 813 $1,447,991 1,284 $1,756,776
2017 829 1,449,580 1,320 1,766,693
2018 843 1,603,404 1,387 1,983,177
2019 825 1,560,838 1,383 1,971,228
2020 848 1,253,711 1,455 1,615,174
Source: State Department of Tax and Fee Administration.
Total taxable transactions during calendar year 2020 in the County were reported to be
$31,782,794,285, a 9.30% decrease in total taxable transactions of $35,040,749,099 reported
during calendar year 2019.
COUNTY OF ALAMEDA
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions
Calendar Years 2016 through 2020
(Dollars in Thousands)
Retail Stores Total All Outlets
Number
of Permits
Taxable
Transactions
Number
of Permits
Taxable
Transactions
2016 27,273 $19,386,688 44,799 $30,958,480
2017 27,431 20,561,252 45,232 32,476,174
2018 27,816 22,857,349 47,402 35,073,302
2019 28,375 21,882,886 49,197 35,040,749
2020 28,831 19,626,570 50,461 31,781,794
Source: State Department of Tax and Fee Administration.
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Construction Activity
Provided below are the building permits and valuations for the City and the County for
calendar years 2016 through 2020.
CITY OF DUBLIN
Building Permit Valuation
(Dollars in Thousands)(1)
2016 2017 2018 2019 2020
Permit Valuation
New Single-family $182,687.1 $239,572.7 $241,339.1 $68,810.7 $73,627.0
New Multi-family 205,534.4 124,110.5 53,361.1 23,753.9 105,932.7
Res. Alterations/Additions 66,984.6 116,342.3 6,938.7 16,759.2 7,506.7
Total Residential 455,206.1 480,025.5 301,638.9 109,323.8 187,066.4
New Commercial 2,794.8 17,184.6 4,009.8 81,009.4 142,998.0
New Industrial 0.0 0.0 0.0 0.0 0.0
New Other 11,395.8 41,550.8 15,680.6 4,763.2 1,229.3
Com. Alterations/Additions 19,204.1_ 114,866.8 24,885.4 33,640.2 14,519.2
Total Nonresidential 47,585.3 173,602.2 44,575.8 119,412.8 158,746.5
New Dwelling Units
Single Family 528 672 608 151 153
Multiple Family 74 435 159 58 346
TOTAL 602 1,107 767 209 499
(1) Totals may not foot due to rounding.
Source: Construction Industry Research Board, Building Permit Summary.
ALAMEDA COUNTY
Building Permit Valuation
(Dollars in Thousands)(1)
2016 2017 2018 2019 2020
Permit Valuation
New Single-family $791,891.2 $763,677.9 $689,530.0 $675,129.8 $394,500.3
New Multi-family 497,341.3 1,307,094.0 1,431,985.0 782,536.4 722,038.0
Res. Alterations/Additions 466,239.3 501,276.2 469,158.5 512,409.9 293,866.8
Total Residential 1,755,471.8 2,572,048.1 2,590,673.5 1,970,076.1 1,410,405.1
New Commercial 444,307.9 585,896.6 551,547.4 718,569.0 238,516.5
New Industrial 53,242.1 26,703.6 302,121.2 5,638.5 0.0
New Other 87,213.3 148,820.3 89,686.1 78,049.8 131,447.0
Com. Alterations/Additions 775,031.8 829,413.8 819,040.7 992,668.1 628,230.5
Total Nonresidential 1,359,795.1 1,590,834.3 1,762,395.4 1,794,925.4 998,194.0
New Dwelling Units
Single Family 2,348 2,175 1,867 1,871 1,152
Multiple Family 3,171 6,889 6,540 4,145 2,610
TOTAL 5,519 9,064 8,407 6,016 3,762
(1) Totals may not foot due to rounding.
Source: Construction Industry Research Board, Building Permit Summary.
ATTACHMENT 8
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APPENDIX C
SUMMARY OF CERTAIN PROVISIONS OF
PRINCIPAL LEGAL DOCUMENTS
ATTACHMENT 8
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APPENDIX D
FORM OF CONTINUING DISCLOSURE CERTIFICATE
$____________
DUBLIN FINANCING AUTHORITY
2021 Lease Revenue Bonds
(Capital Projects)
This Continuing Disclosure Certificate (this “Disclosure Certificate”) is executed and
delivered by the City of Dublin (the “City”) in connection with the issuance by the Authority of the
bonds captioned above (the “Bonds”). The Bonds are being issued under an Indenture of Trust
dated as of October 1, 2021 (the “Indenture”), by and between the Authority and U.S. Bank
National Association, as trustee (the “Trustee”). The City hereby covenants and agrees as
follows:
Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being
executed and delivered by the City for the benefit of the holders and beneficial owners of the
Bonds and in order to assist the Participating Underwriter in complying with S.E.C. Rule 15c2-
12(b)(5).
Section 2. Definitions. In addition to the definitions set forth above and in the Indenture,
which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined
in this Section, the following capitalized terms shall have the following meanings:
“Annual Report” means any Annual Report provided by the City pursuant to, and as
described in, Sections 3 and 4 of this Disclosure Certificate.
“Annual Report Date” means March 31 of each year.
“Dissemination Agent” means Willdan Financial Services, or any successor
Dissemination Agent designated in writing by the City and which has filed with the City a written
acceptance of such designation.
“Listed Events” means any of the events listed in Section 5(a) of this Disclosure
Certificate.
“MSRB” means the Municipal Securities Rulemaking Board, which has been designated
by the Securities and Exchange Commission as the sole repository of disclosure information for
purposes of the Rule, or any other repository of disclosure information that may be designated
by the Securities and Exchange Commission as such for purposes of the Rule in the future.
“Official Statement” means the final official statement executed by the City and the
Authority in connection with the issuance of the Bonds.
“Participating Underwriter” means Hilltop Securities, Inc., the original underwriter of the
Bonds required to comply with the Rule in connection with offering of the Bonds.
“Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as the same may be amended from time to time.
ATTACHMENT 8
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Section 3. Provision of Annual Reports.
(a) The City shall, or shall cause the Dissemination Agent to, not later than the
Annual Report Date, commencing March 31, 2022, with the report for Fiscal Year 2020-21,
provide to the MSRB, in an electronic format as prescribed by the MSRB, an Annual Report that
is consistent with the requirements of Section 4 of this Disclosure Certificate. Not later than 15
Business Days prior to the Annual Report Date, the City shall provide the Annual Report to the
Dissemination Agent (if other than the City). If by 15 Business Days prior to the Annual Report
Date the Dissemination Agent (if other than the City) has not received a copy of the Annual
Report, the Dissemination Agent shall contact the City to determine if the City is in compliance
with the previous sentence. The Annual Report may be submitted as a single document or as
separate documents comprising a package, and may include by reference other information as
provided in Section 4 of this Disclosure Certificate; provided that the audited financial
statements of the City may be submitted separately from the balance of the Annual Report, and
later than the Annual Report Date, if not available by that date. If the City’s Fiscal Year
changes, it shall give notice of such change in the same manner as for a Listed Event under
Section 5(b). The City shall provide a written certificate with each Annual Report furnished to the
Dissemination Agent to the effect that such Annual Report constitutes the Annual Report
required to be furnished by the City hereunder.
(b) If the City does not provide (or cause the Dissemination Agent to provide) an
Annual Report by the Annual Report Date, the City shall provide (or cause the Dissemination
Agent to provide) in a timely manner to the MSRB, in an electronic format as prescribed by the
MSRB, a notice to such effect.
(c) With respect to each Annual Report, the Dissemination Agent shall:
(i) determine each year prior to the Annual Report Date the then-applicable
rules and electronic format prescribed by the MSRB for the filing of annual continuing
disclosure reports; and
(ii) if the Dissemination Agent is other than the City, file a report with the City
certifying that the Annual Report has been provided pursuant to this Disclosure
Certificate, and stating the date it was provided.
Section 4. Content of Annual Reports. The City’s Annual Report shall contain or
incorporate by reference the following:
(a) Audited Financial Statements of the City prepared in accordance with
Generally Accepted Accounting Principles as promulgated to apply to governmental
entities from time to time by the Governmental Accounting Standards Board. If the City’s
audited financial statements are not available by the Annual Report Date, the Annual
Report shall contain unaudited financial statements in a format similar to the financial
statements contained in the final Official Statement, and the audited financial statements
shall be filed in the same manner as the Annual Report when they become available.
(b) To the extent not contained in the audited financial statements filed
pursuant to the preceding clause (a), the Annual Report shall contain information
showing:
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(1) The principal amount of Bonds outstanding as of June 30
preceding the filing of the Annual Report;
(2) Updates as of June 30 preceding the filing of the Annual Report of
the substance of the information contained in Table 5 (Assessed Value of
Taxable Property).
(3) Updates as of June 30 preceding the filing of the Annual Report of
the substance of the information contained in Table 8 (Principal Property
Taxpayers (Secured Roll)).
(c) In addition to any of the information expressly required to be provided under this
Disclosure Certificate, the City shall provide such further material information, if any, as may be
necessary to make the specifically required statements, in the light of the circumstances under
which they are made, not misleading.
(d) Any or all of the items listed above may be included by specific reference to other
documents, including official statements of debt issues of the City or related public entities,
which are available to the public on the MSRB’s Internet web site or filed with the Securities and
Exchange Commission. The City shall clearly identify each such other document so included by
reference.
Section 5. Reporting of Significant Events.
(a) The City shall give, or cause to be given, notice of the occurrence of any of the
following Listed Events with respect to the Bonds:
(1) Principal and interest payment delinquencies.
(2) Non-payment related defaults, if material.
(3) Unscheduled draws on debt service reserves reflecting financial difficulties.
(4) Unscheduled draws on credit enhancements reflecting financial difficulties.
(5) Substitution of credit or liquidity providers, or their failure to perform.
(6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed
or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-
TEB) or other material notices or determinations with respect to the tax status of
the security, or other material events affecting the tax status of the security.
(7) Modifications to rights of security holders, if material.
(8) Bond calls, if material, and tender offers.
(9) Defeasances.
(10) Release, substitution, or sale of property securing repayment of the securities, if
material.
(11) Rating changes.
(12) Bankruptcy, insolvency, receivership or similar event of the City or other
obligated person.
(13) The consummation of a merger, consolidation, or acquisition involving the City or
an obligated person, or the sale of all or substantially all of the assets of the City
or an obligated person (other than in the ordinary course of business), the entry
into a definitive agreement to undertake such an action, or the termination of a
definitive agreement relating to any such actions, other than pursuant to its
terms, if material.
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(14) Appointment of a successor or additional trustee or the change of name of a
trustee, if material.
(15) Incurrence of a financial obligation of the City, if material, or agreement to
covenants, events of default, remedies, priority rights, or other similar terms of a
financial obligation of the City, any of which affect security holders, if material (for
definition of “financial obligation,” see clause (c)).
(16) Default, event of acceleration, termination event, modification of terms, or other
similar events under the terms of a financial obligation of the City, any of which
reflect financial difficulties (for definition of “financial obligation,” see clause (c)).
(b) Whenever the City obtains knowledge of the occurrence of a Listed Event, the
City shall, or shall cause the Dissemination Agent (if not the City) to, file a notice of such
occurrence with the MSRB, in an electronic format as prescribed by the MSRB, in a timely
manner not in excess of 10 business days after the occurrence of the Listed Event.
Notwithstanding the foregoing, notice of Listed Events described in subsection (a)(8) above
need not be given under this subsection any earlier than the notice (if any) of the underlying
event is given to holders of affected Bonds under the Indenture.
(c) The City acknowledges that the events described in subparagraphs (a)(2), (a)(7),
(a)(8) (if the event is a bond call), (a)(10), (a)(13), (a)(14), and (a)(15) of this Section 5 contain
the qualifier “if material” and that subparagraph (a)(6) also contains the qualifier “material” with
respect to certain notices, determinations or other events affecting the tax status of the Bonds.
The City shall cause a notice to be filed as set forth in paragraph (b) above with respect to any
such event only to the extent that it determines the event’s occurrence is material for purposes
of U.S. federal securities law. Whenever the City obtains knowledge of the occurrence of any of
these Listed Events, the City will as soon as possible determine if such event would be material
under applicable federal securities law. If such event is determined to be material, the City will
cause a notice to be filed as set forth in paragraph (b) above.
(d) For purposes of this Disclosure Certificate, any event described in paragraph (a)(12)
above is considered to occur when any of the following occur: the appointment of a receiver,
fiscal agent, or similar officer for the City in a proceeding under the United States Bankruptcy
Code or in any other proceeding under state or federal law in which a court or governmental
authority has assumed jurisdiction over substantially all of the assets or business of the City, or
if such jurisdiction has been assumed by leaving the existing governing body and officials or
officers in possession but subject to the supervision and orders of a court or governmental
authority, or the entry of an order confirming a plan of reorganization, arrangement, or
liquidation by a court or governmental authority having supervision or jurisdiction over
substantially all of the assets or business of the City.
(e) For purposes of Section 5(a)(15) and (16), “financial obligation” means a (i) debt
obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a
source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The
term financial obligation shall not include municipal securities as to which a final official
statement has been provided to the Municipal Securities Rulemaking Board consistent with the
Rule.
Section 6. Identifying Information for Filings with the MSRB. All documents provided to
the MSRB under the Disclosure Certificate shall be accompanied by identifying information as
prescribed by the MSRB.
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Section 7. Termination of Reporting Obligation. The City’s obligations under this
Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in
full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the
City shall give notice of such termination in the same manner as for a Listed Event under
Section 5(b).
Section 8. Dissemination Agent. The City may, from time to time, appoint or engage a
Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate,
and may discharge any such Agent, with or without appointing a successor Dissemination
Agent. Any Dissemination Agent may resign by providing 30 days’ written notice to the City.
Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure
Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclosure
Certificate may be waived, provided that the following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5(a), it
may only be made in connection with a change in circumstances that arises from a change in
legal requirements, change in law, or change in the identity, nature, or status of an obligated
person with respect to the Bonds, or type of business conducted;
(b) the undertakings herein, as proposed to be amended or waived, would, in the
opinion of nationally recognized bond counsel, have complied with the requirements of the Rule
at the time of the primary offering of the Bonds, after taking into account any amendments or
interpretations of the Rule, as well as any change in circumstances; and
(c) the proposed amendment or waiver either (i) is approved by holders of the Bonds
in the manner provided in the Indenture for amendments to the Indenture with the consent of
holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair
the interests of the holders or beneficial owners of the Bonds.
If the annual financial information or operating data to be provided in the Annual Report
is amended pursuant to the provisions hereof, the first annual financial information filed
pursuant hereto containing the amended operating data or financial information shall explain, in
narrative form, the reasons for the amendment and the impact of the change in the type of
operating data or financial information being provided.
If an amendment is made to the undertaking specifying the accounting principles to be
followed in preparing financial statements, the annual financial information for the year in which
the change is made shall present a comparison between the financial statements or information
prepared on the basis of the new accounting principles and those prepared on the basis of the
former accounting principles. The comparison shall include a qualitative discussion of the
differences in the accounting principles and the impact of the change in the accounting
principles on the presentation of the financial information, in order to provide information to
investors to enable them to evaluate the ability of the City to meet its obligations. To the extent
reasonably feasible, the comparison shall be quantitative.
A notice of any amendment made pursuant to this Section 9 shall be filed in the same
manner as for a Listed Event under Section 5(b).
Section 10. Additional Information. Nothing in this Disclosure Certificate shall be
deemed to prevent the City from disseminating any other information, using the means of
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dissemination set forth in this Disclosure Certificate or any other means of communication, or
including any other information in any Annual Report or notice of occurrence of a Listed Event,
in addition to that which is required by this Disclosure Certificate. If the City chooses to include
any information in any Annual Report or notice of occurrence of a Listed Event in addition to that
which is specifically required by this Disclosure Certificate, the City shall have no obligation
under this Disclosure Certificate to update such information or include it in any future Annual
Report or notice of occurrence of a Listed Event.
Section 11. Default. In the event of a failure of the City to comply with any provision of
this Disclosure Certificate, the Participating Underwriter or any holder or beneficial owner of the
Bonds may take such actions as may be necessary and appropriate, including seeking mandate
or specific performance by court order, to cause the City to comply with its obligations under this
Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event
of Default under the Indenture, and the sole remedy under this Disclosure Certificate in the
event of any failure of the City to comply with this Disclosure Certificate shall be an action to
compel performance.
Section 12. Duties, Immunities and Liabilities of Dissemination Agent.
(a) The Dissemination Agent shall have only such duties as are specifically set forth
in this Disclosure Certificate, and the City agrees to indemnify and save the Dissemination
Agent, its officers, directors, employees and agents, harmless against any loss, expense and
liabilities which it may incur arising out of or in the exercise or performance of its powers and
duties hereunder, including the costs and expenses (including attorneys’ fees) of defending
against any claim of liability, but excluding liabilities due to the Dissemination Agent’s
negligence or willful misconduct. The Dissemination Agent shall have no duty or obligation to
review any information provided to it hereunder and shall not be deemed to be acting in any
fiduciary capacity for the City, the Bond owners or any other party. The obligations of the City
under this Section shall survive resignation or removal of the Dissemination Agent and payment
of the Bonds.
(b) The Dissemination Agent shall be paid compensation by the City for its services
provided hereunder in accordance with its schedule of fees as amended from time to time, and
shall be reimbursed for all expenses, legal fees and advances made or incurred by the
Dissemination Agent in the performance of its duties hereunder.
Section 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of
the City, the Dissemination Agent, the Participating Underwriter and holders and beneficial
owners from time to time of the Bonds, and shall create no rights in any other person or entity.
Section 14. Counterparts. This Disclosure Certificate may be executed in several
counterparts, each of which shall be regarded as an original, and all of which shall constitute
one and the same instrument.
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Date: ________________, 2021
CITY OF DUBLIN
By
Authorized Representative
ACCEPTED AND AGREED:
Goodwin Consulting Services,
as Dissemination Agent
By
Authorized Representative
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APPENDIX E
FORM OF OPINION OF BOND COUNSEL
[Closing Date]
Board of Directors
Dublin Financing Authority
100 Civic Plaza
Dublin, California 94568
OPINION: $__________ Dublin Financing Authority
2021 Lease Revenue Bonds (Capital Projects)
Members of the Board of the Directors:
We have acted as bond counsel to the Dublin Financing Authority (the “Authority”) in
connection with the issuance by the Authority of the above-captioned bonds (the “Bonds”),
under an Indenture of Trust dated as of October 1, 2021 (the “Indenture”), between the Authority
and U.S. Bank National Association, as trustee, and under the provisions of Article 4
(commencing with Section 6584) of Chapter 5, Division 7, Title 1 of the California Government
Code (the “Bond Law”). The Bonds are secured by Revenues as defined in the Indenture,
including certain lease payments made by the City of Dublin (the “City”) under a Lease
Agreement dated as of October 1, 2021 (the “Lease”) between the Authority as lessor and the
City as lessee. We have examined the Indenture, the Lease, the Bond Law and such certified
proceedings and other papers as we deem necessary to render this opinion.
As to questions of fact material to our opinion, we have relied upon representations of
the Authority and the City contained in the Indenture, the Lease and in the certified proceedings,
and upon other certifications furnished to us, without undertaking to verify the same by
independent investigation. Based upon our examination, we are of the opinion, under existing
law, as follows:
1. The Authority is a joint exercise of powers agency duly organized and existing
under the laws of the State of California, with power to enter into the Indenture and the Lease,
to perform the agreements on its part contained therein and to issue the Bonds.
2. The Bonds constitute legal, valid and binding special obligations of the Authority
enforceable in accordance with their terms and payable solely from the sources provided
therefor in the Indenture.
3. The Indenture and the Lease have been duly approved by the Authority and
constitute the legal, valid and binding obligations of the Authority enforceable against the
Authority in accordance with their respective terms.
4. The Indenture establishes a valid first and exclusive lien on and pledge of the
Revenues (as that term is defined in the Indenture) and other funds pledged thereby for the
security of the Bonds, in accordance with the terms of the Indenture.
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5. The City is a municipal corporation duly organized and existing under the laws of
the State of California, with power to enter into the Lease and to perform the agreements on its
part contained therein. The Lease has been duly approved by the City and constitutes a legal,
valid and binding obligation of the City enforceable against the City in accordance with its terms.
6. Interest on the Bonds is excluded from gross income for federal income tax
purposes and is not an item of tax preference for purposes of the federal alternative minimum
tax. The opinions set forth in the preceding sentence are subject to the condition that the
Authority and the City comply with all requirements of the Internal Revenue Code of 1986, as
amended, which must be satisfied subsequent to the issuance of the Bonds in order that
interest thereon be, or continue to be, excluded from gross income for federal income tax
purposes. The Authority and the City have covenanted in the Indenture, the Lease and in other
instruments relating to the Bonds to comply with each of such requirements, and the Authority
and the City have full legal authority to make and comply with such covenants. Failure to
comply with certain of such requirements may cause the inclusion of interest on the Bonds in
gross income for federal income tax purposes to be retroactive to the date of issuance of the
Bonds. We express no opinion regarding other federal tax consequences arising with respect to
the ownership, sale or disposition of the Bonds, or the amount, accrual or receipt of interest on
the Bonds.
7. Interest on the Bonds is exempt from California personal income taxation.
We express no opinion regarding any other tax consequences arising with respect to the
ownership, sale or disposition of, or the amount, accrual or receipt of interest on, the Bonds.
The rights of the owners of the Bonds and the enforceability of the Bonds, the Indenture
and the Lease may be subject to bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting creditors’ rights heretofore or hereafter enacted and may also be subject
to the exercise of judicial discretion in appropriate cases.
This opinion is given as of the date hereof, and we assume no obligation to revise or
supplement this opinion to reflect any facts or circumstances that may hereafter come to our
attention, or any changes in law that may hereafter occur. Our engagement with respect to this
matter has terminated as of the date hereof.
Respectfully submitted,
A Professional Law Corporation
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APPENDIX F
DTC AND THE BOOK-ENTRY ONLY SYSTEM
The following description of the Depository Trust Company (“DTC”), the procedures and
record keeping with respect to beneficial ownership interests in the Bonds, payment of principal,
interest and other payments on the Bonds to DTC Participants or Beneficial Owners,
confirmation and transfer of beneficial ownership interest in the Bonds and other related
transactions by and between DTC, the DTC Participants and the Beneficial Owners is based
solely on information provided by DTC. Accordingly, no representations can be made
concerning these matters and neither the DTC Participants nor the Beneficial Owners should
rely on the foregoing information with respect to such matters, but should instead confirm the
same with DTC or the DTC Participants, as the case may be.
Neither the issuer of the Bonds (the “Issuer”) nor the trustee appointed with respect to
the Bonds (the “Agent”) take any responsibility for the information contained in this Appendix.
No assurances can be given that DTC, DTC Participants or Indirect Participants will
distribute to the Beneficial Owners (a) payments of interest, principal or premium, if any, with
respect to the Bonds, (b) certificates representing ownership interest in or other confirmation or
ownership interest in the Bonds, or (c) redemption or other notices sent to DTC or Cede & Co.,
its nominee, as the registered owner of the Bonds, or that they will so do on a timely basis, or
that DTC, DTC Participants or DTC Indirect Participants will act in the manner described in this
Appendix. The current “Rules” applicable to DTC are on file with the Securities and Exchange
Commission and the current “Procedures” of DTC to be followed in dealing with DTC
Participants are on file with DTC.
1. The Depository Trust Company (“DTC”), New York, NY, will act as securities
depository for the securities (the “Securities”). The Securities will be issued as fully-registered
securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other
name as may be requested by an authorized representative of DTC. One fully-registered
Security certificate will be issued for each issue of the Securities, each in the aggregate
principal amount of such issue, and will be deposited with DTC. If, however, the aggregate
principal amount of any issue exceeds $500 million, one certificate will be issued with respect to
each $500 million of principal amount, and an additional certificate will be issued with respect to
any remaining principal amount of such issue.
2. DTC, the world’s largest securities depository, is a limited-purpose trust company
organized under the New York Banking Law, a “banking organization” within the meaning of the
New York Banking Law, a member of the Federal Reserve System, a “clearing corporation”
within the meaning of the New York Uniform Commercial Code, and a “clearing agency”
registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934.
DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity
issues, corporate and municipal debt issues, and money market instruments (from over 100
countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates
the post-trade settlement among Direct Participants of sales and other securities transactions in
deposited securities, through electronic computerized book-entry transfers and pledges
between Direct Participants’ accounts. This eliminates the need for physical movement of
securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and
dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is
a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is
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the holding company for DTC, National Securities Clearing Corporation and Fixed Income
Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users
of its regulated subsidiaries. Access to the DTC system is also available to others such as both
U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing
corporations that clear through or maintain a custodial relationship with a Direct Participant,
either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of ___.
The DTC Rules applicable to its Participants are on file with the Securities and Exchange
Commission. More information about DTC can be found at www.dtcc.com. The information
contained on this Internet site is not incorporated herein by reference.
3. Purchases of Securities under the DTC system must be made by or through Direct
Participants, which will receive a credit for the Securities on DTC’s records. The ownership
interest of each actual purchaser of each Security (“Beneficial Owner”) is in turn to be recorded
on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written
confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive
written confirmations providing details of the transaction, as well as periodic statements of their
holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into
the transaction. Transfers of ownership interests in the Securities are to be accomplished by
entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial
Owners. Beneficial Owners will not receive certificates representing their ownership interests in
Securities, except in the event that use of the book-entry system for the Securities is
discontinued.
4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with
DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name
as may be requested by an authorized representative of DTC. The deposit of Securities with
DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect
any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of
the Securities; DTC’s records reflect only the identity of the Direct Participants to whose
accounts such Securities are credited, which may or may not be the Beneficial Owners. The
Direct and Indirect Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
5. Conveyance of notices and other communications by DTC to Direct Participants, by
Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to
Beneficial Owners will be governed by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect from time to time. Beneficial Owners of Securities
may wish to take certain steps to augment the transmission to them of notices of significant
events with respect to the Securities, such as redemptions, tenders, defaults, and proposed
amendments to the Security documents. For example, Beneficial Owners of Securities may
wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain
and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to
provide their names and addresses to the registrar and request that copies of notices be
provided directly to them.
6. Redemption notices shall be sent to DTC. If less than all of the Securities within an
issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of
each Direct Participant in such issue to be redeemed.
7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with
respect to Securities unless authorized by a Direct Participant in accordance with DTC’s MMI
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Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as
possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting
rights to those Direct Participants to whose accounts Securities are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
8. Redemption proceeds, distributions, and dividend payments on the Securities will be
made to Cede & Co., or such other nominee as may be requested by an authorized
representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s
receipt of funds and corresponding detail information from Issuer or Agent, on payable date in
accordance with their respective holdings shown on DTC’s records. Payments by Participants
to Beneficial Owners will be governed by standing instructions and customary practices, as is
the case with securities held for the accounts of customers in bearer form or registered in “street
name,” and will be the responsibility of such Participant and not of DTC, Agent, or Issuer,
subject to any statutory or regulatory requirements as may be in effect from time to time.
Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such
other nominee as may be requested by an authorized representative of DTC) is the
responsibility of Issuer or Agent, disbursement of such payments to Direct Participants will be
the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be
the responsibility of Direct and Indirect Participants.
9. DTC may discontinue providing its services as depository with respect to the
Securities at any time by giving reasonable notice to Issuer or Agent. Under such
circumstances, in the event that a successor depository is not obtained, Security certificates are
required to be printed and delivered.
10. Issuer may decide to discontinue use of the system of book-entry-only transfers
through DTC (or a successor securities depository). In that event, Security certificates will be
printed and delivered to DTC.
11. The information in this section concerning DTC and DTC’s book-entry system has
been obtained from sources that Issuer believes to be reliable, but Issuer takes no responsibility
for the accuracy thereof.
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STAFF REPORT
CITY COUNCIL
Page 1 of 9
Agenda Item 6.2
DATE: July 20, 2021
TO: Honorable Mayor and City Councilmembers
FROM: Linda Smith, City Manager
SUBJECT: Energy Services Agreement Amendment with Willdan Energy Solutions
for Efficiency and Infrastructure Improvement Projects and
Consideration of a Financing Plan
Prepared by: Colleen Tribby, Assistant City Manager and Laurie Sucgang, City
Engineer
EXECUTIVE SUMMARY:
The City Council will consider the implementation of energy efficiency and related
infrastructure improvement projects by approving an amendment to the design-build energy
savings performance contract with Willdan Energy Solutions. The City Council will also
consider approval of the issuance of tax-exempt bonds to fund the projects and the adoption of
a resolution allowing the City to be reimbursed for expenditures on the projects prior to the
issuance of bonds.
STAFF RECOMMENDATION:
Take the following action: 1) Conduct a Public Hearing and Adopt the Resolution Making
Findings Required Under Government Code Sections 4217.10-18 and Approving an
Amendment to the Design-Build Energy Savings Performance Contract with Willdan Energy
Solutions for Energy Reduction, Core Facility Infrastructure, and Resiliency Upgrades
Projects; 2) Receive a report on the proposed financing plan and provide direction to Staff to
return with the financing documents at a future meeting; and 3) Adopt the Resolution
Declaring Intention to Reimburse Expenditures from the Proceeds of Certain Tax-exempt
Obligations and Directing Certain Actions.
FINANCIAL IMPACT:
The total cost of the projects proposed through the Investment Grade Audit process is
$21,428,950. The Five-Year Capital Improvement Program currently has $2,445,000 ($1,638,665
from the General Fund and $806,335 from the East Dublin Street Light District 1999-1 Fund)
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Page 2 of 9
budgeted in several projects that could be applied to the projects. Funding of all
recommended projects would require the City to either utilize $18,983,950 in General Fund
Undesignated Reserves in combination with the available CIP funds, or finance the
improvements with or without the use of the available CIP funds. Should the City Council
desire to finance the projects via bond issuance, all related costs, including bond and
disclosure counsel services, would be covered by bond proceeds, and debt service payments
would be paid for solely by the General Fund. These options are discussed under the
Financing Plan section of this Staff Report.
If all recommended projects are implemented, there is a potential annual savings of $694,000
and a lifetime savings (25 years) of approximately $28,600,000. In addition, there would be no
cost for the IGA. If the City Council opts to forgo any of the construction projects, the City will
be subject to pay $125,000 for the engineering and design services completed during the IGA
phase, or a prorated amount based on the projects that are not implemented.
DESCRIPTION:
Background
In the last several years, the City has taken steps toward increasing resiliency to become
better prepared for emergency events such as Pacific Gas & Electric Company’s Public Safety
Power Shutoff events in October of 2019 and 2020. More recently, the City has taken steps
toward meeting its Climate Action Plan goals and addressing core infrastructure needs.
Specifically, the City has taken the following actions:
• On June 9, 2020, the City Council adopted the Five-Year Capital Improvement Program
(Resolution No. 54-20) which included funding of the Resiliency and Disaster
Preparedness Improvements project, Citywide Energy Improvements project, and the
Solar Photovoltaic Canopies at The Wave project.
• On September 15, 2020, the City Council adopted the Climate Action Plan 2030 and
Beyond (CAP 2030), which identified Dublin’s plan to significantly reduce carbon
emissions by 2030 and includes the goal of reaching carbon neutrality by 2045.
• In response to the State law transitioning California’s transportation sector to zero
carbon emissions by 2035 (Executive Order N-79-20 of September 2020), Staff has been
developing a plan to transition the City’s fleet of internal combustion engine vehicles to
battery-electric vehicles and is looking for opportunities to install infrastructure for
electric vehicle charging for the fleet vehicles.
• On November 17, 2020, the City Council approved a design-build energy savings
performance contract with Willdan Energy Solutions, to prepare an Investment Grade
Audit (Resolution No. 115-20).
• On June 1, 2021, the City Council received a report on the recommended projects from
the Investment Grade Audit, discussed financing options, and provided direction to
Staff.
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Energy Services Contract
Willdan has now completed Phase 1 of the performance contract, resulting in the Investment
Grade Audit Report (IGA). An IGA includes an in-depth analysis of the financial aspects of
energy savings and the return on investment from potential changes or upgrades to City
facilities that are in alignment with resiliency goals, getting the City closer to meeting its
Climate Action Plan goals, and addressing core infrastructure needs, while considering how
each project may improve the facility’s service and role in the City’s Emergency Operations
Plan and the Tri-Valley Local Hazard Mitigation Plan.
The recommended projects resulting from the IGA were presented to the City Council on June
1, 2021 and are now fully designed and engineered. The scopes of work of the projects
generally include replacement of aged and maintenance-intensive heating, ventilation, and
air conditioning (HVAC) systems, upgrading of facilities to web-based and wireless controls,
converting facility, landscape and park lighting to light-emitting diode (LED) systems with
controls, installation and replacement of back-up generators, installation or upgrade of back-
up power systems at 22 traffic signal intersections, installation of one megawatt of solar
photovoltaic (PV) systems at multiple sites, and installation of power resiliency systems with
batteries and generators. A summary of the projects was provided in the June 1, 2021 Staff
Report (Attachment 4) and detailed in the IGA (Attachment 5). The list of projects was
narrowed down from a larger initial list, and only the most economical, critical, and
beneficial scopes of work and projects were proposed by Willdan in consultation with Staff.
Phase 2 is project implementation. Approval of the amendment to the performance contract
will allow Staff to work with Willdan to implement improvements totaling $21,428,950,
resulting in long-term savings to the City of approximately $28,600,000. Project prioritization
is based on: (1) resiliency and disaster preparedness (for things like PG&E Public Safety Power
Shutoff events), (2) replacement of aged and maintenance-intensive equipment, (3) utility bill
savings, and (4) energy savings and carbon reduction in alignment with the CAP 2030.
The proposed amendment to the performance contract provides for the guaranteed savings
for three years. Willdan will pay for any annual shortfall as indicated in the amendment.
Within the IGA Baseline Utility Analysis, Willdan has established a detailed utility baseline for
how each facility and park operates. This shows existing conditions and allowed Willdan to
create energy models to achieve realistic utility savings that will be seen after the projects are
completed, which Willdan will stand behind for the guaranteed savings performance period.
Cost savings are based on reduced utility bills from less energy usage and the reduced cost to
operate and maintain the equipment. In instances where the equipment is new, the savings is
net of the added cost to operate and maintain the new equipment. No added operations and
maintenance costs were included for existing equipment being replaced, as the City has
already budgeted for these. The energy savings, maintenance savings, and total annual
savings for each category of projects is summarized in the table below.
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RECOMMENDED
TURNKEY SCOPES OF
WORK
Turnkey Cost Rebates &
Incentives
Energy
Savings
Maint.
Savings
Total Annual
Savings
MECHANICAL HVAC & CONTROLS UPGRADES
Dublin Library
$1,845,844
$ 8,000 $ 31,062 $ 5,285 $ 36,347
Senior Center $ 6,275 $ 4,585 $ 4,077 $ 8,662
Shannon Community
Center (Recommissioning
of Existing Systems
$ - $ 500 $ 200 $ 700
Fire Station 16 (Web-
Based Controls Upgrades) $ - $ 1,442 $ - $ 1,442
Fire Station 17 $ - $ 1,512 $ 2,847 $ 4,359
Fire Station 18 $ - $ 648 $ 1,604 $ 2,252
Heritage Park & Museum $ - $ 1,143 $ 1,288 $ 2,431
The Wave (Pool Control
System Firmware
Upgrade)
$ - $ - $ - $ -
Total HVAC $ 1,845,844 $ 14,275 $ 40,892 $ 15,301 $ 56,193
LIGHTING & CONTROLS UPGRADES
Dublin Sports Grounds
Park & Ballfield Lighting
$4,697,972
$ - $ 2,822 $ 6,104 $ 8,926
Emerald Glen Park
Ballfield Lighting $ - $ 1,894 $ 4,578 $ 6,472
Fallon Sports Park &
Ballfield Lighting $ - $ 7,411 $ 12,208 $ 19,619
Kolb Park Park & Ballfield
Lighting $ - $ 875 $ 1,526 $ 2,401
Interior Building Lighting
Upgrades $ 17,885 $ 37,504 $ 5,699 $ 43,203
Exterior, Grounds & Park
Lighting Upgrades &
Improvements
(Mape Memorial Park,
Alamo Creek Park, Ted
Fairfield Park)
$ 638,928 $ 22,590 $ 36,522 $ 4,897 $ 41,419
Streetlight Special District
LED Upgrade (Dublin
Ranch)
$ 1,328,211 $ - $ 58,026 $ 73,700 $ 131,726
Total Lighting $ 6,665,111 $ 40,475 $ 145,054 $ 108,712 $ 253,766
RENEWABLE, RESILIENCY & DISASTER PREPAREDNESS PROJECTS
Install New Generator at
Shannon Community
Center $1,603,436
$ - $ - $ - $ -
Replace Generator at Fire
Station 16 $ - $ - $ - $ -
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Replace Generator at Fire
Station 17 $ - $ - $ - $ -
Replace Generator at Fire
Station 18 $ - $ - $ - $ -
Install New Generator at
Dublin Library $ - $ - $ - $ -
Traffic Signal Resiliency $ 1,086,935 $ - $ - $ - $ -
Dublin Sports Grounds EV
Charging and Solar PV $3,284,500
$ - $ 41,000 $ - $ 41,000
Dublin PSC EV Charging
and Solar PV $ - $ 27,000 $ - $ 27,000
Dublin Library Roof
Patching (Only if Solar
Project is Done)
$6,740,523
$ - $ - $ - $ -
Solar PV w/ Battery
Storage:: Civic Center, The
Wave, Corp Yard, Senior
Center
Solar PV:: Library, Fire
Station 17 & 18, Fallon
$ 383,203 $ 316,109 $ - $ 316,109
Total DER $ 12,715,394 $ 383,203 $ 384,109 $ - $ 384,109
Sub-total $ 21,226,349 $ 437,953 $ 570,055 $ 124,013 $ 694,068
ALLOWANCE & PERFORMANCE GUARANTEE
Performance Guarantee
(Years 2 & 3) $ 102,601 $ - $ - $ - $ -
Allowance for Solar PV &
Battery Energy Storage
System
(Tree Removal,
Transformers, Roof Safety
Tie-Offs, Additional PG&E
Interconnection Fees)
$ 100,000 $ - $ - $ - $ -
TOTAL $ 21,428,950 $ 437,953 $ 570,055 $ 124,013 $ 694,068
To guarantee the energy savings and investment in the various energy reductions, core
facility infrastructure and resiliency upgrades, Staff recommends a measurement and
verification term of three years, in contrast to the standard one-year term. Details of the
measurement and verification plan are provided in Appendix E of the IGA (Attachment 5).
Once complete, the projects will result in an estimated 3% reduction in greenhouse gas (GHG)
emissions for the City, which aligns with the CAP 2030 goals. Although the impact of the
projects on total GHG emissions is relatively small, these investments would provide guidance
to the community on how energy efficiency and resiliency projects can be incorporated into
existing buildings and infrastructure. Achieving the deep GHG emissions reductions required
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to reach the goal of carbon neutrality by 2045 described in the CAP 2030 will require action
and participation by the entire community. Implementation of these projects would
demonstrate the City’s commitment to reaching the CAP 2030 goals in conjunction with asking
residents to implement their own projects or make lifestyle adjustments to help achieve
greater GHG emissions reductions.
If approved, it is anticipated that the total construction project will take approximately 12
months for substantial completion of all projects. There may be an additional three-to-six
months for the solar photovoltaic systems to go live due to coordination with PG&E for
interconnection to the electric grid.
Financing Plan
The total cost of $21,428,950 is the “turnkey” cost, which includes design and engineering,
subcontracts, utility program and grant management as applicable, permits and fees,
construction management and field supervision, operations and maintenance support,
measurement and verification, and guaranteed savings for the selected term.
The City Council has three options available to fund the projects:
1) Capital Improvement Program and General Fund Reserves. The existing CIP includes
$2,445,000 allocated to various energy efficiency projects, funded by the General Fund
and the East Dublin Street Light District 1999-1 Fund. To fund all the projects
identified in the IGA, an additional $18,983,950 would need to be allocated from
General Fund Reserves. This would result in an estimated ending balance of
$43,069,079 in the General Fund Unassigned Cash Flow Reserve, which equates to six
months of the adopted Fiscal Year 2021-22 Budget. Based on the existing levels of
reserves, uncertainty due to the COVID-19 pandemic, and future capital project
funding needs or other potential funding commitments, this option is not
recommended.
2) Tax-Exempt Bond Issuance (Public Placement). The City could issue tax-exempt Lease
Revenue Bonds to fund all the projects identified in the IGA. The City would secure an
underlying credit rating (assume an AA rating from Standard and Poor’s) and issue
bonds in the public market at a time when interest rates are at historically low levels.
The bonds would be an obligation of the City’s General Fund and could be repaid over
a 25-year term (as an example). Annual debt service for a bond issuance of the total
project amount is estimated at roughly $1,124,000, totaling $28,100,000 over the 25-
year period.
Advantages of bond issuance include lower interest rates, longer maturities than a
private placement (up to 30 years), and the fact that it is the most common form of
debt issuance. Some drawbacks to bond issuance include the higher cost of issuance,
a longer time needed to complete the transaction, staff time needed to prepare the
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required documentation, the need to provide annual disclosures, the requirement of a
credit rating, and less flexible call provisions.
3) Tax-Exempt Lease Purchase Agreement (Private Placement). The City could enter into
a tax-exempt Lease Purchase Agreement (LPA) to fund all the Projects identified in
the IGA. The City could repay the LPA over a 15-year term with a bank as a Private
Placement. Annual debt service for the total project amount is estimated at roughly
$1,700,000, totaling $25,500,000 over the 15-year period.
Advantages of the Private Placement include low cost of issuance, no initial or annual
continuing disclosure, no credit rating necessary, a relatively quick process, and more
flexible call features. Drawbacks to a Private Placement include higher interest rates,
the potential for onerous negotiations, the requirement of formal credit approval from
the bank before the rate is locked, the fact that such arrangements are not always
available, and the short-term nature of the placement (typically 10 to 15 years)
Based upon the review of the advantages and drawbacks of both financing mechanisms, and
particularly the lower annual debt service costs for tax-exempt bonds, Staff is
recommending that the City Council authorize proceeding with a bond issuance in the public
market.
Regarding the potential use of the budgeted CIP funds ($2,445,000), Staff recommends that the
General Fund portions of those projects ($1,638,665) be freed up and replaced with bond
proceeds. The portion of the projects funded by the East Dublin Street Light District 1999-1
Fund ($806,335) would remain allocated to the projects, as this is a non-General Fund source
that was collected for the purpose of such improvements. This would result in a total bond
issuance of $20,622,615. Note that the debt service amounts in this Staff Report were prepared
with the slightly higher bond issuance amount. This final bond documents (anticipated in
September) will reflect the actual bonds total.
City Council Actions Needed
Should the City Council direct Staff to pursue issuance of tax-exempt bonds, the first step is
approval of a resolution (Attachment 6) that will enable the City to be reimbursed from bond
proceeds for any expenditures related to the projects prior to the issuance of the bonds. A
reimbursement resolution is the required expression of intent to issue bonds and is needed
for the City to reimburse itself subject to certain limitations. Note that the resolution is not
required for reimbursement of soft costs, however it is good practice to adopt the resolution
well in advance of the expenditure of hard costs.
Future Actions
After tonight’s approval, the Staff anticipates undertaking the following steps to issue the
bonds:
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• Prepare required legal documents and identify the asset(s) to be pledged to secure
the bonds in August
• Prepare required financing documents including the Preliminary Official
Statement and Continuing Disclosure Certificate in August
• Secure an underlying credit presentation from Standard & Poor’s in September
• Return to the City Council in September for approval of all required documents
• Price and close bonds in October
California Environmental Quality Act Analysis
Staff has reviewed the proposed action and recommends the City Council determine that the
Project is exempt from the California Environmental Quality Act (CEQA, Sections 21000, et
seq. of the California Public Resources Code) as follows: (i) Categorical Exemption Class I
(CEQA Guidelines Section 15301) applies to the minor alteration of existing public facilities,
including operation, repair, maintenance, permitting, leasing, licensing, or minor alteration
of existing public or private structures, facilities, mechanical equipment, involving
negligible or no expansion of use beyond that existing at the time of the lead agency’s
determination; (ii) Class 3 (CEQA Guidelines Section 15303) consists of construction and
location of limited numbers of new, small facilities or structures; installation of small new
equipment and facilities in small structures; and the conversion of existing small structures
from one use to another where only minor modifications are made in the exterior of the
structure; and (iii) none of the exceptions in CEQA Guidelines Section 15300.2 are applicable .
STRATEGIC PLAN INITIATIVE:
None.
NOTICING REQUIREMENTS/PUBLIC OUTREACH:
Pursuant to Government Code sections 4217.10 through 4217.18, this public hearing was
noticed at least two weeks in advance of the scheduled meeting and advertised in the East Bay
Times and the City Council Agenda was posted.
ATTACHMENTS:
1) Resolution Making Findings Required Under Government Code Sections 4217.10-18 and
Approving an Amendment to the Design-Build Energy Savings Performance Contract with
Willdan Energy Solutions for Energy Reduction, Core Facility Infrastructure, and
Resiliency Upgrades Projects
2) Exhibit A to Resolution – Performance Contract Amendment
3) Design-Build Energy Savings Performance Contract with Willdan Energy Solutions
4) June 1, 2021 and November 17, 2020 City Council Staff Reports (without attachments)
5) Investment Grade Audit Report
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6) Resolution Declaring Intention to Reimburse Expenditures from the Proceeds of Certain
Tax-exempt Obligations and Directing Certain Actions
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Item 6.1:Approval and Authorization of the City of Dublin and Dublin Financing Authority to Execute the Sale and Issuance of 2021 Lease Revenue Bonds Not-To-Exceed $22 Million September 21, 2021
Background•June 9, 2020 – Adopted new CIP projects addressing Resiliency and Disaster Preparedness and Energy Efficiency.•Sept 15, 2020 – Adopted Climate Action Plan for 2030 and Beyond.•Nov 17, 2020 – Approved contract with Willdan to perform Phase 1 Investment Grade Audit.•June 1, 2021 – Rec’d report on recommended projects.•July 20, 2021 – Approved projects and agreement with Willdan Energy Solutions; reviewed funding options and provided direction to Staff to return in September.
City Council Direction•Prepare the required legal documents and identify asset(s) to pledge to secure bonds. •Prepare required financing documents including Preliminary Official Statement and Continuing Disclosure Certificate.•Secure credit rating from Standard & Poor’s (S&P Global).•Return to City Council in September for approval of required documents.
Staff Update•Selected City Hall as leased asset for the transaction.•Met with S&P Global on September 9, 2021.•Worked with Partner Agency (CSCDA) to create Dublin Financing Authority in order to issue bonds.•Developed drafts of all required documents with Financing Team.
Dublin Financing Authority•Approval – Tonight's Agenda – Item 4.7•Formation of Joint Powers Agreement (JPA) between City and CSCDA.–Required to issue Lease Revenue Bonds •Dublin City Council will serve as the JPA Board and have full control over all decisions and actions.•DFA has similar resolution for approval on a separate agenda at tonight’s meeting.
Action Tonight•Approve issuance of the bonds and all related documents, with the City as the source of the repayment on the bonds (lease payment made from the General Fund).•The Resolution authorizes the issuance of up to $22,000,000 of bonds to:–Provide financing for energy efficiency and related infrastructure improvement projects–Fund the costs and expenses related to the issuance of the bonds
Action TonightDocuments Being ApprovedIndenture of TrustSite LeaseLease AgreementAssignment AgreementBond Purchase AgreementPreliminary Official StatementContinuing Disclosure Certificate
September 21, 20218Estimated Sources, Uses, and Debt ServiceEstimated true interest cost 2.63%.Estimated annual payment $975,720 in year 1.Average annual payment $1,367,318 (years 2 to 2020).These are preliminary, subject to change.FY Ending Prinicpal Interest Total06/30/2022 $465,000 $510,720 $975,72006/30/2023 585,000 783,150 1,368,15006/30/2024 615,000 753,900 1,368,90006/30/2025 645,000 723,150 1,368,15006/30/2026 675,000 690,900 1,365,90006/30/2027 710,000 657,150 1,367,15006/30/2028 745,000 621,650 1,366,65006/30/2029 785,000 584,400 1,369,40006/30/2030 820,000 545,150 1,365,15006/30/2031 860,000 504,150 1,364,15006/30/2032 905,000 461,150 1,366,15006/30/2033 950,000 415,900 1,365,90006/30/2034 1,000,000 368,400 1,368,40006/30/2035 1,040,000 328,400 1,368,40006/30/2036 1,080,000 286,800 1,366,80006/30/2037 1,125,000 243,600 1,368,60006/30/2038 1,170,000 198,600 1,368,60006/30/2039 1,215,000 151,800 1,366,80006/30/2040 1,265,000 103,200 1,368,20006/30/2041 1,315,000 52,600 1,367,600Totals$17,970,000 $8,894,770 $26,954,7702021 Lease Revenue BondsEstimated Annual Payments
Staff RecommendationCity Council•Conduct the Public Hearing, Deliberate, and Adopt:Resolution Approving a Lease Financing and the Issuance and Sale of Lease Revenue Bonds by the Dublin Financing Authority to Finance Energy Efficiency Capital Improvements, and Approving Related Documents and Official Actions•Close Item 6.1, Open the Meeting of the Dublin Financing Authority, and Adopt:Resolution Authorizing the Issuance and Sale of 2021 Lease Revenue Bonds to Finance Energy Efficiency Capital Improvements for the City of Dublin and Approving Related Documents and Official Actions
Additional Actions•Approval of the Resolutions will Authorize the City Manager to:–Amend the FY 2021-22 Budget to make the June 30, 2022 debt service payment.–Adjust the Capital Improvement Program to account for the Citywide Energy Improvements Project.
Next Steps•Post/Print Preliminary Official Statement•Price bonds in late September •Close bonds in mid October
Thank You